Motion to Pay Expense Reimbursement Fees to Bear Stearns

The Debtors have filed a motion to pay an expense reimbursement to Bear Stearns Investment Products, Inc. ("Bear Stearns") in connection with exploring and seeking to secure a $40 million construction financing facility that would be secured by a first priority priming lien on the Debtors' assets. The fee sought to be paid initially is $75,000. In addition, in the event a commitment for financing is issued by Bear Stearns, the Debtors seek authority to pay an additional $100,000 on account of fees and expenses to be incurred in consummating the financing transaction.

Bear Stearns is willing to explore construction financing to fund construction on certain projects that are subject to existing contracts of sale, however, in order to move forward, Bear Stearns requires an initial expense reimbursement for due diligence fees, advisory fees and legal fees associated with the negotiation and preparation of the financing documents. The $75,000 would be paid from the existing facility previously provided by Bear Stearns. The second $100,000 fee is to be paid from the existing facility as well, however only on the issuance of a commitment to finance from Bear Stearns. The Motion indicates that if the fees are less, Bear Stearns will remit the difference from the $100,000 expense reimbursement.