MEMBERSHIP INTEREST TRANSFER AGREEMENT

THIS MEMBERSHIP INTEREST TRANSFER AGREEMENT (“Agreement”) , dated as of this 19 ^th day of November, 2008, by and among ST. CHARLES COMMUNITY, LLC , a Delaware limited  liability company (hereinafter, the “Seller”), and U.S. HOME CORPORATION , a Delaware corporation (hereinafter, the “Purchaser”).

WHEREAS , Seller is the owner of fifty percent (50%) of the membership interests of St. Charles Active Adult Community, LLC, a Maryland limited liability company (the “Company”); and

WHEREAS , Purchaser is the owner of fifty percent (50%) of the membership interests in the Company; and

WHEREAS , the Company was formed as a Maryland limited liability company pursuant to those certain Articles of Organization of the Company filed with the Maryland State Department of Assessments and Taxation on September 21, 2004 (the “Articles of Organization”) and that certain Operating Agreement of the Company dated as of September 28, 2004 (the “Operating Agreement”); and

WHEREAS , pursuant to the provisions of the Operating Agreement, Seller was appointed and has acted as Manager (as such term is defined in the Operating Agreement) of the Company from and after the formation of the Company; and

WHEREAS , the Seller desire to sell its entire, undivided fifty percent (50%) membership interest (the “Membership Interest”) in the Company to Purchaser, and Purchaser desires to acquire from Seller, Seller’s entire undivided Membership Interest in the Company, in accordance with the terms, provisions and conditions set forth herein below; and

WHEREAS , Seller and Purchaser further desire to terminate the Affiliated Agreements (defined hereinafter) in accordance with the terms, provisions and conditions set forth herein below.

NOW, THEREFORE , in consideration of the foregoing premises, the reciprocal agreements of the parties herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1.1            Purchase and Sale of Membership Interest .

                 1.2            Affiliated Agreements . At Closing hereunder, Seller, Purchaser and/or the Company, as the case may be, shall cause the following agreements referred to or contemplated in the Operating Agreement to be terminated upon the terms and subject to the conditions hereinafter contained (collectively, the “Affiliated Agreements”):

(a)   that certain Joint Venture Agreement For St. Charles Active Adult Community dated November 14, 2002 between Seller and Purchaser, as amended by (i) a First Amendment to Joint Venture Agreement dated February 13, 2003, (ii) a Second Amendment to Joint Venture Agreement dated February 28, 2003, (iii) a Third Amendment to Joint Venture Agreement dated February 28, 2003, and (iv) a Fourth Amendment to Joint Venture Agreement dated March, 2003 (collectively, the “Joint Venture Agreement”);

(b)   that certain Management and Development Agreement dated November 23, 2004 between Seller, as manager, and the Company, as owner (the “Management and Development Agreement”); and

(c)   that certain Purchase Agreement dated November 23, 2004 between the Company, as seller,  and the Purchaser, as purchaser, as amended by a First Amendment to Purchase Agreement dated June 20, 2006 (collectively, the “Purchase Agreement”).

2.            Purchase Price .  The purchase price to be paid by Purchaser to Seller (the “Purchase Price”) for the Membership Interest shall be Three Million Four Hundred Sixty-seven Thousand and No/100 Dollars ($3,467,000.00), payable as set forth in Section 3.4 hereunder.

3.1            Conditions Precedent to the Obligations of Purchaser . Each and every obligation of Purchaser to be performed at Closing shall be subject to the satisfaction, prior to or at Closing, of each the following conditions precedent:

(a)   All proceedings, with respect to the Company or otherwise, to be taken in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be reasonably satisfactory in form and substance to Purchaser and Purchaser’s counsel, and Seller shall have made available to Purchaser for examination the originals or true and correct copies of all documents related to the Membership Interest and the Property in Seller’s possession or control, which Purchaser may reasonably request in writing, in connection with the transactions contemplated by this Agreement.

(b)   During the period from the Effective Date through the Closing Date (as hereafter defined), there shall not have occurred, and there shall not exist on the Closing Date, any condition or fact which is or may be materially adverse to the financial condition of the Company.  For purposes of this condition, Purchaser acknowledges that it owns the other fifty percent (50%) membership interest in the Company, and is familiar with the business and affairs of the Company as of the Effective Date, including, but not limited to, its financial standing.

(c)   During the period from the Effective Date through the Closing Date, (i) neither the Company nor any real property, personal property or other assets of the Company shall have been adversely affected by reason of any loss, taking, moratorium, condemnation, destruction or physical damage, whether or not insured against.

(d)   During the period from the Effective Date through the Closing Date, there shall not have occurred any materially adverse change in the physical or environmental condition of the Property, or any part thereof.

(e)   The representations and warranties made by Seller in this Agreement shall be true and correct in all material respects as of the Closing Date with the same force and effect as if said representations and warranties had been made on the Closing Date.  Seller shall provide Purchaser at Closing with a factually accurate written certificate (“Closing Certificate”) confirming that all such representations and warranties remain true and complete on the Closing Date, as if such representations and warranties had been made on the Closing Date.  Notwithstanding that certain of Seller’s representations and warranties may be limited to the extent of the Seller’s knowledge (or other similar qualifiers) of the facts stated therein, the condition precedent to Purchaser’s obligation to settle hereunder shall not be so limited, and the satisfaction of said condition shall depend upon the actual correctness as of the time of Closing of the facts stated in all such representations and warranties.

(f)   From and after the Effective Date, Seller shall be prepared to perform and/or observe, and as of Closing, Seller shall have performed and observed, each in all material respects, all covenants, obligations and agreements required of Seller under this Agreement.

(g)   Fee simple title to the Property (as hereafter defined) shall be vested in the Company and shall be good of record and in fact, insurable at standard rates and free and clear of all liens, encumbrances, leases and tenancies, except for the following exceptions: (a) the lien of any real estate taxes and assessments for the then current tax year, (b) those exceptions shown on Schedule B of that certain owner’s title insurance policy issued to the Company (the “Company’s Title Insurance Policy”), a copy of which is attached as Exhibit A hereto and made a part hereof, (c) such additional instruments, liens, encumbrances, easements and/or rights of way as have been recorded in the Land Records of the County in connection with the development and construction on the Property since the date of the Company’s Title Insurance Policy, and (d) the lien, operation and effect of the first lien deed of trust and any amendments thereto on the Property to secure the Chevy Chase Loan (defined hereinafter) (collectively, the “Permitted Exceptions”).  In addition, Purchaser shall have acquired the binding commitment (which commitment, Purchaser shall diligently pursue) from a nationally recognized title insurance company selected by Purchaser (the “Purchaser’s Title Insurance Company”) to issue to Purchaser (or at Purchaser’s election, the Company) on the Closing Date, at Purchaser’s expense, an A.L.T.A. owner’s title insurance policy (or, at Purchaser’s election, an endorsement to the Company’s Title Insurance Property) with a “non-imputation endorsement” and such other endorsements reasonably requested by Purchaser (collectively, the “Purchaser’s Title Policy”) in the amount of Eleven Million Dollars ($11,000,000.00), insuring the fee simple estate in the Property  to be vested of record in the Company, subject solely to the Permitted Exceptions.

In the event any of the conditions precedent contained in this Agreement have not been satisfied on or before the Closing Date (unless the failure of any such condition precedent is caused by the direct action of Purchaser, which direct action continues after fifteen (15) days written notice from Seller to Purchaser), then Purchaser shall thereafter have the right, by written notice given to Seller on or before the Closing Date, to either (i) terminate this Agreement upon written notice to Seller, in which event neither party shall have any further liability hereunder, except for such liabilities that expressly survive termination of this Agreement, and the Affiliated Agreements shall remain in full force and effect, or (ii) waive such unsatisfied condition(s) by written notice to Seller given on or before the Closing Date, and proceed to Closing as provided herein, provided however, any such waiver shall not constitute a waiver by Purchaser of any breach by Seller of any of its covenants, representations, or warranties under this Agreement, or (iii) extend the Closing Date until that date which is ten (10) days after satisfaction of all such conditions precedent, provided however, if Purchaser elects item (iii), Purchaser shall thereafter continue to have the right to elect item (i) or (ii) above.  Notwithstanding the foregoing, in the event Purchaser elects to extend the Closing Date pursuant to item (iii) above, Seller shall use its best efforts to satisfy all unsatisfied conditions precedent to Closing; provided however, in the event that despite such effort Seller fails to satisfy all unsatisfied conditions precedent to Closing on that date which is sixty (60) days after the original Closing Date, then Purchaser shall, within ten (10) days after the expiration of such sixty (60) day period, elect item (i) or (ii) above by written notice given to Seller.  In the event Purchaser fails to provide said notice within such ten (10) day period, Purchaser shall be deemed to have elected item (i).

3.2            Closing Date .  Provided that all of the conditions precedent set forth in this Agreement have been satisfied, or waived by Purchaser as set forth above, the closing (“Closing”) of the transfer of the Membership Interest pursuant to this Agreement shall occur on November 26, 2008 (the “Closing Date”) at the offices of the Purchaser’s Title Insurance Company (the “Settlement Agent”).  Time shall be of the essence as to the Closing Date.

(a) execute, acknowledge and deliver to Purchaser an Assignment of Membership Interest, in the form attached as Exhibit B , with special warranty of title, conveying to Purchaser all of Seller’s Membership Interest free and clear of any and all Liens (as hereinafter defined).

(b) pay all costs which Seller is obligated to pay under the terms of this Agreement;

(c) approve, execute and deliver to Purchaser and the Settlement Agent a settlement statement prepared by the Settlement Agent and approved by the parties reflecting all payments and adjustments (if any) pertinent to the sale and purchase of the Membership Interest;

(d) execute and deliver to the Settlement Agent a sworn statement that Seller is not a “foreign person” or a “foreign corporation”, as the case may be, and containing such other information as may be required by Section 1445(b)(2) of the Internal Revenue Code and the regulations thereunder;

(e) execute and deliver to Purchaser’s Title Insurance Company any and all affidavits, indemnities and other documentation which may be reasonably required by the Purchaser’s Title Insurance Company, including but not limited to a non-imputation affidavit in usual and customary form;

(f)   execute and deliver the Closing Certificate to Purchaser;

(g)   deliver to Purchaser the fully executed Contract Assignments (defined hereinafter), fully executed by all necessary parties;

(h)   execute and deliver original counterparts of the Joint Venture Termination Agreement (defined hereinafter) and the Purchase Agreement Termination Agreement (defined hereinafter) to Purchaser, and shall cause the Company to execute and deliver original counterparts of the Management and Development Agreement Termination Agreement (defined hereinafter) to Purchaser;

(i)   execute and deliver to Purchaser such resolutions or other documentation reasonably satisfactory to Purchaser necessary to evidence Seller’s resignation and termination as the Manager, an authorized person, and officer of the Company;

(j)   deliver any and all documents and other information with respect to the Company’s bank, credit or investment accounts of the Company, and execute and deliver to Purchaser such resolutions or other documentation reasonably satisfactory to Purchaser and as required by the financial institutions administering such accounts, necessary to evidence Seller’s removal and termination as an authorized person on such accounts;

(k)   cause the return of the letter of credit Deposit (as such term is defined in the Purchase Agreement) in the amount of One Million Dollars ($1,000,000.00) being held by the escrow agent in accordance with the Purchase Agreement, and execute and deliver to Purchaser authorization to cancel such letter of credit in form and substance required by the issuer of such letter of credit, and as otherwise required by Purchaser;

(l)   execute and deliver all additional documents which may be reasonably necessary or appropriate to carry out the provisions of this Agreement; and

(m)   deliver the Financial Statements (defined hereinafter).

3.4            Purchaser’s Obligations .  On the Closing Date, Purchaser shall:

(a) pay the Purchase Price in full to Settlement Agent in immediately available funds, by cashier’s or certified check or wire transfer of funds, for delivery to Seller upon consummation of the Closing;

(b) approve, execute and deliver to Seller and the Settlement Agent a settlement statement prepared by the Settlement Agent and approved by the parties reflecting all payments and adjustments (if any) pertinent to the sale and purchase of the Membership Interest;

(c) execute and deliver original counterparts of the Joint Venture Termination Agreement (defined hereinafter) and the Purchase Agreement Termination Agreement (defined hereinafter) to Seller, and shall cause the Company to execute and deliver original counterparts of the Management and Development Agreement Termination Agreement (defined hereinafter) to Seller; and

(d)   execute and deliver all additional documents which may be reasonably necessary or appropriate to carry out the provisions of this Agreement; and

               4.1             Seller’s Representations and Warranties - as to the Seller . Subject to the terms of this Agreement, Seller represents, warrants and covenants to Purchaser that, as of the Effective Date and again as of the Closing Date:

(a)   Seller is the sole owner, beneficially, legally and of record, of the Membership Interest and possesses all requisite power and authority to enter into and perform this Agreement and to carry out the transactions contemplated herein.  All consents, approvals, and authorizations from any person or entity required for the execution and delivery of this Agreement by Seller, and the compliance by Seller with all the provisions hereof, have been obtained and will be in effect as of the Closing Date.

(b)   The transfer by Seller of its Membership Interest in the Company, pursuant to this Agreement, does not conflict with and will not result in any breach of the terms, conditions or provisions of, constitute a default under, or result in or permit the creation or imposition of any Lien (defined hereinafter) upon the Membership Interest or the Property pursuant to any indenture, mortgage, or other agreement or instrument or any judgment, decree, order or decision to which Seller or the Company is a party or by which Seller and/or its Membership Interest and/or the Company and/or the Property are bound, other than the Chevy Chase Loan Documents.

(c)   There is no pending, and to the best of Seller’s knowledge no threatened, action, suit, arbitration, or legal, administrative, or other proceeding, in any court or by or before any governmental agency affecting Seller’s Membership Interest in the Company or affecting the Company or the Property or in any manner related to or arising out of the ownership, management, or operation of the Property by the Company or otherwise.

(d)   No bankruptcy, insolvency, rearrangement, reorganization or similar action or proceeding, whether voluntary or involuntary, is pending or, to Seller's knowledge, threatened against Seller or the Company, and Seller has no intention of filing or commencing any such action or proceeding.

(e)   Seller has made “capital contributions” to the Company totaling Four Million Six Hundred Twenty-six Thousand Eight Hundred Ninety-four Dollars ($4,626,894) and “additional capital contributions” to the Company totaling Zero Dollars ($0) and Seller’s “capital account” has a positive balance of Three Million Four Hundred Sixty-six Thousand Eight Hundred Ninety-four Dollars ($3,466,894).  For purposes of this Agreement, the terms “capital contribution”, “additional capital contribution” and “capital account” shall have the meanings assigned to them in the Operating Agreement.  From and after Closing hereunder, (i) Seller’s capital account shall transfer and carry over to Purchaser in accordance with the provisions of Treas. Reg. §1.704-1(b)(2)(iv)(1), and (ii) all loans made by Seller to the Company shall be deemed discharged, and paid in full.

(f)   As of the Closing Date, any and all obligations or liabilities which the Company or Purchaser may have under any management agreement, development agreement, loan transaction or similar or related agreements or transactions, including but not limited to the Management and Development Agreement, which may require the Company to pay any fees, compensation or other payments to Seller or to any other person related to or controlled, directly or indirectly, by Seller with respect to the Company or the Property shall be terminated and no longer binding upon the Company or Purchaser, other than the payment of the Road Fee (defined hereinafter in Section 5.1(c)).  Notwithstanding the foregoing, the Company and Purchaser, as applicable, shall remain subject to the obligations contained in the PUD Documents (as defined below) to the same extent that any owner of real property in the St. Charles Planned Unit Development is subject to the PUD Documents.

(g)   This Agreement constitutes Seller’s valid and legally binding obligation enforceable against Seller and its legal representatives, and their respective successors and permitted assigns, in accordance with its terms.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by Seller will not (a) to Seller’s knowledge, violate any law, governmental regulation, order, or decree to which Seller or the Company is subject or any agreement or other instrument to which Seller or the Company is a party or by which it is bound, (b) result in a breach or default under any agreement or other binding commitment of Seller or the Company (other than the Chevy Chase Loan Documents), or any provision of the organizational documents of Seller or the Company, or (c) require any consent or approval or vote that has not been taken or given, or at the time of the transaction involved, shall not have been taken or given.

(h)   Other than as contained in the Permitted Exceptions, the Required Documents (defined hereinafter) or the Approvals (defined hereinafter), Seller has not made, on behalf of itself, the Property, or the Company, any commitments or representations to any applicable governmental authorities, homeowners associations, any adjoining or surrounding property owners, or any other person or entity, which would in any manner be binding upon Purchaser or the Company or interfere with Purchaser’s or the Company’s ability to develop and improve the Property.

(i)   Seller, as manager under the Management and Development Agreement, has fully performed each and every action and obligation required to be performed by manager under the Management and Development Agreement substantially in accordance with the terms and provisions of the Management and Development Agreement, and no “Event of Default” (as such term is defined in the Management and Development Agreement) has occurred thereunder.

4.2     Seller’s Representations and Warranties - as to the Company . Subject to the terms of this Agreement, Seller represents, warrants and covenants to Purchaser that, as of the Effective Date and again as of the Closing Date:

(a)   The Membership Interest is good and marketable, free and clear of any and all liens, encumbrances, pledges, security agreements, options, claims, charges and restrictions of any nature or kind whatsoever (collectively, “Liens”).  The Membership Interest has not previously been assigned, no other person has any right to purchase any of the Membership Interest, Seller has the right and ability to transfer the Membership Interest, no other person or entity has any legal or beneficial interest in the Membership Interest and, except for Purchaser or as may have been created by Purchaser, no other person or entity has any other legal or beneficial interest in the ownership of the Company.

(b)   The Membership Interest constitutes all membership interests owned by Seller in the Company.  To Seller’s knowledge, the Membership Interest has not been certificated, and no certificates or other evidence of the Membership Interest exists.

(c)   As set forth in the Company’s Title Insurance Policy, the Company is the fee simple owner, beneficially, legally and of record, of good and marketable, fee simple title in and to that certain real property and its improvements located in St. Charles, Charles County (the “County”), Maryland, as shown in Parcel A, Gleneagles Neighborhood, as more fully described on Exhibit C , attached hereto and made a part hereof (the “Property”).  The Property is the Company’s primary asset.  To Seller’s knowledge, there are no Liens or encumbrances or restrictions of any kind, nature or description affecting the Property except for the lien of the Chevy Chase Loan Documents, the Permitted Exceptions or those contained in the Required Documents or the Approvals.

(d)   To Seller’s knowledge, the Company has acquired all Approvals for its current uses as to the currently developed phase or phases of the Property, as required by all applicable governmental authorities, and such Approvals are in full force and effect.

(e)   Attached hereto as Exhibit D and made a part hereof is a complete list of all management, service, subcontractor, supplier, general contractor, concession, maintenance, architectural, engineering, testing, consulting, public works, development, construction, and utility contracts and other agreements to which the Company or Seller (either pursuant to the Operating Agreement or the Management and Development Agreement) is a party, including but not limited to the Affiliated Agreements and the Chevy Chase Loan Documents (defined hereinafter in subsection (j) of this Section) (collectively, the “Contracts”), with respect to its ownership, operation and management of the Property.  Seller represents and warrants, to Seller’s knowledge, that (i) all Contracts are in full force and effect in accordance with their respective terms, and (ii) no default or breach exists under any of the Contracts and there exists no condition or circumstance which, with the giving of notice or the passage of time, or both, would result in a default, breach or termination right of any party to such Contracts. To the extent that any Contracts are entered into by Seller rather than the Company, such Contracts shall be so identified on Exhibit D and assigned to the Company at Closing pursuant to an assignment agreement, the form and substance of which shall be subject to Purchaser’s reasonable approval (the “Contract Assignments”).

(f)   Attached hereto as Exhibit E and made a part hereof is a complete list of all payment, performance, maintenance and other bonds, letters of credit and other forms of surety issued by or on behalf of Seller or the Company (collectively, the “Bonds”), with respect to or required by the Approvals, the Contracts, or the ownership, operation or management of the Property.  Seller represents and warrants, to Seller’s knowledge, that (i) all Bonds required by the Approvals have been posted in accordance with the requirements of the Approvals and the applicable governmental authorities, (ii) the Bonds are in full force and effect in accordance with their respective terms, and (iii) no default or breach exists under any of the Bonds and there exists no condition or circumstance which, with the giving of notice or the passage of time, or both, would result in a default, breach or liability with respect to such Bonds.  In the event any Bond is in the name of the Seller, rather than the Company, then the Company shall have the right, from and after Closing hereunder, to work under such Bonds until such time as the Company has assumed or replaced such Bonds in accordance with Section 4.5(c), subject however, to the provisions of Section 4.5(d), which the Company shall diligently pursue.

(g)   The Company is duly organized, validly existing and in good standing as a Maryland limited liability company.  Attached hereto as Exhibit "F" are true and correct copies of the Articles of Organization and Operating Agreement of the Company (the "LLC Documents").  To Seller’s knowledge, the Articles of Organization and Operating Agreement are in full force and effect and have not been modified or amended.

(h)   To Seller’s knowledge, the only activity of the Company since its inception has been the acquisition of the Property, obtaining the Approvals and its performance in accordance with the Contracts, Approvals and the Bonds.

(i)   All bills and claims for current billing periods for labor performed and goods, services or materials furnished to or for the benefit of the Property have been (or prior to the Closing Date will be) paid in full from funds of the Company, and, to Seller’s knowledge, there are no mechanics’ liens or materialmen’s liens (whether or not perfected) on or affecting the Property.  Any funds which the Company may owe or any liability which the Company may have in contravention of the representations and warranties set forth in this subsection are set forth in complete and accurate detail in Exhibit G , including but not limited to the name of the creditor, the amounts owed (or the amounts in dispute) and the addresses, phone numbers and account numbers with such creditors.

(j)   To Seller’s knowledge, the Company has no monetary or other obligation, indebtedness, commitment or liability, known or unknown, choate or inchoate, to any third party, except for those obligations identified in the Required Documents, the Approvals, Exhibit G , and that certain loan (the “Chevy Chase Loan”) made by Chevy Chase Bank in the amount of Eight Million Dollars ($8,000,000.00) pursuant to a certain loan agreement dated March 1, 2005, which loan has a current outstanding balance of Three Million Five Hundred Dollars ($3,500,000.00), and any and all other documents evidencing or securing such loan (collectively, the “Chevy Chase Loan Documents”).  To Seller’s knowledge, other than with respect to Seller’s conveyance of its Membership Interest pursuant to this Agreement, no event exists or is likely to exist in the future which, with the passage of time or the giving of notice, or both, constitutes or wil