Document:

exv10w3

 

Exhibit 10.3

REVOLVING LOAN AGREEMENT

By and Among

Tradition Development Company, LLC, a Florida limited liability company,

Horizons St. Lucie Development, LLC, a Florida limited liability company,

Horizons Acquisition 7, LLC, a Florida limited liability company,

and

Tradition Mortgage, LLC, a Florida limited liability company

(collectively, “Borrower”)

and

Core Communities, LLC, a Florida limited liability company

(“Guarantor”)

and

Wachovia Bank, National Association

(“Lender”)

Dated: April 8, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I.

	 	DEFINITIONS
	 	 	1	 
	ARTICLE II.

	 	LOAN DOCUMENTS
	 	 	9	 
	ARTICLE III.

	 	SECURITY AGREEMENTS
	 	 	9	 
	ARTICLE IV.

	 	CLOSING AND INITIAL DISBURSEMENT
	 	 	11	 
	ARTICLE V.

	 	LOAN FUNDING
	 	 	12	 
	1.

	 	Borrowing Base
	 	 	12	 
	2.

	 	Eligibility Limitations Under Borrowing Base
	 	 	12	 
	3.

	 	Borrowing Base Administration
	 	 	13	 
	4.

	 	Release Prices
	 	 	15	 
	5.

	 	Plats and Consents
	 	 	15	 
	ARTICLE VI.

	 	METHOD AND CONDITIONS OF DISBURSEMENT OF LOAN PROCEEDS
	 	 	16	 
	1.

	 	Revolving Loan
	 	 	16	 
	2.

	 	Loan Requisitions
	 	 	16	 
	3.

	 	Solvency
	 	 	16	 
	4.

	 	Access to Streets
	 	 	16	 
	5.

	 	Final Disbursement Date
	 	 	16	 
	6.

	 	Lien Priority as Prerequisite for Funding
	 	 	16	 
	7.

	 	Conditions Precedent to Each Disbursement of the Loan
	 	 	17	 
	8.

	 	Notice, Frequency and Place of Disbursements
	 	 	17	 
	9.

	 	Advances Do Not Constitute a Waiver
	 	 	17	 
	10.

	 	Letters of Credit
	 	 	17	 
	ARTICLE VII.

	 	WARRANTIES AND REPRESENTATIONS OF BORROWER
	 	 	18	 
	ARTICLE VIII.

	 	COVENANTS AND FURTHER AGREEMENTS OF BORROWER
	 	 	25	 
	1.

	 	Loan Documents
	 	 	25	 
	2.

	 	Insurance
	 	 	25	 
	3.

	 	Collection of Insurance Proceeds
	 	 	25	 
	4.

	 	Ad Valorem Tax and Assessments
	 	 	26	 
	5.

	 	Application of Loan Proceeds
	 	 	26	 
	6.

	 	Interest and Other Reserves
	 	 	26	 

-i-

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	7.

	 	Expenses
	 	 	26	 
	8.

	 	Borrower’s Equity Requirement
	 	 	27	 
	9.

	 	General Construction Requirements
	 	 	27	 
	10.

	 	Access
	 	 	27	 
	11.

	 	Right of Lender to Inspect Property and Review Plans for any Land Under Development
	 	 	27	 
	12.

	 	Changes in Plans and Specifications for Land Under Development
	 	 	27	 
	13.

	 	Correction of Defects
	 	 	28	 
	14.

	 	Sign Regarding Financing
	 	 	28	 
	15.

	 	Books and Records
	 	 	28	 
	16.

	 	Notification by Borrower
	 	 	28	 
	17.

	 	Keeping Guarantor Informed
	 	 	29	 
	18.

	 	Financial and Operating Statements
	 	 	29	 
	19.

	 	Monthly Inventory Reports for Residential Developments
	 	 	30	 
	20.

	 	Bank Accounts
	 	 	30	 
	21.

	 	Financial Covenants
	 	 	30	 
	22.

	 	Updated Opinion of Counsel
	 	 	31	 
	23.

	 	Development of Improvements
	 	 	31	 
	24.

	 	Preservation of Security
	 	 	31	 
	25.

	 	This Loan Agreement
	 	 	31	 
	26.

	 	Further Encumbrances
	 	 	31	 
	27.

	 	Mortgagee Title Insurance
	 	 	31	 
	28.

	 	Warranties and Representations True
	 	 	32	 
	29.

	 	Indemnity Regarding Construction and Other Risks
	 	 	32	 
	30.

	 	Commitment Fee
	 	 	32	 
	31.

	 	Additional Information
	 	 	33	 
	ARTICLE IX.

	 	 DEFAULTS
	 	 	33	 
	1.

	 	Default Under Note
	 	 	33	 
	2.

	 	Default Under Loan Documents
	 	 	33	 
	3.

	 	Breach of Warranty
	 	 	33	 

-ii-

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	4.

	 	Material Adverse Change
	 	 	33	 
	5.

	 	Levy upon the Property
	 	 	33	 
	6.

	 	Bankruptcy or Insolvency of Borrower
	 	 	33	 
	7.

	 	Assignment for the Benefit of Creditors
	 	 	34	 
	8.

	 	Transfer of Property
	 	 	34	 
	9.

	 	Lien Against Property
	 	 	34	 
	10.

	 	Failure to Disprove Default
	 	 	34	 
	11.

	 	Breach
	 	 	34	 
	12.

	 	Letter of Credit
	 	 	34	 
	13.

	 	Financial Covenants
	 	 	34	 
	ARTICLE X.

	 	REMEDIES OF LENDER
	 	 	34	 
	1.

	 	Default Constitutes Default Under Loan Documents
	 	 	35	 
	2.

	 	Right of Lender to Assume Possession and to Complete Construction
	 	 	35	 
	ARTICLE XI.

	 	MISCELLANEOUS
	 	 	35	 
	1.

	 	Binding Terms
	 	 	35	 
	2.

	 	Bank Accounts
	 	 	35	 
	3.

	 	Payment of Construction Costs
	 	 	35	 
	4.

	 	Notices To All Parties
	 	 	35	 
	5.

	 	No Partnership or Joint Venture
	 	 	36	 
	6.

	 	No Assignment by Borrower
	 	 	36	 
	7.

	 	Usury
	 	 	36	 
	8.

	 	Time
	 	 	36	 
	9.

	 	Waiver
	 	 	36	 
	10.

	 	Conflict
	 	 	36	 
	11.

	 	Additional Financing
	 	 	37	 
	ARTICLE XII.

	 	GENERAL CONDITIONS
	 	 	37	 
	1.

	 	Equity Requirements
	 	 	37	 
	2.

	 	Evidence of Satisfaction of Conditions
	 	 	37	 
	3.

	 	Assignment
	 	 	37	 
	4.

	 	Successors and Assigns Included in Parties
	 	 	37	 

-iii-

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	5.

	 	Headings
	 	 	37	 
	6.

	 	Invalid Provisions to Affect No Others
	 	 	37	 
	7.

	 	Number and Gender
	 	 	38	 
	8.

	 	Amendments
	 	 	38	 
	9.

	 	Governing Law
	 	 	38	 
	10.

	 	Litigation
	 	 	38	 
	11.

	 	Relationships With Other Lender Customers
	 	 	 38	 
	12.

	 	Integration and Relation to Loan
Commitment
	 	 	 38	 
	13.

	 	Reasonable Standard
	 	 	38	 
	14.

	 	Waiver of Trial by Jury
	 	 	39	 

-iv-

 

 

REVOLVING LOAN AGREEMENT

     THIS REVOLVING LOAN AGREEMENT (the “Loan Agreement”) is made and executed as of April 8, 2005,
by and among TRADITION DEVELOPMENT COMPANY, LLC, a Florida limited liability company; HORIZONS ST.
LUCIE DEVELOPMENT, LLC, a Florida limited liability company; HORIZONS ACQUISITION 7, LLC, a Florida
limited liability company; and TRADITION MORTGAGE, LLC, a Florida limited liability company
(hereinafter collectively referred to as “Borrower”), CORE COMMUNITIES, LLC, a Florida limited
liability company (“Guarantor”), all located at 10521 S.W. Village Station Drive, Suite 201, Port
St. Lucie, Florida 34987, and WACHOVIA BANK, NATIONAL ASSOCIATION, located at 200 East Broward
Boulevard, Suite 200, Fort Lauderdale, Florida 33301 (hereinafter referred to as “Lender”).

B A C K G R O U N D:

     A. Borrower and Lender have negotiated a Forty Million and 00/100 Dollar ($40,000,000.00)
revolving line of credit loan (“Revolving Loan”) to be used by Borrower for any lawful business
activities conducted by Borrower in the normal course of Borrower’s real estate business,
including, but not limited to, (i) the acquisition and/or development by Borrower of real property
located and being in St. Lucie County, Florida and (ii) issuances of letters by credit by Lender.
Subject to the requirements of this Loan Agreement, the Loan will revolve as to the total principal
amount of Forty Million and 00/100 Dollar ($40,000,000.00).

     B. The Revolving Loan shall be evidenced by a Revolving Loan Note of even date herewith
(“Revolving Note”) in the amount of the Revolving Loan and shall be secured by a Mortgage,
Assignment of Rents and Security Agreement (“Mortgage”) initially encumbering that certain real
property situate in St. Lucie County, Florida, more particularly described in Exhibit “A”
(“Land”) attached hereto and made part hereof, which Land is owned in fee simple by Borrower. (The
Land and the Improvements (as defined below) located or to be located thereon are referred to as
the “Property”.)

     C. Borrower and Lender wish to enter into this Loan Agreement in order to set forth the terms
and conditions of the disbursement of the Loan and other matters with respect thereto.

     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants, representations,
warranties and agreements contained herein, the sum of TEN AND 00/100 DOLLARS ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower, Guarantor and Lender agree as follows:

ARTICLE I.

DEFINITIONS

     1. For the purposes hereof, the following terms shall have the meanings described in
this Article:

 

 

          “Application” means Borrower’s application for payment.

          “Appraisal” means the written appraisal report prepared by an independent licensed
professional appraiser which has been approved by the Lender. All Appraisals required herein shall
be subject to the review of the Lender’s chief appraiser, whose review of the Appraisals must
result in findings satisfactory to the Lender, in the Lender’s reasonable discretion.

          “Appraised Value” means the value of the Property or any specific parcel or parcels within the
Property, as determined by the Appraisal.

          “Assigned Rights” has the meaning as set forth in Article III, Paragraph 1.

          “Borrower” shall refer collectively to Tradition Development Company, LLC, a Florida limited
liability company; Horizons St. Lucie Development, LLC, a Florida limited liability company;
Horizons Acquisition 7, LLC, a Florida limited liability company; and Tradition Mortgage, LLC, a
Florida limited liability company.

          “Borrowing Base” means the method for determining the availability of funds under the
Revolving Loan as set forth in Article V, Paragraph 1.

          “Borrowing Base Report” means the report to be submitted by Borrower to Lender on a monthly
basis on the first day of each and every month included within the form attached hereto as
Composite Exhibit “C”.

          “Capitalized Lease Obligation” means any Indebtedness represented by obligations under a lease
that is required to be capitalized for financial reporting purposes in accordance with GAAP.

          “Closing Date” means the date as of which this Loan Agreement is executed by Borrower and
Lender.

          “Collateral” means the Land and other property rights and security as defined in and
encumbered by the Mortgage, this Loan Agreement, the UCC-1 Financing Statements and such other
security instruments granted by the Borrower to the Lender in connection with the Loan.

          “Commitment” means the commitment letter issued by Lender as of August 18, 2004, and executed
by Borrower on August 23, 2004.

          “Commitment Fee” has the meaning set forth in Section VIII, Paragraph 30 of this Agreement.

          “CDD” means any current or future Community Development Districts which are formed or to be
formed for any portions of the Property.

          “CDD Bond(s)” means those bonds issued by the CDD to provide for funding for certain
infrastructure improvements within the Property.

2

 

          “Core” means Core Communities, LLC, a Florida limited liability company.

          “Cost” means the purchase price paid by Borrower to acquire the Land (or any portion thereof)
plus costs and expenses incurred by Borrower in connection with such purchase including, without
limitation, interest payments, all of which shall be subject to Bank’s prior written approval which
shall not be unreasonably withheld.

          “Declaration(s)” means any and all Declarations of Covenants, Conditions and Restrictions, or
any other restrictive covenants governing or imposed solely upon the Property or the Improvements
or any portion thereof; including in connection with any property owners or homeowners
associations solely governing the Property or the Improvements or any portion thereof.

          “Default” or “Event of Default” means a violation of any term, covenant, or condition
hereunder or a Default as defined under any of the other Loan Documents which remains uncured after
any applicable grace period.

          “Default Rate” means the interest rate which is three percent (3%) greater than the interest
rate stipulated in the Revolving Note.

          “Development Order” means the final development orders or approvals issued for the Land,
including those with respect to any DRI approval process.

          “DRI” means a development of regional impact as defined in Chapter 380, Florida Statutes.

          “Due Diligence Documents” means all due diligence documents required to be delivered by
Borrower to Lender and described in Exhibit “B” attached hereto and made a part hereof.

          “Environmental Laws” means any and all federal, state, or local statutory or common law
relating to pollution or protection of the environment, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), 42 USC §
9601, et seq., the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), Public
Law 99-499, 100 Stat. 1613, the Resource Conservation and Recovery Act (“RCRA”), 42 USC § 6901,
et seq., state and local laws, as the same may be amended from time to time and all
ordinances, regulations, codes, plans, orders, and decrees now existing or in the future enacted,
promulgated, adopted, entered or issued, both within and outside present contemplation of the
Borrower and Lender, and any common law of nuisance or trespass, and any law or regulation relating
to emissions, discharges, releases or threatened releases of Hazardous Substances into the
environment (including without limitation, ambient air, surface water, groundwater, land surfaced
or subsurface strata) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Substances.

          “Financial Covenants” means the financial covenants, conditions and requirements set forth in
Article VIII, Paragraph 21 of this Loan Agreement.

3

 

          “Financing Statements” means the UCC financing statements filed in order to perfect Lender’s
lien on certain personal property and fixtures as more particularly described therein.

          “Florida Lien Law” means the laws of the State of Florida regarding mechanics’, materialmen’s
and suppliers’ liens as provided in Florida Statutes Section 713 et. seq.

          “GAAP” means generally accepted accounting principles in the United States of America in
effect from time to time.

          “Gap” means the period of time between the effective date of the commitment for mortgagee
title insurance and the recording of the Mortgage.

          “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 the Land or to the performance of any act or obligation or the
observance of any agreement, provision or condition of whatsoever nature herein contained.

          “Guarantor” means Core.

          “Guarantor’s Assets” at any date means the amount which, in accordance with GAAP, would be set
forth opposite the caption “total current assets” (or any like caption) on a consolidated balance
sheet of the Guarantor at such date.

          “Guarantor’s Debt” at any date means the aggregate principal amount of all Indebtedness of the
Guarantor at such date in accordance with GAAP.

          “Guarantor’s Liabilities” at any date means the amount which, in accordance with GAAP, would
be set forth opposite the caption “total current liabilities” (or any like caption) on a
consolidated balance sheet of the Guarantor at such date.

          “Guaranty” means the Unconditional Guaranty executed by Guarantor in favor of Lender,
providing for Guarantor’s payment of all sums due under the Loan Documents and of performance of
certain obligations of Borrower thereunder.

          “Hazardous Substances” means any substance or material in violation of an Environmental Law,
including, but not limited to, (i) as identified in Section 101(14) of CERCLA, 42 USC § 9601 (14),
as the same may be amended from time to time, and in any other Environmental Law, or (ii)
determined to be toxic, a pollutant or contaminant, under federal, state or local statute, law,
ordinance, rule or regulation or judicial or administrative order or decision, as same may be
amended from time to time, and further including but not limited to those defined under state and
local laws, as same may be amended from time to time.

          “Improvements” means the site work and infrastructure improvements and other land development
to be completed by Borrower on the Land Under Development in accordance

4

 

with the terms and
provisions hereof, if any, specifically excluding however, any improvements relating to a CDD.

          “Indebtedness” means: (i) all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet of Guarantor as of
the date said Indebtedness is to be determined, including, without limitation, Capitalized Lease
Obligations; (ii) all obligations which Guarantor has guaranteed under the Loan; (iii) all
reimbursement obligations in connection with letters of credit or letter of credit guaranties
issued for the account of Guarantor; and (iv) all other obligations of Guarantor.

          “Indemnified Parties” means and includes Lender, its parent, subsidiary and affiliated
companies, assignees of any of Lender’s interest in the Loan or the Loan Documents, owners of
participating or other interests in the Loan or the Loan Documents.

          “Indemnified Costs” means all actual liabilities, claims, actions, causes of action,
judgments, orders, damages (including foreseeable and unforeseeable consequential damages), costs,
expenses, fines, penalties and losses (including sums paid in settlement of claims and all
consultant, expert and legal fees and expenses of Lender’s attorneys to the extent Lender is a
prevailing party), including those incurred in connection with any investigation of site conditions
or any remedial, removal or restoration work, of any resulting damages, harm or injuries to the
person or property of any third parties or to any natural resources, with respect to the Property
to the extent of a Default and Lender incurs expenses contemplated under the Loan Documents.

          “Initial Borrowing Base Report” means the description of the Maximum Advance Availability, as
of the date hereof, for each Parcel as described in Article VII, Section 1 hereof, a copy of which
is attached as Composite Exhibit “C”.

          “Inspector” means the architectural or engineering firm or such party(s) or such
representative of Lender which Lender shall designate to perform various services on behalf of
Lender. The services to be performed by Lender’s Inspector shall include the issuance of reports
and certifications solely for the benefit of Lender and shall not impose upon Lender any obligation
to make inspections, or to correct or require any other person to correct any defects, or to notify
any person with respect to such defects, review of the Plans for any Improvements and all proposed
changes to them, periodic inspections of construction work of the Improvements, if any, for
conformity with the Plans.

          “Inspection Agreement” means the tri-party agreement among Lender, Borrower and Inspector
providing for the services of, and payment by Borrower to, the Inspector.

          “Inventory Report” means the report to be submitted by Borrower to Lender on a monthly basis
on the first day of each and every month included within the form attached hereto as Composite
Exhibit “C”.

          “LTC” or “Loan to Cost” means, as determined on any date, the percentage arrived at by
dividing (i) the outstanding principal balance of the Loan on such date by (ii) the Cost of the
Property.

          “LTV” or “Loan to Value” means, as determined on any date, the percentage

5

 

arrived at by
dividing (i) the outstanding principal balance of the Loan on such date by (ii) the Appraised Value
of the Property.

          “LUD” or “Land Under Development” means Land owned by Mortgagor which is being developed by
Mortgagor with Improvements.

          “Land” means the real property described in Exhibit “A” attached hereto and any real
property subsequently encumbered by the Loan by modification and spreader agreement.

          “Lender” means Wachovia Bank, National Association, its successors and/or assigns.

          “Letter of Credit” means a standby letter of credit issued by Lender pursuant to the terms of
this Loan Agreement for the account of Borrower, as the same may be renewed, modified, amended or
restated from time to time in the manner provided therein, which shall serve as performance bonds
for Borrower’s development of real property. Draws under the Letters of Credit shall be secured by
the Mortgage as provided herein and in the Mortgage and the Maximum Advance Availability under the
Borrowing Base shall be reduced by the amount of the Letter of Credit issued until returned.

          “Licenses and Development Rights” means any right, title and interest now owned or hereafter
acquired by Borrower in and to the following solely with regard to the Land (i) all development
approvals, plat approvals, site plan approvals, density and similar rights, rights under
development orders in connection with the development of regional impact solely in connection with
the Land, building permits, other governmental approvals, licenses, and other consents and
approvals which it may now or hereafter own solely with respect to or in connection with the
Property; (ii) all plat drawings, site plans, and other drawings, plans and specifications for the
Property and Improvements; (iii) all warranties and guaranties covering any furniture, equipment,
machinery, building supplies and materials, appliances, fixtures and other property now or
hereafter located on or placed upon the Property or related to the Improvements located on the
Land, including, without limitation, air conditioning, heating and other appliances and equipment;
(iv) any other governmental licenses, permits, approvals, allocations, contract rights related to
the design, development or construction of the Improvements, and similar matters and documents
obtained or to be obtained in the future which are necessary or appropriate for the construction,
operation and management of any Improvements located on the Land; (v) all development agreements,
agreements with utility companies, agreements with governmental authorities and similar agreements
solely related to the Land; (vi) all rights in favor of Borrower or the Land under any Community
Development Districts (“CDD”) or agreements with any CDD to the extent assignable; and (vii) any
and all permits, licenses, allocations, approvals, certificates and consents heretofore or
hereafter issued by any governmental or private authority or agency relating solely to the Land or
to any Improvements or the Plans and Specifications thereof, naming Borrower, and all of Borrower’s
right, title and interest in any to any subcontracts or agreements for services, labor or materials
pertaining to any Improvements, and all claims and rights with respect to non-performance or breach
of said contracts and agreements.

6

 

          “Loan” means the Revolving Loan.

          “Loan Agreement” means this Agreement.

          “Loan Documents” means the Commitment, this Loan Agreement, the Notes, any funding agreement,
any “Application and Agreement for Irrevocable Standby Letter(s) of Credit” entered into by Lender
and Borrower with respect to a Letter of Credit, the Mortgage, the other collateral assignments,
the Guaranty, the Financing Statements, and any other document or writing executed in connection
therewith or in furtherance thereof, whether entered into simultaneously herewith or at any time
hereafter.

          “Loan Maturity Date” or “Maturity Date” means that certain date twenty-four (24) months from
and after the Closing Date, as may be extended as set forth in the Note.

          “Lot” means any plotted Lot within the Property.

          “Lot Contracts Report” means the report to be submitted by Borrower to Lender on a monthly
basis on the first day of each and every month included within the form attached hereto as
Composite Exhibit “C”.

          “Management and Leasing Agreements” means (i) any and all management agreements executed by
Borrower with any third party or affiliate of either Borrower or either Guarantor to engage in
management activities in connection with the Property or the Improvements; and (ii) any and all
leasing agreements executed by Borrower with any third party or affiliate of either Borrower or
either Guarantor to engage in leasing or sales activities in connection with the Property or the
Improvements.

          “Maximum Advance Availability” means the amount available for each Sub-limit Classification
available for funding under the Borrowing Base in accordance with Section 1 of Article V hereof
which amount shall be reduced by the face amount of a Letter of Credit.

          “Maximum Debt” means Guarantor’s Debt less (i) customer deposits, and (ii) subordinated debt
due to shareholders of Guarantor.

          “Mortgage” means the Mortgage, Assignment of Rents and Security Agreement of even date
herewith executed by Borrower for the benefit of Lender encumbering the Property, and any
extensions, modifications, renewals or replacements thereof.

          “Mortgagor” means Tradition Development Company, LLC, a Florida limited liability company;
Horizons St. Lucie Development, LLC, a Florida limited liability company; Horizons Acquisition 7,
LLC, a Florida limited liability company; and/or Tradition Mortgage, LLC, a Florida limited
liability company, as the case may be.

          “Notes” means the Revolving Note executed by Borrower in favor of Lender 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 or
as required herein.

7

 

          “Permitted Encumbrances” means those liens, encumbrances, easements and other matters approved
by Lender as acceptable exceptions to Schedule B-Section 2 of the Title Policy, including, but not
limited to, taxes and assessments not yet due and payable for the year of closing, and matters
contemplated under the Loan Documents, including CDDs created with respect to the Land.

          “Parcels” means portions of the Land as described by separate, discrete legal descriptions or
by a separately recorded plat, including as set forth in the Initial Borrowing Base Report.

          “Plans” or “Plans and Specifications” means plans and specifications for the construction of
the Improvements submitted to and approved by Lender from time to time and including such
amendments thereto as may from time to time be made by Borrower and approved by Lender, such
approval not to be unreasonably withheld.

          “Property” means the Land and the Improvements located or to be located on the real property
described in Exhibit “A” attached hereto and made a part hereof encumbered by the Mortgage
and any Land and Improvements subsequently encumbered by the Mortgage, and any rights, other
property, and appurtenances as defined, described or identified in the Mortgage to be used as
Collateral for the Loan.

          “Requisition” means Lender’s form of loan requisition, completed by Borrower, evidencing
Borrower’s draw request.

          “Revolving Loan” means the Forty Million and 00/100 Dollar ($40,000,000.00) revolving line of
credit loan to be funded pursuant to the Borrowing Base as described in this Loan Agreement.

          “Site Plan” means collectively the site plans for the Improvements, approved by the applicable
Governmental Authorities, as same may be amended from time to time with Lender’s approval which
shall not be unreasonably withheld.

          “Sub-Limit Classification(s)” means the type of property to be used in determining the
availability under the Borrowing Base as set forth in Article V hereof.

          “Tangible Net Worth” means Guarantor’s Assets less Guarantor’s Liabilities plus subordinate
and/or subordinated debt payable to Guarantor’s shareholders.

          “Title Commitment” means the mortgagee title insurance commitment satisfying the requirements
of this Loan Agreement.

          “Title Insurer” means title insurance underwriter satisfactory to Lender.

          “Title Policy” means the mortgagee title insurance policy issued pursuant to the Title
Commitment satisfying the requirements of this Loan Agreement.

          “Utilities” means services necessary for the construction of the Improvements and the
operation thereof for their intended purpose are available at the boundaries of the Land,

8

 

including water supply, storm and sanitary sewer facilities, electric, telephone facilities,
cable television, and trash/dumpster services.

          “Work in Progress Report” means the report to be submitted by Borrower to Lender on a monthly
basis on the first day of each and every month included within the form attached hereto as
Composite Exhibit “C”.

     2. Capitalized terms not defined in this Loan Agreement shall have the meanings ascribed to
them in the Mortgage, Notes, or other applicable Loan Documents.

ARTICLE II.

LOAN DOCUMENTS

     As a condition to Closing and prior to and as a condition of any disbursement of Loan funds
hereunder, Borrower shall execute and deliver, or cause to be executed and delivered to Lender the
Loan Documents to be executed by Borrower and/or Guarantor (the “Loan Documents”), and due
diligence documents to be delivered by Borrower and/or Guarantor on the Land which Borrower
utilizes as part of the Borrowing Base (collectively, the “Due Diligence Documents”), including as
described on Exhibit “B” attached hereto and made a part hereof, all in form and substance
reasonably satisfactory to Lender.

     All of the Loan Documents and Due Diligence Documents shall be in form and content reasonably
satisfactory to the Lender, and shall comply with all of the requirements set forth in this Loan
Agreement.

ARTICLE III.

SECURITY AGREEMENTS

     1. In addition to the security interests granted pursuant to the Mortgage and the other Loan
Documents, Borrower hereby collaterally assigns, transfers, sets over and grants a security
interest to Lender, its successors and assigns, in and to the following:

          (a) Design and Construction Contracts, Plans and Specifications. All of its right,
title and interest in and to: (i) all construction contracts now or hereafter entered into by
Borrower with various contractors (hereinafter each such are referred to as a “Contractor”) for the
various Improvements to be constructed upon the Land, and all addenda, modifications and amendments
thereto (“Construction Contracts”);

          (b) Developer’s Rights. All of its rights, title and interest as developer or
declarant in and to the Declarations to the extent assignable in accordance with the terms and
conditions of the Declarations.

          (c) Management and Leasing Agreements. All of its rights, title and interest in and
to the Management and Leasing Agreements.

9

 

          (d) Licenses and Development Rights. All of its rights, title and interest in and to
the Licenses and Development Rights.

          (e) All of its rights, title and interest in and to all current and future purchase and sale
agreements with third party purchasers (collectively, “Purchase Agreements”).

     Hereinafter the Construction Contracts, Declarations, Management and Leasing Agreements,
Licenses and Development Rights, and Purchase Agreements are referred to as the “Assigned Rights”.

     2. Borrower covenants, warrants and represents to Lender that with regard to the Assigned
Rights currently held by Borrower (and for any Assigned Rights subsequently assigned to Lender as
of the date of such assignment) (i) Borrower has all lawful right, title and interest to the
Assigned Rights (if any), and has the right to make this assignment (to the extent the Assigned
Rights are assignable), and (ii) Borrower has not assigned nor shall it assign to any other person
or entity any interest in such Assigned Rights and (iii) the Assigned Rights are in full force and
effect and there are no defaults by Borrower thereunder or by any other party thereto. Borrower
warrants and represents that Lender shall not be under any obligation to perform any of the
obligations of Borrower under the Assigned Rights. Nothing contained herein shall be construed to
impose any liability upon Lender by reason of the assignment granted hereby until Lender exercises
dominion and control with respect thereto, and Borrower shall indemnify, defend and hold Lender
harmless from and against any and all claims, damages, liabilities, fines and expenses (including
but not limited to reasonable attorney’s fees and costs) arising from or related to this assignment
or under any of the Assigned Rights until Lender exercises dominion and control with respect
thereto. Borrower shall deliver to Lender prompt written notice of any and all defaults or events
which, with the giving of notice and/or the passage of time will become defaults by either Borrower
or any third party under any Assigned Rights, and shall deliver copies of all written notices,
demands and material communications between Borrower and any third party under any Assigned Rights.
Borrower shall obtain any necessary consents or joinders necessary to effectuate the Assigned
Rights.

     3. These assignments shall be in full force and effect as of the date hereof. Notwithstanding
that this assignment is effective immediately, so long as there shall exist no Default by Borrower
of this Loan Agreement or any other Loan Document which has not been cured within an applicable
cure period and the cure accepted by Bank, Borrower shall have the right to take all action with
respect to the items and matters assigned hereby. These assignments shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns. Borrower
acknowledges that the making of the Loan by Lender to Borrower shall be made by Lender in full
reliance upon these assignments. This instrument is for the sole benefit of Lender and shall not
be construed for the benefit of any third party or parties.

     4. Upon delivery of written notice of Default to Borrower (after expiration of any applicable
cure period), Lender shall have the right in its sole discretion to take in its name or in the name
of Borrower or otherwise, such action as Lender may at any time or from time to time reasonably
determine to be necessary to cure any Default of Borrower under the Assigned Rights, but under no
circumstances shall Lender be obligated to take such action. Lender shall incur no liability on
account of any action taken in good faith by it or on its behalf or otherwise

10

 

hereunder, whether or not the same shall prove to be improper, inadequate or invalid in whole
or in part, and Borrower agrees to protect, defend, indemnify and hold Lender harmless from and
against any and all loss, cost, liability or expense, including, but not limited to attorneys’ fees
and expenses, in connection with any such action or actions except for Lender’s wrongful acts or
gross negligence. These assignments shall constitute Borrower’s irrevocable direction to and full
authority for third parties to act at Lender’s written direction, notice or demand and to otherwise
perform on Lender’s behalf under the Assigned Rights after a Default exists under the Loan. Third
parties shall be fully protected by Borrower in their reliance upon and compliance with any written
request, notice or demand made by Lender with respect to the Assigned Rights or for performance of
any undertaking thereunder, and shall have no right or duty to inquire as to whether any Default
under the Loan Agreement or the other Loan Documents has actually occurred or is then existing.

     5. Borrower hereby irrevocably constitutes and appoints Lender as its true and lawful
attorney-in-fact, empowered to act in Borrower’s name or in Lender’s name or otherwise, in order to
enforce all rights of Borrower under the Assigned Rights (i) during a Default or (ii) after a
Default has occurred and been cured but said cure has not been accepted by Lender. This power of
attorney, being coupled with an interest, is irrevocable.

ARTICLE IV.

CLOSING AND INITIAL DISBURSEMENT

     1. The Closing of the Loan, and funding of the proceeds of this Loan which are approved by the
Lender for any initial funding are conditioned upon, and such proceeds of the Loan shall be funded
subsequent to, the following:

          (a) Execution and/or delivery of all Loan Documents and Due Diligence Documents such other
documents as Lender and Lender’s counsel may require to insure that the Lender has a valid first
lien on the Property which constitutes the Borrowing Base used by Lender to fund this Loan
Agreement and as necessary or appropriate to effectuate the terms of this Loan Agreement.

          (b) Receipt by Lender of satisfactory evidence of applicable insurance required pursuant to
the Loan Documents.

          (c) Receipt by Lender of the marked-up Title Insurance Commitment, insuring Lender’s Mortgage,
which marked-up commitment must be approved by Lender’s counsel together with all required
reinsurance and co-insurance agreements, required endorsements and coverages.

          (d) Receipt by Lender of evidence satisfactory to Lender and Lender’s counsel of the
Borrower’s and Guarantor’s fulfillment of any other condition to funding as set forth in this Loan
Agreement.

          (e) Borrower and Guarantor are in full compliance with the Loan Documents and all warranties
and representations of the Borrower and Guarantor are true and correct.

11

 

          (f) Written confirmation from Borrower that the applicable Parcels to be included in the
Borrowing Base have the appropriate approvals, permits, licenses and Improvements required (if any)
to qualify for the applicable Sub-Limit Classification set forth in Article VII, Section 1 hereof
and in the Initial Borrowing Base Report.

ARTICLE V.

LOAN FUNDING

     1. Borrowing Base. Eligibility for funding under the Loan shall be determined under a
“Borrowing Base” formula calculated based on the Sub-Limit Classifications (“Sub-Limit
Classification(s)”) set forth in the chart below (“Borrowing Base Matrix”), with each such
Sub-Limit Classification referred to in this Loan Agreement (including without limitation in
calculating the Maximum Advance Availability by the letter reference in the left-hand column of the
chart below). Each such Sub-Limit Classification shall be a sublimit under the Revolving Loan for
that category up to the referenced “Maximum Advance Availability” as shown in the Borrowing Base
Matrix as may be combined with other Sub-Limit Classifications. The Maximum Advance Availability
under the Borrowing Base shall be the value, or cost, as applicable, of each Sub-Limit
Classification set forth below multiplied by the applicable Advance Rate as noted in the Borrowing
Base Matrix, which results in the aggregate Margined Value (as hereinafter defined). “Margined
Value” means the appraised value or cost, if applicable, of the applicable portion of the Mortgaged
Property multiplied by the applicable Advance Rate for the particular Sub-Limit Classification as
set forth below.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	Maximum	 
	 	 	 	 	 	 	 	 	 	 	Advance	 
	 	Sub-Limit Classification	 	 	Advance Rate	 	 	Availability	 
	 	A)

	 	 	Undeveloped Land owned by Borrower Not Under
Contract

Lender has been provided the legal description,
boundary survey, environmental report, site
plan, recorded deed & mortgage, endorsement to
title insurance, and other closing documentation
required. Land use is in place for construction
of the Improvements.
	 	 	50% of lesser of
(i) LTV, or (ii)
LTC
	 	 	$	10,000,000	 	 
	 	B)

	 	 	Undeveloped Land owned by Borrower Under Contract
for Sale

Lender has been provided purchase contract,
legal description, plat or sketch, environmental
report, site plan, recorded deed & mortgage,
endorsement to title insurance, and other
closing documentation required. Land use is in
place for construction of the Improvements.
	 	 	65% of lesser of
(i) LTV, or (ii)
LTC
	 	 	$	40,000,000	 	 
	 	C)

	 	 	Land Under Development Under Contract

Lender has been provided purchase contract,
final DRI Development Order, master PUD master
engineering, permitting, and site plan approved
by Lender and Lender provided with a copy of
approved preliminary plat for parcel to be
developed. Sitework fully permitted, sitework
construction in progress.
	 	 	the lesser of (i)
75% of LTV of the
Improvements “As-If
developed” or (ii)
80% of LTC on LUD
subject to a
contract for sale
	 	 	$	10,000,000	 	 
	 

     2. Eligibility Limitations Under Borrowing Base. Eligibility under the Borrowing
Base will be further limited as follows:

12

 

          (a) For “Undeveloped Land” owned by the Borrower (Sub-Limit Classification A), eligibility
will be limited by the following:

(i) Undeveloped Land identified for use as golf course, amenities,
parks, retention, preserve or other non-development uses for sale
or rental use, or any other property designated as non-master
planned community or property to be deeded to a master property
owners association, an improvement district or a CDD other third
party, is not eligible for the Borrowing Base once it has been
identified and/or Borrower is contractually obligated to convey
the property.

          (b) Any CDD Bond (net of adjustments) will be deducted from the applicable Margined Value (as
hereinafter defined).

          (c) The formation of a CDD or modifications of the conditions of or new funding by an existing
CDD on any part of the Property will require the reasonable consent of the Lender. The Lender
reserves the rights to secure an appraisal update and/or modify the Advance Rate(s) set forth in
Section 1 above with respect to the Property under the Borrowing Base on any portion of the
Property submitted to a CDD. The Borrower shall use best efforts to obtain from the CDD quarterly
internally prepared financial reports and annual audited financial statements; and to cause the
internally prepared reports to be certified. The Borrower shall provide such reports to Lender
within thirty (30) days of receipt by Borrower. Lender acknowledges that any Property under the
Borrowing Base submitted to a CDD will be subject to assessments imposed by the CDD.

          (d) Notwithstanding the foregoing Borrower Base Matrix, if any Land is optioned, contracted or
owned for a period in excess of two (2) years prior to the Closing Date of the Loan, the Maximum
Advance Availability will be based on the LTV Advance Rates and not the LTC Advance Rates listed in
the Borrowing Base Matrix.

     3. Borrowing Base Administration.

          (a) The Lender shall be responsible for administering the Borrowing Base. The following
reports shall be submitted by Borrower on monthly basis on forms and with such supporting
documentation as the Lender shall reasonably require: (i) a Borrowing Base Report (the Initial
Borrowing Base Report shall be used for the determination of the Maximum Advance Availability under
the Borrowing Base for the first quarter); (ii) an Inventory Report; (iii) Work in Progress Report;
and (iv) any other information required by Lender in Lender’s reasonable discretion.

          (b) Additions, reclassifications, and all partial releases of Property under the Borrowing
Base will be processed by the Lender, with assistance from counsel, as requested by the Lender, at
the Borrower’s expense.

          (c) Phase I environmental reports (or participation in Lender’s Environmental Collateral
Protection Program) shall be required on any new real property mortgaged to the Lender, to be
reviewed and determined to be acceptable by the Lender, in the Lender’s

13

 

reasonable discretion. The Lender may accept existing Phase I reports, subject to its review
and acceptance at Lender’s sole and absolute discretion.

          (d) Additions to the Property to be considered eligible for the Borrowing Base must be
acceptable to the Lender in accordance with the requirements set forth in this Loan Agreement, in
Lender’s reasonable discretion, and documented in the same manner as required with respect to the
Property under the terms of this Loan Agreement and the Commitment, and must include, but not
limited to:

               (1) Recorded mortgage spreader and advance documents as reasonably required by Lender’s
counsel.

               (2) Title policies endorsed advancing the effective date of the Lender’s Title Policy,
insuring that no adverse matters have appeared of record since the prior effective date, and adding
such real property insured under Lender’s first priority mortgage subject to any Permitted
Exceptions.

               (3) Recorded plat, if applicable, and a certified boundary survey of the Property then being
encumbered.

               (4) Appraisal in satisfactory form and content in Lender’s sole and absolute discretion.

               (5) Phase I environmental report in satisfactory form and content in Lender’s reasonable
discretion (or participation in Lender’s Environmental Collateral Protection Program).

               (6) Evidence satisfactory to the Lender of Sub-Limit Classification status as defined in the
Borrowing Base.

               (7) Written confirmation of Lender’s counsel that documentation received is acceptable in
order to add the proposed real property to the Borrowing Base.

               (8) If required by Lender, the Lender’s Inspector has performed any required project permit
review, cost/design review, development rights review and/or progress inspections of any Land Under
Development. Borrower will provide copies of progress/development status reports from project
engineers, plans and specification, permits, development orders, and other information the Lender
may reasonably require to validate collateral eligibility under the Borrowing Base. Borrower shall
reimburse the Lender for the cost of the Lender’s Inspector.

          (e) Reclassifications of eligible Land will require:

               (1) Evidence satisfactory to the Lender of Sub-Limit Classification status and Maximum Advance
Availability as defined in the Borrowing Base, including but not limited to, copies of approved
and/or recorded plats, if any, endorsement advancing the effective date of the Lender’s Title
Policy and insuring that no adverse matters have appeared of record since the prior effective date,
whatever affidavits and/or surveys required by title agent in order

14

 

to delete any exceptions for survey matters on the title endorsement, which may include, a
surveyor’s affidavit or updated certified boundary survey (if original boundary survey provided is
dated more than ninety (90) days prior to reclassification request), site plans, if any, permits,
licenses and other approvals as appropriate. The Borrower shall pay for the reasonable fees and
costs for the review of such documentation, including Lender’s reasonable attorneys’ fees and costs
and Lender’s Inspector’s fees and costs.

               (2) Appraisal update (if applicable).

          (f) Deletions or partial releases of portions of Land eligible under the Borrowing Base will
be executed by the Lender upon submission of:

               (1) Partial release and attached legal description.

               (2) If unplatted, at Lender’s request, a boundary survey or sketch.

               (3) Compliance with Paragraph 4 below.

     4. Release Prices. Partial releases will be executed by the Lender without the
requirement for payment of a “Release Price” so long as: (a) there is no uncured Default; (b) the
Lot, development parcel, or other Property to be released is not needed in the Borrowing Base to
support outstanding borrowings, any Letters of Credit issued, or any other exposure; and (c) the
partial release does not negatively impact in any way the value or use of the remaining collateral.
Without limiting the foregoing, Lender acknowledges that Borrower may request, from time to time,
releases for parks, roads, and other non-developable portions of the Property including, but not
limited to, conveyances to property owners associations, CDDs and Governmental Authorities without
payment of a Release Price so long as the requirements for nonpayment of a Release Price contained
in this provision are satisfied. If release of a Lot or development parcel would result in the
amounts outstanding under the Loans being in excess of the Margined Value, the partial release may
be denied or (i) a reduction of principal outstanding to the Margined Value or (ii) an increase in
the Collateral to the Margined Value may be required by the Lender as a condition to the partial
release. Partial Releases will reduce availability in the Borrowing Base by the Margined Value of
the property released. The Borrower shall be required to provide Lender with Partial and Final Lien
Waivers (as applicable) from any party filing a Notice to Owner on any Land encumbered by Lender.

     5. Plats and Consents. Lender acknowledges that Lender will be required to execute
and consent to certain plats, certain easements, declarations and other development documents in
connection with the development of the Land. Lender agrees to execute all such documents, after
Lender’s review and approval of same, such approval not to be unreasonably withheld or delayed
without payment of any Release Price or other consideration. Without limiting the foregoing,
Lender agrees to join in all plats and subordinate the lien of the mortgage to any dedications
provided on such plats and to execute such documents as may be reasonably required from Borrower
with respect to any of the following: (i) recordation of any declaration of covenants and
restrictions for all or any portion of the Property; (ii) formation of any CDD for all or any
portion of the Property; (iii) any easement, license or other grant or conveyance to any
Governmental Authority or utility company; (iii) any dedication, reservation or other restriction

15

 

provided on a plat, and (iv) such other authorizations, consents and joinders as may be
required to obtain the further development approvals with respect to the Property.

ARTICLE VI.

METHOD AND CONDITIONS OF DISBURSEMENT OF LOAN PROCEEDS

     1. Revolving Loan. The purpose of the Revolving Loan is to provide financing under
the Borrowing Base as provided in Article V above.

     2. Loan Requisitions.

          (a) All Requisitions for proceeds of the Loan under Sub-Limit Classifications shall be
disbursed to Borrower upon request in accordance with this Loan Agreement, subject only to the
following limitations: (i) Borrower is in compliance with the terms and conditions of this Loan
Agreement and the Loan Documents including, but not limited to, the Financial and Operating
Statements contained in this Loan Agreement; (ii) there is availability under the Borrowing Base
considering any limitations set forth in Article V hereof; and (iii) no Default shall have occurred
and be uncured as of the date of the funding request.

          (b) Notwithstanding the foregoing, in the event funding on the Borrowing Base exceeds the
amount permitted by an inspection audit as performed by Lender’s Inspector, Borrower must, within
twenty (20) business days after notification by Lender, either (i) reduce the loan balance to the
amount documented by the audit, or (ii) provide additional collateral acceptable to the Lender in
accordance with this Loan Agreement at a value (based on Advance Rates as noted in the Borrowing
Base Matrix) that would support the current Borrowing Base funding.

     3. Solvency. At such time as Borrower shall desire to obtain a disbursement of any
portion of the Loan proceeds, Lender may require, in its reasonable discretion, that Lender be
provided with satisfactory evidence that there is not pending against Borrower a petition in
bankruptcy, whether voluntary or otherwise, any assignment for the benefit of creditors, any
petition seeking reorganization or arrangements under the Federal bankruptcy laws of the United
States or of any other action brought under the aforesaid bankruptcy laws. Such evidence shall be
in the form of affidavits signed by an officer of Borrower.

     4. Access to Streets. Lender shall not make any disbursement for construction of the
Improvements for any Land Under Development if the Land Under Development shall not have legal and
insurable access which may include an easement providing such access. Lender acknowledges and
agrees that legal access to any Land Under Development will be constructed contemporaneously with
the Improvements.

     5. Final Disbursement Date. Subject to other provisions of this Article, Lender shall
not be required to make any disbursement from the proceeds of this Loan later than the Loan
Maturity Date.

     6. Lien Priority as Prerequisite for Funding. As of the date hereof, the Mortgage
shall be of first lien priority as to the Property. Lender shall in no event disburse funds from
the

16

 

Loan proceeds unless (a) the Mortgage then shall constitute a first lien on such Property
subject to the Permitted Exceptions and (b) there shall exist no other lien of any sort, whether
prior or inferior, than the lien of the Mortgage with respect to the Property other than the
Permitted Exceptions.

     7. Conditions Precedent to Each Disbursement of the Loan. At no time and in no event
shall Lender be obligated to disburse funds if any Default as described herein or in the Mortgage
shall have occurred and shall not have been cured prior to the expiration of any applicable cure
period.

     8. Notice, Frequency and Place of Disbursements. At Lender’s option (a) the
above-said Requisition shall be submitted to Lender at least three (3) business days prior to the
date of the requested advance, (b) disbursement shall be made no more frequently than bi-monthly,
and (c) all disbursements as to the Loan shall be made by transfer to Borrower’s account at Lender
or at such other place as Borrower may designate from time to time.

     9. Advances Do Not Constitute a Waiver. No advance of Loan proceeds hereunder shall
constitute a waiver of any of the conditions of Lender’s obligation to make further advances, nor
in the event Borrower is unable to satisfy any such condition, shall any such waiver have the
effect of precluding Lender from thereafter declaring such inability to be an Event of Default
described herein or in the Mortgage.

     10. Letters of Credit. At the request of Borrower and provided that a Default does
not exist, the Lender shall issue, pursuant to the requirements of the Revolving Loan and in
accordance with the Borrowing Base procedures of Article V, stand-by Letters of Credit in favor of
governmental authorities in order to serve as performance bonds for Borrower’s development of real
property. Prior to issuance of a Letter of Credit by the Lender and at such time as a Letter of
Credit is requested by Borrower for the benefit of any real property being developed with proceeds
of the Loan:

          (a) Borrower shall execute an Application and Agreement for Irrevocable Standby Letter(s) of
Credit;

          (b) The amount advanced by Lender under such Letter of Credit shall be secured by the
applicable Mortgage and guaranteed by the applicable Guarantor;

          (c) Borrower shall pay to Bank upon issuance of the Letter of Credit a fee of 1/2 of 1% of the
face amount of such Letter of Credit (and thereafter upon any annual renewal);

          (d) The Letter of Credit shall contain a thirty (30) day cancellation by Bank provision and
shall have an expiration date no later than twelve (12) months (with annual renewal options upon
payment of a renewal fee);

          (e) Any sums paid by Bank under the Letter of Credit shall initially accrue interest at the
Loan interest rate provided in the Note and such sum, together with accrued interest to the extent
it exceeds the Borrowing Base, shall be repaid by Borrower within five (5) business days from
receipt of notice from Bank that the Letter of Credit (or portions thereof) have been paid;

17

 

          (f) In the event the Letter of Credit is paid by Bank (and not repaid by Borrower as provided
immediately above), such payment shall be deemed by Bank as a Default by Borrower under the Loan
and interest shall commence to accrue on the amount of such payment at the Default Rate of Interest
provided in the Note; and

          (g) The applicable Mortgage shall not be satisfied until all Letters of Credit relating to
such Property are returned to Bank or the Letters of Credit are secured by cash or other collateral
acceptable to Bank in its reasonable discretion.

If at any time Borrower requests a reduction or cancellation in the amount of any Letter of Credit
issued by the Lender, Borrower must present written authorization in substance acceptable to the
Lender from the beneficiary of such Letter of Credit approving the reduction and the amount so
reduced. Any Letter of Credit issued shall reduce the Borrowing Base Availability by the amount of
the letter of credit issued.

ARTICLE VII.

WARRANTIES AND REPRESENTATIONS OF BORROWER

     As material inducements to Lender to enter into this Loan Agreement and to make the Loan,
Borrower hereby warrants and represents to Lender as follows:

          (a) Validity of Loan Documents. That the Loan Documents are in all respects legal,
valid and binding according to their terms and grant to Lender a direct, valid and enforceable
first lien security interest in the Property and the personalty located thereon subject only to
bankruptcy, insolvency and other similar laws affecting the rights of creditors.

          (b) Priority of Lien on Personalty. That no bill of sale, security agreement,
financing statement or other title retention agreement (except those executed in favor of Lender)
has or will be executed with respect to any personal property, equipment or fixtures used in
conjunction with the construction, operation or maintenance of the Improvements located on the
Property owned by Borrower other than Improvements for a CDD.

          (c) Conflicting Transactions of Borrower. That the consummation of the transactions
hereby contemplated and the performance of Borrower’s obligations under and by virtue of the Loan
Documents will not result, to the best of Borrower’s knowledge, in any breach of, or constitute a
default under any mortgage, security deed, deed of trust, lease, bank loan or credit agreement,
corporate charter or bylaws or other instrument to which Borrower is a party or by which it may be
bound or affected.

          (d) Pending Litigation. That there are no actions, suits or proceedings pending or,
to the knowledge of Borrower, threatened against or affecting Borrower which adversely affects any
of the Property securing the Loan in any material respect, or involving the validity or
enforceability of any of the Loan Documents or the priority of the lien thereof, at law or in
equity, or before or by any governmental authority, except actions, suits and proceedings which are
fully covered by insurance and which, if adversely determined, would not substantially impair
Borrower’s ability to perform each and every one of its obligations under and by virtue of the
Loan Documents; and that to Borrower’s knowledge, it is not in default with respect to any

18

 

order, writ, injunction, decree or demand of any court or any governmental authority that
would have a material adverse affect on Borrower’s ability to repay the Loan.

          (e) Violations of Governmental Law, Ordinances or Regulations. That Borrower has no
knowledge of any material violation or notice of violations of any federal or state law or
municipal ordinance or order or requirement of, or agreement with, the County or City or any
municipal department or other governmental authority having jurisdiction affecting the Property,
which violations in any way relate to or affect the Property.

          (f) Compliance with Zoning Ordinances, Building Codes, and Similar Laws. That as a
condition of funding a Requisition for any Land Under Development, the proposed Improvements to be
developed thereon will have been approved by all appropriate Governmental and quasi-Governmental
Authorities and all applicable permits will have been issued pursuant to all applicable building
codes. Borrower is familiar, has complied, and will comply with all of the laws, regulations,
codes, ordinances, and development orders and resolutions applicable to the Property and
construction of the Improvements on any Land Under Development. The Land Under Development is and
will be in full compliance with all requirements of any and all existing Development Order(s),
resolutions and approvals; and the Borrower has satisfied all conditions to such Development
Order(s), resolutions and approvals. As a condition of funding any Requisition for any Land Under
Development, Borrower shall have obtained, all permits, licenses and approvals necessary to
construct the Improvements in accordance with all laws, including those pertaining to land use, and
Borrower has delivered or will deliver promptly upon receipt, true and accurate copies of all such
permits, licenses, and approvals to Lender.

          (g) Availability of Utilities. That all utility services necessary for the
construction of the Improvements on any Land Under Development are or will be available at the
boundaries of the Land, including water supply, storm and sanitary sewer facilities, electric,
telephone facilities, cable television, and trash/dumpster services (“Utilities”) at the time of a
funding request.

          (h) Development Approvals and Building Permits. That all development approvals,
permits, licenses and requirements as applicable for any work then to be funded by Lender with
respect to any Property as noted in the relevant Sub-Limit Classification under the Borrowing Base
shall have been obtained as a condition of funding at the Advance Rate noted in the Borrowing Base
Matrix for such Sub-Limit Classification. By submitting a Due Diligence Report and an updated
Borrowing Base Report, the Borrower shall be deemed to have represented to Lender that the state of
facts set forth therein are true and correct in all respects, and that Lender may rely on such Due
Diligence Report and Borrowing Base Report in funding the Loan pursuant to and in accordance with
the Loan Documents, without further inquiry or investigation. Borrower shall deliver copies of all
issued approvals, licenses, permits and other evidence of the satisfaction of governmental
requirements to Lender as a condition of funding and in order to verify the requirements under the
applicable Sub-limit Classification as noted in the Borrowing Base Matrix. For any Land Under
Development, that the Property is vested both for concurrency requirements and under any
Preliminary Development Agreement or DRI Development Order, all necessary density units and uses
are vested with respect to the Improvements, and that the use complies with such DRI Development
Order. The Borrower

19

 

shall deliver to Lender, as obtained, copies of all plats, approvals, and permits as issued by
the applicable governmental authority.

          (i) Condition of Property. That the Property is not now damaged or injured as a
result of any fire, explosion, accident, flood or other casualty and remains in substantially the
same condition as existed on the date of the Appraisal other than preparation of the Land for any
improvements to be constructed. To Borrower’s knowledge, the Property does not contain significant
amount of muck or organic materials which would adversely affect the appraised value of such land
below that required by this Agreement and significant amounts of off-site fill are not required.

          (j) Brokerage Commissions. That any brokerage commission due in connection with the
transaction contemplated hereby has been paid in full and that any such commission coming due in
the future will be paid promptly by Borrower. Borrower agrees to and shall indemnify Lender from
any liability, claim or loss arising by reason of any such brokerage commission. This provision
shall survive the repayment of the Loan and shall continue in full force and effect so long as the
possibility of such liability, claim or loss exists.

          (k) Usury. That the amounts to be received by Lender which are or which may be deemed
to be interest hereunder or under any of the Loan Documents or otherwise in connection with the
transactions herein contemplated constitute lawful interest and are not usurious or illegal under
the laws of the State of Florida, and no aspect of the transactions contemplated by this Loan
Agreement is or will be usurious under current Florida law.

          (l) Accuracy of Information. That Lender’s commitment to make the Loan, as expressed
in the Commitment is based on the accuracy of Borrower’s representations and statements. Neither
this Loan Agreement nor any document, financial statement, credit information, certificate or
statement required herein to be furnished or furnished to Lender contains any untrue statement of a
material fact or omits to state a fact material to this Loan Agreement or to Lender’s decision to
enter into this Loan Agreement or the transaction contemplated hereunder. Lender shall have the
option to declare the Commitment to be breached if there shall have been any material
misrepresentation or misstatement or any material error in any statement, document or other
submission delivered to Lender, or if prior to the initial Loan disbursement, there shall have been
a material adverse change in the state of facts submitted to Lender, or Borrower or any Guarantor
has become insolvent, bankrupt or incapacitated, or has otherwise been subject to any material
adverse change in financial condition.

          (m) Set-Offs. That Borrower and Guarantor do not currently have any defense or
set-off with respect to any money disbursed or otherwise advanced or to be advanced hereunder.

          (n) Investment Company. That Borrower represents and warrants that Borrower is not an
investment company as defined by the Investment Company Act of 1940, as amended, and that Borrower
is not required to register under said Act.

20

 

          (o) Continuation and Investigation. That the warranties and representations contained
herein shall be and remain true and correct so long as any of Borrower’s or any Guarantor’s
obligations hereunder have not been satisfied, or so long as part of the Loan shall remain
outstanding, and each request by Borrower for a disbursement or extension of the Loan shall
constitute an affirmation that the foregoing representations and warranties remain true and correct
as of the date thereof. All representations, warranties, covenants and agreements made herein or
in any certificate or other document delivered to Lender by or on behalf of Borrower pursuant to
or in connection with this Loan Agreement shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf, and
shall survive the making of any or all of the disbursements contemplated hereby.

          (p) Hazardous Substances.

               (1) Borrower and Guarantor represent and warrant to Lender the following:

                    (i) that Borrower and Guarantor have made all due inquiry and investigation into the present
condition of the Property and the previous ownership and uses of the Property consistent with good
commercial or customary practice in an effort to minimize liability with respect to “Hazardous
Substances”, as that term is defined herein;

                    (ii) that neither Borrower, any Guarantor, nor any other person to the Borrower’s and
Guarantor’ knowledge, after all due inquiry and investigation, has ever used the Property as a
facility for the manufacture, processing, distribution, use, transport, handling, storage,
treatment or disposal of any Hazardous Substances, and Borrower and Guarantor will not in the
future use the Property for any such purposes;

                    (iii) that the Property, to the best of Borrower’s and Guarantor’s knowledge, is now and at
all times hereafter will continue to be in full compliance with all federal, state and local
“Environmental Laws” (as that term is defined herein);

                    (iv) that to the best of Borrower’s and Guarantor’s knowledge, as of the date hereof, there
are no hazardous or toxic materials, substances, wastes or other environmentally regulated
substances (including solids or gaseous products and any materials containing asbestos) in
violation of Environmental Laws, the presence of which is limited, regulated or prohibited by any
state, federal or local governmental authority or agency having jurisdiction over the Property, or
which are otherwise known to pose a hazard to health or safety of occupants of the Property,
located on, in or under the Property or used in connection therewith; and any aboveground or
underground storage tanks on the Property have been properly registered with the Florida Department
of Environmental Regulation and are in material compliance with the standards for stationary tanks
contained in Chapter 17-761 or 17-762, Florida Administrative Code, any local tank regulation
program authorized under Chapter 17-63, Florida Administrative Code, and regulations for
underground storage tanks promulgated by the U.S. Environmental Protection Agency in 40 CFR Part
280. Borrower and Guarantor further represent that to the best of each other’s knowledge there has
never been a discharge, as that term is defined in Rule 17-761.200(33)(b), F.A.C., of any
pollutants, contaminants or petroleum products from any of the aboveground or underground storage
tanks and the Property has never

21

 

been the subject of a petroleum contamination site cleanup or remediation under Chapter
17-770, Florida Administrative Code, or other applicable environmental law;

                    (v) that Borrower and/or Guarantor shall promptly notify Lender in writing of any change in
the nature or extent of any Hazardous Substances or toxic materials, substances or wastes
maintained on, in or under the Property or used in connection therewith, and will transmit to
Lender copies of any citations, orders, notices, liens, or other material governmental or other
communication received with respect to any other hazardous materials, substances, wastes or other
environmentally regulated substances affecting the Property; and Borrower and Guarantor shall not
cause or permit to exist, as a result of an intentional or unintentional act or omission on its
part, a releasing, discharging, spilling, leaking, pumping, emitting, pouring, emptying or dumping
of a Hazardous Substance from the Property into waters or onto lands of the State of Florida or the
waters of the United States, or into waters outside the jurisdiction of the State of Florida where
damage may result to the lands, waters, fish, shellfish, wildlife, biota, air and other resources
owned, managed, held in trust or otherwise controlled by the State of Florida or the United States,
unless said release, discharge, spill, leak, pump, emission, pouring, emptying or dumping, etc. is
pursuant to and in compliance with the conditions of a permit issued by the appropriate federal,
state or local governmental authorities;

                    (vi) that Borrower and Guarantor are not aware of, nor have the Borrower, Guarantor, or any
subsidiary or affiliated entities, received notice of, any past, present or future events,
conditions, circumstances, activities, practices, incidents, actions or plans which may interfere
with or prevent compliance or continued compliance with Environmental Laws or any ordinance,
regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, or which may give rise to any common law or legal
liability, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing,
study or investigation, based on or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling, or the emission, discharge, release or
threatened release into the environment, of any Hazardous Substance; and

                    (vii) that there is no civil, criminal or administrative action, suit, demand, claim, hearing,
notice or demand letter, notice of violation, investigation, or proceeding pending or threatened
against Borrower, Guarantor, or the Property, relating in any way to any Environmental Laws or any
regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder.

               (2) Borrower and Guarantor shall, at their own cost and expense, take all actions as shall be
necessary or advisable for the clean-up of the Property, including all removal, containment and
remedial actions in accordance with all applicable Environmental Laws, and shall further pay or
cause to be paid at no expense to Lender all clean-up, administrative, and enforcement costs of
applicable governmental agencies which may be asserted against the Property or the owner thereof.

               (3) Borrower and Guarantor hereby agree to indemnify, reimburse, defend and hold harmless
Lender, its officers, directors, employees, successors and assigns from and against all demands,
claims, civil or criminal actions or causes of action, liens, assessments, civil or criminal
penalties or fines, losses, damages, liabilities, obligations, costs, disbursements,

22

 

expenses or fees of any kind or of any nature (including, without limitation, cleanup costs,
attorneys’, consultants’ or experts’ fees and disbursements and costs of litigation at trial and
appellate levels) which may at any time be imposed upon, incurred by or asserted or awarded
against, Lender directly or indirectly, resulting from: (i) any acts or activities of Borrower,
its agents, employees or contractors, at, on or about the Property which contaminate air, soils,
surface waters or groundwaters over, on or under the Property; (ii) arising from or out of any
Hazardous Substance on, in or under the Property; (iii) pursuant to or in connection with the
application of any Environmental Law to the acts or omissions of Borrower or any other person and
any environmental damage alleged to have been caused, in whole or in part, by the transportation,
treatment, storage, or disposal of any Hazardous Substance; or (iv) arising from or in relation to
the presence, whether past, present or future, of any Hazardous Substances on the Property.

               (4) Without limiting the foregoing, this indemnification provision specifically protects the
Lender against any claim or action from activities described in (i), (ii), (iii) or (iv) above,
based in whole or in part upon any Environmental Law, environmental statute, rule, regulation or
policy, CERCLA and RCRA (as may be amended from time to time), and other laws, whether now in
existence or enacted in the future.

               (5) Borrower’s and Guarantor’s indemnification obligations hereunder shall be one of strict
liability and shall be enforceable without regard to any fault or knowledge of Borrower or
Guarantor with respect to any act or omission or condition or event which is the basis of the claim
under such indemnification obligation. Borrower’s and Guarantor’s obligation under this Paragraph
shall not be limited to any extent by the term of the Note or other obligations secured hereby, and
such obligation shall continue, survive and remain in full force and effect notwithstanding payment
in full or other satisfaction or release therefrom but shall not apply to the gross negligence or
willful misconduct of Lender or events arising after foreclosure or deed in lieu of foreclosure.
The provisions of this Paragraph shall be deemed to survive and continue in full force and effect
after any foreclosure or other proceeding by which the Lender, and its successors and assigns
succeed to ownership of the Property.

               (6) Those liabilities, losses, claims, damages and expenses for which Lender is indemnified
under this Paragraph shall be reimbursable to Lender at Lender’s option to make payments with
respect thereto, without any requirement of waiting for the ultimate outcome of any litigation,
claim or other proceeding, and Borrower and Guarantor shall, jointly and severally, pay such
liability, losses, claims, damages and expenses to Lender as so incurred within thirty (30) days
after notice from Lender itemizing the amounts incurred to the date of such notice. In addition to
any remedy available for failure to periodically pay such amounts, such amounts shall after such
thirty (30) day period bear interest at the “Default Rate” as defined in the Loan Documents.

               (7) Borrower and Guarantor waive any acceptance of this indemnity by Lender. The failure of
Lender to enforce any right or remedy hereunder, or to promptly enforce any such right or remedy,
shall not constitute a waiver thereof nor give rise to any estoppel against Lender, nor excuse
Borrower from their obligations hereunder. Any waiver of such right or remedy must be in writing
and signed by Lender. This indemnity is subject to enforcement at law and/or equity, including
actions for damages and/or specific performance.

23

 

               (8) Lender shall have the right, in its sole discretion, to require Borrower to periodically
perform (at Borrower’s and Guarantor’s expense) an environmental audit (if Lender reasonably
suspects the presence of Hazardous Substances or violation of Environmental Laws, if a notice of
violation is sent by any governmental authority, or if any governmental authority, including those
regulating financial institutions, should require such) and, if deemed necessary by Lender due to
the foregoing, an environmental risk assessment, each of which must be satisfactory to Lender in
its sole discretion, of the Property, hazardous waste management practices and/or hazardous waste
disposal sites used by Borrower. Such audit and/or risk assessment must be by an environmental
consultant satisfactory to Lender. Should Borrower fail to perform such environmental audit or
risk assessment within 30 days of the Lender’s written request, Lender shall have the right but not
the obligation to retain an environmental consultant to perform such environmental audit or risk
assessment. All costs and expenses incurred by Lender in the exercise of such rights shall bear
interest at the default rate set forth in the Note and shall be secured by the Mortgage and shall
be payable by Borrower and Guarantor upon demand or charged to Borrower’s loan balance at the
discretion of the Lender.

               (9) Any breach of warranty, representation or agreement contained in this Paragraph shall be
an Event of Default hereunder and shall entitle Lender to exercise any and all remedies provided in
the Mortgage, or otherwise permitted by law. The warranties, representations, and indemnities made
by Borrower and/or any Guarantor in this Loan Agreement shall survive satisfaction of the Note and
Mortgage.

               (10) Notwithstanding the foregoing, each of the foregoing representations are qualified to the
extent that Borrower has provided Lender with written information, such as an environmental audit
disclosing any environmental conditions.

          (q) Financial Information. All financial information which has been and will be
delivered to Lender in connection with the Loan or pursuant to the Loan Documents, including all
information relating to the financial condition of Borrower, or any of its partners or
shareholders, and Guarantor, fairly and accurately represents the financial condition that is being
reported. All such information was prepared in accordance with generally accepted accounting
principles consistently applied, unless otherwise noted. There has been no material adverse change
in any financial condition reported at any time to Lender that would result in a violation of the
financial covenants applicable to such party. Borrower and Guarantor shall be required to execute
and deliver to Lender attestation forms as to all financial statements provided to the Lender,
which said attestation forms shall be executed by an authorized officer of the Borrower and
Guarantor, respectively.

          (r) Accuracy. All reports, documents, instruments, information and forms of evidence
which have been delivered to Lender concerning the Loan or required by the Loan Documents are
accurate, correct and sufficiently complete in all material respects to give Lender true and
accurate knowledge of their subject matter. None of them contains any misrepresentation or
omission.

          (s) Taxes. Borrower has, prior to delinquency, duly filed, paid and/or discharged all
taxes or other claims that may become a lien on any Property, except to the extent that such items
are being appropriately contested in good faith and an adequate reserve for the

24

 

payment thereof is being maintained. With regard to any other property or assets not subject
to this Loan, the nonpayment by Borrower or Guarantor of taxes or other claims that may be come a
lien on such other property or assets will not have a material adverse effect on the financial
covenants made by Borrower or Guarantor in this Loan Agreement.

          (t) Interest Rate Swap Security. During the term of the Loan, Borrower will be
provided with an option to hedge the Loan’s floating interest expense by entering into a future
interest rate swap (the “Swap”) with Lender contemporaneously with the closing of the Loan,
pursuant to which Borrower would receive the amount necessary to pay the interest expense due under
the Loan (exclusive of default interest or other adjustments provided for in the Loan Documents)
and would pay the amount that would be equal to the interest that would accrue on the Loan at a
fixed rate. Lender will provide this Swap to Borrower upon mutually agreeable terms. The actual
rate of the Swap would be subject to market conditions at the time the Swap is consummated. The
Swap would be governed by an ISDA Master Agreement and secured by the Collateral described in the
Loan Documents.. In the event that the Borrower exercises the Swap with Lender and in the event of
prepayment in whole or in part of the Loan, the Swap must be unwound and a “breakage fee” may be
due and payable to Lender.

          (u) Ownership of Borrower. The Borrower is owned and controlled by Guarantor, which
in turn is owned and controlled by Levitt Corporation.

ARTICLE VIII.

COVENANTS AND FURTHER AGREEMENTS OF BORROWER

     Borrower hereby covenants and agrees with Lender as follows:

     1. Loan Documents. To duly and punctually perform, observe and comply with all of the
terms, provisions, conditions, covenants and agreements on its part to be performed, observed and
complied with hereunder and under the Loan Documents and any other documents and instruments
delivered to Lender in connection herewith. Borrower will not suffer or permit any default or
Event of Default to exist hereunder or thereunder. Borrower will promptly give notice in writing to
Lender (a) of the occurrence of any material litigation or proceeding affecting Borrower and
whether or not Borrower’s liability, if any, is covered by insurance, and (b) of any dispute
between Borrower and any governmental or regulatory body or any other party, which dispute may
materially interfere with Borrower’s normal operations or with construction of the Improvements.

     2. Insurance. Borrower will procure for, deliver copies of and original certificates
of and maintain for the benefit of Lender during the life of the Mortgage, insurance policies in
such amounts as Lender shall reasonably require in accordance with the terms of the Mortgage and
required by the Loan Documents.

     3. Collection of Insurance Proceeds. To cooperate with Lender in obtaining for Lender
the benefits of any insurance or other proceeds lawfully or equitably payable to Borrower or Lender
in connection with the transactions contemplated hereby and in paying any indebtedness or
obligation of Borrower to Lender incurred hereunder (including the payment by

25

 

Borrower of the expense of an independent appraisal on behalf of Lender in case of a fire or
other casualty affecting the Property).

     4. Ad Valorem Tax and Assessments. If required by Lender, after the occurrence of and
during the continuance of any Default or if required by regulatory requirements, Borrower will pay
to Lender on the first (1st) day of each month, together with and in addition to the regular
installment of interest and principal and until the Note is fully paid, an amount equal to
one-twelfth (1/12th) of the estimated ad valorem real estate taxes to enable Lender to pay such
taxes when due. Such added payments shall not be nor be deemed to be trust funds, but may be
commingled with the general funds of Lender and Lender shall not pay interest on them. At the
option of Lender, such added payments may be carried as a debit item on Lender’s books and
accounts. Taxes and assessments for the Property shall be escrowed with the Lender in accordance
with the terms of the Mortgage.

     Upon demand of Lender, Borrower agrees to deliver to Lender such additional sums as are
necessary to make up any deficiencies in the amounts necessary to enable Lender to pay such real
estate taxes. Lender shall have no responsibility for payment of any premium for taxes hereunder,
except to the extent that funds are deposited by Borrower with Lender hereunder. In the event of a
default by Borrower in the performance of any of the terms, covenants and conditions in the
Mortgage, this Loan Agreement or the Note, Lender may, at Lender’s option, apply any amount then
held by Lender under this paragraph to the reduction of the indebtedness secured in the Mortgage.

     If Lender does not require the aforementioned escrow, Borrower shall pay such taxes before
such become delinquent and shall submit proof, on an annual basis, but no later than ten (10) days
after written request from Lender.

     5. Application of Loan Proceeds. Borrower shall be permitted to use the proceeds
under the Loan for any lawful business activities conducted by Borrower in the normal course of
Borrower’s real estate business in accordance with the terms and conditions of this Loan Agreement.

     6. Interest and Other Reserves. Intentionally Omitted.

     7. Expenses. To pay all costs of closing the Loan and incurred during the term of the
Loan and all expenses of Lender with respect thereto, including but not limited to fees of Lender’s
Inspector, the disbursing agent, reasonable attorneys’ fees and costs (including attorneys’ fees
and costs incurred by Lender subsequent to the closing of the Loan in connection with the
disbursement, administration, collection, restructure, amendment or transfer of the Loan),
advances, recording expenses, surveys, title insurance premiums, intangible taxes, documentary
stamps, sales taxes, surtax and other revenue fees, escrow fees, tax service and flood
certification fees, and Engineer’s costs and inspection fees, expenses of foreclosure (including
attorneys’ fees and costs); in the Loan and Letters of Credit by the Lender, and similar items,
and to allow all closing papers, Loan Documents and other legal matters to be subject to the
approval of Lender’s attorneys. Under no circumstances will Lender pay to any third party any
mortgage brokerage or other fees incurred in connection with this Loan and Borrower covenants and
agrees to indemnify Lender and hold Lender harmless from any and all

26

 

such claims for fees or commissions by third parties. Further, Borrower agrees to pay all of
Lender’s costs and attorneys’ fees, including all appellate litigation, involving any of such
claims.

     8. Borrower’s Equity Requirement. Intentionally Omitted.

     9. General Construction Requirements. Good workmanship and quality materials shall be
utilized. Quality of construction, consistent with the caliber of the Improvements and customary
building practices and industry standards, is of the essence. Borrower shall supply such sums of
money and perform such duties as may be necessary to complete the construction of the Improvements
pursuant to the approved Plans and Specifications and in full compliance with all terms and
conditions of the Loan Documents without liens, claims or assessments (actual or contingent)
asserted against the Property for any material, labor or other items furnished in connection
therewith, and all in full compliance with Florida law, and further in compliance with all
construction, use, building, zoning and other similar requirements of any pertinent governmental
authority. Borrower will provide to Lender evidence of satisfactory compliance with all of such
requirements upon request therefore by Lender. Completion of construction shall include, but not be
limited to, lot grading, and adequate sewer, water, electrical, gas, telephone and other utility
facilities at the boundary of the Lot.

     10. Access. The rights-of-way for all roads necessary for the full utilization of any
existing Improvements for their intended purposes, and sufficient to provide legal access to all
undeveloped Parcels have either been acquired by the master property owners association or
appropriate governmental authority or have been dedicated to public use and accepted by such master
property owners association or governmental authority (or are the subject of permanent easements
for ingress and egress, in form and substance satisfactory to Lender).

     11. Right of Lender to Inspect Property and Review Plans for any Land Under
Development. With regard to any Land Under Development, Lender and its representatives and
agents and any Lender’s construction inspector shall be permitted to enter upon the Property
regardless of whether such inspection is related to a specific Requisition, and to cooperate and
cause each Contractor, if any, to cooperate with Lender and its representatives and agents and
Lender’s Inspector during such inspections (including making available to Lender working copies of
the Plans and Specifications together with all related supplementary materials); provided, however,
that this provision shall not be deemed to impose upon Lender any obligation to undertake such
inspections. Lender may, in Lender’s sole discretion, designate a construction Inspector to
perform various services on behalf of Lender. The reasonable costs of these services shall be
charged to and shall be paid by Borrower. The services performed by Lender’s Inspector include but
are not limited to review of the Plans and Specifications, review of any and all other documents in
the possession or control of Borrower and all proposed changes to them, inspection of construction
work for the proposed Improvements and approval of requests for Loan disbursements.

     12. Changes in Plans and Specifications for Land Under Development.

          (a) Borrower must obtain from the appropriate persons or entities all approvals of any changes
in the plans, specifications, work, materials or contracts that are

27

 

required for any Land Under Development by any applicable laws, statutes or regulations, or by
any restrictive covenants encumbering the Property, or under the terms of any lease, loan
commitment or other agreement relating to the Property.

          (b) Lender may take such time as is reasonable to evaluate any requests for proposed changes
in the Plans and Specifications for any Land Under Development, and may require that all other
approvals required from other parties be obtained before it reviews any requested change. Lender
may approve or disapprove changes in the exercise of its reasonable judgment. Borrower
acknowledges that delays may result as a result of such time for approval by Lender, and Borrower
agrees that Lender shall not be liable for such delays and Borrower hold Lender harmless from and
against any claims, demands, damages, costs and expenses arising from such delay.

     13. Correction of Defects. For any Land Under Development, to promptly correct any
defect in the Improvements or any material departure from the Plans and Specifications not
permitted herein which has not been approved previously by Lender. The advance of any Loan
proceeds shall not constitute a waiver of Lender’s right to require compliance with this covenant.

     14. Sign Regarding Financing. During the development of any Improvements, and to the
extent permitted by the applicable ordinances and/or other restrictions, to promptly erect and
maintain on the Property, on a site suitable to Lender, a sign provided by Lender at Lender’s
expense, indicating that Lender is providing financing, all to Lender’s satisfaction, and to
prevent the destruction or removal of said sign without Lender’s prior written approval.

     15. Books and Records. To keep and maintain proper and accurate books, records and
accounts reflecting all items of income and expense of Borrower in connection with the Property and
the construction thereon; and upon the request of Lender, to make such books, records and accounts
immediately available to Lender, upon reasonable notice, for inspection or independent audit. Such
inspection shall take place in Borrower’s offices during normal business hours.

     16. Notification by Borrower. Borrower shall promptly notify Lender in writing of:

          (a) any litigation affecting Borrower, with amounts at issue of greater than $50,000.00 or
which seek attachment, levy, or foreclosure against any of the Property; or

          (b) any written communication that Borrower may receive from any governmental, judicial or
legal authority, giving notice of any claim or assertion that the Land or the Improvements fail in
any respect to comply with any applicable governmental law, regulation, ordinance or guidance;

          (c) any material adverse change in the physical condition of the Property (including any
damage suffered as a result of storms or floods) or the financial condition or operations of
Borrower or either Guarantor;

          (d) any actual or proposed condemnation or taking for public or private use which affects all
or part of the Property or any interest in it;

28

 

          (e) any actual or threatened exercise by any third party of any right or remedy on account of
any default or alleged default of Borrower under or with respect to any loan, contract or agreement
to which Borrower is a party, and which could have a material adverse effect upon Borrower or the
Property; and

          (f) any actual or proposed change in Borrower’s name or any trade name in which it does
business.

     17. Keeping Guarantor Informed. Borrower shall keep Guarantor informed of Borrower’s
financial condition and business operations, the condition and all uses of the Property; including
all changes in condition or use, and all other circumstances which may affect Borrower’s ability to
pay and perform its obligations under the Loan Documents. Guarantor acknowledges and agrees that
the Borrower’s failure to comply with the terms of this paragraph shall not limit, abrogate or
diminish, or constitute a defense to, the Guarantor’s liability to Lender under the guaranty or the
other Loan Documents.

     18. Financial and Operating Statements.

          (a) Borrower and Guarantor shall deliver to Lender, within thirty (30) days after the close of
each quarter, company prepared financial statements reflecting their operations during such fiscal
quarter, including, without limitation, a balance sheet, profit and loss statement and statement of
cash flows, with supporting schedules; all on a consolidated and consolidating basis and in
reasonable detail.

          (b) Borrower shall deliver to Lender, within one hundred twenty (120) days after the close of
its fiscal year, company prepared financial statements reflecting its operations during such fiscal
year, including, without limitation, a balance sheet, profit and loss statement and statement of
cash flows, with supporting schedules; all on a consolidated and consolidating basis and in
reasonable detail. Guarantor shall deliver to Wachovia, within one hundred twenty (120) days after
the close of its fiscal year, audited financial statements reflecting its operations during such
fiscal quarter, including, without limitation, a balance sheet, profit and loss statement and
statement of cash flows, with supporting schedules; all on a consolidated and consolidating basis
and in reasonable detail.

          (c) Borrower and Guarantor shall deliver to Lender, within thirty (30) days of filing,
complete copies of federal and state tax returns, as applicable if not filed on a consolidated
basis, each of which shall be signed and certified by Borrower or Guarantor to be true and complete
copies of such returns. In the event an extension is filed, Borrower or Guarantor shall deliver a
copy of the extension within thirty (30) days of filing. Notwithstanding the foregoing and in lieu
thereof, Guarantor may deliver to Lender, within thirty (30) days of filing, copies of the
applicable pages of the federal and state tax returns of the consolidated tax return of its parent,
Levitt Corporation, relating to the Guarantor.

          (d) Within ten (10) days of the end of each month, the Borrower shall provide to the Lender a
Lot Contracts Report for any Land Under Development and Undeveloped Land Owned by Borrower and
Under Contract for Sale to include among other things: sales, closings, contracts, reservations,
deposits, or additional documentation as required by the Lender in form

29

 

and substance satisfactory to the Lender. Each statement must contain a certification to the
Bank of the statement’s accuracy and completeness signed by an authorized officer as applicable.

          (e) Within ten (10) days of the end of each month, the Borrower shall provide to Lender, (i) a
Borrowing Base Report, (ii) an Inventory Report, (iii) a Work in Progress Report and (iv) a report
setting forth an advance availability calculation and Financial Covenant calculation (all
substantially in the form attached hereto as Composite Exhibit “C”). Each statement must
contain a certification to the Bank of the statement’s accuracy and completeness signed by an
authorized officer as applicable.

          (f) Borrower and Guarantor shall be required on a quarterly basis to provide to Lender a
“Compliance Certificate” in a form satisfactory to Lender, which shall be signed by its chief
financial officer, certifying that Borrower and Guarantor are in full compliance with all Financial
Covenants hereinafter required. Said Compliance Certificate shall show the actual calculations for
each covenant as applicable.

     All financial reporting is to be prepared in a form and substance acceptable to the Lender.
Each statement shall bear an authorized signature of an authorized officer of Borrower and each
Guarantor attesting to the Lender the accuracy of the statement.

     19. Monthly Inventory Reports for Residential Developments. Borrower shall provide
monthly inventory reports to Lender on all residential communities of the Borrower and its
subsidiaries and partnerships now existing or hereinafter formed, including any residential
developments not funded under this Revolving Loan.

     20. Bank Accounts. During the term of the Loan, Borrower shall maintain the following
accounts with Lender:

          (a) its primary operating account; and

          (b) a demand deposit account into which all Loan advances shall be deposited or credited.

     21. Financial Covenants. The Borrower and Guarantor shall at all times comply with
the following financial covenants, conditions and requirements (collectively, the “Financial
Covenants” each a “Financial Covenant”):

          (a) Asset Liquidity. At all times during the term of the Loan (and until such time as
all of the Borrower’s and Guarantor’s obligations under the Loan Documents have been fully paid and
satisfied), Guarantor shall maintain unencumbered and unrestricted liquid assets (in the form of
cash or negotiable securities and availability under the Borrowing Base), having a value of not
less than Seven Million Five Hundred Thousand and No/100 Dollars ($7,500,000.00) of which a minimum
of Two Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00) must be in cash.

          (b) Tangible Net Worth. At all times during the term of the Loan (and until such time
as all of the Borrower’s and Guarantor’s obligations under the Loan Documents have been fully paid
and/or satisfied), Guarantor shall maintain a minimum Tangible Net Worth of

30

 

$30,000,000.00 for the original two (2) year term. The Extension Term (as provided for in the
Note) is contingent upon Guarantor having a minimum Tangible Net Worth of $30,000,000.00 plus fifty
percent (50%) of all net income received by Guarantor for all years after the fiscal year ended
December 31, 2004, which shall be based upon the consolidated financial statements of Guarantor.

          (c) Leverage Covenant. At all times during the term of the Loan, the leverage
position of Guarantor shall not exceed a Maximum Debt to Tangible Net Worth ratio of 2.5:1.

     22. Updated Opinion of Counsel. To submit to Lender an opinion of counsel licensed in
the State of Florida and satisfactory to Lender covering such further matters regarding the
Property and the Loan, as Lender may reasonably require from time to time when additional Property
is added to the Borrowing Base.

     23. Development of Improvements. To furnish to Lender upon request (a) financial
statements of Borrower, and (b) other or further information as to the financial condition of
Borrower, and (c) the names of all persons with whom Borrower or any Contractor has contracted or
intends to contract for all Subcontracts for the construction of the Improvements or the furnishing
of labor or materials therefore on any Property, and (d) each and every other document and
instrument required to be furnished by the terms of the Commitment.

     24. Preservation of Security. To sign and deliver to Lender such documents,
instruments, assignments and other writings, and to do such other acts necessary or desirable to
preserve and protect the collateral at any time securing or intended to secure the Note, as Lender
may reasonably require.

     25. This Loan Agreement. To do and execute all and such further lawful and reasonable
acts, conveyances and assurances in the law for the better and more effective carrying out of the
intents and purposes of this Loan Agreement, as Lender shall require from time to time.

     26. Further Encumbrances. There shall be no secondary or further financing of the
real property now or hereafter located on the Property, or any part thereof, (other than CDD
financing), without Lender’s prior written consent, which consent Lender may arbitrarily withhold.

     27. Mortgagee Title Insurance. Other than the Permitted Exceptions, Borrower warrants
that there are no matters pending against Borrower or the Property which could result in a change
in the status of the title to the Property in the period of time between the effective date of the
commitment for mortgagee title insurance and the recording of the Mortgage (the “gap”). Borrower
covenants that it shall not commit any act or permit any act to be committed which might result in
a change in the status of the title to the Property during the gap other than the Permitted
Exceptions, and Borrower shall indemnify Lender and the title insurance agent and the title
insurance underwriter from any and all losses, costs and expenses (including reasonable attorneys’
fees and costs) suffered as a result of a change in the status of the title to the Property during
the gap.

31

 

     28. Warranties and Representations True. Borrower’s warranties, representations and
covenants in the Loan Documents shall be true and correct on and as of the date of each advance
with the same effect as if made on such date.

     29. Indemnity Regarding Construction and Other Risks.

          (a) Borrower shall indemnify and hold the Indemnified Parties (as defined in clause (c) below)
harmless from and against any and all Indemnified Costs (as defined in clause (d) below) directly
or indirectly arising out of or resulting from the transactions contemplated by this Loan Agreement
and construction of any Improvements on the Property, including any defective workmanship or
materials; or any failure to satisfy any requirements of any laws, regulations, ordinances,
governmental policies or standards, reports, leases or development agreements that apply or pertain
to any construction on the Property; or Lender’s performance of any act permitted under the Loan
Documents (excluding Lender’s gross negligence or willful misconduct or any matters arising after
foreclosure or deed in lieu thereof); or breach of any representation or warranty made or given by
Borrower to any of the Indemnified Parties or to any prospective or actual buyer or lessee of all
or any portion of the Property; or any claim or cause of action of any kind by any party that any
Indemnified Party is liable for any act or omission of Borrower or any other person or entity in
connection with the ownership, sale, leasing, construction, operation or development of the
Property.

          (b) Upon demand by any Indemnified Party, Borrower shall defend any investigation, action or
proceeding involving any Indemnified Costs which is brought or commenced against any Indemnified
Party, whether alone or together with Borrower or any other person, all at Borrower’s own cost and
with attorneys selected by Borrower, subject to the approval of Lender, such approval not to be
unreasonably withheld. In connection therewith, Borrower shall pay for the cost and expense of any
attorneys hired or engaged by an Indemnified Party to protect its interest and/or to oversee any
defense of the Indemnified Party by Borrower and its attorneys. In the alternative, any
Indemnified Party may elect to conduct its own defense at the expense of Borrower.

          (c) Notwithstanding any provision to the contrary set forth in any Loan Document, to the
fullest extent permitted by law, this paragraph shall survive repayment of the Loan and foreclosure
(whether by judicial process, reference proceeding or deed in lieu of foreclosure) of the Mortgage,
and following repayment or foreclosure all obligations of the Borrower under this paragraph shall
be unsecured obligations of the Borrower to the extent they are either unknown or unliquidated at
the time of such repayment or foreclosure.

     30. Commitment Fee. Borrower shall pay a non-refundable commitment fee of .625% of
the Loan Amount in the amount of $250,000 (“Commitment Fee”), payable as follows: (i) $156,250 due
upon acceptance of the Commitment, and (ii) $93,750 due if and when the Loan closes. The
Commitment Fee shall be considered earned upon Borrower’s acceptance of the Commitment. Borrower
acknowledges that the Commitment Fee is a liquidated damages amount and is reasonable compensation
to Lender for expenses, work and services arising from the negotiation and preparation of the
Commitment and preparing the Loan for closing.

32

 

     31. Additional Information. Borrower expressly authorize Lender to contact any
Architect, Engineer, Contractor or any Subcontractor, material supplier, surety or any governmental
authority or agency, to verify any information provided to Lender.

ARTICLE IX.

DEFAULTS

     Upon the occurrence of any one or more of the following circumstances (“Event(s) of Default”),
Lender shall, at its option, be entitled, in addition to and not in lieu of the remedies provided
for in the Note, Mortgage, or other Loan Documents, to proceed to exercise any remedy described
herein:

     1. Default Under Note. Failure by Borrower to pay, as and when due and payable, any
installment of principal or any other payment required to be paid by the Borrower, the Note, the
Mortgage or any other Loan Documents, and the same is not paid within five (5) days from when due
and payable; or

     2. Default Under Loan Documents. Failure by Borrower to duly observe any other
covenant, condition or agreement of the Mortgage, the Note, the Commitment, or any Loan Document or
any other security instrument given hereunder, and the same is not cured within twenty (20) days
from the date of written notice of such failure (however, if such nonperformance is not curable
within said twenty (20) day period and Borrower is diligently pursuing said cure, the cure period
shall be extended for up to an additional thirty (30) days); or

     3. Breach of Warranty. Any warranty made or agreed to be made herein or in any
related Loan Document heretofore, concurrently or hereafter executed shall be breached by Borrower
or shall prove to be false or misleading in any material respect; or

     4. Material Adverse Change. (a) Borrower shall suffer any material adverse change in
its financial condition which, in Lender’s sole opinion, could impair the ability of Borrower to
perform all of its duties and obligations under the Loan Documents (b) Guarantor shall suffer any
material adverse change in its financial condition that, in Lender’s sole opinion, would result in
a breach of a financial covenant made by Guarantor; or

     5. Levy upon the Property. A levy be made under any process on, or a receiver be
appointed for the Property; or

     6. Bankruptcy or Insolvency of Borrower.

          (a) The filing by Borrower (or any Guarantor) of a voluntary petition in bankruptcy for
adjudication as a bankrupt or insolvent, or the filing by Borrower (or any Guarantor) of any
petition or answer seeking or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under any present or future
federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other
relief for debtors, or Borrower (or any Guarantor) seeking or consenting to or acquiescing in the
appointment of any trustee, receiver or liquidator of Borrower (or any Guarantor) or of all or any
substantial part of the Property or of any or all of the rents, revenues, issues, earnings, profits
or

33

 

income thereof, or the making of any general assignment for the benefit of creditors, or
written admission by Borrower (or any Guarantor) of its inability to pay its debts generally as
they become due; or

          (b) The filing of a petition, and the same not being dismissed within seventy-five (75) days
from filing, against Borrower (or any Guarantor) seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any present or future
federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other
relief for debtors, or the appointment of any trustee, receiver or liquidator of Borrower (or any
Guarantor) or of all or any substantial part of the Property or of any or all of the rents,
revenues, issues, earnings, profits or income thereof without Borrower’s (or any Guarantor) consent
or acquiescence, or the dissolution of Borrower or any Guarantor; or

     7. Assignment for the Benefit of Creditors. Borrower shall make a general assignment
for the benefit of creditors; or

     8. Transfer of Property. Without the prior written consent of Bank in each instance,
Mortgagor shall not (i) sell, convey, transfer or encumber (other than as permitted under the
Permitted Exceptions) the Property, or any part thereof or interest therein, whether legal or
equitable, (ii) cause or permit any transfer of the Property or any part thereof, whether
voluntarily, involuntarily or by operation of law, or (iii) enter into any agreement or transaction
to transfer, or accomplish in form or substance a transfer, of the Property without releasing such
portion of the Property from the lien of the Mortgage at the time such Property is to be conveyed.
A “transfer” of the Property shall be as defined in the Mortgage; or

     9. Lien Against Property. Except as permitted by this Loan Agreement, Borrower grants
any mortgage, lien or encumbrance upon the Property other than the Permitted Exceptions; or

     10. Failure to Disprove Default. Lender shall suspect the occurrence of one or more
of the Defaults enumerated above, then Borrower, upon Lender’s written request specifying such
Default, shall fail to provide evidence reasonably satisfactory to Lender that such Default has not
in fact occurred; or

     11. Breach. A violation or breach by Borrower shall occur in any agreement, covenant
or restriction affecting title to the Property, including but not limited to matters appearing as
Permitted Exceptions in the Title Policy, and the same has not been cured with any applicable cure
period provided in the Loan Documents; or

     12. Letter of Credit. A draw under any Letter of Credit issued under this Loan by
Lender unless said draw is reimbursed as set forth in this Loan Agreement; or

     13. Financial Covenants. Failure to meet and to be in compliance with the Financial
Covenants set forth herein.

ARTICLE X.

REMEDIES OF LENDER

34

 

     Upon the occurrence of any one or more of the circumstances set out as a Default herein, which
are not cured with any applicable cure period (until said Default is cured and the cure accepted by
Lender in Lender’s sole and absolute discretion), Lender shall, at its option, be entitled, in
addition to and not in lieu of the remedies provided for in the Note, Mortgage or other related
Loan Documents, to proceed to exercise any of the following remedies:

     1. Default Constitutes Default Under Loan Documents. Borrower agrees that the
occurrence of a Default shall constitute a default under each of the Loan Documents, thereby
entitling Lender (a) to exercise any of the various remedies therein provided, including the
acceleration of the indebtedness evidenced by the Note and the foreclosure of the Mortgage, (b) to
set off and collect against any other collateral of Borrower, and (c) cumulatively to exercise all
other rights, options and privileges provided by law or in equity.

     2. Right of Lender to Assume Possession and to Complete Construction. Borrower
agrees, upon Lender’s request, to vacate the Property and permit Lender:

          (a) to enter into possession,

          (b) to employ security watchmen or otherwise to protect and secure the Property, and

          (c) to perform or cause to be performed any and all work and labor necessary to complete the
Improvements on any Land Under Development in accordance with the Plans and Specifications.

ARTICLE XI.

MISCELLANEOUS

     In the event of a conflict with other provisions of this Loan Agreement, the provisions of
this Article shall control.

     1. Binding Terms. All of the obligations, covenants, terms and conditions hereof
shall be binding obligations, covenants, terms and conditions throughout the term of this Loan.

     2. Bank Accounts. Borrower shall open and maintain during the entire term of this
Loan the accounts noted in Article VIII, Section 20, with respect to the Loan at Lender.

     3. Payment of Construction Costs. Lender shall be under no duty or obligation to
anyone to ascertain whether Borrower has used or will use the Loan proceeds for the payment of
bills incurred by Borrower in connection with the construction of the Improvements. Payment of all
bills for labor and materials in connection with the construction of the Improvements shall be
Borrower’s responsibility, and Lender’s sole obligation shall be to advance the proceeds of the
Loan subject to, and in accordance with this Loan Agreement.

     4. Notices To All Parties. All notices, statements, requests and demands given to or
made upon any party hereto in accordance with the provisions of this Loan Agreement shall be deemed
to have been given or made when hand delivered or when deposited in the Certified

35

 

Mails of the United States, Return Receipt Requested, postage prepaid, addressed to such party
at the address or addresses hereinabove stated following the names of the respective parties, or to
a different address in accordance with any unrevoked written direction from such party to the other
parties hereto, except in cases where it is expressly provided herein that such notice, request or
demand shall not be effective until received by the party to whom it is intended.

     5. No Partnership or Joint Venture. Nothing herein contained nor the acts of the
parties hereto shall be construed to create a partnership or joint venture between Borrower and
Lender, and the parties hereby acknowledge that no such relationship exists between them.

     6. No Assignment by Borrower. This Loan Agreement may not be assigned by Borrower
without the prior written consent of Lender in Lender’s sole discretion. If Lender approves an
assignment hereof by Borrower, Lender shall be entitled to make advances to such assignee and such
advances shall be evidenced by the Note and secured by the Mortgage and related Loan Documents.
Borrower shall remain liable for payment of all sums advanced hereunder before and after such
assignment and Guarantor shall remain liable under their respective guaranties.

     7. Usury. It is the intention of the parties to comply with all applicable usury
laws. Accordingly, it is agreed that notwithstanding any provision to the contrary in the Loan
Documents, in no event shall the Loan Documents require the payment or permit the collection of
interest in excess of the maximum amount permitted by such laws. If any such excess of interest is
contracted for, charged or received under the Loan Documents, or in the event the maturity of the
indebtedness evidenced by such Loan Documents is accelerated in whole or in part, so that under any
such circumstance, the amount of interest contracted for, charged or received shall exceed the
maximum amount of interest permitted by the applicable usury laws, then in any such event (a) the
provisions of this paragraph shall govern or control, (b) neither Borrower, nor any other person or
entity now or hereafter liable for repayment of the Loan shall be obligated to pay the amount of
such interest not permitted by the applicable usury laws, (c) any such excess which may have been
collected shall be refunded to Borrower and (d) the effective rate of interest for the Note shall
be automatically reduced to the maximum lawful rate allowed under applicable usury laws.

     8. Time. Time is of the essence of this Loan Agreement.

     9. Waiver. No waiver of any term, provision, condition, covenant or agreement herein
contained shall be effective unless set forth in a writing signed by Lender, and any such waiver
shall be effective only to the extent set forth in such writing. No failure by Lender to exercise,
or no delay by Lender in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof, or the exercise of any right or remedy provided by
law. No notice to or demand on Borrower in any case shall, in itself, entitle Borrower to any
other or further action in any circumstance without notice or demand.

     10. Conflict. The provisions of this Loan Agreement shall control in the event of any
conflict among it, the Commitment, the Note, the Mortgage and any other Loan Document.

36

 

     11. Additional Financing. The Lender’s obligation to fund this Loan is limited to the
principal amount set forth herein (if the Borrower satisfies all conditions thereto) and the Lender
is not obligated to fund any additional amounts other than as set forth herein. It is expressly
understood that Borrower have sought and agreed to the terms for repayment set forth herein and it
is the burden of the Borrower to provide any permanent financing, bridge financing, or other
financing which may be necessary to repay this Loan on or prior to the Revolving Loan Maturity Date
or the Loan Maturity Date, as applicable. It is expressly understood that it is not the
responsibility of the Lender to provide to Borrower further financing of the Property or the
repayment of this Loan.

ARTICLE XII.

GENERAL CONDITIONS

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

     1. Equity Requirements. Borrower and Lender acknowledge and agree that at all times
throughout the term of the Loan, Borrower remain solvent as defined in accordance with Unites
States’ generally accepted accounting principles.

     2. Evidence of Satisfaction of Conditions. Any condition of this Loan Agreement which
requires the submission of evidence of the existence or nonexistence of a specified fact or facts,
implies as a condition the existence or nonexistence, as the case may be, of such fact or facts,
and Lender shall, at all times, be free to establish independently and to its reasonable
satisfaction such existence or non-existence.

     3. Assignment. Lender shall have the unconditional right to assign all or any part of
its interest hereunder to any third party, but Borrower may not assign this Loan Agreement or any
of its rights or obligations hereunder without Lender’s prior written consent.

     4. Successors and Assigns Included in Parties. Whenever in this Loan Agreement one of
the parties hereto is named or referred to, the heirs, legal representatives, successors and
permitted assigns of such party shall be included, and all covenants and agreements contained in
this Loan Agreement by or on behalf of Borrower or by or on behalf of Lender shall bind and inure
to the benefit of their respective heirs, legal representatives, successors and permitted assigns,
whether so expressed or not. Upon the written request of Borrower and payment in cleared and
collected funds of all amounts due in connection with the Loan, Lender agrees to assign the Loan
Documents, without recourse or warranty other than as provided in the Loan Documents, to a party
identified by Borrower.

     5. Headings. The headings of the sections, paragraphs and subdivisions of this Loan
Agreement are for the convenience of reference only, are not to be considered a part hereof and
shall not limit or otherwise affect any of the terms hereof.

     6. Invalid Provisions to Affect No Others. If fulfillment of any provision hereof or
any transaction related hereto at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by law, then ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity; and if any clause or
provision herein

37

 

contained operates or would prospectively operate to invalidate this Loan Agreement in whole
or in part, then only such clause or provision shall be held for naught as though not herein
contained, and the remainder of this Loan Agreement shall remain operative and in full force and
effect.

     7. Number and Gender. Whenever the singular or plural number, masculine or feminine,
or neuter gender is used herein, it shall equally include the other.

     8. Amendments. Neither this Loan Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only by written instrument signed by the party against
whom enforcement of the change, waiver, discharge or termination is sought.

     9. Governing Law. This Loan Agreement shall be governed in its enforcement,
construction and interpretation by the laws of the State of Florida.

     10. Litigation. In the event any legal proceedings are instituted between the parties
concerning this Loan Agreement, the Note, the Mortgage, or any other Loan Documents, the Lender
shall be entitled to recover its costs of suit, including attorneys’ fees and expenses, at both
trial and appellate levels provided it is the prevailing party in such dispute.

     11. Relationships With Other Lender Customers. From time to time, Lender may have
business relationships with Borrower’s customers, suppliers, contractors, tenants, partners,
shareholders, officers or directors, or with businesses offering products or services similar to
those of Borrower, or with persons seeking to invest in, borrow from or lend to Borrower. Borrower
agrees that Lender may extend credit to such parties and may take any action it may deem necessary
to collect the credit, regardless of the effect that such extension or collection of credit may
have on Borrower’s financial condition or operations. Borrower further agrees that in no event
shall Lender be obligated to disclose to Borrower any information concerning any other Lender
customer.

     12. Integration and Relation to Loan Commitment. The Loan Documents (a) integrate all
the terms and conditions mentioned in or incidental to this Loan Agreement, (b) supersede all oral
negotiations and prior writings with respect to their subject matter, including any loan commitment
to Borrower by Lender, and (c) are intended by the parties as the final expression of the agreement
with respect to the terms and conditions set forth in those documents and as the complete and
exclusive statement of the terms agreed to by the parties. No representation, understanding,
promise or condition shall be enforceable against any party unless it is contained in the Loan
Documents. If there is any conflict between the terms, conditions and provisions of this Loan
Agreement and those of any other agreement or instrument, including any other Loan Document, the
terms, conditions and provisions of this Loan Agreement shall prevail, but only to the extent of
such conflict.

     13. Reasonable Standard. Whenever Lender is required under this Loan Agreement or any
of the Loan Documents to be reasonable or to not unreasonably withhold its approval or consent,
such reasonable standard shall be deemed to have been satisfied in the event Lender acts in its
good faith judgment.

38

 

     14. Waiver of Trial by Jury. Borrower and Lender hereby knowingly, voluntarily and
intentionally waive the right each may have to a trial by jury in respect of any litigation based
hereon, or arising out of, under or in connection with this Loan Agreement and any document
contemplated to be executed in conjunction herewith, or any course of conduct, course of dealing,
statements (whether verbal or written) or actions of either party, whether now existing or arising
in the future, including, without limitation, any and all claims, defenses, counter claims,
crossclaims, third party claims and intervenor’s claims. This provision is a material inducement
for the Lender to enter into this Loan.

[SIGNATURE PAGE FOLLOWS]

39

 

     IN WITNESS WHEREOF, Borrower, Guarantor and Lender have executed this Loan Agreement
on the dates specified below.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	WITNESSES:	 	 	 	 	 	BORROWER:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TRADITION DEVELOPMENT COMPANY,
	 	 	 	 	 	 	LLC, a Florida limited liability company
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Print name:

	 	 	 	 	 	 	 	     James H. Anderson, Executive Vice President	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dated: April 8, 2005
	 	 	 	 	 	 	 	 	 	 	 
	Print name:
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	HORIZONS ST. LUCIE DEVELOPMENT,
	 	 	 	 	 	 	LLC, a Florida limited liability company
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Print name:

	 	 	 	 	 	 	 	     James H. Anderson, Executive Vice President	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dated: April 8, 2005
	 	 	 	 	 	 	 	 	 	 	 
	Print name:
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	HORIZONS ACQUISITION 7, LLC, a Florida
	 	 	 	 	 	 	limited liability company
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Print name:

	 	 	 	 	 	 	 	     James H. Anderson, Executive Vice President	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dated: April 8, 2005
	 	 	 	 	 	 	 	 	 	 	 
	Print name:
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TRADITION MORTGAGE, LLC, a Florida
	 	 	 	 	 	 	limited liability company
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Print name:

	 	 	 	 	 	 	 	     James H. Anderson, Executive Vice President	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dated: April 8, 2005
	 	 	 	 	 	 	 	 	 	 	 
	Print name:
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 

40

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	GUARANTOR:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	CORE COMMUNITIES, LLC, a Florida limited
	 	 	 	 	 	 	liability company
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Print name:

	 	 	 	 	 	 	 	     James H. Anderson, Executive Vice President	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dated: April 8, 2005
	 	 	 	 	 	 	 	 	 	 	 
	Print name:
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 

41

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	LENDER:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Print name:

	 	 	 	 	 	Name:	 	 	 	 	 	 
	

	 	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Title:	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dated: April 8, 2005
	 	 	 	 	 	 	 	 	 	 	 
	Print name:
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 

42

 

EXHIBIT “A”

LEGAL DESCRIPTION

Begin at the Northeast Corner of the Recreation Tract as shown on Tradition Plat No. 16, recorded
in Plat Book 44, at Page 12, 12A through 12J public records of said St. Lucie County, Florida;
Thence traversing the boundary of the said Tradition Plat No. 16, by the following ten (10)
courses:

1. South 84 deg 37’ 09” West, a distance of 138.94 feet to a point of curvature with a curve
concave to the Southeast and having a radius of 250.00 feet;

2. Westerly and Southwesterly along the arc of said curve, through a central angle of 59 deg 03’
56”, an arc distance of 257.72 feet to a point of reverse curvature, with a curve concave to the
Northwest and having a radius of 250.00 feet;

3. Southwesterly along the arc of said curve, through a central angle of 40 deg 26’ 09”, an arc
distance of 176.44 feet to a point of non radial intersection with a line (the radius point of said
curve bears North 27 degrees 00’ 41” west from this point);

4. South 12 degrees 20’ 57” East along said non radial line, a distance of 104.38 feet;

5. South 32 degrees 46’ 15” West, a distance of 33.95 feet;

6. South 10 deg 25’ 34” a distance 9.23 feet to a point of radial intersection with a curve concave
to the northeast and having a radius of 960.00 feet, said curve also being the northerly right of
way line of Tradition Lakes Boulevard as shown on the said Tradition Plat No. 16;

Thence continue traversing said boundary and said northerly right of way by the remaining four (4)
courses:

7. Northwesterly along the arc of said curve, through a central angle of 42 deg 31’ 23”, an arc
distance of 712.48 feet to a point of tangency with a line;

8. North 57 deg 54’ 11” West along said line, a distance of 361.38 feet to a point of curvature
with a curve concave to the Southwest and having a radius of 1465.00 feet;

9. Northwesterly along the arc of said curve, through a central angle of 32 deg 21’ 05”, an arc
distance of 827.19 feet to a point of tangency with a line;

10. South 89 degrees 44’ 44” West along said line, a distance of 51.84 feet to the Northwest corner
of said Tradition Plat No. 16;

Thence traversing the proposed northerly right of way line of said Tradition Lakes Boulevard by the
following two (2) courses;

1. Continue South 89 degrees 44’ 44” West departing said boundary, a distance of 277.08 feet to a
point of curvature with a curve concave to the southeast and having a radius of 440.00 feet;

2. Southwesterly along the arc of said curve, through a central angle of 27 deg 35’ 12”, an arc
distance of 211.85 feet to a point of non radial intersection with a line (the radius point of

 

 

said curve bears South 27 degrees 50’ 28” East from this point);

Thence North 51 deg 55’ 07” West along said non radial line, departing said proposed Northerly
right of way line, a distance of 701.92 feet to a point of non radial intersection with a curve
concave to the Southeast and having a radius of 870.00 feet (radius point of said curve bears South
58 deg 16’ 38” East from this point); thence Northeasterly along the arc of said curve, through a
central angle of 22 deg 54’ 16”, an arc distance of 347.79 feet to a point of compound curvature
with a curve concave to the Southwest and having a radius of 258.00 feet; thence Northeasterly
along the arc of said curve, through a central angle of 34 deg 54’ 19”, a arc distance of 157.18
feet to a point of reverse curvature with a curve concave to the Northwest and having a radius of
67.00 feet; thence Northeasterly along the arc of said curve, through a central angle of 40 deg 13’
48”, a arc distance of 47.04 feet to a point of reverse curvature with a curve concave to the
Southeast and having a radius of 383.00 feet; thence Northeasterly along the arc of said curve,
through a central angle of 33 deg 12’ 16” an arc distance of 221.96 feet to a point of compound
curvature with a curve concave to the South and having a radius of 870.00 feet; thence Easterly
along the arc of said curve, through a central angle of 07 deg 29’ 35”, an arc distance of 113.78
feet to a point of tangency with a line; thence North 90 deg 00’ 00” East along said line a
distance of 75.81 feet to a point of curvature with a curve concave to the Northwest and having a
radius of 1830.00 feet; thence Northesterly along the arc of said curve through a central angle of
23 deg 57’ 36”, an arc distance of 765.27 feet to a point of reverse curvature with a curve concave
to the Southeast and having a radius of 1770.00 feet; thence Northeasterly along the arc of said
curve, through a central angle of 08 deg 33’ 57”, an arc distance of 264.62 feet to a point of
tangency with a line; thence North 74 deg 36’ 21” East along said line, a distance of 400.78 feet
to a point of curvature with a curve concave to the Southeast and having a radius of 183.00 feet;
thence Northeasterly along the arc of said curve, through a central angle of 08 deg 55’ 06”, an arc
distance of 28.48 feet to a point of compound curvature with a curve concave to the Southwest and
having a radius of 50.00 feet; thence Northeasterly, Easterly and Southeasterly along the arc of
said curve, through a central angle of 81 deg 04’ 54”, an arc distance of 70.76 feet to a point of
tangency with a line; thence South 15 deg 23’ 39” East along said line, a distance of 4.85 feet;
thence North 74 deg 36’ 21” East, a distance of 100.00 feet to a point of radial intersection with
a curve concave to the Southeast and having a radius of 50.00 feet; thence Northeasterly along the
arc of said curve, through a central angle of 77 deg 00’ 22”, an arc distance of 67.20 feet to a
point of compound curvature with a curve concave to the Southeast and having a radius of 383.00
feet; thence Northeasterly along the arc of said curve, through a central angle of 10 deg 32’ 34”,
and arc distance of 70.47 feet to a point of reverse curvature, with a curve concave to the
Northwest and having a radius of 1881.55 feet; thence Northeasterly along the arc of said curve,
through a central angle of 22 deg 03’ 06”, an arc distance of 724.16 feet to a point of reverse
curvature with a curve concave to the Southeast and having a radius of 1500.00 feet; Thence
Northeasterly along the arc of said curve, through a central angle of 27 deg 22’ 23”, an arc
distance of 716.63 feet to a point of tangency with a line; thence North 77 deg 28’ 34” East along
said line, a distance of 125.81 feet to a point of curvature with a curve concave to the Southeast
and having a radius of 1500.00 f
eet; thence Northeasterly along the arc of said curve, through a
central angle of 09 deg 33’ 12”, an arc distance of 250.11 feet to a point of tangency with a line;
Thence North 87 deg 01’ 46” East along said line, a distance of 129.19 feet to a point of curvature
with a curve concave to the Northwest and having a radius of 470.00 feet; thence Northeasterly
along the arc of said curve, through a central angle

 

 

of 15 deg 18’ 56”, an arc distance of 125.63 feet to the Southwest corner of Road “J” (Tract
PR-10) as shown on Tradition Plat No. 12, recorded in Plat Book 44, at Pages 3 and 3A through 3D,
in the public records of St. Lucie County, Florida; thence traversing the Southerly right of way
line of said Road “J” and the Westerly right of way line of Community Boulevard (Tract R-2) as
shown on said Tradition Plat No. 12 by the following five (5) courses:

1. Continue Northeasterly along the arc of said curve, through a central angle of 00 deg 54’ 18”,
an arc distance of 7.42 feet to a point of reserve curvature with a curve concave to the South and
having a radius of 183.00 feet;

2. Northeasterly, Easterly and Southeasterly along the arc of said curve, through a central angle
of 35 deg 02’ 51”, an arc distance of 111.94 feet to a point of tangency with a line;

3. South 74 deg 08’ 37” East along said line, a distance of 37.90 feet to a point of curvature with
a curve concave to the Southwest and having a radius of 183.00 feet;

4. Southeasterly along the arc of said curve, through a central angle of 29 deg 08’ 37”, an arc
distance of 93.08 feet to a point of tangency with a line;

5. South 45 deg 00’ 00” East along said line, a distance of 485.13 feet;
Thence South 64 deg 10’ 30” West departing said proposed Westerly right-of-way line, a distance of
421.72 feet to a point of curvature with a curve concave to the Southeast and having a radius of
1155.00 feet; thence Southwesterly along the arc of said curve, through a central angle of 36 deg
15’ 33”, an arc distance of 730.93 feet to a point of reverse curvature with a curve concave to
the Northwest and having a radius of 1245.00 feet; thence Southwesterly along the arc of said
curve, through a central angle of 10 deg 21’ 37”, an arc distance 225.13 feet to a point of reverse
curvature with a curve concave to the Northwest and having a radius of 727.91 feet; thence
southwesterly along the arc of said curve, thru a central angle of 15 deg. 09’ 16”, an arc distance
of 192.33 feet to a point of compound curvature with a curve concave to the east and having a
radius of 269.77 feet; Thence southwesterly, southerly, and southeasterly along the arc of said
curve through a central angle of 55 deg. 31’ 39”, an arc distance of 261.44 feet to a point of non
radial intersection with a line (the radius point of said curve bears North 57 deg. 22’ 22” east
from this point); thence North 43 deg 38’ 14” West along said non radial line, a distance of
222.89 feet; thence North 40 deg 44’ 37” West, a distance of 55.53 feet; thence North 36 deg 21’
17” West, a distance of 28.71 feet; thence North 33 deg 19’ 33” West, a distance of 29.44 feet;
thence North 30 deg 01’ 43” West, a distance of 33.86 feet; thence North 25 deg 56’ 47” West, a
distance of 44.50 feet; thence North 21 deg 40’ 18” West, a distance of 37.55 feet to a point of
non radial intersection with a curve concave to the Southwest and having a radius of 978.88 feet
(the radius point of said curver bears South 69 deg 52’ 11” West from this point); thence
Northwesterly along the arc of said curve, through a central angle of 10 deg 15’ 47”, an arc
distance of 175.34 feet to the point of non radial intersection with a curve concave to the
Southwest and having a radius of 2862.48 feet (the radius point of said curve having a radius of
978.88 feet bears South 57 deg 08’ 13” West from this point and the radius point of said curve
having a radius of 2868.48 feet bears South 59 deg 36’ 24” West from this point); thence
Northwesterly along the arc of said curve, through a central angle of 02 deg 47’ 56”, an arc
distance of 139.83 feet to a point of non radial intersection with a line (the radius point of said
curve bears South 54 deg 20’ 17” West from this point); thence North 59 deg 06’ 35” West along said
non radial line, a distance of 143.79 feet; thence North 80 deg 53’ 39” West, a distance of 125.53
feet; thence South 71 deg 44’ 37” West, a distance of 34.33 feet; thence South 35 deg 24’ 00” West,
a distance of 87.48 feet; thence South 00 deg 45’ 41” West, a distance of 132.15 feet;

 

 

thence South 06 deg 59’ 03”, a distance of 104.72 feet; thence South 06 deg 27’ 08” East, a
distance of 47.41 feet; thence South 01 deg 35’ 43” West, a distance of 77.02 feet; thence South 09
deg 59’ 53” East, a distance of 220.16 feet; thence South 27 deg 38’00” East, a distance of 286.71
feet; thence South 14 deg 11’ 03” East, a distance of 242.60 feet to the point of beginning.

PARCEL 2: A Parcel of land lying in Section 9, Township 37 South, Range 39 East, St. Lucie County,
Florida and being more particularly described as follows:

Begin at the Northwest corner of Plat of Tradition No. 17, recorded in Plat Book 43, at Pages 22
and 22A through 22F, public records of St. Lucie County, Florida, and also being the Southwest
Corner of Community Boulevard (Tract R-2) of future Tradition Plat No. 12; thence South 45 deg 26’
22” West as basis of bearing, along the Northwesterly boundary of said Tradition Plat No. 17, a
distance of 34.06 feet to the Northeast corner of Plat of Tradition Plat No. 5, recorded in Plat
Book 42, at Pages 4 and 4A through 4I, public records St. Lucie County, Florida, and also being a
point on the Northerly right of way line of Tradition Lakes Boulevard (Tract PR-5); thence
traversing along said Northerly boundary of Tradition Plat No. 5 and said Northerly right of way
line by the following twenty-one (21) courses:

1. North 89 deg 21’ 23” West, a distance of 40.60 feet to a point of curvature with a curve concove
to the Northeast and having a radius of 184.00 feet;

2. Northwesterly along the arc of said curve, through a central angle of 29 deg 48’ 11”, an arc
distance of 95.71 feet to a point of tangency with a line;

3. North 59 deg 33’ 12” West along said line, a distance of 72.07 feet to a point of curvature with
a curve concave to the Southwest and having a radius of 196.00 feet;

4. Northwesterly, Westerly and Southwesterly along the arc of said curve, through a central angle
of 52 deg 45’ 37”, an arc distance of 180.48 feet to a point of tangency with a line;

5. South 67 deg 41’ 11” West along said line, a distance of 82.41 feet to a point of curvature with
a curve concave to the Northwest and having a radius of 509.00 feet;

6. Southwesterly, Westerly and Northwesterly along the arc of said curve, through a central angle
of 35 deg 29’ 52”, an arc distance of 315.35 feet to a point of compound curvature with a curve
concave to the Northeast and having a radius of 1100.00 feet;

7. Northwesterly along the arc of said curve, through a central angle of 11 deg 36’ 44”, an arc
distance of 222.94 feet to a point of non radial intersection with a line (the radius point of said
curve bears North 24 deg 47’ 47” East from this point);

8. North 18 deg 34’ 33” West along said non radial line, a distance of 34.75 feet;

9. North 62 deg 35’ 57” West, a distance of 50.00 feet;

10. South 73 deg 22’ 39” West, a distance of 34.75 feet to a point of non radial intersection with
a curve concave to the Northeast and having a radius of 1100.00 feet (the radius point of said
curve bears North 30 deg 00’ 19” East from this point);

11. Northwesterly along the arc of said curve, through a central angle of 10 deg 28’ 38”, an arc
distance of 201.15 feet to a point of tangency with a line;

12. North 49 deg31’ 03” West along said line a distance of 195.89 feet;

13. North 08 deg13’ 49” West a distance of 37.57 feet;

14. North 49 deg 35’ 24” West, a distance of 50.74 feet;

15. South 81 deg 14’ 16” West, a distance of 32.64 feet;

16. North 49 deg 31’ 03” West, a distance of 189.84 feet;

17. South 40 deg 28’ 57” West, a distance of 10.00 feet;

 

 

18. North 49 deg 31’ 03” West, a distance of 32.07 feet to a point of curvature with a curve
concave to the Southwest and having a radius of 1040.00 feet;

19. Northwesterly along the arc of said curve, through a central angle of 32 deg 34’ 48” an arc
distance of 591.37 feet to a point of non radial intersection with a line (the radius point of said
curve bears South 07 deg 54’ 09” West from this point);

20. North 40 deg 54’ 11” West along said non radial line, a distance of 37.23 feet;

21. North 84 deg 40’ 56” West, a distance of 4.45 feet to a point of intersection with the Westerly
line of future Tradition Plat No. 16;

Thence traversing said westerly line by the following three (3) courses:

1. North 05 deg 34’ 48” East, departing said Northerly boundary of Tradition Plat No. 5 and said
Northerly right of way line, along said Westerly line, a distance of 8.05 feet to a point of
curvature with a curve concave to the Southwest and having a radius of 174.00 feet;

2. Northwesterly along the arc of said curve, through a central angle of 73 deg 15’ 12” an arc
distance of 222.46 feet to a point of reverse curvature with a curve concave to the Northeast and
having a radius of 310.30 feet;

3. Northwesterly along the arc of said curve, through a central angle of 41 deg 12’ 47”, an arc
distance of 223.20 feet to a point of non radial intersection with a line (the radius point of said
curve bears North 63 deg 32’ 23” East from this point) said point also being a corner on the
boundary of future Tradition Plat No. 15.

Thence traversing along said boundary line by the following twenty-five (25) courses;

1. North 14 deg 11’ 03” West along said non radial line, a distance of 242.60 feet;

2. North 27 deg 38’ 00” West, a distance of 286.71 feet;

3. North 09 deg 59’ 53” West, a distance of 220.16 feet;

4. North 01 deg 35’ 43” East, a distance of 77.02 feet;

5. North 06 deg 27’ 08” West, a distance of 47.71 feet;

6. North 06 deg 59’ 03” West, a distance of 104.72 feet;

7. North 00 deg 45’ 41” East, a distance of 132.15 feet;

8. North 35 deg 24’ 00” East, a distance of 87.48 feet;

9. North 71 deg 44’ 37” East, a distance of 34.33 feet;

10. South 80 deg 53’ 39” East, a distance of 125.53 feet;

11. South 59 deg 06’ 35” East, a distance of 143.79 feet to a point of non radial intersection with
a curve concave to the Southwest and having a radius of 2862.48 feet (the radius point of said
curve bears South 54 deg 20’ 17” West from this point);

12. Southeasterly along the arc of said curve, through a central angle of 02 deg 47’ 56”, an arc
distance of 139.83 feet to a point of non radial intersection with a curve concave to the Southwest
and having a radius of 978.88 feet (the radius point of said curve having a radius of 2862.48 feet
bears South 57 deg 08’ 13” West from this point and the radius point of said curve having a radius
of 978.88 feet bears South 59 deg 36’ 24” West from this point);

13. Southeasterly along the arc of said curve having a radius of 978.88 feet, through a central
angle of 10 deg 15’ 47”, an arc distance of 175.34 feet toa point of non radial intersection with a
line (the radius point of said curve bears South 69 deg 52’ 11” West from this point);

14. South 21 deg 40’ 18” East along said non radial line, a distance of 37.55 feet;

 

 

15. South 25 deg 56’ 47” East, a distance of 44.50 feet;

16. South 30 deg 01’ 43” East, a distance of 33.86 feet;

17. South 33 deg 19’ 33” East, a distance of 29.44 feet;

18. South 36 deg 21’ 17” East, a distance of 28.71 feet;

19. South 40 deg 44’ 37” East, a distance of 55.53 feet;

20. South 43 deg 38’ 14” East, a distance of 222.89 feet to a point of non radial intersection with
a curve concave to the East and having a radius of 269.77 feet (the radius point of said curve
bears North 57 deg 35’ 39” East from this point);

21. Northwesterly, Northerly and Northeasterly along the arc of said curve, through a central angle
of 55 deg 31’ 39”, an arc distance of 261.44 feet to a point of compound curvature with a curve
concave to the Southeast and having a radius of 727.91 feet;

22. Northeasterly along the arc of said curve, through a central angle of 15 deg 09’ 16”, an arc
distance of 192.53 feet to a point of reverse curvature with a curve concave to the Northwest and
having a radius of 1245.00 feet;

23. Northeasterly along the arc of said curve, through a central angle of 10 deg 21’ 37”, an arc
distance of 225.13 feet to a point of reverse curvature with a curve concave to the Southeast and
having a radius of 1155.00 feet;

24. Northeasterly along the arc of said curve, through a central angle of 36 deg 15’ 33”, an arc
distance of 730.93 feet to a point of tangency with a line;

25. North 64 deg 10’ 30” East along said line, a distance of 421.72 feet to a point of intersection
with the Westerly right-of-way line of said Community Boulevard (Tract R-2) and the Westerly
boundary of said future Tradition Plat No. 12;

Thence traversing said Westerly right-of-way line and said Westerly boundary by the following five
(5) courses:

1. South 45 deg 00’ 00” East, departing said Southeasterly boundary of said future Tradition Plat
No. 15, a distance of 10.46 feet to a point of curvature with a curve concave to the Southwest and
having a radius of 2950.00 feet;

2. Southeasterly, Southerly and Southwesterly along the arc of said curve, through a central angle
of 45 deg 14’ 07”, an arc distance of 2329.03 feet to a point of tangency with a line;

3. South 00 deg 14’ 07” West along said line, a distance of 551.70 feet;

4. North 89 deg 45’ 53” West, a distance of 10.00 feet;

5. South 00 deg 14’ 07” West, a distance of 214.96 feet to the point of beginning.

 

 

EXHIBIT “B”

LOAN DOCUMENTS and DUE DILIGENCE DOCUMENTS

Note. Revolving Promissory Note of even date herewith payable to the order of Lender in
the total principal amount of the Revolving Loan (the “Note”), which shall include such terms and
conditions as have heretofore been mutually agreed upon between Borrower and Lender.

Mortgage, Assignment of Rents and Security Agreement. A Mortgage, Assignment of Rents and
Security Agreement encumbering the Land which shall constitute a first lien thereon (the
“Mortgage”) and which Mortgage shall be in a form satisfactory to Lender and shall be subject only
to those Permitted Exceptions and matters satisfactory to Lender.

UCC-1 Financing Statements (Local and State). UCC-1 Financing Statements (local and state)
covering all personal property, fixtures and equipment placed or to be placed on or under the
Property and such other documents as will insure Lender a first perfected security interest in and
to said personal property, fixtures and equipment which Lender will provide funding.

Mortgagee Title Insurance Commitment and Policy. One or more mortgagee title insurance
commitments and policies (“Policy”) in the aggregate face amount of $40,000,000.00 as to
the Property, insuring the Mortgage as a valid first lien on the Property subject only to the
Permitted Exceptions as shall be approved in writing by Lender, issued by a title company
satisfactory to Lender (“Title Insurer”), and in a form satisfactory to and approved by Lender and
satisfying the requirements set forth in the Commitment, including such reinsurance and/or
coinsurance agreements, if any, and any affirmative coverage required by Lender, including but not
limited to, Florida Form 9 and Revolving Credit Endorsement. Borrower, at Borrower’s expense,
shall deliver to Lender copies of any documents which may affect the Property in any manner (as
determined by Lender’s counsel) at any time prior to or during the term of the Loan.

Survey. A current survey of the Property, certified to Bank and the title insurer, showing
the boundaries of the Property by courses and distances, together with a corresponding metes and
bounds description, the actual or proposed location of all improvements, encroachments and
restrictions, the location and width of all easements, utility lines, rights-of-way and building
set-back lines, and notes referencing book and page numbers for the instruments granting the same.
Bank, at Bank’s sole discretion, may at any time and from time to time may require an ALTA survey.
Additionally, the Borrower shall provide two (2) copies of each recorded, approved, and/or proposed
plat for each portion of the Property as such are or may become available. Further, the Borrower
shall provide a certificate of a Florida registered surveyor to the effect that each parcel that
constitutes the Property is contiguous with a right of way or road tract dedicated to the public, a
CDD or the master property owners’ association.

Opinion of Counsel. An opinion of counsel licensed in the State of Florida addressed to
Lender and any participating banks and in form and substance, and from such law firm, satisfactory
to Lender which covers such matters as may be required by Lender, including but not limited to the
valid existence and authority of any trusts, partnerships and other borrowing entities.

 

 

Borrower’s Affidavit. Borrower’s Affidavit, in form and content sufficient to permit the
Title Insurer to delete any exception for parties in possession, matters of survey, mechanic’s or
materialmen’s liens, gap, and taxes and assessments which are due and payable, and attesting to all
such other matters as Lender may require.

Borrowing Authority Instruments. Documents evidencing the necessary authorization for all
actions taken by Borrower, in connection with this Loan as may be required by Lender. Appropriate
documents may include corporate resolutions and certificates of active status, certificates of
authority, and certified copies of articles of incorporation and all amendments thereto.

Commitment Fee. The non-refundable Commitment Fee shall be paid at the Closing of the
Loan.

Guaranties. The Unconditional Guaranties executed by Guarantor.

Taxes. Proof of current payment of real property and personal property taxes and
information as to tax identification numbers, tax rates, estimated tax values and the identities of
the taxing authorities and evidence of payment of any outstanding liens or other outstanding
obligations or encumbrances against the Property or Improvements.

Financial Statements. Current financial statements, tax returns, and such other credit
information as Lender may reasonably require for Borrower, in form and content reasonably
satisfactory to Lender.

Sales Contract. Copies of the sales contract form for the Property, if applicable, which
form of contract must be acceptable to Lender.

Appraisal. Appraisal in accordance with the requirements of the Commitment.

Environmental Audit. An environmental audit in the form and substance as required by the
Commitment and, if required by Lender, Lender’s form of environmental assessment checklist
verifying that no material environmental contamination on the Property has occurred or is imminent
or participation in Lender’s Environmental Collateral Protection Program.

Partnership and Corporate Documents. Certified copies of all partnership agreements,
corporate articles and bylaws, trust agreements, articles of organization, operating agreements,
and such other documentation required by Lender as a condition of closing, and from time-to-time
during the term of the Loan, to verify the existence, authority and other matters related to the
borrowing entities.

 

 

COMPOSITE EXHIBIT “C”

INITIAL BORROWING BASE REPORT

 

 

REVOLVING

PROMISSORY NOTE

	 	 	 
	$40,000,000.00

	 	April 8, 2005

Tradition Development Company, LLC

c/o Core Communities, LLC

10521 S.W. Village Station Drive, Suite 201

Port St. Lucie, Florida 34987

Horizons St. Lucie Development, LLC

c/o Core Communities, LLC

10521 S.W. Village Station Drive, Suite 201

Port St. Lucie, Florida 34987

Horizons Acquisition 7, LLC

c/o Core Communities, LLC

10521 S.W. Village Station Drive, Suite 201

Port St. Lucie, Florida 34987

and

Tradition Mortgage, LLC

c/o Core Communities, LLC

10521 S.W. Village Station Drive, Suite 201

Port St. Lucie, Florida 34987

(Hereinafter collectively referred to as the “Borrower”)

and

Wachovia Bank, National Association

200 E. Broward Boulevard, 2nd floor

Ft. Lauderdale, FL 33301

(Hereinafter referred to as the “Bank”)

PRINCIPAL BALANCE. Borrower hereby promises to pay to the order of Bank, in lawful money of
the United States of America, at its office indicated above or wherever else Bank may specify, the
sum of Forty Million and 00/100 Dollars ($40,000,000.00) or such sum as may be advanced and
outstanding from time to time (the “Loan Amount”), with interest on the unpaid principal balance at
the rate and on the terms provided in this Revolving Promissory Note (including all renewals,
extensions or modifications hereof, this “Note”).

LOAN AGREEMENT. The Note is subject to the provisions of that certain Acquisition,
Development and Construction Loan Agreement between Bank and Borrower of even date herewith, as
modified from time to time (the “Loan Agreement”). Terms not otherwise defined herein shall have
the meaning ascribed to them in the Loan Agreement.

USE OF PROCEEDS. Borrower shall use the proceeds of the loan(s) evidenced by this Note for
the purposes of Borrower as set forth in the Loan Agreement.

1

 

SECURITY. Borrower has granted Bank a security interest in the collateral described in the
Loan Documents, including, but not limited to: (i) real property collateral described in that
certain Mortgage, Assignment of Leases and Rents and Security Agreement of even date herewith from
Borrower to Bank (the “Mortgage”); and (ii) personal property collateral described in the Mortgage.

INTEREST RATE. Interest shall accrue on the unpaid principal balance of this Note during each
Interest Period (as defined below) from the date hereof at a floating rate per annum equal to
either of the following (the “Interest Rate Options”):

(i) the LIBOR Market Index Rate plus 2.50%, as that rate may change from day to day. “LIBOR
Market Index Rate”, for any day, is the rate for 1 month U.S. dollar deposits as reported on
Telerate page 3750 as of 11:00 a.m., London time, on such day, or if such day is not a London
business day, then the immediately preceding London business day (or if not so reported, then as
determined by Bank from another recognized source or interbank quotation), or

(ii) Bank’s Prime Rate (as defined below) minus .25%. “Bank’s Prime Rate” means that rate
announced by Bank from time to time a its prime rate and is one of several interest rate bases used
by Bank. Bank lends at rates both above and below Bank’s Prime Rate, and Borrower acknowledges
that Bank’s Prime Rate is not represented or intended to be the lowest or most favorable rate of
interest offered by Bank.

(iii) “Interest Period” means each period commencing on and including the date an interest
payment is due as provided in the Repayment Terms paragraph and ending on but excluding the date
the next interest payment is due, with the first Interest Period commencing on May 3, 2005.

(iv) Borrower may change the Interest Rate Option not more than once every thirty (30) days by
providing written notice thereof to Bank at least three (3) days’ prior to the beginning of the
next Interest Period.

DEFAULT RATE. In addition to all other rights contained in this Note, if a Default (as
defined herein) occurs and as long as a Default continues, all outstanding Obligations
shall bear interest at the Interest Rate plus 3% (“Default Rate”). The Default Rate shall
also apply from acceleration until the Obligations or any judgment thereon is paid in full.

INTEREST AND FEE(S) COMPUTATION (ACTUAL/360). Interest and fees, if any, shall be computed on
the basis of a 360-day year for the actual number of days in the applicable period (“Actual/360
Computation”). The Actual/360 Computation determines the annual effective interest yield by taking
the stated (nominal) rate for a year’s period and then dividing said rate by 360 to determine the
daily periodic rate to be applied for each day in the applicable period. Application of the
Actual/360 Computation produces an annualized effective rate exceeding the nominal rate.

REPAYMENT TERMS. This Note shall be due and payable as follows: from the date of this Note
through and including the twenty-fourth month thereafter (“Maturity Date”), as same may be extended
pursuant to the terms of this Note, commencing on May 3, 2005, and continuing on the third day of
each month thereafter, the Note shall be payable in consecutive monthly payments of accrued
interest only calculated on the outstanding principal balance. The Borrower shall have the option
to extend the term of the Loan for one additional twelve (12) month period (“Extension Term”) on
the same terms and conditions as the prior twenty-four (24) months of the Loan upon satisfaction of
the “Conditions to Extension”. Any and all remaining principal and accrued interest shall be due
and payable on the Maturity Date.

CONDITIONS TO EXTENSION. No Event of Default under the Loan Documents shall have occurred and
be continuing and Bank has received (a) all the items required to be delivered pursuant to the Loan
Agreement; (b) approvals from all governmental authorities that are required for the Improvements
to be used as intended, (c) payment from Borrower of an extension fee in an amount equal to .25% of
the Loan Amount at the time of exercise of the extension and (d) evidence reasonably satisfactory
to Bank that Guarantor has a Tangible Net Worth of (i) THIRTY MILLION DOLLARS ($30,000,000), plus
(ii) fifty percent (50%) of all net income received by Guarantor for all years after the fiscal
year ended December 31, 2004, which shall be based upon the consolidated financial statements of
Guarantor. In addition, the

2

 

Extension Term shall be subject to satisfaction of the Financial Covenants as outlined in the Loan Agreement.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application toward
payment of the Obligations shall be applied to pay late charges, accrued and unpaid interest,
principal, escrow (if any) and any other fees, costs and expenses which Borrower is obligated to
pay under this Note, in such order as Bank may elect from time to time in its sole discretion.
Upon the occurrence of a Default in the payment of the Obligations or a Default (as defined in the
other Loan Documents) under any other Loan Document, monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank.

If any payment received by Bank under this Note or other Loan Documents is rescinded, avoided
or for any reason returned by Bank because of any adverse claim or threatened action, the returned
payment shall remain payable as an obligation of all persons liable under this Note or other Loan
Documents as though such payment had not been made.

OPTIONAL HEDGE. During the term of the Loan, Borrower will be provided
with an option to hedge the Loan’s floating interest expense by entering into a future
interest rate swap (the “Swap”) with Bank contemporaneously with the closing of the loan, pursuant
to which Borrower would receive the amount necessary to pay the interest expense due under the Loan
(exclusive of default interest or other adjustments provided for in the loan documents) and would
pay the amount that would be equal to the interest that would accrue on the Loan at a fixed rate.
Bank is willing to provide this Swap to Borrower upon mutually agreeable terms. The actual rate of
the Swap would be subject to market conditions at the time the Swap is consummated. The Swap would
be governed by an ISDA Master Agreement and secured by the Collateral described herein. In the
event that the Borrower exercises the Swap with Bank and in the event of prepayment in whole or in
part of the Loan, the Swap must be unwound and a “breakage fee” may be due and payable to Bank.

PREPAYMENT. This Note may be prepaid, in whole or in part, at any time and from time to time,
without penalty, provided, however, that Borrower shall indemnify Bank against Bank’s additional
cost to break a LIBOR Agreement which is prepaid, if any (“Indemnified Loss or Expense”). The
amount of such indemnified Loss or Expense shall be determined by Bank based upon the assumption
that Bank funded one hundred percent (100%) of the Note in the London Interbank Market. Any
prepayment shall include accrued and unpaid interest to the date of prepayment on the principal
amount prepaid and all other sums due and payable hereunder. Nothing herein shall be deemed to
alter or affect any obligations that Borrower may have to Bank under any Swap (as defined herein).
Should Borrower exercise the Swap with Bank, then in the event of prepayment in whole or in part of
this Note, the Swap must be unwound. In the event that the Swap is unwound, a “breakage fee” may
be due and payable to Bank. For purposes hereof the term “Swap” means an agreement between
Borrower and Bank (or other counterparty acceptable to Bank) pursuant to which Borrower shall
receive an amount necessary to pay the interest expenses due under this Note (exclusive of default
interest or other adjustments provided for in the Loan Documents) and shall pay the amount that
would be equal to the interest that would accrue on this Note at a fixed rate.

DEFINITIONS. Loan Documents. The term “Loan Documents”, as used in this Note and the other
Loan Documents, refers to all documents executed in connection with or related to the loan
evidenced by this Note and any prior notes which evidence all or any portion of the loan evidenced
by this Note, and any letters of credit issued pursuant to any loan agreement to which this Note is
subject, any applications for such letters of credit and any other documents executed in connection
therewith or related thereto, and may include, without limitation, a commitment letter that
survives closing, a loan agreement, this Note, guaranty agreements, security agreements, security
instruments, financing statements, mortgage instruments, any renewals or modifications, whenever
any of the foregoing are executed, but does not include swap agreements (as defined in 11 U.S.C. §
101). Obligations. The term “Obligations”, as used in this Note and the other Loan Documents,
refers to any and all indebtedness and other obligations under this Note, all other obligations
under any other Loan Document(s), and all obligations under any swap agreements (as defined in 11
U.S.C. § 101) between Borrower and Bank whenever executed. Certain Other Terms. All terms that
are used but not otherwise defined in any of the Loan Documents

3

 

shall have the definitions provided in the Uniform Commercial Code.

LATE CHARGE. If any payments are not timely made, Borrower shall also pay
to Bank a late charge equal to 5% of each payment past due for 10 or more days.

Acceptance by Bank of any late payment without an accompanying late charge shall not be deemed
a waiver of Bank’s right to collect such late charge or to collect a late charge for any subsequent
late payment received.

ATTORNEYS’ FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank’s reasonable
expenses incurred to enforce or collect any of the Obligations to the extent Bank is the prevailing
party including, without limitation, reasonable arbitration, paralegals’, attorneys’ and experts’
fees and expenses, whether incurred without the commencement of a suit, in any trial, arbitration,
or administrative proceeding, or in any appellate or bankruptcy proceeding.

USURY. If at any time the effective interest rate under this Note would, but for this
paragraph, exceed the maximum lawful rate, the effective interest rate under this Note shall be the
maximum lawful rate, and any amount received by Bank in excess of such rate shall be applied to
principal and then to fees and expenses, or, if no such amounts are owing, returned to Borrower.

CURE PERIOD. Except as provided below, a Default based upon Nonpayment, as defined herein,
may be cured within five (5) days of the date such payment is due and any other Default may be
cured within twenty (20) days after written notice thereof is mailed to the Borrower by Bank
provided, however, if such nonperformance is not curable within said twenty (20) day period and
Borrower is diligently pursuing said cure, the cure period shall be extended for up to an
additional thirty (30) days. The Borrower’s right to cure shall be applicable only to curable
defaults and shall not apply, without limitation, to Defaults based upon False Warranty or
Cessation; Bankruptcy. Bank shall mail only one notice annually for the same type of nonmonetary
Default. In the event a different type of nonmonetary Default occurs in the same year, Bank shall
mail notice to Borrower for that Default. Bank shall not exercise its remedies to collect the
Obligations except as Bank reasonably deems necessary to protect its interest in collateral
securing the Obligations during a cure period.

DEFAULT. If any of the following occurs and is not cured within the applicable Cure Period, a
default (“Default”) under this Note shall exist: Nonpayment; Nonperformance. The failure of
timely payment or performance of the Obligations or Default, however denominated, under this Note
or any other Loan Documents. False Warranty. A warranty or representation made or deemed made in
the Loan Documents or furnished Bank in connection with the loan evidenced by this Note proves
materially false, or if of a continuing nature, becomes materially false. Cross Default. At
Bank’s option, any default in payment or performance of any obligation under any other loans,
contracts or agreements of Borrower with Bank or its affiliates (“Affiliate” shall have the meaning
as defined in 11 U.S.C. § 101, except that the term “Borrower” shall be substituted for the term
“Debtor” therein). Cessation; Bankruptcy. The death of, appointment of a guardian for,
dissolution of, termination of existence of, loss of good standing status by, appointment of a
receiver for, assignment for the benefit of creditors of, or commencement of any bankruptcy or
insolvency proceeding by or against Borrower, its Subsidiaries or Affiliates, if any, or any
general partner of or the holder(s) of the majority ownership interests of Borrower, or any party
to the Loan Documents. Material Business Alteration. Without prior written consent of Bank, a material alteration in the kind
or type of Borrower’s business. It is acknowledged by Bank that Borrower is in the real estate
business. Material Capital Structure or Business Alteration. Without the prior written consent of
Bank, which consent will not be unreasonably withheld, (i) a material alteration in the kind or
type of Borrower’s business; (ii) the sale of substantially all of the business or assets of
Borrower, or any guarantor, or a material portion (ten percent (10%) or more) of such business or
assets if such a sale is outside the ordinary course of business of Borrower, or any guarantor, or
more than fifty percent (50%) of the outstanding stock or voting power of or in any such entity in
a single transaction or a series of transactions; or (iii) should any Borrower or any of Borrower’s
Subsidiaries or Affiliates (other than Guarantor) enter into any merger or consolidation where
Borrower or the Affiliates is not the surviving entity. Material Adverse Change. Bank determines
in good faith, in its reasonable discretion, that the prospects for payment or performance of the
Obligations are impaired or there has occurred a material

4

 

adverse change in the business or prospects of Borrower, financial or otherwise.

REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan Documents, Bank may at
any time thereafter, take the following actions: Bank Lien. Foreclose its security interest or
lien against Borrower’s accounts without notice. Acceleration Upon Default. Accelerate the
maturity of this Note and, at Bank’s option, any or all other Obligations, other than Obligations
under any swap agreements (as defined in 11 U.S.C. § 101) between Borrower and Bank, which shall be
governed by the default and termination provisions of said swap agreements; whereupon this Note and
the accelerated Obligations shall be immediately due and payable; provided, however, if the Default
is based upon a bankruptcy or insolvency proceeding commenced by or against Borrower or any
guarantor or endorser of this Note, all Obligations (other than Obligations under any swap
agreement as referenced above) shall automatically and immediately be due and payable. Cumulative.
Exercise any rights and remedies as provided under the Note and other Loan Documents, or as
provided by law or equity.

FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information as Bank may
reasonably request from time to time, including without limitation, financial statements and
information pertaining to Borrower’s financial condition. Such information shall be true,
complete, and accurate.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and other Loan
Documents shall be valid unless in writing and signed by an officer of Bank and Borrower. No
waiver by Bank of any Default shall operate as a waiver of any other Default or the same Default on
a future occasion. Neither the failure nor any delay on the part of Bank in exercising any right,
power, or remedy under this Note and other Loan Documents shall operate as a waiver thereof, nor
shall a single or partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.

Except as set forth in the Loan Documents, each Borrower or any person liable under this Note
waives presentment, protest, notice of dishonor, demand for payment, notice of intention to
accelerate maturity, notice of acceleration of maturity, notice of sale and all other notices of
any kind. Further, each agrees that Bank may extend, modify or renew this Note or make a novation
of the loan evidenced by this Note for any period, and grant any releases,
compromises or indulgences with respect to any collateral securing this Note, or with respect
to any other Borrower or any other person liable under this Note or other Loan Documents, all
without notice to or consent of each Borrower or each person who may be liable under this Note or
any other Loan Document and without affecting the liability of Borrower or any person who may be
liable under this Note or any other Loan Document.

MISCELLANEOUS PROVISIONS. Assignment. This Note and the other Loan Documents shall inure to
the benefit of and be binding upon the parties and their respective heirs, legal representatives,
successors and assigns. Bank’s interests in and rights under this Note and the other Loan
Documents are freely assignable, in whole or in part, by Bank. In addition, nothing in this Note
or any of the other Loan Documents shall prohibit Bank from pledging or assigning this Note or any
of the other Loan Documents or any interest therein to any Federal Reserve Bank. Borrower shall
not assign its rights and interest hereunder without the prior written consent of Bank, and any
attempt by Borrower to assign without Bank’s prior written consent is null and void. Any
assignment shall not release Borrower from the Obligations. Organization; Powers. Borrower
represents that Borrower (i) is (a) an adult individual and is sui juris, or (b) a
corporation, general partnership, limited partnership, limited liability company or other legal
entity, duly organized, validly existing and in good standing under the laws of its state of
organization, and is authorized to do business in each other jurisdiction wherein its ownership of
property or conduct of business legally requires such organization (ii) has the power and authority
to own its properties and assets and to carry on its business as now being conducted and as now
contemplated; and (iii) has the power and authority to execute, deliver and perform, and by all
necessary action has authorized the execution, delivery and performance of, all of its obligations
under this Note and any other Loan Document to which it is a party. Applicable Law; Conflict
Between Documents. This Note and, unless otherwise provided in any other Loan Document, the other
Loan Documents shall be governed by and construed under the laws of the state named in Bank’s
address on the first page hereof without regard to that state’s conflict of laws principles. If
the terms of this Note should conflict with the terms of any loan agreement or any commitment
letter that survives closing, the terms of this Note shall control.

5

 

Borrower’s Accounts. Borrower shall open and maintain during the entire term of this Loan all of its project accounts with
respect to this project at Lender. Additionally, Borrower shall maintain a meaningful depository
relationship at Lender for the term of the Loan. Jurisdiction. Borrower irrevocably agrees to
non-exclusive personal jurisdiction in the state named in Bank’s address on the first page hereof.
Severability. If any provision of this Note or of the other Loan Documents shall be prohibited or
invalid under applicable law, such provision shall be ineffective but only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Note or other such document. Notices. Any notices to Borrower shall be
sufficiently given, if in writing and mailed or delivered to the Borrower’s address shown above or
such other address as provided hereunder, and to Bank, if in writing and mailed or delivered to
Bank’s address shown above or such other address as Bank may specify in writing from time to time.
In the event that Borrower changes Borrower’s address at any time prior to the date the Obligations
are paid in full, Borrower agrees to promptly give written notice of said change of address by
registered or certified mail, return receipt requested, all charges prepaid. Plural; Captions.
All references in the Loan Documents to Borrower, guarantor, person, document or other nouns of
reference mean both the singular and plural form, as the case may be, and the term “person” shall
mean any individual, person or entity. The captions contained in the Loan Documents are
inserted for convenience only and shall not affect the meaning or interpretation of the Loan
Documents. Advances. Bank may, in its sole discretion, make other advances which shall be deemed
to be advances under this Note, even though the stated principal amount of this Note may be
exceeded as a result thereof. Posting of Payments. All payments received during normal banking
hours after 2:00 p.m. local time at the office of Bank first shown above shall be deemed received
at the opening of the next banking day. Joint and Several Obligations. Each person who signs this
Note as a Borrower (as defined herein) is jointly and severally obligated. Fees and Taxes.
Borrower shall promptly pay all documentary, intangible recordation and/or similar taxes on this
transaction whether assessed at closing or arising from time to time.

WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER BY EXECUTION HEREOF
AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONNECTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL
OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT
TO BANK TO ACCEPT THIS NOTE.

BORROWER AND BANK AGREE THAT THEY SHALL NOT HAVE A REMEDY OF PUNITIVE OR EXEMPLARY DAMAGES
AGAINST THE OTHER IN ANY DISPUTE AND HEREBY WAIVE ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY
DAMAGES THEY HAVE NOW OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY DISPUTE WHETHER THE
DISPUTE IS RESOLVED BY ARBITRATION OR JUDICIALLY.

[NO FURTHER TEXT ON THIS PAGE]

6

 

     IN WITNESS WHEREOF, Borrower, on the day and year first above written, has caused this Note to
be executed under seal.

	 	 	 	 	 
	 	 	TRADITION DEVELOPMENT COMPANY, LLC, a Florida limited liability company
	 
	 	 	 	 
	 	 	Taxpayer ID: 65-1060893
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 
	 	 	Print name: James H. Anderson
	 	 	Title: Executive Vice President
	 
	 	 	 	 
	 	 	HORIZONS ST. LUCIE DEVELOPMENT, LLC, a Florida limited liability company
	 
	 	 	 	 
	 	 	Taxpayer ID: 65-1150484
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 
	 	 	Print name: James H. Anderson
	 	 	Title: Executive Vice President
	 
	 	 	 	 
	 	 	HORIZONS ACQUISITION 7, LLC, a Florida limited liability company
	 
	 	 	 	 
	 	 	Taxpayer ID: 72-1549797
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 
	 	 	Print name: James H. Anderson
	 	 	Title: Executive Vice President
	 
	 	 	 	 
	 	 	TRADITION MORTGAGE, LLC, a Florida limited liability company
	 
	 	 	 	 
	 	 	Taxpayer ID: 57-1149547
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 
	 	 	Print name: James H. Anderson
	 	 	Title: Executive Vice President

7

 

PREPARED BY: Karen D. Geller, Esq.

RETURN TO: Gunster, Yoakley & Stewart, P.A.

800 SE Monterey Commons Blvd., Suite 200

Stuart, FL 34996

(772) 288-1980

MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT

     THIS MORTGAGE, ASSIGNMENT OF RENTS, AND SECURITY AGREEMENT (hereinafter referred to as
“Mortgage”) is made effective April 8, 2005, between TRADITION DEVELOPMENT COMPANY, LLC, a Florida
limited liability company, whose address is c/o Core Communities, LLC, 10521 S.W. Village Station
Drive, Suite 201, Port St. Lucie, Florida 34987, (referred to herein as “Mortgagor”) and WACHOVIA
BANK, NATIONAL ASSOCIATION, whose address is 200 E. Broward Boulevard, 2nd floor, Ft. Lauderdale,
FL 33301(“Bank”).

W I T N E S S E T H :

     To secure payment and performance of obligations under (i) a Revolving Promissory Note (the
“Note”) of even date herewith, in the amount of FORTY MILLION AND 00/100 DOLLARS ($40,000,000.00),
made by Mortgagor; Horizons St. Lucie Development, LLC, a Florida limited liability company;
Horizons Acquisition 7, LLC, a Florida limited liability company; and Tradition Mortgage, LLC, a
Florida limited liability company (collectively, “Borrower”) payable to Bank, this Mortgage, other
loan documents as defined in the Note (the “Loan Documents”), and swap agreements (as defined in 11
U.S.C. § 101) between Bank and Borrower, and any renewals, extensions, novations, or modifications
of the foregoing (collectively the “Obligations”), and in consideration of these premises and for
other consideration, Mortgagor does mortgage, grant and convey unto Bank, its successors and
assigns, all of Mortgagor’s right, title and interest now owned or hereafter acquired in and to
each of the following (collectively, the “Property”): (i) all those certain tracts of land in St.
Lucie County, Florida, more particularly described in EXHIBIT A attached hereto and made part
hereof (the “Land”); (ii) all buildings and improvements now or hereafter erected on the Land;
(iii) all fixtures, machinery, equipment and other articles of real, personal or mixed property
attached to, situated or installed in or upon the Land or any buildings or improvements situated
thereon, whether or not such real, personal or mixed property is or shall be affixed to the Land;
(iv) all building materials, building machinery and building equipment delivered on site to the
Land during the course of, or in connection with, any construction, repair or renovation of the
buildings and improvements situated or to be situated thereon; (v) all leases, licenses or
occupancy agreements of all or any part of the Land and all extensions, renewals, and modifications
thereof, and any options, rights of first refusal or guarantees relating thereto; all rents,
income, revenues, security deposits, issues, profits, awards and payments of any kind payable under
the leases or otherwise arising from the Land; (vi) all contract rights, accounts receivable and
general intangibles relating solely to the Land or the use, occupancy, maintenance, construction,
repair or operation thereof; all management agreements, franchise agreements, utility agreements
and deposits; all maps, plans, surveys and specifications; all warranties and guaranties; all
permits, licenses and approvals; and all insurance policies; (vii) all estates, rights, tenements,
hereditaments, privileges, rents, issues, profits, easements, and appurtenances of any kind
benefiting the Land, including any and all easements for ingress and egress and access to and from
the Land, whether public or private; and all water and mineral

1

 

rights; and (viii) all “Proceeds” of any of the above-described property, which term shall have the meaning given to it in
the Uniform Commercial Code of the jurisdiction where this Mortgage is recorded (the “UCC”),
whether cash or non-cash, and including insurance proceeds and condemnation awards; and all
replacements, substitutions and accessions thereof.

     In the event that Mortgagor is the owner of a leasehold estate with respect to any portion of
the Property and Mortgagor obtains a fee estate in such portions of the Property, then, such fee
estate shall automatically, and without further action of any kind on the part of the Mortgagor, be
and become subject to the security title and lien of this Mortgage.

     TO HAVE AND TO HOLD the Property and all the estate, right, title and interest, in law and in
equity, of Mortgagor’s in and to the Property unto Bank, its successors and assigns, forever.

     PROVIDED, HOWEVER, the amount secured hereby at any time shall not exceed the principal amount
of FORTY MILLION AND 00/100 DOLLARS ($40,000,000.00) (“Original Maximum Principal Amount”), plus
all interest, costs, reimbursements, fees and expenses in connection therewith.

     Mortgagor WARRANTS AND REPRESENTS that Mortgagor is lawfully seized of the Property, in fee
simple, absolute, that Mortgagor has the legal right to convey and encumber the same, and that the
Property is free and clear of all liens and encumbrances other than as set forth in the title
policy provided to and approved by Bank and other matters as set forth in the Permitted Exceptions
and contemplated by the Loan Documents and approved by Lender (“Permitted Exceptions”). Mortgagor
further warrants and will forever defend all and singular the Property and title thereto to Bank
and Bank’s successors and assigns, against the lawful claims of all persons whomsoever subject to
the Permitted Exceptions.

     PROVIDED ALWAYS that if (i) all the Obligations (including without limitation, all termination
payments and any other amounts due under or in connection with any swap agreements (as defined in
11 U.S.C. § 101) secured hereunder) are paid in full, (ii) each and every representation, warranty,
agreement, covenant and condition of this Mortgage, and the other Loan Documents, are complied with
and abided by, and (iii) any and all swap agreements (as defined in 11 U.S.C. § 101) secured
hereunder have matured or been terminated, then this Mortgage and the estate hereby created shall
cease and be null, void, and canceled of record.

     To protect the security of this Mortgage, Mortgagor further represents and agrees with Bank as
follows:

     Payment of Obligations. That the Obligations shall be timely paid and performed.

     Revolving Note. Advances made under the Note or any future promissory notes secured hereby or
other evidences of obligation now or hereafter secured by this Mortgage shall be in the form of a
continual revolving line of credit whereby advances may be made, repaid and re-advanced from time
to time but in no event shall the outstanding principal balance at any time exceed the Original
Maximum Principal Amount. Bank shall maintain an account on its books, which shall evidence at all
times the amount from time to time outstanding under the Note or any other promissory note now or
hereafter made evidencing the indebtedness secured hereby. Advances made by Bank pursuant to the
Mortgage, including without limitation, for the payment of taxes, assessments, insurance premiums,
costs for the protection of the Property, reasonable attorneys’ fees (whether or not litigation has
been commenced and in all trial, bankruptcy and

2

 

appellate proceedings) and court costs incurred in
the collection of any or all of such sums of money and interest thereon in whatever manner the
indebtedness may be evidenced or represented, shall be secured by this Mortgage until the Mortgage
is satisfied of record.

     Future Advances. This Mortgage is given to secure not only existing Obligations, but also
future advances, including obligations under swap agreements made, and future swap agreements (as
defined in 11 U.S.C. § 101) entered into with Bank, within twenty (20) years of the date of this
Mortgage pursuant to a Revolving Loan Agreement between Borrower and Bank of even date herewith
(the “Loan Agreement”) to the same extent as if such future advances and obligations under swap
agreements are made on the date of the execution of this Mortgage. The principal amount (including
any swap agreements and future advances) that may be so secured may decrease or increase from time
to time, but the total amount so secured at any one time shall not exceed TWENTY MILLION AND 00/100
Dollars ($20,000.00.00), plus all interest, costs, reimbursements, fees and expenses due under this
Mortgage and secured hereby. Notwithstanding the foregoing, the maximum principal amount secured
hereby shall not exceed the Original Maximum Principal Amount. All covenants and agreements
contained in this Mortgage shall be applicable to all further advances made by Bank to Mortgagor
under this future advance clause. Any such future advances, whether obligatory or to be
made at the option of Bank, or otherwise, may be made either prior to or after the due date of the
Note or any other note secured by this Mortgage. Mortgagor shall not execute any document that
impairs or otherwise impacts the priority of any existing or future Obligations secured by this
Mortgage.

     Grant of Security Interest in Personal Property. This Mortgage constitutes a security
agreement under the UCC and shall be deemed to constitute a fixture financing statement. Mortgagor
hereby grants a security interest in any personal property included in the Property. On request of
Bank, Mortgagor will execute one or more Financing Statements in form satisfactory to Bank and will
pay all costs and expenses of filing the same in all public filing offices, where filing is deemed
desirable by Bank. Bank is authorized to file Financing Statements relating to the Property
without Mortgagor’s signature where permitted by law. Mortgagor appoints Bank as its
attorney-in-fact to execute such documents necessary to perfect Bank’s security interest on
Mortgagor’s behalf. The appointment is coupled with an interest and shall be irrevocable as long
as any Obligations remain outstanding.

Nothing herein obligates Bank to provide credit in excess of the Obligations.

     Leases, Subleases and Easements. Mortgagor shall maintain, enforce and cause to be performed
all of the terms and conditions under any lease, sublease or easement which may constitute a
portion of the Property. Mortgagor shall not, without the consent of Bank, enter into any new
lease of all or any portion of the Property outside the criteria for said leases approved by Bank,
agree to the cancellation or surrender under any lease of all or any portion of the Property, agree
to prepayment of rents, issues or profits (other than rent paid at the signing of a lease or
sublease), modify any such lease so as to shorten the term, decrease the rent, accelerate the
payment of rent, or change the terms of any renewal option; and any such purported new lease,
cancellation, surrender, prepayment or modification made without the consent of Bank shall be void
as against Bank.

     Required Insurance. Mortgagor shall maintain with respect to the Property liability insurance
providing coverage in such amount as Bank may require but in no event less than $1,000,000.00 per
occurrence, with aggregate excess coverage of not less than

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$10,000,000.00, naming Bank as an
additional insured, and such other insurance as Bank may require from time to time.

     All property insurance policies shall contain an endorsement or agreement by the insurer in
form satisfactory to Bank that any loss shall be payable in accordance with the terms of such
policy notwithstanding any act or negligence of Mortgagor and the further agreement (within both
the property and liability policies) of the insurer waiving rights of subrogation against Bank, and
rights of set-off, counterclaim or deductions against Mortgagor.

     All insurance policies shall be in form, provide coverages, be issued by companies and be in
amounts satisfactory to Bank. At least 30 days prior to the expiration of each such policy,
Mortgagor shall furnish Bank with evidence satisfactory to Bank that such policy has been renewed
or replaced or is no longer required hereunder. All such policies shall provide that the policy
will not be canceled or materially amended without at least 30 days prior written notice to Bank.
In the event Mortgagor fails to provide, maintain, keep in force, and furnish to Bank the policies
of insurance required by this paragraph, Bank may procure such insurance or single-interest
insurance in such amounts, at such premium, for such risks and by such means as Bank chooses, at
Mortgagor’s expense; provided however, Bank shall have no responsibility to obtain any insurance,
but if Bank does obtain insurance, Bank shall have no responsibility to assure that the insurance
obtained shall be adequate or provide any protection to Mortgagor.

     Insurance Proceeds. After occurrence of any loss to any of the Property, Mortgagor shall give
prompt written notice thereof to Bank.

     Impositions; Escrow Deposit. Mortgagor will pay all taxes, levies, assessments and other fees
and charges imposed upon or which may become a lien upon the Property under any law or ordinance
(all of the foregoing collectively “Impositions”) before they become delinquent and in any event in
the same calendar year in which they first become due. Upon request of Bank after an Event of
Default, Mortgagor shall add to each periodic payment required under the Note the amount estimated
by Bank to be sufficient to enable Bank to pay, as they come due, all Impositions and insurance
premiums which Mortgagor is required to pay hereunder. Payments requested under this provision
shall be supplemented or adjusted as required by Bank from time to time. Such funds may be
commingled with the general funds of Bank and shall not earn interest. Upon the occurrence of a
Default, Bank may apply such funds to pay any of the Obligations.

     Use of Property. Mortgagor shall use and operate, and require its lessees or licensees to use
and operate, the Property in compliance with all applicable laws (including, for example, the
Americans with Disabilities Act and the Fair Housing Act) and ordinances, covenants, and
restrictions, and with all applicable requirements of any lease or sublease now or hereafter
affecting the Property. Mortgagor shall not permit any unlawful use of the Property or any use
that may give rise to a claim of forfeiture of any of the Property. Mortgagor shall not allow
changes in the stated use of Property from that disclosed to Bank at the time of execution hereof
or approved by Bank, which approval shall not be unreasonably withheld. Mortgagor shall not
initiate or acquiesce to a zoning change of the Property without prior notice to, and written
consent of, Bank.

     Maintenance, Repairs and Alterations. Mortgagor shall keep and maintain the Property in good
condition and repair and fully protected from the elements to the satisfaction of Bank. Mortgagor
shall promptly notify Bank in writing of any material loss, damage or adverse condition affecting
the Property.

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     Eminent Domain. Should the Property or any interest therein be taken or damaged by reason of
any public use or improvement or condemnation proceeding (“Condemnation”), or should Mortgagor
receive any notice or other information regarding such Condemnation, Mortgagor shall give prompt
written notice thereof to Bank. In the event the Collateral for the Borrowing Base is negatively
impacted resulting in an adjusted loss in the value of the Collateral, Bank shall be entitled to
all compensation, awards and other payments or relief granted in connection with such Condemnation
and, at its option, may commence, appear in and prosecute in its own name any action or proceedings
relating thereto. Mortgagor shall be entitled to make any compromise or settlement in connection
with such taking or damage after consulting with and obtaining Bank’s prior written consent. All
compensation, awards, and damages awarded to Mortgagor related to any Condemnation (the “Proceeds”)
in accordance herewith are hereby assigned to Bank and Mortgagor agrees to execute such further assignments of
the Proceeds as Bank may require. Bank shall have the option of applying or paying the Proceeds in
the same manner as insurance proceeds as provided herein. Mortgagor appoints Bank as its
attorney-in-fact to receive and endorse the Proceeds to Bank, which appointment is coupled with an
interest and shall be irrevocable as long as any Obligations remain unsatisfied.

     Environmental Condition of Property and Indemnity. Mortgagor warrants and represents to Bank,
except as reported by Mortgagor to Bank in writing, that: (i) Mortgagor has inspected and is
familiar with the environmental condition of the Property; (ii) the Property and Mortgagor, and any
occupants of the Property, are in compliance with and shall continue to be in compliance with all
applicable federal, state and local laws and regulations intended to protect the environment and
public health and safety as the same may be amended from time to time (as further defined in the
Loan Agreement) (“Environmental Laws”); (iii) the Property is not and has never been used to
generate, handle, treat, store or dispose of, in any quantity, oil, petroleum products, hazardous
or toxic substances, hazardous waste, regulated substances or hazardous air pollutants in violation
of Environmental Laws (“Hazardous Materials”) in violation of any Environmental Laws; (iv) no
Hazardous Materials (including asbestos or lead paint in any form) are located on or under the
Property or emanate from the Property; (v) there are no unregistered underground storage tanks on
the Property that are subject to any underground storage tank registration laws or regulations;
(vi) no notice has been received with regard to any Hazardous Material on the Property; (vii) no
action, investigation or proceeding is pending or to Mortgagor’s knowledge threatened which seeks
to enforce any right or remedy against Mortgagor or the Property under any Environmental Law; and
(viii) all licenses, permits and other governmental or regulatory actions necessary for the
Property to comply with Environmental Laws shall be obtained and maintained and Mortgagor shall
assure compliance therewith.

     Mortgagor agrees to notify Bank immediately upon receipt of any citations, warnings, orders,
notices, consent agreements, process or claims alleging or relating to violations of any
Environmental Laws or to the environmental condition of the Property and shall conduct and complete
all investigations and all cleanup actions necessary to comply with the Environmental Laws and to
remove, in accordance with Environmental Laws, any Hazardous Material from the Property.

     Mortgagor shall indemnify, hold harmless, and defend Bank from and against any and all
damages, penalties, fines, claims, suits, liabilities, costs, judgments and expenses, including
attorneys’, consultants’ or experts’ fees of every kind and nature incurred, suffered by or
asserted against Bank as a direct or indirect result of: (i) representations made by Mortgagor in

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this Section being or becoming untrue in any material respect; (ii) Mortgagor’s violation of or
failure to meet the requirements of any Environmental Laws; or (iii) Hazardous Materials which,
while the Property is subject to this Mortgage, exist on the Property but not for matters occurring
after foreclosure or deed in lieu thereof. Bank shall have the right to arrange for or conduct
environmental inspections of the Property from time to time (including the taking of soil, water,
air or material samples). The cost of such inspections (i) made after Default, (ii) which are
required by laws or regulations applicable to Bank, or (iii) which are ordered by Bank following
Bank’s good faith determination that Mortgagor may be in violation of any Environmental Laws and/or
there are Hazardous Materials on the Property, shall be borne by Mortgagor. However, Mortgagor’s
indemnity shall not apply to any negligent or intentional act of Bank, its successors or assigns,
which takes place after foreclosure, deed in lieu of foreclosure, or satisfaction of this Mortgage.
These indemnification obligations are in addition to General Indemnification provisions set forth
hereafter. Mortgagor’s Obligations under this section shall continue, survive and remain in full
force and effect notwithstanding the repayment of the Obligations, a foreclosure of or exercise of
power of sale under this instrument, a delivery of a deed in lieu of foreclosure, a cancellation or
termination of record of this instrument and the transfer of the Property.

     Appraisals. Mortgagor agrees that Bank may obtain an appraisal of the Property when required
by the regulations of the Federal Reserve Board or the Office of the Comptroller of the Currency,
any other regulatory agency or at such other times as Bank may reasonably require. Such appraisals
shall be performed by an independent third party appraiser selected by Bank. The cost of such
appraisals shall be borne by Mortgagor. If requested by Bank, Mortgagor shall execute an
engagement letter addressed to the appraiser selected by Bank. Mortgagor’s failure or refusal to
sign such an engagement letter, however, shall not impair Bank’s right to obtain such an appraisal.
Mortgagor agrees to pay the cost of such appraisal within 10 days after receiving an invoice for
such appraisal.

     Inspections. Bank, or its representatives or agents, are authorized to enter at any
reasonable time upon any part of the Property for the purpose of inspecting the Property and for
the purpose of performing any of the acts it is authorized to perform under the terms of this
Mortgage.

     Liens and Subrogation. Mortgagor shall pay and promptly discharge all liens, claims and
encumbrances upon the Property except for those described in EXHIBIT B or those matters
contemplated by the Loan Documents and approved by Bank. Mortgagor shall have the right to contest
in good faith the validity of any such lien, claim or encumbrance, provided: (i) such contest
suspends the collection thereof or there is no danger of the Property being sold or forfeited while
such contest is pending; (ii) Mortgagor first deposits with Bank a bond or other security
satisfactory to Bank in such amounts as Bank shall reasonably require; and (iii) Mortgagor
thereafter diligently proceeds to cause such lien, claim or encumbrance to be removed and
discharged.

     Bank shall be subrogated to any liens, claims and encumbrances against Mortgagor or the
Property that are paid or discharged through payment by Bank or with loan proceeds, notwithstanding
the record cancellation or satisfaction thereof.

     Waiver of Mortgagor’s Rights. To the fullest extent permitted by law, Mortgagor waives the
benefit of all laws now existing or that hereafter may be enacted providing for (i) any
appraisement before sale of any portion of the Property, (ii) in any way extending the time for the
enforcement of the collection of the Note or the debt evidenced thereby or any of the other

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Obligations, rights under the fifth and fourteenth amendments to the Constitution of the United
States and any similar rights under the constitutions of any state, and any rights to hearing prior
to the exercise by Bank of any right, power, or remedy herein provided to Bank.

     To the full extent Mortgagor may do so, Mortgagor agrees that Mortgagor will not at any time
insist upon, plead, claim or seek to take the benefit or advantage of any law now or hereafter in
force providing for any exemption (including homestead exemption), appraisement, valuation, stay,
extension or redemption, and Mortgagor for themselves and their respective heirs, devisees,
representatives, successors and assigns, and for any and all persons claiming any interest in the
Property, to the extent permitted by law, hereby waive and release all rights of valuation,
appraisement, redemption, stay of execution, the benefit of all exemption laws, notice of election
to mature or declare due the whole of the secured indebtedness and marshalling in the event of
foreclosure of the liens hereby created. Except for notices to be provided in accordance with the
Loan Documents, Mortgagor further waives any and all notices including, without limitation, notice
of intention to accelerate and of acceleration of the Obligations.

     Payments by Bank. In the event of default in the timely payment or performance of any of the
Obligations not cured within the applicable cure period, Bank, at its option and without any duty
on its part to determine the validity or necessity thereof, may pay the sums for which Mortgagor is
obligated. Further, after an Event of a Default that has not been cured by Mortgagor within any
applicable cure period, Bank may pay such sums as Bank deems appropriate for the protection and
maintenance of the Property including, without limitation, sums to pay Impositions and other levies, assessments or
liens, maintain insurance, make repairs, secure the Property, maintain utility service, intervene
in any condemnation, make advances under a construction loan to enable completion of construction
and pay attorneys’ fees and other fees and costs to enforce this Mortgage or protect the lien
hereof (including foreclosure) or collect the Obligations, without limitation, including those
incurred in any proceeding including Bankruptcy or arbitration. Any amounts so paid shall bear
interest at the default rate stated in the Note and shall be secured by this Mortgage.

     Indemnification. Mortgagor shall protect, indemnify and save harmless Bank from and against
all losses, liabilities, obligations, claims, damages, penalties, causes of action, costs and
expenses (including, without limitation, reasonable attorneys’ fees and expenses) (collectively,
“Damages”) imposed upon, incurred by or asserted against Bank on account of (i) the Loan Documents
or any failure or alleged failure of Mortgagor to comply with any of the terms or representations
of this Mortgage; (ii) any claim of loss or damage to the Property or any injury or claim of injury
to, or death of, any person or property that may be occasioned by any cause whatsoever pertaining
to the Property or the use, occupancy or operation thereof (hereinafter collectively “Loss”) prior
to a judgment of foreclosure or deed in lieu thereof unless said Loss is a result of the use,
occupancy or operation of the Property by Mortgagor prior to said foreclosure judgment or deed in
lieu thereof, (iii) any failure or alleged failure of Mortgagor to comply with any law, rule or
regulation applicable to the Property or the use, occupancy or operation of the Property
(including, without limitation, the failure to pay any taxes, fees or other charges), provided that
such indemnity shall be effective only to the extent of any Damages that may be sustained by Bank
in excess of any net proceeds received by it from any insurance of Mortgagor (other than
self-insurance) with respect to such Damages, (iv) any Damages whatsoever by reason of any alleged
action, obligation or undertaking of Bank (other than Bank’s gross negligence or willful
misconduct) relating in any way to or any matter contemplated by the Loan Documents (v) any claim
for brokerage fees or such other commissions by or through Mortgagor relating to the Property or
any other Obligations, or (vi) any and all liability

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arising from any leases related to the
Property prior to a judgment of foreclosure or deed in lieu thereof unless said liability is a
result of Mortgagor’s actions or inaction relating to the lease prior to said foreclosure judgment
or deed in lieu thereof. Nothing contained herein shall require Mortgagor to indemnify Bank for
any Damages resulting from Bank’s gross negligence or its willful and wrongful acts. The indemnity
provided for herein shall survive payment of the Obligations and shall extend to the officers,
directors, employees and duly authorized agents of Bank. In the event the Bank incurs any Damages
arising out of or in any way relating to the transaction contemplated by the Loan Documents
(including any of the matters referred to in this section), the amounts of such Damages shall be
added to the Obligations, shall bear interest, to the extent permitted by law, at the interest rate
borne by the Obligations from the date incurred until paid and shall be payable on demand.

     Assignment of Rents. Mortgagor hereby absolutely assigns and transfers to Bank all the
leases, rents, issues and profits of the Property (collectively “Rents”). Although this assignment
is effective immediately, so long as no Default exists, Bank gives to and confers upon Mortgagor
the privilege under a revocable license to collect as they become due, but not prior to accrual,
the Rents and to demand, receive and enforce payment, give receipts, releases and satisfactions,
and sue in the name of Mortgagor for all such Rents. Mortgagor represents there has been no prior
assignment of leases or Rents, and agrees not to further assign such leases or Rents. Upon any
occurrence of Default, the license granted to Mortgagor herein shall be automatically revoked
without further notice to or demand upon Mortgagor until such Default is cured, and Bank shall have
the right, in its discretion, without notice, by agent or by a receiver appointed by a court, and
without regard to the adequacy of any security for the Obligations, (i) to enter upon and take
possession of the Property, (ii) notify tenants, subtenants and any property manager to pay Rents
to Bank or its designee, and upon receipt of such notice such persons are authorized and directed
to make payment as specified in the notice and disregard any contrary direction or instruction by
Mortgagor, and (iii) in its own name, sue for or otherwise collect Rents, including those past due,
and apply Rents, less costs and expenses of operation and collection, including attorneys’ fees, to the
Obligations in such order and manner as Bank may determine or as otherwise provided for herein.
Bank’s exercise of any one or more of the foregoing rights shall not cure or waive any Default or
notice of Default hereunder. The terms of this Section are in addition to those terms set forth in
that certain Absolute Assignment of Lessor’s Interest in Leases and Rents executed by Mortgagor to
Bank of even date herewith.

     Due on Sale or Further Encumbrance or Transfer of an Interest in Mortgagor. Without the prior
written consent of Bank in each instance unless the Mortgagor releases the portion of the Mortgaged
Property in accordance with Bank’s requirements and the terms and conditions of the Loan Documents,
Mortgagor shall not (i) sell, convey, transfer or encumber the Property, or any part thereof or
interest therein, whether legal or equitable, (ii) cause or permit any transfer of the Property or
any part thereof, whether voluntarily, involuntarily or by operation of law, or (iii) enter into
any agreement or transaction to transfer, or accomplish in form or substance a transfer, of the
Property without releasing such portion of the property from the lien of this Mortgage at the time
such property is to be conveyed. A “transfer” of the Property includes: (a) the direct or
indirect sale, transfer or conveyance of the Property or any portion thereof or interest therein;
(b) the execution of an installment sale contract or similar instrument affecting all or any
portion of the Property; (c) if Mortgagor or any general partner or member of Mortgagor, is a
corporation, partnership, limited liability company, trust or other business entity, the transfer
(whether in one transaction or a series of transactions) of any stock, partnership, limited
liability company or other ownership interests in such corporation, partnership, limited liability
company or entity including, without limitation, changes in stockholders, partners, members,
managers, trustees, beneficiaries, or their respective interests; (d) if Mortgagor, or

8

 

any general
partner or member of Mortgagor, is a corporation, the creation or issuance of new stock by which an
aggregate of more than 10% of such corporation’s stock shall be vested in a party or parties who
are not now stockholders other than to an entity controlled by Guarantor Core Communities, LLC and
(e) an agreement by Mortgagor leasing all or a substantial part of the Property for other than
actual occupancy by a space tenant or agricultural lease thereunder or a sale, assignment or other
transfer of or the grant of a security interest in and to any Leases.

     Bank’s consent to any conveyance or encumbrance may be conditioned upon an increase in the
interest rate specified in the Note (or other Obligations), an extension or curtailment of the
maturity of the Obligations, or other modification of the Note or this instrument.

     Remedies of Bank on Default. Failure of Mortgagor or any other person liable to (i) timely
pay (and such nonpayment is not cured within five (5) days of the due date) or (ii) perform any of
the Obligations (and such nonperformance is not cured within twenty (20) days of receipt of notice
by Mortgagor of such nonperformance provided, however, if such nonperformance is not curable within
said twenty (20) day period and Mortgagor is diligently pursuing said cure, the cure period shall
be extended for up to an additional thirty (30) days, is a default (“Default”) under this Mortgage.
Upon the occurrence of Default the following remedies are available, without limitation, to Bank:
(i) Bank may exercise any or all of Bank’s remedies under this Mortgage or other Loan Documents
including, without limitation, acceleration of the maturity of all payments and Obligations,
including any swap agreements (as defined in 11 U.S.C. § 101) with Bank (provided that the early
termination shall be governed by the default and termination provisions of said swap agreements);
(ii) Bank may take immediate possession of the Property or any part thereof (which Mortgagor agrees
to surrender to Bank) and manage, control or lease the same to such persons and at such rental as
it may deem proper and collect and apply Rents to the payment of: (a) the Obligations, together
with all costs and attorneys’ fees; (b) all Impositions and any other levies, assessments or liens
which may be prior in lien or payment to the Obligations, and premiums for insurance, with interest
on all such items; and (c) the cost of all expenses incident to taking and retaining possession of
the Property and the management and operation thereof; all in such order or priority as Bank in its
sole discretion may determine. The taking of possession shall not prevent concurrent or later proceedings for the foreclosure sale of the Property; and (iii) Bank may apply
to any court of competent jurisdiction for the appointment of a receiver for all purposes
including, without limitation, to manage and operate the Property or any part thereof, and to apply
the Rents therefrom as hereinabove provided. In the event of such application, Mortgagor consents
to the appointment of a receiver, and agrees that a receiver may be appointed without notice to
Mortgagor, without regard to whether Mortgagor has committed waste or permitted deterioration of
the Property, without regard to the adequacy of any security for the Obligations, and without
regard to the solvency of Mortgagor or any other person, firm or corporation who or which may be
liable for the payment of the Obligations; (iv) Bank may exercise all the remedies of a mortgagee
as provided by law and in equity including, without limitation, foreclosure upon this Mortgage and
sale of the Property, or any part of the Property, at public sale conducted according to applicable
law (referred to as “Sale”) and conduct additional Sales as may be required until all of the
Property is sold or the Obligations are satisfied; (v) With respect to any portion of the Property
governed by the UCC, Bank shall have all of the rights and remedies of a secured party thereunder.
Bank may elect to foreclose upon any Property that is fixtures under law applicable to foreclosure
of interests in real estate or law applicable to personal property; (vi) Bank may bid at Sale and
may accept, as successful bidder, credit of the bid amount against the Obligations as payment of
any portion of the purchase price; and (vii) Bank shall apply the proceeds of Sale, first to any
fees or attorney fees permitted Bank by law in connection with Sale, second to expenses of
foreclosure,

9

 

publication, and sale permitted Bank by law in connection with Sale, third to the
Obligations, and any remaining proceeds as required by law.

     Miscellaneous Provisions. Mortgagor agrees to the following: (i) All remedies available to
Bank with respect to this Mortgage or available at law or in equity shall be cumulative and may be
pursued concurrently or successively. No delay by Bank in exercising any remedy shall operate as a
waiver of that remedy or of any Default. Any payment by Bank or acceptance by Bank of any partial
payment shall not constitute a waiver by Bank of any Default; (ii) Mortgagor represents that
Mortgagor (a) is (1) an adult individual and is sui juris, or (2) a corporation, general
partnership, limited partnership, limited liability company or other legal entity, duly organized,
validly existing and in good standing under the laws of its state of organization, and is
authorized to do business in each other jurisdiction wherein its ownership of property or conduct
of business legally requires such organization (b) has the power and authority to own its
properties and assets and to carry on its business as now being conducted and as now contemplated;
and (c) has the power and authority to execute, deliver and perform, and by all necessary action
has authorized the execution, delivery and performance of, all of its obligations under this
Mortgage and any other Loan Document to which it is a party. (iii) The provisions hereof shall be
binding upon and inure to the benefit of Mortgagor, its heirs, personal representatives, successors
and assigns including, without limitation, subsequent owners of the Property or any part thereof,
and shall be binding upon and inure to the benefit of Bank, its successors and assigns and any
future holder of the Note or other Obligations; (iv) Any notices, demands or requests shall be
sufficiently given Mortgagor if in writing and mailed or delivered to the address of Mortgagor
shown above or to another address as provided herein and to Bank if in writing and mailed or
delivered to Wachovia Bank, National Association, at the address shown above, or such other address
as Bank may specify from time to time and in the event that Mortgagor changes Mortgagor’s address
at any time prior to the date the Obligations are paid in full, that party shall promptly give
written notice of such change of address by registered or certified mail, return receipt requested,
all charges prepaid; (v) The captions or headings at the beginning of each paragraph hereof are for
the convenience of the parties and are not a part of this Mortgage; (vi) If the lien of this
Mortgage is invalid or unenforceable as to any part of the Obligations, the unsecured portion of
the Obligations shall be completely paid (and all payments made shall be deemed to have first been
applied to payment of the unsecured portion of the Obligations) prior to payment of the secured
portion of the Obligations and if any clause, provision or obligation hereunder is determined
invalid or unenforceable the remainder of this Mortgage shall be construed and enforced as if such
clause, provision or obligation had not been contained herein; (vii) This Mortgage shall be
governed by and construed under the laws of the jurisdiction where this Mortgage is recorded; (viii) Mortgagor by execution
and Bank by acceptance of this Mortgage agree to be bound by the terms and provisions hereof.

     Minimum Standards. In addition to the requirements set forth in the Loan Documents, all
surveys, insurance, title policies, construction documents, environmental reports, payment and
performance bonds, and any other due diligence or additional documents required in connection with
this Loan, shall comply with Bank’s minimum standards in place from time to time for such
documents, which shall be provided in writing by Bank to Borrower upon request.

     Joinders and Consents. Mortgagee agrees, upon request of Mortgagor, to join in and consent to
any plat for the Real Estate and any utility easements, dedications, and to consent to any property
association documents or declarations, development agreements or similar instruments affecting the
Real Estate and needed by the Mortgagor in connection with the development of the Real Estate as
contemplated by the Loan Documents, at no cost or liability to Mortgagee, except for the cost of
review of such documentation by Mortgagor’s attorney

10

 

which shall be payable by Mortgagor, for the
sole purpose of subjecting the lien of this Mortgage to the effects of such instruments, provided
that such instruments are in form and substance acceptable to Mortgagee in Mortgagee’s reasonable
discretion reasonably exercised. All homeowner association documents or declarations, development
agreements or similar instruments affecting the Real Estate shall contain customary provisions
subordinating the lien and encumbrance of any assessments or other charges provided for thereunder
to the lien of this Mortgage. Mortgagee shall have no obligation to join in or consent to any such
documents if doing so would materially diminish the value of the Property or require Mortgagee to
directly assume any of Mortgagor’s obligations under such instruments. Mortgagor hereby agrees not
to relocate any conservation easements currently off the Real Estate as referenced on Exhibit B
attached hereto to the Real Estate.

     WAIVER OF EXEMPLARY DAMAGES. MORTGAGOR AND BANK AGREE THAT THEY SHALL NOT HAVE A REMEDY OF
PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER IN ANY DISPUTE AND HEREBY WAIVE ANY RIGHT OR CLAIM
TO PUNITIVE OR EXEMPLARY DAMAGES THEY HAVE NOW OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH
ANY DISPUTE WHETHER THE DISPUTE IS RESOLVED BY ARBITRATION OR JUDICIALLY.

     WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, MORTGAGOR BY EXECUTION
HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS MORTGAGE, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONNECTION WITH THIS MORTGAGE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT TO BANK TO ACCEPT THIS MORTGAGE.

     ASSIGNMENT UPON FULL PAYMENT. UPON PAYMENT OF ALL SUMS DUE BANK, BANK SHALL, AT MORTGAGOR’S
REQUEST, ASSIGN THE NOTE AND OTHER LOAN DOCUMENTS WITHOUT RECOURSE OR WARRANTY OF ANY KIND ON AN
“AS IS”, “WHERE IS” BASIS, ONLY ACKNOWLEDGING OWNERSHIP OF THE LOAN AND THE LOAN DOCUMENTS
UNENCUMBERED, FOR AN ASSIGNMENT FEE NOT TO EXCEED $2,500.00.

     PARTIAL RELEASES. The Bank shall grant partial releases of portions of the Mortgaged Property
in accordance with the terms and conditions of the Loan Agreement.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, Mortgagor has signed and sealed this instrument as of the day and year
first above written.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	TRADITION DEVELOPMENT COMPANY, LLC,

a Florida limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Taxpayer ID: 65-1060893
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	Print name:

	______________________________________________________	 	 	 	JAMES H. ANDERSON, Executive Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Print name:

	______________________________________________________	 	 	 	 	 	 

State of Florida

County of Martin

     The foregoing instrument was acknowledged before me this 8th day of April, 2005, by JAMES H.
ANDERSON, Executive Vice President of TRADITION DEVELOPMENT COMPANY, LLC, a Florida limited
liability company, on behalf of the company. He/she is personally known to me or has produced
___(type of identification) as identification.

	 	 	 	 	 
	 	 	 
	 	 	Notary Public, State of Florida
	

	 	Print Name:	 	 
	

	 	 	 
	

	 	 	 	[Seal]

12

 

EXHIBIT A

LEGAL DESCRIPTION

PARCEL 1: A parcel of land lying in Sections 8 and 9, Township 37 South, Range 39 East, St. Lucie
County, Florida and being more particularly described as follows:

Begin at the Northeast Corner of the Recreation Tract as shown on Tradition Plat No. 16, recorded
in Plat Book 44, at Page 12, 12A through 12J public records of said St. Lucie County, Florida;
Thence traversing the boundary of the said Tradition Plat No. 16, by the following ten (10)
courses:

1. South 84 deg 37’ 09” West, a distance of 138.94 feet to a point of curvature with a curve
concave to the Southeast and having a radius of 250.00 feet;

2. Westerly and Southwesterly along the arc of said curve, through a central angle of 59 deg 03’
56”, an arc distance of 257.72 feet to a point of reverse curvature, with a curve concave to the
Northwest and having a radius of 250.00 feet;

3. Southwesterly along the arc of said curve, through a central angle of 40 deg 26’ 09”, an arc
distance of 176.44 feet to a point of non radial intersection with a line (the radius point of said
curve bears North 27 degrees 00’ 41” west from this point);

4. South 12 degrees 20’ 57” East along said non radial line, a distance of 104.38 feet;

5. South 32 degrees 46’ 15” West, a distance of 33.95 feet;

6. South 10 deg 25’ 34” a distance 9.23 feet to a point of radial intersection with a curve concave
to the northeast and having a radius of 960.00 feet, said curve also being the northerly right of
way line of Tradition Lakes Boulevard as shown on the said Tradition Plat No. 16;

Thence continue traversing said boundary and said northerly right of way by the remaining four (4)
courses:

7. Northwesterly along the arc of said curve, through a central angle of 42 deg 31’ 23”, an arc
distance of 712.48 feet to a point of tangency with a line;

8. North 57 deg 54’ 11” West along said line, a distance of 361.38 feet to a point of curvature
with a curve concave to the Southwest and having a radius of 1465.00 feet;

9. Northwesterly along the arc of said curve, through a central angle of 32 deg 21’ 05”, an arc
distance of 827.19 feet to a point of tangency with a line;

10. South 89 degrees 44’ 44” West along said line, a distance of 51.84 feet to the Northwest corner
of said Tradition Plat No. 16;

Thence traversing the proposed northerly right of way line of said Tradition Lakes Boulevard by the
following two (2) courses;

1. Continue South 89 degrees 44’ 44” West departing said boundary, a distance of 277.08 feet to a
point of curvature with a curve concave to the southeast and having a radius of 440.00 feet;

13

 

2. Southwesterly along the arc of said curve, through a central angle of 27 deg 35’ 12”, an arc
distance of 211.85 feet to a point of non radial intersection with a line (the radius point of said
curve bears South 27 degrees 50’ 28” East from this point);

Thence North 51 deg 55’ 07” West along said non radial line, departing said proposed Northerly
right of way line, a distance of 701.92 feet to a point of non radial intersection with a curve
concave to the Southeast and having a radius of 870.00 feet (radius point of said curve bears South
58 deg 16’ 38” East from this point); thence Northeasterly along the arc of said curve, through a
central angle of 22 deg 54’ 16”, an arc distance of 347.79 feet to a point of compound curvature
with a curve concave to the Southwest and having a radius of 258.00 feet; thence Northeasterly
along the arc of said curve, through a central angle of 34 deg 54’ 19”, a arc distance of 157.18
feet to a point of reverse curvature with a curve concave to the Northwest and having a radius of
67.00 feet; thence Northeasterly along the arc of said curve, through a central angle of 40 deg 13’
48”, a arc distance of 47.04 feet to a point of reverse curvature with a curve concave to the
Southeast and having a radius of 383.00 feet; thence Northeasterly along the arc of said curve,
through a central angle of 33 deg 12’ 16” an arc distance of 221.96 feet to a point of compound
curvature with a curve concave to the South and having a radius of 870.00 feet; thence Easterly
along the arc of said curve, through a central angle of 07 deg 29’ 35”, an arc distance of 113.78
feet to a point of tangency with a line; thence North 90 deg 00’ 00” East along said line a
distance of 75.81 feet to a point of curvature with a curve concave to the Northwest and having a
radius of 1830.00 feet; thence Northesterly along the arc of said curve through a central angle of
23 deg 57’ 36”, an arc distance of 765.27 feet to a point of reverse curvature with a curve concave
to the Southeast and having a radius of 1770.00 feet; thence Northeasterly along the arc of said
curve, through a central angle of 08 deg 33’ 57”, an arc distance of 264.62 feet to a point of
tangency with a line; thence North 74 deg 36’ 21” East along said line, a distance of 400.78 feet
to a point of curvature with a curve concave to the Southeast and having a radius of 183.00 feet;
thence Northeasterly along the arc of said curve, through a central angle of 08 deg 55’ 06”, an arc
distance of 28.48 feet to a point of compound curvature with a curve concave to the Southwest and
having a radius of 50.00 feet; thence Northeasterly, Easterly and Southeasterly along the arc of
said curve, through a central angle of 81 deg 04’ 54”, an arc distance of 70.76 feet to a point of
tangency with a line; thence South 15 deg 23’ 39” East along said line, a distance of 4.85 feet;
thence North 74 deg 36’ 21” East, a distance of 100.00 feet to a point of radial intersection with
a curve concave to the Southeast and having a radius of 50.00 feet; thence Northeasterly along the
arc of said curve, through a central angle of 77 deg 00’ 22”, an arc distance of 67.20 feet to a
point of compound curvature with a curve concave to the Southeast and having a radius of 383.00
feet; thence Northeasterly along the arc of said curve, through a central angle of 10 deg 32’ 34”,
and arc distance of 70.47 feet to a point of reverse curvature, with a curve concave to the
Northwest and having a radius of 1881.55 feet; thence Northeasterly along the arc of said curve,
through a central angle of 22 deg 03’ 06”, an arc distance of 724.16 feet to a point of reverse
curvature with a curve concave to the Southeast and having a radius of 1500.00 feet; Thence
Northeasterly along the arc of said curve, through a central angle of 27

14

 

deg 22’ 23”, an arc distance of 716.63 feet to a point of tangency with a line; thence North 77 deg 28’ 34” East along
said line, a distance of 125.81 feet to a point of curvature with a curve concave to the Southeast
and having a radius of 1500.00 feet; thence Northeasterly along the arc of said curve, through a
central angle of 09 deg 33’ 12”, an arc distance of 250.11 feet to a point of tangency with a line; Thence North 87 deg 01’ 46” East along said line, a
distance of 129.19 feet to a point of curvature with a curve concave to the Northwest and having a
radius of 470.00 feet; thence Northeasterly along the arc of said curve, through a central angle of
15 deg 18’ 56”, an arc distance of 125.63 feet to the Southwest corner of Road “J” (Tract PR-10)
as shown on Tradition Plat No. 12, recorded in Plat Book 44, at Pages 3 and 3A through 3D, in the
public records of St. Lucie County, Florida; thence traversing the Southerly right of way line of
said Road “J” and the Westerly right of way line of Community Boulevard (Tract R-2) as shown on
said Tradition Plat No. 12 by the following five (5) courses:

1. Continue Northeasterly along the arc of said curve, through a central angle of 00 deg 54’ 18”,
an arc distance of 7.42 feet to a point of reserve curvature with a curve concave to the South and
having a radius of 183.00 feet;

2. Northeasterly, Easterly and Southeasterly along the arc of said curve, through a central angle
of 35 deg 02’ 51”, an arc distance of 111.94 feet to a point of tangency with a line;

3. South 74 deg 08’ 37” East along said line, a distance of 37.90 feet to a point of curvature with
a curve concave to the Southwest and having a radius of 183.00 feet;

4. Southeasterly along the arc of said curve, through a central angle of 29 deg 08’ 37”, an arc
distance of 93.08 feet to a point of tangency with a line;

5. South 45 deg 00’ 00” East along said line, a distance of 485.13 feet;
Thence South 64 deg 10’ 30” West departing said proposed Westerly right-of-way line, a distance of
421.72 feet to a point of curvature with a curve concave to the Southeast and having a radius of
1155.00 feet; thence Southwesterly along the arc of said curve, through a central angle of 36 deg
15’ 33”, an arc distance of 730.93 feet to a point of reverse curvature with a curve concave to
the Northwest and having a radius of 1245.00 feet; thence Southwesterly along the arc of said
curve, through a central angle of 10 deg 21’ 37”, an arc distance 225.13 feet to a point of reverse
curvature with a curve concave to the Northwest and having a radius of 727.91 feet; thence
southwesterly along the arc of said curve, thru a central angle of 15 deg. 09’ 16”, an arc distance
of 192.33 feet to a point of compound curvature with a curve concave to the east and having a
radius of 269.77 feet; Thence southwesterly, southerly, and southeasterly along the arc of said
curve through a central angle of 55 deg. 31’ 39”, an arc distance of 261.44 feet to a point of non
radial intersection with a line (the radius point of said curve bears North 57 deg. 22’ 22” east
from this point); thence North 43 deg 38’ 14” West along said non radial line, a distance of
222.89 feet; thence North 40 deg 44’ 37” West, a distance of 55.53 feet; thence North 36 deg 21’
17” West, a distance of 28.71 feet; thence North 33 deg 19’ 33” West, a distance of 29.44 feet;
thence North 30 deg 01’ 43” West, a distance of 33.86 feet; thence North 25 deg 56’ 47” West, a
distance of 44.50 feet; thence North 21 deg 40’ 18” West, a distance of 37.55 feet to a point of
non radial intersection with a curve concave to the Southwest and

15

 

having a radius of 978.88 feet
(the radius point of said curver bears South 69 deg 52’ 11” West from this point); thence
Northwesterly along the arc of said curve, through a central angle of 10 deg 15’ 47”, an arc
distance of 175.34 feet to the point of non radial intersection with a curve concave to the
Southwest and having a radius of 2862.48 feet (the radius point of said curve having a radius of
978.88 feet bears South 57 deg 08’ 13” West from this point and the radius point of said curve
having a radius of 2868.48 feet bears South 59 deg 36’ 24” West from this point); thence
Northwesterly along the arc of said curve, through a central angle of 02 deg 47’ 56”, an arc
distance of 139.83 feet to a point of non radial intersection with a line (the radius point of said
curve bears South 54 deg 20’ 17” West from this point); thence North 59 deg 06’ 35” West along
said non radial line, a distance of 143.79 feet; thence North 80 deg 53’ 39” West, a distance of
125.53 feet; thence South 71 deg 44’ 37” West, a distance of 34.33 feet; thence South 35 deg 24’
00” West, a distance of 87.48 feet; thence South 00 deg 45’ 41” West, a distance of 132.15 feet;
thence South 06 deg 59’ 03”, a distance of 104.72 feet; thence South 06 deg 27’ 08” East, a
distance of 47.41 feet; thence South 01 deg 35’ 43” West, a distance of 77.02 feet; thence South 09
deg 59’ 53” East, a distance of 220.16 feet; thence South 27 deg 38’00” East, a distance of 286.71
feet; thence South 14 deg 11’ 03” East, a distance of 242.60 feet to the point of beginning.

PARCEL 2: A Parcel of land lying in Section 9, Township 37 South, Range 39 East, St. Lucie County,
Florida and being more particularly described as follows:

Begin at the Northwest corner of Plat of Tradition No. 17, recorded in Plat Book 43, at Pages 22
and 22A through 22F, public records of St. Lucie County, Florida, and also being the Southwest
Corner of Community Boulevard (Tract R-2) of future Tradition Plat No. 12; thence South 45 deg 26’
22” West as basis of bearing, along the Northwesterly boundary of said Tradition Plat No. 17, a
distance of 34.06 feet to the Northeast corner of Plat of Tradition Plat No. 5, recorded in Plat
Book 42, at Pages 4 and 4A through 4I, public records St. Lucie County, Florida, and also being a
point on the Northerly right of way line of Tradition Lakes Boulevard (Tract PR-5); thence
traversing along said Northerly boundary of Tradition Plat No. 5 and said Northerly right of way
line by the following twenty-one (21) courses:

1. North 89 deg 21’ 23” West, a distance of 40.60 feet to a point of curvature with a curve concove
to the Northeast and having a radius of 184.00 feet;

2. Northwesterly along the arc of said curve, through a central angle of 29 deg 48’ 11”, an arc
distance of 95.71 feet to a point of tangency with a line;

3. North 59 deg 33’ 12” West along said line, a distance of 72.07 feet to a point of curvature with
a curve concave to the Southwest and having a radius of 196.00 feet;

4. Northwesterly, Westerly and Southwesterly along the arc of said curve, through a central angle
of 52 deg 45’ 37”, an arc distance of 180.48 feet to a point of tangency with a line;

5. South 67 deg 41’ 11” West along said line, a distance of 82.41 feet to a point of curvature with
a curve concave to the Northwest and having a radius of 509.00 feet;

6. Southwesterly, Westerly and Northwesterly along the arc of said curve, through a central angle
of 35 deg 29’ 52”, an arc distance of 315.35 feet to a point of compound

16

 

curvature with a curve concave to the Northeast and having a radius of 1100.00 feet;

7. Northwesterly along the arc of said curve, through a central angle of 11 deg 36’ 44”, an arc
distance of 222.94 feet to a point of non radial intersection with a line (the radius point of said
curve bears North 24 deg 47’ 47” East from this point);

8. North 18 deg 34’ 33” West along said non radial line, a distance of 34.75 feet;

9. North 62 deg 35’ 57” West, a distance of 50.00 feet;

10. South 73 deg 22’ 39” West, a distance of 34.75 feet to a point of non radial intersection with
a curve concave to the Northeast and having a radius of 1100.00 feet (the radius point of said
curve bears North 30 deg 00’ 19” East from this point);

11. Northwesterly along the arc of said curve, through a central angle of 10 deg 28’ 38”, an arc
distance of 201.15 feet to a point of tangency with a line;

12. North 49 deg31’ 03” West along said line a distance of 195.89 feet;

13. North 08 deg13’ 49” West a distance of 37.57 feet;

14. North 49 deg 35’ 24” West, a distance of 50.74 feet;

15. South 81 deg 14’ 16” West, a distance of 32.64 feet;

16. North 49 deg 31’ 03” West, a distance of 189.84 feet;

17. South 40 deg 28’ 57” West, a distance of 10.00 feet;

18. North 49 deg 31’ 03” West, a distance of 32.07 feet to a point of curvature with a curve
concave to the Southwest and having a radius of 1040.00 feet;

19. Northwesterly along the arc of said curve, through a central angle of 32 deg 34’ 48” an arc
distance of 591.37 feet to a point of non radial intersection with a line (the radius point of said
curve bears South 07 deg 54’ 09” West from this point);

20. North 40 deg 54’ 11” West along said non radial line, a distance of 37.23 feet;

21. North 84 deg 40’ 56” West, a distance of 4.45 feet to a point of intersection with the Westerly
line of future Tradition Plat No. 16;

Thence traversing said westerly line by the following three (3) courses:

1. North 05 deg 34’ 48” East, departing said Northerly boundary of Tradition Plat No. 5 and said
Northerly right of way line, along said Westerly line, a distance of 8.05 feet to a point of
curvature with a curve concave to the Southwest and having a radius of 174.00 feet;

2. Northwesterly along the arc of said curve, through a central angle of 73 deg 15’ 12” an arc
distance of 222.46 feet to a point of reverse curvature with a curve concave to the Northeast and
having a radius of 310.30 feet;

3. Northwesterly along the arc of said curve, through a central angle of 41 deg 12’ 47”, an arc
distance of 223.20 feet to a point of non radial intersection with a line (the radius point of said
curve bears North 63 deg 32’ 23” East from this point) said point also being a corner on the
boundary of future Tradition Plat No. 15.

Thence traversing along said boundary line by the following twenty-five (25) courses;

1. North 14 deg 11’ 03” West along said non radial line, a distance of 242.60 feet;

2. North 27 deg 38’ 00” West, a distance of 286.71 feet;

3. North 09 deg 59’ 53” West, a distance of 220.16 feet;

4. North 01 deg 35’ 43” East, a distance of 77.02 feet;

17

 

5. North 06 deg 27’ 08” West, a distance of 47.71 feet;

6. North 06 deg 59’ 03” West, a distance of 104.72 feet;

7. North 00 deg 45’ 41” East, a distance of 132.15 feet;

8. North 35 deg 24’ 00” East, a distance of 87.48 feet;

9. North 71 deg 44’ 37” East, a distance of 34.33 feet;

10. South 80 deg 53’ 39” East, a distance of 125.53 feet;

11. South 59 deg 06’ 35” East, a distance of 143.79 feet to a point of non radial intersection with
a curve concave to the Southwest and having a radius of 2862.48 feet (the radius point of said
curve bears South 54 deg 20’ 17” West from this point);

12. Southeasterly along the arc of said curve, through a central angle of 02 deg 47’ 56”, an arc
distance of 139.83 feet to a point of non radial intersection with a curve concave to the Southwest
and having a radius of 978.88 feet (the radius point of said curve having a radius of 2862.48 feet
bears South 57 deg 08’ 13” West from this point and the radius point of said curve having a radius
of 978.88 feet bears South 59 deg 36’ 24” West from this point);

13. Southeasterly along the arc of said curve having a radius of 978.88 feet, through a central
angle of 10 deg 15’ 47”, an arc distance of 175.34 feet toa point of non radial intersection with a
line (the radius point of said curve bears South 69 deg 52’ 11” West from this point);

14. South 21 deg 40’ 18” East along said non radial line, a distance of 37.55 feet;

15. South 25 deg 56’ 47” East, a distance of 44.50 feet;

16. South 30 deg 01’ 43” East, a distance of 33.86 feet;

17. South 33 deg 19’ 33” East, a distance of 29.44 feet;

18. South 36 deg 21’ 17” East, a distance of 28.71 feet;

19. South 40 deg 44’ 37” East, a distance of 55.53 feet;

20. South 43 deg 38’ 14” East, a distance of 222.89 feet to a point of non radial intersection with
a curve concave to the East and having a radius of 269.77 feet (the radius point of said curve
bears North 57 deg 35’ 39” East from this point);

21. Northwesterly, Northerly and Northeasterly along the arc of said curve, through a central angle
of 55 deg 31’ 39”, an arc distance of 261.44 feet to a point of compound curvature with a curve
concave to the Southeast and having a radius of 727.91 feet;

22. Northeasterly along the arc of said curve, through a central angle of 15 deg 09’ 16”, an arc
distance of 192.53 feet to a point of reverse curvature with a curve concave to the Northwest and
having a radius of 1245.00 feet;

23. Northeasterly along the arc of said curve, through a central angle of 10 deg 21’ 37”, an arc
distance of 225.13 feet to a point of reverse curvature with a curve concave to the Southeast and
having a radius of 1155.00 feet;

24. Northeasterly along the arc of said curve, through a central angle of 36 deg 15’ 33”, an arc
distance of 730.93 feet to a point of tangency with a line;

25. North 64 deg 10’ 30” East along said line, a distance of 421.72 feet to a point of intersection
with the Westerly right-of-way line of said Community Boulevard (Tract R-2) and the Westerly
boundary of said future Tradition Plat No. 12;

Thence traversing said Westerly right-of-way line and said Westerly boundary by the following five
(5) courses:

18

 

1. South 45 deg 00’ 00” East, departing said Southeasterly boundary of said future Tradition Plat
No. 15, a distance of 10.46 feet to a point of curvature with a curve concave to the Southwest and
having a radius of 2950.00 feet;

2. Southeasterly, Southerly and Southwesterly along the arc of said curve, through a central angle
of 45 deg 14’ 07”, an arc distance of 2329.03 feet to a point of tangency with a line;

3. South 00 deg 14’ 07” West along said line, a distance of 551.70 feet;

4. North 89 deg 45’ 53” West, a distance of 10.00 feet;

5. South 00 deg 14’ 07” West, a distance of 214.96 feet to the point of beginning.

19

 

EXHIBIT B

This Exhibit B is attached to a certain Mortgage by and between TRADITION DEVELOPMENT COMPANY, LLC,
a Florida limited liability company (“Mortgagor”) and Wachovia Bank, National Association, securing
that certain Revolving Promissory Note of even date herewith executed by Mortgagor in the amount of
$40,000,000.00.

PRIOR ENCUMBRANCES

Those certain restrictions, easements and agreements described in Schedule B of Chicago Title
Insurance Company Commitment No. under Office File No. 44941-27 with an effective date of March 10,
2005 at 8:00 a.m.

20exv10w4

 

Exhibit 10.4

UNCONDITIONAL GUARANTY

April 8, 2005

Tradition Development Company, LLC

c/o Core Communities, LLC

10521 S.W. Village Station Drive, Suite 201

Port St. Lucie, Florida 34987

Horizons St. Lucie Development, LLC

c/o Core Communities, LLC

10521 S.W. Village Station Drive, Suite 201

Port St. Lucie, Florida 34987

Horizons Acquisition 7, LLC

c/o Core Communities, LLC

10521 S.W. Village Station Drive, Suite 201

Port St. Lucie, Florida 34987

and

Tradition Mortgage, LLC

c/o Core Communities, LLC

10521 S.W. Village Station Drive, Suite 201

Port St. Lucie, Florida 34987

(Hereinafter collectively referred to as the “Borrower”)

Core Communities, LLC

10521 S.W. Village Station Drive, Suite 201

Port St. Lucie, Florida 34987

(Hereinafter referred to as “Guarantor”)

Wachovia Bank, National Association

200 E. Broward Boulevard, 2nd floor

Ft. Lauderdale, FL 33301

(Hereinafter referred to as “Bank”)

To induce Bank to make a $40,000,000.00 revolving loan (“Loan”), and in consideration of
loans, advances, credit, or other financial accommodations made, extended or renewed to or for the
benefit of Borrower in connection with said Loan, which are and will be to the direct interest and
advantage of the Guarantor, Guarantor hereby absolutely, irrevocably and unconditionally guarantees
to Bank and its successors, assigns and affiliates the timely payment and performance of all
liabilities and obligations of Borrower to Bank under that certain Revolving Promissory Note of
even date herewith in the amount of $40,000,000.00 (the “Note”), the Loan Documents as defined
below, and all obligations with respect to any swap agreements (as defined in 11 U.S. Code § 101),
and all extensions, modifications and renewals thereof, (collectively, the “Guaranteed
Obligations”). There shall be no limitation on the amount of the Guaranteed Obligations of
Guarantor.

Guarantor hereby further unconditionally and irrevocably guarantees to Bank and its
successors, endorsees and assigns that: (a) the Property shall be and remain free and clear of all
liens from any and

1

 

all persons, firms, corporations or other entities furnishing materials, labor
or services in the construction, equipment or completion of the Improvements, if any, (as same is
defined in the Revolving Loan Agreement executed by Borrower simultaneously herewith (“Loan
Agreement”)); and (b) Borrower shall fully and punctually comply with the all the terms, covenants
and conditions on its part to be complied with under the Loan Documents.

In the event that the Improvements on any Land Under Development (as same is defined in the
Loan Agreement) (the funding of which was requested by Borrower under the Loan) are not completed
and paid for or are not free of all liens, claims and demands upon the completion thereof, as
guaranteed herein, (a) Guarantor agrees to fully indemnify Bank and save Bank harmless from all
costs and damages that Bank may suffer by reason thereof; (b) in the event that Bank shall (i)
cause any construction or equipment of the Improvements to be done, (ii) pay any costs in
connection with the construction or equipment of the Improvements, if any, or (iii) cause any such
lien, claim or demand to be released or paid, then Guarantor agrees to reimburse Bank for all sums
paid and all costs and expenses incurred by it in connection therewith; and (c) Guarantor agrees,
if requested by Bank, to complete or cause the completion of the construction and equipment of the
Improvements, if any, in accordance with the Loan
Agreement.

Guarantor acknowledges and agrees that it will be impossible to measure and accurately
determine the damages to Bank resulting from a breach of the covenants in the Loan Documents, that
such a breach will cause irreparable injury to Bank and that Bank has no adequate remedy at law in
respect of such breach and, as a consequence, agrees that such covenant shall be specifically
enforceable against Guarantor and hereby waives and agrees not to assert any defense based on
denial of any of the foregoing in an action for specific performance of such covenant.

Guarantor consents that the terms, covenants, and provisions contained in any of the Loan
Documents may be altered, extended, released, modified or cancelled, all without any further
consent of Guarantor, and Guarantor agrees that this Guaranty shall in no way be affected,
diminished or released by any such alteration, extension, modification, release or cancellation.

In addition to the above, the Guaranteed Obligations shall further include the full and prompt
payment and performance when due of all present and future liability, obligations and
indemnifications whatsoever, of Borrower to Bank under and pursuant to the sections of the Loan
Documents relating to “Hazardous Material”, with such interest as may accrue thereon and such other
charges as may be due in connection therewith, whether such obligations now exist or arise
hereafter. Guarantor agrees that, if Borrower does not pay said liability, obligations and
indemnifications relating to Hazardous Material, for any reason, Guarantor shall immediately make
such payments. Guarantor’s liability, obligations and indemnifications relating to Hazardous
Material shall not be discharged or satisfied by repayment of the obligations evidenced by the Loan
Documents, or by foreclosure of the Security Instrument, and shall continue in effect after any
transfer of the real estate secured by the Security Instrument, including, without limitation,
transfers pursuant to foreclosure (or in lieu of) proceedings and subsequent transfers.

Guarantor further covenants and agrees:

GUARANTOR’S LIABILITY. This Guaranty is a continuing and unconditional guaranty of payment
and performance and not of collection. The parties to this Guaranty are jointly and severally
obligated hereunder. This Guaranty does not impose any obligation on Bank to extend or continue to
extend credit or otherwise deal with Borrower at any subsequent time. This Guaranty shall continue
to be effective or be reinstated, as the case may be, if at any time any payment of the Guaranteed
Obligations is rescinded, avoided or for any other reason must be returned by Bank, and the
returned payment shall remain payable as part of the Guaranteed Obligations, all as though such
payment had not been made. Except to the extent the provisions of this Guaranty give Bank
additional rights, this Guaranty shall not be deemed to supersede or replace any other guaranties
given to Bank by Guarantor; and the obligations guaranteed hereby shall be in addition to any other
obligations guaranteed by Guarantor pursuant to any other agreement of guaranty given to Bank and
other guaranties of the Guaranteed Obligations. Notwithstanding the foregoing, in the future Bank
will consider a reduction in the amount of the guarantee

2

 

based upon the Project’s cash flow.

TERMINATION OF GUARANTY. Guarantor may terminate this Guaranty only by written notice,
delivered personally to or received by certified or registered United States Mail by an authorized
officer of Bank at the address for notices provided herein. Such termination shall be effective
with respect to Guaranteed Obligations arising more than 15 days after the date such written notice
is received by said Bank officer. Guarantor may not terminate this Guaranty as to Guaranteed
Obligations (including any subsequent extensions, modifications or compromises of the Guaranteed
Obligations) then existing, or to Guaranteed Obligations arising subsequent to receipt by Bank of
said notice if such Guaranteed Obligations are a result of Bank’s obligation to make advances
pursuant to a commitment entered into prior to expiration of the 15 day notice period, or are a
result of advances which are necessary for Bank to protect its collateral or otherwise preserve its
interests. Termination of this Guaranty by any single Guarantor will not affect the existing and
continuing obligations of any other Guarantor hereunder.

CONSENT TO MODIFICATIONS. Guarantor consents and agrees that Bank may from time to time, in
its sole discretion, without affecting, impairing, lessening or releasing the obligations of
Guarantor hereunder: (a) extend or modify the time, manner, place or terms of payment or
performance and/or otherwise change or modify the credit terms of the Guaranteed Obligations; (b)
increase, renew, or enter into a novation of the Guaranteed Obligations; (c) waive or consent to
the departure from terms of the Guaranteed Obligations; (d) permit any change in the business or
other dealings and relations of Borrower or any other guarantor with Bank; (e) proceed against,
exchange, release, realize upon, or otherwise deal with in any manner any collateral that is or may
be held by Bank in connection with the Guaranteed Obligations or any liabilities or obligations of
Guarantor; and (f) proceed against, settle, release, or compromise with Borrower, any insurance
carrier, or any other person or entity liable as to any part of the Guaranteed Obligations, and/or
subordinate the payment of any part of the Guaranteed Obligations to the payment of any other
obligations, which may at any time be due or owing to Bank; all in such manner and upon such terms
as Bank may deem appropriate, and without notice to or further consent from Guarantor. No
invalidity, irregularity, discharge or unenforceability of, or action or omission by Bank relating
to any part of the Guaranteed Obligations or any security therefor shall affect or impair this
Guaranty.

WAIVERS AND ACKNOWLEDGMENTS. Guarantor waives and releases the following rights, demands, and
defenses Guarantor may have with respect to Bank and collection of the Guaranteed Obligations: (a)
promptness and diligence in collection of any of the Guaranteed Obligations from Borrower or any
other person liable thereon, and in foreclosure of any security interest and sale of any property
serving as collateral for the Guaranteed Obligations; (b) subject to Borrower receiving any
applicable notice to cure as required in the Loan Documents, if any, any law or statute that
requires that Bank make demand upon, assert claims against, or collect from Borrower or other
persons or entities, foreclose any security interest, sell collateral, exhaust any remedies, or
take any other action against Borrower or other persons or entities prior to making demand upon,
collecting from or taking action against Guarantor with respect to the Guaranteed Obligations,
including any such rights Guarantor might otherwise have had under Va. Code §§ 49-25 and 49-26,
et seq., N.C.G.S. §§ 26-7, et seq., Tenn. Code Ann. § 47-12-101, O.C.G.A. § 10-7-24
and any successor statute and any other applicable law; (c) any law or statute that requires that
Borrower or any other person be joined in, notified of or made part of any action against
Guarantor; (d) that Bank preserve, insure or perfect any
security interest in collateral or sell or dispose of collateral in a particular manner or at
a particular time, provided that Bank’s obligation to dispose of Collateral in a commercially
reasonable manner is not waived hereby; (e) notice of extensions, modifications, renewals, or
novations of the Guaranteed Obligations, of any new transactions or other relationships between
Bank, Borrower and/or any guarantor, and of changes in the financial condition of, ownership of, or
business structure of Borrower or any other guarantor; (f) except as otherwise provided in the Loan
Documents, presentment, protest, notice of dishonor, notice of default, demand for payment, notice
of intention to accelerate maturity, notice of acceleration of maturity, notice of sale, and all
other notices of any kind whatsoever to which Guarantor may be entitled; (g) the right to assert
against Bank any defense (legal or equitable), set-off, counterclaim, or claim that Guarantor may
have at any time against Borrower or any other party liable to Bank; (h) all defenses relating to
invalidity, insufficiency, unenforceability, enforcement, release or impairment of Bank’s lien on
any collateral, of the Loan

3

 

Documents, or of any other guaranties held by Bank; (i) any right to
which Guarantor is or may become entitled to be subrogated to Bank’s rights against Borrower or to
seek contribution, reimbursement, indemnification, payment or the like, or participation in any
claim, right or remedy of Bank against Borrower or any security which Bank now has or hereafter
acquires, until such time as the Guaranteed Obligations have been fully satisfied beyond the
expiration of any applicable preference period; (j) any claim or defense that acceleration of
maturity of the Guaranteed Obligations is stayed against Guarantor because of the stay of assertion
or of acceleration of claims against any other person or entity for any reason including the
bankruptcy or insolvency of that person or entity; and (k) the right to marshalling of Borrower’s
assets or the benefit of any exemption claimed by Guarantor. Guarantor acknowledges and represents
that Guarantor has relied upon Guarantor’s own due diligence in making an independent appraisal of
Borrower, Borrower’s business affairs and financial condition, and any collateral; Guarantor will
continue to be responsible for making an independent appraisal of such matters; and Guarantor has
not relied upon Bank for information regarding Borrower or any collateral.

FINANCIAL CONDITION. Guarantor warrants, represents and covenants to Bank that on and after
the date hereof: (a) the fair saleable value of Guarantor’s assets exceeds its liabilities,
Guarantor is meeting its current liabilities as they mature, and Guarantor is and shall remain
solvent; (b) all financial statements of Guarantor furnished to Bank are correct and accurately
reflect the financial condition of Guarantor as of the respective dates thereof; (c) since the date
of such financial statements, there has not occurred a material adverse change in the financial
condition of Guarantor; (d) there are not now pending any court or administrative proceedings or
undischarged judgments against Guarantor, no federal or state tax liens have been filed or
threatened against Guarantor and Guarantor is not in default or claimed default under any agreement
which would have a material adverse affect on Guarantor’s ability to perform its Guaranteed
Obligations hereunder; and (e) at such reasonable times as Bank requests, Guarantor will furnish
Bank with such other financial information as Bank may reasonably request.

INTEREST AND APPLICATION OF PAYMENTS. Regardless of any other provision of this Guaranty or
other Loan Documents, if for any reason the effective interest on any of the Guaranteed Obligations
should exceed the maximum lawful interest, the effective interest shall be deemed reduced to and
shall be such maximum lawful interest, and any sums of interest which have been collected in excess
of such maximum lawful interest shall be applied as a credit against the unpaid principal balance
of the Guaranteed Obligations. Monies received
from any source by Bank for application toward payment of the Guaranteed Obligations may be
applied to such Guaranteed Obligations in any manner or order deemed appropriate by Bank.

DEFAULT. If any of the following events occur and are not cured within any cure period
provided for in the Loan Documents, a default (“Default”) under this Guaranty shall exist: (a)
failure of timely payment or performance of the Guaranteed Obligations or a Default under any Loan
Document; (b) a breach of any agreement or representation contained or referred to in the Guaranty,
or any of the Loan Documents, whether now existing or hereafter arising; (c) the death of,
appointment of a guardian for, dissolution of, termination of existence of, loss of good standing
status by, appointment of a receiver for, assignment for the benefit of creditors of, or the
commencement of any insolvency or bankruptcy proceeding by or against Guarantor not dismissed
within seventy-five (75) days of the filing thereof (d) Bank determines in good faith, in its
reasonable discretion, that the prospects for payment or performance of the Guaranteed Obligations
are impaired or there has occurred a material adverse change in the business or prospects of
Borrower or Guarantor, financial or otherwise, that would have a material adverse affect on
Borrower or Guarantor’s ability to perform its Obligations under the Loan Documents.

If a Default occurs, the Guaranteed Obligations shall be due immediately and payable without
notice, other than Guaranteed Obligations under any swap agreements (as defined in 11 U.S.C. § 101)
with Bank, which shall be governed by the default and termination provisions of said swap
agreements, and, Bank may exercise any rights and remedies as provided in this Guaranty and other
Loan Documents, or as provided at law or equity. Guarantor shall pay interest on the Guaranteed
Obligations from the date of such Default at the Default Rate set forth in the Note.

ATTORNEYS’ FEES AND OTHER COSTS OF COLLECTION. Guarantor shall pay all of Bank’s

4

 

reasonable expenses incurred to enforce or collect any of the Guaranteed Obligations (to the extent Bank is a
prevailing party), including, without limitation, reasonable arbitration, paralegals’, attorneys’
and experts’ fees and expenses, whether incurred without the commencement of a suit, in any suit,
arbitration, or administrative proceeding, or in any appellate or bankruptcy proceeding.

SUBORDINATION OF OTHER DEBTS. Guarantor agrees: (a) to subordinate the obligations now or
hereafter owed by Borrower to Guarantor (“Subordinated Debt”) to any and all obligations of
Borrower to Bank under the Loan Documents now or hereafter existing while this Guaranty is in
effect, provided however that Guarantor may receive regularly scheduled principal and interest
payments on the Subordinated Debt so long as (i) all sums due and payable by Borrower to Bank have
been paid in full on or prior to such date, and (ii) no event or condition which constitutes or
which with notice or the lapse of time would constitute an event of default with respect to the
Guaranteed Obligations shall be continuing on or as of the payment date; and (b) except as
permitted by this paragraph, Guarantor will not request or accept payment of or any security for
any part of the Subordinated Debt, and any proceeds of the Subordinated Debt paid to Guarantor,
through error or otherwise, shall immediately be forwarded to Bank by Guarantor, properly endorsed
to the order of Bank, to apply to the Guaranteed Obligations.

MISCELLANEOUS. Assignment. This Guaranty and other Loan Documents shall inure to the benefit
of and be binding upon the parties and their respective heirs, legal representatives, successors
and assigns. Bank’s interests in and rights under this Guaranty and other Loan Documents are
freely assignable, in whole or in part, by Bank. Any assignment shall not release Guarantor from
the Guaranteed Obligations. Organization; Powers. Guarantor represents that Guarantor (i) is (a)
an adult individual and is sui juris, or (b) a corporation, general partnership, limited
partnership, limited liability company or other legal entity (as indicated below), duly organized,
validly existing and in good standing under the laws of its state of organization, and is
authorized to do business in each other jurisdiction wherein its ownership of property or conduct
of business legally requires such organization; (ii) has the power and authority to own its
properties and assets and to carry on its business as now being conducted and as now contemplated;
and (iii) has the power and authority to execute, deliver and perform, and by all necessary action
has authorized the execution, delivery and performance of, all of its obligations under this
Guaranty and any other Loan Document to which it is a party. Applicable Law; Conflict Between
Documents. This Guaranty shall be governed by and construed under the laws of the state named in
Bank’s address shown above without regard to that state’s conflict of laws principles. If the
terms of this Guaranty should conflict with the terms of any commitment letter that survives
closing, the terms of this Guaranty shall control. Guarantor’s Accounts. Intentionally
deleted. Jurisdiction. Guarantor irrevocably agrees to non-exclusive personal jurisdiction in
the state named in Bank’s address shown above. Severability. If any provision of this Guaranty or
of the other Loan Documents shall be prohibited or invalid under applicable law, such provision
shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Guaranty or other Loan
Documents. Notices. Any notices to Guarantor shall be sufficiently given if in writing and mailed
or delivered to Guarantor’s address shown above or such other address as provided hereunder, and to
Bank, if in writing and mailed or delivered to Wachovia Bank, National Association, at Bank’s
address shown above or such other address as Bank may specify in writing from time to time. In the
event that Guarantor changes Guarantor’s address at any time prior to the date the Guaranteed
Obligations are paid in full, Guarantor agrees to promptly give written notice of said change of
address to Bank by registered or certified mail, return receipt requested, all charges prepaid.
Plural; Captions. All references in the Loan Documents to borrower, guarantor, person, document or
other nouns of reference mean both the singular and plural form, as the case may be, and the term
“person” shall mean any individual person or entity. The captions contained in the Loan Documents
are inserted for convenience only and shall not affect the meaning or interpretation of the Loan
Documents. Binding Contract. Guarantor by execution of and Bank by acceptance of this Guaranty
agree that each party is bound to all terms and provisions of this Guaranty. Amendments, Waivers
and Remedies. No waivers, amendments or modifications of this Guaranty and other Loan Documents
shall be valid unless in writing and signed by an officer of Bank and Guarantor. No waiver by Bank
of any Default shall operate as a waiver of any other Default or the same Default on a future
occasion. Neither the failure nor any delay on the part of Bank in exercising any right, power, or
privilege granted pursuant to this Guaranty and other Loan Documents shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or further exercise or
the

5

 

exercise of any other right, power or privilege. All remedies available to Bank with respect
to this Guaranty and other Loan Documents and remedies available at law or in equity shall be
cumulative and may be pursued concurrently or successively. Partnerships. If Guarantor is a partnership, the obligations, liabilities and agreements on the part of
Guarantor shall remain in full force and effect and fully applicable notwithstanding any changes in
the individuals comprising the partnership. The term “Guarantor” includes any altered or
successive partnerships, and predecessor partnership(s) and the partners shall not be released from
any obligations or liabilities hereunder. Loan Documents. The term “Loan Documents” refers to all
documents executed in connection with or related to the Guaranteed Obligations and may include,
without limitation, commitment letters that survive closing, loan agreements, other guaranty
agreements, security agreements, instruments, financing statements, mortgages, deeds of trust,
deeds to secure debt, letters of credit and any amendments or supplements (excluding swap
agreements as defined in 11 U.S. Code § 101).

FINANCIAL AND OTHER INFORMATION. Guarantor shall deliver to Bank such information as Bank may
reasonably request from time to time, including without limitation, financial statements and
information pertaining to Guarantor’s financial condition and those certain financial statements
and information required to be delivered to Bank pursuant to the terms of the Loan Agreement. Such
information shall be true, complete, and accurate.

ANNUAL FINANCIAL STATEMENTS. Guarantor shall deliver to Bank, within 120 days after the close
of each fiscal year, audited financial statements reflecting its operations during such fiscal
year, including, without limitation, a balance sheet, profit and loss statement and statement of
cash flows, with supporting schedules; all on a consolidated and consolidating basis with respect
to Guarantor and in reasonable detail, prepared in conformity with generally accepted accounting
principles, applied on a basis consistent with that of the preceding year. All such statements
shall be examined by an independent certified public accountant acceptable to Bank. The opinion of
such independent certified public accountant shall not be acceptable to Bank if qualified due to
any limitations in scope imposed by Guarantor or any other person or entity. Any other
qualification of the opinion by the accountant shall render the acceptability of the financial
statements subject to Bank’s approval.

TAX RETURNS. Guarantor shall deliver to Lender, within thirty (30) days of filing, complete
copies of federal and state tax returns, as applicable if not filed on a consolidated basis, each
of which shall be signed and certified by Guarantor to be true and complete copies of such returns.
In the event an extension is filed, Guarantor shall deliver a copy of the extension within thirty
(30) days of filing. Notwithstanding the foregoing and in lieu thereof, Guarantor may deliver to
Lender, within thirty (30) days of filing, copies of the applicable pages of the federal and state
tax returns of the consolidated tax return of its parent, Levitt Corporation, relating to the
Guarantor.

FINANCIAL COVENANTS. Guarantor shall at all times comply with the following financial
covenants, conditions and requirements (collectively, the “Financial Covenants” each a “Financial
Covenant”):

     (a) Asset Liquidity. At all times during the term of the Loan (and until such
time as all of the Borrower’s and Guarantor’s obligations under the Loan Documents have been fully
paid and satisfied), Guarantor shall maintain unencumbered and unrestricted liquid assets (in the
form of cash and availability under the Borrowing Base), having a value of not less than Seven
Million Five Hundred Thousand and No/100 Dollars ($7,500,000.00) of which a minimum of Two Million
Five Hundred Thousand and No/100 Dollars ($2,500,000.00) must be in cash.

     (b) Tangible Net Worth. At all times during the term of the Loan (and until such time
as all of the Borrower’s and Guarantor’s obligations under the Loan Documents have been fully paid
and/or satisfied), Guarantor shall maintain a minimum Tangible Net Worth of $30,000,000.00 for the
original two (2) year term. The Extension Term (as defined in the Note) is contingent upon
satisfaction of certain Conditions to Conversion (as defined in the Note) including Guarantor
having a minimum Tangible Net Worth of $30,000,000.00 plus fifty percent (50%) of all net income
received by Guarantor for all years after the fiscal year ended December 31, 2004, which shall be
based upon the consolidated financial statements of Guarantor.

6

 

     (c) Leverage Covenant. At all times during the term of the Loan, the leverage
position of Guarantor shall not exceed a Maximum Debt to Tangible Net Worth ratio of 2.5:1.

     (d) Compliance Certificate. Guarantor shall be required on a quarterly basis to
provide to Bank a “Compliance Certificate” in a form satisfactory to Bank, which shall be signed by
its chief financial officer, certifying that Guarantor is in full compliance with all Financial
Covenants. Said Compliance Certificate shall show the actual calculations for each Financial
Covenant as applicable.

     All financial reporting is to be prepared in a form and substance acceptable to the Bank.
Each statement shall bear an authorized signature of an authorized officer of Guarantor attesting
to the Bank the accuracy of the statement.

ACCESS TO BOOKS AND RECORDS. Guarantor shall, upon reasonable advance notice, allow
Bank, or its agents, during normal business hours, access to the books, records and such other
documents of Guarantor as Bank shall reasonably require, and allow Bank, at Borrower’s expense, to
inspect, audit and examine the same and to make extracts therefrom and to make copies thereof.

NOTICE OF DEFAULT AND OTHER NOTICES. (a) Notice of Default. Guarantor shall furnish to Bank
within twenty-four (24) hours of becoming aware of the existence of any condition or event which
constitutes a Default (as defined in the Loan Documents) or any event which, upon the giving of
notice or lapse of time or both, may become a Default, written notice specifying the nature and
period of existence thereof and the action which Guarantor is taking or proposes to take with
respect thereto. (b) Other Notices. Promptly notify Bank in writing of (i) any material adverse
change in its financial condition or its business; (ii) any default under any material agreement,
contract or other instrument to which it is a party or by which any of its properties are bound, or
any acceleration of the maturity of any indebtedness owing by Guarantor that would cause a breach
of Guarantor’s financial covenants under this Guaranty; (iii) any material adverse claim against or
affecting Guarantor or any part of its properties; (iv) the commencement of, and any material
determination in, any litigation with any third party or any proceeding before any governmental
agency or unit affecting Guarantor; and (v) at least 30 days prior thereto, any change in
Guarantor’s name or address as shown above, and/or any change in Guarantor’s structure.

PAYMENT OF DEBTS. Guarantor shall pay and discharge when due, and before subject to penalty
or further charge, and otherwise satisfy before maturity or delinquency, all obligations, debts,
taxes, and liabilities of whatever nature or amount, except those which Guarantor in good faith
disputes.

NEGATIVE COVENANTS. Guarantor agrees that from the date of this Agreement and until final
payment in full of the Guaranteed Obligations, unless Bank shall
otherwise consent in writing, Guarantor will not: Change in Fiscal Year. Change its fiscal
year. Change of Control. Make or suffer a change of ownership that effectively changes control of
Guarantor from current ownership. Cross Default. Default in payment or performance of any
obligation under any other loans of Guarantor in favor of Bank. Nonpayment; Nonperformance. Fail
to pay or perform the Obligations or Default (as defined in the Loan Documents) under any of the
Loan Documents. Default on Other Contracts or Obligations. Intentionally deleted.
Government Intervention. Permit the assertion or making of any seizure, vesting or intervention by
or under authority of any governmental entity, as a result of which the management of Guarantor or
any guarantor is displaced of its authority in the conduct of its respective business or such
business is curtailed or materially impaired. Judgment Entered. Permit the entry of any monetary
judgment or the assessment against, the filing of any tax lien against, or the issuance of any writ
of garnishment or attachment against any property of or debts due Guarantor that would have a
material adverse affect on Guarantor and would result in a violation of the financial covenants of
Guarantor in this Guaranty that is not discharged or execution is not stayed within 30 days of
entry.

WAIVER OF EXEMPLARY DAMAGES. GUARANTOR AND BANK AGREE THAT THEY SHALL NOT HAVE A REMEDY OF
PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER IN ANY DISPUTE AND HEREBY WAIVE ANY RIGHT OR CLAIM
TO PUNITIVE OR EXEMPLARY DAMAGES THEY HAVE NOW OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH
ANY DISPUTE WHETHER THE DISPUTE IS RESOLVED BY ARBITRATION OR JUDICIALLY.

7

 

WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR BY EXECUTION
HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS GUARANTY, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONNECTION WITH THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT TO BANK TO ACCEPT THIS GUARANTY.

[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, Guarantor, on the day and year first written above, has caused this
Unconditional Guaranty to be executed under seal.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	CORE COMMUNITIES, LLC, a Florida limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Taxpayer ID: 65-1060886
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:
	______________________________________________________	 	 
	 	 	 	 	Print name: James H. Anderson
	 	 	 	 	Title: Executive Vice President
	 
	 	 	 	 	 	 	 	 
	State of Florida	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	County of

	______________________________________________	 	 	 	 	 	 

     The foregoing instrument was acknowledged before me this ___day of April, 2005, by JAMES
H. ANDERSON, as Executive Vice President of CORE COMMUNITIES, LLC, a Florida limited liability
company, on behalf of the company. He/she is personally known to me or has produced
 ______(type of identification) as identification.

	 	 	 	 	 
	 	 	 
	 	 	Notary Public, State of Florida
	

	 	Print Name:	 	 
	

	 	 	 
	

	 	 	 	(Notary Seal)

9

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