LOAN AGREEMENT

Exhibit 10.61

LOAN AGREEMENT

DATED AS OF MARCH 14, 2008

by and among

COMSTOCK STATION VIEW, L.C.,

COMSTOCK POTOMAC YARD, L.C.,

AS BORROWERS,

KEYBANK NATIONAL ASSOCIATION,

THE OTHER LENDERS THAT MAY BECOME

PARTIES TO THIS AGREEMENT,

AND

KEYBANK NATIONAL ASSOCIATION,

AS AGENT

TABLE OF CONTENTS

TABLE OF CONTENTS

(continued)

ii

TABLE OF CONTENTS

(continued)

iii

TABLE OF CONTENTS

(continued)

iv

TABLE OF CONTENTS

(continued)

v

TABLE OF CONTENTS

(continued)

vi

EXHIBITS AND SCHEDULES

vii

LOAN AGREEMENT

THIS LOAN AGREEMENT (this “Agreement”) is made as of the 14th day of March, 2008 by and among COMSTOCK STATION VIEW, L.C. , a Virginia limited liability company (“Station View”), COMSTOCK POTOMAC YARD, L.C. , a Virginia limited liability company (“Potomac”; Station View and Potomac are sometimes hereinafter referred to individually as “Borrower” and collectively as “Borrowers”), KEYBANK NATIONAL ASSOCIATION (“KeyBank”) and the other lending institutions that may become parties hereto pursuant to §18 (together with KeyBank, the “Lenders”), and KEYBANK NATIONAL ASSOCIATION , as Agent for the Lenders (the “Agent”).

RECITALS

WHEREAS , Borrowers have requested that the Lenders provide a loan to Borrowers; and

WHEREAS , the Agent and the Lenders are willing to provide such loan to Borrowers on and subject to the terms and conditions set forth herein;

NOW, THEREFORE , in consideration of the recitals herein and mutual covenants and agreements contained herein, the parties hereto hereby covenant and agree as follows:

§1.1 Definitions . The following terms shall have the meanings set forth in this §l or elsewhere in the provisions of this Agreement referred to below:

Affiliate . An Affiliate, as applied to any Person, shall mean any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means (a) the possession, directly or indirectly, of the power to vote ten percent (10%) or more of the stock, shares, voting trust certificates, beneficial interest, partnership interests, member interests or other interests having voting power for the election of directors of such Person or otherwise to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise, or (b) the ownership of (i) a general partnership interest, (ii) a managing member’s or manager’s interest in a limited liability company or (iii) a limited partnership interest or preferred stock (or other ownership interest) representing ten percent (10%) or more of the outstanding limited partnership interests, preferred stock or other ownership interests of such Person.

Agent . KeyBank National Association, acting as administrative agent for the Lenders, and its successors and assigns.

Agent’s Head Office . The Agent’s head office located at 127 Public Square, Cleveland, Ohio 44114-1306, or at such other location as the Agent may designate from time to time by notice to the Borrowers and the Lenders.

Agent’s Special Counsel . McKenna Long & Aldridge LLP or such other counsel as selected by Agent.

Agreement . This Loan Agreement, including the Schedules and Exhibits hereto.

Agreement Regarding Fees . See §4.2.

Appraisal . An MAI appraisal of the value of the Mortgaged Property, determined on an “as-is” market value basis, performed by an independent appraiser selected by the Agent who is not an employee of the Borrowers, the Guarantor or any of their Affiliates, the Agent or a Lender, the form and substance of such appraisal and the identity of the appraiser to be in compliance with the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended, the rules and regulations adopted pursuant thereto and all other regulatory laws and policies (both regulatory and internal) applicable to the Lenders and otherwise acceptable to the Agent.

Appraised Value . The “as is” market value of the Mortgaged Property as reflected in the Appraisal of the Mortgaged Property; subject, however, to such reasonable adjustments to the value determined thereby as may be required by the appraisal department of the Agent in its good faith business judgment. The Appraised Value of the Mortgaged Property shall be determined based only upon permits for the development of the Mortgaged Property that have been issued and are in full force and effect.

Assignment and Acceptance Agreement . See §18.1.

Assignment of Interests . The Assignment of Interests dated of even date herewith by the Guarantor in favor of Agent for the benefit of the Lenders, as the same may be hereafter modified or amended.

Assignment of Potomac Loan Documents . The Assignment dated of even date herewith from Corus Bank, N.A. to Agent.

Assignment of Sales Contracts and Deposits . The Assignment of Sales Contracts and Deposits dated of even date herewith by Potomac in favor of Agent for the benefit of the Lenders, as the same may be hereafter modified or amended.

Assignment of Station View Loan Documents . The Assignment dated of even date herewith from KeyBank National Association to Agent.

Authorized Officer . Christopher Clemente and Bruce Labovitz as to Station View, and Christopher Clemente and Bruce Labovitz as to Potomac.

Balance Sheet Date . December 31, 2007.

Bankruptcy Code . Title 11, U.S.C.A., as amended from time to time or any successor statute thereto.

2

Base Rate . The greater of (a) the fluctuating annual rate of interest announced from time to time by the Agent at the Agent’s Head Office as its “prime rate” or (b) one half of one percent (0.5%) above the Federal Funds Effective Rate. The Base Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer. Any change in the rate of interest payable hereunder resulting from a change in the Base Rate shall become effective as of the opening of business on the day on which such change in the Base Rate becomes effective, without notice or demand of any kind.

Base Rate Loans . Collectively, Loans bearing interest calculated by reference to the Base Rate.

Borrowers . As defined in the preamble hereto.

Breakage Costs . The cost to any Lender of re-employing funds bearing interest at LIBOR (calculated based on the change in LIBOR) for the balance of an applicable Interest Period (actual or requested), incurred (or reasonably expected to be incurred) in connection with (i) any payment of any portion of the Loans bearing interest at LIBOR prior to the termination of any applicable Interest Period, (ii) the conversion of a LIBOR Rate Loan to any other applicable interest rate on a date other than the last day of the relevant Interest Period, or (iii) the failure of a Borrower to draw down, on the first day of the applicable Interest Period, any amount as to which such Borrower has elected a LIBOR Rate Loan.

Business Day . Any day on which banking institutions located in the same city and State as the Agent’s Head Office are located are open for the transaction of banking business and, in the case of LIBOR Rate Loans, which also is a LIBOR Business Day.

Capitalized Lease . A lease under which the discounted future rental payment obligations of the lessee or the obligor are required to be capitalized on the balance sheet of such Person in accordance with GAAP.

CERCLA . The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

Change of Control . A “Change of Control” shall occur if (i) any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), including a “group” as defined in Section 13(d)(3) of the Exchange Act (but excluding a director or other fiduciary holding securities under an employee benefit plan of the Guarantor), becomes the beneficial owner of Equity Interests of the Guarantor having at least fifty percent (50%) of the total number of votes that may be cast for the election of directors of the Guarantor; (ii) the merger or other business combination of the Guarantor, sale of all or substantially all of the Guarantor’s assets or combination of the foregoing transactions; or (iii) the persons who were directors of the Guarantor on the date hereof (the “Incumbent Directors”) shall cease to constitute at least a majority of the board of directors of the Guarantor; provided, that, any director who was not a director as of the date hereof shall be deemed to be an Incumbent Director if such director was elected to the board of directors by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this provision, unless such election, recommendation or approval was the result of an actual or threatened election contest of the type contemplated by Regulation 14a-11 promulgated under the Exchange Act or any successor provision.

3

CHCI Subordinate Notes . The promissory notes issued pursuant to that certain Indenture dated March 15, 2007, by and between Guarantor and Wells Fargo Bank, N.A. (“Trustee”), as amended and restated pursuant to that certain Amended and Restated Indenture dated March 14, 2008, by and between Guarantor and Trustee.

Closing Date . The first date on which all of the conditions set forth in §10 and §11 have been satisfied.

Code . The Internal Revenue Code of 1986, as amended.

Collateral . All of the property, rights and interests of the Borrowers and the Guarantor which are subject to the security interests, security title, liens and mortgages created by the Security Documents, including, without limitation, the Mortgaged Property, the Guaranty and the Assignment of Interests.

Commitment . With respect to each Lender, the amount set forth on Schedule 1.1 hereto as the amount of such Lender’s Commitment to make or maintain Loans to the Borrowers, as the same may be changed from time to time in accordance with the terms of this Agreement.

Commitment Percentage . With respect to each Lender, the percentage set forth on Schedule 1.1 hereto as such Lender’s percentage of the aggregate Commitments of all of the Lenders, as the same may be changed from time to time in accordance with the terms of this Agreement.

Compliance Certificate . See §7.4(i).

Condemnation Proceeds . All compensation, awards, damages, judgments and proceeds awarded to a Borrower by reason of any Taking, net of all reasonable and customary amounts actually expended to collect the same.

Condominium Declaration . Declaration of The Eclipse on Center Park Condominium dated as of October 20, 2006, by Comstock Potomac Yard, L.C., a Virginia limited liability company (“Declarant”), recorded on October 20, 2006 at Book 4033, Page 290, in the Office of the Clerk of the Circuit Court of Arlington County, Virginia; as amended by that certain Corrective Amendment to Condominium Instruments to The Eclipse on Center Park Condominium, dated November 27, 2006, by Declarant, recorded on November 29, 2006, at Book 4045, Page 1819, aforesaid records; as further amended by that certain Corrective Amendment to Condominium Instruments to The Eclipse on Center Park Condominium dated June 19, 2007, by Declarant, recorded on June 20, 2007, at Book 4109, Page 110, aforesaid records; as further amended by that certain Corrective Amendment to Condominium Instruments to The Eclipse on Center Park Condominium dated May 18, 2007, by Declarant, recorded on December 19, 2007, at Book 4156, Page 891, aforesaid records; as further amended by that certain Corrective Amendment to Condominium Instruments to The Eclipse on Center Park Condominium dated December 27, 2007, by Declarant, recorded on December 28, 2007 at Book 4158, Page 1412, aforesaid records; as further amended by that certain Amendment to

4

Condominium Instruments of The Eclipse on Center Park Condominium Assigning Storage Spaces, dated December 27, 2007, by Declarant, recorded on December 28, 2007, at Book 4158, Page 1515, aforesaid records.

Contribution Agreement . That certain Contribution Agreement dated of even date herewith among the Borrowers and the Guarantor, as the same may be modified, amended or ratified from time to time.

Conversion/Continuation Request . A notice given by a Borrower to the Agent of its election to convert or continue a Loan in accordance with §4.1.

Declaration . The instrument, and all amendments or supplements thereto, recorded in among the land records of the jurisdiction in which the Station View Project or any part thereof is located, that either (i) imposes on the association maintenance or operational responsibilities for the common area or (ii) creates the authority in the association to impose on lots, or on the owners or occupants of such lots, or on any other entity any mandatory payment of money in connection with the provision of maintenance and/or services for the benefit of some or all of the lots, the owners or occupants of the lots, or the common area.

Default . See §12.1.

Default Rate . See §4.12.

Delinquent Lender . See §14.5(c).

Derivatives Contract . Any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement. Not in limitation of the foregoing, the term “Derivatives Contract” includes any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities under any such master agreement.

Distribution . With respect to any Person, the declaration or payment of any cash, cash flow, dividend or distribution on or in respect of any shares of any class of capital stock, partner’s interest, member’s interest or other beneficial interest of such Person; the purchase, redemption, exchange or other retirement of any shares of any class of capital stock, partner’s interest, member’s interest or other beneficial interest of such Person, directly or indirectly through a subsidiary of such Person or otherwise; the return of capital by a Person to its shareholders, partners, members or other beneficial owners as such; any payment made to retire,

5

or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any capital stock, partner’s interest, member’s interest or other beneficial interest in a Person; or any other distribution on or in respect of any shares of any class of capital stock, partner’s interest, member’s interest or other beneficial interest of such Person.

Dollars or $ . Dollars in lawful currency of the United States of America.

Domestic Lending Office . Initially, the office of each Lender designated as such on Schedule 1.1 hereto; thereafter, such other office of such Lender, if any, located within the United States that will be making or maintaining Base Rate Loans.

Drawdown Date . The date on which any Loan is made or is to be made, and the date on which any Loan which is made prior to the Maturity Date is converted in accordance with §4.1.

Employee Benefit Plan . Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by either Borrower or any ERISA Affiliate, other than a Multiemployer Plan.

Environmental Engineer . A firm of independent professional engineers or other scientists generally recognized as expert in the detection, analysis and remediation of Hazardous Substances and related environmental matters and acceptable to the Agent in its reasonable discretion.

Environmental Laws . As defined in the Indemnity Agreement.

Equity Interests . With respect to any Person, any share of capital stock of (or other ownership or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of capital stock of (or other ownership or profit interests in) such Person, any security convertible into or exchangeable for any share of capital stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date of determination.

ERISA . The Employee Retirement Income Security Act of 1974, as amended and in effect from time to time.

ERISA Affiliate . Any Person which is treated as a single employer with a Borrower or the Guarantor under §414 of the Code.

ERISA Reportable Event . A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder as to which the requirement of notice has not been waived.

Event of Default . See §12.1.

6

Federal Funds Effective Rate . For any day, the rate per annum (rounded upward to the nearest one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve Bank of Cleveland on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate.”

GAAP . Generally accepted accounting principles that are (a) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time and (b) consistently applied with past financial statements of the Person adopting the same principles.

General Contractor Dispute . The disputes relating to Potomac’s and Balfour Beatty Construction LLC (as successor-in-interest to Centex Construction LLC) obligations for the Potomac Project under the AIA construction contract and exhibits executed on November 4, 2004 by Potomac and Centex Construction LLC and related Agreement dated January 30, 2008 by and between Potomac and Balfour Beatty Construction LLC.

Governmental Authority . The United States of America, the Commonwealth of Virginia, any political subdivision thereof, and any agency, authority, department, commission, board, bureau, or instrumentality of any of them.

Guaranteed Pension Plan . Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by a Borrower or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Guarantor . Comstock Homebuilding Companies, Inc., a Delaware corporation.

Guaranty . The Unconditional Guaranty of Payment and Performance dated of even date herewith made by Guarantor in favor of the Agent and the Lenders, as the same may be modified, amended, or ratified, such Guaranty to be in form and substance satisfactory to Agent.

Hazardous Substances . As defined in the Indemnity Agreement.

Holdbacks . The Interest Holdback.

Indebtedness . With respect to a Person, at the time of computation thereof, all of the following (without duplication): (a) all obligations of such Person in respect of money borrowed (other than trade debt incurred in the ordinary course of business which is not more than thirty (30) days past due); (b) all obligations of such Person, whether or not for money borrowed (i) represented by notes payable, or drafts accepted, in each case representing extensions of credit, (ii) evidenced by bonds, debentures, notes or similar instruments, or (iii) constituting purchase money indebtedness, conditional sales contracts, title retention debt instruments or other similar instruments, upon which interest charges are customarily paid or that are issued or assumed as full or partial payment for property or services rendered; (c) obligation

7

of such Person as a lessee or obligor under a Capitalized Lease; (d) all reimbursement obligations of such Person under any letters of credit or acceptances (whether or not the same have been presented for payment); (e) all obligations of such Person in respect of any purchase obligation, repurchase obligation, takeout commitment or forward equity commitment, in each case evidenced by a binding agreement; (f) obligations under any Derivatives Contract; (g) all Indebtedness of other Persons which such Person has guaranteed or is otherwise recourse to such Person, including liability of a general partner in respect of liabilities of a partnership in which it is a general partner which would constitute “Indebtedness” hereunder, any obligation to supply funds to or in any manner to invest directly or indirectly in a Person, to maintain working capital or equity capital of a Person or otherwise to maintain net worth, solvency or other financial condition of a Person, to purchase indebtedness, or to assure the owner of indebtedness against loss, including, without limitation, through an agreement to purchase property, securities, goods, supplies or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise; and (h) all Indebtedness of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness or other payment obligation.

Indemnity Agreement . The Indemnity Agreement Regarding Hazardous Materials made by the Borrowers and Guarantor in favor of the Agent and the Lenders, as the same may be modified, amended or ratified, such agreement to be in form and substance satisfactory to Agent.

Insurance Proceeds . All insurance proceeds, damages and claims and the right thereto under any insurance policies relating to any portion of any Collateral, net of all reasonable and customary amounts actually expended to collect the same.

Interest Holdback . See §9(a).

Interest Payment Date . As to each Loan, the first (1st) day of each calendar month during the term of such Loan.

Interest Period . With respect to each LIBOR Rate Loan (a) initially, the period commencing on the Drawdown Date of such LIBOR Rate Loan and ending one, two or three months (subject to availability) thereafter, and (b) thereafter, each period commencing on the day following the last day of the next preceding Interest Period applicable to such Loan and ending on the last day of one of the periods set forth above, as selected by a Borrower in a Loan Request or Conversion/Continuation Request; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

(i) if any Interest Period with respect to a LIBOR Rate Loan would otherwise end on a day that is not a LIBOR Business Day, such Interest Period shall end on the next succeeding LIBOR Business Day, unless such next succeeding LIBOR Business Day occurs in the next calendar month, in which case such Interest Period shall end on the next preceding LIBOR Business Day, as determined conclusively by the Agent in accordance with the then current bank practice in London;

8

(ii) if a Borrower shall fail to give notice as provided in §4.1, such Borrower shall be deemed to have requested a conversion of the affected LIBOR Rate Loan to a Base Rate Loan on the last day of the then current Interest Period with respect thereto;

(iii) any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the applicable calendar month; and

(iv) no Interest Period relating to any LIBOR Rate Loan shall extend beyond the Maturity Date.

KeyBank . As defined in the preamble hereto.

Lenders . KeyBank and any other Person which becomes an assignee of any rights of a Lender pursuant to §18 (but not including any participant as described in §18).

LIBOR . For any LIBOR Rate Loan for any Interest Period, the average rate (rounded upwards to the nearest 1/16th) as shown in Reuters Screen LIBOR01 Page at which deposits in U.S. dollars are offered by first class banks in the London Interbank Market at approximately 11:00 a.m. (London time) on the day that is two (2) LIBOR Business Days prior to the first day of such Interest Period with a maturity approximately equal to such Interest Period and in an amount approximately equal to the amount to which such Interest Period relates, adjusted for reserves and taxes if required by future regulations. If Reuters no longer reports such rate, then the rate shall be determined by reference to such other comparable publicly available service displaying such rate as selected by Agent in its sole discretion. If Agent determines in good faith that the rate so reported no longer accurately reflects the rate available to Agent in the London Interbank Market, Loans shall accrue interest based upon the Base Rate. For any period during which a Reserve Percentage shall apply, LIBOR with respect to LIBOR Rate Loans shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage.

LIBOR Business Day . Any day on which commercial banks are open for international business (including dealings in Dollar deposits) in London, England.

LIBOR Lending Office . Initially, the office of each Lender designated as such on Schedule 1.1 hereto; thereafter, such other office of such Lender, if any, that shall be making or maintaining LIBOR Rate Loans.

Lien . See §8.2.

Loan or Loans . An individual Loan or the aggregate Loans, as the case may be, made by the Lenders hereunder to Borrowers.

Loan Documents . This Agreement, the Notes, the Security Documents and all other documents, instruments or agreements now or hereafter executed or delivered by or on behalf of a Borrower or the Guarantor in connection with the Loans.

9

Loan Request . See §2.3.

Loan to Value Ratio . See §2.6.

Majority Lenders . As of any date, the Lender or Lenders whose aggregate Commitment Percentage is greater than fifty percent (50%) of the Total Commitment; provided that if there shall only be two (2) Lenders, the Majority Lenders shall mean both of such Lenders; and provided further that in determining said percentage at any given time, all then existing Delinquent Lenders will be disregarded and excluded and the Commitment Percentages of the Lenders shall be redetermined for voting purposes only to exclude the Commitment Percentages of such Delinquent Lenders.

Material Adverse Effect . A material adverse effect on (a) the business activities, properties, assets, prospects, condition (financial or otherwise) or results of operations of a Borrower; (b) the ability of any Borrower or the Guarantor to perform any of its obligations under the Loan Documents; or (c) the validity or enforceability of any of the Loan Documents or the rights or remedies of Agent or the Lenders thereunder; provided, however, that none of the following shall constitute, or shall be considered in determining whether there has occurred, and no event, circumstance, change or effect resulting from or arising out of any of the following shall constitute, a Material Adverse Effect: (i) the announcement of the execution of this Agreement; (ii) changes in the national or world economy or financial markets as a whole (but excluding changes in economic conditions that affect the industries or markets in which Borrowers or Guarantor conduct their business) so long as such changes or conditions do not adversely affect Borrowers or Guarantor, taken as a whole, in a materially disproportionate manner relative to other similarly situated participants in the industries or markets in which Borrowers or Guarantor operate; and (iii) a decline in the price, or a change in the trading volume or listing status, of the common stock of Guarantor on the NASDAQ.

Maturity Date . March 14, 2011, or such earlier date on which the Loans shall become due and payable pursuant to the terms hereof.

Moody’s . Moody’s Investor Service, Inc.

Mortgage . The Deed of Trust from a Borrower to the trustees named therein acting on behalf of the Agent for the benefit of the Lenders, as the same may be modified or amended, pursuant to which such Borrower has conveyed or granted a mortgage lien upon or a conveyance in fee simple of the Mortgaged Property as security for the Obligations.

Mortgaged Property or Mortgaged Properties . The real estate owned by a Borrower which is security for the Obligations pursuant to the Mortgage.

Mortgaged Property Qualification Documents . See Schedule 1.2 attached hereto.

Multiemployer Plan . Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by a Borrower or any ERISA Affiliate.

Net Sales Proceeds . With respect to the sale of any portion of the Mortgaged Property in accordance with the provisions of §5.2, all gross proceeds of such sale plus all other

10

consideration received in conjunction with such sale less all reasonable, ordinary and customary costs, expenses and commissions incurred as a direct result of such sale and paid to any Person; provided that if such commissions are to a Person related to the Borrowers, Guarantor or any of their respective partners, members, managers, officers or directors or any Person affiliated with the Borrowers, Guarantor or any their respective partners, members, managers, officers or directors, then such commissions shall be reasonable and customary in the market in which the Mortgaged Property is located. Net Sales Proceeds shall under no circumstances be less than ninety percent (90%) of the sales price set forth in the Purchase Contract without the prior written consent of Agent.

Notes . See §2.1(b).

Notice . See §19.

Obligations . All indebtedness, obligations and liabilities of the Borrowers or the Guarantor to any of the Lenders or the Agent, individually or collectively, under this Agreement or any of the other Loan Documents or in respect of any of the Loans or the Notes, or other instruments at any time evidencing any of the foregoing, whether existing on the date of this Agreement or arising or incurred hereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise.

OFAC . Office of Foreign Asset Control of the Department of the Treasury of the United States of America.

Original Potomac Loan Agreement . The “Loan Agreement,” as defined in the Assignment of Potomac Loan Documents.

Original Potomac Note . The “Note,” as defined in the Assignment of Potomac Loan Documents.

Original Station View Loan Agreement . The “Loan Agreement,” as defined in the Assignment of Station View Loan Documents.

Original Station View Note . The “Note,” as defined in the Assignment of Station View Loan Documents.

Outstanding . With respect to any Loan, the aggregate unpaid principal thereof as of any date of determination.

Patriot Act . The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as the same may be amended from time to time, and corresponding provisions of future laws.

PBGC . The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

11

Person . Any individual, corporation, limited liability company, partnership, trust, unincorporated association, business, or other legal entity, and any government or any governmental agency or political subdivision thereof.

Plan Assets . Assets of any employee benefit plan subject to Part 4, Subtitle A, Title I of ERISA.

Potomac . As defined in the preamble hereto.

Potomac Loans . The portion of the Loans that are not Station View Loans.

Potomac Project . A completed 465-unit condominium project located in Alexandria, Virginia between U.S. Route 1 and the Potomac River, subject only to minor customary punchlist items in connection with the sale of Potomac Units and warranty work typical for a condominium project.

Potomac Units . Each of the residential condominium units within the Potomac Project established by the Condominium Declaration, together with any appurtenant undivided interest in the common elements created under the Condominium Declaration and easements for the use of any appurtenant limited common elements.

Purchase Contract . A purchase and sale agreement between a Borrower and the purchaser of a Unit for the purchase of a Unit (and appurtenant percentage interests in the limited common elements and common elements, if any), whether now or hereafter existing.

Record . The grid attached to any Note, or the continuation of such grid, or any other similar record, including computer records, maintained by the Agent with respect to any Loan referred to in such Note.

Register . See §18.2.

Release . See §6.16(c)(iii).

Rent Roll . A report prepared by Potomac Yard showing for the Potomac Project owned or leased by Potomac Yard, its occupancy, lease expiration dates, lease rent and other information in substantially the form presented to Agent prior to the date hereof or in such other form as may be reasonably acceptable to the Agent.

Requirements . Any law, ordinance, code, order, rule or regulation of any Governmental Authority relating in any way to the acquisition and ownership of the Potomac Project or the Station View Project, or the use, occupancy, operation or sale of the Potomac Project or Station View Project, including those relating to subdivision control, zoning, building, use and occupancy, fire prevention, health, safety, sanitation, handicapped access, historic preservation and protection, tidelands, wetlands, flood control, access and earth removal, interstate land sales and all Environmental Laws.

Reserve Percentage . For any Interest Period, that percentage which is specified three (3) Business Days before the first day of such Interest Period by the Board of Governors of

12

the Federal Reserve System (or any successor) or any other governmental or quasi-governmental authority with jurisdiction over Agent or any Lender for determining the maximum reserve requirement (including, but not limited to, any marginal reserve requirement) for Agent or any Lender with respect to liabilities constituting of or including (among other liabilities) Eurocurrency liabilities in an amount equal to that portion of the Loan affected by such Interest Period and with a maturity equal to such Interest Period.

Salable Inventory . The total amount of unsold Potomac Units on a square foot basis.

SEC . The federal Securities and Exchange Commission.

Security Documents . Collectively, the Guaranty, the Mortgage, the Indemnity Agreement, the Assignment of Interests, the Assignment of Sales Contracts and Deposits, UCC-1 financing statements and any further collateral assignments to the Agent for the benefit of the Lenders.

Single Purpose Entity . See §7.14(b).

S&P . Standard & Poor’s Ratings Group.

Station View . As defined in the preamble hereto.

Station View Loans . The portion of the loans used to refinance existing indebtedness secured by the Station View Project.

Station View Project . A 7.4 acre parcel of land in Ashburn, Virginia on which Station View intends to construct a residential community consisting of forty-seven (47) fee simple residential townhomes.

Subsidiary . For any Person, any corporation, partnership, limited liability company or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership, limited liability company or other entity (without regard to the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person, and shall include all Persons the accounts of which are consolidated with those of such Person pursuant to GAAP.

Survey . An instrument survey of the Mortgaged Property prepared by a registered land surveyor which shall show the location of all buildings, structures, easements and utility lines on such property, shall be sufficient to remove the standard survey exception from the Title Policy, shall show that all buildings and structures are within the lot lines of the Mortgaged Property and shall not show any encroachments by others (or to the extent any encroachments are shown, such encroachments shall be acceptable to the Agent in its reasonable discretion), shall show rights of way, adjoining sites, establish building lines and street lines, the distance to and names of the nearest intersecting streets and such other details as the Agent may reasonably require; and shall show whether or not the Mortgaged Property is located in a flood

13

hazard district as established by the Federal Emergency Management Agency or any successor agency or is located in any flood plain, flood hazard or wetland protection district established under federal, state or local law and shall otherwise be in form and substance reasonably satisfactory to the Agent.

Surveyor Certification . With respect to the Mortgaged Property, a certificate executed by the surveyor who prepared the Survey with respect thereto, dated as of a recent date and containing such information relating to such parcel as the Agent or the Title Insurance Company may reasonably require, such certificate to be reasonably satisfactory to the Agent in form and substance.

Taking . The taking or appropriation (including by deed in lieu of condemnation) of any Mortgaged Property, or any part thereof or interest therein, whether permanently or temporarily, for public or quasi-public use under the power of eminent domain, by reason of any public improvement or condemnation proceeding, or in any other manner or any damage or injury or diminution in value through condemnation, inverse condemnation or other exercise of the power of eminent domain.

Title Insurance Company . Lawyers Title Insurance Company and/or any other title insurance company or companies approved by the Agent and the Borrowers.

Title Policy . With respect to the Mortgaged Property, an ALTA standard form title insurance policy (or, if such form is not available, an equivalent, legally promulgated form of mortgagee title insurance policy reasonably acceptable to the Agent) issued by a Title Insurance Company (with such reinsurance as the Agent may reasonably require, any such reinsurance to be with direct access endorsements to the extent available under applicable law) in an amount as the Agent may reasonably require based upon the fair market value of the applicable Mortgaged Property insuring the priority of the Mortgage thereon and that a Borrower holds marketable fee simple title to such parcel, subject only to the encumbrances acceptable to Agent in its reasonable discretion and which shall not contain standard exceptions for mechanics liens, persons in occupancy or matters which would be shown by a survey, shall not insure over any matter except to the extent that any such affirmative insurance is acceptable to the Agent in its reasonable discretion, and shall contain such endorsements and affirmative insurance as the Agent may reasonably require and is available in the State in which the Mortgaged Property is located.

Total Commitment . The sum of the Commitments of the Lenders, as in effect from time to time.

Transfer . See §5.4.

Type . As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

Unit or Units . Any or all of the Potomac Units.

14

§1.2 Rules of Interpretation .

(a) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Agreement.

(b) The singular includes the plural and the plural includes the singular.

(c) A reference to any law includes any amendment or modification of such law.

(d) A reference to any Person includes its permitted successors and permitted assigns.

(e) Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to which they refer.

(f) The words “include”, “includes” and “including” are not limiting.

(g) The words “approval” and “approved”, as the context requires, means an approval in writing given to the party seeking approval after full and fair disclosure to the party giving approval of all material facts necessary in order to determine whether approval should be granted.

(h) All terms not specifically defined herein or by GAAP, which terms are defined in the Uniform Commercial Code as in effect in the Commonwealth of Virginia, have the meanings assigned to them therein.

(i) Reference to a particular “§”, refers to that section of this Agreement unless otherwise indicated.

(j) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Agreement as a whole and not to any particular section or subdivision of this Agreement.

§2.1 Loans .

(a) Subject to the terms and conditions set forth in this Agreement, each of the Lenders severally agrees to lend to Borrowers on the Closing Date, and Borrowers agree to borrow on the Closing Date, such Lender’s Loan Commitment Percentage of the total Loan Commitment (except the portion allocated to the Interest Holdback, which shall be advanced as provided in §9(a)).

(b) The Loans shall be evidenced by notes of the Borrowers in substantially the form of Exhibit A hereto (collectively, the “Notes”), dated of even date with this Agreement (except as otherwise provided in §18.3) and completed with appropriate insertions. One Note shall be payable to the order of each Lender in the principal amount equal to such Lender’s Loan

15

Commitment, respectively, or, if less, the outstanding amount of all Loans made by such Lender, plus interest accrued thereon, as set forth below. The Borrowers irrevocably authorize Agent to make or cause to be made, at or about the time of the Drawdown Date of any Loan or the time of receipt of any payment of principal thereof, an appropriate notation on Agent’s Record reflecting the making of such Loan or (as the case may be) the receipt of such payment. The outstanding amount of the Loans set forth on Agent’s Record shall be prima facie evidence of the principal amount thereof owing and unpaid to each Lender, but the failure to record, or any error in so recording, any such amount on Agent’s Record shall not limit or otherwise affect the obligations of the Borrowers hereunder or under any Note to make payments of principal of or interest on any Note when due.

§2.2 Interest on Loans .

(a) Each Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the date on which such Base Rate Loan is repaid or converted to a LIBOR Rate Loan at the rate per annum equal to the sum of the Base Rate plus one and one-half percent (1.5%).

(b) Each LIBOR Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of each Interest Period with respect thereto at the rate per annum equal to the sum of LIBOR determined for such Interest Period plus four percent (4%).

(c) Borrowers promise to pay interest on the Loans in arrears on each Interest Payment Date with respect thereto.

(d) Base Rate Loans and LIBOR Rate Loans may be converted to Loans of the other Type as provided in §4.1.

§2.3 Requests for Loans . A Borrower shall give to the Agent written notice executed by an Authorized Officer of such Borrower in the form of Exhibit B hereto (or telephonic notice confirmed in writing in the form of Exhibit B hereto) of each Loan requested hereunder (including a request for a disbursement from the Interest Holdback) (a “Loan Request”) by 11:00 a.m. (Cleveland time) one (1) Business Day prior to the proposed Drawdown Date with respect to Base Rate Loans and two (2) Business Days prior to the proposed Drawdown Date with respect to LIBOR Rate Loans. Each such notice shall specify with respect to the requested Loan, the proposed principal amount of such Loan, the Type of Loan, the initial Interest Period (if applicable) for such Loan and the Drawdown Date. Promptly upon receipt of any such notice, the Agent shall notify each of the Lenders thereof. Each such Loan Request shall be irrevocable and binding on such Borrower and shall obligate such Borrower to accept the Loan requested from the Lenders on the proposed Drawdown Date. There shall be no more than six (6) LIBOR Rate Loans outstanding at any one time. Notwithstanding anything herein to the contrary, Lenders shall not be required to advance any Loans if such advance would cause the Loan to Value Ratio to exceed the thresholds permitted under §2.6.

16

§2.4 Funds for Loans .

(a) Not later than 1:00 p.m. (Cleveland time) on the proposed Drawdown Date of any Loans, each of the Lenders will make available to the Agent, at the Agent’s Head Office, in immediately available funds, the amount of such Lender’s Loan Commitment or Loan Commitment Percentage, as applicable, of the amount of the requested Loan which may be disbursed pursuant to §2.1 or §9. Upon receipt from each Lender of such amount, and upon receipt of the documents required by §10 and §11, as applicable, and the satisfaction of the other conditions set forth therein, to the extent applicable, the Agent will make available to a Borrower (or to the Agent for the benefit of the Lenders with respect to disbursements from the Holdbacks for the payment of interest) the aggregate amount of such Loans made available to the Agent by the Lenders by crediting such amount to the account of a Borrower maintained at the Agent’s Head Office.

(b) Unless the Agent shall have been notified by any Lender prior to the applicable Drawdown Date that such Lender will not make available to Agent such Lender’s Commitment Percentage of a proposed Loan, Agent may in its discretion assume that such Lender has made such Loan available to Agent in accordance with the provisions of this Agreement and the Agent may, if it chooses, in reliance upon such assumption make such Loan available to a Borrower (or to the Agent for the benefit of the Lenders with respect to disbursements from the Holdbacks for the payment of interest), and such Lender shall be liable to the Agent for the amount of such advance. If such Lender does not pay such corresponding amount upon the Agent’s demand therefor, the Agent will promptly notify the Borrowers, and the Borrowers shall promptly pay such corresponding amount to the Agent; provided, however, such obligation of Borrowers shall be deemed satisfied if Agent’s demand is not made to, Borrowers within five (5) Business Days following the applicable Drawdown Date. The Agent shall also be entitled to recover from the Lender or the Borrowers, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrowers to the date such corresponding amount is recovered by the Agent at a per annum rate equal to (i) from the Borrowers at the applicable rate for such Loan or (ii) from a Lender at the Federal Funds Effective Rate.

§2.5 Use of Proceeds . The Borrowers will use the proceeds of the Loans as follows: solely to (i) pay closing costs in connection with this Agreement, (ii) refinance existing indebtedness secured by the Station View Project, (iii) refinance existing indebtedness secured by the Potomac Project, (iv) fund interest due on the Loans, (v) fund to Potomac for the repurchase by Guarantor of the CHCI Subordinate Notes the amount identified on the Loan settlement statement for such purpose, and (vi) the remainder not specifically used by the foregoing item (v) shall be available for general working capital purposes. The Borrowers and Guarantor each represent and warrant that the amounts advanced or to be advanced under the Notes and Loans are greater than $5,000.00 and are being made exclusively in connection with loans made for business or investment purposes within the meaning and intent of Section 6.1-330.75 of the Code of Virginia (1950), as amended.

§2.6 Remargining . Borrowers will not at any time permit the ratio of (a) the Outstanding Loans as of such date to (b) the aggregate Appraised Value as of such date (such ratio, the “Loan to Value Ratio”) to exceed seventy-two percent (72%); provided, however, from and after December 31, 2008, such Loan to Value Ratio may not exceed seventy percent (70%) at any time. Borrowers acknowledge that in the event that following the receipt of a new

17

Appraisal Agent determines that the Outstanding Loans is greater than seventy percent (70%) of the aggregate Appraised Value, the Outstanding Loans shall be reduced such that the Outstanding Loans does not exceed seventy percent (70%) of the aggregate Appraised Value, and Borrowers shall within thirty (30) days of notice from Agent pay to Agent as a prepayment of the Loans (to be applied pro rata among the Potomac Loan and the Station View Loan) such amount as is necessary so that the sum of the Outstanding Loans does not exceed seventy percent (70%) of the aggregate Appraised Value. If the Borrowers fail to remargin the Loan within such thirty (30) day period, then Borrowers shall have an additional sixty (60) days to make the required prepayment hereunder so long as Borrowers are diligently and continuously attempting to cure such Default. The Agent on behalf of the Banks shall have the right to obtain from time to time, at the Borrowers’ cost and expense, updated Appraisals of the Project which will be ordered by the Agent, provided that so long as no Default or Event of Default shall have occurred and be continuing, the Borrowers shall only be obligated to pay for the costs and expenses associated with one such Appraisal during any twelve (12) month period prior to the occurrence of the Maturity Date. The reasonable actual out-of-pocket costs and expenses incurred by the Agent in obtaining such Appraisals shall be paid by the Borrowers forthwith upon billing or request by the Agent for reimbursement therefor. Notwithstanding the foregoing, provided no Event of Default has occurred and is continuing, then Agent shall not have the right to obtain an updated Appraisal prior to December 31, 2008; provided, further, however that in the event Agent determines in its reasonable discretion that Potomac Units are not going under contract or are not being released pursuant to §5.2 at a frequency and sales price that would support the mandatory prepayments required by §3.3, then Agent shall have the right to obtain an Appraisal of the Potomac Project as of December 31, 2008 at the Borrowers’ expense.

§2.7 Reborrowing for Purposes of Paying Interest . Notwithstanding anything herein to the contrary, Borrowers may reborrow (and repay and reborrow) from time to time between the Closing Date and the Maturity Date funds not to exceed the amount in the Interest Holdback from the Interest Holdback at such time as the Interest Holdback is fully funded pursuant to §5.2(d)(ii). Borrowers may only reborrow such amounts for the purpose of paying interest on the Loans.

§2.8 Revolving Credit Facility . Provided that no Default or Event of Default shall have occurred and be continuing, on the date the total Outstanding Loans reduce to $30,000,000, Borrowers may give written notice to the Agent within thirty (30) days of the Outstanding Loans reducing to $30,000,000 that Borrowers desire to modify this Agreement to permit reborrowings. Borrowers and Agent agree to enter into good-faith discussions regarding a modification of this Agreement and the other Loan Documents permitting reborrowings for projects other than the Potomac Project and Station View Project and establishing a borrowing base pursuant to such documents and terms as are satisfactory to Borrowers, Agent and the Lenders in their sole discretion. Additionally, inclusion of any new projects as Collateral shall be at the sole discretion of Agent and the Lenders.

18

§3.1 Stated Maturity . Borrowers promise to pay on the Maturity Date and there shall become absolutely due and payable on the Maturity Date all of the Loans outstanding on such date, together with any and all accrued and unpaid interest thereon.

§3.2 Optional Prepayments . Borrowers shall have the right, at their election, to prepay the outstanding amount of the Loans, as a whole or in part, at any time without penalty or premium; provided , that if any prepayment of the outstanding amount of any LIBOR Rate Loans pursuant to this §3.2 is made on a date that is not the last day of the Interest Period relating thereto, such prepayment shall be accompanied by the payment of any amounts due pursuant to §4.8. A Borrower shall give the Agent, no later than 10:00 a.m. (Cleveland time) at least three (3) days prior written notice of any prepayment pursuant to this §3.2, in each case specifying the proposed date of prepayment of the Loans and the principal amount to be prepaid.

§3.3 Mandatory Prepayments . Beginning on March 31, 2009 and on each of September 30, 2009 and March 30, 2010, Potomac shall immediately pay the amounts set forth on Schedule 3.3 hereto to the Agent for the respective accounts of the Lenders for application to the outstanding principal balance of the Loans; provided, however, Potomac shall receive a credit against any amounts due pursuant to this §3.3 for release proceeds paid to Agent pursuant to §5.2(d) for application to the outstanding principal balance of the Potomac Loans, such credit to carry over to subsequent prepayment dates.

§3.4 Partial Prepayments . Except with respect to the sale of Units pursuant to §5.2, each partial prepayment of the Loans under §3.2 shall be in a minimum amount of $100,000.00 or an integral multiple of $50,000.00 in excess thereof, and shall be accompanied by the payment of accrued interest on the principal prepaid to the date of payment. Each partial payment under §3.2, §3.3 or §5.2 shall, in the absence of instruction by the Borrowers, be applied first to the principal of Base Rate Loans of such Borrower, and then to the principal of LIBOR Rate Loans of such Borrower. Each partial payment under §5.2(d) or §5.2(e) shall reduce the outstanding principal balance of the Potomac Loans or Station View Loans, respectively.

§3.5 Effect of Prepayments . Amounts of the Loans prepaid prior to the Maturity Date may not be reborrowed, except as expressly permitted in §2.7 of this Agreement.

§4.1 Conversion Options .

(a) The Borrowers may elect from time to time to convert any of their respective outstanding Loans to a Loan of another Type and such Loans shall thereafter bear interest as a Base Rate Loan or a LIBOR Rate Loan, as applicable; provided that (i) with respect to any such conversion of a LIBOR Rate Loan to a Base Rate Loan, a Borrower shall give the Agent at least one (1) Business Day’s prior written notice of such election, and such conversion shall only be made on the last day of the Interest Period with respect to such LIBOR Rate Loan; (ii) with respect to any such conversion of a Base Rate Loan to a LIBOR Rate Loan, a Borrower shall give the Agent at least two (2) LIBOR Business Days’ prior written notice of such election and the Interest Period requested for such Loan, the principal amount of the Loan so converted

19

shall be in a minimum aggregate amount of $100,000.00 or an integral multiple of $50,000.00 in excess thereof and, after giving effect to the making of such Loan, there shall be no more than six (6) LIBOR Rate Loans outstanding at any one time; and (iii) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing. All or any part of the outstanding Loans of any Type may be converted as provided herein, provided that no partial conversion shall result in a Base Rate Loan in a principal amount of less than $100,000.00 or an integral multiple of $50,000.00 or a LIBOR Rate Loan in a principal amount of less than $100,000.00 or an integral multiple of $50,000.00. On the date on which such conversion is being made, each Lender shall take such action as is necessary to transfer its Commitment Percentage of such Loans to its Domestic Lending Office or its LIBOR Lending Office, as the case may be. Each Conversion/Continuation Request relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by the Borrowers.

(b) Any LIBOR Rate Loan may be continued as such Type upon the expiration of an Interest Period with respect thereto by compliance by a Borrower with the terms of §4.1; provided that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, but shall be automatically converted to a Base Rate Loan on the last day of the Interest Period relating thereto ending during the continuance of any Default or Event of Default.

(c) In the event that a Borrower does not notify the Agent of its election hereunder with respect to any LIBOR Rate Loan, such Loan shall be automatically converted to a Base Rate Loan at the end of the applicable Interest Period.

§4.2 Closing Fee . The Borrowers agree to pay to KeyBank certain fees for services rendered or to be rendered in connection with the Loans as provided pursuant to an Agreement Regarding Fees dated as of even date herewith between the Borrowers and KeyBank (the “Agreement Regarding Fees”). All such fees shall be fully earned when paid and nonrefundable under any circumstances.

§4.3 [Intentionally omitted] .

§4.4 Funds for Payments .

(a) All payments of principal, interest, facility fees, Agent’s fees, closing fees and any other amounts due hereunder or under any of the other Loan Documents shall be made to the Agent, for the respective accounts of the Lenders and the Agent, as the case may be, at the Agent’s Head Office, not later than 2:00 p.m. (Cleveland time) on the day when due, in each case in lawful money of the United States in immediately available funds. The Agent is hereby authorized to charge the accounts of the Borrowers with KeyBank, on the dates when the amount thereof shall become due and payable, with the amounts of the principal of and interest on the Loans and all fees, charges, expenses and other amounts owing to the Agent and/or the Lenders under the Loan Documents. Subject to the foregoing, all payments made to Agent on behalf of the Lenders, and actually received by Agent, shall be deemed received by the Lenders on the date actually received by Agent.

20

(b) All payments by the Borrowers hereunder and under any of the other Loan Documents shall be made without setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrowers are compelled by law to make such deduction or withholding. If any such obligation is imposed upon the Borrowers with respect to any amount payable by it hereunder or under any of the other Loan Documents, the Borrowers will pay to the Agent, for the account of the Lenders or (as the case may be) the Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Lenders or the Agent to receive the same net amount which the Lenders or the Agent would have received on such due date had no such obligation been imposed upon the Borrowers. The Borrowers will deliver promptly to the Agent certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Borrowers hereunder or under any other Loan Document.

(c) Each Lender organized under the laws of a jurisdiction outside the United States, if requested in writing by the Borrowers (but only so long as such Lender remains lawfully able to do so), shall provide the Borrowers with such duly executed form(s) or statement(s) which may, from time to time, be prescribed by law and, which, pursuant to applicable provisions of (i) an income tax treaty between the United States and the country of residence of such Lender, (ii) the Code, or (iii) any applicable rules or regulations in effect under (i) or (ii) above, indicates the withholding status of such Lender; provided that nothing herein (including without limitation the failure or inability to provide such form or statement) shall relieve the Borrowers of their obligations under §4.4(b). In the event that the Borrowers shall have delivered the certificates or vouchers described above for any payments made by the Borrowers and such Lender receives a refund of any taxes paid by the Borrowers pursuant to §4.4(b), such Lender will pay to the Borrowers the amount of such refund promptly upon receipt thereof; provided that if at any time thereafter such Lender is required to return such refund, the Borrowers shall promptly repay to such Lender the amount of such refund.

§4.5 Computations . All computations of interest on the Loans and of other fees to the extent applicable shall be based on a 360 day year and paid for the actual number of days elapsed. Except as otherwise provided in the definition of the term “Interest Period” with respect to LIBOR Rate Loans, whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension. The Outstanding Loans as reflected on the records of the Agent from time to time shall be considered prima facie evidence of such amount absent manifest error.

§4.6 Suspension of LIBOR Rate Loans . In the event that, prior to the commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent shall determine that adequate and reasonable methods do not exist for ascertaining LIBOR for such Interest Period, or the Agent shall reasonably determine that LIBOR will not accurately and fairly reflect the cost of the Lenders making or maintaining LIBOR Rate Loans for such Interest Period, the Agent shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrowers and the Lenders absent manifest error) to the Borrowers and the Lenders. In such

21

event (a) any Loan Request with respect to a LIBOR Rate Loan shall be automatically withdrawn and shall be deemed a request for a Base Rate Loan and (b) each LIBOR Rate Loan will automatically, on the last day of the then current Interest Period applicable thereto, become a Base Rate Loan, and the obligations of the Lenders to make LIBOR Rate Loans shall be suspended until the Agent determines that the circumstances giving rise to such suspension no longer exist, whereupon the Agent shall so notify the Borrowers and the Lenders.

§4.7 Illegality . Notwithstanding any other provisions herein, if any present or future law, regulation, treaty or directive or the interpretation or application thereof shall make it unlawful, or any central bank or other governmental authority having jurisdiction over a Lender or its LIBOR Lending Office shall assert that it is unlawful, for any Lender to make or maintain LIBOR Rate Loans, such Lender shall forthwith give notice of such circumstances to the Agent and the Borrowers and thereupon (a) the commitment of the Lenders to make LIBOR Rate Loans shall forthwith be suspended and (b) the LIBOR Rate Loans then outstanding shall be converted automatically to Base Rate Loans on the last day of each Interest Period applicable to such LIBOR Rate Loans or within such earlier period as may be required by law. Notwithstanding the foregoing, before giving such notice, the applicable Lender shall designate a different lending office if such designation will void the need for giving such notice and will not, in the judgment of such Lender, be otherwise materially disadvantageous to such Lender or increase any costs payable by Borrowers hereunder.

§4.8 Additional Interest . If any LIBOR Rate Loan or any portion thereof is repaid or is converted to a Base Rate Loan for any reason on a date which is prior to the last day of the Interest Period applicable to such LIBOR Rate Loan, or if repayment of the Loans has been accelerated as provided in §12.1, a Borrower will pay to the Agent upon demand for the account of the applicable Lenders in accordance with their respective Commitment Percentages, in addition to any amounts of interest otherwise payable hereunder, the Breakage Costs. Borrowers understand, agree and acknowledge the following: (i) no Lender has any obligation to purchase, sell and/or match funds in connection with the use of LIBOR as a basis for calculating the rate of interest on a LIBOR Rate Loan; (ii) LIBOR is used merely as a reference in determining such rate; and (iii) Borrowers have accepted LIBOR as a reasonable and fair basis for calculating such rate and any Breakage Costs. Borrowers further agree to pay the Breakage Costs, if any, whether or not a Lender elects to purchase, sell and/or match funds.

§4.9 Additional Costs, Etc . Notwithstanding anything herein to the contrary, if any present or future applicable law, which expression, as used herein, includes statutes, rules and regulations thereunder and interpretations thereof by any competent court or by any governmental or other regulatory body or official charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to any Lender or the Agent by any central bank or other fiscal, monetary or other authority (whether or not having the force of law), shall:

(a) subject any Lender or the Agent to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Agreement, the other Loan Documents, such Lender’s Commitment or the Loans (other than taxes based upon or measured by the gross receipts, income or profits of such Lender or the Agent or its franchise tax), or

22

(b) materially change the basis of taxation (except for changes in taxes on gross receipts, income or profits or its franchise tax) of payments to any Lender of the principal of or the interest on any Loans or any other amounts payable to any Lender under this Agreement or the other Loan Documents, or

(c) impose or increase or render applicable any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law and which are not already reflected in any amounts payable by Borrowers hereunder) against assets held by, or deposits in or for the account of, or loans by, or commitments of an office of any Lender, or

(d) impose on any Lender or the Agent any other conditions or requirements with respect to this Agreement, the other Loan Documents, the Loans, such Lender’s Commitment or any class of loans or commitments of which any of the Loans or such Lender’s Commitment forms a part; and the result of any of the foregoing is:

(i) to increase the cost to any Lender of making, funding, issuing, renewing, extending or maintaining any of the Loans or such Lender’s Commitment, or

(ii) to reduce the amount of principal, interest or other amount payable to any Lender or the Agent hereunder on account of such Lender’s Commitment or any of the Loans, or

(iii) to require any Lender or the Agent to make any payment or to forego any interest or other sum payable hereunder, the amount of which payment or foregone interest or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by such Lender or the Agent from the Borrowers hereunder,

then, and in each such case, the Borrowers will, within fifteen (15) days of demand made by such Lender or (as the case may be) the Agent at any time and from time to time and as often as the occasion therefor may arise, pay to such Lender or the Agent such additional amounts as such Lender or the Agent shall determine in good faith to be sufficient to compensate such Lender or the Agent for such additional cost, reduction, payment or foregone interest or other sum. Each Lender and the Agent in determining such amounts may use any reasonable averaging and attribution methods generally applied by such Lender or the Agent.

§4.10 Capital Adequacy . If after the date hereof any Lender determines that (a) the adoption of or change in any law, rule, regulation or guideline regarding capital requirements for banks or bank holding companies or any change in the interpretation or application thereof by any governmental authority charged with the administration thereof, or (b) compliance by such Lender or its parent bank holding company with any guideline, request or directive of any such entity regarding capital adequacy (whether or not having the force of law), has the effect of reducing the return on such Lender’s or such holding company’s capital as a consequence of such Lender’s commitment to make Loans hereunder to a level below that which such Lender or holding company could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such holding company’s then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount

23

deemed by such Lender to be material, then such Lender may notify the Borrowers thereof. The Borrowers agree to pay to such Lender the amount of such reduction in the return on capital as and when such reduction is determined, upon presentation by such Lender of a statement of the amount setting forth the Lender’s calculation thereof. In determining such amount, such Lender may use any reasonable averaging and attribution methods generally applied by such Lender.

§4.11 Breakage Costs . Borrowers shall pay all Breakage Costs required to be paid by them pursuant to this Agreement and incurred from time to time by any Lender upon demand within fifteen (15) days from receipt of written notice from Agent, or such earlier date as may be required by this Agreement.

§4.12 Default Interest; Late Charge . Following the occurrence and during the continuance of any Event of Default, and regardless of whether or not the Agent or the Lenders shall have accelerated the maturity of the Loans, all Loans shall bear interest payable on demand at a rate per annum equal to six percent (6.0%) above the Base Rate (the “Default Rate”), until such amount shall be paid in full (after as well as before judgment), or if such amount shall exceed the maximum rate permitted by law, then at the maximum rate permitted by law. In addition, Borrowers shall pay a late charge equal to four percent (4.0%) of any amount of interest and/or principal payable on the Loans to it or any other amounts payable hereunder or under the other Loan Documents, which is not paid by the Borrowers within ten (10) days of the date when due.

§4.13 Certificate . A certificate setting forth any amounts payable pursuant to §4.8, §4.9, §4.10, §4.11 or §4.12 and a reasonably detailed explanation of such amounts which are due, submitted by any Lender or the Agent to the Borrowers, shall be conclusive in the absence of manifest error.

§4.14 Limitation on Interest . Notwithstanding anything in this Agreement or the other Loan Documents to the contrary, all agreements between or among the Borrowers, the Guarantor, the Lenders and the Agent, whether now existing or hereafter arising and whether written or oral, are hereby limited so that in no contingency, whether by reason of acceleration of the maturity of any of the Obligations or otherwise, shall the interest contracted for, charged or received by the Lenders exceed the maximum amount permissible under applicable law. If, from any circumstance whatsoever, interest would otherwise be payable to the Lenders in excess of the maximum lawful amount, the interest payable to the Lenders shall be reduced to the maximum amount permitted under applicable law; and if from any circumstance the Lenders shall ever receive anything of value deemed interest by applicable law in excess of the maximum lawful amount, an amount equal to any excessive interest shall be applied to the reduction of the principal balance of the Obligations and to the payment of interest or, if such excessive interest exceeds the unpaid balance of principal of the Obligations, such excess shall be refunded to the Borrowers. All interest paid or agreed to be paid to the Lenders shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal of the Obligations (including the period of any renewal or extension thereof) so that the interest thereon for such full period shall not exceed the maximum amount permitted by applicable law. This Section shall control all agreements between or among the Borrowers, the Guarantor, the Lenders and the Agent.

24

§4.15 Certain Provisions Relating to Increased Costs . If a Lender gives notice of the existence of the circumstances set forth in §4.7 or any Lender requests compensation for any losses or costs to be reimbursed pursuant to any one or more of the provisions of §4.9 or §4.10, then, upon request of Borrowers, such Lender, as applicable, shall use reasonable efforts in a manner consistent with such institution’s practice in connection with loans like the Loan of such Lender to eliminate, mitigate or reduce amounts that would otherwise be payable by Borrowers under the foregoing provisions, provided that such action would not be otherwise prejudicial to such Lender, including, without limitation, by designating another of such Lender’s offices, branches or affiliates; the Borrowers agreeing to pay all reasonably incurred costs and expenses incurred by such Lender in connection with any such action. Notwithstanding anything to the contrary contained herein, if no Default or Event of Default shall have occurred and be continuing, and if any Lender has given notice of the existence of the circumstances set forth in §4.7 or has requested payment or compensation for any losses or costs to be reimbursed pursuant to any one or more of the provisions of §4.9 or §4.10 (each, an “Affected Lender”), then, within thirty (30) days after such notice or request for payment or compensation, Borrowers shall have the one-time right as to such Affected Lender to be exercised by delivery of written notice delivered to the Agent and the Affected Lender within thirty (30) days of receipt of such notice to elect to cause the Affected Lender to transfer its Commitment. The Agent shall promptly notify the remaining Lenders that each of such Lenders shall have the right, but not the obligation, to acquire a portion of the Commitment, pro rata based upon their relevant Commitment Percentages, of the Affected Lender (or if any of such Lenders does not elect to purchase its pro rata share, then to such remaining Lenders in such proportion as approved by the Agent). In the event that the Lenders do not elect to acquire all of the Affected Lender’s Commitment, then the Agent shall endeavor to obtain a new Lender to acquire such remaining Commitment. Upon any such purchase of the Commitment of the Affected Lender, the Affected Lender’s interest in the Obligations and its rights hereunder and under the Loan Documents shall terminate at the date of purchase, and the Affected Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest. The purchase price for the Affected Lender’s Commitment shall equal any and all amounts outstanding and owed by Borrowers to the Affected Lender, as applicable, including principal and all accrued and unpaid interest or fees.

§5.1 Collateral . The Obligations shall be secured by a perfected first priority lien and security interest to be held by the Agent for the benefit of the Lenders in the Collateral pursuant to the Security Documents.

§5.2 Release of Mortgaged Property . Provided no Default or Event of Default shall have occurred hereunder and be continuing (or would exist immediately after giving effect to the transactions contemplated by this §5.2), the Agent shall release a Unit or Units included in the Mortgaged Property to be conveyed pursuant to a Purchase Contract from the lien or security title of the Security Documents encumbering the same upon the request of a Borrower subject to and upon the following terms and conditions:

(a) such Borrower shall deliver to the Agent written notice of its desire to obtain such release no later than three (3) Business Days prior to the date on which such release is to be effected. Such request shall be accompanied by a copy of the sales contract, closing statement and any related documents reasonably requested by the Agent;

25

(b) all release documents to be executed by the Agent shall be in form and substance reasonably satisfactory to the Agent;

(c) Borrowers shall pay all reasonable costs and expenses of the Agent in connection with such release, including without limitation, reasonable attorney’s fees;

(d) with respect to the Potomac Units, Potomac shall cause the settlement agent to contemporaneously with each sale of a Unit pay to the Agent for the account of the Lenders an amount equal to one hundred percent (100%), as may be adjusted below in this §5.2(d), of the Net Sales Proceeds for such Potomac Unit, which payment shall be applied by Agent as follows:

(i) First, to reduce the Outstanding Potomac Loans as provided in §3.4 in an amount equal to one hundred ten percent (110%) of the portion of the Potomac Loans allocated to such Potomac Unit on a square foot basis as set forth on Schedule 5.2 hereto multiplied by the square footage of such Potomac Unit to be released;

(ii) Second, any remaining Net Sales Proceeds shall be applied as a prepayment of the Potomac Loan and increase the Interest Holdback to an amount not greater than seven and one-half percent (7.5%) of the total amount of the Potomac Loans which may be borrowed by Potomac (including the Interest Holdback);

(iii) Third, any remaining Net Sales Proceeds shall be used to reduce the outstanding principal balance of the Potomac Loans as provided in §3.4.

Notwithstanding the foregoing, once the Interest Holdback reaches an amount equal to seven and one-half percent (7.5%) of the total amount of the Potomac Loans which may be borrowed by Potomac (including the Interest Holdback), then the percentage of Net Sales Proceeds to be applied by Agent pursuant to this §5.2(d) shall decrease as the Outstanding Potomac Loans per square foot of Salable Inventory reduces as follows:

(e) Intentionally Omitted;

(f) in no event shall Agent release a Unit if following such sale portions of the remaining Mortgaged Property (i) shall be without access to a public street over remaining Mortgaged Property or over a perpetual easement for ingress and egress, or (ii) shall no longer be

26

able to tap into, connect with, utilize or maintain all utilities necessary to serve such portions of the Mortgaged Property, to the extent applicable, including without limitation, storm sewer, sanitary sewer, water, electricity and gas, either over remaining Mortgaged Property or over a perpetual easement with respect thereto;

(g) prior to any sale hereunder, such Borrower shall have taken such actions as may be required to cause the portion of the Mortgaged Property to be sold to be taxed separately from the remaining portion of the Mortgaged Property;

(h) both the portion of the Mortgaged Property to be sold and any improvements thereon and the Mortgaged Property remaining after such sale and any improvements thereon will be in compliance with all zoning laws, building codes, parking laws and regulations, subdivision laws or approvals, set-back lines or any other governmental regulation, requirement or agreement, including, without limitation, environmental laws, and any recorded covenants, conditions or restrictions; and

(i) the sale of such property shall not cause any Borrower to be in violation of or result in a breach under any other agreement or instrument by which it or any portion of the Mortgaged Property is bound.

§5.3 Release of Collateral . Upon the refinancing or repayment of the Obligations in full, then the Agent shall release the Collateral from the lien and security interest of the Security Documents. Notwithstanding the foregoing, provided no Default or Event of Default shall have occurred hereunder and be continuing (or would exist immediately after giving effect to the transactions contemplated by this §5.3), upon the bulk sale of the Station View Project, Agent shall release the Station View Project from the lien and security interests of the Security Documents upon a payment of the sum of $2,820,000 as a prepayment of principal, plus any amounts drawn under the Interest Holdback which are allocable to the Station View Loans; provided, however, in the event the Potomac Loans have been paid in full, Borrowers shall be required to repay the Obligations in full to obtain a release of the Station View Project.

§5.4 Sale of Mortgaged Property or Change in Borrowers .

(a) Borrowers acknowledge that the Lenders have examined and relied on the creditworthiness and experience of Borrowers in agreeing to make the Loan, and that the Lenders have a valid interest in maintaining the value of the Mortgaged Property and the other Collateral so as to ensure that should Borrowers default in the repayment of the Loans, the Lenders can recover the Obligations by a sale of the Collateral.

(b) Borrowers may not Transfer the Collateral (except as permitted in §5.2, §7.12, or §8.4), nor allow any Change in Ownership.

(c) A “ Transfer ” is defined as any sale, conveyance, assignment, alienation, mortgage, hypothecation, encumbrance, grant of a lien over or a security interest in, pledge or other transfer of the Mortgaged Property, any other Collateral or any part thereof or interest therein, whether voluntary or involuntary. Without limiting the generality of the foregoing, a Transfer is deemed to include: (i) an installment sales agreement wherein a Borrower agrees to sell the Mortgaged Property or any part thereof for a price to be paid in installments; (ii) an

27

agreement by a Borrower leasing all or any part of the Mortgaged Property; or (iii) a sale, assignment or other transfer of, or the grant of a security interest in, any Borrower’s right, title and interest in and to any rents, issues or profits from the Collateral.

(d) A “ Change in Ownership ” shall occur (i) upon any transfer of any direct or indirect ownership or economic interests in any Borrower or the creation of new or additional Equity Interests in any Borrower; or (ii) upon the addition, change, removal, resignation or transfer of a managing member, general partner or similar controlling person or entity of any Borrower.

The Borrowers represent and warrant to the Agent and the Lenders as follows.

§6.1 Corporate Authority, Etc .

(a) Incorporation; Good Standing . Each of the Borrowers and the Guarantor (i) is a corporation, limited partnership, general partnership, limited liability company or trust duly organized under the laws of its State of organization and is validly existing and in good standing under the laws thereof, (ii) has all requisite power to own its property and conduct its business as now conducted and as presently contemplated and (iii) is in good standing and is duly authorized to do business in the jurisdiction where the Mortgaged Property is located (to the extent required by applicable law) and in each other jurisdiction where a failure to be so qualified could have a Material Adverse Effect.

(b) Authorization . The execution, delivery and performance of this Agreement and the other Loan Documents to which any Borrower or the Guarantor is a party and the transactions contemplated hereby and thereby (i) are within the authority of such Person, (ii) have been duly authorized by all necessary proceedings on the part of such Person, (iii) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which such Person is subject or any judgment, order, writ, injunction, license or permit applicable to such Person, (iv) do not and will not conflict with or constitute a default (whether with the passage of time or the giving of notice, or both) under any provision of the partnership agreement, articles of incorporation, operating agreement or other charter documents or bylaws of, or any agreement or other instrument binding upon, such Person or any of its properties, (v) do not and will not result in or require the imposition of any lien or other encumbrance on any of the properties, assets or rights of such Person other than the liens and encumbrances in favor of Agent contemplated by this Agreement and the other Loan Documents, and (vi) do not require the approval or consent of any Person other than those already obtained and delivered to Agent.

(c) Enforceability . The execution and delivery of this Agreement and the other Loan Documents to which any Borrower or the Guarantor is a party are valid and legally binding obligations of such Person enforceable in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and general principles of equity.

28

§6.2 Governmental Approvals . The execution, delivery and performance of this Agreement and the other Loan Documents to which the Borrowers or the Guarantor is a party and the transactions contemplated hereby and thereby do not require the approval or consent of, or filing or registration with, or the giving of any notice to, any court, department, board, governmental agency or authority other than those already obtained and the filing of the Security Documents in the appropriate records office with respect thereto.

§6.3 Financial Statements . The Borrowers have furnished to Agent: (a) the balance sheet of each Borrower as of the Balance Sheet Date certified by the chief financial or accounting officer of each Borrower, and (b) certain other financial information relating to the Borrowers, the Guarantor and the Mortgaged Property. Such balance sheet and statements have been prepared in accordance with GAAP and fairly present the financial condition of each Person covered thereby as of such dates. There are no liabilities, contingent or otherwise, of the Borrowers or Guarantor involving material amounts not disclosed in said financial statements and the related notes thereto.

§6.4 No Material Changes . Since the Balance Sheet Date there has occurred no materially adverse change in the financial condition or business of any Borrower or the Guarantor as shown on or reflected in the balance sheet of such Person as of the Balance Sheet Date, other than changes in the ordinary course of business that have not and could not reasonably be expected to have a Material Adverse Effect.

§6.5 Franchises, Patents, Copyrights, Etc . The Borrowers possess all franchises, patents, copyrights, trademarks, trade names, service marks, licenses and permits, and rights in respect of the foregoing, adequate for the conduct of their business substantially as now conducted without known conflict with any rights of others. The Mortgaged Property is not owned or operated under or by reference to any registered or protected trademark, trade name, service mark or logo.

§6.6 Litigation . Except as stated on Schedule 6.6 , there are no actions, suits, proceedings or investigations of any kind pending or to the knowledge of the Borrowers threatened against any Borrower or the Guarantor before any court, tribunal, arbitrator, mediator or administrative agency or board which question the validity of this Agreement or any of the other Loan Documents, any action taken or to be taken pursuant hereto or thereto or any lien, security title or security interest created or intended to be created pursuant hereto or thereto, or which if adversely determined could reasonably be expected to have a Material Adverse Effect or impair the right or ability of such Person to carry on business substantially as now conducted. Except as set forth on Schedule 6.6 , there are no judgments, final orders or awards outstanding against or affecting any Borrower, the Guarantor or the Mortgaged Property.

§6.7 No Material Adverse Contracts, Etc . None of the Borrowers or the Guarantor is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation that has or is expected in the future to have a Material Adverse Effect. None of the Borrowers or the Guarantor is a party to any contract or agreement that has or could reasonably be expected to have a Material Adverse Effect.

29

§6.8 Compliance with Other Instruments, Laws, Etc . None of the Borrowers or the Guarantor is in violation of any provision of its charter or other organizational documents, bylaws, or any agreement or instrument to which it is subject or by which it or any of its properties is bound or any decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a manner that has had or could reasonably be expected to have a Material Adverse Effect.

§6.9 Tax Status . Each of the Borrowers and the Guarantor (a) has made or filed all federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject or has obtained an extension for filing, (b) has paid prior to delinquency all taxes and other governmental assessments and charges shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and by appropriate proceedings and (c) has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers or partners of such Person know of no basis for any such claim. There are no audits pending or to the knowledge of Borrowers threatened with respect to any tax returns filed by Borrowers or the Guarantor. The taxpayer identification numbers or social security numbers for the Borrowers and the Guarantor is as set forth in Schedule 6.9 hereto.

§6.10 No Event of Default . No Default or Event of Default has occurred and is continuing.

§6.11 Investment Company Act . None of the Borrowers is an “investment company”, or an “affiliated company” or a “principal underwriter” of an “investment company”, as such terms are defined in the Investment Company Act of 1940.

§6.12 Employee Benefit Plans . None of the Borrowers or any ERISA Affiliate maintains or contributes to any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan. None of the assets of the Borrowers constitute a “plan asset” of any Employee Plan, Multiemployer Plan or Guaranteed Pension Plan.

§6.13 Disclosure . All of the representations and warranties made by or on behalf of the Borrowers and the Guarantor in this Agreement and the other Loan Documents or any document or instrument delivered to the Agent or the Lenders pursuant to or in connection with any of such Loan Documents are true and correct in all material respects, and neither the Borrowers nor the Guarantor has failed to disclose such information as is necessary to make such representations and warranties not misleading. There is no material fact or circumstance that has not been disclosed to the Agent and the Lenders, and the written information, reports and other papers and data with respect to the Borrowers, the Guarantor or the Mortgaged Property (other than projections and estimates) furnished to the Agent or the Lenders in connection with this Agreement or the obtaining of the Commitments of the Lenders hereunder was, at the time so furnished, complete and correct in all material respects, or has been subsequently supplemented by other written information, reports or other papers or data, to the extent necessary to give in all material respects a true and accurate knowledge of the subject matter in all material respects; provided that such representation shall not apply to (a) the accuracy of any appraisal or

30

environmental reports prepared by third parties or legal conclusions or analysis provided by the Borrowers’ and/or the Guarantor’s counsel (although the Borrowers and the Guarantor have no reason to believe that the Agent and the Lenders may not rely on the accuracy thereof) or (b) budgets, projections and other forward-looking speculative information prepared in good faith by the Borrowers (except to the extent the related assumptions were when made manifestly unreasonable).

§6.14 Trade Name; Place of Business . Neither of the Borrowers uses any trade name and conducts business under any name other than its actual name set forth in the Loan Documents. The principal place of business of the Borrowers is 11465 Sunset Hills Road, 5th Floor, Reston, Virginia 20190.

§6.15 Regulations T, U and X . No portion of any Loan is to be used for the purpose of purchasing or carrying any “margin security” or “margin stock” as such terms are used in Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224. Neither of the Borrowers is engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any “margin security” or “margin stock” as such terms are used in Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224.

§6.16 Environmental Compliance . The Borrowers have taken all commercially reasonable steps to investigate the past and present conditions and usage of the Mortgaged Property and the operations conducted thereon and, except as specifically set forth in the written environmental site assessment reports of the Environmental Engineer and all other soil, construction, forensic site reports, surveys and assessments relating to and documenting the condition and history of the Mortgaged Property provided to the Agent on or before the date hereof, make the following representations and warranties:

(a) Neither any Borrower nor any operator of the Mortgaged Property, nor any operations thereon or any prior use thereof, nor the Mortgaged Property, is in violation or alleged violation of any judgment, decree, order, law, license, rule or regulation pertaining to environmental matters, including without limitation, those arising under any Environmental Law.

(b) There are no claims by former owners or occupants of the Mortgaged Property, or by owners of other properties, or by any other third parties, or by any government agencies, relating to or arising out of the presence of Hazardous Materials on, in, under, or migrating from the Mortgaged Property.

(c) (i) No portion of the Mortgaged Property has been used for the handling, processing, storage or disposal of Hazardous Substances, and no underground tank or other underground storage receptacle for Hazardous Substances is located on any portion of the Mortgaged Property; (ii) in the course of any activities conducted by the Borrowers or the operators of the Mortgaged Property, no Hazardous Substances have been generated or are being used on the Mortgaged Property; (iii) there has been no past or present releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, disposing or dumping (a “Release”) or threatened Release of Hazardous Substances on, upon, into or from the

31

Mortgaged Property; (iv) there have been no Releases on, upon, from or into any real property in the vicinity of the Mortgaged Property which, through soil or groundwater contamination or otherwise, may have come to be located on the Mortgaged Property; and (v) any Hazardous Substances that have been generated on the Mortgaged Property have been transported off site in accordance with all applicable Environmental Laws.

(d) None of the Borrowers nor the Mortgaged Property is subject to any applicable Environmental Law requiring the performance of Hazardous Substances site assessments, or the removal or remediation of Hazardous Substances, or the giving of notice to any governmental agency or the recording or delivery to other Persons of an environmental disclosure document or statement in each case by virtue of the transactions set forth herein and contemplated hereby, or as a condition to the recording of the Mortgages or to the effectiveness of any other transactions contemplated hereby except for such matters that shall be complied with as of the Closing Date.

(e) There are no existing or closed sanitary landfills, solid waste disposal sites, or hazardous waste treatment, storage or disposal facilities on or affecting the Mortgaged Property, and the Mortgaged Property has never been used for the disposal of solid waste, trash or debris.

(f) Neither of the Borrowers has received notice of any claim by any party that any use, operation, or condition of the Mortgaged Property has caused any nuisance or any other liability or adverse condition on any other property, nor is there any knowledge of any basis for such a claim.

(g) There are no Hazardous Materials in, on, or under the Mortgaged Property in any concentration or in any condition that would limit, restrict, or otherwise affect any future use of the Mortgaged Property, including without limitation: any residential use; use of groundwater for any purpose, including drinking water; or grading, excavation, and disposal of soil.

(h) The Mortgaged Property is not subject to any orders, decrees, or notices that would require the owner to take any action under any applicable Environmental Laws, nor are there conditions on the Mortgaged Property that could subject the owner of the Property to any such order, decree, or notice.

(i) The Mortgaged Property contains no wetlands (as that term is defined in the Clean Water Act) except as shown on the Survey, endangered or threatened species (as those terms are defined in the Endangered Species Act), listed critical habitat or property that is eligible for listing as critical habitat (under the Endangered Species Act), and is not subject to any other ecological condition or classification that would limit, restrict, or otherwise affect any future use of the Mortgaged Property.

§6.17 Subsidiaries; Organizational Structure . Neither of the Borrowers has any Subsidiaries. Schedule 6.17 sets forth the form and jurisdiction of organization of each Person that directly or indirectly owns an interest in the Borrowers and such Person’s ownership interest therein. No Person owns any legal, equitable or beneficial interest in any of the Persons set forth on Schedule 6.17 except as set forth on such Schedules.

32

§6.18 Mortgaged Property . The Borrowers have obtained the approvals, consents, orders, agreements, authorizations, permits and licenses from applicable governmental authorities or under the terms of any restriction, covenant or easement affecting the portion of the Mortgaged Property on which the Potomac Project is located, to permit the development of the Potomac Project for use as a mixed use condominium, and all such approvals are in full force and effect. The Mortgaged Property is in compliance with all applicable federal and state law and governmental regulations and any local ordinances, orders or regulations, including without limitation, laws, regulations and ordinances relating to zoning, building codes, subdivision, fire protection, health, safety, historic preservation and protection, wetlands, tidelands, and Environmental Laws. None of the Mortgaged Property is subject to any lease, license or other occupancy agreement, except as expressly permitted in §7.12. There is no violation or asserted violation of any agreements or restrictions concerning the Mortgaged Property or the existing or contemplated use thereof. The Borrowers have no notice, information or knowledge of any change contemplated in any applicable law, ordinance, regulation or restriction, or any judicial, administrative, governmental or quasi-governmental action, or any action by adjacent landowners, or of any natural or artificial conditions existing upon the Mortgaged Property, which would materially limit or restrict or prevent the contemplated or intended use and purpose of the Mortgaged Property. All water, sewer, electric, gas, telephone and other utilities necessary for the development, use and operation of the Potomac Project for its current and intended use are installed to the property lines of the Potomac Project through dedicated public rights-of-way or through perpetual private easements approved by the Agent with respect to which the Mortgage creates a valid and enforceable first lien or security title, and there is sufficient existing capacity for each of such utilities to provide service to the Potomac Project in accordance with the anticipated use thereof. The streets abutting the Potomac Project are dedicated and accepted public roads, to which the Potomac Project has direct access by trucks and other motor vehicles and by foot, or are perpetual private ways (with direct access by trucks and other motor vehicles and by foot to public roads) to which the Potomac Project has direct access approved by the Agent and with respect to which the applicable Mortgage creates a valid and enforceable first lien. All private ways providing access to the Mortgaged Property are zoned in a manner which will permit access to the Mortgaged Property over such ways by trucks and other commercial, industrial and personal vehicles. There are no unpaid or outstanding real estate or other taxes or assessments on or against any of the Mortgaged Property which are payable by the Borrowers (except only real estate or other taxes or assessments, that are not yet delinquent or are being protested as permitted by this Agreement). The Mortgaged Property is separately assessed for purposes of real estate tax assessment and payment and is covered by a tax parcel or parcels which pertain to such Mortgaged Property only and not to any property which is not subject to the Mortgages. There are no pending, or to the knowledge of Borrowers threatened or contemplated, eminent domain proceedings against any of the Mortgaged Property. None of the Mortgaged Property is now damaged as a result of any fire, explosion, accident, flood or other casualty. Neither of the Borrowers has received any outstanding notice from any insurer or its agent requiring performance of any work with respect to any of the Mortgaged Property or canceling or threatening to cancel any policy of insurance, and the Mortgaged Property complies with the requirements of all of the Borrowers’ insurance carriers. No Person has any right or option to acquire the Mortgaged Property or any portion thereof or interest therein except as set forth on Schedule 6.18(c) .

33

§6.19 Brokers . No Borrower nor Guarantor has engaged or otherwise dealt with any broker, finder or similar entity in connection with this Agreement or the Loans contemplated hereunder.

§6.20 Other Debt . Neither of the Borrowers has any Indebtedness other than Indebtedness that will be satisfied on the Closing Date.

§6.21 Solvency . As of the Closing Date and after giving effect to the transactions contemplated by this Agreement and the other Loan Documents, including all Loans made or to be made hereunder, neither any Borrower nor the Guarantor is insolvent on a balance sheet basis such that the sum of such Person’s assets exceeds the sum of such Person’s liabilities, each Borrower and the Guarantor is able to pay its debts as they become due, and each Borrower and the Guarantor has sufficient capital to carry on its business.

§6.22 No Bankruptcy Filing . None of the Borrowers or Guarantor is contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of its assets or property, and the Borrowers have no knowledge of any Person contemplating the filing of any such petition against either Borrower or the Guarantor.

§6.23 No Fraudulent Intent . Neither the execution and delivery of this Agreement or any of the other Loan Documents nor the performance of any actions required hereunder or thereunder is being undertaken by any Borrower or the Guarantor with or as a result of any actual intent by any of such Persons to hinder, delay or defraud any entity to which any of such Persons is now or will hereafter become indebted.

§6.24 OFAC . None of the Borrowers or the Guarantor is (or will be) a person with whom any Lender is restricted from doing business under OFAC (including, those Persons named on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order (including the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and shall not engage in any dealings or transactions or otherwise be associated with such persons. In addition, Borrower hereby agrees to provide to the Lenders any additional information that a Lender deems necessary from time to time in order to ensure compliance with all applic