Exhibit 10.1

EXECUTION VERSION

OMNIBUS AMENDMENT

OMNIBUS AMENDMENT (this “Amendment”), dated as of July 28, 2016, consisting of
(i) the FOURTH AMENDMENT to the Credit Agreement, dated as of April 7, 2014 (as
amended, restated, supplemented or otherwise modified prior to the date hereof,
the “Credit Agreement”), among AV HOMES, INC., a Delaware corporation (the
“Borrower”), the several banks and other financial institutions or entities from
time to time parties thereto (the “Lenders”) and JPMORGAN CHASE BANK, N.A., as
administrative agent and collateral agent (in its capacity as administrative
agent, the “Administrative Agent”, in its capacity as collateral agent, the
“Collateral Agent” and collectively, the “Agents”) and (ii) the FIRST AMENDMENT
to the Guarantee and Collateral Agreement, dated as of April 7, 2014 (as
amended, restated, supplemented or otherwise modified prior to the date hereof,
the “Security Agreement”), made by the Borrower and certain of its Subsidiaries
(each individually a “Guarantor” and collectively the “Guarantors”) in favor of
the Collateral Agent.

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make, and
have made, certain loans and extensions of credit to the Borrower;

WHEREAS, the Borrower has requested that certain provisions of the Credit
Agreement and Security Agreement be amended as set forth herein;

WHEREAS, the Borrower has requested $60,000,000 in Incremental Commitments;

WHEREAS, the Lenders party hereto are willing to agree to such amendments, in
each case on the terms set forth herein;

WHEREAS, the Incremental Lenders (as defined below) are willing to provide the
requested Incremental Commitments;

NOW THEREFORE, in consideration of the premises and mutual covenants contained
herein, the parties hereto agree as follows:

Section 1. Defined Terms; References. Unless otherwise specifically defined
herein, each term used herein that is defined in the Credit Agreement has the
meaning assigned to such term in the Credit Agreement. Each reference to
(x) “hereof”, “hereunder”, “herein” and “hereby” and each other similar
reference and each reference to “this Agreement” and each other similar
reference contained in the Credit Agreement and (y) “thereof”, “thereunder”,
“therein” and “thereby” and each other similar reference and each reference to
the Credit Agreement and each other similar reference contained in the other
Loan Documents shall, in each case, as of the Amendment Effective Date (as
defined below), refer to the Credit Agreement as amended hereby (the Credit
Agreement as so amended, the “Amended Credit Agreement”).

Section 2. Credit Agreement Amendments. (a) The Credit Agreement is hereby
amended as set forth on Exhibit A to this Amendment. Language being inserted
into the applicable section of the Credit Agreement is evidenced by blue
double-underlined text (indicated textually in the same manner as the following
example: double-underlined text). Language being deleted from the applicable
section of the Credit Agreement is evidenced by red strike-through text
(indicated textually in the same manner as the following example: stricken
text).

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(b) The Schedules to the Credit Agreement are hereby replaced in full by the
Schedules attached hereto as Exhibit B to this Agreement (and each reference in
the Amended Credit Agreement to a Schedule shall be a reference to the
applicable Schedule attached as part of Exhibit B).

(c) The Exhibits to the Credit Agreement shall continue to be the Exhibits under
the Amended Credit Agreement.

Section 3 Security Agreement Amendments. Section 6.5 of the Security Agreement
is hereby amended by deleting clauses First through Fourth therein, and
substituting in lieu thereof the following:

“First, to pay incurred and unpaid fees and expenses of the Administrative Agent
and the Collateral Agent under the Loan Documents;

Second, to the Collateral Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations
(other than Obligations in respect of Specified Cash Management Agreements and
Specified Swap Agreements), pro rata among the Secured Parties according to the
amounts of the Obligations (other than Obligations in respect of Specified Cash
Management Agreements and Specified Swap Agreements) then due and owing and
remaining unpaid to the Secured Parties;

Third, to the Collateral Agent, for application by it towards prepayment of the
Obligations (other than Obligations in respect of Specified Cash Management
Agreements and Specified Swap Agreements), pro rata among the Secured Parties
according to the amounts of the Obligations (other than Obligations in respect
of Specified Cash Management Agreements and Specified Swap Agreements) then held
by the Secured Parties;

Fourth, to the Collateral Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations in
respect of Specified Cash Management Agreements and Specified Swap Agreements,
pro rata among the Secured Parties according to the amounts of the Obligations
in respect of Specified Cash Management Agreements and Specified Swap Agreements
then due and owing and remaining unpaid to the Secured Parties;

Fifth, to the Collateral Agent, for application by it towards prepayment of the
Obligations in respect of Specified Cash Management Agreements and Specified
Swap Agreements, pro rata among the Secured Parties according to the amounts of
the Obligations in respect of Specified Cash Management Agreements and Specified
Swap Agreements then held by the Secured Parties; and

Sixth, any balance remaining after the Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have
terminated shall be paid over to the Borrower or to whomsoever may be lawfully
entitled to receive the same.”

Section 4. Incremental Commitments. (a) This Amendment shall also serve as a
Commitment Increase activation notice referred to in Section 2.21 of the Credit
Agreement (the “Commitment Increase Activation Notice”) with respect to
$60,000,000 in aggregate amount of Incremental Commitments. Each Person
signatory hereto whose name appears on Annex A hereto

 

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(each such Person, an “Incremental Lender”) hereby agrees to provide Incremental
Commitments in the amount set forth opposite such Incremental Lender’s name on
Annex A hereto under the caption “Incremental Commitment”, which Incremental
Commitments shall be Commitments under the Amended Credit Agreement. The
Increased Facility Closing Date in respect of the Incremental Commitments shall
be the Amendment Effective Date.

(b) The Borrower, the Administrative Agent and each Lender party hereto agree to
waive the 10 Business Day notice requirement set forth in Section 2.21 of the
Credit Agreement for this Commitment Increase Activation Notice.

(c) Each Incremental Lender that was not a Lender under the Credit Agreement
immediately prior to the Amendment Effective Date (each, a “New Lender”) agrees
that on the Amendment Effective Date, it shall become a Lender under the Amended
Credit Agreement having the Commitment under the Amended Credit Agreement set
forth on Annex A hereto opposite such New Lender’s name under the caption
“Incremental Commitment” and shall be bound by the obligations of the Amended
Credit Agreement as a Lender thereunder and entitled to the benefits of the
Amended Credit Agreement, effective as of the Amendment Effective Date. The
parties hereto agree that this clause (c) shall serve as the New Lender
Supplement required by Section 2.21 of the Credit Agreement in respect of each
New Lender.

(d) The Administrative Agent hereby consents to each New Lender becoming a
Lender under the Amended Credit Agreement pursuant to Section 2.21 of the Credit
Agreement.

Section 5. Representations of Borrower. The Borrower represents and warrants
that (a) each of the representations and warranties made by any Loan Party in or
pursuant to the Loan Documents is true and correct in all material respects as
of, and after giving effect to, the Amendment Effective Date; provided that to
the extent any such representation or warranty is already qualified by
materiality or reference to Material Adverse Effect, such representation is true
and correct in all respects and (b) no Default or Event of Default has occurred
and is continuing on, or after giving effect to, the Amendment Effective Date.

Section 6. Counterparts. This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Amendment by email or
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.

Section 7. Effectiveness. This Amendment shall become effective on the date (the
“Amendment Effective Date”) when the following conditions shall be satisfied:

(a) the Administrative Agent shall have received this Amendment, executed and
delivered by the Loan Parties, the Administrative Agent, the Required Lenders
and each Lender and Incremental Lender listed on Schedule 1.1A attached as part
of Exhibit B hereto;

(b) the Lenders, the Incremental Lenders and the Agents shall have received all
fees required to be paid, and all expenses for which invoices have been
presented (including the reasonable fees and expenses of legal counsel to the
Agents) on or before the Amendment Effective Date;

(c) the Administrative Agent shall have received with respect to the Borrower
and the other Loan Parties: (i) a certificate certifying that (x) its
certificate or articles of incorporation, formation,

 

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organization or certificate of limited partnership (as applicable), (y) its
regulations or by-laws, partnership agreement or operating agreement or limited
liability company agreement (as applicable) and (z) the resolutions previously
adopted by it authorizing the execution and delivery of the Credit Agreement,
any Notes, the Guarantee and Collateral Agreement and the other Loan Documents
delivered on the Effective Date or the Closing Date to which it is a party and
performance by it of all of its obligations thereunder have, in each case, not
been amended since the Effective Date, (ii) a copy of resolutions of its board
of directors or the executive committee of the board of directors, certified by
its secretary or assistant secretary to be a true and accurate copy of
resolutions duly adopted by such board of directors or the executive committee
of the board of directors, or other appropriate resolutions or consents of its
general partner, manager or members certified by its secretary, assistant
secretary, general partner or manager (as applicable) to be true and correct
copies thereof duly adopted, approved or otherwise delivered by its general
partner, manager or members (to the extent necessary and applicable), each of
which is certified to be in full force and effect on the Amendment Effective
Date, authorizing the execution and delivery by it of this Amendment and any
other Loan Documents to be delivered on the Amendment Effective Date to which it
is a party and the performance by it of all its obligations thereunder and
(iii) confirmation (to the extent applicable in such Loan Party’s jurisdiction
of organization) that it is good standing;

(d) the Administrative Agent shall have received favorable legal opinions of
Faegre Baker Daniels LLP, counsel to the Borrower and its Subsidiaries, as to
matters of Delaware and New York law, and of Melisa Konderik, Vice President and
Assistant General Counsel of the Borrower, as to matters of Arizona and Florida
law, which legal opinions shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require;

(e) the Administrative Agent shall have received a certificate from the Borrower
stating that: (i) no Default or Event of Default has occurred and is continuing
on, or after giving effect to, the Amendment Effective Date and (ii) each of the
representations and warranties made by any Loan Party in or pursuant to the Loan
Documents is true and correct in all material respects as of, and after giving
effect to, the Amendment Effective Date; provided that to the extent any such
representation or warranty is already qualified by materiality or reference to
Material Adverse Effect, such representation is true and correct in all
respects;

(f) the Administrative Agent shall have received the results of recent Uniform
Commercial Code Lien searches in each relevant jurisdiction of the Loan Parties
as requested by the Administrative Agent, and such searches shall reveal no
Liens on any Collateral, except for Permitted Liens;

(g) each document (including any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by the
Collateral Agent to be filed, registered or recorded in order to create in favor
of the Collateral Agent, for the benefit of the Lenders and the Incremental
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Permitted
Liens), is in proper form for filing, registration or recordation;

(h) the Collateral Agent shall have received certificates of insurance, together
with the endorsements thereto that reflect the status of the Collateral Agent as
a lender loss payee and the Collateral Agent as additional insured in such
certificates of insurance, as are required by Section 6.4 of the Credit
Agreement, the form and substance of which shall be reasonably satisfactory to
the Collateral Agent;

 

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(i) with respect to mortgaged real property, the Administrative Agent shall have
received a completed “Life-of-Loan” Federal Emergency Management Agency standard
flood hazard determination (and if any improvements on such mortgaged property
are located in a special flood hazard area, the Administrative Agent shall have
received a (1) a notice about special flood hazard area status and flood
disaster assistance duly executed by the applicable Loan Parties and
(2) evidence of insurance required by Section 6.4 of the Credit Agreement in
form and substance reasonably satisfactory to the Administrative Agent); and

(j) the Administrative Agent shall have received, to the extent requested by the
Administrative Agent:

(i) an amendment (a “Mortgage Amendment”) to each Mortgage listed on Schedule I
hereto (collectively, the “Continuing Mortgages”) , duly executed and
acknowledged by the applicable Loan Party, and in form for recording in the
recording office where such Mortgage was recorded, together with such
certificates, affidavits, questionnaires or returns as shall be required in
connection with the recording or filing thereof under applicable law, in each
case in form and substance reasonably satisfactory to the Administrative Agent
and otherwise approved by the applicable local counsel for filing in the
appropriate jurisdiction;

(ii) a date down endorsement to the existing title insurance policy covering
each Continuing Mortgage (each a “Mortgage Policy”), which shall be in form and
substance reasonably satisfactory to the Administrative Agent and reasonably
assures the Collateral Agent as of the date of such endorsement that the
Mortgaged Property subject to the lien of such Mortgage is free and clear of all
defects and encumbrances except those Liens permitted under such Mortgage;

(iii) such affidavits, certificates, information and instruments of
indemnification as shall be required to induce the title insurance company to
issue the endorsement to the Mortgage Policy contemplated in clause (ii) above;

(iv) with respect to each Mortgage Amendment, opinions of local counsel to the
Loan Parties, which opinions shall cover the enforceability of the respective
Mortgage, as amended by the Mortgage Amendment; and

(v) evidence of payment of all applicable title insurance premiums, search and
examination charges, mortgage recording taxes and related charges required for
the issuance of the endorsement to the Mortgage Policy contemplated in clause
(ii) above and evidence of payment by the Borrower of all search and examination
charges, escrow charges and related charges, and all other fees, charges, costs
and expenses required for the recording of the Mortgage Amendment referred to
above.

Section 8. Reference To and Effect Upon the Credit Agreement and the Security
Agreement; Reaffirmation.

(a) Except as expressly amended hereby, the provisions of the Credit Agreement,
as amended, are and shall remain in full force and effect.

(b) Except as expressly amended hereby, the provisions of the Security
Agreement, as amended, are and shall remain in full force and effect.

 

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(c) This Amendment shall constitute a Loan Document for all purposes of the
Credit Agreement and all the other Loan Documents.

(d) Each Loan Party party hereto agrees that with respect to each Loan Document
to which it is a party:

(i) all of its obligations, liabilities and indebtedness under such Loan
Document shall remain in full force and effect on a continuous basis after
giving effect to this Amendment (and the Incremental Commitments made
hereunder); and

(ii) all of the Liens and security interests created and arising under such Loan
Document remain in full force and effect, and the perfected status and priority
of each such Lien and security interest continues in full force and effect,
unimpaired, uninterrupted and undischarged, on a continuous basis after giving
effect to this Amendment, as collateral security for its obligations,
liabilities and indebtedness under the Credit Agreement and under its guarantees
in the Loan Documents.

Section 9. Governing Law. This Amendment shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.

Section 9. Expenses. The Borrower agrees to pay or reimburse the Administrative
Agent for all of its out-of-pocket costs and expenses incurred in connection
with the preparation, negotiation and execution of this Amendment, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.

 

AV HOMES, INC. as Borrower By:  

/ Roger A. Cregg

  Roger A. Cregg, President and   Chief Executive Officer   Date: July 28, 2016

[Signature page to Omnibus Amendment]

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JPMORGAN CHASE BANK, N.A., as

      Agents and as a Lender

By:  

/ Jaime Gitler

Name:   Jaime Gitler Title:   Vice President

[Signature page to Omnibus Amendment]

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CITIBANK, N.A., as a Lender and an

      Incremental Lender

By:  

/ John Van Brederode

Name:   John Van Brederode Date:   July 7, 2016

[Signature page to Omnibus Amendment]

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CREDIT SUISSE AG, CAYMAN ISLANDS

      BRANCH, as a Lender and an

      Incremental Lender

By:  

/ Bill O’Daly

Name:   Bill O’Daly,   Authorized Signatory Date:   By:  

/ Karim Rahimtoola

Name:   Karim Rahimtoola,   Authorized Signatory Date:  

[Signature page to Omnibus Amendment]

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DEUTSCHE BANK AG NEW YORK

      BRANCH, as a Non-Extended Lender

By:  

/ Michael Shannon

Name:   Michael Shannon Title:   Vice President By:  

/ Peter Cucchiara

Name:   Peter Cucchiara Title:   Vice President

[Signature page to Omnibus Amendment]

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FLAGSTAR BANK, as an Incremental

      Lender

By:  

/ Philip Trujillo

Name:   Philip Trujillo Title:   Vice President

 

By:  

/ Greg Grote

Name:   Greg Grote Title:   Vice President

[Signature page to Omnibus Amendment]

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ROYAL BANK OF CANADA, as a Lender By:  

/ Rina Kansagra

Name:   Rina Kansagra Date:   07/20/2016

[Signature page to Omnibus Amendment]

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U.S. BANK, N.A., as an Incremental Lender By:  

/s/ Troy Lyscio

Name:   Troy Lyscio Title:   Vice President

[Signature page to Omnibus Amendment]

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AVATAR PROPERTIES INC., a Florida

      corporation, as a Guarantor

By:  

/ Roger A. Cregg

Name:   Roger A. Cregg, President and Chief Executive Officer Date:   July 28,
2016

[Signature page to Omnibus Amendment]

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VITALIA AT TRADITION, LLC, as a

      Guarantor

By:   Avatar Properties Inc.   Its Sole Member  

/ Roger A. Cregg

 

Roger A. Cregg, President and Chief

Executive Officer

Date:   July 28, 2016

[Signature page to Omnibus Amendment]

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AVH BETHPAGE, LLC, as a Guarantor By:   AVH Carolina, LLC   Its Sole Member By:
  Avatar Properties Inc.   Its Sole Member  

/ Roger A. Cregg

 

Roger A. Cregg, President and Chief

Executive Officer

Date:   July 28, 2016

[Signature page to Omnibus Amendment]

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AVH CAROLINAS, LLC, as a Guarantor By:   Avatar Properties Inc.   Its Sole
Member By:  

/ Roger A. Cregg

  Roger A. Cregg, President and   Chief Executive Officer Date:   July 28, 2016

[Signature page to Omnibus Amendment]

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AV HOMES OF ARIZONA, LLC, as a

      Guarantor

By:   JCH Group LLC   Its Sole Member By:   Avatar Properties Inc.   Its Sole
Member By:  

/ Roger A. Cregg

  Roger A. Cregg, President and   Chief Executive Officer Date:   July 28, 2016

[Signature page to Omnibus Amendment]

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AVH EM, LLC, as a Guarantor By:   JCH Group LLC   Its Sole Member By:   Avatar
Properties Inc.   Its Sole Member By:  

/ Roger A. Cregg

  Roger A. Cregg, President and   Chief Executive Officer Date:   July 28, 2016

[Signature page to Omnibus Amendment]

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JCH GROUP LLC, as a Guarantor By:   Avatar Properties Inc.   Its Sole Member By:
 

/ Roger A. Cregg

  Roger A. Cregg, President and   Chief Executive Officer Date:   July 28, 2016

[Signature page to Omnibus Amendment]

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ROYAL OAK HOMES, LLC, as a Guarantor By:   Avatar Properties Inc.   Its Sole
Member By:  

/ Roger A. Cregg

  Roger A. Cregg, President and   Chief Executive Officer Date:   July 28, 2016

[Signature page to Omnibus Amendment]

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BONTERRA BUILDERS, LLC, as a

      Guarantor

By:   Avatar Properties Inc.   Its Sole Member By:  

/ Roger A. Cregg

  Roger A. Cregg, President and   Chief Executive Officer Date:   July 28, 2016

[Signature page to Omnibus Amendment]

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ANNEX A

INCREMENTAL COMMITMENTS

 

Lender

   Incremental Commitment  

JPMorgan Chase Bank, N.A.

   $ 10,000,000   

Citibank, N.A.

   $ 5,000,000   

Credit Suisse AG, Cayman Islands Branch

   $ 5,000,000   

U.S. Bank, N.A.

   $ 20,000,000   

Flagstar Bank, FSB

   $ 20,000,000   

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EXHIBIT A

AMENDED CREDIT AGREEMENT

[Attached]

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CONFORMED FOR AMENDMENTS 1-3EXECUTION VERSION

$65,000,000165,000,000

CREDIT AGREEMENT

among

AV HOMES, INC., as Borrower,

and

The Several Lenders from Time to Time Parties Hereto,

and

JPMORGAN CHASE BANK, N.A.,

as Swingline Lender, an Issuing Lender, Administrative Agent and Collateral
Agent

Dated as of April 7, 2014

 

 

 

J.P. MORGAN SECURITIES LLC,

as Lead Arranger and Lead Bookrunner

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TABLE OF CONTENTS

 

SECTION 1. DEFINITIONS

     1   

1.1

   Defined Terms      1   

1.2

   Other Definitional Provisions      31    SECTION 2. AMOUNT AND TERMS OF
COMMITMENTS      32   

2.1

   Commitments      32   

2.2

   Procedure for Revolving Loan Borrowing      32   

2.3

   Swingline Commitment[Reserved]      33   

2.4

   Procedure for Swingline Borrowing; Refunding of Swingline Loans[Reserved]   
  33   

2.5

   Commitment Fees, etc      34   

2.6

   Termination or Reduction of Commitments      35   

2.7

   Optional Prepayments      35   

2.8

   Mandatory Prepayments      35   

2.9

   Conversion and Continuation Options      35   

2.10

   Limitations on Eurodollar Tranches      36   

2.11

   Interest Rates and Payment Dates      36   

2.12

   Computation of Interest and Fees      36   

2.13

   Inability to Determine Interest Rate      37   

2.14

   Pro Rata Treatment and Payments      37   

2.15

   Requirements of Law      38   

2.16

   Taxes      40   

2.17

   Indemnity      43   

2.18

   Change of Lending Office      43   

2.19

   Replacement of Lenders      44   

2.20

   Defaulting Lenders      44   

2.21

   Increase in Commitments      46    SECTION 3. LETTERS OF CREDIT      47   

3.1

   L/C Commitment      47   

3.2

   Procedure for Issuance of Letter of Credit      48   

3.3

   Fees and Other Charges      48   

3.4

   L/C Participations      49   

3.5

   Reimbursement Obligation of the Borrower      50   

3.6

   Obligations Absolute      50   

3.7

   Letter of Credit Payments      50   

3.8

   Applications      51   

3.9

   Cash Collateral      51   

 

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SECTION 4. REPRESENTATIONS AND WARRANTIES      51   

4.1

   Financial Statement      51   

4.2

   No Material Adverse Change      52   

4.3

   Organization, Powers, and Capital Stock      52   

4.4

   Authorization; and Validity of this Agreement; Consents; etc.      52   

4.5

   Compliance with Laws and Other Requirements      53   

4.6

   Litigation      53   

4.7

   No Default      53   

4.8

   Title to Properties      53   

4.9

   Tax Liability      54   

4.10

   Regulations U and X; Investment Company Act      54   

4.11

   ERISA Compliance      54   

4.12

   Subsidiaries; Joint Ventures      55   

4.13

   Environmental Matters      55   

4.14

   No Misrepresentation      56   

4.15

   Solvency      56   

4.16

   Foreign Direct Investment Regulations      56   

4.17

   Relationship of the Loan Parties      56   

4.18

   Insurance      56   

4.19

   Anti-Corruption Laws and Sanctions      56   

4.20

   Intellectual Property; Licenses, Etc.      57   

4.21

   Security Documents      57   

4.22

   Regulation H      57    SECTION 5. CONDITIONS PRECEDENT      57   

5.1

   Conditions to Effectiveness      57   

5.2

   Conditions to Initial Extension of Credit      59   

5.2

   Conditions to Each Extension of Credit      60    SECTION 6. AFFIRMATIVE
COVENANTS      61   

6.1

   Reporting Requirements      61   

6.2

   Payment of Obligations, Taxes and Other Potential Liens      63   

6.3

   Preservation of Existence      63   

6.4

   Maintenance of Properties      64   

6.5

   Access to Premises and Books      64   

6.6

   Notices      64   

6.7

   Addition or Release of Guarantors; Additional Collateral, Etc      64   

6.8

   Compliance with Laws and Other Requirements      66   

6.9

   Use of Proceeds      66   

 

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6.10

   Further Assurances      66   

6.11

   Borrowing Base Account, Interest Reserve Account, Collateral Proceeds Account
and Operating Accounts      66   

6.12

   Appraisals      67    SECTION 7. NEGATIVE COVENANTS      67   

7.1

   Financial Condition Covenants      67   

7.2

   Liens and Encumbrances      68   

7.3

   Fundamental Changes; Asset Sales; Acquisitions      68   

7.4

   Investments      69   

7.5

   Secured Indebtedness      70   

7.6

   No Margin Stock      70   

7.7

   Burdensome Agreements      71   

7.8

   Restricted Payments      71   

7.9

   Prepayments of Indebtedness      71   

7.10

   Pension Plan      72   

7.11

   Transactions with Affiliates      72   

7.12

   Use of Proceeds      72    SECTION 8. EVENTS OF DEFAULT; REMEDIES      72   
SECTION 9. THE AGENTS      75   

9.1

   Appointment      75   

9.2

   Delegation of Duties      76   

9.3

   Exculpatory Provisions      76   

9.4

   Reliance by Agents      76   

9.5

   Notice of Default      77   

9.6

   Non-Reliance on Agents and Other Lenders      77   

9.7

   Indemnification      77   

9.8

   Agents in Their Individual Capacity      78   

9.9

   Successor Agents      78    SECTION 10. MISCELLANEOUS      78   

10.1

   Amendments and Waivers      78   

10.2

   Notices      79   

10.3

   No Waiver; Cumulative Remedies      80   

10.4

   Survival of Representations and Warranties      80   

10.5

   Payment of Expenses and Taxes      80   

10.6

   Successors and Assigns; Participations and Assignments      81   

10.7

   Adjustments; Set off      84   

10.8

   Counterparts      85   

 

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10.9

   Severability      85   

10.10

   Integration      85   

10.11

   GOVERNING LAW      85   

10.12

   Submission To Jurisdiction; Waivers      85   

10.13

   Acknowledgements      86   

10.14

   Releases of Guarantees; Release of Security      86   

10.15

   Modifications to Mortgaged Property      87   

10.16

   Confidentiality      88   

10.17

   WAIVERS OF JURY TRIAL      89   

10.18

   USA Patriot Act      89   

 

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SCHEDULES:

 

1.1A   Commitments 1.1B   Existing Liens 1.1C   Initial Guarantors 1.1D  
Issuing Lender Addresses 4.11   Pension Plans 4.12   Subsidiaries 4.21(a)  
Financing Statements 6.1(f)   Format of Joint Venture Reporting 7.3   Amenities
Disposition 7.5   Secured Indebtedness EXHIBITS: A   Form of Guarantee and
Collateral Agreement B   Form of Compliance Certificate C   Form of Borrowing
Base Certificate D   Form of Assignment and Assumption E   Form of New Lender
Supplement F   Forms of Legal Opinions G   Form of Exemption Certificates H  
Administration of Security and Borrowing Base

 

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CREDIT AGREEMENT (this “Agreement”), dated as of April 7, 2014, among AV HOMES,
INC., a Delaware corporation (the “Borrower”), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the “Lenders”) and JPMORGAN CHASE BANK, N.A., as Swingline Lender, an Issuing
Lender, Administrative Agent and Collateral Agent (each as hereinafter defined).

The parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“ABR”: for any day, a rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day,
(b) the Federal Funds Effective Rate in effect on such day plus  1⁄2 of 1% and
(c) the Eurodollar Rate that would be calculated as of such day (or, if such day
is not a Business Day, as of the preceding Business Day) in respect of a
proposed Eurodollar Loan with a one-month Interest Period plus 1.0%. Any change
in the ABR due to a change in the Prime Rate, the Federal Funds Effective Rate
or such Eurodollar Rate shall be effective as of the opening of business on the
day of such change in the Prime Rate, the Federal Funds Effective Rate or such
Eurodollar Rate, respectively.

“ABR Loans”: Loans the rate of interest applicable to which is based upon the
ABR.

“Acceptable Appraisal”: an appraisal (reasonably acceptable to each Lender as to
form, assumptions, substance and appraisal date that is addressed to the
Administrative Agent and was commissioned by the Administrative Agent) prepared
on a fair market value basis by a qualified licensed professional appraiser
reasonably acceptable to the Administrative Agent and complying in all material
respects with the requirements of the Federal Financial Institutions Reform,
Recovery and Enforcement Act of 1989. The procedure for review and acceptance by
each Lender of an Acceptable Appraisal shall be as described in Exhibit H.

“Acquisition”: any transaction, or any series of related transactions, by which
the Borrower or any Guarantor (i) acquires all or substantially all of the
assets of any firm, corporation or division thereof, whether through purchase of
assets, merger or otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of transactions) at
least a majority (in number of votes or by percentage of voting power) of the
Voting Stock of another Person.

“Adjusted Appraised Value”: with respect to any Unit Under Contract, the lesser
of (a) the Appraised Value of such Unit Under Contract and (b) the cash
consideration for such Unit Under Contract set forth in the bona fide contract
of sale for such Unit.

“Administrative Agent”: JPMorgan Chase Bank, N.A., together with its affiliates,
successors and assigns, as the administrative agent for the Lenders under this
Agreement and the other Loan Documents.

“Affiliate”: as to any Person, any Person (a) which directly, or indirectly
through one or more intermediaries, Controls, or is Controlled by, or is under
common Control with such Person, or (b) which directly, or indirectly through
one or more intermediaries, owns beneficially or of record twenty percent
(20%) or more of the Voting Stock of such Person.

 

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“Agents”: the Administrative Agent and the Collateral Agent.

“Agent Indemnitee”: as defined in Section 9.7.

“Agreement”: as defined in the preamble hereto.

“Anti-Corruption Laws”: all laws, rules and regulations of any jurisdiction
applicable to the Borrower or its Subsidiaries from time to time concerning or
relating to bribery or corruption.

“Applicable Margin”: (a) 2.25%, in the case of ABR Loans and (b) 3.25%, in the
case of Eurodollar Loans.

“Application”: an application, in such customary form as an Issuing Lender may
specify from time to time, requesting such Issuing Lender to open a Letter of
Credit.

“Appraised Value”: with respect to any Real Property Inventory or any portion
thereof, the appraised value of such Real Property Inventory or portion thereof
set forth on an “as is” basis in the most-recent Acceptable Appraisal received
by the Administrative Agent pursuant to this Agreement. The Appraised Value of
Real Property Inventory shall be adjusted to take into account any portion that
has been sold or otherwise transferred. The Appraised Value of a portion of Real
Property Inventory shall be calculated based on the Acceptable Appraisal for
such Real Property Inventory and allocated to such portion of such Real Property
Inventory by the Borrower based on the methodology described in Exhibit H. The
Appraised Value of all or any portion of any Real Property Inventory shall be
adjusted from time to time to take into account the book value of ongoing or
completed construction of Units and improvements to Real Property Inventory
based on the methodology described in Exhibit H or as otherwise approved by the
Administrative Agent in its reasonable discretion.

“Approved Fund”: any entity that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of business and that is administered or managed by (a) a Lender, (b) an
Affiliate of Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Arranger”: J.P. Morgan Securities LLC.

“Assignee”: as defined in Section 10.6(b).

“Assignment and Assumption”: an Assignment and Assumption, substantially in the
form of Exhibit D.

“Authorized Financial Officer”: any of the chief financial officer, treasurer,
assistant treasurer or controller of the Borrower.

“Available Commitment”: as to any Lender at any time, an amount equal to the
excess, if any, of (a) such Lender’s Commitment then in effect over (b) such
Lender’s Percentage Interest of the Borrowing Base Debt.

“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the
applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation”: with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the

 

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implementing law for such EEA Member Country from time to time which is
described in the EU Bail-In Legislation Schedule.

“Bankruptcy Event”: with respect to any Person, such Person becomes the subject
of a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee, administrator, custodian, assignee for the benefit of creditors or
similar Person charged with the reorganization or liquidation of its business
appointed for it, or, in the good faith determination of the Administrative
Agent, has taken any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any such proceeding or appointment, provided
that a Bankruptcy Event shall not result solely by virtue of any ownership
interest, or the acquisition of any ownership interest, in such Person by a
Governmental Authority or instrumentality thereof, provided, further, that such
ownership interest does not result in or provide such Person with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

“Basel III”: the third of the so-called Basel Accords issued by the Basel
Committee on Banking Supervision.

“Benefitted Lender”: as defined in Section 10.7(a).

“Blocked Account Control Agreement”: a blocked account control agreement by and
among the relevant Loan Party, the relevant depositary bank and/or securities
intermediary (which shall be JPMorgan Chase Bank, N.A. or another financial
institution reasonably acceptable to the Collateral Agent), and the Collateral
Agent, which agreement shall be in form and substance reasonably satisfactory to
the Collateral Agent.

“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor).

“Borrower”: as defined in the preamble hereto.

“Borrowing Base”: as of any date, an amount calculated as follows (with each of
the following included only to the extent such assets are wholly-owned assets of
Loan Parties and are not encumbered by Liens (other than, to the extent any of
the following constitute Qualified Real Property Inventory, those Permitted
Liens specified in the definition of “Qualified Real Property Inventory”)):

(a) 100% of Borrowing Base Cash to the extent the amount of such Borrowing Base
Cash exceeds the Interest Reserve; plus

(b) 100% of the amount of Escrow Proceeds Receivable; plus

(c) 85% of the Adjusted Appraised Value of Units Under Contract; plus

(d) subject to the limitations set forth below, 85% of the Appraised Value of
Speculative Units; plus

(e) subject to the limitations set forth below, 85% of the Appraised Value of
Model Units; plus

(f) 65% of the Appraised Value of Finished Lots; plus

 

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(g) 65% of the Appraised Value of Lots Under Development; plus

(h) subject to the limitation set forth below, 50% of the Appraised Value of
Entitled Land that is not included in the Borrowing Base clauses (a) through
(g).

Notwithstanding the foregoing:

(i) the advance rate for Speculative Units shall decrease to 65% for any Unit
that has been a Speculative Unit for more than 360 days;

(ii) the advance rate for Model Units shall decrease to 65% for any Unit that
has been a Model Unit for more than 360 days following the sale of the last
production Unit in the applicable project relating to such Model Unit; and

(iii) the Borrowing Base shall not include any amount under clause (h) under the
Borrowing Base to the extent that such amount exceeds 40% of the total Borrowing
Base.

The Borrowing Base shall be administered by the Administrative Agent in
accordance with the procedures described on Exhibit H. Such procedures may be
modified with the consent of the Administrative Agent and the Borrower.

“Borrowing Base Account”: one or more deposit accounts or securities accounts
maintained by the Borrower with the Collateral Agent or its designee or such
other financial institution reasonably acceptable to the Collateral Agent in
which the Collateral Agent has (for the ratable benefit of the Lenders and the
Agents) a first priority security interest and Lien, perfected by control
pursuant to a Blocked Account Control Agreement, as collateral security for the
Obligations.

“Borrowing Base Availability”: as of any date, the lesser of (a) the Commitments
minus the Borrowing Base Debt on such date and (b) the excess, if positive, of
the Borrowing Base calculated in the most recently delivered Borrowing Base
Certificate minus the Borrowing Base Debt on such date.

“Borrowing Base Cash”: Unrestricted Cash held by the Loan Parties in the
Borrowing Base Account.

“Borrowing Base Certificate”: a certificate setting forth the Borrowing Base
duly executed by an Authorized Financial Officer substantially in the form of
Exhibit C.

“Borrowing Base Debt”: as of any date, the aggregate principal amount of Loans
outstanding after giving effect to any borrowings, repayments and prepayments on
such date plus the amount of L/C Obligations outstanding on such date after
giving effect to any issuance, reimbursements or terminations made on such date.

“Borrowing Date”: any Business Day specified by the Borrower as a date on which
the Borrower requests the relevant Lenders to make Loans hereunder.

“Business”: the business of owning, developing and selling single-family
residential real estate (including Real Property Inventory), acquiring real
estate for such purposes and, in connection therewith, providing the required
services, credit and other facilities related thereto.

“Business Day”: a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close,
provided, that with respect to notices

 

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and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, such day is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.

“Capital Stock”: any and all shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of any Person, including any preferred stock, but excluding
any debt securities convertible into such equity.

“Capitalized Lease”: with respect to any Person, any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.

“Capitalized Lease Obligations”: any obligations under a lease that is required
to be capitalized for financial reporting purposes in accordance with GAAP. The
amount of any such obligations shall be the capitalized amount thereof
determined in accordance with GAAP at the time any determination thereof is to
be made.

“Cash Collateralize”: to pledge and deposit with or deliver to the Collateral
Agent, for the benefit of one or more of the Issuing Lenders or Lenders, as
collateral for L/C Obligations or obligations of Lenders to fund participations
in respect of L/C Obligations, cash or deposit account balances or, if the
Collateral Agent and each applicable Issuing Lender shall agree in their sole
discretion, other credit support, in each case pursuant to documentation in form
and substance satisfactory to the Collateral Agent and each applicable Issuing
Lender. “Cash Collateralized” and “Cash Collateralization” shall have a meaning
correlative to the foregoing. “Cash Collateral” shall have a meaning correlative
to the foregoing and shall include the proceeds of such cash collateral and
other credit support.

“Cash Equivalents”: (1) securities, certificates and notes with maturities of
364 days or less from the date of acquisition that are within one of the
following classifications: (a) securities issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) mortgage-backed
securities issued or fully guaranteed or insured by the Federal Home Loan
Mortgage Corporation, Federal National Mortgage Association, or a similar
government sponsored enterprise or mortgage agency, (c) securities issued by
States, territories and possessions of the United States and their political
subdivisions (municipalities), with ratings of at least “A” or the equivalent
thereof by Standard & Poor’s Financial Services LLC (“S&P”) or Moody’s Investors
Services, Inc. (“Moody’s”), (d) time deposits, certificates of deposit, bankers’
acceptances, or similar short-term notes issued by a commercial bank domiciled
and registered in the United States which has (or the holding company of which
has) a commercial paper rating of at least A-l or the equivalent thereof by S&P
or P-l or the equivalent thereof by Moody’s or (e) commercial paper of a
domestic issuer rated at least A-l or the equivalent thereof by S&P or P-l or
the equivalent thereof by Moody’s; and (2) money market mutual funds which
invest in securities listed in (a) through (e) above with a weighted average
maturity of less than one year.

“CDD”: a Community Development District and/or, Community Development Authority,
Special Assessment District and/or similar governmental or quasi-governmental
entity created under state or local statutes to encourage planned community
development and to allow for the construction, purchase and/or maintenance of
long-term infrastructure and recreational assets through alternative financing
sources, including the tax-exempt and/or the taxable bond markets.

“Change in Status”: the occurrence of any of the following events with respect
to a Subsidiary that, immediately prior to such event, is a Loan Party: (a) all
of the assets of such Subsidiary are sold or otherwise disposed of in a
transaction in compliance with the terms of this Agreement; (b) all of the
Capital Stock of such Subsidiary held by the Borrower or any Restricted
Subsidiary is sold or otherwise disposed of to any Person other than a Borrower
or a Restricted Subsidiary in a transaction in compliance with the terms of this
Agreement; or (c) such Subsidiary is designated an Unrestricted

 

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Subsidiary (or otherwise ceases to be a Restricted Subsidiary, including by way
of liquidation or merger) in compliance with the terms of this Agreement.

“Change of Control”: (a) any Person or group (as that term is understood under
Section 13(d) of the Exchange Act and the rules and regulations thereunder)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of a percentage (based on voting power, in the event different
classes of stock shall have different voting powers) of the voting stock of the
Borrower equal to at least fifty percent (50%); or (b) as of any date a majority
of the board of directors of the Borrower consists of individuals who were not
either (i) directors of the Borrower as of the corresponding date of the
previous year, (ii) selected or nominated to become directors by the board of
directors of the Borrower of which a majority consisted of individuals described
in clause (b)(i) above or (iii) selected or nominated to become directors by the
board of directors of the Borrower of which a majority consisted of individuals
described in clause (b)(i) above and individuals described in clause (b)(ii)
above.

“Closing Date”: the date on which the conditions precedent set forth in
Section 5.2 shall have beenwere satisfied (which in no event shall be later than
June 6, 2014).

“Code”: the Internal Revenue Code of 1986, as amended from time to time.

“Collateral”: all Property of the Loan Parties, now owned or hereafter acquired,
upon which a Lien is purported to be created by any Security Documents.

“Collateral Agent”: JPMorgan Chase Bank, N.A.

“Collateral Assignment”: the Collateral Assignment of Proceeds, dated
November 27, 2013 by AV Homes of Arizona, LLC for the benefit of SCC-Canyon II,
LLC, a Delaware limited liability company.

“Collateral Proceeds Account”: one or more deposit accounts or securities
accounts (to which are credited only cash and Cash Equivalents representing or
arising from proceeds of the sale or other disposition of Qualified Real
Property Inventory) maintained by the Borrower with the Collateral Agent or its
designee or such other financial institutions reasonably acceptable to the
Collateral Agent in which the Collateral Agent has (for the ratable benefit of
the Lenders and the Agents) a first priority security interest and Lien,
perfected by control pursuant to a Contingent Account Control Agreement, as
collateral security for the Obligations.

“Commitment”: as to any Lender, the obligation of such Lender to make Revolving
Loans and participate in Swingline Loans and Letters of Credit in an aggregate
principal and/or face amount not to exceed the amount set forth under the
heading “Commitment” opposite such Lender’s name on Schedule 1.1A or in the
Assignment and Assumption pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof. The
original amount of the Total Commitments is $65,000,000.

“Commitments”: the Non-Extended Commitments and the Extended Commitments.

“Commitment Fee Rate”: 0.50% per annum.

“Commitment Period”: the period from and including the Closing Date to the
Termination Date(a) with respect to the Non-Extended Lenders, the Non-Extended
Commitment Period and (b) with respect to the Extended Lenders, the Extended
Commitment Period.

 

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“Competitor”: any Person that is itself, or is owned or Controlled by, a Person
that is (i) listed on the most recent Builder 100 list published by Builder
magazine, ranked by revenues or closings (or if such list is no longer
published, identified in such other published list or through such other means
as is mutually agreed by the Administrative Agent and the Borrower) or any
Affiliate of such Person or (ii) engaged primarily in the Business or the
business of investing in distressed real estate and is not a banking
institution, life insurance company, fund or other similar financial institution
that ordinarily is engaged in the business of making real estate loans in the
ordinary course of business.

“Compliance Certificate”: a certificate duly executed by an Authorized Financial
Officer substantially in the form of Exhibit B.

“Consolidated Debt”: at any date, without duplication:

(a) all funded Indebtedness (other than Contingent Obligations) of the Loan
Parties and their respective Subsidiaries (other than Unrestricted Subsidiaries)
determined on a consolidated basis in accordance with GAAP; plus

(b) funded Indebtedness of each Joint Venture to the extent that it has recourse
to or is guaranteed by the Borrower or any other Loan Party; plus

(c) Contingent Obligations of the Loan Parties and their respective Subsidiaries
(other than Unrestricted Subsidiaries), regardless of whether amounts are then
due and payable in respect thereof; plus

(c) the sum of all reimbursement obligations with respect to drawn Performance
Letters of Credit and Financial Letters of Credit (excluding any portion of the
actual or potential reimbursement obligations that are secured by cash
collateral), in each case for which the applicant is a Loan Party or any of its
Subsidiaries (other than Unrestricted Subsidiaries); plus

(d) funded Indebtedness of Unrestricted Subsidiaries or third parties to the
extent that it has recourse to or is guaranteed by any Loan Party or any of its
Subsidiaries (other than Unrestricted Subsidiaries); plus

(e) the net aggregate Swap Termination Value of all agreements relating to
Hedging Obligations of the Loan Parties and their respective Subsidiaries (other
than Unrestricted Subsidiaries).

Notwithstanding the foregoing, “Consolidated Debt” shall exclude
(i) Indebtedness of a Loan Party to another Loan Party, (ii) except as otherwise
provided in the foregoing clauses (b), (c) and (d), Indebtedness of Unrestricted
Subsidiaries and Joint Ventures that otherwise is consolidated under GAAP,
(iii) (x) Capitalized Lease Obligations pertaining to Model Units and (y) at any
time, up to $5,000,000 of Capitalized Lease Obligations not described in
sub-clause (x) of this clause (iii) and (iv) liabilities relating to real estate
not owned as determined under GAAP.

“Consolidated EBITDA”: for any period, (a) the Consolidated Net Income of the
Loan Parties and their respective Subsidiaries plus (b) to the extent deducted
from revenues in determining Consolidated Net Income of the Loan Parties and
their respective Subsidiaries and without duplication: (i) Consolidated Interest
Expense, (ii) expense for income taxes paid or accrued, (iii) depreciation,
(iv) amortization, (v) non-cash (including impairment) charges,
(vi) extraordinary losses, (vii) loss (gain) on early extinguishment of
indebtedness and (viii) until the relevant period for which Consolidated EBITDA
is measured no longer includes any period ending on or before June 30, 2014,
one-time one-time non-

 

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amortizing equity and/or debt issuance transaction costs and expenses in an
amount not to exceed $682,000 in the aggregate, minus (c) to the extent added to
revenues in determining Consolidated Net Income, non-cash gains and
extraordinary gains (including for the avoidance of doubt, gains relating to the
release of any tax valuation asset reserves); provided, however, that
Consolidated EBITDA shall include net income of any Unrestricted Subsidiary or
Joint Venture only to the extent distributed to Loan Parties.

“Consolidated Interest Expense”: for any period, the consolidated interest
expense and capitalized interest and other interest charges amortized to cost of
sales of Loan Parties and their respective Subsidiaries (other than Unrestricted
Subsidiaries) for such period, determined on a consolidated basis in accordance
with GAAP; provided, however, “Consolidated Interest Expense” shall exclude
Consolidated Interest Expense of Joint Ventures (but only to the extent that any
corresponding Indebtedness does not have recourse to, and is not guaranteed by,
a Loan Party) that otherwise is consolidated under GAAP.

“Consolidated Interest Incurred”: for any period, the aggregate amount (without
duplication and determined in each case in accordance with GAAP) of interest
(excluding interest of a Loan Party to another Loan Party) incurred, whether
such interest was expensed or capitalized, paid, accrued, or scheduled to be
paid or accrued during such period by the Loan Parties and their respective
Subsidiaries during such period, including (a) the interest portion of all
deferred payment obligations, and (b) all commissions, discounts, and other fees
and charges (excluding premiums) owed with respect to bankers’ acceptances and
letter of credit financings (including, without limitation, letter of credit
fees) and Hedging Obligations, in each case to the extent attributable to such
period; provided, however, that (x) the Consolidated Interest Incurred of any
Subsidiary shall only be included in the amount of the Loan Parties’ pro-rata
share of interest, (y) for the avoidance of doubt, Consolidated Interest
Incurred shall not include the amortization of deferred financing costs or
expenses, and (z) “Consolidated Interest Incurred” shall exclude Consolidated
Interest Incurred of Joint Ventures and Unrestricted Subsidiaries (but (i) only
to the extent that any corresponding Indebtedness does not have recourse to, and
is not guaranteed by, a Loan Party and (ii) Consolidated Interest Incurred of
Joint Ventures and Unrestricted Subsidiaries shall be included to the extent any
such interest is paid by any Loan Party) that otherwise is consolidated under
GAAP. For purposes of this definition, interest on Capital Leases shall be
deemed to accrue at an interest rate reasonably determined by the Borrower to be
the rate of interest implicit in such Capital Leases in accordance with GAAP.

“Consolidated Net Income”: for any period, the net income (or loss) attributable
to the Loan Parties and their respective Subsidiaries (other than Unrestricted
Subsidiaries) for such period, determined on a consolidated basis in accordance
with GAAP.

“Consolidated Tangible Net Worth”: at any date, the consolidated stockholders
equity, less Intangible Assets, of the Loan Parties and their respective
Subsidiaries (other than Unrestricted Subsidiaries) determined in accordance
with GAAP on a consolidated basis, all determined as of such date.

“Contingent Account Control Agreement”: a contingent account control agreement
by and among the relevant Loan Party, the relevant depositary bank and/or
securities intermediary (which shall be JPMorgan Chase Bank, N.A. or another
financial institution reasonably acceptable to the Collateral Agent) and the
Collateral Agent, which agreement shall be in form and substance reasonably
satisfactory to the Collateral Agent.

“Contingent Obligation”: with respect to any Person, any agreement, undertaking
or arrangement by which such Person assumes, guarantees (which, for the
avoidance of doubt, shall include

 

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payment guarantees), endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes or is contingently liable upon, the
monetary obligation or monetary liability of any other Person, or agrees to
maintain the net worth or working capital or other financial condition of any
other Person, or otherwise assures any creditor of such other Person against
loss, including any comfort letter, operating agreement, take-or-pay contract,
“put” agreement or other similar arrangement; provided that Contingent
Obligations shall not include (w) re-margin guarantees, (x) obligations
(including indemnity obligations, but excluding Indebtedness for borrowed money)
incurred in the ordinary course of business, including in respect of land
acquisition contracts, (y) endorsements of instruments for deposit or collection
in the ordinary course of business and (z) the development liability for sold
land described in Note 8 to the consolidated financial statements of the
Borrower as of December 31, 2013 included in the Form 10-K of the Borrower for
the period ended December 31, 2013 and similar obligations. The amount of any
Contingent Obligation shall be equal to the amount so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.

“Contractual Obligation”: any provision of any security issued by such Person or
of any agreement, instrument or other undertaking to which such Person is a
party or by which it or any of its property is bound.

“Control”: the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise. “Controlling”
and “Controlled” have meanings correlative thereto.

“Credit Party”: the Agents, the Issuing Lenders, the Swingline Lender or any
other Lender and, for the purposes of Section 10.13 only, any other Agent and
the Arranger.

“Default”: any event or circumstance that, with the giving of notice or passage
of time, or both, would become an Event of Default.

“Defaulting Lender”: any Lender that (a) has failed, within two Business Days of
the date required to be funded or paid, to (i) fund any portion of its Loans,
(ii) fund any portion of its participations in Letters of Credit or Swingline
Loans or (iii) pay over to any Credit Party any other amount required to be paid
by it hereunder, unless, in the case of clause (i) above, such Lender notifies
the Administrative Agent in writing that such failure is the result of such
Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular default, if any) has not
been satisfied, (b) has notified the Borrower or any Credit Party in writing, or
has made a public statement to the effect, that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular default, if any) to funding a loan under
this Agreement cannot be satisfied) or generally under other agreements in which
it commits to extend credit, (c) has failed, within three Business Days after
request by a Credit Party, acting in good faith, to provide a certification in
writing from an authorized officer of such Lender that it will comply with its
obligations (and is financially able to meet such obligations) to fund
prospective Loans and participations in then outstanding Letters of Credit and
Swingline Loans under this Agreement, provided that such Lender shall cease to
be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s
receipt of such certification in form and substance satisfactory to it and the
Administrative Agent, or (d) has become the subject of a Bankruptcy Event or
(e) has, or has a direct or indirect parent company that has, become the subject
of a Bail-In Action.

“Dollars” and “$”: dollars in lawful currency of the United States.

 

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“EEA Financial Institution”: (a) any institution established in any EEA Member
Country which is subject to the supervision of an EEA Resolution Authority,
(b) any entity established in an EEA Member Country which is a parent of an
institution described in clause (a) of this definition, or (c) any institution
established in an EEA Member Country which is a subsidiary of an institution
described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.

“EEA Member Country”: any of the member states of the European Union, Iceland,
Liechtenstein, and Norway.

“EEA Resolution Authority”: any public administrative authority or any Person
entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date”: the date on which the conditions precedent set forth in
Section 5.1 shall have beenwere satisfied, which date shall be the date of this
Agreementwas April 7, 2014.

“Eligible Assignee”: any of (i) a Lender or a Lender Affiliate, (ii) a
commercial bank organized under the laws of the United States, or any State
thereof, and having (x) total assets in excess of $1,000,000,000 and (y) a
combined capital and surplus of at least $250,000,000; (iii) a commercial bank
organized under the laws of any other country which is a member of OECD, or a
political subdivision of any such country, and having (x) total assets in excess
of $1,000,000,000 and (y) a combined capital and surplus of at least
$250,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of OECD; (iv) a life insurance company organized under the laws of any
State of the United States, or organized under the laws of any country and
licensed as a life insurer by any State within the United States and having
admitted assets of at least $1,000,000,000; (v) a nationally or internationally
recognized investment banking company or other financial institution in the
business of making, investing in or purchasing loans, or an Affiliate thereof
organized under the laws of any State of the United States or any other country
which is a member of OECD, and licensed or qualified to conduct such business
under the laws of any such State and having (1) total assets of at least
$1,000,000,000 and (2) a net worth of at least $250,000,000; or (vi) an Approved
Fund. Notwithstanding the foregoing, the following shall not be “Eligible
Assignees”: (a) any Defaulting Lender, (b) the Borrower or any of its Affiliates
and (c) Competitors identified to the Administrative Agent and the Lenders from
time to time.

“Entitled Land”: Qualified Real Property Inventory comprised of land where all
requisite zoning requirements and land use requirements have been satisfied, and
all requisite approvals have been obtained from all applicable Governmental
Authorities (other than approvals which are simply ministerial and
non-discretionary in nature or otherwise not material) in order to develop the
land as a residential housing project.

“Environmental Laws”: any and all foreign, Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirement of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or safety, or the
environment, as now or may at any time hereafter be in effect.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.

“ERISA Affiliate”: (a) any entity, whether or not incorporated, that is under
common control with a Loan Party within the meaning of Section 4001(a)(14) of
ERISA; (b) any corporation

 

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which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Code of which a Loan Party is a member; (c) any trade or
business (whether or not incorporated) which is a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the Code
of which a Loan Party is a member; and (d) with respect to any Loan Party, any
member of an affiliated service group within the meaning of Section 414(m) or
(o) of the Code of which that Loan Party, any corporation described in clause
(b) above or any trade or business described in clause (c) above is a member.
Any former ERISA Affiliate of any Loan Party shall continue to be considered an
ERISA Affiliate of the Loan Party within the meaning of this definition with
respect to the period such entity was an ERISA Affiliate of the Loan Party and
with respect to liabilities arising after such period for which the Loan Party
could be liable under the Code or ERISA.

“ERISA Event”: (a) the failure of any Plan to comply with any material
provisions of ERISA and/or the Code (and applicable regulations under either) or
with the material terms of such Plan; (b) the existence with respect to any Plan
of a non-exempt Prohibited Transaction; (c) any Reportable Event; (d) the
failure of any Loan Party or ERISA Affiliate to make by its due date a required
installment under Section 430(j) of the Code with respect to any Pension Plan or
any failure by any Pension Plan to satisfy the minimum funding standards (within
the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to
such Pension Plan, whether or not waived in accordance with Section 412(c) of
the Code or Section 302(c) of ERISA; (e) a determination that any Pension Plan
is, or is expected to be, in “at risk” status (within the meaning of Section 430
of the Code or Section 303 of ERISA); (f) the filing pursuant to Section 412 of
the Code or Section 302 of ERISA of an application for a waiver of the minimum
funding standard with respect to any Pension Plan; (g) the occurrence of any
event or condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or the incurrence by any Loan Party or any ERISA Affiliate of any liability
under Title IV of ERISA with respect to the termination of any Pension Plan,
including but not limited to the imposition of any Lien in favor of the PBGC or
any Pension Plan; (h) the receipt by any Loan Party or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to an intention to
terminate any Pension Plan or to appoint a trustee to administer any Pension
Plan under Section 4042 of ERISA; (i) the failure by any Loan Party or any of
its ERISA Affiliates to make any required contribution to a Multiemployer Plan
pursuant to Sections 431 or 432 of the Code; (j) the incurrence by any Loan
Party or any ERISA Affiliate of any liability with respect to the withdrawal or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Pension Plan or Multiemployer Plan; (k) the receipt by any Loan Party or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from a
Loan Party or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, Insolvent, in Reorganization, in “endangered” or “critical”
status (within the meaning of Sections 431 or 432 of the Code or Sections 304 or
305 of ERISA), or terminated (within the meaning of Section 4041A of ERISA) or
that it intends to terminate or has terminated under Section 4041A or 4042 of
ERISA; (l) the failure by any Loan Party or any of its ERISA Affiliates to pay
when due (after expiration of any applicable grace period) any installment
payment with respect to Withdrawal Liability under Section 4201 of ERISA;
(m) the withdrawal by any Loan Party or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability to any Loan Party or any of
their respective ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA;
(n) the imposition of liability on any Loan Party or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (o) the occurrence of an act or
omission which could give rise to the imposition on any Loan Party or any of
their respective ERISA Affiliates of fines, penalties, taxes or related charges
under Chapter 43 of the Code or under Section 409, Section 502(c), (i) or (l),
or Section 4071 of ERISA in respect of any Plan; (p) the assertion of a material
claim (other than routine claims for benefits) against any Plan other than a
Multiemployer Plan or the assets thereof, or against any Loan Party or any of
their respective ERISA Affiliates in connection with any Plan; (q) receipt from
the IRS of notice of the failure of any Pension

 

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Plan (or any other Plan intended to be qualified under Section 401(a) of the
Code) to qualify under Section 401(a) of the Code, or the failure of any trust
forming part of any Pension Plan (or any other Plan) to qualify for exemption
from taxation under Section 501(a) of the Code; or (r) the imposition of a Lien
pursuant to Section 430(k) of the Code or pursuant to ERISA with respect to any
Pension Plan.

“Escrow Proceeds Receivable”: (a) funds unconditionally due to the Borrower or
any Guarantor held in escrow following the sale and conveyance of title of a
Unit to a buyer and (b) non-refundable deposits held in escrow for the benefit
of the Borrower or any Guarantor.

“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published
by the Loan Market Association (or any successor Person), as in effect from time
to time.

“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.

“Eurodollar Base Rate”: with respect to any Eurodollar Loan for any Interest
Period, the London interbank offered rate as administered by the British Bankers
AssociationICE Benchmark Administration (or any other Person that takes over the
administration of such rate) for Dollars for a period equal in length to such
Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters Screen
that displays such rate (or, in the event such rate does not appear on a Reuters
page or screen, on any successor or substitute page on such screen that displays
such rate, or on the appropriate page of such other information service that
publishes such rate from time as selected by the Administrative Agent in its
reasonable discretion; in each case, the “Screen Rate”) at approximately 11:00
A.M., London time, two Business Days prior to the commencement of such Interest
Period; provided, that, if the Screen Rate shall not be available at such time
for such Interest Period (an “Impacted Interest Period”) with respect to Dollars
then the Eurodollar Base Rate shall be the Interpolated Rate. “Interpolated
Rate” means the rate per annum determined by the Administrative Agent (which
determination shall be conclusive and binding absent manifest error) to be equal
to the rate that results from interpolating on a linear basis between: (a) the
Screen Rate for the longest period (for which that Screen Rate is available in
Dollars) that is shorter than the Impacted Interest Period and (b) the Screen
Rate for the shortest period (for which that Screen Rate is available for
Dollars) that exceeds the Impacted Interest Period, in each case at such time.
Notwithstanding the foregoing, if the Eurodollar Base Rate is less than zero, it
shall be deemed to be zero for purposes of this Agreement.

“Eurodollar Loans”: Loans the rate of interest applicable to which is based upon
the Eurodollar Rate.

“Eurodollar Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula:

 

Eurodollar Base Rate

 

 

1.00 - Eurocurrency Reserve Requirements                

 

 

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“Eurodollar Tranche”: the collective reference to those Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Eurodollar Loans shall
originally have been made on the same date).

“Event of Default”: any of the events specified in Section 8.

“Exchange Act”: the Securities Exchange Act of 1934, as amended.

“Extended Commitment”: as to any Lender, the obligation of such Lender to make
Revolving Loans and participate in Letters of Credit during the Extended
Commitment Period in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading “Extended Commitment” opposite such Lender’s
name on Schedule 1.1A or in the Assignment and Assumption pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. As of the Fourth Amendment Effective Date, the
amount of the Extended Commitments is $150,000,000.

“Extended Commitment Period”: the period from and including the Fourth Amendment
Effective Date to the Extended Termination Date.

“Extended Lenders”: Lenders with Extended Commitments and/or holding Loans or
L/C Obligations made in respect of the Extended Commitments.

“Extended Termination Date”: the third anniversary of the Fourth Amendment
Effective Date, subject, however, to earlier termination of the Total Commitment
pursuant of the terms of this Agreement.

“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Effective Rate”: for any day, the weighted average of the rates
on overnightrate calculated by the NYFRB based on such day’s federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, asby depositary institutions, as determined in such manner as the
NYFRB shall set forth on its public website from time to time, and published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day of such transactions received by PNC Bank, National
Association from three federal funds brokers of recognized standing selected by
it.NYFRB as the federal funds effective rate; provided that if the Federal Funds
Effective Rate is less than zero, it shall be deemed to be zero for purposes of
this Agreement.

“Financial Letter of Credit”: a letter of credit that is not a Performance
Letter of Credit.

“Financial Letter of Credit Sublimit”: at any time, a dollar amount equal to the
lesser of (a) 50% of the aggregate Commitments outstanding at such time and
(b) the L/C Commitments.

“Financial Services Subsidiary”: a Subsidiary engaged exclusively in mortgage
banking (including mortgage origination, loan servicing, mortgage broker and
title and escrow businesses), master servicing and related activities,
including, without limitation, a Subsidiary which facilitates the financing of
mortgage loans and mortgage-backed securities and the securitization of
mortgage-backed bonds and

 

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other activities ancillary thereto. Any Financial Services Subsidiary may
execute and deliver to the Administrative Agent a supplement to the Guarantee
and Collateral Agreement and become a Guarantor.

“Finished Lots”: Entitled Land with respect to which (a) work has been completed
in relation to such Entitled Land to such an extent that building permits at
each Unit on such Entitled Land may be obtained and (b) vertical construction
has not commenced.

“Flood Laws” means, collectively, (i) the National Flood Insurance Act of 1968,
(ii) the Flood Disaster Protection Act of 1973, (iii) the National Flood
Insurance Reform Act of 1994, and (iv) the Flood Insurance Reform Act of 2004,
in each case, as now or hereinafter in effect, and any successor statute
thereto.

“Foreign Benefit Arrangement”: any employee benefit arrangement mandated by
non-US law that is maintained or contributed to by any Group Member, any ERISA
Affiliate or any other entity related to a Group Member on a controlled group
basis.

“Foreign Plan”: each employee benefit plan (within the meaning of Section 3(3)
of ERISA, whether or not subject to ERISA) that is not subject to US law and is
maintained or contributed to by any Group Member, or ERISA Affiliate or any
other entity related to a Group Member on a controlled group basis.

“Foreign Plan Event”: with respect to any Foreign Benefit Arrangement or Foreign
Plan, (a) the failure to make or, if applicable, accrue in accordance with
normal accounting practices, any employer or employee contributions required by
applicable law or by the terms of such Foreign Benefit Arrangement or Foreign
Plan; (b) the failure to register or loss of good standing with applicable
regulatory authorities of any such Foreign Benefit Arrangement or Foreign Plan
required to be registered; or (c) the failure of any Foreign Benefit Arrangement
or Foreign Plan to comply with any material provisions of applicable law and
regulations or with the material terms of such Foreign Benefit Arrangement or
Foreign Plan.

“Fourth Amendment”: the Fourth Amendment to this Agreement, dated as of July 28,
2016, among the Borrower, the Lenders party thereto and the Administrative
Agent.

“Fourth Amendment Effective Date”: the date on which the Fourth Amendment became
effective, which date is July 28, 2016.

“Fronting Exposure”: at any time there is a Defaulting Lender, (a) with respect
to any Issuing Lender, such Defaulting Lender’s Percentage Interest of the
outstanding L/C Obligations with respect to Letters of Credit issued by such
Issuing Lender other than L/C Obligations as to which such Defaulting Lender’s
participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof, and (b) with respect to any
Swingline Lender, such Defaulting Lender’s Percentage Interest of outstanding
Swingline Loans made by such Swingline Lender other than Swingline Loans as to
which such Defaulting Lender’s participation obligation has been reallocated to
other Lenders..

“Funding Office”: the office of the Administrative Agent specified in
Section 10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.

“GAAP”: generally accepted accounting principles in the United States as in
effect from time to time; provided that if the Borrower notifies the
Administrative Agent that the Borrower requests

 

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an amendment to any provision hereof to eliminate the effect of any change
occurring after the Fourth Amendment Effective dDate hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.

“Governmental Authority”: any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive, legislative, judicial,
taxing, regulatory, or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.

“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to
be executed and delivered by each Guarantor, substantially in the form of
Exhibit A.

“Guarantors”: each direct or indirect Subsidiary of the Borrower except
Unrestricted Subsidiaries. The initial Guarantors are indicated on Schedule 1.1C
to this Agreement.

“Hazardous Substances”: all explosive or radioactive substances or wastes and
all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, infectious or medical wastes and all other substances
or wastes of any nature that are regulated pursuant to, or would give rise to
liability under, any Environmental Law.

“Hedging Obligations”: with respect to any Person, any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), (a) under any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party’s assets, liabilities,
or exchange transaction, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.

“Increased Facility Closing Date”: as defined in Section 2.21.

“Indebtedness”: with respect to any Person, at any date, without duplication,
(a) all liabilities and obligations, contingent or otherwise, of such Person,
(i) in respect of borrowed money, (ii) evidenced by bonds, notes, debentures or
similar instruments, (iii) representing the balance deferred and unpaid balance
of the purchase price of any property or services, except those incurred in the
ordinary course of its business that would constitute ordinarily a trade payable
to trade creditors (but specifically excluding from such exception the deferred
purchase price of Real Property Inventory), (iv) evidenced by bankers’
acceptances, (v) consisting of obligations, whether or not assumed, secured by
Liens or payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person, except Liens described in clauses
(b) through (f) of the definition of “Permitted Liens”, so long as the
obligations secured thereby are not more than sixty (60) days delinquent,
(vi) consisting of Capitalized Lease Obligations (including any Capitalized
Leases entered into as a part of a sale/leaseback transaction), (vii) consisting
of liabilities and obligations under any receivable sales transactions, (viii)

 

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consisting of a Financial Letter of Credit (but excluding Performance Letters of
Credit and performance or surety bonds) or a reimbursement obligation of such
Person with respect to any Financial Letter of Credit (but excluding Performance
Letters of Credit and performance or surety bonds), (ix) consisting of the net
obligations of such Person with respect to any Hedging Obligations,
(x) consisting of Off-Balance Sheet Liabilities or (xi) consisting of Contingent
Obligations; and (b) obligations of such Person to purchase Securities or other
property arising out of or in connection with the sale of the same or
substantially similar securities or property.

“Indemnified Liabilities”: as defined in Section 10.5.

“Indemnitee”: as defined in Section 10.5.

“Intangible Assets”: assets that are considered to be intangible assets under
GAAP, including, to the extent considered to be intangible assets under GAAP,
customer lists, goodwill, copyrights, trade names, trademarks, patents,
franchises and licenses.

“Intangible Tax Account”: a deposit account maintained by the Borrower with the
Collateral Agent or its designee (to which is credited only cash representing
the intangible taxes that would be payable with respect to any Mortgage recorded
in the State of Florida if the Obligations secured by such Mortgage were not
contingent) in which the Collateral Agent has (for the ratable benefit of the
Lenders and the Agents) a first priority security interest and Lien, perfected
by control pursuant to a Blocked Account Control Agreement, as collateral
security for the Obligations.

“Interest Coverage Ratio”: as of any date, for a rolling period of the most
recent four fiscal quarters for which financial statements are available, the
ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Incurred.

“Interest Payment Date”: (a) as to any ABR Loan (other than any Swingline Loan),
the last Business Day of each March, June, September and December to occur while
such Loan is outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last day
of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day that is three months, and a whole multiple
thereof, after the first day of such Interest Period and the last day of such
Interest Period, and (d) as to any Loan (other than any Revolving Loan that is
an ABR Loan and any Swingline Loan), the date of any repayment or prepayment
made in respect thereof and (e) as to any Swingline Loan, the day that such Loan
is required to be repaid.

“Interest Period”: as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter (or,
such other period as may be agreed to by all Lenders), as selected by the
Borrower in its notice of borrowing or notice of conversion, as the case may be,
given with respect thereto; and (b) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six months thereafter (or, such other period
as may be agreed to by all Lenders), as selected by the Borrower by irrevocable
notice to the Administrative Agent not later than 11:00 A.M., New York City
time, on the date that is three (3) Business Days prior to the last day of the
then current Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the following:

(i) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless the result of

 

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such extension would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the immediately preceding
Business Day;

(ii) prior to the Non-Extended Termination Date, the Borrower may not select an
Interest Period that would extend beyond the Non-Extended Termination Date and
on or after the Non-Extended Termination Date, the Borrower may not select an
Interest Period that would extend beyond the Extended Termination Date; and

(iii) any Interest Period 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 a calendar month.

“Interest Reserve”: (a) at any time that the Interest Coverage Ratio, as of the
last day of the most recently ended fiscal quarter, is less than 1.5 to 1.0, the
Minimum Liquidity Amount and (b) at any time that the Interest Coverage Ratio,
as of the last day of the most recently ended fiscal quarter, is more than 1.5
to 1.0, zero.

“Interest Reserve Account”: one or more deposit accounts or securities accounts
(to which are credited only cash and Cash Equivalents representing the Interest
Reserve) maintained by the Borrower with the Collateral Agent or its designee or
such other financial institution reasonably acceptable to the Collateral Agent
in which the Collateral Agent has (for the ratable benefit of the Lenders and
the Agents) a first priority security interest and Lien, perfected by control
pursuant to a Blocked Account Control Agreement, as collateral security for the
Obligations.

“Interpolated Rate”: as defined in the definition of “Eurodollar Base Rate”.

“Investment”: (a) the purchase or other acquisition of Capital Stock or other
securities of another Person, (b) a loan, advance, extension of credit (by way
of guarantee or otherwise) or capital contribution to another Person or (c) the
purchase or other acquisition of assets of another Person that constitute a
business unit. For purposes hereof, the book value of any Investment shall be
calculated in accordance with GAAP unless otherwise specified herein.

“Issuance Date”: the date of issuance of a Letter of Credit by an Issuing
Lender.

“Issuing Lender”: JPMorgan Chase Bank, N.A., in its capacity as issuer of any
Letter of Credit, and any other Lender approved by the Borrower that has agreed
in its sole discretion to act as an “Issuing Lender” hereunder, or, in each
case, any of their respective affiliates, in each case in its capacity as issuer
of any Letter of Credit and with respect to all or a portion of the L/C
Commitment (as agreed separately in writing with the Borrower). Each reference
herein to “the Issuing Lenders” shall be the collective reference to each
Issuing Lender.

“Issuing Lender Commitment”: (a) with respect to JPMorgan Chase Bank, N.A.,
$50,000,000 and (b) with respect to any other Issuing Lender, such amount as may
be separately agreed in writing by such Issuing Lender and the Borrower.

“Joint Venture”: any Person, other than a Subsidiary, in which the Borrower or a
Subsidiary holds any stock, partnership interest, joint venture interest,
limited liability company interest or other equity interest.

“L/C Commitment”: at any time, an amount equal to 50% of the amount of the Total
Commitments then in effect.

 

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“L/C Exposure”: at any time, the total L/C Obligations. The L/C Exposure of any
Lender at any time shall be its Percentage Interest of the total L/C Exposure at
such time.

“L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate
then undrawn and unexpired amount of the then outstanding Letters of Credit and
(b) the aggregate amount of drawings under Letters of Credit that have not then
been reimbursed pursuant to Section 3.5.

“L/C Participants”: the collective reference to all the Lenders other than the
applicable Issuing Lender.

“Lenders”: as defined in the preamble hereto and, as the context requires,
includes the Swingline Lender.; provided that at any point in time, “Lenders”
shall only include those Lenders that hold a Commitment at such time, or if the
Commitments have been terminated (or any portion thereof has expired and Lenders
with expired Commitments still hold a portion of the Borrowing Base Debt), the
Borrowing Base Debt at such time.

“Letters of Credit”: as defined in Section 3.1(a).

“Leverage Ratio”: the ratio, as of any date, of (a) Consolidated Debt minus
Unrestricted Cash, to the extent Unrestricted Cash exceeds the Interest Reserve,
divided by (b) Consolidated Debt plus Consolidated Tangible Net Worth minus
Unrestricted Cash, to the extent Unrestricted Cash exceeds the Interest Reserve.

“Lien”: any mortgage, deed of trust, pledge, hypothecation, assignment, deposit
arrangement, charge, encumbrance, lien (statutory or other), preference,
priority or other security agreement or similar preferential arrangement of any
kind or nature whatsoever (including without limitation any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the authorized filing by or
against a Person of any financing statement as debtor under the Uniform
Commercial Code or comparable law of any jurisdiction). For the avoidance of
doubt, a restriction, covenant, easement, right of way, or similar encumbrance
affecting any interest in real property owned by any Loan Party and which does
not secure an obligation to pay money is not a Lien.

“Liquidity”: at any time, the sum of all Unrestricted Cash held by the Loan
Parties and their respective Subsidiaries (other than Unrestricted
Subsidiaries).

“Loan”: any Revolving Loan made by any Lender or Swingline Loan made by the
Swingline Lender pursuant to this Agreement.

“Loan Documents”: this Agreement, the Security Documents, the Notes (if any),
all other documents (if any) from time to time executed and delivered by a Loan
Party that evidence, secure or guarantee any of the Obligations and any
amendment, waiver, supplement or other modification to any of the foregoing.

“Loan Parties”: as of any date, collectively, the Borrower and the Guarantors. A
“Loan Party” shall mean, the Borrower or any Guarantor, individually.

“Lots Under Development”: Entitled Land where physical site work has commenced
but which is not a Finished Lot, Unit Under Construction or Unit Under Contract.

 

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“Material Adverse Effect”: (a) a change, event or circumstance that could
reasonably be expected to result in a material adverse effect on the financial
condition of the Loan Parties and their respective Subsidiaries, taken as a
whole; (b) a material impairment of the ability of the Borrower or any other
Loan Party to perform its payment or other material obligations under any Loan
Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect, or enforceability against the Borrower or
any other Loan Party of any payment or material obligations of the Borrower or
such other Loan Party under any Loan Document to which it is a party.

“Minimum Liquidity Amount”: as defined in Section 7.1(b).

“Model Unit”: a Unit Under Construction to be used as a model home in connection
with the sale of Units in a residential housing project. “Mortgage”: each of the
mortgages, deeds of trust and similar instruments (including any spreader,
amendment, restatement or similar modification of any existing Mortgage) made by
any Loan Party in favor or for the benefit of Collateral Agent for the benefit
of itself and the Lenders, in form and substance reasonably satisfactory to
Collateral Agent and the Borrower.

“Mortgaged Property”: the Real Property Inventory of the Loan Parties, as to
which there has been granted, for the benefit of the Agents and the Lenders, a
Lien pursuant to a Mortgage. Mortgaged Property includes Qualified Real Property
Inventory.

“Multiemployer Plan”: any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“New Lender”: as defined in Section 2.21.

“New Lender Supplement”: as defined in Section 2.21.

“Non-Excluded Taxes”: as defined in Section 2.16(a).

“Non-Extended Commitment”: as to any Lender, the obligation of such Lender to
make Revolving Loans and participate in Letters of Credit during the
Non-Extended Commitment Period in an aggregate principal and/or face amount not
to exceed the amount set forth under the heading “Non-Extended Commitment”
opposite such Lender’s name on Schedule 1.1A or in the Assignment and Assumption
pursuant to which such Lender became a party hereto, as the same may be changed
from time to time pursuant to the terms hereof. As of the Fourth Amendment
Effective Date, the amount of the Non-Extended Commitments is $15,000,000.

“Non-Extended Commitment Period”: the period from and including the Fourth
Amendment Effective Date to the Non-Extended Termination Date.

“Non-Extended Lenders”: Lenders with Non-Extended Commitments and/or holding
Loans or L/C Obligations made in respect of the Non-Extended Commitments.

“Non-Extended Termination Date”: June 6, 2017, subject, however, to earlier
termination of the Total Commitment pursuant of the terms of this Agreement.

“Non-Recourse Indebtedness”: Indebtedness of a Loan Party for which its
liability is limited to the Real Property Inventory upon which it grants a Lien
to the holder of such Indebtedness as security for such Indebtedness (including,
in the case of Indebtedness of a Subsidiary that holds title to

 

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Real Property Inventory, liability of that Subsidiary and liabilities secured by
a pledge of the equity interests of such Subsidiary (if such Real Property
Inventory constitutes all or substantially all the assets of such Subsidiary)).

“Non-U.S. Lender”: as defined in Section 2.16(d).

“Notes”: the collective reference to any promissory note evidencing Loans.

“NYFRB”: the Federal Reserve Bank of New York.

“Obligations”: the unpaid principal of and interest on (including interest
accruing after the maturity of the Loans and Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Agents or to any Lender (or, in the case of
Specified Swap Agreements and Specified Cash Management Agreements, any
affiliate of any Lender), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, any other Loan Document,
the Letters of Credit, any Specified Swap Agreement, any Specified Cash
Management Agreement or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including all
fees, charges and disbursements of counsel to the Agents or to any Lender that
are required to be paid by the Borrower pursuant hereto) or otherwise.

“OECD”: the Organization of Economic Cooperation and Development.

“Off-Balance Sheet Liabilities”: (a) any repurchase obligation or liability of
such Person or any of its Subsidiaries with respect to accounts or notes
receivable sold by such Person or any of its Subsidiaries or (b) any liability
of such Person or any of its Subsidiaries under any financing lease, any
synthetic lease (under which all or a portion of the rent payments made by the
lessee are treated, for tax purposes, as payments of interest, notwithstanding
that the lease may constitute an operating lease under GAAP) or any other
similar lease transaction.

“Other Taxes”: any and all present or future stamp or documentary taxes, charges
or similar levies arising from any payment made hereunder or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document (including any interest, additions to tax or penalties
applicable thereto), except any such taxes that are described under clause
(ii) of the first sentence of Section 2.16(a) and that are imposed with respect
to an assignment or transfer (other than an assignment or transfer made pursuant
to Section 2.19).

“Operating Accounts”: one or more deposit accounts or securities accounts
maintained by the Borrower with the Collateral Agent or its designee or such
other financial institutions reasonably acceptable to the Collateral Agent in
which the Collateral Agent has for the ratable benefit of the Lenders and the
Collateral Agent a first priority security interest and Lien, perfected by
control pursuant to a Contingent Account Control Agreement, as collateral
security for the Obligations; provided that the Operating Accounts shall not
include (a) deposit accounts specifically and exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the benefit
of any Loan Party’s salaried employees, and (b) to the extent not subject to a
control agreement after exercise of commercially reasonable efforts by the
Borrower, zero balance accounts.

“Participant”: as defined in Section 10.6(c).

 

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“Participant Register”: as defined in Section 10.6(c).

“PBGC”: the Pension Benefit Guaranty Corporation established under Section 4002
of ERISA and any successor entity performing similar functions.

“Pension Plan”: any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA
Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding five plan years.

“Percentage Interest”: as to any Lender at any time, the percentage which such
Lender’s Commitment then constitutes of the Total Commitments or, at any time
after the Commitments shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender’s Loans then outstanding constitutes
of the aggregate principal amount of the Loans then outstanding; provided, that,
in the event that the Loans are paid in full prior to the reduction to zero of
the Borrowing Base Debt, the Percentage Interests shall be determined in a
manner designed to ensure that the remaining Borrowing Base Debt shall be held
by the Lenders on a comparable basis. Notwithstanding the foregoing, when a
Defaulting Lender shall exist, the Percentage Interest of any Lender shall, for
purposes of the definition of “Available Commitment”, the definition of “L/C
Exposure” and Section 3.4(a) be adjusted to give effect to any reallocation
effected pursuant to Section 2.20.

“Performance Letter of Credit”: any letter of credit issued: (a) on behalf of a
Person in favor of a Governmental Authority, including any utility, water, or
sewer authority, or other similar entity, for the purpose of assuring such
Governmental Authority that such Person or an Affiliate of such Person will
properly and timely complete work it has agreed to perform for the benefit of
such Governmental Authority; (b) in lieu of cash deposits to obtain a license,
in place of a utility deposit, or for land option contracts; (c) in lieu of
other contract performance, to secure performance warranties payable upon
breach, and to secure the performance of labor and materials, including
construction, bid, and performance bonds; or (d) to secure refund or advance
payments on contractual obligations where default of a performance-related
contract has occurred.

“Permitted Acquisition”: any Acquisition (other than by means of a hostile
takeover, hostile tender offer or other similar hostile transaction) of a
business or entity engaged primarily in the Business or a business reasonably
related thereto or a reasonable extension thereof, in respect of which the
majority of shareholders (or other equity interest holders), the board of
directors or other governing body thereof approves such Acquisition, provided
that, immediately before and after giving effect to such Acquisition, no Default
or Event of Default has occurred and is continuing.

“Permitted Liens”:

(a) Liens existing on the Fourth Amendment Effective dDate of this Agreement and
described on Schedule 1.1B hereto and Liens, if any, granted to secure the
Obligations;

(b) Liens imposed by Governmental Authorities for taxes, assessments or other
charges (other than any such obligation imposed pursuant to Section 430(k) of
the Code or 303(k) of ERISA) not yet subject to penalty or which are being
contested in good faith and by appropriate proceedings, if adequate reserves
with respect thereto are maintained on the books of the Borrower in accordance
with GAAP;

 

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(c) statutory liens of carriers, warehousemen, mechanics, materialmen,
landlords, repairmen or other like Liens arising by operation of law (even if
pursuant to additional notices or filings authorized by statute) in the ordinary
course of business provided that (i) the underlying obligations are not overdue
or (ii) such Liens are being contested in good faith and by appropriate
proceedings and adequate reserves with respect thereto are maintained on the
books of the Borrower in accordance with GAAP; provided that the aggregate
amount of Liens outstanding at any time pursuant to this clause (ii) shall in no
event exceed the lesser of (x) $20,000,00030,000,000 and (y) from and after the
ClosingFourth Amendment Effective Date, 15% of the Borrowing Base (with the
Borrowing Base calculated without including any amounts pursuant to clause
(a) of the definition of “Borrowing Base”) at such time;

(d) Liens securing the performance of bids, trade contracts (other than borrowed
money or the purchase price of property or services), leases, statutory
obligations, surety and appeal bonds, performance bonds (including Construction
Bonds) and other obligations of a like nature incurred in the ordinary course of
business;

(e) Liens in favor of surety bond companies pursuant to indemnity agreements to
secure the reimbursement obligations of any of the Loan Parties on Construction
Bonds, provided (A) the Liens securing Construction Bonds shall be limited to
the assets of, as appropriate, the applicable Loan Parties at, and the rights
of, as appropriate, the applicable Loan Parties arising out of, the projects
that are the subject of the Construction Bonds, (B) the Liens shall not attach
to any real estate and (C) the aggregate amount of such Liens at any time shall
not exceed the dollar amount of Construction Bonds then outstanding;

(f) easements, rights-of-way, zoning restrictions, assessment district or
similar Liens in connection with municipal financing or community development
bonds, and similar restrictions, encumbrances or title defects which, singly or
in the aggregate, do not in any case materially detract from the value of the
real estate subject thereto (as such real estate is used by any Loan Party) or
interfere with the ordinary conduct of the business of the Loan Parties or, for
any particular property, which are identified in a Title Insurance Policy
covering such property;

(g) pledges or deposits made in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other types of social
security legislation;

(h) Liens securing Indebtedness of a Person existing at the time such Person
becomes a Loan Party or is merged with or into a Loan Party and Liens on assets
or properties at the time of acquisition thereof, provided that such Liens were
in existence prior to the date of such acquisition, merger or consolidation,
were not incurred in anticipation thereof and do not extend to any other assets;

(i) Liens securing Non-Recourse Indebtedness and other Liens securing Secured
Indebtedness permitted under this Agreement, including, without limitation, any
Liens (and associated Secured Indebtedness) pursuant to development agreements
or land contracts for the purchase or sale of real property, which secure
(i) the return of a land deposit from another builder and/or developer,
(ii) development obligations, (iii) the deferred purchase price of land or other
payments due to the seller pursuant to a contract for the purchase of real
property and (iv) other similar Liens in connection with development agreements
or land contracts for the purchase or sale of real property; provided that, in
each case, such Liens do not extend to assets other than such real property;

 

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(j) Liens securing obligations of any Loan Party to any third party in
connection with (i) Profit and Participation Agreements, (ii) any option or
right of first refusal to purchase real property or marketing deed of trust
granted to the master developer or the seller of real property that arises as a
result of the non-use or non-development of such real property by such Loan
Party or relates to the coordinated marketing and promotion by the master
developer, or (iii) joint development agreements with third parties to perform
and/or pay for or reimburse the costs of construction and/or development related
to or benefiting any Loan Party’s property and property belonging to such third
parties, in each case entered into in the ordinary course of such Loan Party’s
business;

(k) Liens securing Indebtedness incurred to refinance any Indebtedness that was
previously so secured by a Lien and permitted hereunder (which refinancing
Indebtedness may exceed the amount refinanced, provided such refinancing
Indebtedness is otherwise permitted under this Agreement) upon terms and
conditions substantially similar to the terms of the Lien securing such
refinanced Indebtedness immediately prior to it having been so refinanced;

(l) Liens arising pursuant to vexatious, frivolous or meritless claims, suits,
actions or filings, or other similar bad faith actions, taken by a Person not an
Affiliate of the Borrower; provided that a Loan Party is disputing such Lien in
good faith and by appropriate proceedings;

(m) Liens securing Hedging Obligations arising in the ordinary course of
business of a Loan Party and not for speculative purposes;

(n) Liens securing obligations of a Loan Party arising in connection with
letters of credit and/or letter of credit facilities;

(o) Liens securing Capitalized Lease Obligations entered into in the ordinary
course of business and that do not extend to assets other than the assets that
are the subject of the applicable Capital Lease;

(p) Liens of landlords, arising solely by operation of law, on fixtures and
moveable property located on premises leased in the ordinary course of business;
provided, however, that the rental payments secured thereby are not yet due;

(q) Liens arising as a result of a judgment or judgments against the Borrower or
any of the Guarantors which do not in the aggregate exceed $2,500,00010,000,000
at any one time outstanding, which are being diligently contested in good faith,
which are not the subject of any attachment, levy or enforcement proceeding, and
as to which appropriate reserves have been established in accordance with GAAP;

(r) Liens securing payments required to be made by Loan Parties to CDDs with
respect to bonds issued by such CDDs; and

(s) Liens securing other Indebtedness or obligations in an amount not in excess
of $15,000,00020,000,000 in the aggregate.; and

(t) Liens (i) of a collecting bank arising in the ordinary course of business
under Section 4-210 of the Uniform Commercial Code in effect in the relevant
jurisdiction covering only the items being collected upon or (ii) in favor of a
banking institution arising as a matter of law, encumbering amounts credited to
deposit or securities accounts (including the right of set-off) and which are
within the general parameters customary in the banking industry.

 

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“Permitted Refinancing”: with respect to all or any portion of any Indebtedness,
any modification, refinancing, refunding, renewal or extension of such
Indebtedness; provided that (i) the principal amount thereof does not exceed the
principal amount of the Indebtedness so modified, refinanced, refunded, renewed
or extended (plus any accrued but unpaid interest, fees and redemption premiums
payable by the terms of such Indebtedness thereon and reasonable expenses
incurred in connection therewith), (ii) such modification, refinancing,
refunding, renewal or extension has (x) a final maturity date equal to or later
than the later of (A) the final maturity date of the Indebtedness being
modified, refinanced, refunded, renewed or extended and (B) the date that is six
months after the Extended Termination Date and (y) has a weighted average life
to maturity equal to or greater than the weighted average life to maturity of
the Indebtedness being modified, refinanced, refunded, renewed or extended,
(iii) if the Indebtedness being modified, refinanced, refunded, renewed or
extended is subordinated in right of payment to the Obligations, such
modification, refinancing, refunding, renewal or extension is subordinated in
right of payment to the Obligations on terms at least as favorable on the whole
to the Lenders as those contained in the documentation governing the
Indebtedness being modified, refinanced, refunded, renewed or extended, (iv) the
terms and conditions of any such modified, refinanced, refunded, renewed or
extended Indebtedness are market terms on the date of issuance (as determined in
good faith by the Borrower) or are not, taken as a whole, materially more
restrictive than the covenants and events of default contained in this Agreement
(as determined in good faith by the Borrower), (v) such modification,
refinancing, refunding, renewal or extension shall not be incurred by a Person
who is not a Guarantor (unless such Indebtedness being refinanced was originally
incurred or guaranteed by a Person who was not a Guarantor) and (vi) at the time
thereof, no Default or Event of Default shall have occurred and be continuing.

“Person”: any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or
other entity.

“Plan”: any employee benefit plan as defined in Section 3(3) of ERISA, including
any employee welfare benefit plan (as defined in Section 3(1) of ERISA), any
employee pension benefit plan (as defined in Section 3(2) of ERISA but excluding
any Multiemployer Plan), and any plan which is both an employee welfare benefit
plan and an employee pension benefit plan, and in respect of which any Loan
Party or any ERISA Affiliate is (or, if such Plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in section 3(5)
of ERISA.

“Prime Rate”: the rate of interest per annum publicly announced from time to
time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal
office in New York City (the Prime Rate not being intended to be the lowest rate
of interest charged by JPMorgan Chase Bank, N.A. in connection with extensions
of credit to debtors).

“Profit and Participation Agreement”: an agreement, secured by a deed of trust,
mortgage or other Lien against a property or asset, with respect to which the
purchaser of such property or asset agrees to pay the seller of such property or
asset a profit, price, premium participation or other similar amount in respect
of such property or asset.

“Prohibited Transaction”: as defined in Section 406 of ERISA and Section 4975(c)
of the Code.

“Property”: any right or interest in or to property of any kind whatsoever,
whether real property, personal or mixed and whether tangible or intangible.

“Qualified Real Property Inventory”: as of any date, Real Property Inventory
that is owned solely by Loan Parties, is not subject to or encumbered by any
deed of trust, mortgage, judgment

 

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Lien, or any other Lien (other than (x) the Permitted Liens described in clauses
(b), (c), (f), (p) or (r) of the definition of “Permitted Liens” and (y) solely
with respect to the properties described on Exhibit A of the Collateral
Assignment (as defined below), Permitted Liens described in clause (i)(iii) of
the definition of “Permitted Liens”; provided that with respect to this clause
(y), such Permitted Liens and any obligations described in clause (i)(iii) of
the definition of “Permitted Liens” are expressly subordinated to the Liens
securing the Obligations and the Obligations, respectively, on terms reasonably
acceptable to the Administrative Agent) and with respect to which:

(a) the Administrative Agent shall have received an Acceptable Appraisal;

(b) the Collateral Agent shall have received environmental assessment reports,
in form and substance reasonably satisfactory to the Collateral Agent from an
environmental consulting firm reasonably satisfactory to the Collateral Agent,
and within 15 days after such reports are made available to the Collateral
Agent, the Collateral Agent shall not have received notice from the Required
Lenders that such reports or firm are (is) not satisfactory to the Required
Lenders;

(c) the Collateral Agent shall have received, upon its request, a copy of all
recorded documents referred to, or listed as exceptions to title in, the Title
Insurance Policy (as defined in clause (e) below) and a copy of all other
material documents affecting such Real Property Inventory;

(d) the Collateral Agent shall have received (i) a Mortgage covering such Real
Property Inventory duly executed and delivered by a duly authorized officer of
each party thereto that is recorded and filed in the appropriate offices in
order to create valid and perfected first priority Liens on such Real Property
Inventory in favor of the Collateral Agent, (ii) a Title Insurance Policy with
respect to such Qualified Real Property Inventory, or (iii) other evidence
reasonably satisfactory to the Collateral Agent that such Mortgage has been
recorded and filed and the Collateral Agent shall have received such other
evidence that all other actions that the Collateral Agent may reasonably deem
necessary or desirable in order to create valid and perfected first priority
Liens on such Real Property Inventory have been taken;

(e) the Collateral Agent shall have received from a title insurance company
acceptable to the Collateral Agent (the “Title Insurance Company”) in respect of
such Real Property Inventory a Title Insurance Policy in form and substance
reasonably satisfactory to the Collateral Agent;

(f) the Collateral Agent shall have received evidence satisfactory to it that
such Real Property Inventory is covered by property and liability insurance that
is reasonably satisfactory to the Collateral Agent and, in the case of property
insurance, names the Collateral Agent an additional insured and as mortgagee;

(g) the Collateral Agent shall have received evidence satisfactory to it that
all premiums in respect of the policies referred to in clause (e) above, all
charges for mortgage recording tax, documentary tax, intangible tax, recording
charges and all related expenses, if any, have been paid or have been provided
for;

(h) the Collateral Agent shall have received (i) a life of loan standard flood
hazard determination, (ii) a policy of flood insurance to the extent
improvements on such Real Property Inventory are located in a federally
designated “special flood hazard area”, which policy provides coverage in an
amount reasonably satisfactory to the Collateral Agent, (iii) to the extent

 

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improvements on such Real Property Inventory are located in a federally
designated “special flood hazard area”, confirmation that the Borrower or the
applicable Guarantor has received the notice required pursuant to applicable
Flood Laws and (iv) evidence satisfactory to the Collateral Agent that all
actions relating such Real Property Inventory as are required by applicable
Flood Laws with respect to loans secured by property located in areas having
special flood hazards have been accomplished;

(i) the Collateral Agent shall have received an opinion letter from local
counsel reasonably requested by the Collateral Agent addressed to the Agents and
the Lenders (i) in the jurisdiction in which such Real Property Inventory is
located with respect to the enforceability, validity and form of the Mortgage in
respect of such Real Property Inventory and any related fixture filings and such
other matters as are reasonably requested by the Collateral Agent and (ii) in
the jurisdiction where the applicable owner of such Real Property Inventory is
organized covering such matters with respect to the transactions contemplated
hereby as each Lender and the Agents or their respective counsel may reasonably
require, all in form and substance reasonably satisfactory to the Collateral
Agent;

(j) the Borrower shall have executed and delivered or caused to be executed and
delivered at Borrower’s sole cost and expense, any reports, financing or
continuation statements and other agreements, amendments, documents,
assignments, statements or instruments in each case in form and substance
satisfactory to the Collateral Agent as may be reasonably necessary to evidence,
perfect or otherwise implement and maintain the Lien on such Real Property
Inventory as collateral security for the Obligations;

(k) except for (i) Real Property Inventory owned as of the ClosingFourth
Amendment Effective Date and (ii) Real Property Inventory purchased with
Borrowing Base Cash or proceeds from the Collateral Proceeds Account, 90 days
shall have passed from the date on which the applicable mortgage is properly
recorded in the applicable real property records; and

(l) for Qualified Real Property Inventory located in the State of Florida, the
Borrower shall have on deposit in the Intangible Tax Account the amount of
Florida intangible taxes that would be payable with respect to such Mortgage if
the Obligations secured by such Mortgage were not contingent; provided that the
requirements of this clause (l) (i) shall not go into effect until after
June 30, 2015 and (ii) shall notshall only be applicable at any time after the
Fourth Amendment Effective Date that the Interest Coverage Ratio (as of the last
day of the most recently ended fiscal quarter) is greaterless than 1.5 to 1.0.

“Real Property Inventory”: as of any date, land (including improvements under
construction on such land) that is owned by any Loan Party, which land is being
developed or held for future development or sale, together with the right, title
and interest of such Loan Party in and to the streets, the land lying in the bed
of any streets, roads or avenues, open or proposed, in or of, the air space and
development rights pertaining thereto and the right to use such air space and
development rights, all rights of way, privileges, liberties, tenements,
hereditaments and appurtenances belonging in or in any way appertaining thereto,
all fixtures, all easements now or hereafter benefiting such land and all
royalties and rights appertaining to the use and enjoyment of such land
necessary for the residential development of such land, together with all of the
buildings and other improvements now or hereafter erected on such land, and any
fixtures appurtenant thereto and all related personal property.

“Recent Balance Sheet”: as defined in Section 4.8.

“Refunded Swingline Loans”: as defined in Section 2.4(b).

 

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“Register”: as defined in Section 10.6(b).

“Regulations U and X”: Regulations U and X of the Board as in effect from time
to time.

“Reimbursement Obligation”: the obligation of the Borrower to reimburse the
applicable Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.

“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Reportable Event”: a reportable event as defined in Section 4043 of ERISA and
the regulations issued under such section, with respect to a Plan, excluding,
however, such events as to which the PBGC by regulation waived the requirement
of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence
of such event, provided, however, that a failure to meet the minimum funding
standard of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.

“Required Lenders”: subject to Section 2.20(a)(i), at any time, the holders of
more than fifty percent (50%) of the Total Commitments then in effect or, if the
Commitments have been terminated (or any portion thereof has expired and Lenders
with expired Commitments still hold a portion of the Borrowing Base Debt), the
Borrowing Base Debt at such time; provided that at any time when two or more
Lenders (excluding Defaulting Lenders) are party to this Agreement, the
“Required Lenders” shall in no event mean fewer than two Lenders.

“Requirement of Law”: any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

“Restricted Payments”: with respect to any Person, any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or any payment on account of, including any sinking or other analogous fund for,
the purchase, redemption, defeasance, retirement or other acquisition of, any
Capital Stock of any Person or any of its Subsidiaries, or any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of such Person or any of its Subsidiaries.

“Restricted Subsidiaries”: as of any date, the Subsidiaries of the Borrower and
any other Loan Party which are not Unrestricted Subsidiaries.

“Revolving Credit Exposure”: with respect to any Lender at any time, the sum of
(a) the outstanding principal amount of such Lender’s Revolving Loans then
outstanding, and (b) such Lender’s Swingline Exposure at such time and (c) such
Lender’s L/C Exposure at such time.

“Revolving Loans”: as defined in Section 2.1(a).

“Sanctioned Country”: at any time, a country or territory that is the subject or
target of any Sanctions.

“Sanctioned Person”: at any time, (a) any Person listed in any Sanctions-related
list of designated Persons maintained by the Office of Foreign Assets Control of
the U.S. Department of the

 

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Treasury or the U.S. Department of State, (b) any Person operating, organized or
resident in a Sanctioned Country or (c) any Person controlled by any such
Person.

“Sanctions”: economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State.

“SEC”: the Securities and Exchange Commission, any successor thereto.

“Secured Indebtedness”: as of any date, any Indebtedness of a Loan Party
(excluding Indebtedness (i) owing to the Borrower or any Guarantor or (ii) owing
under the Loan Documents) that is secured by a Lien on assets of the Borrower or
any Loan Party, valued at the lower of the value of such assets or the aggregate
principal amount of such Indebtedness outstanding.

“Security Documents”: collectively, the Guarantee and Collateral Agreement, the
Mortgages, the Blocked Account Control Agreements, the Contingent Account
Control Agreements and all other security documents hereafter delivered to the
Collateral Agent granting a Lien on any property of the Borrower or a Guarantor
to secure the Obligations (in the case of the Borrower), or of the amounts
guaranteed by the Guarantee and Collateral Agreement (in the case of a
Guarantor), as the same shall be amended, amended and restated, or supplemented
in accordance herewith or therewith.

“Solvent”: when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the “present fair saleable value” of the assets
of such Person will, as of such date, exceed the amount of all “liabilities of
such Person, contingent or otherwise”, as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the probable liability of such Person on its debts
as such debts become absolute and matured, (c) such Person will not have, as of
such date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) “debt” means liability on a “claim”, and
(ii) “claim” means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or
(y) right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.

“Specified Cash Management Agreement”: any agreement providing for treasury,
depositary, purchasing card or cash management services, including in connection
with any automated clearing house transfers of funds or any similar transactions
between the Borrower or any Guarantor and any Lender or affiliate thereof, which
has been designated by such Lender and the Borrower, by notice to the
Administrative Agent not later than 90 days after the execution and delivery by
the Borrower or such Guarantor, as a “Specified Cash Management Agreement”.

“Specified Swap Agreement”: any Swap Agreement in respect of interest rates that
is (a) designated by notice to the Administrative Agent as a “Specified Swap
Agreement” by the Borrower within 30 days of entry into such Swap Agreement and
(b) entered into by the Borrower or any Guarantor and any Person that is a
Lender or an affiliate of a Lender at the time such Swap Agreement is entered
into.

“Speculative Unit”: any Unit Under Construction that is not a Unit Under
Contract and excluding all Model Units.

 

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“Subsidiary”: as to any Person, a corporation, limited liability company or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, limited
liability company or other entity are at the time owned, or the management of
which is otherwise controlled, directly or indirectly, through one or more
intermediaries, or both, by such Person, and including all Subsidiaries of
Subsidiaries of such Person; provided, however, that, as to the Borrower and any
subsidiary of the Borrower, “Subsidiary” shall in no event include a homeowner’s
association in which the Borrower or a subsidiary does not own stock or other
ownership interest.

“Swap Agreement”: any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or any of
its Subsidiaries shall be a “Swap Agreement”.

“Swap Termination Value”: in respect of any one or more agreements relating to
Hedging Obligations, after taking into account the effect of any legally
enforceable netting agreement relating to such agreements, (a) for any date on
or after the date such agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date of determination prior to the date referenced in clause (a), the amounts(s)
determined as the mark to market values(s) for such agreements, as determined
based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such agreements.

“Swingline Commitment”: the obligation of the Swingline Lender to make Swingline
Loans pursuant to Section 2.3 in an aggregate principal amount at any one time
outstanding not to exceed $30,000,000.

“Swingline Exposure”: at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
in respect of any Swingline Loan shall be its Percentage Interest of the
principal amount of such Swingline Loan.

“Swingline Lender”: JPMorgan Chase Bank, N.A., in its capacity as the lender of
Swingline Loans.

“Swingline Loans”: as defined in Section 2.3.

“Swingline Participation Amount”: as defined in Section 2.4.

“Termination Date”: the third anniversary of the Closing Date, subject, however,
to earlier termination of the Total Commitment pursuant of the terms of this
AgreementNon-Extended Termination Date or the Extended Termination Date, as
applicable.

“Title Insurance Policy”: an ALTA 2006 loan policy of title insurance or marked
up unconditional commitment for such insurance, or other mortgagee’s title
insurance policy (or policies) in form and substance reasonably satisfactory to
Collateral Agent and containing such endorsements as Collateral Agent may
reasonably request, provided that: (a) with respect to any Real Property
Inventory on which work has commenced, Borrower shall have no obligation to
obtain mechanic’s lien coverage; (b) with respect to any Real Property Inventory
located in Florida, notices of commencement filed against

 

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such Real Property Inventory shall be a permitted exception; and (c) with
respect to any Real Property Inventory with respect to which a survey or a
building plat does not exist, Borrower shall have no obligation to provide any
of the following endorsements unless the Title Insurance Company can issue the
same without a survey (and the Borrower agrees to execute any affidavit or
certificate reasonably requested by the Title Insurance Company in order to
issue any such endorsements): zoning, comprehensive, same as survey, access and
entry, contiguity, location or utility access.

“Total Commitments”: at any time, the aggregate amount of the Commitments then
in effect.

“TPG”: TPG Aviator, L.P., the record holder of approximately 4243% of the
Borrower’s Capital Stock as of the Fourth Amendment Effective Date.

“Transferee”: any Assignee or Participant.

“Type”: as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

“Uniform Commercial Code”: the Uniform Commercial Code, as the same may, from
time to time, be in effect in the State of New York; provided, however, that in
the event that, by reason of mandatory provisions of law, any or all of the
perfection or priority of the security interest in any collateral provided
pursuant to this Agreement is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, the term “Uniform
Commercial Code” shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or priority (but not attachment) and for purposes of definitions
related to such provisions.

“Unit”: Qualified Real Property Inventory that is, or is planned to be,
comprised of a single family residential housing unit.

“United States”: the United States of America.

“Unit Under Construction”: a Unit where on-site work has commenced as evidenced
by the trenching of foundations for such Unit, other than a Unit Under Contract.

“Unit Under Contract”: a Unit as to which the Borrower or Guarantor owning such
Unit has entered into a bona fide contract of sale (a) in a form customarily
employed by the Borrower or such Guarantor, (b) not more than twelve (12) months
after the date of such contract and (c) with a Person who is not a Subsidiary or
Affiliate of the Borrower (other than any contract entered into with TPG or any
other Affiliate of the Borrower (other than a Guarantor) in the ordinary course
of business and pursuant to the reasonable requirements of the business of the
Borrower or such Guarantor and upon fair and reasonable terms no less favorable
to the Borrower or such Guarantor than the Borrower or such Guarantor would
obtain in a comparable arms’-length transaction).

“Unrestricted Cash”: cash and Cash Equivalents of the Loan Parties that are free
and clear of all Liens and not subject to any restrictions on the use thereof to
pay Indebtedness and other obligations of the applicable Loan Party; provided
that cash and Cash Equivalents included in the Interest Reserve shall be deemed
Unrestricted Cash so long as such cash and Cash Equivalents are held in the
Interest Reserve Account and are free and clear of all Liens other than Liens in
favor of the Collateral Agent.

 

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“Unrestricted Subsidiary”: (a) each of the Subsidiaries listed as an
Unrestricted Subsidiary on Schedule 4.12 hereto and (b) any other Subsidiary
hereafter designated by the Borrower (evidenced by resolutions of the board of
directors or the executive committee of the board of directors of the Borrower,
delivered to the Administrative Agent, certifying that such designation does not
violate any provision of this Agreement (including Section 7.4(g)) as an
Unrestricted Subsidiary; provided that no Subsidiary that guarantees any
existing or future senior notes of the Borrower or any other Loan Party shall be
designated as an Unrestricted Subsidiary.

“Voting Stock”: with respect to any Person, securities of any class of Capital
Stock of such Person entitling the holders thereof (whether at all times or only
so long as no senior class of stock has voting power by reason of any
contingency) to vote in the election of members of the board of directors of
such Person.

“Write-Down and Conversion Powers”: with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

1.2 Other Definitional Provisions.

(a) Unless otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the other Loan Documents or any
certificate or other document made or delivered pursuant hereto or thereto.

(b) As used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting terms
relating to any Loan Party not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP (provided that all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without
giving effect to (i) any election under Accounting Standards Codification
825-10-25 (previously referred to as Statement of Financial Accounting Standards
159) (or any other Accounting Standards Codification or Financial Accounting
Standard having a similar result or effect) to value any Indebtedness or other
liabilities of the Borrower or any Subsidiary at “fair value”, as defined
therein and (ii) any treatment of Indebtedness in respect of convertible debt
instruments under Accounting Standards Codification 470-20 (or any other
Accounting Standards Codification or Financial Accounting Standard having a
similar result or effect) to value any such Indebtedness in a reduced or
bifurcated manner as described therein, and such Indebtedness shall at all times
be valued at the full stated principal amount thereof, (ii) the words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”, (iii) the word “incur” shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer to exist (and the words
“incurred” and “incurrence” shall have correlative meanings), (iv) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, accounts, leasehold interests and
contract rights, and (v) references to agreements or other Obligations shall,
unless otherwise specified, be deemed to refer to such agreements or Obligations
as amended, supplemented, restated or otherwise modified from time to time.

(c) The words “hereof”, “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

 

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(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

2.1 Commitments.

(a) Subject to the terms and conditions hereof, each Lender severally agrees to
make revolving credit loans (“Revolving Loans”) to the Borrower from time to
time during the applicable Commitment Period in an aggregate principal amount at
any one time outstanding which, when added to such Lender’s Revolving Credit
Exposure, and after giving effect to the proposed Revolving Loan and application
of the proceeds thereof to the repayment of any outstanding Obligations,
(A) does not exceed the amount of such Lender’s Commitment and (B) does not
cause the Borrowing Base Availability to become less than zero. For the
avoidance of doubt, during the Non-Extended Commitment Period, the Revolving
Loans shall be made pro rata among the Non-Extended Lenders and the Extended
Lenders according to their respective Commitments and from and after the
Non-Extended Commitment Period, the Revolving Loans shall be made pro rata among
the Extended Lenders only according to their respective Commitments. During the
Commitment Periods, the Borrower may use the Commitments by borrowing, prepaying
the Revolving Loans in whole or in part, and reborrowing, all in accordance with
the terms and conditions hereof. The Revolving Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.9.

(b) The Borrower shall repay all outstanding Revolving Loans on theeach
Termination Date.; provided that on the Non-Extended Termination Date and
notwithstanding the requirements of Section 5.3(b) and (c), the Borrower may
elect (subject to Section 3.4(a)) to cashlessly roll the outstanding Revolving
Loans of the Extended Lenders into new Revolving Loans.

(c) The Non-Extended Commitments shall terminate on the Non-Extended Termination
Date and the Extended Commitments shall terminate on the Extended Termination
Date.

2.2 Procedure for Revolving Loan Borrowing. The Borrower may borrow under the
Commitments during the Extended Commitment Period on any Business Day, provided
that the Borrower shall give the Administrative Agent irrevocable notice (which
notice must be received by the Administrative Agent prior to (a) 1:00 p.m., New
York City time, three (3) Business Days prior to the requested Borrowing Date,
in the case of Eurodollar Loans, or (b) 12 Noon, New York City time, on the
requested Borrowing Date, in the case of ABR Loans), specifying (i) the amount
and Type of Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in
the case of Eurodollar Loans, the respective amounts of each such Type of Loan
and the respective lengths of the initial Interest Periods therefor. Unless
notice of one or more Eurodollar Loans is given at least three (3) Business Days
prior to the Closing Date, any Loans made on the Closing Date shall initially be
ABR Loans. Each borrowing under the Commitments shall be in an amount equal to
(x) in the case of ABR Loans, $100,000 or any larger amount which is an even
multiple of $100,000 (or, if the then aggregate Available Commitments are less
than $100,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$1,000,000 or a whole multiple of $100,000 in excess thereof; provided, that the
Swingline Lender may request, on behalf of the Borrower, borrowings under the
Commitments that are ABR Loans in other amounts pursuant to Section 2.4. Upon
receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify each Lender (or after the Non-Extended Termination Date, each
Extended Lender) thereof. Each Lender will make the amount of its pro rata share
of each borrowing available to the Administrative Agent for the account of the
Borrower at the Funding Office prior to 2:00 P.M., New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such

 

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borrowing will then be made available to the Borrower by the Administrative
Agent crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent or by
otherwise transferring such amounts as the Borrower shall direct.

2.3 Swingline Commitment[Reserved].

(a) Subject to the terms and conditions hereof, the Swingline Lender agrees to
make a portion of the credit otherwise available to the Borrower under the
Commitments from time to time during the Commitment Period by making swing line
loans (“Swingline Loans”) to the Borrower; provided that (i) the aggregate
principal amount of Swingline Loans outstanding at any time shall not exceed the
Swingline Commitment then in effect (notwithstanding that the Swingline Loans
outstanding at any time, when aggregated with the Swingline Lender’s other
outstanding Revolving Loans, may exceed the Swingline Commitment then in
effect), (ii) the Borrower shall not request, and the Swingline Lender shall not
make, any Swingline Loan if, after giving effect to the making of such Swingline
Loan, the aggregate amount of the Available Commitments would be less than zero,
and (iii) the Borrower shall not request, and the Swingline Lender shall not
make, any Swingline Loan if, after giving effect to the making of such Swingline
Loan, the Borrowing Base Availability would be less than zero. During the
Commitment Period, the Borrower may use the Swingline Commitment by borrowing,
repaying and reborrowing, all in accordance with the terms and conditions
hereof. Swingline Loans shall be ABR Loans only.

(b) The Borrower shall repay to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of the Termination Date, the tenth
(10th) Business Day after such Swingline Loan is made, or the date that the next
Revolving Loan is borrowed.

2.4 Procedure for Swingline Borrowing; Refunding of Swingline Loans[Reserved].

(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans
it shall give the Swingline Lender irrevocable telephonic notice (or electronic
mail notice in conformance with the Administrative Agent’s policies and advance
documentation therefor in effect from time to time) confirmed promptly in
writing (which telephonic notice must be received by the Swingline Lender not
later than 1:00 P.M., New York City time, on the proposed Borrowing Date),
specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date
(which shall be a Business Day during the Commitment Period). Each borrowing
under the Swingline Commitment shall be in an amount equal to $100,000 or a
whole multiple of $100,000 in excess thereof. On the Borrowing Date specified in
a notice in respect of Swingline Loans, the Swingline Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the amount of the Swingline Loan to be made
by the Swingline Lender. The Administrative Agent shall make the proceeds of
such Swingline Loan available to the Borrower on such Borrowing Date by
depositing such proceeds in the account of the Borrower with the Administrative
Agent or as otherwise directed by the Borrower on such Borrowing Date in
immediately available funds.

(b) The Swingline Lender, at any time and from time to time in its sole and
absolute discretion may (and, not later than three (3) Business Days after the
making of a Swingline Loan, shall), on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), on one
(1) Business Day’s notice given by the Swingline Lender no later than 12:00
Noon, New York City time, request each Lender to make, and each Lender hereby
agrees to make, a Revolving Loan, in an amount equal to such Lender’s Percentage
Interest of the aggregate amount of the Swingline Loans (the “Refunded Swingline
Loans”) outstanding on the date of such notice, to repay the Swingline Lender.
Each Lender shall make the amount of such Revolving Loan available to the
Administrative Agent at the

 

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Funding Office in immediately available funds, not later than 10:00 A.M., New
York City time, one (1) Business Day after the date of such notice. The proceeds
of such Revolving Loans shall be immediately made available by the
Administrative Agent to the Swingline Lender for application by the Swingline
Lender to the repayment of the Refunded Swingline Loans. If the amounts received
from the Lenders are not sufficient to repay in full such Refunded Swingline
Loans, then the Borrower shall pay such difference to the Administrative Agent
within two (2) Business Days of notice from the Administrative Agent, which
payments shall be made available by the Administrative Agent to the Swingline
Lender to repay the Refunded Swingline Loans.

(c) If prior to the time a Revolving Loan would have otherwise been made
pursuant to Section 2.4(b), one of the events described in Section 8 shall have
occurred and be continuing with respect to the Borrower or if for any other
reason, as determined by the Swingline Lender in its sole discretion, Revolving
Loans may not be made as contemplated by Section 2.4(b), each Lender shall, on
the date such Revolving Loan was to have been made pursuant to the notice
referred to in Section 2.4(b), purchase for cash an undivided participating
interest in the then outstanding Swingline Loans by paying to the Swingline
Lender an amount (the “Swingline Participation Amount”) equal to (i) such
Lender’s Percentage Interest times (ii) the sum of the aggregate principal
amount of Swingline Loans then outstanding that were to have been repaid with
such Revolving Loans.

(d) Whenever, at any time after the Swingline Lender has received from any
Lender such Lender’s Swingline Participation Amount, the Swingline Lender
receives any payment on account of the Swingline Loans, the Swingline Lender
will distribute to such Lender its Swingline Participation Amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender’s participating interest was outstanding and funded and, in
the case of principal and interest payments, to reflect such Lender’s pro rata
portion of such payment if such payment is not sufficient to pay the principal
of and interest on all Swingline Loans then due); provided, however, that in the
event that such payment received by the Swingline Lender is required to be
returned, such Lender will return to the Swingline Lender any portion thereof
previously distributed to it by the Swingline Lender.

(e) Each Lender’s obligation to make the Loans referred to in Section 2.4(b) and
to purchase participating interests pursuant to Section 2.4(c) shall be absolute
and unconditional and shall not be affected by any circumstance, including
(i) any setoff, counterclaim, recoupment, defense or other right that such
Lender or the Borrower may have against the Swingline Lender, the Borrower or
any other Person for any reason whatsoever, (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5, (iii) any adverse change in the condition
(financial or otherwise) of the Borrower, (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Lender or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.

2.5 Commitment Fees, etc.

(a) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender a commitment fee for the period from and including the Fourth
Amendment Effective dDate hereof to but excluding the last day of the applicable
Commitment Period, computed at the Commitment Fee Rate on the average daily
amount of the Available Commitment of such Lender during the period for which
payment is made, payable quarterly in arrears within three (3) Business Days of
receipt of an invoice from the Administrative Agent; provided, however, pursuant
to Section 2.20, the Borrower shall not be obligated to pay a commitment fee for
the account of any Defaulting Lender; provided further that, solely for purposes
of this Section 2.5(a), Swingline Loans shall not be considered outstanding
Borrowing Base Debt for purposes of calculating the Available Commitment.

 

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(b) The Borrower agrees to pay to the Administrative Agent the fees in the
amounts and on the dates as set forth in any fee agreements with the
Administrative Agent and to perform any other obligations contained therein.

2.6 Termination or Reduction of Commitments. The Borrower shall have the right,
upon not less than five (5) Business Days’ notice to the Administrative Agent,
to terminate the Commitments or, from time to time, to reduce the amount of the
Commitments; provided that no such termination or reduction of Commitments shall
be permitted if, after giving effect thereto and to any prepayments of the Loans
made on the effective date thereof, (x) the Borrowing Base Debt would exceed the
Total Commitments or (y) the L/C Obligations in respect of Letters of Credit
that are Financial Letters of Credit would exceed the Financial Letter of Credit
SublimitL/C Commitment, in each case giving effect to such termination or
reduction. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Commitments then in
effect.

2.7 Optional Prepayments. The Borrower may at any time and from time to time
prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent no later than 1:00
p.m., New York City time, (a) three (3) Business Days prior thereto, in the case
of Eurodollar Loans, and (b) on the same Business Day, in the case of ABR Loans,
which notice shall specify the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans or ABR Loans; provided, that if a Eurodollar
Loan is prepaid on any day other than the last day of the Interest Period
applicable thereto, the Borrower shall also pay any amounts owing pursuant to
Section 2.17. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid.
Partial prepayments of Revolving Loans shall be in an aggregate principal amount
of (i) $1,000,000 or a whole multiple of $100,000 in excess thereof, with
respect to Eurodollar Loans, and (ii) $100,000 or a whole multiple thereof, with
respect to ABR Loans. Partial prepayments of Swingline Loans shall be in an
aggregate principal amount of $100,000 or a whole multiple thereof.

2.8 Mandatory Prepayments. If, on any date, Borrowing Base Debt exceeds the
Borrowing Base, the Borrower shall, on such date, prepay Loans and/or Cash
Collateralize L/C Obligations in accordance with this Section 2.8 such that
(a) Borrowing Base Debt is equal to or less than the Borrowing Base or (b) all
Letters of Credit are Cash Collateralized and there are no Revolving Loans
outstanding. Amounts to be applied in connection with prepayments made pursuant
to this Section 2.8 shall be applied, first, to the prepayment of Swingline
Loans, second, to the prepayment of Revolving Loans, and thirdsecond, if the
aggregate principal amount of Revolving Loans and Swingline Loans
then-outstanding is less than the amount of such prepayments because L/C
Obligations constitute a portion thereof, the Administrative Agent shall deposit
the balance of such prepayments in a cash collateral account established with
the Administrative Agent for the benefit of the Lenders on terms and conditions
reasonably satisfactory to the Administrative Agent to Cash Collateralize any
L/C Obligations. The application of any prepayment of Revolving Loans pursuant
to this Section 2.8 shall be made, first, to ABR Loans and, second, to
Eurodollar Loans. Each prepayment of the Loans under this Section 2.8 shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid.

2.9 Conversion and Continuation Options.

(a) The Borrower may elect from time to time to convert Eurodollar Loans to ABR
Loans by giving the Administrative Agent prior irrevocable notice of such
election no later than 1:00 P.M., New York City time, on the Business Day
preceding the proposed conversion date, provided that any such conversion of
Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to convert ABR Loans
to Eurodollar Loans by

 

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giving the Administrative Agent prior irrevocable notice of such election no
later than 1:00 P.M., New York City time, on the third Business Day preceding
the proposed conversion date (which notice shall specify the length of the
initial Interest Period therefor), provided that no ABR Loan may be converted
into a Eurodollar Loan when any Event of Default has occurred and is continuing
and the Required Lenders have determined in their sole discretion not to permit
such conversions and have provided the Administrative Agent with written notice
of such determination prior to such conversion request. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.

(b) Any Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower giving irrevocable
notice to the Administrative Agent within the timeframe established under
Section 2.2 relating to an original request for a Eurodollar Loan, in accordance
with the applicable provisions of the term “Interest Period” set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan may be continued as such when any Event
of Default has occurred and is continuing and the Required Lenders have
determined in their sole discretion not to permit such continuations, and
provided, further, that if the Borrower shall fail to give any required notice
as described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted to
ABR Loans on the last day of such then expiring Interest Period. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.

2.10 Limitations on Eurodollar Tranches. Notwithstanding anything to the
contrary in this Agreement, no more than six (6) Eurodollar Tranches shall be
outstanding at any one time.

2.11 Interest Rates and Payment Dates.

(a) Each Eurodollar Loan shall bear interest during each Interest Period with
respect thereto at a rate per annum equal to the Eurodollar Rate determined for
such Interest Period plus the Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus
the Applicable Margin.

(c)(i) If all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), all outstanding Loans and Reimbursement Obligations
(whether or not overdue) shall bear interest at a rate per annum equal to (x) in
the case of the Loans, the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of this Section plus two percent (2%) or
(y) in the case of Reimbursement Obligations, the rate applicable to ABR Loans
plus two percent (2%), and (ii) if all or a portion of any interest payable on
any Loan or Reimbursement Obligation or any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), after giving effect to any applicable grace period,
such overdue amount shall bear interest at a rate per annum equal to the rate
then applicable to ABR Loans plus two percent (2%), in each case, with respect
to clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full.

(d) Interest shall be payable in arrears on each Interest Payment Date, provided
that interest accruing pursuant to paragraph (c) of this Section 2.11 shall be
payable from time to time on demand.

2.12 Computation of Interest and Fees.

 

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(a) Interest and fees payable pursuant hereto shall be calculated on the basis
of a 360-day year for the actual days elapsed, except that, with respect to ABR
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. Interest shall accrue
for each period from and including the first day of such period but excluding
the last day of such period. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.

(b) Each determination of an interest rate by the Administrative Agent pursuant
to any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error.

2.13 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:

(a) the Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that adequate and reasonable means (including,
without limitation, by means of an Interpolated Rate) do not exist for
ascertaining the Eurodollar Base Rate or the Eurodollar Rate, as applicable, for
such Interest Period, or

(b) the Administrative Agent shall have received notice from the Required
Lenders that the Eurodollar Base Rate or the Eurodollar Rate, as applicable,
determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such Interest
Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall
be converted, on the last day of the then-current Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower have
the right to convert Loans to Eurodollar Loans.

2.14 Pro Rata Treatment and Payments.

(a) Except as set forth in Section 2.20 below, each borrowing by the Borrower
from the Lenders hereunder, each payment by the Borrower on account of any
commitment fee and any reduction of the Commitments of the Lenders shall be made
pro rata according to the respective Percentage Interests of the Lenders.

(b) Except as set forth in Section 2.20 below, each payment (including each
prepayment) by the Borrower on account of principal of and interest on the
Revolving Loans shall be made pro rata according to the respective outstanding
principal amounts of the Revolving Loans then held by the Lenders.

 

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(c) All payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 2:00 p.m., New York
City time, on the due date thereof to the Administrative Agent, for the account
of the Lenders, at the Funding Office, in Dollars and in immediately available
funds. Except as set forth in Section 2.20 below, the Administrative Agent shall
distribute such payments to each Lender promptly upon receipt in like funds as
received, net of any amounts owing by such Lender pursuant to Section 9.7. If
any payment hereunder (other than payments on the Eurodollar Loans) becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.

(d) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon, at a rate
equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation, for the period until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender’s share of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans, on
demand, from the Borrower.

(e) Unless the Administrative Agent shall have been notified in writing by the
Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption and, subject to Section 2.20, make available to
the Lenders their respective pro rata shares of a corresponding amount. If such
payment is not made to the Administrative Agent by the Borrower within three
(3) Business Days after such due date, the Administrative Agent shall be
entitled to recover, on demand, from each Lender to which any amount which was
made available pursuant to the preceding sentence, such amount with interest
thereon at the rate per annum equal to the daily average Federal Funds Effective
Rate. Nothing herein shall be deemed to limit the rights of the Administrative
Agent or any Lender against the Borrower.

(f) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.4(b), 2.4(c), 2.14(d), 2.14(e), 3.4(a) or 9.7, then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision of this Agreement), apply any amounts thereafter received by the
Administrative Agent, the Swingline Lender or the applicable Issuing Lender(s)
for the account of such Lender to satisfy such Lender’s obligations under such
Sections until all such unsatisfied obligations are fully paid.

2.15 Requirements of Law.

 

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(a) If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by the Administrative Agent,
the applicable Issuing Lender(s) or any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the Fourth Amendment Effective dDate
hereof:

(A) shall subject the Administrative Agent, such Issuing Lender(s) or any Lender
to any tax of any kind whatsoever with respect to this Agreement, any Letter of
Credit, any Application or any Loan made by it, or change the basis of taxation
of payments to the Administrative Agent, the Issuing Lenders or such Lender in
respect thereof (except for Non-Excluded Taxes or Other Taxes, in either case
covered by Section 2.16, and changes in the rate of tax on the overall net
income of the Administrative Agent, the Issuing Lenders or such Lender);

(B) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender that is not otherwise included in the determination of the
Eurodollar Rate; or

(C) shall impose on such Lender any other similar condition;

and the result of any of the foregoing is to increase the cost to the
Administrative Agent, such Issuing Lender(s) or such Lender, by an amount that
the Administrative Agent, such Issuing Lender(s) or such Lender deems to be
material, of making, converting into, continuing or maintaining Loans or issuing
or participating in Letters of Credit, or to reduce any amount receivable by the
Administrative Agent, such Issuing Lender(s) or such Lender hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay the
Administrative Agent, such Issuing Lender(s) or such Lender, upon its demand,
any additional amounts necessary to compensate the Administrative Agent, such
Issuing Lender(s) or such Lender for such increased cost or reduced amount
receivable. If the Administrative Agent, such Issuing Lender(s) or any Lender
becomes entitled to claim any additional amounts pursuant to this paragraph, it
shall promptly notify the Borrower by providing a certificate along with
reasonably detailed calculations of such additional amounts (with a copy to the
Administrative Agent, if applicable) of the event by reason of which it has
become so entitled.

(b) If any Lender shall have determined that the adoption of or any change in
any Requirement of Law regarding capital or liquidity adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the Fourth Amendment Effective dDate hereof shall
have the effect of reducing the rate of return on such Lender’s or such
corporation’s capital as a consequence of its obligations hereunder or under or
in respect of any Letter of Credit to a level below that which such Lender or
such corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender’s or such corporation’s policies with
respect to capital adequacy and liquidity) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower by providing a certificate along with reasonably detailed calculations
of such additional amounts (with a copy to the Administrative Agent) of a
written request therefor, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such corporation for such
reduction.

(c) Notwithstanding anything herein to the contrary, (i) all requests, rules,
guidelines, requirements and directives promulgated by the Bank for
International Settlements, the Basel

 

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Committee on Banking Supervision (or any successor or similar authority) or by
United States or foreign regulatory authorities, in each case pursuant to Basel
III, and (ii) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines, requirements and directives thereunder or
issued in connection therewith or in implementation thereof, shall in each case
be deemed to be a change in a Requirement of Law, regardless of the date
enacted, adopted, issued or implemented.

(d) A certificate as to any additional amounts payable pursuant to this
Section 2.15 submitted by the Administrative Agent, such Issuing Lender(s) or
any Lender to the Borrower (with a copy to the Administrative Agent, if
applicable) shall be conclusive in the absence of manifest error.
Notwithstanding anything to the contrary in this Section 2.15, the Borrower
shall not be required to compensate the Administrative Agent, such Issuing
Lender(s) or a Lender pursuant to this Section 2.15 for any amounts incurred
more than six months prior to the date that the Administrative Agent, such
Issuing Lender(s) or such Lender notifies the Borrower of such Lender’s
intention to claim compensation therefor; provided that, if the circumstances
giving rise to such claim have a retroactive effect, then such six-month period
shall be extended to include the period of such retroactive effect. The
obligations of the Borrower pursuant to this Section 2.15 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

2.16 Taxes.

(a) All payments made by or on behalf of any Loan Party under this Agreement or
any other Loan Document shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (including any taxes or withholdings arising under
FATCA), excluding taxes imposed on or measured by net income (however
denominated) or franchise taxes, or branch profit taxes imposed (i) as a result
of the Administrative Agent or any Lender being organized under the laws of, or
having its principal office or, in the case of any Lender, its applicable
lending office located in the United States (or a political subdivision thereof)
or any jurisdiction imposing such tax (or any political subdivision thereof) or
(ii) on the Administrative Agent or any Lender as a result of a present or
former connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document), unless such a deduction or
withholding is required by law, as determined in good faith by the applicable
withholding agent. If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or Other Taxes
are required to be withheld from any amounts payable to the Administrative Agent
or any Lender hereunder, the amounts so payable by the applicable Loan Party to
the Administrative Agent or such Lender shall be increased as necessary so that,
after such withholding has been made (including such withholdings applicable to
additional sums payable under this Section 2.16), the amounts received with
respect to this Agreement or any other Loan Document equal the sum which would
have been received had no such withholding been made, provided, however, that
the applicable Loan Party shall not be required to increase any such amounts
payable to any Lender or the Administrative Agent with respect to any
Non-Excluded Taxes pursuant to this Section 2.16(a) (i) that are attributable to
such Lender’s failure to comply with the requirements of paragraph (d), (e) or
(f) of this Section 2.16, (ii) that are United States withholding taxes imposed
on amounts payable to or for the account of such Lender or the Administrative
Agent at the time such Lender or the Administrative Agent becomes a party to
this Agreement or such Lender changes its lending office, except to the extent
that such Lender’s assignor (if any) or such Lender (in the case of a change in
lending office) was entitled, at the time of assignment or immediately before it
changed its lending office, to receive additional amounts from such Loan Party
with respect to such Non-Excluded

 

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Taxes pursuant to this paragraph or (iii) any U.S. federal withholding taxes
that are imposed pursuant to FATCA.

(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c) Whenever any taxes are payable by a Loan Party pursuant to this
Section 2.16, as promptly as possible thereafter the applicable Loan Party shall
send to the Administrative Agent for its own account or for the account of the
relevant Lender, as the case may be, a complete and correct copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower is required by law to deduct and/or withhold any taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, other than
Non-Excluded Taxes and Other Taxes, then (i) the Borrower shall make such
deductions, (ii) the Borrower shall pay the amount deducted to the relevant
Governmental Authority or other authority in accordance with applicable law, and
(iii) the amounts so deducted and paid to the relevant Governmental Authority
shall be treated under this Agreement as made to the affected Lender.

(d) Each Lender (or Transferee) that is not a “United States person” as defined
in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) (i) two
copies of either U.S. Internal Revenue Service (“IRS”) Form W-8BEN or W-8BEN-E,
Form W-8ECI, or Form W-8IMY (together with any applicable underlying IRS forms),
(ii) in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest”, a statement substantially in the form of
Exhibit G and the applicable IRS Form W-8, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal withholding
tax on payments under this Agreement and the other Loan Documents, or (iii) any
other form prescribed by applicable requirements of U.S. federal income tax law
as a basis for claiming exemption from or a reduction in U.S. federal
withholding tax duly completed together with such supplementary documentation as
may be prescribed by applicable requirements of law to permit the Borrower and
the Administrative Agent to determine the withholding or deduction required to
be made. Such forms shall be delivered by each Non-U.S. Lender on or before the
date it becomes a party to this Agreement (or, in the case of any Participant,
on or before the date such Participant purchases the related participation) and
from time to time thereafter upon the request of the Borrower or the
Administrative Agent. In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower
and the Administrative Agent at any time it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrower (or any
other form of certification adopted by the U.S. taxing authorities for such
purpose). Each Lender (or Transferee) that is a “United States person” as
defined in Section 7701(a)(30) of the Code (a “U.S. Lender”) shall deliver to
the Borrower and the Administrative Agent (or, in the case of a Participant, to
the Lender from which the related participation shall have been purchased) two
copies of IRS Form W-9, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such U.S. Lender certifying an
exemption from U.S. federal backup withholding tax on all payments by the
Borrower under this Agreement and the other Loan Documents. Such forms shall be
delivered by each U.S. Lender on or before the date it becomes a party to this
Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation) and from time to time
thereafter upon the request of the Borrower or the Administrative Agent. In
addition, each U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such U.S. Lender.
Each U.S. Lender shall promptly notify the Borrower at any time it determines
that it is no longer in a position to provide any previously delivered
certificate to the Borrower (or any other form of certification adopted by the
U.S. taxing authorities for such purpose). Notwithstanding any other

 

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provision of this Section, a Non-U.S. Lender shall not be required to deliver
any form pursuant to this Section that such Non-U.S. Lender is not legally able
to deliver.

(e) A Lender that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate, provided that
such Lender is legally entitled to complete, execute and deliver such
documentation and in such Lender’s judgment such completion, execution or
submission would not materially prejudice the legal or commercial position of
such Lender.

(f) If a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent, at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or Administrative Agent, such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or Administrative
Agent as may be necessary for the Borrower and the Administrative Agent to
comply with their obligations under FATCA, to determine that such Lender has or
has not complied with such Lender’s obligations under FATCA and, as necessary,
to determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (f), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

(g) The Loan Parties shall jointly and severally indemnify each Credit Party,
within 10 days after demand therefor, for the full amount of any Non-Excluded
Taxes or Other Taxes (including Non-Excluded Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.16) payable
or paid by such Credit Party or required to be withheld or deducted from a
payment to such Credit Party and any reasonable expenses arising therefrom or
with respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(h) Each Lender shall severally indemnify the Administrative Agent, within 10
days after demand therefor, for (i) any taxes attributable to such Lender (but
only to the extent that any Loan Party has not already indemnified the
Administrative Agent for such taxes and without limiting the obligation of the
Loan Parties to do so) and (ii) any taxes attributable to such Lender’s failure
to comply with the provisions of Section 10.6(c) relating to the maintenance of
a Participant Register, in either case, that are payable or paid by the
Administrative Agent in connection with any Loan Document, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to any Lender by the Administrative Agent shall be conclusive absent manifest
error. Each Lender hereby authorizes the Administrative Agent to set off and
apply any and all amounts at any time owing to such Lender under any Loan
Document or otherwise payable by the Administrative Agent to the Lender from any
other source against any amount due to the Administrative Agent under this
paragraph (h).

 

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(i) If the Administrative Agent or any Lender determines, in its sole discretion
(exercised in good faith), that it has received a refund of any tax as to which
it has been indemnified by a Loan Party or with respect to which a Loan Party
has paid additional amounts pursuant to this Section 2.16, it shall pay over
such refund to such Loan Party (but only to the extent of indemnity payments
made, or additional amounts paid, by such Loan Party under this Section 2.16
with respect to the tax giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that such Loan Party, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
such Loan Party (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
any Loan Party or any other Person.

(j) The agreements in this Section 2.16 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

(k) For purposes of this Section 2.16, the term “Lender” includes the Issuing
Lender and the Swingline Lender and the term “applicable law” includes FATCA.

(l) For purposes of determining withholding taxes imposed under FATCA, from and
after the Fourth Amendment Effective Date, the Borrower and the Administrative
Agent shall treat (and the Lenders hereby authorize the Administrative Agent to
treat) this Agreement as not qualifying as a “grandfathered obligation” within
the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

2.17 Indemnity. The Borrower agrees to indemnify each Lender for, and to hold
each Lender harmless from, any loss or expense that such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

2.18 Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.15 or 2.16(a) with respect
to such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event with the object of avoiding
the consequences of such event; provided, that such designation is made on terms
that, in the

 

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sole judgment of such Lender (exercised in good faith), cause such Lender and
its lending office(s) to suffer no economic, legal or regulatory disadvantage,
and provided, further, that nothing in this Section shall affect or postpone any
of the obligations of the Borrower or the rights of any Lender pursuant to
Section 2.15 or 2.16(a).

2.19 Replacement of Lenders. The Borrower shall be permitted to replace any
Lender (a) to which the Borrower becomes required to pay additional amounts
pursuant to Section 2.15 or 2.16(a), (b) that is a Defaulting Lender, or
(c) that does not consent to any proposed amendment, supplement, modification,
consent or waiver of any provision of this Agreement or any other Loan Document
that requires the consent of each of the Lenders or each of the Lenders affected
thereby (so long as the consent of the Required Lenders has been obtained), with
a replacement financial institution; provided that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) prior to any
such replacement, such Lender shall have taken no action under Section 2.18 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 2.15 or 2.16(a), (iv) the replacement Lender shall purchase, at par, all
Loans and other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.17 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement shall be an Eligible Assignee reasonably satisfactory to
the Administrative Agent, (vii) the replaced Lender shall be obligated to make
such replacement in accordance with the provisions of Section 10.6 (provided
that the Borrower shall be obligated to pay the registration and processing fee
referred to therein), (viii) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any) required
pursuant to Section 2.15 or 2.16(a), as the case may be, and (ix) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender.

2.20 Defaulting Lenders.

(a) Notwithstanding anything to the contrary contained in this Agreement, if any
Lender becomes a Defaulting Lender, then, until such time as such Lender is no
longer a Defaulting Lender, to the extent permitted by applicable law:

(i) Voting. Such Defaulting Lender shall not be entitled to vote on any matter
requiring the consent or approval of all Lenders or the Required Lenders, and
the Commitment of such Defaulting Lender shall not be included in determining
whether all Lenders or the Required Lenders have taken or may take any action
hereunder (including any consent to any amendment, waiver or other modification
pursuant to Section 10.1), provided that (a) any waiver, amendment or
modification requiring the consent of all Lenders or each affected Lender which
affects such Defaulting Lender more adversely than other affected Lenders shall
require the consent of such Defaulting Lender and (b) the Commitment of such
Defaulting Lender may not be increased without the consent of such Defaulting
Lender.

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Section 8 or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 10.7 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to any Issuing Lender or Swingline Lender hereunder;
third, to Cash Collateralize the

 

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Issuing Lenders’ Fronting Exposure with respect to such Defaulting Lender in
accordance with Section 3.9; fourth, as the Borrower may request (so long as no
Default or Event of Default exists), to the funding of any Loan in respect of
which such Defaulting Lender has failed to fund its portion thereof as required
by this Agreement, as determined by the Administrative Agent; fifth, if so
determined by the Administrative Agent and the Borrower, to be held in a deposit
account and released pro rata in order to (x) satisfy such Defaulting Lender’s
potential future funding obligations with respect to Loans under this Agreement
and (y) Cash Collateralize the Issuing Lenders’ future Fronting Exposure with
respect to such Defaulting Lender with respect to future Letters of Credit
issued under this Agreement, in accordance with Section 3.9; sixth, to the
payment of any amounts owing to the Lenders, the Issuing Lenders or Swingline
Lenders as a result of any judgment of a court of competent jurisdiction
obtained by any Lender, or the Issuing Lenders or Swingline Lenders against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; seventh, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the Borrower
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and eighth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Loans or L/C
Obligations in respect of which such Defaulting Lender has not fully funded its
appropriate share, and (y) such Loans were made or the related Letters of Credit
were issued at a time when the conditions set forth in Section 5.3 were
satisfied or waived, such payment shall be applied solely to pay the Loans of,
and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis
prior to being applied to the payment of any Loans of, or L/C Obligations owed
to, such Defaulting Lender until such time as all Loans and funded and unfunded
participations in L/C Obligations and Swingline Loans are held by the Lenders
pro rata in accordance with the Commitments without giving effect to
Section 2.20(a)(iv). Any payments, prepayments or other amounts paid or payable
to a Defaulting Lender that are applied (or held) to pay amounts owed by a
Defaulting Lender or to post Cash Collateral pursuant to this Section 2.20 shall
be deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents hereto.

(iii) Certain Fees:

(A) No Defaulting Lender shall be entitled to receive any commitment fee
contemplated by Section 2.5(a) for any period during which that Lender is a
Defaulting Lender (and the Borrower shall not be required to pay any such fee
that otherwise would have been required to have been paid to that Defaulting
Lender).

(B) Each Defaulting Lender shall be entitled to receive any fees pursuant to
Section 3.3 for any period during which that Lender is a Defaulting Lender only
to the extent allocable to its Percentage Interest of the stated amount of
Letters of Credit for which the Defaulting Lender has provided Cash Collateral
pursuant to Section 2.20(a)(ii).

(C) With respect to any fees pursuant to Section 3.3 not required to be paid to
any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall
(x) pay to each Non-Defaulting Lender that portion of any such fee otherwise
payable to such Defaulting Lender with respect to such Defaulting Lender’s
participation in L/C Obligations or Swingline Loans that has been reallocated to
such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to each
Issuing Lender and Swingline Lender, as applicable, the amount of any such fee
otherwise payable to such Defaulting Lender to the extent allocable to such
Issuing Lender’s or Swingline Lender’s Fronting Exposure to such Defaulting
Lender, and (z) not be required to pay the remaining amount of any such fee.

 

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(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part
of such Defaulting Lender’s participation in L/C Obligations and Swingline Loans
shall be reallocated among the Non-Defaulting Lenders in accordance with their
respective Percentage Interests (calculated without regard to such Defaulting
Lender’s Commitment) but only to the extent that (x) the conditions set forth in
Section 5.3 are satisfied at the time of such reallocation (and, unless the
Borrower shall have otherwise notified the Administrative Agent at such time,
the Borrower shall be deemed to have represented and warranted that such
conditions are satisfied at such time), and (y) such reallocation does not cause
the Revolving Credit Exposure of any Non-Defaulting Lender to exceed such
Non-Defaulting Lender’s Commitment. No reallocation hereunder shall constitute a
waiver or release of any claim of any party hereunder against a Defaulting
Lender arising from that Lender having become a Defaulting Lender, including any
claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s
increased exposure following such reallocation.

(v) Cash Collateral, Repayment of Swingline Loans. If the reallocation described
in clause (iv) above cannot, or can only partially, be effected, the Borrower
shall, without prejudice to any right or remedy available to it hereunder or
under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline
Lenders’ Fronting Exposure and (y) second, Cash Collateralize the Issuing
Lenders’ Fronting Exposure in accordance with the procedures set forth in
Section 3.9.

(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent, the
Swingline Lender and the Issuing Lenders agree in writing that a Lender is no
longer a Defaulting Lender, the Administrative Agent will so notify the parties
hereto, whereupon as of the effective date specified in such notice and subject
to any conditions set forth therein (which may include arrangements with respect
to any Cash Collateral), that Lender will, to the extent applicable, purchase at
par that portion of outstanding Loans of the other Lenders or take such other
actions as the Administrative Agent may determine to be necessary to cause the
Loans and funded and unfunded participations in Letters of Credit and Swingline
Loans to be held pro rata by the Lenders in accordance with the Commitments
(without giving effect to Section 2.20(a)(iv)), whereupon such Lender will cease
to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrower while that Lender was a Defaulting Lender; and provided, further,
that except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.

(c) New Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting
Lender, (i) the Swingline Lender shall not be required to fund any Swingline
Loans unless it is satisfied that it will have no Fronting Exposure after giving
effect to such Swingline Loan and (ii) no Issuing Lender shall be required to
issue, extend, renew or increase any Letter of Credit unless it is satisfied
that it will have no Fronting Exposure after giving effect thereto.

2.21 Increase in Commitments. The Borrower may, at its option, at any time or
from time to time prior to the Extended Termination Date, increase the Total
Commitments (each such increase, a “Commitment Increase” and the additional
Commitments pursuant to each such Commitment Increase, “Incremental
Commitments”) to an aggregate principal amount not to exceed
$175,000,000200,000,000 (with each Commitment Increase being in a minimum
aggregate principal amount of $5,000,000 (the “Minimum Increase Amount”) or a
whole multiple of $1,000,000 in excess of the Minimum Increase Amount) by
requesting that existing Lenders or new lenders commit to any such increase;
provided that: (i) no Lender shall be required to commit to any such increase;
(ii) no such increase shall become effective unless at the time thereof and
after giving effect thereto (A) no Default or

 

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Event of Default shall have occurred and be continuing, (B) each of the
representations and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct in all material respects, provided, that, to
the extent any such representation and warranty is already qualified by
materiality or reference to Material Adverse Effect, such representation shall
be true and correct in all respects and (C) the Administrative Agent shall have
received a certificate from the Borrower to the effect of (A) and (B) of this
clause (ii); and (iii) no new lender shall become a Lender pursuant to this
Section 2.21 unless such lender is an Eligible Assignee and the Administrative
Agent shall have given its prior written consent, which consent shall not be
unreasonably withheld. The Borrower shall be entitled to pay upfront or other
fees to such lenders who extend credit pursuant to this Section 2.21 as the
Borrower and such lenders may agree. Each Commitment Increase shall become
effective on the date (each such date, an “Increased Facility Closing Date”)
specified in an activation notice delivered to the Administrative Agent no less
than ten (10) Business Days prior to the effective date of such notice
specifying the amount of the increase and the effective date thereof. Each new
lender that provides any part of any such increase in the Commitments (a “New
Lender”) shall execute a New Lender Supplement (each, a “New Lender
Supplement”), substantially in the form of Exhibit E, whereupon such New Lender
shall become a Lender for all purposes and to the same extent as if originally a
party hereto and shall be bound by and entitled to the benefits of this
Agreement to such extent. On any Increased Facility Closing Date, subject to the
satisfaction of the foregoing terms and conditions, (i) each of the Lenders
shall be deemed to assign to each Person with Incremental Commitments (each, an
“Incremental Lender”) and each of the Incremental Lenders shall be deemed to
purchase from each of the Lenders, at the principal amount thereof, such
interests in the Revolving Loans outstanding on such Increased Facility Closing
Date as shall be necessary in order that, after giving effect to all such
assignments and purchases, the Revolving Loans will be held by the Lenders
(including Incremental Lenders) ratably in accordance with their respective
Commitments after giving effect to the addition of such Incremental Commitments
to the Commitments, (ii) each Incremental Commitment shall be deemed for all
purposes a Commitment and each Revolving Loan made thereunder (an “Incremental
Loan”) shall be deemed for all purposes a Revolving Loan and (iii) each
Incremental Lender that is a New Lender shall become a Lender in accordance with
the immediately preceding sentence. The terms and provisions of the Incremental
Loans and Incremental Commitments shall be substantially identical to the terms
and conditions of the Revolving Loans and Extended Commitments.

SECTION 3. LETTERS OF CREDIT

3.1 L/C Commitment.

(a) Subject to the terms and conditions hereof, each Issuing Lender, in reliance
on the agreements of the other Lenders set forth in Section 3.4(a), agrees to
issue letters of credit (“Letters of Credit”) for the account of the Borrower
(and on behalf of the Borrower or any of its Subsidiaries) on any Business Day
during the Commitment Period in such customary form as may be approved from time
to time by such Issuing Lender; provided that such Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the aggregate amount of the Available Commitments would be less
than zero, (ii) the Available Commitment of any Lender would be less than zero,
(iii) the Borrowing Base Availability would be less than zero or (iiiiv) the L/C
Obligations in respect of Letters of Credit that are Financial Letters of
Creditissued by such Issuing Lender would exceed the Financial Letter of Credit
Sublimitsuch Issuing Lender’s Issuing Lender Commitment. Each Letter of Credit
shall (A) be denominated in Dollars and (B) expire no later than the date that
is 364 days after the Extended Termination Date, provided (I) that any Letter of
Credit with an expiry date prior to the Extended Termination Date may provide
for the renewal thereof for additional periods (which shall in no event extend
beyond the date referred to in clause (B) above) and (II) with respect to any
Letter of Credit that expires on or after the date that is five (5) Business
Days prior to the Extended Termination Date, at least 60 days prior to the
Extended Termination Date, the Borrower shall back-stop such Letter of Credit

 

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and/or deposit an amount in cash equal to 100% of the L/C Obligations in respect
of such Letter of Credit in a cash collateral account established with the
Collateral Agent for the benefit of the applicable Issuing Lender on terms and
conditions satisfactory to the Collateral Agent and such Issuing Lender. The
Borrower hereby acknowledges that the issuance of Letters of Credit for the
account of a Subsidiary inures to the benefit of the Borrower, and that the
Borrower’s business derives substantial benefits from the businesses of each
such Subsidiary. From time to time and upon reasonable request therefor,
(i) each Issuing Lender shall confirm to the Administrative Agent the L/C
Exposure in respect of Letters of Credit issued by it and its portion of the L/C
Commitment and (ii) the Administrative Agent shall confirm to each Issuing
Lender the aggregate amount of Available Commitments. For the avoidance of
doubt, in no event shall the sum of the Issuing Lenders’ respective portions of
the L/C CommitmentL/C Obligations exceed the L/C Commitment.

(b) No Issuing Lender shall at any time be obligated to issue any Letter of
Credit if such issuance would conflict with, or cause any Issuing Lender or any
L/C Participant to exceed any limits imposed by, any applicable Requirement of
Law.

3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to
time request that an Issuing Lender issue a Letter of Credit by delivering
(including via electronic delivery) an Application therefor to such Issuing
Lender at its address specified on Schedule 1.1D or such other address as such
Issuing Lender shall notify to the Borrower, completed to the satisfaction of
such Issuing Lender, and such information describing the purpose of the Letter
of Credit, whether such Letter of Credit is a Financial Letter of Credit or a
Performance Letter of Credit and the location of the related project or
development as such Issuing Lender may request. Upon receipt of any Application,
such Issuing Lender will process such Application and such information
describing the purpose of the Letter of Credit and the location of the related
project or development delivered to it in connection therewith in accordance
with its customary procedures and shall issue, unless such Issuing Lender has
received written notice from any Lender, the Administrative Agent or the
Borrower, at least one (1) Business Day prior to the requested date of issuance
or amendment of the applicable Letter of Credit, that one or more applicable
conditions contained in Section 5.3 shall not be satisfied, the Letter of Credit
requested thereby within two (2) Business Days after its receipt of the
Application therefor and all such requested information relating thereto by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by such Issuing Lender and the Borrower. Such Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower and the
Administrative Agent promptly following the issuance thereof. Such Issuing
Lender shall promptly furnish to the Administrative Agent, which shall in turn
promptly furnish to the Lenders, notice of the issuance of each Letter of Credit
(including the amount thereof).

3.3 Fees and Other Charges.

(a) The Borrower will pay a fee on the undrawn portion of all outstanding
Letters of Credit at a per annum rate equal to the Applicable Margin then in
effect with respect to Eurodollar Loans, shared ratably among the Lenders and
payable quarterly in arrears on calendar quarters and within three (3) Business
Days of receipt an invoice from Administrative Agent after the Issuance Date. In
addition, the Borrower shall pay to each applicable Issuing Lender for its own
account a fronting fee of 0.125% per annum on the aggregate undrawn and
unexpired amount of each Letter of Credit, payable quarterly in arrears on
calendar quarters and within three (3) Business Days of receipt an invoice from
Administrative Agent or such Issuing Lender after the Issuance Date.

(b) In addition to the foregoing fees, the Borrower shall pay or reimburse each
Issuing Lender for such normal and customary costs and expenses as are incurred
or charged by the Issuing Lender in issuing, negotiating, effecting payment
under, amending or otherwise administering any Letter of Credit.

 

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3.4 L/C Participations.

(a) Each Issuing Lender irrevocably agrees to grant and hereby grants to each
L/C Participant, and, to induce each Issuing Lender to issue Letters of Credit,
each L/C Participant irrevocably agrees to accept and purchase and hereby
accepts and purchases from each Issuing Lender, on the terms and conditions set
forth below, for such L/C Participant’s own account and risk an undivided
interest equal to such L/C Participant’s Percentage Interest in such Issuing
Lender’s obligations and rights under and in respect of each Letter of Credit
and the amount of each draft paid by such Issuing Lender thereunder. Each L/C
Participant agrees with each Issuing Lender that, if a draft is paid under any
Letter of Credit for which such Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement (or in the event that
any reimbursement received by such Issuing Lender shall be required to be
returned by it at any time), such L/C Participant shall pay to such Issuing
Lender upon demand at such Issuing Lender’s address specified on Schedule 1.1D
or such other address as such Issuing Lender shall notify to the L/C
Participants an amount equal to such L/C Participant’s Percentage Interest of
the amount that is not so reimbursed (or is so returned). Each L/C Participant’s
obligation to pay such amount shall be absolute and unconditional and shall not
be affected by any circumstance, including (i) any setoff, counterclaim,
recoupment, defense or other right that such L/C Participant may have against
any Issuing Lender, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower,
(iv) any breach of this Agreement or any other Loan Document by the Borrower,
any other Loan Party or any other L/C Participant or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
Upon the Non-Extended Termination Date, if there are outstanding Letters of
Credit, such Letters of Credit shall automatically be deemed to have been issued
(including for purposes of the obligations of the Lenders to purchase
participations therein and to make payments in respect thereof pursuant to this
Section 3.4) under (and ratably participated in by Lenders pursuant to) the
Extended Commitments (it being understood that the participations therein of the
Non-Extended Lenders shall be correspondingly released) and, to the extent
necessary, the Borrower shall pay in cash outstanding Loans of the Extended
Lenders on the Non-Extended Termination Date in an amount sufficient to permit
the reallocation of the L/C Exposure relating to such outstanding Letters of
Credit contemplated hereby.

(b) If any amount required to be paid by any L/C Participant to any Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any
payment made by such Issuing Lender under any Letter of Credit is paid to such
Issuing Lender within three (3) Business Days after the date such payment is
due, such L/C Participant shall pay to such Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to such
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to any Issuing Lender by such L/C
Participant within three (3) Business Days after the date such payment is due,
such Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans under this Agreement. A certificate of an
Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section 3.4 shall be conclusive in the absence of manifest
error.

(c) Whenever, at any time after any Issuing Lender has made payment under any
Letter of Credit and has received from any L/C Participant its pro rata share of
such payment in accordance with Section 3.4(a), such Issuing Lender receives any
payment related to such Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of collateral applied thereto by such

 

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Issuing Lender), or any payment of interest on account thereof, such Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by such
Issuing Lender shall be required to be returned by such Issuing Lender, such L/C
Participant shall return to such Issuing Lender the portion thereof previously
distributed by such Issuing Lender to it.

3.5 Reimbursement Obligation of the Borrower. If any draft is paid under any
Letter of Credit, the Borrower shall, at its option, either (i) reimburse the
applicable Issuing Lender through the Administrative Agent if so requested by
the Administrative Agent on the Business Day next succeeding the Business Day on
which such Issuing Lender notifies the Borrower of the date and amount of a
draft presented under any Letter of Credit and paid by such Issuing Lender or
(ii) (x) request an ABR Loan pursuant to Section 2.2 hereof (if otherwise
permitted hereunder) to be made on the Business Day next succeeding the Business
Day on which such Issuing Lender notifies the Borrower of the date and amount of
a draft presented under any Letter of Credit and paid by such Issuing Lender and
(y) direct that the proceeds of such ABR Loan be applied to reimburse the
applicable Issuing Lender; in each case for the amount of (a) the draft so paid
and (b) any costs and expenses described in Section 3.3(b) incurred by such
Issuing Lender in connection with such payment. Each such payment shall be made
to such Issuing Lender or the Administrative Agent at (x) in the case of such
Issuing Lender, its address specified on Schedule 1.1D or such other address as
such Issuing Lender shall notify to the Borrower and (y) in the case of the
Administrative Agent, at the Funding Office, in each case in Dollars and in
immediately available funds. Interest shall be payable on any such amounts from
the date on which the relevant draft is paid until payment in full at the rate
set forth in (x) until the Business Day next succeeding the date of the relevant
notice, Section 2.11(b) and (y) thereafter, Section 2.11(c).

3.6 Obligations Absolute. The Borrower’s obligations under this Section 3 shall
be absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment that the Borrower may have or
have had against any Issuing Lender, any beneficiary of a Letter of Credit or
any other Person. The Borrower also agrees with each Issuing Lender that such
Issuing Lender shall not be responsible for, and the Borrower’s Reimbursement
Obligations under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence, bad
faith or willful misconduct of such Issuing Lender. The Borrower agrees that any
action taken or omitted by any Issuing Lender under or in connection with any
Letter of Credit or the related drafts or documents, if done in the absence of
gross negligence, bad faith or willful misconduct, shall be binding on the
Borrower and shall not result in any liability of such Issuing Lender to the
Borrower.

3.7 Letter of Credit Payments. If any draft shall be presented for payment under
any Letter of Credit, the applicable Issuing Lender shall, within one
(1) Business Day after receipt thereof, notify the Borrower and the
Administrative Agent of the date and amount thereof together with a copy of such
draft. The responsibility of any Issuing Lender to the Borrower in connection
with any draft presented for payment under any Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.

 

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3.8 Applications. To the extent that any provision of any Application related to
any Letter of Credit is inconsistent with the provisions of this Agreement, the
provisions of this Agreement shall apply.

3.9 Cash Collateral. At any time that there shall exist a Defaulting Lender,
within three (3) Business Days following the written request of the
Administrative Agent or any Issuing Lender (with a copy to the Administrative
Agent) the Borrower shall Cash Collateralize the Issuing Lenders’ Fronting
Exposure with respect to such Defaulting Lender (determined after giving effect
to Sections 2.20(a)(ii) and 2.20(a)(iv) and any Cash Collateral provided by such
Defaulting Lender).

(a) Grant of Security Interest. The Borrower, and to the extent that Cash
Collateral is provided by any Defaulting Lender, such Defaulting Lender, hereby
grants to the Collateral Agent, for the benefit of the Issuing Lenders, and
agrees to maintain, a first priority security interest in all such Cash
Collateral as security for the Defaulting Lenders’ obligation to fund
participations in respect of L/C Obligations, to be applied pursuant to clause
(b) below. If at any time the Collateral Agent determines that Cash Collateral
is subject to any right or claim of any Person other than the Collateral Agent
and the Issuing Lenders as herein provided, the Borrower will, promptly upon
demand by the Collateral Agent, pay or provide to the Collateral Agent
additional Cash Collateral in an amount sufficient to eliminate such deficiency
(after giving effect to any Cash Collateral provided by the Defaulting Lender).

(b) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under this Section 3.9 or
Section 2.20(a)(ii) in respect of Letters of Credit shall be applied to the
satisfaction of the Defaulting Lender’s obligation to fund participations in
respect of L/C Obligations (including, as to Cash Collateral provided by a
Defaulting Lender, any interest accrued on such obligation) for which the Cash
Collateral was so provided, prior to any other application of such property as
may otherwise be provided for herein.

(c) Termination of Requirement. Cash Collateral (or the appropriate portion
thereof) provided to reduce any Issuing Lender’s Fronting Exposure shall no
longer be required to be held as Cash Collateral pursuant to this Section 3.9
following (i) the elimination of the applicable Fronting Exposure (including by
the termination of Defaulting Lender status of the applicable Lender), or
(ii) the determination by the Collateral Agent and each Issuing Lender that
there exists excess Cash Collateral; provided that, subject to Section 2.20 the
Person providing Cash Collateral and each Issuing Lender may agree that Cash
Collateral shall be held to support future anticipated Fronting Exposure or
other obligations.

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Agents and the Lenders to enter into this Agreement and to make
the Loans and issue or participate in the Letters of Credit, the Borrower hereby
represents and warrants to each Agent and each Lender that:

4.1 Financial Statement. The Borrower has furnished to Lenders that are parties
this Agreement on the Effective Datethe Administrative Agent a copy of the Form
10-K of the Borrower for the period ended December 31, 20132015; it being
understood that such financial statements filed with or furnished to the SEC by
the Borrower (and which are available online on the SEC website, SEC.gov) shall
be deemed to have been provided by the Borrower. The financial statements and
the notes thereto included in such Form 10-K fairly present in all material
respects the consolidated financial position of the Loan Parties and their
respective Subsidiaries as at the date specified therein and the consolidated
results of operations and cash flows for the period then ended, all in
conformity with GAAP.

 

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4.2 No Material Adverse Change. There has been no material adverse change in the
financial condition of the Loan Parties and their respective Subsidiaries, taken
as a whole, since December 31, 20132015.

4.3 Organization, Powers, and Capital Stock. Each of the Loan Parties (a) is a
corporation, limited partnership or limited liability company (as applicable)
duly organized or formed, validly existing and in good standing under laws of
its state of incorporation or formation, (b) has the power and authority to own
or hold under lease the properties it purports to own or hold under lease and to
carry on its business as now conducted, (c) is duly qualified or licensed to
transact business in every jurisdiction in which such qualification or licensing
is necessary to enable it to enforce all of its contracts and other rights and
to avoid any penalty or forfeiture except, in the case of this clause (c), to
the extent the failure to do so would not have a Material Adverse Effect.

4.4 Authorization; and Validity of this Agreement; Consents; etc.

(a) Each of the Loan Parties has the power and authority to execute and deliver
this Agreement, the Notes, the Guarantee and Collateral Agreement and the other
Loan Documents to which it is a party and to perform all its obligations
hereunder and thereunder. The execution and delivery by the Borrower of this
Agreement, the Guarantee and Collateral Agreement and the Notes and by each of
the Loan Parties of the Guarantee and Collateral Agreement and the other Loan
Documents to which it is a party and its performance of its obligations
hereunder and thereunder and any and all actions taken by the Loan Parties
(i) have been duly authorized by all requisite corporate action or other
applicable limited partnership or limited liability company action, (ii) will
not violate or be in conflict with (A) any provisions of law (including, without
limitation, any applicable usury or similar law), (B) any order, rule,
regulation, writ, judgment, injunction, decree or award of any court or other
agency of government, or (C) any provision of its certificate or articles of
incorporation or regulations or by-laws, certificate of limited partnership or
limited partnership agreement, or articles or certificate of formation or
operating or limited liability company agreement (as applicable), (iii) will not
violate, be in conflict with, result in a breach of or constitute (with or
without the giving of notice or the passage of time or both) a default under any
indenture, agreement or other instrument to which such Loan Party is a party or
by which it or any of its properties or assets is or may be bound (including
without limitation any indentures pursuant to which any debt securities of the
Borrower have been issued), except in each case where such violation, conflict
or breach would not reasonably be expected to have a Material Adverse Effect and
(iv) except as contemplated by this Agreement, will not result in the creation
or imposition of any lien, charge or encumbrance upon, or any security interest
in, any of its properties or assets. Each of this Agreement, the Notes, the
Guarantee and Collateral Agreement and the other Loan Documents has been duly
executed and delivered by the Loan Parties party thereto. The Loan Documents
constitute legal, valid and binding obligations of the Loan Parties party
thereto, enforceable against such Loan Parties in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally.

(b) None of the Loan Parties nor any of their respective Subsidiaries is a party
to any agreement or instrument or is subject to any charter or other
restrictions that could reasonably be expected to have a Material Adverse
Effect. None of the Loan Parties nor any of their respective Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party that could reasonably be expected to have a Material Adverse Effect, and
consummation of the transactions contemplated hereby and in the other Loan
Documents will not cause any Loan Party to be in material default under any
material indenture, agreement or other instrument to which such Loan Party is a
party or by which it or any of its properties or assets is or may be bound
(including any indentures pursuant to which any debt securities of the Borrower
have been issued).

 

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(c) No order, license, consent, approval, authorization of, or registration,
declaration, recording or filing (except for the filing of a Current Report on
Form 8-K, and a quarterly report on Form 10-Q, in each case with the SEC) with,
or validation of, or exemption by, any governmental or public authority (whether
federal, state or local, domestic or foreign) or any subdivision thereof is
required in connection with, or as a condition precedent to, the due and valid
execution, delivery and performance by any Loan Party of any of the Loan
Documents to which it is a party, or the legality, validity, binding effect or
enforceability of any of the respective terms, provisions or conditions thereof.
To the extent that any franchises, licenses, certificates, authorizations,
approvals or consents from any federal, state or local (domestic or foreign)
government, commission, bureau or agency are required for the acquisition,
ownership, operation or maintenance by any Loan Party of properties now owned,
operated or maintained by any of them, those franchises, licenses, certificates,
authorizations, approvals and consents have been validly granted, are in full
force and effect and constitute valid and sufficient authorization therefor,
except in each case to the extent of omissions that would not have a Material
Adverse Effect.

4.5 Compliance with Laws and Other Requirements. The Loan Parties are in
compliance with and conform to all statutes, laws (including Environmental
Laws), ordinances, rules, regulations, orders, restrictions and all other legal
requirements of all domestic or foreign governments or any instrumentality
thereof having jurisdiction over the conduct of their respective businesses or
the ownership of their respective properties, the violation of which would have
a Material Adverse Effect, including regulations of the Board, the Federal
Interstate Land Sales Full Disclosure Act, the Florida Land Sales Act or any
comparable statute in any other applicable jurisdiction. None of the Loan
Parties has received any notice to the effect that any of them are (a) in
non-compliance with any of the requirements of applicable Environmental Laws or
any applicable federal, state and local health and safety statutes and
regulations or (b) the subject of any governmental investigation concerning the
release of any Hazardous Substances, in either case, which non-compliance or
remedial action could reasonably be expected to have a Material Adverse Effect.

4.6 Litigation. There is no action, suit, proceeding, arbitration, inquiry or
investigation (whether or not purportedly on behalf of the Borrower or any of
its Subsidiaries) pending or, to the best knowledge of the Borrower, threatened
against or affecting the Loan Parties or any of their respective Subsidiaries
(including under or related to Environmental Laws) (a) with respect to this
Agreement, the Notes, the Guarantee and Collateral Agreement, any other Loan
Document or the transactions contemplated hereby or (b) which could reasonably
be expected to have a Material Adverse Effect. None of the Loan Parties nor any
of their respective Subsidiaries is in default with respect to any final
judgment, writ, injunction, decree, rule or regulation of any court or federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign (collectively, “Judgments”),
except for Judgments with respect to which the liability does not exceed
$5,000,00015,000,000 in the aggregate.

4.7 No Default. No event has occurred and is continuing that is a Default or an
Event of Default.

4.8 Title to Properties. Each of the Loan Parties has good and marketable fee
title, or title insurable by a reputable and nationally recognized title
insurance company, to the Real Property Inventory owned by it, and to all the
other assets owned by it and either reflected on the balance sheet and related
notes and schedules most recently delivered by the Borrower to the Lenders (the
“Recent Balance Sheet”) or acquired by it after the date of the Recent Balance
Sheet and prior to the Fourth Amendment Effective dDate hereof, except for those
properties and assets which have been disposed of since the date of the Recent
Balance Sheet or which no longer are used or are useful in the conduct of its
business or which are classified as real estate not owned under GAAP. All
Qualified Real Property Inventory and other assets owned by the Loan Parties are
free and clear of all mortgages, Liens, charges and other

 

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encumbrances (other than Permitted Liens and notices of commencement filed
against Qualified Real Property Inventory located in Florida).

4.9 Tax Liability. There have been filed all federal, state and local tax
returns with respect to the operations of the Loan Parties which are required to
be filed, except where extensions of time to make those filings have been
granted by the appropriate taxing authorities and the extensions have not
expired or where failure to file would not have a Material Adverse Effect. The
Loan Parties have paid or caused to be paid to the appropriate taxing
authorities all taxes as shown on those returns and on any assessment received
by any of them, to the extent that those taxes have become due, except for taxes
the failure of which to pay does not violate the provisions of this Agreement.

4.10 Regulations U and X; Investment Company Act.

(a) Neither the Borrower nor any other Loan Party is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any margin stock (within the meaning of
Regulation U or Regulation X of the Board). Margin stock (as defined in
Regulation U) constitutes less than 25% of those assets of the Loan Parties and
their respective Subsidiaries on a consolidated basis which are subject to any
limitation on sale, pledge, or other restriction hereunder.

(b) No part of the proceeds of any extension of credit hereunder will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock. If requested by the
Lenders, the Borrower shall furnish to the Lenders a statement in conformity
with the requirements of Federal Reserve Form U-1 referred to in Regulation U of
said Board. No part of the proceeds of any extension of credit hereunder will be
used for any purpose that violates, or which is inconsistent with, the
provisions of Regulation X of said Board.

(c) None of the Loan Parties nor any of their respective Subsidiaries is an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

4.11 ERISA Compliance. Except as could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect: (a) each Loan Party and
its Subsidiaries and each of their respective ERISA Affiliates (and in the case
of a Pension Plan or a Multiemployer Plan, each of their respective ERISA
Affiliates) are in compliance with all applicable provisions and requirements of
ERISA and the Code and other federal and state laws and the regulations and
published interpretations thereunder with respect to each Plan and Pension Plan
and have performed all their obligations under each Plan and Pension Plan;
(b) no ERISA Event or Foreign Plan Event has occurred or is reasonably expected
to occur; (c) each Plan or Pension Plan which is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from
the IRS covering such plan’s most recently completed five (5)-year remedial
amendment cycle in accordance with Revenue Procedure 2007-44, I.R.B. 2007-28,
indicating that such Plan or Pension Plan is so qualified and the trust related
thereto has been determined by the IRS to be exempt from federal income tax
under Section 501(a) of the Code or an application for such a determination is
currently pending before the IRS and, to the knowledge of the Borrower, nothing
has occurred subsequent to the issuance of the most recent determination letter
which would cause such Plan or Pension Plan to lose its qualified status; (d) no
liability to the PBGC (other than required premium payments), the IRS, any Plan
or Pension Plan or any trust established under Title IV of ERISA has been or is
expected to be incurred by any Loan Party or its Subsidiaries or any of their
ERISA Affiliates; (e) no ERISA Event has occurred and neither the Borrower nor
any ERISA Affiliate is aware of any fact, event or circumstance that could
reasonably be expected to constitute or result in an ERISA Event; (f) each of
the Loan Parties and their respective Subsidiaries’ ERISA Affiliates have
complied with the requirements

 

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of Section 515 of ERISA with respect to each Multiemployer Plan and are not in
“default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan; (g) all amounts required by applicable law with respect
to, or by the terms of, any retiree welfare benefit arrangement maintained by
any Loan Party or its Subsidiaries or any ERISA Affiliate or to which any Loan
Party or its Subsidiaries or any ERISA Affiliate has an obligation to contribute
have been accrued in accordance with ASC Topic 715-60; (h) as of the most recent
valuation date for each Multiemployer Plan for which the actuarial report is
available, no Loan Party nor any of their respective Subsidiaries or ERISA
Affiliates has any potential liability for a complete withdrawal from such
Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA; (i) there has been no Prohibited Transaction or violation of the
fiduciary responsibility rules with respect to any Plan or Pension Plan that has
resulted or could reasonably be expected to result in a Material Adverse Effect;
(j) neither any Loan Party nor any of its Subsidiaries nor any ERISA Affiliate
maintains or contributes to, or has any unsatisfied obligation to contribute to,
or liability under, any active or terminated Pension Plan other than (i) on the
Fourth Amendment Effective Date, those listed on Schedule 4.11 hereto and
(ii) thereafter, Pension Plans not otherwise prohibited by this Agreement. The
present value of all accumulated benefit obligations under each Pension Plan,
did not, as of the close of its most recent plan year, exceed by more than an
immaterial amount the fair market value of the assets of such Pension Plan
allocable to such accrued benefits (determined in both cases using the
applicable assumptions under Section 430 of the Code and the Treasury
Regulations promulgated thereunder), and the present value of all accumulated
benefit obligations of all underfunded Pension Plans did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more
than an immaterial amount the fair market value of the assets of all such
underfunded Pension Plans (determined in both cases using the applicable
assumptions under Section 430 of the Code and the Treasury Regulations
promulgated thereunder).

4.12 Subsidiaries; Joint Ventures. Schedule 4.12 contains a complete and
accurate list of (a) all Subsidiaries of the Borrower, including, (i) with
respect to each Subsidiary, its state of organization, (ii) with respect to each
Restricted Subsidiary, all jurisdictions (if any) in which it is qualified as a
foreign corporation, foreign limited liability company or foreign limited
partnership, as applicable, (iii) with respect to each Subsidiary, the
percentage of Capital Stock owned by the Borrower and/or by any other Subsidiary
and (iv) whether such Subsidiary is a Guarantor or an Unrestricted Subsidiary
(and, if it is an Unrestricted Subsidiary, whether it is a Financial Services
Subsidiary), and (b) each Joint Venture, including, with respect to each such
Joint Venture, (i) its jurisdiction of organization and (ii) the percentage of
Capital Stock owned by the Borrower and/or by any other Subsidiary. All the
outstanding Capital Stock of each Subsidiary of the Borrower is validly issued,
and all of the outstanding shares of Capital Stock of each Subsidiary of the
Borrower are fully paid and nonassessable, except as otherwise provided by state
wage claim laws of general applicability. All of the outstanding Capital Stock
of each Subsidiary owned by the Borrower or another Subsidiary as specified in
Schedule 4.12 are owned free and clear of all Liens, security interests, equity
or other beneficial interests, charges and encumbrances of any kind whatsoever,
except for Permitted Liens. Neither the Borrower nor any other Loan Party owns
of record or beneficially any Capital Stock or other equity interests of any
Subsidiary that is not a Guarantor, except Unrestricted Subsidiaries.

4.13 Environmental Matters. Except as could not be reasonably expected to,
individually or in the aggregate, have a Material Adverse Effect: (i) no
Hazardous Substances are known to be (or should be known to be) present at, on
or under any of the Real Property Inventory, or any other real property owned by
a Loan Party, in each case, under circumstances which could reasonably be
expected to give rise to liability under any applicable Environmental Law;
(ii) none of the Loan Parties has received any notice or claim to the effect
that any of the Real Property Inventory or any of their respective operations
are not in compliance with any applicable Environmental Laws or are the subject
of

 

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any investigation concerning the release or threatened release of any Hazardous
Substance; (iii) each of the Loan Parties is, and within the period of all
applicable statutes of limitation has been, in compliance with all applicable
Environmental Laws, and none of the Loan Parties is aware of any reasonably
anticipated future events or circumstances that could be expected to prevent
continued compliance with Environmental Law; (iv) none of the Loan Parties has
entered into any consent decree, order, or settlement or other agreement, nor is
subject to any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum, relating to compliance with or
liability under any Environmental Law; and (v) none of the Loan Parties has
assumed or retained, by contract or operation of law, any liabilities under any
Environmental Law or with respect to any Hazardous Substances.

4.14 No Misrepresentation. No representation or warranty by any Loan Party made
under this Agreement and no certificate, schedule, exhibit, report or other
document provided or to be provided by any Loan Party in connection with the
transactions contemplated hereby or thereby (including, without limitation, the
negotiation of and compliance with the Loan Documents) contains or will contain
a misstatement of a material fact or omit to state a material fact required to
be stated therein in order to make the statements contained therein, in the
light of the circumstances under which made, not misleading.

4.15 Solvency. The Loan Parties and their respective Subsidiaries are, on a
consolidated basis, Solvent.

4.16 Foreign Direct Investment Regulations. Neither the making of the Loans or
advances of credit nor the repayment thereof nor any other transaction
contemplated hereby will involve or constitute a violation by any Loan Party of
any provision of the Foreign Direct Investment Regulations of the United States
Department of Commerce or of any license, ruling, order, or direction of the
Secretary of Commerce thereunder.

4.17 Relationship of the Loan Parties. The Loan Parties are engaged as an
integrated group in the Business. The Loan Parties require financing on such a
basis that funds can be made available from time to time to such entities, to
the extent required for the continued successful operation of their integrated
operations. The Loans and other advances of credit to be made to the Borrower
under this Agreement are for the purpose of financing the integrated operations
of the Loan Parties, and the Loan Parties expect to derive benefit, directly or
indirectly, from the Loans and other advances, both individually and as a member
of the integrated group, since the financial success of the operations of the
Loan Parties is dependent upon the continued successful performance of the
integrated group as a whole.

4.18 Insurance. The properties of the Loan Parties and their respective
Subsidiaries are insured with financially sound and reputable insurance
companies, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Loan Parties and their respective
Subsidiaries operate.

4.19 Anti-Corruption Laws and Sanctions. The Borrower has implemented and
maintains in effect policies and procedures designed to ensure compliance by the
Borrower, its Subsidiaries and their respective directors, officers, employees
and agents with Anti-Corruption Laws and applicable Sanctions, and the Borrower,
its Subsidiaries and their respective officers and employees, and to the
knowledge of the Borrower its directors and agents, are in compliance with
Anti-Corruption Laws and applicable Sanctions in all material respects. None of
(a) the Borrower, any Subsidiary or any of their respective directors, officers
or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower
or any Subsidiary that will act in any capacity in connection with or benefit
from the credit facility established hereby, is a Sanctioned Person. No
Borrowing or Letter of Credit, use of proceeds or

 

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other transaction contemplated by the Credit Agreement will violate
Anti-Corruption Laws or applicable Sanctions.

4.20 Intellectual Property; Licenses, Etc. The Borrower and its Restricted
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights that are reasonably necessary for the
operation of their respective businesses, without conflict with the rights of
any other Person.

4.21 Security Documents.

(a) The Security Documents are effective to create in favor of the Collateral
Agent, for the benefit of the Lenders, a legal, valid and enforceable security
interest in the Collateral described therein and proceeds thereof. In the case
of the certificated securities described in the Security Documents, when stock
certificates representing such securities are delivered to the Collateral Agent
(together with properly completed and signed stock power or endorsement), and in
the case of the other Collateral described in the Security Documents (other than
Collateral in which a security cannot be perfected by the filings specified on
Schedule 4.21(a)), when financing statements specified on Schedule 4.21(a) in
appropriate form are filed in the offices specified on Schedule 4.21(a), the
Security Documents shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as defined
in the Security Documents), in each case prior and superior in right to any
other Person (except, in the case of Collateral other than certificated
securities, Liens permitted by Section 7.2).

(b) Each of the Mortgages, when filed or recorded, is or will be in form
sufficient to create in favor of the Collateral Agent, for the benefit of the
Lenders, a legal, valid and enforceable Lien on the Mortgaged Properties
described therein and proceeds thereof, and when the Mortgages are filed in the
offices where such Mortgaged Properties are located and, if required, mortgage
registry tax is paid, each such Mortgage shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in the Mortgaged Properties and the proceeds thereof, as security for the
Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person (other than for Liens permitted by
Section 7.2).

4.22 Regulation H. No Mortgage encumbers real property upon which a “building”
(as defined under the National Flood Insurance Act of 1968, as amended) has been
constructed that is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and for
which required flood insurance has been made available under the National Flood
Insurance Act of 1968, as amended, unless such insurance has been obtained and
is being maintained in accordance with the terms of this Agreement.

4.23. EEA Financial Institutions. No Loan Party is an EEA Financial Institution.

SECTION 5. CONDITIONS PRECEDENT

5.1 Conditions to Effectiveness. The effectiveness of this Agreement iswas
subject to the satisfaction of the following conditions precedent (it being
understood that this Agreement became effective on the Effective Date; terms
used in this Section 5.1 shall have the meanings assigned thereto as of the
Effective Date):

(a) Credit Agreement; Guarantee and Notes. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by the Borrower, each Lender
listed on Schedule

 

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1.1A, the Administrative Agent and the Collateral Agent, which shall be in full
force and effect and (ii) the Guarantee and Collateral Agreement, executed and
delivered by each Guarantor and the Collateral Agent, which shall be in full
force and effect.

(b) Financial Statements. The Lenders shall have received the Form 10-K for the
Borrower filed for the fiscal year ended December 31, 2013 (which financial
statements were deemed delivered when filed with the SEC).

(c) Fees. The Lenders and the Agents shall have received all fees required to be
paid, and all expenses for which invoices have been presented (including the
reasonable fees and expenses of legal counsel to the Agents) on or before the
Effective Date.

(d) Closing Certificate; Certified Certificate of Incorporation; Good Standing
Certificates. The following supporting documents with respect to the Borrower
and the other Loan Parties: (i) a copy of its certificate or articles of
incorporation, formation, organization or certificate of limited partnership (as
applicable), certified as of a date reasonably close to the Effective Date to be
a true and accurate copy by the Secretary of State (or similar Governmental
Authority) of its state of incorporation or formation; (ii) a certificate of
that Secretary of State (or similar Governmental Authority), dated as of a date
reasonably close to the Effective Date, as to its existence and (if available)
good standing; (iii) a copy of its regulations or by-laws, partnership
agreement, or operating agreement or limited liability company agreement (as
applicable), certified by its secretary or assistant secretary, general partner,
manager or other appropriate Person (as applicable) to be a true and accurate
copy of its regulations or by-laws, partnership agreement, or operating
agreement or limited liability company agreement (as applicable) in effect on
the Effective Date; (iv) a certificate of its secretary or assistant secretary,
general partner, manager or other appropriate Person (as applicable), as to the
incumbency and signatures of its officers or other Persons who have executed any
documents on behalf of such Loan Party in connection with the transactions
contemplated by this Agreement; (v) a copy of resolutions of its board of
directors or the executive committee of the board of directors, certified by its
secretary or assistant secretary to be a true and accurate copy of resolutions
duly adopted by such board of directors or the executive committee of the board
of directors, or other appropriate resolutions or consents of its general
partner, manager or members certified by its secretary, assistant secretary,
general partner or manager (as applicable) to be true and correct copies thereof
duly adopted, approved or otherwise delivered by its general partner, manager or
members (to the extent necessary and applicable), each of which is certified to
be in full force and effect on the Effective Date, authorizing the execution and
delivery by it of this Agreement and any Notes, the Guarantee and Collateral
Agreement and other Loan Documents delivered on the Effective Date or to be
delivered on the Closing Date to which it is a party and the performance by it
of all its obligations thereunder; and (vi) such additional supporting documents
and other information with respect to its operations and affairs as the
Administrative Agent may reasonably request.

(e) Legal Opinions. The Administrative Agent shall have received favorable legal
opinions of Faegre Baker Daniels LLP, counsel to the Borrower and its
Subsidiaries, as to matters of Delaware and New York law, and of Melisa Boross,
Vice President and Associate General Counsel of the Borrower, as to matters of
Arizona and Florida law, substantially in the form of Exhibit F, which legal
opinions shall cover such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may reasonably
require.

(f) Representations and Warranties; No Defaults. Certificates signed by a duly
authorized officer of the Borrower stating that: (i) the representations and
warranties of the Borrower contained in Section 4 hereof are correct and
accurate in all material respects on and as of the Effective Date, provided,
that, to the extent any such representation or warranty is already qualified by
materiality or reference to Material Adverse Effect, such representation shall
be true and correct in all respects, and

 

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(ii) no event has occurred and is continuing which constitutes an Event of
Default or Default hereunder as of the Effective Date.

(g) Compliance Certificate. Delivery of a Compliance Certificate, substantially
in the form of Exhibit B, as of December 31, 2013.

(h) Lien Searches. The Administrative Agent shall have received the results of
recent Uniform Commercial Code Lien searches in each relevant jurisdiction of
the Loan Parties as requested by the Administrative Agent, and such searches
shall reveal no Liens on any Collateral, except for Permitted Liens.

(i) Pledged Stock; Stock Powers; Pledged Notes. The Collateral Agent shall have
received (i) the certificates representing the shares of Capital Stock pledged
pursuant to the Guarantee and Collateral Agreement, together with an undated
stock power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof and (ii) each promissory note (if any) pledged to
the Collateral Agent pursuant to the Guarantee and Collateral Agreement endorsed
(without recourse) in blank (or accompanied by an executed transfer form in
blank) by the pledgor thereof; provided that the pledgors shall only be required
to deliver promissory notes pursuant to this clause (ii) to the extent the
aggregate principal amount of such pledged promissory notes exceeds $1,000,000.

(j) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Security Documents or under
law or reasonably requested by the Collateral Agent to be filed, registered or
recorded in order to create in favor of the Collateral Agent, for the benefit of
the Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Permitted
Liens), shall be in proper form for filing, registration or recordation.

(k) No Indebtedness. The Administrative Agent shall have received evidence
reasonably satisfactory to the Administrative Agent that the Loan Parties shall
have no outstanding Secured Indebtedness other than Indebtedness permitted under
Section 7.

(l) Insurance. The Collateral Agent shall have received certificates of
insurance, together with the endorsements thereto that reflect the status of the
Collateral Agent as a loss payee and the Collateral Agent as additional insured
in such certificates of insurance, as are required by Section 6.4, the form and
substance of which shall be reasonably satisfactory to Collateral Agent.

(m) Additional Documents. The Administrative Agent shall have received such
other agreements, instruments and documents as any Agents, their counsel or any
Lender may reasonably request.

5.2 Conditions to Initial Extension of Credit. The agreement of each Lender
(including the Swingline Lender and(as defined in this Agreement prior to giving
effect to the Fourth Amendment Effective Date) and the Issuing Lenders) to make
the initial extension of credit requested to be made by it is subject to the
satisfaction, prior to or concurrently with the making of such extension of
credit, of the following conditions precedent (it being understood that each
such agreement became effective on the Closing Date; terms used in this
Section 5.1 shall have the meanings assigned thereto as of the Closing Date):

(a) Account Control Agreements; Notes. The Administrative Agent shall have
received (i) Contingent Account Control Agreements covering the Operating
Accounts and the Collateral Proceeds Account, in each case executed and
delivered by each party thereto, which shall be in full force

 

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and effect, (ii) Blocked Account Control Agreements covering the Borrowing Base
Account and the Interest Reserve Account, in each case executed and delivered by
each party thereto, which shall be in full force and effect, and (iii) Notes, if
requested, payable to the order of each requesting Lender, which shall be in
full force and effect.

(b) Fees. The Lenders and the Agents shall have received all fees required to be
paid, and all expenses for which invoices have been presented (including the
reasonable fees and expenses of legal counsel to the Agents) on or before the
Closing Date.

(c) Closing Certificate; Good Standing Certificates. The following supporting
documents with respect to the Borrower and the other Loan Parties: (i) a
certificate certifying that (x) its certificate or articles of incorporation,
formation, organization or certificate of limited partnership (as applicable),
(y) its regulations or by-laws, partnership agreement or operating agreement or
limited liability company agreement (as applicable) and (z) the resolutions
previously adopted by it authorizing the execution and delivery of this
Agreement, any Notes, the Guarantee and Collateral Agreement and the other Loan
Documents delivered on the Effective Date or to be delivered on the Closing Date
to which it is a party and performance by it of all of its obligations
thereunder have, in each case, not been amended since the Effective Date and
(ii) confirmation (to the extent applicable in such Loan Party’s jurisdiction of
organization) that it is good standing.

(d) Legal Opinions. The Administrative Agent shall have received (i) favorable
legal opinions of Faegre Baker Daniels LLP, counsel to the Borrower and its
Subsidiaries, as to matters of Delaware and New York law, and of Melisa Boross,
Vice President and Associate General Counsel of the Borrower, as to matters of
Arizona and Florida law, which legal opinions shall cover the Contingent Account
Control Agreements, the Blocked Account Control Agreements and any Notes to be
issued on the Closing Date, and such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may reasonably
require and (ii) favorable legal opinions of Arizona and Florida special counsel
to the Borrower, which legal opinions shall cover the enforceability of the
Mortgages under Arizona and Florida law and such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require, in each case the form and substance of which shall be
reasonably satisfactory to the Administrative Agent.

(e) Borrowing Base Certificate. Delivery of a Borrowing Base Certificate,
substantially in the form of Exhibit C, as of the Closing Date.

(f) Additional Documents. The Administrative Agent shall have received such
other agreements, instruments and documents as any Agents, their counsel or any
Lender may reasonably request.

5.3 Conditions to Each Extension of Credit. The agreement of each Lender to make
any extension of credit requested to be made by it on any date (including its
initial extension of credit) is subject to the satisfaction of the following
conditions precedent:

(a) Borrowing Request. The Administrative Agent shall have received notice of
the Borrower’s request for Revolving Loan as provided in Section 2.2, Swingline
Loan as provided in Section 2.3 or Application as provided in Section 3.2.

(b) Representations and Warranties. Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct in all material respects (except any representations and warranties
which are qualified by materiality, which shall be true and correct in all
respects) on and as of such date as if made on and as of such date, provided if
any such

 

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representations and warranties are expressly made only as of a prior date, such
representations and warranties shall be true as of such prior date.

(c) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.

(d) Availability. Giving effect to such extension of credit, Borrowing Base Debt
shall not be greater than the Borrowing Base; provided that the condition
precedent in this Section 5.3(d) shall be deemed to be satisfied if the Borrower
shall, substantially concurrently with such extension of credit, take actions as
required by Section 2.8 so that Borrowing Base Debt is equal to or less than the
Borrowing Base.

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.3 have been satisfied.

SECTION 6. AFFIRMATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Letter of Credit for which 100% of the L/C Obligations thereunder has not
been Cash Collateralized remains outstanding or any Loan or other amount (other
than contingent obligations such as indemnities or increased costs) is owing to
any Lender or Agent hereunder, the Borrower shall and shall cause each Loan
Party to:

6.1 Reporting Requirements. Maintain a standard system of accounting established
and administered in accordance with GAAP and shall cause to be delivered to the
Administrative Agent (for prompt distribution by the Administrative Agent to
Lenders):

(a) as soon as available and in any event within 90 days after the end of each
fiscal year of the Borrower, a consolidated balance sheet of the Loan Parties
and their respective Subsidiaries as of the end of that fiscal year and the
related consolidated statements of operations, stockholders’ equity and cash
flows for that fiscal year, all with accompanying notes and schedules, prepared
in accordance with GAAP consistently applied and audited and reported upon by
Ernst & YoungDeloitte & Touche LLP or another firm of independent certified
public accountants of similar recognized standing selected by the Borrower and
acceptable to the Administrative Agent (such audit report shall not contain a
“going concern” or like qualification or exception, or qualification arising out
of the scope of the audit or qualification which would affect the computation of
financial covenants contained herein other than a qualification for consistency
due to a change in the application of GAAP with which Borrower’s independent
certified public accountants concur); the financial statements filed with or
furnished to the SEC by the Borrower (and which are available online) shall be
deemed to have been provided by the Borrower under this reporting requirement;

(b) as soon as available and in any event within 45 days after the end of each
of the first three quarters of each fiscal year of the Borrower, a consolidated
balance sheet of the Loan Parties and their respective Subsidiaries as of the
end of that quarter, and the related consolidated statement of operations and
cash flows of the Loan Parties and their respective Subsidiaries for the period
from the beginning of the fiscal year to the end of that quarter, all prepared
in accordance with GAAP consistently applied, unaudited but certified to be true
and accurate, subject to normal year-end audit adjustments, by an Authorized
Financial Officer of the Borrower; the financial statements filed with or
furnished to the

 

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SEC by the Borrower (and which are available online) shall be deemed to have
been provided by the Borrower under this reporting requirement;

(c) concurrently with the delivery of the financial statements described in
subsections (a) and (b) above, a certificate signed by (i) the Chief Executive
Officer, President or Executive Vice President or (ii) an Authorized Financial
Officer of the Borrower, to the effect that, having read this Agreement, and
based upon an examination which he or she deemed sufficient to enable him or her
to make an informed statement, there does not exist any Event of Default or
Default, or if any Event of Default or Default has occurred, specifying the
facts with respect thereto;

(d) within 90 days after the beginning of each fiscal year of the Borrower, a
projection, in reasonable detail and in form and substance satisfactory to the
Administrative Agent, on a quarterly basis, of the earnings, cash flow, balance
sheet and covenant calculations (with assumptions for all of the foregoing) of
the Loan Parties and their respective Subsidiaries for that fiscal year;

(e) promptly upon becoming available, copies of all financial statements,
reports, notices and proxy statements sent by the Borrower to its stockholders,
and of all regular and periodic reports and other material (including copies of
all registration statements and reports under the Securities Act of 1933, as
amended, and the Exchange Act) filed by the Borrower with or furnished to any
securities exchange or any Governmental Authority or commission, except material
filed with or furnished to governmental authorities or commissions relating to
the development of Real Property Inventory in the ordinary course of the
business of the Loan Parties and which does not relate to or disclose any
Material Adverse Effect; the reports and financial statements filed with or
furnished to the SEC by the Borrower (and which are available online) shall be
deemed to have been provided by the Borrower under these reporting requirements;

(f) as soon as available and in any event within 90 days after the end of the
fourth quarter of each fiscal year, for each Joint Venture in which the Borrower
or a Subsidiary has an Investment greater than $2,000,000, a statement of
earnings, assets, liabilities and net worth, indicating the Borrower’s and each
Loan Party’s pro rata share of such Joint Venture, in the form attached as
Schedule 6.1(f);

(g) the following reports: (i) within 30 days after the end of each calendar
month, (beginning with the first calendar month ending at least 15 days after
the Closing Date), a Borrowing Base Certificate as of the end of such month and
promptly upon demand by the Administrative Agent, the Borrower shall provide the
Administrative Agent with all documentation and other data supporting such
calculations as the Administrative Agent may reasonably require. In the event
that the Administrative Agent notifies the Borrower in writing of any inaccuracy
in a Borrowing Base Certificate, the Borrower and the Administrative Agent shall
work in good faith to resolve such discrepancy, but pending such resolution, the
amount calculated as the Borrowing Base in such Borrowing Base Certificate shall
be revised as reasonably determined by the Administrative Agent and (ii) within
45 days after the end of each of the first three quarters, and within 90 days
after the end of each fiscal year of the Borrower, a report which shall include
the information and calculations provided for in the Compliance Certificate
attached to this Agreement, which shall be in reasonable detail and in form and
substance satisfactory to the Administrative Agent, with calculations indicating
that the Borrower is in compliance, as of the last day of such quarterly or
annual period, as the case may be, with the provisions of the financial
covenants in Section 7.1 of the Borrower and the Loan Parties and with the
provisions of Sections 7.4(g). The reports furnished pursuant to this subsection
(g) shall each be certified to be true and correct by an Authorized Financial
Officer of the Borrower;

 

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(h) as soon as possible and in any event within 10 Business Days after the
Borrower knows that any Reportable Event has occurred with respect to any Plan,
a statement, signed by an Authorized Financial Officer of the Borrower,
describing said Reportable Event and the action which the Borrower proposes to
take with respect thereto;

(i) as soon as possible and in any event within 10 Business Days after receipt
thereof by any of the Loan Parties or any of their respective Subsidiaries, a
copy of (i) any notice or claim to the effect that any of the Loan Parties or
their respective Subsidiaries is or may be liable to any Person as a result of
the release or threatened release by any of the Loan Parties, any of their
respective Subsidiaries or any other Person of any Hazardous Substance into the
indoor or outdoor environment, and (ii) any notice or claim alleging any
violation of any Environmental Law or any federal, state or local health or
safety law or regulation by any of the Loan Parties or any of their respective
Subsidiaries, which, in either case, could reasonably be expected to have a
Material Adverse Effect;

(j) promptly following receipt thereof, copies of (i) any documents described in
Section 101(f), 101(k) or 101(l) of ERISA that any Loan Party or any ERISA
Affiliate may request with respect to any Multiemployer Plan or Pension Plan;
provided, that if the relevant Loan Party or ERISA Affiliate have not requested
such documents or notices from the administrator or sponsor of the applicable
Multiemployer Plans or Pension Plans, then, upon reasonable request of the
Administrative Agent, such Loan Party or the ERISA Affiliate shall promptly make
a request for such documents or notices from such administrator or sponsor and
the Borrower shall provide copies of such documents and notices to the
Administrative Agent promptly after receipt thereof; and

(k) such supplements to the aforementioned documents and additional information
and reports as the Administrative Agent or any Lender may from time to time
reasonably require.

6.2 Payment of Obligations, Taxes and Other Potential Liens. Pay, discharge or
satisfy all its debts and perform all itsother obligations promptly and in
accordance with the terms governing such debts or other obligations, and pay and
discharge or cause to be paid and discharged promptly all taxes, assessments and
governmental charges or levies imposed upon any Loan Party or upon any of their
respective incomes or receipts or upon any of their respective properties before
the same shall become in default or past due, as well as all lawful claims for
labor, materials and supplies or otherwise which, if unpaid, might result in the
imposition of a Lien or charge upon such properties or any part thereof;
provided, however, that it shall not constitute a violation of the provisions of
this Section 6.2 if any Loan Party shall fail to (x) performpay any such
obligation or to pay any such debt (except for obligations for money borrowed),
tax, assessment, governmental charge or levy or claim for labor, materials or
supplies which is being contested in good faith, by proper proceedings
diligently pursued, and as to which adequate reserves have been provided in
conformity with GAAP, or (y) pay a debt secured by a mortgage, deed of trust or
comparable Lien on real estate if such debt is, by its terms, Non-Recourse
Indebtedness.

6.3 Preservation of Existence. Except as permitted by Section 7.3, do or cause
to be done all things or proceed with due diligence with any actions or courses
of action which may be necessary to preserve and keep in full force and effect
its existence under the laws of its state of incorporation or formation and all
qualifications or licenses in jurisdictions in which such qualification or
licensing is required for the conduct of its business, except where the failure
to do so would not reasonably be expected to result in a Material Adverse
Effect. The Borrower will, and will cause each Subsidiary to, carry on and
conduct its business in substantially the same manner and in substantially the
same fields of enterprise as it is presently conducted and maintain all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted. The primary business of the Loan Parties and their
respective Subsidiaries shall at all times be the Business.

 

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6.4 Maintenance of Properties. Maintain all its personal property in good
working order and condition, ordinary wear and tear excepted, and, with respect
to real and personal property, make all necessary repairs, renewals and
replacements thereof so that its business carried on in connection therewith may
be properly conducted at all times in all material respects; and maintain or
require to be maintained (a) reasonably adequate insurance, by financially sound
and reputable insurers, on all properties of the Loan Parties which are of a
character usually insured by Persons engaged in the same or a similar business
in the same general geographic area (including, without limitation, all Real
Property Inventory encumbered by mortgages securing mortgage loans made by any
Loan Party, to the extent normally required by prudent mortgagees, and all Real
Property Inventory which is the subject of an equity investment by any Loan
Party, to the extent normally carried by prudent builder-developers) against
loss or damage resulting from fire, defects in title or other risks insured
against by extended coverage and of the kind customarily insured against by
those Persons, (b) reasonably adequate public liability insurance against tort
claims which may be incurred by any Loan Party, and (c) such other insurance as
may be required by law, in each case, except where the failure to do so would
not reasonably be expected to result in a Material Adverse Effect. Upon the
request of the Administrative Agent, the Borrower will furnish to the Lenders
full information as to the insurance carried. All certificates of insurance are
to be delivered to the Collateral Agent, with the additional lender loss payable
and additional insured endorsement in favor of the Collateral Agent.

6.5 Access to Premises and Books. At all reasonable times during normal business
hours upon reasonable notice to the Borrower and as often as any Lender may
reasonably request, permit authorized representatives and agents (including
accountants) designated by that Lenderthe Administrative Agent to (a) have
access to and inspect the premises and properties (including for purposes of
appraising and/or re-appraising properties) of the Borrower and each Subsidiary
and their respective corporate books and financial records, and all other
records relating to their respective operations and procedures, (b) make copies
of or excerpts from those books and records and (c) discuss the respective
affairs, finances and operations of the Loan Parties and their respective
Subsidiaries with, and to be advised as to the same by, their respective
officers and directors; provided, however, that unless an Event of Default shall
have occurred and be continuing, not more than one such visit shall occur every
twelve (12) month period.

6.6 Notices. Give prompt written notice to the Administrative Agent (who
promptly shall furnish the same to the Lenders) of (a) any proceeding instituted
by or against the Borrower or any of the Loan Parties in any federal or state
court or before any commission or other regulatory body, federal, state or local
or other governmental agency, which, if adversely determined, could reasonably
be expected to have a Material Adverse Effect on any Loan Party, (b) any other
event which could reasonably be expected to lead to or result in a Material
Adverse Effect on any Loan Party or result in an Event of Default, (c) (i) upon
becoming aware of the occurrence of or forthcoming occurrence of any ERISA Event
or Foreign Plan Event, a written notice specifying the nature thereof, what
action Borrower, any of the Loan Parties or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the IRS, the Department of Labor
or the PBGC with respect thereto; and (ii) with reasonable promptness, upon
Administrative Agent’s request, copies of (1) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by Borrower, any of
the Loan Parties or any of their respective ERISA Affiliates with the IRS with
respect to each Pension Plan; (2) all notices received by Borrower, any of the
Loan Parties or any of their respective ERISA Affiliates from a Multiemployer
Plan sponsor concerning an ERISA Event or Foreign Plan Event; and three
(3) copies of such other documents or governmental reports or filings relating
to any Plan or Pension Plan as Administrative Agent shall reasonably request,
and (d) the occurrence of any Default or Event of Default.

6.7 Addition or Release of Guarantors; Additional Collateral, Etc.

 

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(a) Give the Administrative Agent prompt written notice of the formation or
acquisition of any Subsidiary. Such Subsidiary shall be required to become and
continue to be a Loan Party, unless such Subsidiary is designated as an
Unrestricted Subsidiary as permitted by this Agreement. Notwithstanding anything
to the contrary, if at any time or from time there occurs a Change in Status of
a Loan Party, the Borrower shall deliver notice thereof to the Administrative
Agent, including a reasonably detailed description of the Change in Status and a
statement of the effective date of the Change in Status. Each Change in Status
event shall be effective as of the effective date of such Change in Status,
automatically, without any further action by any party to this Agreement, and
the Subsidiary that is subject to such Change in Status shall no longer be a
Loan Party and shall be released from the Guarantee and Collateral Agreement. In
connection with each Change in Status, the Administrative Agent, on behalf of
Lenders, shall promptly following receipt of written notice of Change in Status,
execute and deliver to the Borrower a written confirmation of such Change in
Status. A newly formed or acquired Subsidiary which the Borrower does not
designate as an Unrestricted Subsidiary and any Unrestricted Subsidiary that the
Borrower elects to re-designate as a Restricted Subsidiary will become a Loan
Party under this Agreement, and the Borrower shall promptly deliver to the
Administrative Agent (which, in the case of such a newly formed or acquired
Subsidiary, shall be delivered within forty-five (45) days) (i) an Assumption
Agreement, substantially in the form provided for in the Guarantee and
Collateral Agreement, executed by a duly authorized officer of such Subsidiary
(which shall provide that the Borrower and such Subsidiary shall make the
representations and warranties in Section 4 of this Agreement with respect to
such Subsidiary); (ii) a copy of the certificate or articles of incorporation or
other organizational document of such Subsidiary, certified by the Secretary of
State or other official of the state or other jurisdiction of its incorporation
or formation; (iii) such amendments to the Guarantee and Collateral Agreement as
the Collateral Agent deems necessary to grant to the Collateral Agent, for the
benefit of the Lenders, a perfected first priority security interest (subject to
Permitted Liens) in the Capital Stock of such Subsidiary; (iv) if applicable,
deliver to the Collateral Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by
duly authorized officers of the owner of such Capital Stock; (v) evidence that
such Subsidiary has become a party to the Guarantee and Collateral Agreement and
that all actions necessary to grant to the Collateral Agent for the benefit of
the Lenders a perfected first priority security interest (subject to Permitted
Liens) in the Collateral described in the Guarantee and Collateral Agreement
with respect to such Subsidiary has been taken, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by laws or as may be reasonably
requested by the Collateral Agent, and (vi) if, requested, deliver to the
Collateral Agent legal opinions relating to the matters described above, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Collateral Agent.

(b) With respect to any personal Property acquired after the Effective Date by
the Borrower or any Guarantor (other than personal Property which is excluded
from the Collateral pursuant to the terms of the Guarantee and Collateral
Agreement) as to which the Collateral Agent, for the benefit of the Lenders,
does not have a perfected Lien, promptly, and in any event on or prior to thirty
(30) days after such acquisition (or such longer period as the Collateral Agent
may agree in its reasonable discretion) (i) execute and deliver to the
Collateral Agent such amendments to the Guarantee and Collateral Agreement or
such other documents as the Collateral Agent reasonably deems necessary to grant
to the Collateral Agent, for the benefit of the Lenders, a security interest in
such Property and (ii) take all actions necessary to grant to the Collateral
Agent, for the benefit of the Lenders, a perfected first priority security
interest in such Property (subject to Permitted Liens), including without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be reasonably requested by the Collateral Agent.

 

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6.8 Compliance with Laws and Other Requirements. (i) Promptly and fully comply
with, conform to and obey all present and future laws (including all applicable
Environmental Laws), ordinances, rules, regulations, orders, writs, judgments,
injunctions, decrees, awards and all other legal requirements applicable to the
Loan Parties, their respective Subsidiaries and their respective properties,
including, without limitation, Regulation Z of the Board, the Federal Interstate
Land Sales Full Disclosure Act, ERISA, the Florida Land Sales Act or any similar
statute in any applicable jurisdiction, in each case, the violation of which
would have a Material Adverse Effect on any Loan Party; (ii) comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect; and (iii) maintain in effect and enforce
policies and procedures designed to ensure compliance by the Borrower, its
Subsidiaries and their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions.

6.9 Use of Proceeds. Use and cause to be used the proceeds of the Loans and
other extensions of credit for working capital and general corporate purposes.

6.10 Further Assurances. Promptly upon request by any Agent, or any Lender
through the Administrative Agent, and subject to the limitations described in
Section 6.7, (i) correct any material defect or error that may be discovered in
any Loan Document or other document or instrument relating to any Collateral or
in the execution, acknowledgment, filing or recordation thereof and (ii) do,
execute, acknowledge, deliver, record, re-record, file, refile, register and
re-register any and all such further acts, deeds, certificates, assurances and
other instruments as any Agent, or any Lender through the Administrative Agent,
may reasonably require from time to time in order to grant, preserve, protect
and continue the validity, perfection and priority of the security interests
created or intended to be created by the Security Documents.

6.11 Borrowing Base Account, Interest Reserve Account, Collateral Proceeds
Account, Intangible Tax Account and Operating Accounts. From and after the
Closing Date (or in the case of the Interest Reserve Account, if earlier, 30
days after the Effective Date), so long as any Commitment remains in effect or
any portion of any Loan or any Letter of Credit remains outstanding, the
Borrower agrees at all times to maintain the Borrowing Base Account, the
Interest Reserve Account, the Collateral Proceeds Account, the Intangible Tax
Account and the Operating Accounts pursuant to arrangements reasonably
satisfactory to the Collateral Agent. The Borrowing Base Account, the Intangible
Tax Account and the Interest Reserve Account shall be, at all times from and
after the date on which they are required to be established hereunder, subject
to a Blocked Account Control Agreement, and the Collateral Proceeds Account and
the Operating Accounts shall be, at all times from and after the Closing Date,
subject to a Contingent Account Control Agreement. The Borrower hereby pledges,
assigns and grants to the Collateral Agent on behalf of and for the ratable
benefit of the Lenders and the Issuing Lender, a security interest in all of the
Borrower’s right, title and interest thereto and all funds and amounts from time
to time on deposit in the Borrowing Base Account, Interest Reserve Account,
Intangible Tax Account, Collateral Proceeds Account and Operating Accounts to
secure prompt and complete performance of its Obligations. The Borrowing Base
Account is a blocked account, and the Collateral Agent shall not be obligated to
honor any withdrawal or transfer instructions pertaining thereto except as
provided in Section 10.14 hereof. The Interest Reserve Account is a blocked
account, and the Collateral Agent shall not be obligated to honor any withdrawal
or transfer instructions pertaining thereto except as provided in this
Agreement; provided that the Collateral Agent shall honor any withdrawal or
transfer instructions pertaining thereto so long as (i) no Event of Default
shall have occurred and be continuing or would result therefrom and (ii) after
giving effect to such withdrawal or transfer, amounts on deposit in the Interest
Reserve Account would be not less than the Interest Reserve. The Intangible Tax
Account is a blocked account, and the Collateral Agent shall not be obligated to
honor any withdrawal or transfer instructions pertaining thereto except as
provided in this Agreement; provided that the Collateral

 

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Agent shall honor any withdrawal or transfer instructions pertaining thereto so
long as (i) no Event of Default shall have occurred and be continuing or would
result therefrom and (ii) the Interest Coverage Ratio (as of the last day of the
most recently ended fiscal quarter) is greater than 1.5 to 1.0. Funds on deposit
in the Intangible Tax Account may be used and applied by the Collateral Agent in
order to pay the Florida intangible taxes if and when they become due on any
Mortgage recorded in the State of Florida. Such payment may be made to the
applicable taxing authority or otherwise as a court having jurisdiction shall
direct. Unless and until an Event of Default shall have occurred and be
continuing and so long as no Event of Default would result therefrom, the
Borrower may make withdrawals and transfers from the Operating Accounts and the
Collateral Proceeds Account. After the occurrence and during the continuance of
an Event of Default, the Collateral Proceeds Account and the Operating Accounts
shall be blocked accounts, and the Collateral Agent shall not be obligated to
honor any withdrawal or transfer instructions pertaining thereto. In addition,
no withdrawals or transfers from the Collateral Proceeds Account or the
Operating Accounts shall be made any time when a mandatory prepayment is payable
by the Borrower pursuant to Section 2.8 other than for necessary operating
expenses payable in the ordinary course of business. The Borrower agrees that it
will (a) maintain on deposit in or credited to the Borrowing Base Account only
cash or Cash Equivalents and (b) cause to be deposited into or credited to the
Borrowing Base Account only (i) proceeds from the Collateral Proceeds Account
and (ii) other amounts held for a period of at least ninety (90) days in one or
more accounts maintained by the Borrower with the Collateral Agent or its
designee in which the Collateral Agent at all times has for the ratable benefit
of the Lenders and the Collateral Agent a first priority security interest and
Lien, perfected by control pursuant to a Blocked Account Control Agreement, as
collateral security for the Obligations.

6.12 Appraisals. The Administrative Agent will be entitled to obtain, at the
Borrower’s expense (i) at the direction of the Required Lenders, a new
Acceptable Appraisal of all Qualified Real Property Inventory (or any portion
thereof) included in the Borrowing Base once every twelve (12) months during the
term of this Agreement commencing on the first anniversary of the ClosingFourth
Amendment Effective Date and (ii) additional Acceptable Appraisals of any such
Qualified Real Property Inventory (or any portion thereof) (A) if an Event of
Default has occurred and is continuing, (B) if an appraisal is required under
applicable Requirements of Law or (C) upon any increase in Commitments pursuant
to Section 2.21. Additionally, the Administrative Agent will be required to
obtain an Acceptable Appraisal for any parcel of Qualified Real Property, no
more than one time every twelve (12) months for each such parcel of Qualified
Real Property, at the request of any Lender and at such Lender’s sole cost and
expense. Prior to the finalization of each Acceptable Appraisal obtained by the
Administrative Agent, the Administrative Agent shall furnish a copy of the
substantially final draft thereof to the Borrower for review. The Borrower shall
have ten (10) Business Days to respond to the Administrative Agent with comments
to such draft; provided, however, that the Administrative Agent shall have no
obligation to accept any such comments. Additionally, the Borrower may require
the Administrative Agent to obtain, no more than one time every twelve
(12) months for each parcel of Qualified Real Property and at the Borrower’s
sole cost and expense, an Appraisal, which shall constitute an Acceptable
Appraisal if the Administrative Agent determines that such Appraisal satisfies
the criteria therefore specified in the definition thereof.

SECTION 7. NEGATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Letter of Credit for which 100% of the L/C Obligations thereunder has not
been Cash Collateralized remains outstanding or any Loan or other amount (other
than contingent obligations such as indemnities and increased costs) is owing to
any Lender or Agent hereunder:

7.1 Financial Condition Covenants. The Borrower shall not,

 

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(a) Maximum Leverage Ratio. As of the end of each fiscal quarter of the
Borrower, permit the Leverage Ratio to exceed 60%.

(b) Minimum Interest Coverage/Minimum Liquidity Test. As of the end of each
fiscal quarter of the Borrower, fail to maintain either (i) Liquidity (held in
the Interest Reserve Account) in an amount not less than Consolidated Interest
Incurred for the last twelve (12) months then ended (such amount, the “Minimum
Liquidity Amount”) or (ii) an Interest Coverage Ratio not less than 1.50:1.00
(for the avoidance of doubt, as of the end of any fiscal quarter of the
Borrower, the Borrower shall be required to satisfy (i) or (ii) above, but not
both).

(c) Minimum Tangible Net Worth Test. As of the end of each fiscal quarter of the
Borrower, fail to maintain minimum Consolidated Tangible Net Worth not less than
(i) $228,881,000 plus (ii) the sum of (A) 50% of the cumulative Consolidated Net
Income, if positive, of the Loan Parties and their respective Subsidiaries
(other than Unrestricted Subsidiaries) from and after December 31, 20132015
through the end of the fiscal quarter as of which Consolidated Tangible Net
Worth is being determined plus (B) 50% of the net proceeds from any equity
offerings (it being understood that any conversion of convertible securities
shall not be considered an equity offering) of the Borrower occurring on or
after December 31, 20132015 through the end of the fiscal quarter as of which
Consolidated Tangible Net Worth is being determined.

7.2 Liens and Encumbrances. The Borrower shall not, nor shall it permit any
Restricted Subsidiary to, grant or suffer or permit to exist any Liens on any of
its rights, properties or assets, other than Liens incurred under the Loan
Documents and Permitted Liens.

7.3 Fundamental Changes; Asset Sales; Acquisitions.

(a) The Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, do any of the following:

(i) acquire any other Person, except pursuant to a Permitted Acquisition;

(ii) sell, assign, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or any portion of its assets (whether now owned
or hereafter acquired), except (A) the sale or other disposition of assets in
the ordinary course of business or, (B) other dispositions, sales, or
assignments of properties (including a bulk sale of properties held in a
geographic region) relating to a restructuring or withdrawal from one or more
geographic regions, provided that with respect to any such dispositions, sales
or transfers in this clause (B), (i) the fair value in any fiscal quarter does
not exceed 25% of Consolidated Tangible Net Worth (determined as of the last day
of the fiscal quarter for which financial statements are available), (ii) after
giving effect thereto, the Borrower shall be in pro forma compliance with the
financial covenants set forth in Section 7.1 hereof, and shall have provided an
officer’s certificate certifying compliance with such covenants and setting
forth the calculations thereof and (iii) after giving effect thereto, the
Borrowing Base Debt does not exceed the lesser of (Ax) the Commitments and (By)
the Borrowing Base or (C) the sale of the amenities described in Schedule 7.3;

(iii) merge into or consolidate with any other Person or permit any other Person
to merge into or consolidate with it;

(iv) dissolve, liquidate or wind up its business by operation of law or
otherwise; or

 

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(v) distribute to the stockholders of the Borrower any Capital Stock of any
Guarantor;

provided, however, that any Subsidiary or any other Person may merge into or
consolidate with or may dissolve and liquidate into a Loan Party and any
Subsidiary that is not a Loan Party may merge into or consolidate with or may
dissolve and liquidate into another Subsidiary that is not a Loan Party, if (and
only if), (1) in the case of a merger or consolidation involving a Loan Party
other than the Borrower, the surviving Person is, or upon such merger or
consolidation becomes, a Loan Party, (2) in the case of a merger or
consolidation involving the Borrower, the Borrower is the surviving Person,
(3) the character of the business of the Borrower and the Subsidiaries on a
consolidated basis will not be materially changed by such occurrence, and
(4) such occurrence shall not constitute or give rise to (a) an Event of Default
or (b) default (beyond all applicable grace and cure periods) in respect of any
of the covenants contained in any agreement to which the Borrower or any such
Subsidiary is a party or by which its property may be bound if such default
would have a Material Adverse Effect.

Nothing contained in this Section 7.3, however, shall restrict any sale of
assets among the Loan Parties and their Subsidiaries which is in the ordinary
course of business or is otherwise in compliance with all other provisions of
this Agreement.

7.4 Investments. The Borrower shall not, nor shall it permit any Loan Party to,
make any Investment or otherwise acquire any interest in any Person, except:

(a) Investments in Cash Equivalents;

(b) Investments constituting extensions of credit in connection with the sale of
land;

(c) loans and advances to officers and employees of the Borrower or any
Guarantor, to other Persons in the ordinary course of business or as permitted
by the code of regulations of the Borrower, which in the aggregate do not exceed
$2,500,000 at any time outstanding;

(d) Investments in any Guarantor;

(e) [rReserved];

(f) [rReserved];

(g) Investments in Unrestricted Subsidiaries and Joint Ventures; provided that
the aggregate cost of all Investments in Unrestricted Subsidiaries, when
combined with the aggregate cost of all Investments in Joint Ventures, does not
at any one time exceed 30% of Consolidated Tangible Net Worth (determined as of
the last day of the prior fiscal quarter for which financial statements are
available); provided further that no such Investment may be made if it causes or
results (singly or with other actions or events) in (x) any violation of any
other covenant or condition of this Agreement or (y) any other Default or Event
of Default. For purposes of determining a Loan Party’s Investment in an
Unrestricted Subsidiary or Joint Venture, such Investment shall be determined in
accordance with GAAP (excluding, however, such Loan Party’s equity in the
undistributed earnings or losses in such Unrestricted Subsidiary or Joint
Venture), but also shall be deemed to include the amount, as determined in
accordance with GAAP, of any loans or advances from any Loan Party to such
Unrestricted Subsidiary or Joint Venture, and any guarantee or contractual
commitment, arrangement or other agreement by such Loan Party to provide funds
or credit to such Unrestricted Subsidiary or Joint Venture;

(h) Investments permitted by Section 7.3 (including Permitted Acquisitions);

 

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(i) Investments by Financial Service Subsidiaries in mortgages, mortgage-backed
securities, mortgage commitments and similar financial instruments related to
the origination of mortgages and similar activities in the ordinary course of
such Subsidiaries;

(j) Investments in securities of any trade creditor or customer received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditor or customer;

(k) Investments in mortgages, receivables, other securities or ownership
interests, loans or advances made in connection with a strategy to acquire land
or other homebuilding assets through foreclosure or other exercise of remedies;
and

(l) Investments, other than those permitted by subsections (a) through
(k) above, in the ordinary course of business and which are directly related to
the Borrower’s homebuilding business, to the extent not otherwise prohibited by
this Agreement and subject to the other provisions of this Agreement (provided
that this clause (l) shall not permit Investments in Joint Ventures or
Unrestricted Subsidiaries); and

(m) other Investments (not specifically listed in items (a) through (l) above)
in an aggregate amount not to exceed $10,000,00015,000,000 at any time
outstanding.

7.5 Secured Indebtedness. The Borrower shall not, nor shall it permit any Loan
Party to, create, incur, issue or suffer to exist any Secured Indebtedness
exceeding $20,000,00025,000,000 in aggregate principal amount at any time
outstanding, other than:

(a) Secured Indebtedness outstanding on the Fourth Amendment Effective Date and
set forth on Schedule 7.5, and any Permitted Refinancing thereof;

(b) Secured Indebtedness in respect of letters of credit fully secured by a Lien
on cash and Cash Equivalents;

(c) purchase money Indebtedness and other Non-Recourse Indebtedness;

(d) Capitalized Lease Obligations;

(e) bonds issued by CDDs or similar bonds issued by Governmental Authorities to
accomplish similar purposes, to the extent such bonds are secured by tax Liens
or otherwise; and

(f) Indebtedness secured solely by Liens granted under the Security Documents;
and

(fg) Secured Indebtedness incurred pursuant to development agreements or land
contracts for the purchase or sale of real property which secure (i) the return
of a land deposit from another builder and/or developer, (ii) development
obligations, (iii) the deferred purchase price of land or other payments due to
the seller pursuant to a contract for the purchase of real property and
(iv) other similar obligations in connection with development agreements or land
contracts for the purchase or sale of real property.

7.6 No Margin Stock. The Borrower shall not use or permit to be used any of the
proceeds of the Loans or other extensions of credit hereunder to purchase or
carry any “margin stock” (as defined in Regulation U).

 

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7.7 Burdensome Agreements. The Borrower shall not, nor shall it permit any of
its Restricted Subsidiaries to, enter into any Contractual Obligation that
limits the ability (i) of any Restricted Subsidiary to make Restricted Payments
to the Borrower or any Guarantor or to otherwise transfer property to the
Borrower or any Guarantor, (ii) of any Restricted Subsidiary to guarantee the
Indebtedness of the Borrower or (iii) of the Borrower or any Restricted
Subsidiary to create, incur, assume or suffer to exist Liens on property of such
Person to secure its obligations under the Loan Documents to which it is a
party; provided, however, that the foregoing shall not apply to (v) restrictions
imposed by agreements governing Indebtedness described in clause (i) or (ii) of
the definition thereof so long as such restrictions will not materially affect
the Borrower’s ability to make anticipated principal or interest payments on the
Loans or payments in respect of the other Obligations hereunder (as determined
in good faith by the Borrower), (w) restrictions imposed by law or this
Agreement, (x) customary restrictions and conditions contained in agreements
relating to a sale of a Subsidiary or all or substantially all of its assets
pending such sale, provided such restrictions and conditions apply only to the
Subsidiary that is sold and such sale is permitted hereunder, (y) customary
provisions in leases, partnership agreements, limited liability company
organizational governance documents, joint venture agreements, joint development
agreements, license and sublicense agreements and other similar agreements
entered into in the ordinary course of business that restrict the transfer or
encumbrance of property under joint development or ownership, leasehold
interests or ownership interests in such partnership, limited liability company,
joint venture or similar Person and (z) with respect to clause (iii), the
granting of a pari passu Lien in favor of any holder of any public Indebtedness
if the Obligations hereunder are required to be secured equally and ratably
therewith or customary provisions in leases restricting the assignment thereof.

7.8 Restricted Payments. The Borrower will not declare or pay, or permit any of
its Subsidiaries to declare or pay, any Restricted Payments, except that:

(a) any Subsidiary may make Restricted Payments to the Borrower or any wholly
owned Guarantor;

(b) the repurchase, redemption, defeasance or other acquisition or retirement
for value of Capital Stock of the Borrower held by officers, directors or
employees or former officers, directors or employees (or their transferees,
estates or beneficiaries under their estates) of the Borrower or any Restricted
Subsidiary, in each case, upon their bankruptcy or petition for bankruptcy,
death, disability, retirement, severance or termination of employment or service
or any other repurchase event set forth pursuant to any equity subscription
agreement, stock option agreement, shareholders’ agreement or similar agreement
or benefit plan of any kind; provided that the aggregate cash consideration paid
for all such redemptions shall not exceed $2,000,000 during any calendar year
(it being understood, however, that unused amounts permitted to be paid pursuant
to this proviso are available to be carried over to the immediately succeeding
calendar year);

(c) repurchases of Capital Stock deemed to occur upon the exercise, conversion
or exchange of stock options, warrants, other rights to purchase Capital Stock
or other convertible or exchangeable securities if such Capital Stock represent
all or a portion of the exercise price thereof or upon the vesting of restricted
stock, restricted stock units or similar equity incentives to satisfy tax
withholding or similar tax obligations with respect thereto; and

(d) the payment, by the Borrower, of cash in lieu of the issuance of fractional
shares upon the exercise of any option, warrant or similar instrument or upon
the conversion or exchange of Capital Stock of the Borrower.

7.9 Prepayment of Indebtedness. The Borrower shall not, nor shall it permit any
of its Restricted Subsidiaries to, voluntarily prepay, repurchase, redeem or
cause the defeasance of senior

 

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notes or senior Indebtedness unless (a) after giving effect to such prepayment,
repurchase, redemption or defeasance, (i) the Borrower is in pro forma
compliance with the financial covenants in Section 7.1 hereof as of the end of
the fiscal quarter of the Borrower ended immediately prior to such prepayment,
repurchase, redemption or defeasance (for the avoidance of doubt, in relation to
Section 7.1(b), as of such date, the Borrower shall be required to satisfy
subclause (i) or (ii) of such section, but not both) and the Borrower has
provided an officer’s certificate certifying compliance with such covenants and
setting forth the calculations thereof and (ii) the Borrowing Base Debt does not
exceed the lesser of (A) the Commitments and (B) the Borrowing Base, (b) it is
refinanced with Permitted Refinancing Indebtedness, or (c) it is prepaid,
repurchased or redeemed, or its defeasance is consummated, with the net proceeds
of any issuance of common equity of the Borrower after the Fourth Amendment
Effective Date.

7.10 Pension Plan. The Borrower shall not enter into, maintain or make
contributions to, or permit any Subsidiary to enter into, maintain or make
contributions to, directly or indirectly, any plan that is subject to Title IV
of ERISA, except for defined benefit pension plans of any Person formed or
acquired, directly or indirectly, by any Loan Party in a Permitted Acquisition,
and in each case with prior notice being given to the Administrative Agent of
the adoption or assumption of such defined benefit plan.

7.11 Transactions with Affiliates. Except for (a) compensation arrangements in
the ordinary course of business with the officers, directors and employees of
the Borrower and any Subsidiary, (b) payment pursuant to the Management Services
Agreement, dated as of June 20, 2013, by and among the Borrower, each of the
subsidiaries of the Borrower signatory thereto and TPG VI Management, LLC, as in
effect on the Effective Date, or (c) any participation by TPG in equity
issuances of the Borrower pursuant to pre-emptive participation rights granted
to TPG in accordance with the terms of the stockholders agreement between the
Borrower and TPG, or (d) any transactions, payments or transfers among Loan
Parties, the Borrower or any other Loan Party shall not enter into any
transaction (including, without limitation, the purchase or sale of any property
or service) with, or make any payment or transfer to, any Affiliate (or permit
any Loan Party to do any of the foregoing) in excess of $1,000,000, except in
the ordinary course of business and pursuant to the reasonable requirements of
the business of the Borrower or such Loan Party and upon fair and reasonable
terms no less favorable to the Borrower or such Loan Party than the Borrower or
such Loan Party would obtain in a comparable arms’-length transaction.

7.12 Use of Proceeds. The Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, use, and the respective directors,
officers, employees and agents of the Borrower and its Subsidiaries shall not
use, the proceeds of any Loan or Letter of Credit (A) in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any
Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating
any activities, business or transaction of or with any Sanctioned Person, or in
any Sanctioned Country, or (C) in any manner that would result in the violation
of any Sanctions applicable to any party hereto.

SECTION 8. EVENTS OF DEFAULT; REMEDIES

If any of the following events shall occur and be continuing:

(a) the Borrower shall fail to pay any principal of any Loan or Reimbursement
Obligation when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Loan, Reimbursement Obligation, any fees
hereunder or any other amount payable hereunder or under any other Loan Document
within five (5) Business Days after any such interest, fees or other amounts
becomes due in accordance with the terms hereof; or

 

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(b) any representation or warranty made or deemed made by any Loan Party herein
or in any other Loan Document or that is contained in any certificate, document
or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document when made which
shall be false or misleading in any material respect when made; or

(c) any Loan Party shall default in the observance or performance of any
covenant contained in Sections 6.3, 6.5 or 6.6, or Section 7; or

(d) any Loan Party shall default in the observance or performance of any other
covenant contained in this Agreement or any other Loan Document (other than as
provided in paragraphs (a) through (c) of this Section 8), and such default
shall continue unremedied for a period of thirty (30) days; or

(e) any Loan Party shall (i) default in making any payment of any principal of
any Indebtedness (including any Contingent Obligation, but excluding the Loans)
beyond any applicable period of grace, or (ii) default in making any payment of
any interest on any such Indebtedness or Contingent Obligation set forth in
clause (i) beyond the period of grace, if any, provided in the instrument or
agreement under which such obligation was created, or (iii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or Contingent Obligation set forth in clause (i) or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness or Contingent Obligation (or a trustee or agent on behalf of such
holder or beneficiary) to cause, with the giving of notice if required, such
Indebtedness or Contingent Obligation to become due prior to its stated maturity
or (in the case of any Contingent Obligation) to become payable; provided, that
a default, event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default unless, at
such time, one or more defaults, events or conditions of the type described in
clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness or Contingent Obligations the aggregate
outstanding principal amount of which is $10,000,00015,000,000 or more; or

(f) (i) the Borrower or any other Loan Party shall commence any case, proceeding
or other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets; or (ii) there
shall be commenced against the Borrower or any other Loan Party any case,
proceeding or other action of a nature referred to in clause (i) above that
(A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed or undischarged for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any other Loan Party
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Borrower or
any other Loan Party shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any other Loan Party shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or (vi) or the Borrower or any other Loan
Party shall make a general assignment for the benefit of its creditors; or

 

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(g)(i) an ERISA Event or Foreign Plan Event shall have occurred, (ii) a trustee
shall be appointed by a United States district court to administer any Pension
Plan, (iii) the PBGC shall institute proceedings to terminate any Pension
Plan(s), (iv) any Loan Party or any of their respective ERISA Affiliates shall
have been notified by the sponsor of a Multiemployer Plan that it has incurred
or will be assessed Withdrawal Liability to such Multiemployer Plan and such
entity does not have reasonable grounds for contesting such Withdrawal Liability
or is not contesting such Withdrawal Liability in a timely and appropriate
manner; or (v) any other event or condition shall occur or exist with respect to
a Plan; and in each case in clauses (i) through (v) above, such event or
condition, together with all other such events or conditions, if any, which
could reasonably be expected to result in a Material Adverse Effect; or

(h) one or more final non-appealable judgments or decrees shall be entered
against any Loan Party involving in the aggregate a liability of more than
$10,000,00015,000,000, and all such judgments or decrees shall not have been
paid, settled, vacated, discharged, stayed or bonded pending appeal within 30
days from the entry thereof; or

(i) any Loan Party shall be found responsible for (A) the release or threatened
release by any Loan Party, any of its Subsidiaries or any other Person of any
Hazardous Substance into the indoor or outdoor environment, or (B) any violation
of any Environmental Law or any federal, state or local health or safety law or
regulation, which, in either case of clause (A) or (B), could reasonably be
expected to have a Material Adverse Effect; or

(j) any of the Loan Documents (including the Guarantee and Collateral Agreement)
shall cease, for any reason, to be in full force and effect or any Loan Party or
any Affiliate of any Loan Party shall so assert, or any Lien created by any of
the Security Documents shall cease to be enforceable and of the same effect and
priority as purported to be created thereby;

(k) the guarantee contained in Section 2 of the Guarantee and Collateral
Agreement shall cease, for any reason, to be in full force and effect or any
Loan Party or any Affiliate of any Loan Party shall so assert; or

(l) there shall occur any Change of Control;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents (including all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both of
the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents (including all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) to be due and payable forthwith,
whereupon the same shall immediately become due and payable. With respect to all
Letters of Credit with respect to which presentment for honor shall not have
occurred at the time of an acceleration pursuant to this paragraph, the Borrower
shall at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to 103% of the

 

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aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts
held in such cash collateral account shall be applied by the Administrative
Agent to the payment of drafts drawn under such Letters of Credit, and the
unused portion thereof after all such Letters of Credit shall have expired or
been fully drawn upon, if any, shall be applied to repay other obligations of
the Borrower hereunder and under the other Loan Documents. After all such
Letters of Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the Borrower
hereunder and under the other Loan Documents shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower (or such other Person as may be lawfully entitled thereto). Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived by the Borrower.

On and after the occurrence of an Event of Default, the Administrative Agent
shall apply all payments in respect of any Obligations in the following order:
(i) first, to pay Obligations in respect of (A) any fees, expenses,
reimbursements or indemnities then due to the Agents on a ratable basis, (B) any
fees (other than commitment fees and Letter of Credit fees), expenses,
reimbursements or indemnities then due to the Lenders and Issuing Lenders and
(C) to pay commitment fees, Letter of Credit fees and interest due in respect of
Loans and Letters of Credit; (ii) second to the ratable payment or prepayment of
principal outstanding on Loans and Letters of Credit; and (iii) third, to the
ratable payment of all other Obligations. On or after the occurrence of an Event
of Default, all principal payments in respect of Loans shall be applied, first,
to repay outstanding Swingline Loans, next outstanding ABR Loans and then to
repay outstanding Eurodollar Loans, with those that have the earlier expiring
Interest Period being repaid prior to those that have later expiring Interest
Periods. The order of priority set forth in this paragraph and the related
provisions of this Agreement are set forth solely to determine the rights and
priorities of the Agents, the Lenders, and the Issuing Lenders as among
themselves. The order of priority set forth in clause (i) may be changed only
with the prior written consent of the Agents and the order of priority of
payments in respect of Letters of Credit may be changed only with the prior
written consent of the Issuing Lenders.

 

SECTION 9. THE AGENTS

9.1 Appointment. (a) Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.

(b) The Administrative Agent shall also act as the Collateral Agent under the
Loan Documents, and each of the Lenders hereby irrevocably appoints and
authorizes the Administrative Agent to act as the Collateral Agent of (and to
hold any security interest created by the Security Documents for and on behalf
of or in trust for) such Lender for purposes of acquiring, holding and enforcing
any and all Liens on Collateral granted by any of the Loan Parties to secure any
of the Obligations, together with such powers and discretion as are reasonably
incidental thereto. In this connection, the Administrative Agent, as Collateral
Agent (and any co-agents, sub-agents and attorneys-in-fact appointed by the
Administrative Agent pursuant to this Agreement for purposes of holding or
enforcing any Lien on the Collateral (or any portion thereof) granted under the
Security Documents, or for exercising any rights and

 

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remedies thereunder at the direction of the Administrative Agent), shall be
entitled to the benefits of all provisions of this Section 9 (including
Section 9.07, as though such co-agents, sub-agents and attorneys-in-fact were
the Collateral Agent under the Loan Documents) and Section 10.05 as if set forth
in full herein with respect thereto and all references to Administrative Agent
in this Section 9 shall, where applicable, be read as including a reference to
the Collateral Agent. Without limiting the generality of the foregoing, the
Lenders hereby expressly authorize the Administrative Agent as Collateral Agent
to execute any and all documents (including releases) with respect to the
Collateral and the rights of the secured parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents and acknowledge and agree that any such action shall bind the
Lenders.

9.2 Delegation of Duties. An Agent may execute any of its duties under this
Agreement and the other Loan Documents (including for purposes of holding or
enforcing any Lien on the Collateral (or any portion thereof) granted under the
Security Documents or of exercising any rights and remedies thereunder) by or
through agents or attorneys in fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. An Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in fact
selected by it with reasonable care.

9.3 Exculpatory Provisions. Neither the Agents nor any of their respective
officers, directors, employees, agents, advisors, attorneys in fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person’s own gross negligence, bad faith or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by an Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, the
creation, perfection or priority of any Lien, or security interest created or
purported to be created under the Security Documents, or for any failure of any
Loan Party a party thereto to perform its obligations hereunder or thereunder.
No Agent shall be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.

9.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy or email message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including counsel to the Borrower rendered in
any legal opinion for the benefit of an Agent or any Lender), independent
accountants and other experts selected by an Agent. The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement,

 

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all Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.

9.5 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Administrative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders (or, if so specified by this Agreement, all Lenders);
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.

9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges
that neither any Agent nor any of their officers, directors, employees, agents,
advisors, attorneys in fact or affiliates have made any representations or
warranties to it and that no act by an Agent hereafter taken, including any
review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be
deemed to constitute any representation or warranty by an Agent to any Lender.
Each Lender represents to the Agents that it has, independently and without
reliance upon any Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and made
its own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon any
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by any Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of any Agent or any of its
officers, directors, employees, agents, advisors, attorneys in fact or
affiliates.

9.7 Indemnification. The Lenders agree to indemnify each Agent and its officers,
directors, employees, affiliates, agents, advisors and controlling persons
(each, an “Agent Indemnitee”) (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Percentage Interests in effect on the date on which
indemnification is sought under this Section 9.7, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent Indemnitee in any way relating to or arising out of,
the Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
Indemnitee under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such Agent
Indemnitee’s gross negligence, bad faith or willful misconduct. The agreements
in this Section 9.7 shall

 

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survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

9.8 Agents in Their Individual Capacity. Any Agent and its affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
any Loan Party as though such Agent were not an agent hereunder. With respect to
its Loans made or renewed by it and with respect to any Letter of Credit issued
or participated in by it, an Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an agent, and the terms “Lender” and “Lenders” shall
include such Agent in its individual capacity.

9.9 Successor Agents. The Administrative Agent or the Collateral Agent may
resign as Administrative Agent or Collateral Agent, as applicable, upon thirty
(30) days’ notice to the Lenders and the Borrower. If the Administrative Agent
or Collateral Agent shall resign as Administrative Agent or Collateral agent, as
applicable, under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent for the Lenders,
which successor agent shall (unless an Event of Default under Section 8(a) or
Section 8(f) with respect to the Borrower shall have occurred and be continuing)
be subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent or Collateral Agent, as
applicable, and the term “Administrative Agent” or “Collateral Agent” shall mean
such successor agent effective upon such appointment and approval, and the
former Administrative Agent’s or Collateral Agent’s rights, powers and duties as
Administrative Agent or Collateral Agent, as applicable, shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or Collateral Agent, as applicable, or any of the parties
to this Agreement or any holders of the Loans. If no successor agent has
accepted appointment as Administrative Agent or Collateral Agent by the date
that is thirty (30) days following a retiring Administrative Agent’s or
Collateral Agent’s notice of resignation, the retiring Administrative Agent’s or
Collateral Agent’s resignation shall nevertheless thereupon become effective,
and the Lenders shall assume and perform all of the duties of the Administrative
Agent or Collateral Agent, as applicable, hereunder until such time, if any, as
the Required Lenders appoint a successor agent as provided for above. After any
retiring Administrative Agent’s or Collateral Agent’s resignation as
Administrative Agent or Collateral Agent, the provisions of this Section 9 and
of Section 10.5 shall continue to inure to its benefit. Upon the acceptance of
any appointment as Administrative Agent or Collateral Agent hereunder by a
successor and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable in order to continue the perfection of the Liens
granted or purported to be granted by the Security Documents, the Administrative
Agent or Collateral Agent, as applicable, shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Administrative Agent or Collateral Agent.

SECTION 10. MISCELLANEOUS

10.1 Amendments and Waivers. Neither this Agreement, any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 10.1. The Required Lenders and
each Loan Party party to the relevant Loan Document may, or, with the written
consent of the Required Lenders, the Administrative Agent and each Loan Party
party to the relevant Loan Document may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such

 

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instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) forgive the principal amount or extend the final scheduled date of
maturity of any Loan, reduce the stated rate of any interest or fee payable
hereunder (except (x) in connection with the waiver of applicability of any
post-default increase in interest rates (which waiver shall be effective with
the consent of the Required Lenders) and (y) that any amendment or modification
of defined terms used in the financial covenants in this Agreement shall not
constitute a reduction in the rate of interest or fees for purposes of this
clause (i)) or extend the scheduled date of any payment thereof, or increase the
amount or extend the expiration date of any Lender’s Commitment, in each case
without the written consent of each Lender directly affected thereby;
(ii) eliminate or reduce the voting rights of any Lender under this Section 10.1
without the written consent of such Lender; (iii) reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, or except in accordance with this
Agreement, (A) release all or substantially all of the collateral, if any,
provided pursuant to this Agreement or (B) release all or substantially all of
the Guarantors from their obligations under the Guarantee and Collateral
Agreement and/or all or substantially all of the Collateral, in each case
without the written consent of all Lenders; (iv) amend, modify or waive any
provision of Section 2.14 of this Agreement without the written consent of all
the Lenders; (v) amend, modify or waive any provision of Section 9 or any other
provision of any Loan Document that affects the Administrative Agent without the
written consent of the Administrative Agent; (vi) amend, modify or waive any
provision of Section 2.3 or 2.4 without the written consent of the Swingline
Lender;[reserved]; (vii) amend, modify or waive any provision of Section 3
without the written consent of the Issuing Lenders; or (viii) amend, modify or
waive any rights or obligations of any Agent without the written consent of such
Agent. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Loan Parties,
the Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent on a subsequent or other
Default or Event of Default.

10.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three Business Days after being deposited in
the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of the Borrower, the Administrative Agent and
the Collateral Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:

 

              Borrower:                    AV Homes, Inc.

        8601 North Scottsdale Road, Suite 225

        Scottsdale, AZ 85253

        Attention: Michael S. Burnett,

                      Executive Vice President and Chief Financial Officer

        Telecopy: (480) 948-0701

        Telephone: (480) 214-7408

        Email: M.Burnett@avhomesinc.com

        with copies to:

 

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                AV Homes, Inc.

        8601 North Scottsdale Road, Suite 225

        Scottsdale, AZ 85253

        Attention: Dave M. GomezGary Shullaw,

                      Executive Vice President and General Counsel

        Telecopy: (480) 948-0701

        Telephone: (480) 214-7388

        Email: dg. gomezshullaw@avhomesinc.com

Administrative Agent and Collateral Agent:

        JPMorgan Chase Bank, N.A.

        500 Stanton-Christiana Road

        OPS2 3rd Floor

        Newark, DE 19713

        Attention: Nathan Parmenter

        Telecopy: (302) 634-8459

        Telephone: (302) 634-5585

        Email: Nathan.t.parmenter@jpmorgan.com

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Section 2 unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

10.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse
the Agents and the Arranger for all their reasonable and invoiced out-of-pocket
costs and expenses incurred in connection with the syndication, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the administration of the transactions contemplated
hereby and thereby, including the reasonable and invoiced fees and disbursements
of counsel to the Agents and Arranger, filing and recording fees and expenses
and reasonable fees and expenses associated

 

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with any of the actions taken under this Agreement in relation to the
administration of the Borrowing Base Account, the Interest Reserve Account or
the Operating Accounts, administration of the Borrowing Base, and any
appraisals, including (i) all reasonable fees and charges with respect to any
appraisal, re-appraisal, and survey costs (other than those required pursuant to
Section 6.12(ii)), (ii) title insurance charges and premiums, (iii) the cost of
title searches and examinations, including abstracts, abstractors’ certificates
and uniform commercial code searches reasonably requested by the Administrative
Agent or the Collateral Agent, (iv) judgment and tax Lien searches for each Loan
Party reasonably requested by the Administrative Agent or the Collateral Agent,
(v) reasonable fees and costs of environmental investigations, site assessments
and remediations reasonably requested by the Administrative Agent or the
Collateral Agent, (vi) recordation taxes, documentary taxes, transfer taxes and
mortgage taxes, (vii) filing and recording fees and (viii) reasonable
subcontractor costs and expenses; with statements with respect to the foregoing
to be submitted to the Borrower prior to the Effective Date (in the case of
amounts to be paid on the Effective Date) and from time to time thereafter on a
quarterly basis or such other periodic basis as the Administrative Agent shall
deem appropriate, (b) to pay or reimburse the Agents and the Lenders for all
their respective reasonable and invoiced out-of-pocket costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents, including
the fees and disbursements of counsel for the Agents and the Lenders, (c) to
pay, indemnify, and hold each Lender and each Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes (but excluding
any taxes or increased costs otherwise not subject to the gross-up provided for
by Section 2.16(a)), if any, that may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the other Loan Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender, the Issuing Lenders, the Agents and the
Arranger and their respective officers, directors, employees, affiliates,
agents, advisors and controlling persons (each, an “Indemnitee”) harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of any Loan Party or
any of the properties and the reasonable fees and expenses of legal counsel in
connection therewith (all the foregoing in this clause (d), collectively, the
“Indemnified Liabilities”), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence, bad faith or willful misconduct of such Indemnitee. Without limiting
the foregoing, and to the extent permitted by applicable law, the Borrower
agrees not to assert and to cause its Subsidiaries not to assert, and hereby
waives and agrees to cause its Subsidiaries to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section 10.5 shall be payable not later than thirty (30) days after
written demand therefor. Statements payable by the Borrower pursuant to this
Section 10.5 shall be submitted to the address of the Borrower set forth in
Section 10.2, or to such other Person or address as may be hereafter designated
by the Borrower in a written notice to the Administrative Agent. The agreements
in this Section 10.5 shall survive the termination of this Agreement and the
repayment of the Loans and all other amounts payable hereunder.

10.6 Successors and Assigns; Participations and Assignments.

 

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(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Lender that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign,
participate or otherwise transfer its rights or obligations hereunder(s) (x) to
a Competitor without the Borrower’s written consent or (y) otherwise except in
accordance with this Section.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more Eligible Assignees (each, an “Assignee”) all or
a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it) with the prior
written consent of:

(A) the Borrower (such consent not to be unreasonably withheld), provided that
no consent of the Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender, or an Approved Fund, or, if an Event of Default has
occurred and is continuing, any other Person; provided further that the Borrower
shall be deemed to have consented to a proposed assignment unless it shall
object thereto by written notice to the Administrative Agent within ten
(10) Business Days after having received notice thereof; and

(B) the Administrative Agent (such consent not to be unreasonably withheld),
provided that no consent of the Administrative Agent shall be required for an
assignment by a Lender to an Affiliate of such Lender.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or
an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitments or Loans, the amount of the Commitments or Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 unless each of
the Borrower and the Administrative Agent otherwise consent, provided that
(1) no such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing and (2) such amounts shall be aggregated in respect
of each Lender and its Affiliates or Approved Funds, if any;

(B) (1) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500 and (2) the assigning Lender shall have paid in
full any amounts owing by it to the Administrative Agent; and

(C) the Assignee, if it is not a Lender, shall deliver to the Administrative
Agent an administrative questionnaire in which the Assignee designates one or
more credit contacts to whom all syndicate-level information (which may contain
material non-public information about the Borrower and its Affiliates and their
related parties or their respective securities) will be made available and who
may receive such information in accordance with the assignee’s compliance
procedures and applicable laws, including federal and state securities laws.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
below, from and after the effective date specified in each Assignment and
Assumption the Assignee

 

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thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Assumption, the Assignee shall have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.15
and 2.16 (as they relate to any period during which such Lender was a party
hereto), and Sections 2.17 and 10.5). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 10.6 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section 10.6.

(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amount (and
stated interest) of the Loans and L/C Obligations owing to, each Lender pursuant
to the terms hereof from time to time (the “Register”). No transfer or
assignment of a Lender’s participation hereunder shall be effective unless and
until recorded in the Register. The entries in the Register shall be conclusive
absent manifest error, and the Borrower, the Administrative Agent, the Issuing
Lenders and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender at any reasonable time
and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an Assignee, the Assignee’s completed administrative
questionnaire (unless the Assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section 10.6
and any written consent to such assignment required by paragraph (b) of this
Section 10.6, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

(c) (i) Subject to Section 10.6(a)(ii), any Lender may, without the consent of
the Borrower or the Administrative Agent, sell participations to one or more
Persons provided such Persons are a banking institution, life insurance company,
or other similar chartered or licensed financial institution that ordinarily is
engaged in the business of making real estate loans, or any fund that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of business (each, a “Participant”) in all or a
portion of such Lender’s rights and obligations under this Agreement (including
all or a portion of its Commitments and the Loans owing to it); provided that
(A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (C) the Borrower, the Administrative
Agent, the Issuing Lenders and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver that (1) requires the consent of each Lender
directly affected thereby pursuant to clause (i) of the proviso to the second
sentence of Section 10.1 and (2) directly affects such Participant. Subject to

 

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paragraph (c)(ii) of this Section, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section 10.6. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 10.7(b) as
though it were a Lender, provided such Participant shall be subject to
Section 10.7(a) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the Borrower,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each Participant’s interest
in the Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register to any Person (including the identity of
any Participant or any information relating to a Participant’s interest in any
Commitments, Loans, Letters of Credit or its other obligations under any Loan
Document) except to the extent that such disclosure is necessary to establish
that such Commitment, Loan, Letter of Credit or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.16 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, except to
the extent such entitlement to receive a greater payment results from an
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the Closing dDate hereof that occurs
after the Participant acquired the applicable participation. No Participant
shall be entitled to the benefits of Section 2.16 unless such Participant
complies with the applicable provisions of Section 2.16 as if it were a Lender.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section 10.6 shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.

(e) The Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in paragraph (d) above.

10.7 Adjustments; Set off.

(a) Except to the extent that this Agreement or a court order expressly provides
for payments to be allocated to a particular Lender, if any Lender (a
“Benefitted Lender”) shall receive any payment of all or part of the Obligations
owing to it (other than in connection with an assignment made pursuant to
Section 10.6), or receive any collateral in respect thereof (whether voluntarily
or involuntarily, by set off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be

 

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necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.

(b) In addition to any rights and remedies of the Lenders provided by law, each
Lender and its Affiliates shall have the right, without notice to the Borrower,
any such notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon any Obligations becoming due and payable by the Borrower
(whether at the stated maturity, by acceleration or otherwise but after giving
effect to any applicable period of grace), to apply to the payment of such
Obligations, by setoff or otherwise, any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender, any Affiliate thereof or any of their respective branches
or agencies to or for the credit or the account of the Borrower; provided that
if any Defaulting Lender shall exercise any such right of setoff, (i) all
amounts so set off shall be paid over immediately to the Administrative Agent
for further application in accordance with the provisions of this Agreement and,
pending such payment, shall be segregated by such Defaulting Lender from its
other funds and deemed held in trust for the benefit of the Agents, the Issuing
Lenders, the Swingline Lender and the Lenders and (ii) the Defaulting Lender
shall provide promptly to the Administrative Agent a statement describing in
reasonable detail the obligations owing to such Defaulting Lender as to which it
exercised such right of set off. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such application made by such
Lender or its Affiliate, provided that the failure to give such notice shall not
affect the validity of such application.

10.8 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by email or
facsimile transmission shall be effective as delivery of an original executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

10.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

10.10 Integration. This Agreement and the other Loan Documents represent the
entire agreement of the Borrower, the Agents and the Lenders with respect to the
subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Agents or any Lender relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.

10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

10.12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and
unconditionally:

 

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(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive jurisdiction of any state or federal court sitting in the Borough of
Manhattan in the City of New York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section 10.12 any special, exemplary, punitive or consequential damages.

10.13 Acknowledgements. The Borrower hereby acknowledges and agrees that (a) no
fiduciary, advisory or agency relationship between the Loan Parties and the
Credit Parties is intended to be or has been created in respect of any of the
transactions contemplated by this Agreement or the other Loan Documents,
irrespective of whether the Credit Parties have advised or are advising the Loan
Parties on other matters, and the relationship between the Credit Parties, on
the one hand, and the Loan Parties, on the other hand, in connection herewith
and therewith is solely that of creditor and debtor, (b) the Credit Parties, on
the one hand, and the Loan Parties, on the other hand, have an arm’s length
business relationship that does not directly or indirectly give rise to, nor do
the Loan Parties rely on, any fiduciary duty to the Loan Parties or their
affiliates on the part of the Credit Parties, (c) the Loan Parties are capable
of evaluating and understanding, and the Loan Parties understand and accept, the
terms, risks and conditions of the transactions contemplated by this Agreement
and the other Loan Documents, (d) the Loan Parties have been advised that the
Credit Parties are engaged in a broad range of transactions that may involve
interests that differ from the Loan Parties’ interests and that the Credit
Parties have no obligation to disclose such interests and transactions to the
Loan Parties, (e) the Loan Parties have consulted their own legal, accounting,
regulatory and tax advisors to the extent the Loan Parties have deemed
appropriate in the negotiation, execution and delivery of this Agreement and the
other Loan Documents, (f) each Credit Party has been, is, and will be acting
solely as a principal and, except as otherwise expressly agreed in writing by it
and the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Loan Parties, any of their affiliates or any
other Person, (g) none of the Credit Parties has any obligation to the Loan
Parties or their affiliates with respect to the transactions contemplated by
this Agreement or the other Loan Documents except those obligations expressly
set forth herein or therein or in any other express writing executed and
delivered by such Credit Party and the Loan Parties or any such affiliate and
(h) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Credit Parties or among the Loan Parties and the Credit Parties.

10.14 Releases of Guarantees; Release of Security. (a) Notwithstanding anything
to the contrary contained herein or in any other Loan Document, the Collateral
Agent is hereby irrevocably authorized by each Lender (without requirement of
notice to or consent of any Lender except as expressly

 

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required by Section 10.1) to take any action requested by the Borrower having
the effect of releasing any guarantee obligations or Collateral to the extent
necessary to permit consummation of any transaction not prohibited by any Loan
Document, including Section 6.7 of this Agreement, or that has been consented to
in accordance with Section 10.1; provided that with respect to the release of
any Collateral, (i) after giving effect to such release and any substitution of
Qualified Real Property Inventory or Borrowing Base Cash, the Borrowing Base
Debt does not exceed the lesser of (A) the Commitments and (B) the Borrowing
Base, and (ii) if such release is of Borrowing Base Cash, or if the Qualified
Real Property Inventory subject to the request for a release, in either case
constitutes more than ten percent (10%) of the Borrowing Base, the Borrower has
delivered to the Administrative Agent a pro forma Borrowing Base Certificate,
based on the Borrowing Base Certificate most recently delivered under this
Agreement and adjusted to reflect such release of Borrowing Base Cash or
Qualified Real Property Inventory, as applicable, evidencing compliance with
this Agreement. The Collateral Agent and the Borrower agree that any action
taken by the Collateral Agent to release any guarantee obligations or Collateral
to the extent necessary to permit consummation of any transaction not prohibited
by any Loan Document or that has been consented to in accordance with
Section 10.1 shall be at the expense of the Borrower and without recourse to the
Collateral Agent. Upon the release of the Collateral Agent’s Liens on any
Mortgaged Property, such Mortgaged Property shall no longer be included in the
calculation of the Borrowing Base.

(b) The Agents and Lenders agree that:

(i) The Borrower may request the release of the security interests and Liens of
the Collateral Agent on the Collateral that is (A) uneconomical, excess,
damaged, obsolete, no longer useful in the Borrower’s or a Guarantor’s business,
or worn out or scrap personal property, (B) other personal property being
replaced with personal property of substantially equivalent value, or (C) in
accordance with Exhibit H, whereupon the Collateral Agent shall release (or to
the extent approved by any such secured party subordinate) such security
interests and Liens promptly (and in any event within ten (10) days after
receipt of such request), and, at the expense of the Borrower and without
recourse to the Collateral Agent, execute any documents reasonably requested by
the Borrower to evidence such release, so long as no Default or Event of Default
has occurred and is then continuing or would result therefrom.

(ii) The Agents and Lenders agree that, upon the termination of the Commitments,
termination, expiration or cash collateralization of all Letters of Credit and
indefeasible payment and satisfaction in full of the Obligations (other than
contingent indemnification obligations for which no claim has been asserted),
all of the security interests in, and Liens on, the Collateral shall be
automatically released, discharged and terminated, and the Collateral Agent
shall (I) execute (as applicable) and deliver Uniform Commercial Code
termination statements (and does hereby authorize the Loan Parties from and
after such date, to file or cause to be filed such termination statements),
mortgage release documents, intellectual property release documents and such
other instruments of release and discharge pertaining to the security interests
and other Liens granted to the Collateral Agent pursuant to the Security
Documents in any of the Collateral being so released as the Borrower may
reasonably request to effectuate or to reflect of public record the release and
discharge of any such security interests and Liens, and (II) deliver promptly
all Collateral in its possession to the extent that the Liens on such Collateral
are being released, discharged or terminated. All of the foregoing deliveries
shall be at the expense of the Borrower, with no liability to the Agents or any
Lender and with no representation or warranty by or recourse to the Agents or
any Lender.

10.15 Modifications to Mortgaged Property. A Loan Party may, without consent of
any Lender, any Agent or any Person (i) make dispositions (including, but not
limited to, lot line adjustments)

 

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of portions of any Mortgaged Property for dedication to the public and permit
the creation of Liens to secure the levy of special assessments in favor of
Governmental Authorities, community development districts and property owners’
associations, (ii) make dispositions of portions of the Mortgaged Property to
third parties for the purposes of resolving any encroachment issues, (iii) grant
easements, restrictions, covenants, reservations and rights-of-way for resolving
minor encroachment issues or for access, water and sewer lines, telephone cable
and internet lines, electric lines or other utilities or for other similar
purposes, and (iv) consent to or join in any land use or other development
approval documents (including subdivision plats, easements and the like)
provided that, in each case, such disposition, grant or consent does not
materially impair the value, utility or operation of the applicable Mortgaged
Property. In connection with any disposition or creation of any Lien or any
grant or consent permitted pursuant to this Section 10.15, the Collateral Agent
shall execute and deliver or cause to be executed and delivered any instrument
reasonably necessary or appropriate in the case of the dispositions referred to
above to release the portion of the Mortgaged Property affected by such
disposition from the Lien of the applicable Mortgage, or to subordinate the Lien
of the applicable Mortgage, or acknowledgement that the Lien of any Mortgage is
subordinate, to such Liens, easements, restrictions, covenants, reservations and
rights-of-way or other similar grants, or to evidence such consent or joinder,
in each case upon receipt by the Collateral Agent of (A) ten (10) days’ prior
written notice thereof (or such shorter period as the Collateral Agent may
agree); (B) a copy of the applicable instrument or instruments of disposition or
subordination; and (C) a certificate from an officer of the Borrower stating
that such disposition does not materially impair the value, utility or operation
of the applicable Mortgaged Property.

10.16 Confidentiality. Each Agent, each Lender and each Issuing Lender agrees to
keep confidential all non-public iInformation provided to it by any Loan Party,
any Agent or any Lender pursuant to or in connection with this Agreement that is
designated by the provider thereof as confidential or as material and non-public
information(as defined below); provided that nothing herein shall prevent any
Agent or Lender from disclosing any such information (a) to the Administrative
Agent, the Collateral Agent, any other Lender or any Affiliate thereof,
(b) subject to an agreement to comply with the provisions of this Section 10.16,
to any actual or prospective Transferee, (c) to its employees, directors,
agents, attorneys, accountants and other professional advisors or those of any
of its Affiliates, (d) upon the request or demand of any Governmental Authority,
(e) in response to any order of any court or other Governmental Authority or as
may otherwise be required pursuant to any Requirement of Law, (f) if required to
do so in connection with any litigation or similar proceeding arising under or
related to this credit facility, (g) that has been publicly disclosed by a
Person other than the Administrative Agent, the Collateral Agent, the Lenders or
their respective Affiliates, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender’s investment portfolio
in connection with ratings issued with respect to such Lender, (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document or
(j) if agreed by the Borrower in its sole discretion, to any other Person.
“Information” means all information received from any Loan Party relating to the
Loan Parties or their business that is designated by such Loan Party as
confidential or as material and non-public information, other than any such
information that is available to the Administrative Agent, any Issuing Lender or
any Lender on a non-confidential basis prior to disclosure by the applicable
Loan Party and other than information pertaining to this Agreement routinely
provided by arrangers to data service providers, including league table
providers, that serve the lending industry.

Each Lender acknowledges that information furnished to it pursuant to this
Agreement or the other Loan Documents may include material non-public
information concerning the Borrower and its Affiliates and their related parties
or their respective securities, and confirms that it has developed compliance
procedures regarding the use of material non-public information and that it will
handle such material non-public information in accordance with those procedures
and applicable law, including federal and state securities laws.

 

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All information, including requests for waivers and amendments, furnished by the
Borrower or the Administrative Agent pursuant to, or in the course of
administering, this Agreement or the other Loan Documents will be
syndicate-level information, which may contain material non-public information
about the Borrower and its Affiliates and their related parties or their
respective securities. Accordingly, each Lender represents to the Borrower and
the Administrative Agent that it has identified in its administrative
questionnaire a credit contact who may receive information that may contain
material non-public information in accordance with its compliance procedures and
applicable law, including federal and state securities laws.

10.17 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

10.18 USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Patriot Act”), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender to identify the Borrower in accordance with the Patriot Act.

10.19 Acknowledgement of Bail-In Provisions. Notwithstanding anything to the
contrary in any Loan Document or in any other agreement, arrangement or
understanding among any such parties, each party hereto acknowledges that any
liability of any EEA Financial Institution arising under any Loan Document may
be subject to the Write-Down and Conversion Powers of an EEA Resolution
Authority and agrees and consents to, and acknowledges and agrees to be bound
by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent entity,
or a bridge institution that may be issued to it or otherwise conferred on it,
and that such shares or other instruments of ownership will be accepted by it in
lieu of any rights with respect to any such liability under this Agreement or
any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

[Signatures appear on the next page.]

 

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EXHIBIT B

SCHEDULES

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SCHEDULE 1.1A

COMMITMENTS

 

Lender

   Non-Extended
Commitment      Extended Commitment  

JPMorgan Chase Bank, N.A.

   $ —         $ 40,000,000.00   

Citibank, N.A.

   $ —         $ 30,000,000.00   

Royal Bank of Canada

   $ —         $ 20,000,000.00   

Credit Suisse AG, Cayman Islands Branch

   $ —         $ 20,000,000.00   

Flagstar Bank, FSB

   $ —         $ 20,000,000.00   

U.S. Bank, National Association

   $ —         $ 20,000,000.00   

Deutsche Bank AG New York Branch

   $ 15,000,000.00       $ —     

Total

   $ 15,000,000.00       $ 150,000,000.00   

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SCHEDULE 1.1B

EXISTING LIENS

 

1. Borrower and Guarantor Avatar Properties, Inc. (“API”) granted a security
interest in certain equipment located at Solivita, 384 Village Drive,
Poincianna, FL 34759, to Leasing Innovations, Inc., listed on Schedule A to
Lease Agreement No. HGF120112. The security interest has been assigned to
Extraco Banks, N.A.

 

2. Borrower granted a security interest in all equipment leased to or financed
for Borrower by Flexprint, Inc., under that certain Print Plus Program Agreement
No. 7775937-001, including all accessories, accessions, replacements, additions,
substitutions, add-ons and upgrades thereto, and any proceeds therefrom.

 

3. API granted a security interest in (i) all Equipment from time to time
between API as lessee and Cisco Systems Capital Corporation as lessor and any
and all Schedules from time to time entered into or prepared in connection with
any Master Agreement, (ii) all insurance, warranty, rental and other claims and
rights to payment and chattel paper arising out of such Equipment, and (iii) all
books, records and proceeds relating to the foregoing.

 

4. General Electric Capital Corporation filed a lien against Bonterra Builders,
LLC in connection with equipment leased to or financed for Bonterra Builders,
LLC under that certain Lease and Maintenance Agreement No. 7772083-003 including
all accessories, accessions, replacements, additions, substitutions, add-ons and
upgrades thereto, and any proceeds therefrom.

 

5. Leasing Innovations, Incorporated filed a lien against API in connection with
certain equipment leased to API listed on Schedule A to Lease Agreement No.
HGF020314-2 and located at Vitalia at Tradition, 10004 SW Oak Tree Circle, Port
St. Lucie, FL 34987.

 

6. Leasing Innovations, Incorporated filed a lien against API in connection with
certain equipment leased to API listed on Schedule A to Lease Agreement No.
HGF120714-4 and located at Bellalago, 1200 Lago Vista Court, Kissimmee, FL
34746.

 

7. Leasing Innovations, Incorporated filed a lien against API in connection with
certain equipment leased to API listed on Schedule A to Lease Agreement No.
HGF120614-3 and located at The Palms at Solivita, 1055 San Clemente Ave.,
Kissimmee, FL 34759.

 

8. De Lage Landen Financial Services, Inc. filed a lien against API in
connection with certain equipment leased or financed to or for API pursuant to
lease number 100-10096245, together with all additions, attachments, accessories
and substitutions to or for the same, and all proceeds of the foregoing.

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SCHEDULE 1.1C

GUARANTORS

 

1. Avatar Properties Inc.

 

2. Vitalia at Tradition, LLC

 

3. AVH Bethpage, LLC

 

4. AVH Carolinas, LLC

 

5. AV Homes of Arizona, LLC

 

6. AVH EM, LLC

 

7. JCH Group LLC

 

8. Royal Oak Homes, LLC

 

9. Bonterra Builders, LLC

--------------------------------------------------------------------------------

SCHEDULE 1.1D

ISSUING LENDER ADDRESSES

JPMorgan Chase Bank, N.A.

500 Stanton-Christiana Road

OPS2 3rd Floor

Newark, DE 19713

Attention: Daniel Lahijani

Telecopy: (302) 634-4733

Telephone: (302) 634-4208

Email: Daniel.x.lahijani@jpmorgan.com

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SCHEDULE 4.11

PENSION PLANS

None.

--------------------------------------------------------------------------------

SCHEDULE 4.12

SUBSIDIARIES; JOINT VENTURES

 

(a) Subsidiaries.

 

Name   State of
Organization   Foreign
Jurisdictions   Percentage of
Capital Stock
Held by
Borrower     Percentage of
Capital Stock
Held by
another
Subsidiary     Relationship of Holder to
Subsidiary  

Guarantor or

Unrestricted

Subsidiary1

AV Homes Legacy Developers, Inc.

  FL   —       0 %      100 %    Guarantor   Unrestricted Subsidiary

AV Homes of Arizona, LLC

  AZ   —       0 %      100 %    Guarantor   Guarantor

Avatar Homes of Arizona, Inc.

  AZ   —       0 %      100 %    Unrestricted Subsidiary   Unrestricted
Subsidiary

Avatar Properties Inc.

  FL   AL, AZ, NH,

NJ, NY, NC and
SC

    100 %      0 %    N/A   Guarantor

Avatar Retirement Communities, Inc.

  DE   AL, AZ, FL     100 %      0 %    N/A   Unrestricted Subsidiary

AVH Bethpage, LLC

  AZ   NC     0 %      100 %    Guarantor   Guarantor

AVH Carolinas, LLC

  AZ   NC     0 %      100 %    Guarantor   Guarantor

AVH EM, LLC

  AZ   —       0 %      100 %    Guarantor   Guarantor

AVH North Florida, LLC

  FL   —       0 %      100 %    Guarantor   Unrestricted Subsidiary

AVH Realty, LLC

  FL   —       0 %      100 %    Guarantor   Unrestricted Subsidiary

Bonterra Builders, LLC

  NC   SC     0 %      100 %    Guarantor   Guarantor

EM 646, LLC

  AZ   —       0 %      58.1951 %    Guarantor   Unrestricted Subsidiary

JCH Construction, LLC

  AZ   —       0 %      100 %    Guarantor   Unrestricted Subsidiary

JCH Construction, LLC

  NV   —       0 %      100 %    Guarantor   Unrestricted Subsidiary

JCH Group LLC

  DE   —       0 %      100 %    Guarantor   Guarantor

JEN Florida II, LLC

  DE   —       0 %      100 %    Guarantor   Unrestricted Subsidiary

Joseph Carl Homes, LLC

  NV   —       0 %      100 %    Guarantor   Unrestricted Subsidiary

Rio Rico Properties Inc.

  AZ   AL, FL, NJ,
OH, PA     0 %      100 %    Guarantor   Unrestricted Subsidiary

Royal Oak Homes, LLC

  FL   —       0 %      100 %    Guarantor   Guarantor

Solivita at Poinciana Golf Club, Inc.

  FL   —       0 %      100 %    Unrestricted Subsidiary   Unrestricted
Subsidiary

Solivita at Poinciana Recreation, Inc.

  FL   —       0 %      100 %    Unrestricted Subsidiary   Unrestricted
Subsidiary

Solivita at Poinciana, Inc.

  FL   —       0 %      100 %    Unrestricted Subsidiary   Unrestricted
Subsidiary

Vitalia at Tradition, LLC

  FL   —       0 %      100 %    Guarantor   Guarantor

 

 

1  No Unrestricted Subsidiaries are Financial Services Subsidiaries.

--------------------------------------------------------------------------------

(b) Joint Ventures

 

Name    State of
Organization    Percentage of
Capital Stock
Held by
Borrower     Percentage of
Capital Stock
Held by
another
Subsidiary  

Fieldstone Land, LLC

   FL      0 %      20.0000 % 

--------------------------------------------------------------------------------

SCHEDULE 4.21(a)

FINANCING STATEMENTS

 

Debtor:    UCC Filing Office: AV Homes, Inc.    Delaware Secretary of State
Avatar Properties Inc.    Florida Secured Transaction Registry Vitalia at
Tradition, LLC    Florida Secured Transaction Registry AVH Bethpage, LLC   
Arizona Secretary of State AVH Carolinas, LLC    Arizona Secretary of State AV
Homes of Arizona, LLC    Arizona Secretary of State AVH EM, LLC    Arizona
Secretary of State JCH Group LLC    Delaware Secretary of State Royal Oak Homes,
LLC    Florida Secured Transaction Registry Bonterra Builders, LLC    North
Carolina Secretary of State

--------------------------------------------------------------------------------

SCHEDULE 6.1(f)

FORMAT OF JOINT VENTURE REPORTING

AV Homes

Joint Ventures

DATE:                     

 

Joint Venture Name

   Market      AV
%
Ownership      Managing
Member      Additional
Member(s)      Year
Formed      Joint Venture      AV
Investment      12 mo.
AV
Earnings
(loss)      Lender                     Asset      Liabilities      Debt     
Equity           

NAME

                                   

NAME

                                   

NAME

                                   

NAME

                                   

NAME

                                   

NAME

                                   

NAME

                                   

NAME

                                   

NAME

                                                     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

TOTAL

                  $ 0       $ 0       $ 0       $ 0       $ 0       $ 0         
              

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

PLUS AV HOMES SUB DEBT TO JVs

  

                    —           

LESS IMPAIRMENT

                                                                 

 

 

       

AV HOMES INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

   

                  $ 0                                       

 

 

       

--------------------------------------------------------------------------------

SCHEDULE 7.3

AMENITIES DISPOSITION

The Borrower may, either directly or through its Subsidiaries, sell, assign,
lease or otherwise dispose of its amenity assets in its Solivita and Bellalago
communities.

--------------------------------------------------------------------------------

SCHEDULE 7.5

SECURED INDEBTEDNESS

None.

--------------------------------------------------------------------------------

SCHEDULE I

CONTINUING MORTGAGES

 

  1. Eastmark- Deed of Trust, Security Agreement, Assignment of Leases and
Rents, Financing Statement and Fixture Filing dated as of May 28, 2015, and
recorded May 29, 2015, in the Official Records of Maricopa County as Document
No. 20150380048

 

  2. Solivita Grande- Mortgage, Security Agreement, Assignment of Leases and
Rents, Financing Statement and Fixture Filing dated as of May 28, 2015, recorded
May 29, 2015, in the Official Records of Polk County, Florida in Book 9539, Page
0111, and as recorded May 29, 2015 in the Official Records of Osceola County,
Florida in Book 4785, Page 1446

 

  3. CantaMia Phase I & II- Deed of Trust, Security Agreement, Assignment of
Leases and Rents, Financing Statement and Fixture Filing dated as of June 4,
2014, and recorded June 5, 2014, in the Official Records of Maricopa County as
Document No. 20140368202, as amended by that certain First Amendment to Deed of
Trust, Security Agreement, Assignment of Leases and Rents, Financing Statement
and Fixture Filing dated as of August 5, 2014, and recorded August 7, 2014, in
the Official Records of Maricopa County as Doc. No. 20140520375, and as amended
by that certain Second Amendment to Deed of Trust, Security Agreement,
Assignment of Leases and Rents, Financing Statement and Fixture Filing dated as
of December 19, 2014, and recorded December 19, 2014, in the Official Records of
Maricopa County as Doc. No. 20140837170

 

  4. CantaMia Phase III- Deed of Trust, Security Agreement, Assignment of Leases
and Rents, Financing Statement and Fixture Filing dated as of June 4, 2014, and
recorded June 5, 2014, in the Official Records of Maricopa County as Document
No. 20140368219, as amended by that certain First Amendment to Deed of Trust,
Security Agreement, Assignment of Leases and Rents, Financing Statement and
Fixture Filing dated as of August 5, 2014, and recorded August 7, 2014, in the
Official Records of Maricopa County as Doc. No. 20140520386 and as amended by as
amended by that certain Second Amendment to Deed of Trust, Security Agreement,
Assignment of Leases and Rents, Financing Statement and Fixture Filing dated as
of December 19, 2014, and recorded December 19, 2014, in the Official Records of
Maricopa County as Doc. No. 20140837729

 

  5. Vitalia- Mortgage, Security Agreement, Assignment of Leases and Rents,
Financing Statement and Fixture Filing dated as of August 5, 2014, and recorded
August 8, 2014, in St. Lucie County, Florida in Book 3660, Page 2267, File
No. 3983393, as amended by that certain First Amendment to Mortgage, Security
Agreement, Assignment of Leases and Rents, Financing Statement and Fixture
Filing dated as of December 19, 2014, and recorded December 23, 2014 in the
Official Records of St. Lucie County, Florida in Book 3701, Page 2955-2960, File
No. 4025296

 

  6.

Solivita- Mortgage, Security Agreement, Assignment of Leases and Rents,
Financing Statement and Fixture Filing dated as of August 5, 2014, and recorded
August 11, 2014, in Polk County, Florida in Book 9312, Page 914-939,

--------------------------------------------------------------------------------

  Instrument No. 2014136479, as amended by that certain First Amendment to
Mortgage, Security Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing dated as of December 19, 2014, and recorded
December 19, 2014 in the Official Records of Polk County, Florida in Book 9413,
Pages 1735-1740, Instrument No. 2014215229

 

  7. SB 105 Mesa- Deed of Trust, Security Agreement, Assignment of Leases and
Rents, Financing Statement and Fixture Filing dated as of June 4, 2014, and
recorded June 5, 2014, in the Official Records of Maricopa County as Document
No. 20140367859, as amended by that certain First Amendment to Deed of Trust,
Security Agreement, Assignment of Leases and Rents, Financing Statement and
Fixture Filing dated as of August 5, 2014, and recorded August 7, 2014, in the
Official Records of Maricopa County as Doc. No. 20140520383, and as amended by
that certain Second Amendment to Deed of Trust, Security Agreement, Assignment
of Leases and Rents, Financing Statement and Fixture Filing dated as of
December 19, 2014, and recorded December 19, 2014, in the Official Records of
Maricopa County as Doc. No. 20140837186

 

  8. Milago/Mills Run- Deed of Trust, Security Agreement, Assignment of Leases
and Rents, Financing Statement and Fixture Filing dated as of September 18,
2014, and recorded September 18, 2014, in the Official Records of Pinal County
as Document No. 2014-053727, as amended by that certain First Amendment to Deed
of Trust, Security Agreement, Assignment of Leases and Rents, Financing
Statement and Fixture Filing dated as of December 19, 2014, recorded
December 22, 2014, in the Official Records of Pinal County as Document
No. 2014-073221

 

  9. Bellalago - Mortgage, Security Agreement, Assignment of Leases and Rents,
Financing Statement and Fixture Filing dated as of June 4, 2014, and recorded
June 5, 2014, in Osceola County, Florida in Book 4618, Page 2856, Instrument
No. 2014079443, as corrected by that certain corrective Mortgage, Security
Agreement, Assignment of Leases and Rents, Financing Statement and Fixture
Filing dated as of June 4, 2014 and recorded July 7, 2014 in Osceola County,
Florida in Book 4632, Page 2103, as Instrument No. 2014095621, as amended by
that certain First Amendment to Mortgage, Security Agreement, Assignment of
Leases and Rents, Financing Statement and Fixture Filing dated as of August 5,
2014, and recorded August 7, 2014, in Osceola County, Florida, in Book 4648,
Page 263, as Instrument No. 2014114074 and as amended by that certain Second
Amendment to Mortgage, Security Agreement, Assignment of Leases and Rents,
Financing Statement and Fixture Filing dated as of December 19, 2014, and
recorded December 19, 2014, in Osceola County, Florida, in Book 4711, Page 1897,
as Instrument No. 2014184868