Exhibit 10.1

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

 

This THIRD AMENDMENT TO CREDIT AGREEMENT (“Amendment”), dated as of September
29, 2017, among M.D.C. Holdings, Inc., a Delaware corporation (the “Borrower”),
the undersigned Lenders and U.S. BANK NATIONAL ASSOCIATION, as Designated Agent
(the “Designated Agent”).

 

RECITALS

 

WHEREAS, the Borrower, the Lenders and the Designated Agent are parties to that
certain Credit Agreement dated as of December 13, 2013 (as the same has been
amended and as the same may be further amended, restated, supplemented or
otherwise modified from time to time, including pursuant to this Amendment, the
“Credit Agreement”) (all capitalized terms not defined herein shall have the
meanings given such terms in the Credit Agreement); and

 

WHEREAS the Borrower has requested and the Lenders have agreed to extend the
Facility Termination Date to December 16, 2022, increase the Aggregate
Commitment to $700,000,000 and to amend the Credit Agreement in certain
respects.

 

NOW, THEREFORE, for good and valuable consideration, the parties hereto hereby
agree as follows:

 

1.     Amendments to the Credit Agreement. Effective as of the Third Amendment
Effective Date, each of the Credit Agreement and Schedule 1, Schedule 3,
Schedule 5.8 and Exhibit D to the Credit Agreement is hereby amended pursuant to
Exhibit A hereto.

 

2.     Conditions Precedent. This Amendment shall be effective as of the date
(the “Third Amendment Effective Date”) upon which the following conditions are
satisfied:

 

(a)     The Designated Agent shall have received from the Borrower and each of
the Lenders a counterpart of this Amendment signed on behalf of each such party.

 

(b)     The Designated Agent shall have received from the Guarantors the Consent
and Agreement substantially in the form attached hereto as Exhibit B.

 

(c)     The Designated Agent shall have received a certificate, signed by an
Authorized Officer on behalf of the Borrower, stating that as of the Third
Amendment Effective Date (1) no Default or Event of Default has occurred and is
continuing and (2) the representations and warranties contained in Article V of
the Credit Agreement are true and correct in all material respects (except to
the extent already qualified by materiality, in which case said representations
and warranties are true and correct in all respects) as of the Third Amendment
Effective Date except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case such representation or
warranty shall have been true and correct in all material respects (except to
the extent already qualified by materiality, in which case said representations
and warranties are true and correct in all respects) on and as of such earlier
date.

 

 

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(d)     On the Third Amendment Effective Date, the Borrower shall have paid to
the Designated Agent for the benefit of the Swing Line Lender immediately prior
to the effectiveness of this Amendment (the “Existing Swing line Lender”) the
aggregate outstanding principal amount of the Swing Line Loans and all accrued
interest on the Swing Line Loans and other outstanding Obligations due and owing
to the Swing Line Lender, in each case, which are outstanding immediately prior
to the effectiveness of this Amendment.

 

(e)     The Designated Agent shall have received such documents, certificates
and opinions of counsel as the Designated Agent or its counsel may reasonably
request relating to the organization or formation, existence and good standing
of the Borrower, and the Guarantors the authorization of this Amendment and any
other legal matters relating to the Borrower, the Guarantors, this Amendment or
the Credit Agreement, including, without limitation, those documents set forth
on Exhibit C attached hereto, all in form and substance satisfactory to the
Designated Agent and its counsel.

 

(f)     The Designated Agent and the Arrangers shall have received all fees and
other amounts due and payable to them and to the Lenders on or prior to the
Third Amendment Effective Date, including reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower under
the Credit Agreement and the fees set forth in the Third Supplemental Fee
Letter, dated as of August 31, 2017, among the Borrower, U.S. Bank and Citigroup
Global Markets Inc.

 

(g)     The Designated Agent shall have received from any existing Lenders that
are increasing their Commitments or any financial institutions that are joining
the Credit Agreement as Lenders on the date hereof (such Lenders, “Incremental
Lenders”), such amounts in immediately available funds as the Designated Agent
shall determine, for the benefit of the other Lenders, necessary to cause each
Lender’s portion of the outstanding Loans of all the Lenders to equal its Pro
Rata Share of such outstanding Loans after giving effect to such increase in the
Aggregate Commitment on the date hereof.

 

3.     Representation and Warranty. The Borrower hereby represents and warrants
that no Default or Event of Default has occurred and is continuing on and as of
the date hereof.

 

4.     Ratification. The Credit Agreement, as amended hereby, is hereby ratified
and remains in full force and effect.

 

5.     Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same document. An electronic or facsimile
copy of any signature hereto shall have the same effect as the original thereof.

 

6.     Choice of Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

7.     Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

 

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The remainder of this page is intentionally blank.

 

 

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IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuers, the Designated
Agent and the Co-Administrative Agents have executed this Amendment as of the
date first above written.

 

 

 

 

M.D.C. HOLDINGS, INC., a Delaware

corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ John J. Heaney                              

 

 

 

John J. Heaney

 

 

 

Senior Vice President and Treasurer

 

 

 

Signature Page to Third Amendment to Credit Agreement

 

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U.S. BANK NATIONAL ASSOCIATION,

 

as a Lender, Existing Swing Line Lender, LC

Issuer, Designated Agent and Co-Administrative

Agent

     

 

By: /s/ Benjamin Kuruvila                          

Name: Benjamin Kuruvila
Title:   Vice President

 

 

Signature Page to Third Amendment to Credit Agreement

 

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CITIBANK, N.A., as a Lender, LC Issuer and

Co-Administrative Agent

 

 

By: /s/ Michael Vondriska                             

Name: Michael Vondriska
Title:   Vice President

 

 

Signature Page to Third Amendment to Credit Agreement

 

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PNC Bank, National Association, as a Lender

and LC Issuer

 

 

By: /s/ J. Richard Litton                                  

Name: J. Richard Litton
Title:   Senior Vice President

 

 

Signature Page to Third Amendment to Credit Agreement

 

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SUNTRUST BANK, as a Lender and LC Issuer,

and Co-Syndication Agent

 

 

By: /s/ Lisa S. Boyer                                      

Name: Lisa S. Boyer
Title:   Senior Vice President

 

 

Signature Page to Third Amendment to Credit Agreement

 

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Bank of The West, a California banking

corporation, as a Lender and LC Issuer

 

 

By: /s/ Cris Galzez                                        

Name: Cris Galvez
Title:   Vice President

 

By: /s/ Benjamin Arroyo                               

Name: Benjamin Arroyo
Title: Vice President

   

 

 

Signature Page to Third Amendment to Credit Agreement

 

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Regions Bank, as a Lender and LC Issuer

 

 

By: /s/ Randall S. Reid                                  

Name: Randall S. Reid
Title:   Senior Vice President

 

 

Signature Page to Third Amendment to Credit Agreement

 

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ZB, N.A. dba Vectra Bank Colorado, as a Lender

and LC Issuer

 

 

By: /s/ H. Shaw Thomas                                  

Name: H. Shaw Thomas  
Title:   Senior Vice President

 

 

Signature Page to Third Amendment to Credit Agreement

 

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EXHIBIT A

 

AMENDED CREDIT AGREEMENT

 

 

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CREDIT AGREEMENT

DATED AS OF DECEMBER 13, 2013
and as amended as of December 17, 2014, December 18, 2015 and September 29, 2017

AMONG

M.D.C. HOLDINGS, INC.,

THE LENDERS,

U.S. BANK NATIONAL ASSOCIATION,
AS DESIGNATED AGENT

U.S. BANK NATIONAL ASSOCIATION
AND
CITIBANK, N.A.
AS CO-ADMINISTRATIVE AGENTS

 

 

SUNTRUST BANK,
AND
PNC BANK, NATIONAL ASSOCIATION

AS CO-SYNDICATION AGENTS

 

AND

U.S. BANK NATIONAL ASSOCIATION,
CITIGROUP GLOBAL MARKETS INC., SUNTRUST ROBINSON HUMPHREY, INC.

AND PNC CAPITAL MARKETS LLC
AS JOINT LEAD ARRANGERS AND JOINT BOOK RUNNERS

 

 

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Page

ARTICLE I DEFINITIONS

1

       

ARTICLE II THE CREDITS

28

         

2.1.

Commitment

28

 

2.2.

Determination of Dollar Amounts; Required Payments; Termination

28

 

2.3.

Ratable Loans; Types of Advances

29

 

2.4.

[Reserved]

29

 

2.5.

Commitment Fee

29

 

2.6.

Minimum Amount of Each Advance

29

 

2.7.

Reductions in Aggregate Commitment; Optional Principal Payments

29

 

2.8.

Method of Selecting Types and Interest Periods for New Revolving Advances

30

 

2.9.

Conversion and Continuation of Outstanding Advances; Maximum Number of Interest
Periods

30

 

2.10.

Interest Rates

31

 

2.11.

Rates Applicable After Event of Default

31

 

2.12.

Method of Payment

32

 

2.13.

Noteless Agreement; Evidence of Indebtedness

32

 

2.14.

Telephonic Notices

33

 

2.15.

Interest Payment Dates; Interest and Fee Basis

33

 

2.16.

Notification of Advances, Interest Rates, Prepayments and Commitment Reductions

33

 

2.17.

Lending Installations

33

 

2.18.

Non-Receipt of Funds by the Designated Agent

34

 

2.19.

Facility LCs

34

 

2.20.

Replacement of Lender

39

 

2.21.

Limitation of Interest

40

 

2.22.

Defaulting Lenders

41

 

2.23.

Term-Out Period

44

 

2.24.

Increase Option

45

 

2.25.

Returned Payments

46

 

2.26.

Extension of Facility Termination Date

46

       

ARTICLE III YIELD PROTECTION; TAXES

47

         

3.1.

Yield Protection

47

 

3.2.

Changes in Capital Adequacy Regulations

47

 

3.3.

Availability of Types of Advances; Adequacy of Interest Rate

48

 

3.4.

Funding Indemnification

48

 

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3.5.

Taxes

48  

3.6.

Selection of Lending Installation; Mitigation Obligations; Lender Statements;
Survival of Indemnity

52

 

3.7.

Cutoff

52

       

ARTICLE IV CONDITIONS PRECEDENT

53

         

4.1.

Initial Credit Extension

53

 

4.2.

Each Credit Extension

54

       

ARTICLE V REPRESENTATIONS AND WARRANTIES

55

         

5.1.

Existence and Standing

55

 

5.2.

Authorization and Validity

55

 

5.3.

No Conflict; Government Consent

55

 

5.4.

Financial Statements

55

 

5.5.

Material Adverse Change

56

 

5.6.

Taxes

56

 

5.7.

Litigation and Contingent Obligations

56

 

5.8.

Subsidiaries

56

 

5.9.

ERISA

56

 

5.10.

Accuracy of Information

57

 

5.11.

Regulation U

57

 

5.12.

Material Agreements

57

 

5.13.

Compliance With Laws

57

 

5.14.

Ownership of Properties

57

 

5.15.

Plan Assets; Prohibited Transactions

57

 

5.16.

Environmental Matters

57

 

5.17.

Investment Company Act

58

 

5.18.

Insurance

58

 

5.19.

Subordinated Indebtedness

58

 

5.20.

Solvency

58

 

5.21.

No Default

59

 

5.22.

Anti-Corruption Laws; Sanctions; Anti-Terrorism Laws

59

       

ARTICLE VI COVENANTS

59

         

6.1.

Financial Reporting

59

 

6.2.

Use of Proceeds

60

 

6.3.

Notice of Material Events

61

 

6.4.

Conduct of Business

61

 

6.5.

Taxes

62

 

6.6.

Insurance

62

 

6.7.

Compliance with Laws and Material Contractual Obligations

62

 

6.8.

Maintenance of Properties

62

 

6.9.

Books and Records; Inspection

62

 

6.10.

Payment of Obligations

62

 

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6.11.

Intentionally Omitted

63

 

6.12.

Merger

63

 

6.13.

Sale of Assets

63

 

6.14.

Investments and Acquisitions

64

 

6.15.

Liens

65

 

6.16.

Affiliates

68

 

6.17.

Modification of Certain Indebtedness

68

 

6.18.

Restricted Payment; Repurchase of Stock

68

 

6.19.

Financial Covenants and Tests

68

 

6.20.

Guaranty

71

 

6.21.

Negative Pledge

72

 

6.22.

PATRIOT Act Compliance

72

       

ARTICLE VII DEFAULTS

72

       

ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

75

         

8.1.

Acceleration; Remedies

75

 

8.2.

Application of Funds

76

 

8.3.

Amendments

77

 

8.4.

Preservation of Rights

78

       

ARTICLE IX GENERAL PROVISIONS

78

         

9.1.

Survival of Representations

78

 

9.2.

Governmental Regulation

78

 

9.3.

Headings

78

 

9.4.

Entire Agreement

78

 

9.5.

Several Obligations; Benefits of this Agreement

79

 

9.6.

Expenses; Indemnification

79

 

9.7.

Numbers of Documents

80

 

9.8.

Accounting

80

 

9.9.

Severability of Provisions

80

 

9.10.

Nonliability of Lenders

80

 

9.11.

Confidentiality

81

 

9.12.

Nonreliance

81

 

9.13.

Disclosure

81

 

9.14.

USA PATRIOT ACT NOTIFICATION

81

 

9.15.

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

82        

ARTICLE X THE DESIGNATED AGENT

82

         

10.1.

Appointment; Nature of Relationship

82

 

10.2.

Powers

83

 

10.3.

General Immunity

83

 

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10.4.

No Responsibility for Loans, Recitals, etc

83

 

10.5.

Action on Instructions of Lenders

83

 

10.6.

Employment of Agents and Counsel

84

 

10.7.

Reliance on Documents; Counsel

84

 

10.8.

Designated Agent’s Reimbursement and Indemnification

84

 

10.9.

Notice of Event of Default

85

 

10.10.

Rights as a Lender

85

 

10.11.

Lender Credit Decision, Legal Representation

85

 

10.12.

Successor Designated Agent

86

 

10.13.

Designated Agent and Arrangers Fees

86

 

10.14.

Delegation to Affiliates

87

 

10.15.

Co-Administrative Agents, Co-Syndication Agents, etc

87

 

10.16.

No Advisory or Fiduciary Responsibility

87

       

ARTICLE XI RATABLE PAYMENTS

87

         

11.1.

Ratable Payments

87

       

ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

88

         

12.1.

Successors and Assigns

88

 

12.2.

Participations

88

 

12.3.

Assignments

90

       

ARTICLE XIII NOTICES

91

         

13.1.

Notices; Effectiveness; Electronic Communication

91

       

ARTICLE XIV COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION

93          

14.1.

Counterparts; Effectiveness

93

 

14.2.

Electronic Execution of Assignments

93

 

14.3.

Electronic Records

93

       

ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

93          

15.1.

CHOICE OF LAW

93

 

15.2.

CONSENT TO JURISDICTION

94

 

15.3.

WAIVER OF JURY TRIAL

94

 

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SCHEDULES

 

PRICING SCHEDULE

 

SCHEDULE 1 – Commitments

 

SCHEDULE 2 – Existing Letters of Credit

 

SCHEDULE 3 – Guarantors

 

SCHEDULE 4 – [Reserved]

 

SCHEDULE 5.8 – Subsidiaries

 

SCHEDULE 6.15 - Liens

 

 

EXHIBITS

 

EXHIBIT A – Form of Opinion

 

EXHIBIT B – Form of Compliance Certificate

 

EXHIBIT C – Form of Assignment and Assumption Agreement

 

EXHIBIT D – Form of Borrowing Notice

 

EXHIBIT E – Form of Guaranty

 

EXHIBIT F – Form of Note

 

EXHIBIT G – Form of Increasing Lender Supplement

 

EXHIBIT H – Form of Augmenting Lender Supplement

 

EXHIBIT I – List of Closing Documents

 

EXHIBIT J – Form of Borrowing Base Certificate

 

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CREDIT AGREEMENT

 

This Credit Agreement (the “Agreement”), dated as of December 13, 2013, is among
M.D.C. Holdings, Inc., a Delaware corporation, the Lenders and U.S. Bank
National Association, a national banking association, as LC Issuer and
Designated Agent. The parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

As used in this Agreement:

 

“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Guarantors (i) acquires any going business or all or substantially all of
the assets of any firm, corporation or limited liability company, 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) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding ownership interests of a partnership or limited
liability company.

 

“Act” is defined in Section 9.14.

 

“Adjusted Book Value of Land Owned” means, as of the last day of any fiscal
quarter, (i) the book value of all land owned by the Borrower or any Guarantor
at such date, including without limitation Land Under Development, Entitled Land
and Finished Lots but excluding any parcel of land on which a Housing Unit is
located, less (ii) an amount equal to the lesser of (A) fifty percent (50%) of
the book value of the land component of all Housing Units with respect to which
Housing Unit Closings occurred during the period of four consecutive fiscal
quarters ending on such date and (B) fifty percent (50%) of Adjusted
Consolidated Tangible Net Worth as of such date.

 

“Adjusted Consolidated Tangible Net Worth” means, at any date, (a) Consolidated
Tangible Net Worth, plus (b) the lesser of (i) fifty percent (50%) of the
Subordinated Indebtedness of the Borrower and Guarantors (taken as a whole on a
consolidated basis) and (ii) $100,000,000.

 

“Advance” means a borrowing hereunder, (i) made by some or all of the Lenders on
the same Borrowing Date, or (ii) converted or continued by the Lenders on the
same date of conversion or continuation, consisting, in either case, of the
aggregate amount of the several Loans of the same Type and, in the case of
Eurocurrency Loans, for the same Interest Period.

 

“Affected Lender” is defined in Section 2.20.

 

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“Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person, including,
without limitation, such Person’s Subsidiaries. A Person shall be deemed to
control another Person if the controlling Person owns 10% or more of any class
of voting securities (or other ownership interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of stock, by contract or otherwise.

 

“Aggregate Commitment” means the aggregate of the Commitments of all the
Lenders, as increased or reduced from time to time pursuant to the terms hereof.
As of the Third Amendment Effective Date, the Aggregate Commitment is
$700,000,000.

 

“Aggregate Outstanding Credit Exposure” means, at any time, the aggregate of the
Outstanding Credit Exposure of all the Lenders.

 

“Agreement” means this Credit Agreement, as it may be amended or modified and in
effect from time to time.

 

“Agreement Accounting Principles” is defined in Section 9.8.

 

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to
the highest of (i) 0.0%, (ii) the Prime Rate for such day, (iii) the sum of the
Federal Funds Effective Rate for such day plus 1.50% per annum and (iv) the
Eurocurrency Rate (without giving effect to the Applicable Margin) for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) for Dollars plus 1.00%, provided that, for
the avoidance of doubt, the Eurocurrency Rate for any day shall be based on the
rate reported by the applicable financial information service at approximately
11:00 a.m. London time on such day.

 

“Anti-Corruption Laws” means 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 Fee Rate” means, at any time, the percentage rate per annum at which
Commitment Fees are accruing on the Available Aggregate Commitment at such time
as set forth in the Pricing Schedule.

 

“Applicable Margin” means, with respect to Advances of any Type at any time, the
percentage rate per annum which is applicable at such time with respect to
Advances of such Type as set forth in the Pricing Schedule.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Arrangers” means U.S. Bank, Citigroup Global Markets Inc., SunTrust Robinson
Humphrey, Inc. and PNC Capital Markets LLC, and their respective successors, in
their capacities as Joint Lead Arrangers and Joint Book Runners.

 

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“Article” means an article of this Agreement unless another document is
specifically referenced.

 

“Augmenting Lender” is defined in Section 2.24.

 

“Authorized Officer” means any of the President, Chief Financial Officer, or
Treasurer of the Borrower, acting singly.

 

“Available Aggregate Commitment” means, at any time, the Aggregate Commitment
then in effect minus the Aggregate Outstanding Credit Exposure at such time.

 

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

 

“Base Rate” means, for any day, a rate per annum equal to (i) the Alternate Base
Rate for such day plus (ii) the Applicable Margin, in each case changing when
and as the Alternate Base Rate changes.

 

“Base Rate Advance” means an Advance which, except as otherwise provided in
Section 2.11, bears interest at the Base Rate.

 

“Base Rate Loan” means a Loan which, except as otherwise provided in Section
2.11, bears interest at the Base Rate.

 

“Borrower” means M.D.C. Holdings, Inc., a Delaware corporation, and its
successors and assigns.

 

“Borrowing Base” means, with respect to an Inventory Valuation Date for which it
is to be determined, an amount equal to the sum (without duplication) of the
following assets of the Borrower and each Guarantor (but only to the extent that
such assets are not subject to any Liens other than Permitted Liens):

 

 

(i)

one hundred percent (100%) of Cash, Cash Equivalents and Marketable Securities;

 

 

(ii)

the book value of Receivables, multiplied by ninety percent (90%); plus

 

 

(iii)

the book value of Presold Units, multiplied by ninety percent (90%); plus

 

 

(iv)

the book value of Model Units, multiplied by eighty percent (80%); plus

 

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(v)

the book value of Speculative Units (other than such Speculative Units, if any,
as are excluded from the Borrowing Base pursuant to the provisions of Section
6.19(c), multiplied by eighty percent (80%)); plus

 

 

(vi)

the book value of Finished Lots (other than such Finished Lots, if any, as are
excluded from the Borrowing Base pursuant to the provisions of Section 6.19(d),
multiplied by seventy percent (70%)); plus

 

 

(vii)

the book value of Land Under Development (other than such Land Under
Development, if any, as is excluded from the Borrowing Base pursuant to the
provisions of Section 6.19(d), multiplied by sixty percent (60%)); plus

 

 

(viii)

the book value of Entitled Land (other than such Entitled Land, if any, as is
excluded from the Borrowing Base pursuant to the provisions of Section 6.19(d),
multiplied by forty-five percent (45%));

 

provided, however, that the aggregate (without duplication) of the amounts
calculated pursuant to clauses (vi), (vii) and (viii) shall not exceed at any
time forty percent (40%) of the Borrowing Base.

 

“Borrowing Base Certificate” means a certificate executed by an Authorized
Officer, in the form attached hereto as Exhibit I (with such modifications to
such form as may be reasonably requested by the Designated Agent or the Required
Lenders from time to time), setting forth the Borrowing Base and the component
calculations in respect of the foregoing.

 

“Borrowing Date” means a date on which an Advance is made or a Facility LC is
issued hereunder.

 

“Borrowing Notice” is defined in Section 2.8.

 

“Business Day” means (i) with respect to any borrowing, payment or rate
selection of Eurocurrency Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in New York City, New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in Dollars are carried
on in the London interbank market and (ii) for all other purposes, a day (other
than a Saturday or Sunday) on which banks generally are open in New York City,
New York for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.

 

“Capitalized Lease” of a Person means any lease of Property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.

 

“Capitalized Lease Obligations” of a Person means the amount of the obligations
of such Person under Capitalized Leases which would be shown as a liability on a
balance sheet of such Person prepared in accordance with Agreement Accounting
Principles.

 

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“Cash Collateralize” means to deposit in the Facility LC Collateral Account or
to pledge and deposit with or deliver to the Designated Agent, for the benefit
of one or more of the applicable LC Issuers or Lenders, as collateral for LC
Obligations or obligations of Lenders to fund participations in respect of LC
Obligations, cash or deposit account balances or, if the Designated Agent and
the applicable LC Issuers shall agree in their sole discretion, other credit
support, in each case pursuant to documentation in form and substance
satisfactory to the Designated Agent and the applicable LC Issuers. “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” means Investments that would be set forth in a consolidated
balance sheet of Borrower (in a manner consistent with the financial statements
referenced in Section 5.4) under the heading “cash and cash equivalents.”

 

“Change in Control” means (i) the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the U.S. Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 50% or more of the outstanding shares of voting stock
of the Borrower on a fully diluted basis; or (ii) within any twelve-month
period, occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Borrower by Persons who were neither (x) nominated by
the board of directors of the Borrower nor (y) appointed or approved by
directors so nominated.

 

“Change in Law” is defined in Section 3.1.

 

“Class”, when used in reference to any Loan or Advance, refers to whether such
Loan, or the Loans comprising such Advance, are Revolving Loans.

 

“Co-Administrative Agents” means U.S. Bank and Citibank, N.A.

 

“Co-Syndication Agents” means SunTrust Bank and PNC Bank, National Association.

 

“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

 

“Collateral Shortfall Amount” is defined in Section 8.1.

 

“Commitment” means, for each Lender, the obligation of such Lender to make Loans
to, and participate in Facility LCs issued upon the application of, the
Borrower, in an amount not exceeding the amount set forth in Schedule 1, as it
may be modified (i) pursuant to Section 2.7, (ii) as a result of any assignment
that has become effective pursuant to Section 12.3(c) or (iii) otherwise from
time to time pursuant to the terms hereof.

 

“Commitment Fee” is defined in Section 2.5.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. §1 et seq.),
as amended from time to time, and any successor statute.

 

“Computation Date” is defined in Section 2.2.

 

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“Consolidated EBITDA” means, for any period, without duplication, the following,
all as determined on a consolidated basis for the Borrower and Guarantors
(specifically excluding the Non-Guarantor Subsidiaries except as otherwise
provided in the definition of “Consolidated Net Income”) in conformity with
Agreement Accounting Principles,

 

 

(ix)

the sum of the amounts for such period of (a) Consolidated Net Income, (b)
Consolidated Interest Expense, (c) charges against income for all federal, state
and local taxes, (d) depreciation expense, (e) amortization expense, (f) other
non-cash charges and expenses, and (g) any losses arising outside of the
ordinary course of business which have been included in the determination of
such Consolidated Net Income, less

 

 

(x)

any gains arising outside of the ordinary course of business which have been
included in the determination of such Consolidated Net Income.

 

“Consolidated Indebtedness” means, at any date, the outstanding amount of all
Indebtedness (including without limitation any Subordinated Indebtedness) of the
Borrower and Guarantors, without duplication, (taken as a whole on a
consolidated basis in conformity with Agreement Accounting Principles).
“Consolidated Indebtedness” shall specifically exclude Indebtedness of any
Non-Guarantor Subsidiary.

 

“Consolidated Interest Expense” means for any period, without duplication, the
aggregate amount of interest which, in conformity with Agreement Accounting
Principles, would be set opposite the caption “interest expense” or any like
caption on a consolidated income statement for the Borrower and Guarantors
(specifically excluding the Non-Guarantor Subsidiaries), including, without
limitation, imputed interest included on Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to Letters
of Credit and bankers’ acceptance financing, the net costs associated with Rate
Management Transactions, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of discount or
premiums, if any, and all other noncash interest expense, other than interest
and other charges amortized to cost of sales. Consolidated Interest Expense
includes, with respect to the Borrower and Guarantors (specifically excluding
the Non-Guarantor Subsidiaries), without duplication, all interest included as a
component of cost of sales for such period.

 

“Consolidated Interest Incurred” means for any period, without duplication, the
aggregate amount of interest which, in conformity with Agreement Accounting
Principles, would be set opposite the caption “interest expense” or any like
caption on a consolidated income statement for the Borrower and Guarantors
(specifically excluding the Non-Guarantor Subsidiaries), including, without
limitation, imputed interest included on Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to Letters
of Credit and bankers’ acceptance financing, the net costs associated with Rate
Management Transactions, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of discount or
premium, if any, and all other noncash interest expense other than interest and
other charges amortized to cost of sales. Consolidated Interest Incurred
includes, with respect to the Borrower and Guarantors, without duplication, all
capitalized interest for such period, all interest attributable to discontinued
operations for such period to the extent not set forth on the income statement
under the caption “interest expense” or any like caption, and all interest
actually paid by the Borrower or any Guarantor (specifically excluding the
Non-Guarantor Subsidiaries) under any Contingent Obligation during such period.

 

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“Consolidated Net Income” means, for any period, the net income (or loss) of the
Borrower and the Guarantors (specifically excluding net income of the
Non-Guarantor Subsidiaries but including, however, any dividends and
reimbursements of taxes paid by any Non-Guarantor Subsidiary to the Borrower or
any Guarantor) on a consolidated basis for such period, determined in conformity
with Agreement Accounting Principles.

 

“Consolidated Senior Debt Borrowings” means, at any date, with respect to the
Borrower and Guarantors, without duplication (taken as a whole on a consolidated
basis), the outstanding principal amount of all obligations described in clauses
(i), (iv) or (viii) of the definition of “Indebtedness” (including the
Obligations and the Senior Debt) calculated in accordance with Agreement
Accounting Principles but excluding (i) Indebtedness of any Non-Guarantor
Subsidiary, (ii) Indebtedness of the Borrower to a Guarantor, a Guarantor to the
Borrower or a Guarantor to another Guarantor, (iii) any Subordinated
Indebtedness and (iv) Indebtedness secured by collateral having a value in
excess of the amount of such Indebtedness.

 

“Consolidated Tangible Net Worth” means, at any date, the stockholders’ equity
of the Borrower determined on a consolidated basis in conformity with Agreement
Accounting Principles less (a) its consolidated intangible assets determined in
accordance with Agreement Accounting Principles, (b) loans and advances to
directors, officers and employees of the Borrower (excluding (i) loans for
purposes of exercising options to purchase capital stock in the Borrower to the
extent not otherwise netted out in the determination of stockholders’ equity,
(ii) any arms-length mortgage loans made by any Subsidiary in the ordinary
course of such Subsidiary’s business, and (iii) any advances made to employees
in the ordinary course of business for travel and other items, not to exceed
$10,000,000 in the aggregate), and (c) the Net Worth of the Non-Guarantor
Subsidiaries (taken as a whole on a consolidated basis).

 

“Consolidated Tangible Net Worth Covenant” is defined in Section 6.19(e).

 

“Consolidated Tangible Net Worth Test” is defined in Section 6.19(a).

 

“Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or 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, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.

 

“Conversion/Continuation Notice” is defined in Section 2.9.

 

“Coverage Test Failure Quarter” is defined in Section 6.19(b)(ii). For avoidance
of doubt, the second consecutive fiscal quarter as of which the Borrower fails
to satisfy the Interest Coverage Test shall constitute a Coverage Test Failure
Quarter and each consecutive fiscal quarter thereafter as of which the Borrower
fails to satisfy the Interest Coverage Test shall also constitute a Coverage
Test Failure Quarter.

 

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“Credit Extension” means the making of an Advance or the issuance of a Facility
LC hereunder.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect.

 

“Declining Lender” is defined in Section 2.26.

 

“Declining Lender’s Termination Date” is defined in Section 2.26.

 

“Default” means an event which but for the lapse of time or the giving of
notice, or both, would constitute an Event of Default.

 

“Defaulting Lender” means, subject to Section 2.22(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two (2) Business Days
after the date such Loans were required to be funded hereunder unless such
Lender notifies the Designated Agent and the Borrower in writing that such
failure is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied or waived, or (ii) pay to the Designated Agent, the LC Issuers or
any other Lender any other amount required to be paid by it hereunder (including
in respect of its participation in Facility LCs) within two (2) Business Days
after the date when due, (b) has notified the Borrower, the Designated Agent or
the LC Issuers in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Lender’s obligation to fund a
Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
(3) Business Days after written request by the Designated Agent or the Borrower,
to confirm in writing to the Designated Agent and the Borrower that it will
comply with its prospective funding obligations hereunder (provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
receipt of such written confirmation by the Designated Agent and the Borrower),
or (d) has, or has a direct or indirect parent company that has, (i) become the
subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a
receiver, custodian, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business or assets (other than an Undisclosed
Administration), including the Federal Deposit Insurance Corporation or any
other state or federal regulatory authority acting in such a capacity or (iii)
become the subject of a Bail-In Action; provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender 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 Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by the Designated Agent that a Lender is a Defaulting
Lender under any one or more of clauses (a) through (d) above shall be
conclusive and binding absent manifest error, and such Lender shall be deemed to
be a Defaulting Lender (subject to Section 2.22(b)) upon delivery of written
notice of such determination to the Borrower, the LC Issuers and each Lender.

 

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“Designated Agent” means U.S. Bank in its capacity as contractual representative
of the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Designated Agent appointed pursuant to Article X.

 

“Dollar” and “$” means the lawful currency of the United States of America.

 

“Dollar Amount” means, on any date of determination, with respect to any amount
in Dollars, such amount.

 

“Domestic Subsidiary” means a Subsidiary of the Borrower incorporated or
organized under the laws of the United States of America, any state thereof or
the District of Columbia.

 

“EEA Financial Institution” means (a) any credit institution or investment firm
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 financial 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” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means 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” means the date on which the conditions specified in Section 4.1
are satisfied.

 

“Eligible Assignee” means (i) a Lender (ii) an Approved Fund; (iii) a commercial
bank organized under the laws of the United States, or any state thereof, and
having total assets in excess of $3,000,000,000, calculated in accordance with
the accounting principles prescribed by the regulatory authority applicable to
such bank in its jurisdiction of organization; (iv) a commercial bank organized
under the laws of any other country that is a member of the OECD or a political
subdivision of any such country, and having total assets in excess of
$3,000,000,000, calculated in accordance with the accounting principles
prescribed by the regulatory authority applicable to such bank in its
jurisdiction of organization, so long as such bank is acting through a branch or
agency located in the country in which it is organized or another country that
is described in this clause (iv); or (v) the central bank of any country that is
a member of the OECD; provided, however, that neither the Borrower nor an
Affiliate of the Borrower shall qualify as an Eligible Assignee.

 

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“Entitled Land” means parcels of land owned by the Borrower or any Guarantor
which are zoned for the construction of single-family dwellings, whether
detached or attached (excluding mobile homes); provided, however, that the term
“Entitled Land” shall not include Land under Development, Finished Lots or any
real property upon which the construction of Housing Units has commenced (as
described in the definition of “Housing Unit”).

 

“Environmental Laws” means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) personal injury or property damage relating
to the release or discharge of Hazardous Materials, (iii) emissions, discharges
or releases of pollutants, contaminants, hazardous substances or wastes into
surface water, ground water or land, or (iv) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, hazardous substances or wastes or the clean-up or
other remediation thereof.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any rule or regulation issued thereunder.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the failure with
respect to any Plan to satisfy the “minimum funding standard” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition upon
the Borrower or any of its ERISA Affiliates of withdrawal liability under
Section 4201 of ERISA or a determination that a Multiemployer Plan is, or is
expected to be, insolvent within the meaning of Title IV of ERISA.

 

“EU” means the European Union.

 

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

 

“Eurocurrency Advance” means an Advance which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurocurrency Rate.

 

“Eurocurrency Base Rate” means, with respect to a Eurocurrency Advance for the
relevant Interest Period, the greater of (a) zero percent (0.0%) and (b) the
applicable interest settlement rate for deposits in Dollars administered by ICE
Benchmark Administration (or any other Person that takes over the administration
of such rate) appearing on the applicable Reuters Screen (or on any successor or
substitute page on such screen) as of 11:00 a.m. (London time) on the Quotation
Date for such Interest Period, and having a maturity equal to such Interest
Period, provided that, if the applicable Reuters Screen (or any successor or
substitute page) is not available to the Designated Agent for any reason, the
applicable Eurocurrency Base Rate for the relevant Interest Period shall instead
be the applicable interest settlement rate for deposits in Dollars administered
by ICE Benchmark Administration (or any other Person that takes over the
administration of such rate) as reported by any other generally recognized
financial information service selected by the Designated Agent as of 11:00 a.m.
(London time) on the Quotation Date for such Interest Period, and having a
maturity equal to such Interest Period, provided that, if no such interest
settlement rate administered by ICE Benchmark Administration (or any other
Person that takes over the administration of such rate) is available to the
Designated Agent, the applicable Eurocurrency Base Rate for the relevant
Interest Period shall instead be the rate determined by the Designated Agent to
be the rate at which the Designated Agent or one of its Affiliate banks offers
to place deposits in Dollars with first-class banks in the interbank market at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period, in the approximate amount of the Designated Agent’s
relevant Eurocurrency Loan and having a maturity equal to such Interest Period.

 

“Eurocurrency Loan” means a Loan which, except as otherwise provided in Section
2.11, bears interest at the applicable Eurocurrency Rate.

 

“Eurocurrency Rate” means, with respect to a Eurocurrency Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurocurrency
Base Rate applicable to such Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest Period,
plus (ii) the Applicable Margin.

 

“Event of Default” is defined in Article VII.

 

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any guarantee thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the guarantee of such Guarantor or the grant
of such security interest becomes effective with respect to such Swap
Obligation. If a Swap Obligation arises under a master agreement governing more
than one swap, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to swaps for which such guarantee or security
interest becomes illegal.

 

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“Excluded Taxes” means, in the case of each Lender or applicable Lending
Installation, the LC Issuers, and the Designated Agent, (i) Taxes imposed on its
overall net income, franchise Taxes, and branch profits Taxes imposed on it, by
the respective jurisdiction under the laws of which such Lender, the LC Issuers
or the Designated Agent is incorporated or is organized or in which its
principal executive office is located or, in the case of a Lender, in which such
Lender’s applicable Lending Installation is located, (ii) in the case of a
Non-U.S. Lender, any withholding tax that is imposed on amounts payable to such
Non-U.S. Lender pursuant to the laws in effect at the time such Non-U.S. Lender
becomes a party to this Agreement or designates a new Lender Installation,
except in each case to the extent that, pursuant to Section 3.5(a), amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its Lender Installation, or is attributable to the Non-U.S. Lender’s
failure to comply with Section 3.5(f), and (iii) any U.S. federal withholding
taxes imposed by FATCA.

 

“Exhibit” refers to an exhibit to this Agreement, unless another document is
specifically referenced.

 

“Existing Letters of Credit” means those Letters of Credit identified in
Schedule 2 hereto heretofore issued by the Lenders identified in Schedule 2 and
outstanding as of the date hereof in the amounts set forth in Schedule 2.

 

“Extension Date” is defined in Section 2.26.

 

“Extension Request” is defined in Section 2.26.

 

“Facility LC” means (a) any Existing Letter of Credit and (b) any Letter of
Credit issued by an LC Issuer in accordance with Section 2.19.

 

“Facility LC Application” is defined in Section 2.19(c).

 

“Facility LC Collateral Account” is defined in Section 2.19(k).

 

“Facility Termination Date” means December 16, 2022, as the same may be extended
as provided in Section 2.26, or any earlier date on which the Aggregate
Commitment is reduced to zero or otherwise terminated pursuant to the terms
hereof.

 

“FATCA” means 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, any agreements entered into
pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement, treaty or convention among Governmental Authorities entered into in
connection with the implementation of the foregoing.

 

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“Federal Funds Effective Rate” means, for any day, an interest rate per annum
equal to the greater of (i) 0% and (ii) the rate per annum calculated by the
Federal Reserve Bank of New York based on such day’s federal funds transactions
by depository institutions (as determined in such manner as the Federal Reserve
Bank of New York 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 as the federal funds effective rate, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations at
approximately 10:00 a.m. (Eastern time) on such day on such transactions
received by the Designated Agent from three (3) Federal funds brokers of
recognized standing selected by the Designated Agent in its sole discretion.

 

“Fee Letters” is defined in Section 10.13.

 

“Financial Contract” of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics or (ii) any Rate Management Transaction.

 

“Finished Lots” means parcels of land owned by the Borrower or any Guarantor
which are duly recorded and platted for the construction of single-family
dwelling units, whether detached or attached (but excluding mobile homes) and
zoned for such use, with respect to which all requisite governmental consents
and approvals required for a building permit to be issued have been, or could
be, obtained; provided, however, that the term “Finished Lots” shall not include
any real property upon which the construction of a Housing Unit has commenced
(as described in the definition of “Housing Unit”).

 

“Fitch” means Fitch, Inc.

 

“Foreign Subsidiary” means any Subsidiary organized under the laws of a
jurisdiction not located in the United States of America.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, with
respect to an LC Issuer, such Defaulting Lender’s ratable share of the LC
Obligations with respect to Facility LCs issued by such LC Issuer other than LC
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.

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, applied in a manner consistent with that used in
preparing the financial statements referred to in Section 5.4, subject at all
times to Section 9.8.

 

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including, without limitation, any supra-national bodies such as the
European Union or the European Central Bank) and any group or body charged with
setting financial accounting or regulatory capital rules or standards
(including, without limitation, the Financial Accounting Standards Board, the
Bank for International Settlements or the Basel Committee on Banking Supervisory
Practices or any successor or similar authority to any of the foregoing).

 

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“Guarantor” means the Subsidiaries listed on Schedule 3 hereto, and each
Subsidiary that becomes a party to the Guaranty after the date hereof pursuant
to the terms of Section 6.20(a), and their respective successors and assigns
(excluding any Guarantor released from the Guaranty in accordance with the terms
of this Agreement).

 

“Guaranty” means that certain Guaranty dated as of the date hereof executed by
each of the Guarantors in the form attached hereto as Exhibit E, as amended,
restated, supplemented or otherwise modified, renewed or replaced from time to
time pursuant to the terms hereof and thereof.

 

“Hazardous Material” means any explosive or radioactive substances or wastes,
any hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and any other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Highest Lawful Rate” means, on any day, the maximum non-usurious rate of
interest permitted for that day by applicable federal or state law stated as a
rate per annum.

 

“Homebuilding Subsidiary” means any wholly-owned Subsidiary that is engaged in
the homebuilding business.

 

“Housing Unit” means a single-family dwelling (where construction has
commenced), whether detached or attached (including condominiums but excluding
mobile homes), including the parcel of land on which such dwelling is located,
that is or will be available for sale by the Borrower or a Guarantor.  The
construction of a Housing Unit shall be deemed to have commenced upon
commencement of the trenching for the foundation of the Housing Unit.  Each
“Housing Unit” is either a Presold Unit, a Spec Unit or a Model Unit.

 

“Housing Unit Closing” means a closing of the sale of a Housing Unit by the
Borrower or a Guarantor to a bona fide purchaser for value.

 

“Increasing Lender” is defined in Section 2.24.

 

“Indebtedness” of a Person means, without duplication, such Person’s

 

 

(i)

obligations for borrowed money,

 

 

(ii)

obligations representing the deferred purchase price of Property or services
(other than (A) trade accounts payable and accrued expenses arising or occurring
in the ordinary course of such Person’s business, and (B) obligations evidenced
by the Permitted Liens described in clause (vi) of the definition of Permitted
Liens),

 

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(iii)

obligations, whether or not assumed, secured by Liens on, or payable out of the
proceeds or production from, Property now or hereafter owned or acquired by such
Person (other than the obligations evidenced by the Permitted Liens described in
clause (vi) of the definition of Permitted Liens),

 

 

(iv)

obligations which are evidenced by notes, bonds, debentures, or other similar
instruments,

 

 

(v)

Capitalized Lease Obligations,

 

 

(vi)

Net Mark-to-Market Exposure under Rate Management Transactions,

 

 

(vii)

all Contingent Obligations, including all liabilities and obligations of others
of the kind described in clauses (i) through (vi) and (viii) that such Person
has guaranteed, or that are secured by Liens on Property now or hereafter owned
or acquired by such Person (other than the obligations evidenced by the
Permitted Liens described in clause (vi) of the definition of Permitted Liens)
or that are otherwise the legal liability of such Person,

 

 

(viii)

reimbursement obligations for which such Person is obligated with respect to a
Letter of Credit (which shall be included in the face amount of such Letter of
Credit, whether or not such reimbursement obligations are due and payable),
provided, however, that any Letter of Credit supporting performance obligations
shall not be included in Indebtedness unless and until such Letter of Credit is
drawn upon,

 

 

(ix)

obligations to purchase securities or other Property arising out of or in
connection with the sale of the same or substantially similar securities or
Property, and

 

 

(x)

the applicable pro rata share of the Indebtedness of any joint venture in which
such Person holds an interest.

 

Indebtedness includes, without limitation, in the case of the Borrower, the
Obligations (subject to clause (viii) above) and the obligations evidenced by
the Senior Notes and the documents executed in connection therewith.

 

“Indemnified Taxes” means Taxes imposed on or with respect to any payment made
by or on account of any obligation of any Loan Party under any Loan Document,
other than Excluded Taxes and Other Taxes.

 

“Indenture” means the Senior Debt Securities Indenture, dated as of December 3,
2002 between Borrower and U.S. Bank National Association (the “Base Indenture”),
as supplemented by (i) the Supplemental Indenture dated as of January 15, 2010
relating to the 5.625% Senior Notes due 2020, (ii) the Second Supplemental
Indenture dated as of January 3, 2013 relating to the 5.625% Senior Notes due
2020, (iii) the Supplemental Indenture dated as of January 10, 2013 relating to
the 6.000% Senior Notes due 2043, and (iv) the Supplemental Indenture dated as
of January 15, 2014 relating to the 5.500% Senior Notes due 2024, pursuant to
which the Senior Notes were issued.

 

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“Interest Coverage Ratio” means, as of the last day of any fiscal quarter, (a)
Consolidated EBITDA for the period of four consecutive fiscal quarters ending on
such date to (b) Consolidated Interest Incurred for the period of four
consecutive fiscal quarters ending on such date.

 

“Interest Coverage Test” is defined in Section 6.19(b)(ii).

 

“Interest Differential” is defined in Section 3.4.

 

“Interest Period” means, with respect to a Eurocurrency Advance, a period of one
(1), two (2) or three (3) months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one (1), two (2) or three (3) months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second or third succeeding month, such Interest
Period shall end on the last Business Day of such next, second or third
succeeding month. If an Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next succeeding
Business Day, provided, however, that if said next succeeding Business Day falls
in a new calendar month, such Interest Period shall end on the immediately
preceding Business Day.

 

“Inventory Valuation Date” means the last day of the most recent fiscal quarter
with respect to which the Borrower is requested to have delivered a Borrowing
Base Certificate pursuant to Section 6.1(d) hereof.

 

“Investment” of a Person means (a) any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; (b) stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities (including warrants
or options to purchase securities) owned by such Person; (c) any deposit
accounts and certificate of deposit owned by such Person; and (d) structured
notes, derivative financial instruments and other similar instruments or
contracts owned by such Person.

 

“Investment Grade Rating” means a Rating of Baa3 (or higher) from Moody’s or
BBB- (or higher) from S&P or BBB- (or higher) from Fitch.

 

“Land-Owned Test” is defined in Section 6.19(d).

 

“Land Under Development” means parcels of land owned by the Borrower or any
Guarantor which are zoned for the construction of single-family dwelling units,
whether attached or detached (excluding mobile homes) and upon which the
construction of site improvements has commenced and is proceeding; provided,
however, that the term “Land Under Development” shall not include (i) Finished
Lots, (ii) Entitled Land, (iii) any real property upon which the construction of
a Housing Unit has commenced, or (iv) vacant land held by the Borrower or any
Guarantor for future development or sale and designated as inactive land in the
footnotes to the Borrower’s or such Guarantor’s financial statements.

 

“LC Fee” is defined in Section 2.19(d).

 

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“LC Issuer” means each of the Lenders (or any subsidiary or affiliate of such
Lender designated by such Lender) that has issued an Existing Letter of Credit,
U.S. Bank (or any subsidiary or affiliate of U.S. Bank designated by U.S. Bank),
Citibank, N.A. (or any subsidiary or affiliate of Citibank, N.A. designated by
Citibank, N.A.), or any other Lender that agrees, at the Borrower’s request, to
issue Facility LCs hereunder (or any subsidiary or affiliate of such Lender
designated by such Lender), each in its capacity as issuer of Facility LCs
hereunder.

 

“LC Issuer’s LC Limit” means, with respect to each Lender party to the Agreement
on the Effective Date, an amount equal to 50% of its Commitment or such higher
or lower amount as shall be agreed by such Lender and the Borrower. In the case
of any Person that becomes a Lender after the date hereof, such Lender’s LC
Issuer’s LC Limit shall be an amount equal to 50% of its Commitment unless such
Lender and the Borrower shall otherwise agree and so notify the Designated
Agent. A Lender or the Borrower shall promptly notify the Designated Agent of
any change in such Lender’s LC Issuer’s LC Limit.

 

“LC Obligations” means, at any time, the sum, without duplication, of (i) the
aggregate undrawn stated amount under all Facility LCs outstanding at such time
plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations.

 

“LC Payment Date” is defined in Section 2.19(e).

 

“Lenders” means the lending institutions listed on the signature pages of this
Agreement and their respective successors and assigns.

 

“Lending Installation” means, with respect to a Lender or the Designated Agent,
the office, branch, subsidiary or affiliate of such Lender or the Designated
Agent listed on the signature pages hereof (in the case of the Designated Agent)
or on its Administrative Questionnaire (in the case of a Lender) or otherwise
selected by such Lender or the Designated Agent pursuant to Section 2.17.

 

“Letter of Credit” of a Person means a letter of credit or similar instrument
which is issued upon the application of such Person or upon which such Person is
an account party or for which such Person is in any way liable.

 

“Leverage Ratio” means, as of any date of calculation, the ratio (expressed as a
percentage) of (i) (A) Consolidated Indebtedness outstanding on such date less
(B) Unrestricted Cash in excess of $50,000,000 on such date to (ii) (A) the sum
of Consolidated Indebtedness on such date and Consolidated Tangible Net Worth on
such date less (B) Unrestricted Cash in excess of $50,000,000 on such date.

 

“Leverage Test” is defined in Section 6.19(b)(i).

 

“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).

 

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“Loan” means a Revolving Loan.

 

“Loan Documents” means this Agreement, the Facility LC Applications, the
Guaranty and any Note or Notes executed by the Borrower in connection with this
Agreement and payable to a Lender, now or in the future, executed by the
Borrower for the benefit of the Designated Agent or any Lender in connection
with this Agreement.

 

“Loan Party” or “Loan Parties” means, individually or collectively, the Borrower
and the Guarantors.

 

“Marketable Securities” means Investments that would be set forth in a
consolidated balance sheet of Borrower (in a manner consistent with the
financial statements referenced in Section 5.4) under the heading “marketable
securities.”

 

“Material Adverse Effect” means a material adverse effect, based on commercially
reasonable standards, on (i) the business, Property, condition (financial or
otherwise), or results of operations of the Borrower and Guarantors, taken as a
whole, (ii) the ability of the Borrower and the Guarantors, taken as a whole, to
perform their obligations under the Loan Documents, or (iii) the validity or
enforceability under applicable law of any of the Loan Documents or the rights
or remedies of Designated Agent, Lenders or any LC Issuer thereunder (except
that, as to clause (iii), a Material Adverse Effect may not result solely from
the acts or omissions of the Designated Agent or any Lender). Items disclosed by
the Borrower in its form 10-Q and form 10-K or any other filings with the
Securities and Exchange Commission shall not be deemed to have a Material
Adverse Effect solely because of such disclosure, and the existence and content
of such disclosure shall not be prima facie evidence of a Material Adverse
Effect.

 

“Material Indebtedness” means Indebtedness (excluding Non-Recourse Indebtedness)
of the Borrower or any Guarantor in an outstanding principal amount of
$40,000,000 or more in the aggregate (or the equivalent thereof in any currency
other than Dollars).

 

“Material Indebtedness Agreement” means any agreement under which any Material
Indebtedness was created or is governed or which provides for the incurrence of
Indebtedness in an amount which would constitute Material Indebtedness (whether
or not an amount of Indebtedness constituting Material Indebtedness is
outstanding thereunder).

 

“Minimum Collateral Amount” means, with respect to a Defaulting Lender, at any
time, (i) with respect to Cash Collateral consisting of cash or deposit account
balances, an amount equal to 105% of the Fronting Exposure of each LC Issuer
with respect to such Defaulting Lender for all Facility LCs issued and
outstanding at such time and (ii) otherwise, such lesser amount determined by
the Designated Agent and the applicable LC Issuer in their sole discretion.

 

“Minimum Interest Coverage Ratio” means an Interest Coverage Ratio equaling or
exceeding (i) 1.00 to 1.00 from and after December 31, 2014 through and
including March 31, 2015 and (ii) 1.50 to 1.00 after March 31, 2015.

 

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“Model Unit” means a Housing Unit constructed initially for inspection by
prospective purchasers that is not intended to be sold until all or
substantially all other Housing Units in the applicable subdivision are sold.

 

“Modify” and “Modification” are defined in Section 2.19(a).

 

“Monthly Payment Date” means the first (1st) day of each month, provided, that
if such day is not a Business Day, the Monthly Payment Date shall be the
immediately succeeding Business Day.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which the Borrower or any ERISA Affiliate
is a party to which more than one employer is obligated to make contributions.

 

“Net Mark-to-Market Exposure” of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. “Unrealized
losses” means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and “unrealized
profits” means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).

 

“Net Worth” means, as of any date of determination, as to each Non-Guarantor
Subsidiary, the sum of (A) all stockholders’ equity of such Non-Guarantor
Subsidiary, less (B) all loans or advances made by such Subsidiary to the
Borrower or any Guarantor and outstanding at such date, all as determined on a
consolidated basis in conformity with Agreement Accounting Principles.

 

“Non-Cash Collateralized Letters of Credit” is defined in Section 2.19(l).

 

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.

 

“Non-Guarantor Subsidiary” means each Subsidiary of the Borrower that is not a
Guarantor.

 

“Non-Recourse Indebtedness” with respect to any Person means Indebtedness of
such Person (i) for which the sole legal recourse for collection of principal
and interest on such Indebtedness is against the specific property identified in
the instruments evidencing or securing such Indebtedness and such property was
acquired with the proceeds of such Indebtedness or such Indebtedness was
incurred within ninety (90) days after the acquisition of such property and for
which no other assets of such Person may be realized upon in collection of
principal or interest on such Indebtedness, or (ii) that refinances Indebtedness
described in clause (i) and for which the recourse is limited to the same extent
described in clause (i).

 

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“Non-U.S. Lender” means a Lender that is not a United States person as defined
in Section 7701(a)(30) of the Code.

 

“Note” is defined in Section 2.13(d).

 

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Obligations, all Rate Management Obligations provided to the
Borrower or any Guarantor by the Designated Agent or any other Lender or any
Affiliate of any of the foregoing, all accrued and unpaid fees, and all
expenses, reimbursements, indemnities and other obligations of the Borrower to
the Lenders or to any Lender, the Designated Agent, any LC Issuer or any
indemnified party arising under the Loan Documents (including interest and fees
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding); provided, that obligations in respect of Rate Management
Obligations shall only constitute “Obligations” if owed to the Designated Agent
or if the Designated Agent shall have received notice from the relevant Lender
not later than sixty (60) days after such Rate Management Obligations have been
provided; provided, further, that “Obligations” shall exclude all Excluded Swap
Obligations.

 

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control, and any successor thereto.

 

“Operating Lease” of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.

 

“Operating Lease Obligations” means, as at any date of determination, the amount
obtained by aggregating the present values, determined in the case of each
particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under Agreement Accounting
Principles if such Operating Lease were a Capitalized Lease) from the date on
which each fixed lease payment is due under such Operating Lease to such date of
determination, of all fixed lease payments due under all Operating Leases of the
Borrower and its Subsidiaries.

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance or enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document.

 

“Outstanding Credit Exposure” means, as to any Lender at any time, the sum of
(i) the aggregate principal Dollar Amount of its Revolving Loans outstanding at
such time, plus (ii) an amount equal to its Pro Rata Share of the LC Obligations
at such time.

 

“Participants” is defined in Section 12.2(a).

 

“Participant Register” is defined in Section 12.2(c).

 

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), as amended from time to time, and any successor
statute.

 

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“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

 

“Permitted Acquisition” means any Acquisition made by the Borrower or any of its
Subsidiaries, provided that, (a) as of the date of the consummation of such
Acquisition, no Event of Default shall have occurred and be continuing or would
result from such Acquisition, and the representation and warranty contained in
Section 5.11 shall be true both before and after giving effect to such
Acquisition, (b) the business to be acquired in such Acquisition is in a Related
Business or, if not in a Related Business, such transaction is in compliance
with the provisions of Section 6.14(vii), (c) as of the date of the consummation
of such Acquisition, all material approvals required in connection therewith
shall have been obtained, and (d) the Borrower shall have furnished to the
Designated Agent a certificate (i) certifying that, taking into account such
Acquisition, no Event of Default exists and (ii) demonstrating in reasonable
detail, as of the last day of the quarter most recently ended prior to the date
of such Acquisition, pro forma compliance with the Consolidated Tangible Net
Worth Test and Leverage Test, in each case calculated as if such Acquisition,
including the consideration therefor, had been consummated on such day.

 

“Permitted Leverage Ratio” means, as of the date hereof, 60%, as such amount may
hereafter be adjusted from time to time as provided in Section 6.19(b).

 

“Permitted Liens” means, as to the Borrower or any Guarantor, any of the
following:

 

(i)     Liens for taxes, assessments or governmental charges or levies on the
Borrower’s or such Guarantor’s Property if the same (A) shall not at the time be
delinquent or thereafter can be paid without penalty, or (B) are being contested
in good faith and by appropriate proceedings and for which adequate reserves
shall have been established on the Borrower’s or such Guarantor’s books in
accordance with Agreement Accounting Principles.

 

(ii)     Liens imposed by law, such as carriers’, warehousemen’s, mechanics’ and
materialmen’s Liens and other similar Liens arising in the ordinary course of
business with respect to amounts that either (A) are not yet delinquent, or (B)
are delinquent but are being contested in a timely manner in good faith by
appropriate proceedings and for which adequate reserves shall have been
established on the Borrower’s or Guarantor’s books in accordance with Agreement
Accounting Principles.

 

(iii)     Utility easements, rights of way, zoning restrictions, covenants,
reservations, and such other burdens, encumbrances or charges against real
property, or other minor irregularities of title, as are of a nature generally
existing with respect to properties of a similar character and which do not in
any material way interfere with the use thereof or the sale thereof in the
ordinary course of business of the Borrower or such Guarantor.

 

(iv)     Easements, dedications, assessment district or similar Liens in
connection with municipal financing and other similar encumbrances or charges,
in each case reasonably necessary or appropriate for the development of real
property of the Borrower or such Guarantor, and which are granted in the
ordinary course of the business of the Borrower or such Guarantor, and which in
the aggregate do not materially burden or impair the fair market value or use of
such real property (or the project to which it is related) for the purposes for
which it is or may reasonably be expected to be held.

 

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(v)     Any option or right of first refusal to purchase real property 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 the Borrower or such
Guarantor.

 

(vi)     Any agreement or contract to participate in the income or revenue or to
pay lot premiums, in each case derived from the sale of Housing Units and
granted in the ordinary course of business to the seller of the real property
upon which the Housing Unit is constructed.

 

(vii)     Liens arising by virtue of any statutory, contractual or common law
provisions relating to banker’s liens, rights of setoff or similar rights as to
deposit or other accounts.

 

“Person” means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

 

“Plan” means an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
or Section 302 of ERISA as to which the Borrower or any ERISA Affiliate may have
any liability.

 

“Presold Unit” means a Housing Unit owned by the Borrower or any Guarantor that
is subject to a bona fide written agreement between the Borrower or such
Guarantor and a third Person purchaser for sale in the ordinary course of the
Borrower’s or such Guarantor’s business of such Housing Unit and the related
lot, accompanied by a cash earnest money deposit or down payment in an amount
that is customary, and subject only to ordinary and customary contingencies to
the purchaser’s obligation to buy the Housing Unit and related lot.

 

“Pricing Schedule” means the Schedule attached hereto identified as such.

 

“Prime Rate” means a rate per annum equal to the prime rate of interest
announced from time to time by the Designated Agent or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes.

 

“Property” of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

 

“Pro Rata Share” means, with respect to a Lender, a portion equal to a fraction
the numerator of which is such Lender’s Commitment and the denominator of which
is the Aggregate Commitment, provided, however, if all of the Commitments are
terminated pursuant to the terms of this Agreement, then “Pro Rata Share” means
the percentage obtained by dividing (a) such Lender’s Outstanding Credit
Exposure at such time by (b) the Aggregate Outstanding Credit Exposure at such
time; and provided, further, that when a Defaulting Lender shall exist, “Pro
Rata Share” shall mean the percentage of the Aggregate Commitment (disregarding
any Defaulting Lender’s Commitment) represented by such Lender’s Commitment
(except that no Lender is required to fund or participate in Revolving Loans or
Facility LCs to the extent that, after giving effect thereto, the aggregate
amount of its outstanding Revolving Loans and funded or unfunded participations
in Facility LCs would exceed the amount of its Commitment (determined as though
no Defaulting Lender existed)).

 

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“Public Indebtedness” means Indebtedness evidenced by notes, debentures, or
other similar instruments issued after the date of this Agreement pursuant to
either (i) a registered public offering or (ii) a private placement of such
instruments in accordance with an exemption from registration under the
Securities Act of 1933 and/or the Securities Exchange Act of 1934 or similar
law.

 

“Purchasers” is defined in Section 12.3(a).

 

“Qualified Bank” means (a) any Lender or any Affiliate of a Lender, or (b) a
bank that has, or is a wholly-owned subsidiary of a corporation that has, (i) an
unsecured long-term debt rating of not less than BBB+ from S&P or Baa1 from
Moody’s and (ii) if its unsecured short-term debt is rated, an unsecured
short-term debt rating of A2 from S&P or P2 from Moody’s. For the avoidance of
doubt, neither the Borrower nor an Affiliate of the Borrower shall qualify as a
Qualified Bank.

 

“Quarterly Payment Date” means the first (1st) day of each fiscal quarter,
provided, that if such day is not a Business Day, the Quarterly Payment Date
shall be the immediately succeeding Business Day.

 

“Quotation Date” means, in relation to any Interest Period for which an interest
rate is to be determined, two (2) Business Days before the first day of that
period.

 

“Rate Management Obligations” means any and all obligations of the Borrower or
any Guarantor, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.

 

“Rate Management Transaction” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered into by the Borrower or any
Guarantor which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.

 

“Rating” means, at any time, the rating issued by a Rating Agency and then in
effect with respect to the Borrower’s unsecured long-term debt securities
without third-party credit enhancement.

 

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“Rating Agencies” means Fitch, Moody’s and S&P.

 

“Receivables” means the net proceeds payable to, but not yet received by, the
Borrower or any Guarantor following a Housing Unit Closing.

 

“Refinancing Indebtedness” means Indebtedness that refunds, refinances or
extends any Indebtedness (or that refunds, refinances or extends any refund,
refinancing or extension of such Indebtedness), but only to the extent that:

 

(i)     the Refinancing Indebtedness is subordinated to or pari passu with the
Obligations (or a Guarantor’s obligations under its Guaranty, as applicable) to
the same extent as the Indebtedness being refunded, refinanced or extended,

 

(ii)     the Refinancing Indebtedness is scheduled to mature no earlier than the
then current maturity date of such Indebtedness,

 

(iii)     such Refinancing Indebtedness is in an aggregate amount that is equal
to or less than the sum of the aggregate amount then outstanding plus all
amounts committed but undisbursed under the Indebtedness being refunded,
refinanced or extended,

 

(iv)     the Person or Persons liable for the payment of such Refinancing
Indebtedness are the same Person or Persons (or successor(s) thereto) that were
liable for the Indebtedness being refunded, refinanced or extended when such
Indebtedness was initially incurred, and

 

(v)     such Refinancing Indebtedness is incurred within 120 days after the
Indebtedness being refunded, refinanced or extended is so refunded, refinanced
or extended.

 

“Register” is defined in Section 12.3(d).

 

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

 

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.

 

“Reimbursement Obligations” means, at any time, the aggregate of all obligations
of the Borrower then outstanding under Section 2.19 to reimburse the LC Issuers
for amounts paid by the LC Issuers in respect of any one or more drawings under
Facility LCs.

 

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“Related Business” means any of the following lines of business or business
activity of the type conducted by the Borrower and its Subsidiaries on the date
hereof: (i) the home building business, (ii) the residential mortgage loan
business, (iii) the real estate development business, (iv) the insurance
business, (v) the title insurance agency and settlement business, and (vi) the
insurance agency business.

 

“Replacement Lender” is defined in Section 2.20.

 

“Reports” is defined in Section 9.6(a).

 

“Required Lenders” means Lenders in the aggregate having greater than 50% of the
Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding greater than 50% of the Aggregate Outstanding
Credit Exposure. The Commitments and Outstanding Credit Exposure of any
Defaulting Lender shall be disregarded in determining Required Lenders at any
time.

 

“Reserve Requirement” means, with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D on Eurocurrency liabilities.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any equity interest in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
Property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such equity interests in the Borrower or any Subsidiary thereof or any
option, warrant or other right to acquire any such equity interest in the
Borrower or any Subsidiary thereof.

 

“Revolving Loan” means, with respect to a Lender, such Lender’s loan made
pursuant to its commitment to lend set forth in Section 2.1 (or any conversion
or continuation thereof).

 

“Risk-Based Capital Guidelines” means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States, including transition rules, and, in each
case, any amendments to such regulations.

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business.

 

“Sanctioned Country” means, at any time, any country or territory which is
itself the subject or target of any comprehensive Sanctions.

 

“Sanctioned Person” means, at any time, (a) any Person or group listed in any
Sanctions-related list of designated Persons maintained by OFAC or the U.S.
Department of State, (b) any Person or group operating, organized or resident in
a Sanctioned Country, (c) any agency, political subdivision or instrumentality
of the government of a Sanctioned Country, or (d) any Person 50% or more owned,
directly or indirectly, by any of the above.

 

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“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by the U.S. government, including
those administered by OFAC or the U.S. Department of State.

 

“Schedule” refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

 

“Second Amendment Effective Date” means December 18, 2015.

 

“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.

 

“Senior Debt” means the Senior Notes or, if the Senior Notes are refinanced, the
Refinancing Indebtedness with respect thereto.

 

“Senior Notes” means (a) the 5.625% Senior Notes due 2020 of Borrower issued in
the original principal amount of $250,000,000 (the “5.625% Senior Notes due
2020”), (b) the 6.000% Senior Notes due 2043 of Borrower issued in the original
aggregate principal amount of $350,000,000 (the “6.000% Senior Notes due 2043”),
and (c) the 5.500% Senior Notes due 2024 of Borrower issued in the original
principal amount of $250,000,000 (the “5.500% Senior Notes due 2024”).

 

“Senior Officer” means each of the Authorized Officers, the General Counsel of
Borrower and the Chief Financial Officer of Borrower.

 

“Significant Homebuilding Subsidiary” means any Homebuilding Subsidiary that has
a Net Worth, determined as of the last day of the most recently ended fiscal
quarter of the Borrower, equal to or exceeding $5,000,000.

 

“Spec Unit” means any Housing Unit owned by the Borrower or any Guarantor that
is not a Presold Unit or a Model Unit.

 

“Spec Unit Inventory Test” is defined in Section 6.19(c).

 

“Stated Rate” is defined in Section 2.21.

 

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Obligations to the
written satisfaction of the Required Lenders and none of the principal of which
is payable until at least 90 days after the Facility Termination Date.
Subordinated Indebtedness shall specifically not include Indebtedness of any
Guarantor to Borrower or Borrower to any Guarantor.

 

“Subsidiary” of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a “Subsidiary”
shall mean a Subsidiary of the Borrower.

 

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“Substantial Portion” means, with respect to the Property of the Borrower and
the Guarantors, Property which represents more than 10% of the consolidated
assets of the Borrower and the Guarantors taken as a whole as would be shown in
the consolidated financial statements of the Borrower and the Guarantors as at
the beginning of the fiscal quarter in which such determination is made.

 

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Taxes” means any and all present or future taxes, duties, levies, imposts,
deductions, fees, assessments, charges or withholdings, and any and all
liabilities with respect to the foregoing, including interest, additions to tax
and penalties applicable thereto, imposed by any Governmental Authority.

 

“Term-Out Date” means, in the case of each of Section 6.19(a) or Section
6.19(b)(v), as applicable, the last day of the second consecutive quarter as of
which the Borrower has failed to satisfy the Consolidated Tangible Net Worth
Test or Leverage Test (as applicable). For purposes of illustration (but without
limitation of the foregoing), if the Borrower fails to satisfy the Leverage Test
as of March 31, 2014 and as of June 30, 2014, the Term-Out Date shall be June
30, 2014, and the first reduction of the Aggregate Commitment pursuant to
Section 2.23 shall occur on September 30, 2014.

 

“Term-Out Period” means the period of time commencing on the Term-Out Date and
expiring on the Facility Termination Date.

 

“Third Amendment Effective Date” means September 29, 2017.

 

“Transferee” is defined in Section 12.3(e).

 

“Type” means, with respect to any Advance, its nature as a Base Rate Advance or
a Eurocurrency Advance and with respect to any Loan, its nature as a Base Rate
Loan or a Eurocurrency Loan.

 

“Undisclosed Administration” means in relation to a Lender the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official by a supervisory authority or regulator under or based
on the law in the country where such Lender is subject to home jurisdiction
supervision if applicable law requires that such appointment is not to be
publicly disclosed.

 

“Unrestricted Cash” means cash, Cash Equivalents and Marketable Securities of
the Borrower and the Guarantors that are free and clear of all Liens (other than
customary deposit bank liens) and not subject to any restrictions (other than
with respect to costs of liquidating certain Cash Equivalents prior to
maturity).

 

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“U.S. Bank” means U.S. Bank National Association, a national banking
association, in its individual capacity, and its successors.

 

“Wholly-Owned Subsidiary” of a Person means (i) any Subsidiary of which 100% of
the beneficial ownership interests shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization of which 100% of the beneficial
ownership interests shall at the time be so owned or controlled.

 

“Write-Down and Conversion Powers” means, 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.

 

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms. For purposes of this Agreement, Loans may be
classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g.,
a “Eurocurrency Loan”) or by Class and Type (e.g., a “Eurocurrency Revolving
Loan”). Advances also may be classified and referred to by Class (e.g., a
“Revolving Advance”) or by Type (e.g., a “Eurocurrency Advance”) or by Class and
Type (e.g., a “Eurocurrency Revolving Advance”).

 

ARTICLE II

THE CREDITS

 

2.1.     Commitment. From and including the date of this Agreement and prior to
the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Revolving Loans to the Borrower
in Dollars and participate in Facility LCs issued upon the request of the
Borrower, provided that (i) after giving effect to the making of each such Loan
and the issuance of each such Facility LC, the Dollar Amount of such Lender’s
Outstanding Credit Exposure shall not exceed its Commitment and (ii) at any time
at which the Leverage Ratio, determined as of the last day of the most recent
fiscal quarter, exceeds 55%, the aggregate principal amount of all Consolidated
Senior Debt Borrowings outstanding shall not exceed the Borrowing Base
determined as of the most recent Inventory Valuation Date. Subject to the terms
of this Agreement, the Borrower may borrow, repay and reborrow the Revolving
Loans at any time prior to the Facility Termination Date. Commitments shall
terminate on the Facility Termination Date. Each LC Issuer will issue Facility
LCs hereunder on the terms and conditions set forth in Section 2.19.

 

2.2.     Determination of Dollar Amounts; Required Payments; Termination. The
Designated Agent will determine the Dollar Amount of: (a) each Advance as of the
date three (3) Business Days prior to the Borrowing Date or, if applicable, date
of conversion/continuation of such Advance, and (b) all outstanding Advances on
and as of the last Business Day of each quarter and on any other Business Day
elected by the Designated Agent in its discretion or upon instruction by the
Required Lenders. Each day upon or as of which the Designated Agent determines
Dollar Amounts as described in the preceding clauses (a) and (b) is herein
described as a “Computation Date” with respect to each Advance for which a
Dollar Amount is determined on or as of such day. If at any time either (i) the
Aggregate Outstanding Credit Exposure exceeds the Aggregate Commitment or (ii)
the Leverage Ratio, determined as of the last day of the most recent fiscal
quarter, exceeds 55%, the aggregate principal amount of all Consolidated Senior
Debt Borrowings exceeds the Borrowing Base determined as of the most recent
Inventory Valuation Date, then the Borrower shall within three (3) Business Days
after notice from the Designated Agent make a payment on the Loans or Cash
Collateralize LC Obligations in an account with the Designated Agent pursuant to
Section 2.19(k) sufficient to eliminate such excess. The Aggregate Outstanding
Credit Exposure (other than LC Obligations that are Cash Collateralized in
accordance with this Agreement) and all other unpaid Obligations under this
Agreement and the other Loan Documents shall be paid in full by the Borrower on
the Facility Termination Date.

 

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2.3.     Ratable Loans; Types of Advances. Each Advance hereunder shall consist
of Revolving Loans made from the several Lenders ratably according to their Pro
Rata Shares. The Revolving Advances may be Base Rate Advances or Eurocurrency
Advances, or a combination thereof, selected by the Borrower in accordance with
Sections 2.8 and 2.9.

 

2.4.     [Reserved].

 

2.5.     Commitment Fee. The Borrower agrees to pay to the Designated Agent for
the account of each Lender according to its Pro Rata Share a Commitment Fee (the
“Commitment Fee”) at a per annum rate equal to the Applicable Fee Rate on the
average daily Available Aggregate Commitment from the date hereof to and
including the Facility Termination Date, payable in arrears on each Quarterly
Payment Date hereafter and on the Facility Termination Date. The Commitment Fee
shall continue to be payable during the Term-Out Period.

 

2.6.     Minimum Amount of Each Advance. Each Eurocurrency Advance shall be in
the minimum amount of $1,000,000 and incremental amounts in integral multiples
of $100,000, and each Base Rate Advance shall be in the minimum amount of
$500,000 and incremental amounts in integral multiples of $50,000, provided,
however, that any Base Rate Advance may be in the amount of the Available
Aggregate Commitment or, if less, the maximum amount permitted to be advanced
under clause (ii) of Section 2.1.

 

2.7.     Reductions in Aggregate Commitment; Optional Principal Payments. The
Borrower may permanently reduce the Aggregate Commitment in whole, or in part
ratably among the Lenders in integral multiples of $5,000,000 (but not less than
$25,000,000), upon at least five (5) Business Days’ prior written notice to the
Designated Agent by 12:00 noon (Eastern time), which notice shall specify the
amount of any such reduction, provided, however, that the amount of the
Aggregate Commitment may not be reduced below the Aggregate Outstanding Credit
Exposure. All accrued Commitment Fees shall be payable on the effective date of
any termination of the obligations of the Lenders to make Credit Extensions
hereunder. The Borrower may from time to time pay, without penalty or premium,
all outstanding Base Rate Advances, or, in a minimum aggregate amount of
$500,000 and incremental amounts in integral multiples of $50,000 (or the
aggregate amount of the outstanding Revolving Loans at such time), any portion
of the aggregate outstanding Base Rate Advances upon same day notice by 12:00
noon (Eastern time) to the Designated Agent. The Borrower may from time to time
pay, subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurocurrency
Advances, or, in a minimum aggregate amount of $1,000,000 and incremental
amounts in integral multiples of $100,000 (or the aggregate amount of the
outstanding Revolving Loans at such time), any portion of the aggregate
outstanding Eurocurrency Advances upon at least two (2) Business Days’ prior
written notice to the Designated Agent by 12:00 noon (Eastern time).

 

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2.8.     Method of Selecting Types and Interest Periods for New Revolving
Advances. The Borrower shall select the Type of Advance and, in the case of each
Eurocurrency Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Designated Agent irrevocable notice in the form of
Exhibit D (a “Borrowing Notice”) not later than 1:00 p.m. (Eastern time) on the
Borrowing Date of each Base Rate Advance and two (2) Business Days before the
Borrowing Date for each Eurocurrency Advance in Dollars, specifying:

 

 

(i)

the Borrowing Date, which shall be a Business Day, of such Advance,

 

 

(ii)

the aggregate amount of such Advance,

 

 

(iii)

the Type of Advance selected, and

 

 

(iv)

in the case of each Eurocurrency Advance, the Interest Period applicable
thereto.

 

Not later than 2:00 p.m. (Eastern time) on each Borrowing Date, each Lender
shall make available its Loan or Loans in funds immediately available to the
Designated Agent at its address specified pursuant to Article XIII. The
Designated Agent will make the funds so received from the Lenders available to
the Borrower at the Designated Agent’s aforesaid address.

 

2.9.     Conversion and Continuation of Outstanding Advances; Maximum Number of
Interest Periods. Base Rate Advances shall continue as Base Rate Advances unless
and until such Base Rate Advances are converted into Eurocurrency Advances
pursuant to this Section 2.9 or are repaid in accordance with Section 2.7. Each
Eurocurrency Advance shall continue as a Eurocurrency Advance until the end of
the then applicable Interest Period therefor, at which time such Eurocurrency
Advance shall be automatically converted into a Base Rate Advance unless (x)
such Eurocurrency Advance is or was repaid in accordance with Section 2.7 or (y)
the Borrower shall have given the Designated Agent a Conversion/Continuation
Notice (as defined below) requesting that, at the end of such Interest Period,
such Eurocurrency Advance continue as a Eurocurrency Advance for the same or
another Interest Period. Subject to the terms of Section 2.6, the Borrower may
elect from time to time to convert all or any part of a Base Rate Advance into a
Eurocurrency Advance. The Borrower shall give the Designated Agent irrevocable
notice (a “Conversion/Continuation Notice”) of each conversion of a Base Rate
Advance into a Eurocurrency Advance, conversion of a Eurocurrency Advance to a
Base Rate Advance, or continuation of a Eurocurrency Advance not later than
12:00 noon (Eastern time) at least two (2) Business Days prior to the date of
the requested conversion or continuation, specifying:

 

 

(i)

the requested date, which shall be a Business Day, of such conversion or
continuation,

 

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(ii)

the Type of the Advance which is to be converted or continued, and

 

 

(iii)

the amount of such Advance which is to be converted into or continued as a
Eurocurrency Advance and the duration of the Interest Period applicable thereto.

 

After giving effect to all Advances, all conversions of Advances from one Type
to another and all continuations of Advances of the same Type, there shall be no
more than six (6) Interest Periods in effect hereunder.

 

Notwithstanding anything to the contrary in this Agreement, any Lender may
exchange, continue or roll over all or a portion of its Loans in connection with
any refinancing, extension, loan modification or similar transaction permitted
by the terms of this Agreement, pursuant to a cashless settlement mechanism
approved by the Borrower, the Designated Agent and such Lender.

 

2.10.     Interest Rates. Each Base Rate Advance shall bear interest on the
outstanding principal amount thereof, for each day from and including the date
such Advance is made or is automatically converted from a Eurocurrency Advance
into a Base Rate Advance pursuant to Section 2.9, to but excluding the date it
becomes due or is converted into a Eurocurrency Advance pursuant to Section 2.9
hereof, at a rate per annum equal to the Base Rate for such day. Changes in the
rate of interest on that portion of any Advance maintained as a Base Rate
Advance will take effect simultaneously with each change in the Alternate Base
Rate. Each Eurocurrency Advance shall bear interest on the outstanding principal
amount thereof from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined by the Designated Agent as applicable to such
Eurocurrency Advance based upon the Borrower’s selections under Sections 2.8 and
2.9 and the Pricing Schedule. No Interest Period may end after the Facility
Termination Date.

 

2.11.     Rates Applicable After Event of Default. Notwithstanding anything to
the contrary contained in Sections 2.8, 2.9 or 2.10, during the continuance of a
Default or Event of Default the Required Lenders may, at their option, by notice
from the Designated Agent to the Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.3
requiring unanimous consent of the Lenders to changes in interest rates),
declare that no Advance may be made as, converted into or continued as a
Eurocurrency Advance. During the continuance of an Event of Default the Required
Lenders may, at their option, by notice from the Designated Agent to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.3 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (i) each Eurocurrency
Advance shall bear interest for the remainder of the applicable Interest Period
at the rate otherwise applicable to such Interest Period plus 2.00% per annum,
(ii) each Base Rate Advance shall bear interest at a rate per annum equal to the
Base Rate in effect from time to time plus 2.00% per annum, and (iii) the LC Fee
shall be increased by 2.00% per annum, provided that, during the continuance of
an Event of Default under Sections 7.6 or 7.7, the interest rates set forth in
clauses (i) and (ii) above and the increase in the LC Fee set forth in clause
(iii) above shall be applicable to all Credit Extensions without any election or
action on the part of the Designated Agent or any Lender. After an Event of
Default has been waived, the interest rate applicable to advances and the LC Fee
shall revert to the rates applicable prior to the occurrence of an Event of
Default.

 

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2.12.     Method of Payment. Each Advance shall be repaid and each payment of
interest thereon shall be paid in the currency in which such Advance was made.
All payments of the Obligations under this Agreement and the other Loan
Documents shall be made, without setoff, deduction, or counterclaim, in
immediately available funds to the Designated Agent at the Designated Agent’s
address specified pursuant to Article XIII, or at any other Lending Installation
of the Designated Agent specified in writing by the Designated Agent to the
Borrower, by 12:00 noon (Eastern time) on the date when due and shall (except
(i) in the case of Reimbursement Obligations for which the LC Issuers have not
been fully indemnified by the Lenders or (ii) as otherwise specifically required
hereunder) be applied ratably by the Designated Agent among the Lenders. Each
payment delivered to the Designated Agent for the account of any Lender shall be
delivered promptly by the Designated Agent to such Lender in the same type of
funds that the Designated Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a notice received by
the Designated Agent from such Lender. The Designated Agent is hereby authorized
to charge the account of the Borrower maintained with U.S. Bank for each payment
of principal, interest, Reimbursement Obligations and fees as it becomes due
hereunder. Each reference to the Designated Agent in this Section 2.12 shall
also be deemed to refer, and shall apply equally, to the LC Issuers, in the case
of payments required to be made by the Borrower to the LC Issuers pursuant to
Section 2.19(f).

 

2.13.     Noteless Agreement; Evidence of Indebtedness.

 

(a)      Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.

 

(b)     The Designated Agent shall also maintain accounts in which it will
record (i) the amount of each Loan made hereunder and Type thereof and the
Interest Period with respect thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder, (iii) the original stated amount of each Facility LC and the
amount of LC Obligations outstanding at any time, and (iv) the amount of any sum
received by the Designated Agent hereunder from the Borrower and each Lender’s
share thereof.

 

(c)     The entries maintained in the accounts maintained pursuant to paragraphs
(a) and (b) above shall be prima facie evidence of the existence and amounts of
the Obligations therein recorded; provided, however, that the failure of the
Designated Agent or any Lender to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to repay the
Obligations in accordance with their terms.

 

(d)     Any Lender may request that its Loans be evidenced by a promissory note
substantially in the form of Exhibit F (each a “Note”). In such event, the
Borrower shall prepare, execute and deliver to such Lender such Note or Notes
payable to the order of such Lender in a form supplied by the Designated Agent.
Thereafter, the Loans evidenced by such Note and interest thereon shall at all
times (prior to any assignment pursuant to Section 12.3) be represented by one
or more Notes payable to the order of the payee named therein, except to the
extent that any such Lender subsequently returns any such Note for cancellation
and requests that such Loans once again be evidenced as described in clauses (b)
(i) and (ii) above.

 

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2.14.     Telephonic Notices. The Borrower hereby authorizes the Lenders and the
Designated Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
Person or Persons the Designated Agent or any Lender in good faith believes to
be acting on behalf of the Borrower, it being understood that the foregoing
authorization is specifically intended to allow Borrowing Notices and
Conversion/Continuation Notices to be given telephonically. The Borrower agrees
to deliver promptly to the Designated Agent a written confirmation (which may
include e-mail) of each telephonic notice authenticated by an Authorized
Officer. If the written confirmation differs in any material respect from the
action taken by the Designated Agent and the Lenders, the records of the
Designated Agent and the Lenders shall govern absent manifest error. The parties
agree to prepare appropriate documentation to correct any such error within ten
(10) days after discovery by any party to this Agreement.

 

2.15.     Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Base Rate Advance shall be payable on each Monthly Payment Date, commencing
with the first such Monthly Payment Date to occur after the date hereof and at
maturity. Interest accrued on each Eurocurrency Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the
Eurocurrency Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurocurrency Advance having an Interest
Period longer than three (3) months shall also be payable on the last day of
each three-month interval during such Interest Period. Interest accrued pursuant
to Section 2.11 shall be payable on demand. Interest on all Advances and fees
shall be calculated for actual days elapsed on the basis of a 360-day year,
except that interest at the Base Rate shall be calculated for actual days
elapsed on the basis of a 365/366-day year. Interest shall be payable for the
day an Advance is made but not for the day of any payment on the amount paid if
payment is received prior to 12:00 noon (Eastern time) at the place of payment.
If any payment of principal of or interest on an Advance shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day.

 

2.16.     Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Designated Agent will notify
each Lender of the contents of each Commitment reduction notice, Borrowing
Notice, Conversion/Continuation Notice, and repayment notice received by it
hereunder. Promptly after notice from an LC Issuer, the Designated Agent will
notify each Lender of the contents of each request for issuance of a Facility LC
hereunder. The Designated Agent will notify each Lender of the interest rate
applicable to each Eurocurrency Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.

 

2.17.     Lending Installations. Each Lender may book its Advances and its
participation in any LC Obligations and each LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or such LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or each LC Issuer, as the case may
be, for the benefit of any such Lending Installation. Each Lender and each LC
Issuer may, by written notice to the Designated Agent and the Borrower in
accordance with Article XIII, designate replacement or additional Lending
Installations through which Loans will be made by it or Facility LCs will be
issued by it and for whose account Loan payments or payments with respect to
Facility LCs are to be made.

 

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2.18.     Non-Receipt of Funds by the Designated Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Designated Agent prior to the date on
which it is scheduled to make payment to the Designated Agent of (i) in the case
of a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a
payment of principal, interest or fees to the Designated Agent for the account
of the Lenders, that it does not intend to make such payment, the Designated
Agent may assume that such payment has been made. The Designated Agent may, but
shall not be obligated to, make the amount of such payment available to the
intended recipient in reliance upon such assumption. If such Lender or the
Borrower, as the case may be, has not in fact made such payment to the
Designated Agent, the recipient of such payment shall, on demand by the
Designated Agent, repay to the Designated Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the Designated Agent
until the date the Designated Agent recovers such amount at a rate per annum
equal to (x) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day for the first three (3) days and, thereafter, the interest
rate applicable to the relevant Loan or (y) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.

 

2.19.     Facility LCs.

 

(a)     Issuance. Each LC Issuer hereby agrees, within the limits of its LC
Issuer’s LC Limit and on the terms and conditions set forth in this Agreement,
to issue standby Letters of Credit denominated in Dollars (each, a “Facility
LC”) and to renew, extend, increase, decrease or otherwise modify each Facility
LC (“Modify,” and each such action a “Modification”), from time to time from and
including the date of this Agreement and prior to the Facility Termination Date
upon the request of the Borrower; provided that immediately after each such
Facility LC is issued or Modified, (i) the aggregate maximum amount then
available for drawing under Facility LCs issued by such LC Issuer shall not
exceed its LC Issuer’s LC Limit, (ii) the aggregate Dollar Amount of the
outstanding LC Obligations shall not exceed fifty percent (50%) of the Aggregate
Commitment, (iii) the Aggregate Outstanding Credit Exposure shall not exceed the
Aggregate Commitment and (iv) at any time at which the Leverage Ratio,
determined as of the last day of the most recent fiscal quarter, exceeds 55%,
the aggregate principal amount of all Consolidated Senior Debt Borrowings
outstanding shall not exceed the Borrowing Base determined as of the most recent
Inventory Valuation Date. No Facility LC shall have an expiry date later than
the fifth Business Day prior to the Facility Termination Date; provided,
however, that the expiry date of a Facility LC may be up to one (1) year later
than the fifth Business Day prior to the Facility Termination Date if the
Borrower has Cash Collateralized such Facility LC in accordance with Section
2.19(l). Notwithstanding the foregoing, no Declining Lender shall issue a
Facility LC that has an expiry date that is later than its Declining Lender’s
Termination Date.

 

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(b)     Participations. Upon the issuance or Modification by an LC Issuer of a
Facility LC in accordance with this Section 2.19, such LC Issuer shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably sold to each Lender, and each Lender shall be deemed, without
further action by any party hereto, to have unconditionally and irrevocably
purchased from such LC Issuer, a participation in such Facility LC (and each
Modification thereof) and the related LC Obligations in proportion to its Pro
Rata Share.

 

(c)     Notice. Subject to Section 2.19(a), the Borrower shall give the
Designated Agent notice prior to 12:00 noon (Eastern time) at least five (5)
Business Days prior to the proposed date of issuance or Modification of each
Facility LC, specifying the applicable LC Issuer, the beneficiary, the proposed
date of issuance (or Modification) and the expiry date of such Facility LC, and
describing the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby. Upon receipt of such notice, the
Designated Agent shall promptly notify the applicable LC Issuer and each Lender
of the contents thereof and of the amount of such Lender’s participation in such
proposed Facility LC. The issuance or Modification by an LC Issuer of any
Facility LC shall, in addition to the conditions precedent set forth in Article
IV, be subject to the conditions precedent that such Facility LC shall be
satisfactory to such LC Issuer and that the Borrower shall have executed and
delivered such application agreement and/or such other instruments and
agreements relating to such Facility LC as such LC Issuer shall have reasonably
requested (each, a “Facility LC Application”). No LC Issuer shall have any
independent duty to ascertain whether the conditions set forth in Article IV
have been satisfied; provided, however, that no LC Issuer shall issue a Facility
LC if, on or before the proposed date of issuance, such LC Issuer shall have
received notice from the Designated Agent or the Required Lenders that any such
condition has not been satisfied or waived. In the event of any conflict between
the terms of this Agreement and the terms of any Facility LC Application, the
terms of this Agreement shall control.

 

(d)     LC Fees. The Borrower shall pay to the Designated Agent, for the account
of the Lenders ratably in accordance with their respective Pro Rata Shares, with
respect to each Facility LC, a letter of credit fee at a per annum rate equal to
the Applicable Margin for Eurocurrency Loans in effect from time to time on the
average daily undrawn face amount of such Facility LC for the period from the
date of issuance to the scheduled expiration date of such Facility LC, such fee
to be payable in arrears on each Quarterly Payment Date (the “LC Fee”). The
Borrower shall also pay to each LC Issuer for its own account (x) a fronting fee
in an amount equal to 0.125% per annum of the average daily undrawn face amount
under such Facility LC issued by it, such fee to be payable in arrears on each
Quarterly Payment Date and (y) on demand, all amendment, drawing and other fees
regularly charged by such LC Issuer to its letter of credit customers and all
out-of-pocket expenses incurred by such LC Issuer in connection with the
issuance, Modification, administration or payment of any Facility LC.

 

(e)     Administration; Reimbursement by Lenders. Upon receipt from the
beneficiary of any Facility LC of any demand for payment under such Facility LC,
the applicable LC Issuer shall notify the Designated Agent and the Designated
Agent shall promptly notify the Borrower and each other Lender as to the amount
to be paid by such LC Issuer as a result of such demand and the proposed payment
date (the “LC Payment Date”). The responsibility of each LC Issuer to the
Borrower and each Lender shall be only to determine that the documents
(including each demand for payment) delivered under each Facility LC in
connection with such presentment shall be in conformity in all material respects
with such Facility LC. Each LC Issuer shall endeavor to exercise the same care
in the issuance and administration of the Facility LCs as it does with respect
to letters of credit in which no participations are granted, it being understood
that in the absence of any gross negligence or willful misconduct by such LC
Issuer, each Lender shall be unconditionally and irrevocably liable without
regard to the occurrence of any Event of Default or any condition precedent
whatsoever, to reimburse such LC Issuer on demand for (i) such Lender’s Pro Rata
Share of the amount of each payment made by such LC Issuer under each Facility
LC to the extent such amount is not reimbursed by the Borrower pursuant to
Section 2.19(f) below and there are not funds available in the Facility LC
Collateral Account to cover the same, plus (ii) interest on the foregoing amount
to be reimbursed by such Lender, for each day from the date of such LC Issuer’s
demand for such reimbursement (or, if such demand is made after 11:00 a.m.
(Eastern time) on such date, from the next succeeding Business Day) to the date
on which such Lender pays the amount to be reimbursed by it, at a rate of
interest per annum equal to the Federal Funds Effective Rate for the first three
(3) days and, thereafter, at a rate of interest equal to the rate applicable to
Base Rate Advances.

 

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(f)     Reimbursement by the Borrower. The Borrower shall be irrevocably and
unconditionally obligated to reimburse each LC Issuer on or before the
applicable LC Payment Date for any amounts to be paid by such LC Issuer upon any
drawing under any Facility LC, without presentment, demand, protest or other
formalities of any kind; provided that neither the Borrower nor any Lender shall
hereby be precluded from asserting any claim for direct (but not consequential)
damages suffered by the Borrower or such Lender to the extent, but only to the
extent, caused by (i) the willful misconduct or gross negligence of such LC
Issuer in determining whether a request presented under any Facility LC issued
by it complied with the terms of such Facility LC or (ii) such LC Issuer’s
failure to pay under any Facility LC issued by it after the presentation to it
of a request strictly complying with the terms and conditions of such Facility
LC. All such amounts paid by an LC Issuer and remaining unpaid by the Borrower
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to (x) the rate applicable to Base Rate Advances for such day if
such day falls on or before the applicable LC Payment Date and (y) the sum of
2.00% per annum plus the rate applicable to Base Rate Advances for such day if
such day falls after such LC Payment Date. Each LC Issuer will pay to each
Lender ratably in accordance with its Pro Rata Share all amounts received by it
from the Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Facility LC issued by such LC Issuer,
but only to the extent such Lender has made payment to such LC Issuer in respect
of such Facility LC pursuant to Section 2.19(e). Subject to the terms and
conditions of this Agreement (including without limitation the submission of a
Borrowing Notice in compliance with Section 2.8 and the satisfaction of the
applicable conditions precedent set forth in Article IV), the Borrower may
request an Advance hereunder for the purpose of satisfying any Reimbursement
Obligation.

 

(g)     Obligations Absolute. The Borrower’s obligations under this Section 2.19
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against any LC Issuer, any Lender or any
beneficiary of a Facility LC. The Borrower further agrees with the LC Issuers
and the Lenders that the LC Issuers and the Lenders shall not be responsible
for, and the Borrower’s Reimbursement Obligation in respect of any Facility LC
shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, or any dispute
between or among the Borrower, any of its Affiliates, the beneficiary of any
Facility LC or any financing institution or other party to whom any Facility LC
may be transferred or any claims or defenses whatsoever of the Borrower or of
any of its Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuers shall not 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 Facility LC. The Borrower
agrees that any action taken or omitted by any LC Issuer or any Lender under or
in connection with each Facility LC and the related drafts and documents, if
done without gross negligence or willful misconduct, shall be binding upon the
Borrower and shall not put any LC Issuer or any Lender under any liability to
the Borrower. Nothing in this Section 2.19(g) is intended to limit the right of
the Borrower to make a claim against an LC Issuer for damages as contemplated by
the proviso to the first sentence of Section 2.19(f).

 

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(h)     Actions of LC Issuers. Each LC Issuer shall be entitled to rely, and
shall be fully protected in relying, upon any Facility LC, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile, telex, teletype or electronic mail message, statement,
order or other document 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, independent accountants and other experts selected
by such LC Issuer. Each LC Issuer shall be fully justified in failing or
refusing to take any action under this Agreement unless it shall first have
received such advice or concurrence of the Required Lenders as it reasonably
deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Notwithstanding any other provision of this Section 2.19, each LC Issuer shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon the Lenders and any future holders of a participation in any Facility LC.

 

(i)     Indemnification. The Borrower hereby agrees to indemnify and hold
harmless each Lender, each LC Issuer and the Designated Agent, and their
respective directors, officers, agents and employees from and against any and
all claims and damages, losses, liabilities, costs or expenses (including
reasonable counsel fees and disbursements) which such Lender, such LC Issuer or
the Designated Agent may incur (or which may be claimed against such Lender,
such LC Issuer or the Designated Agent by any Person whatsoever) by reason of or
in connection with the issuance, execution and delivery or transfer of or
payment or failure to pay under any Facility LC or any actual or proposed use of
any Facility LC, including, without limitation, any claims, damages, losses,
liabilities, costs or expenses (including reasonable counsel fees and
disbursements) which such LC Issuer may incur (i) by reason of or in connection
with the failure of any other Lender to fulfill or comply with its obligations
to such LC Issuer hereunder (but nothing herein contained shall affect any
rights the Borrower may have against any Defaulting Lender) or (ii) by reason of
or on account of such LC Issuer issuing any Facility LC which specifies that the
term “Beneficiary” included therein includes any successor by operation of law
of the named Beneficiary, but which Facility LC does not require that any
drawing by any such successor Beneficiary be accompanied by a copy of a legal
document, satisfactory to such LC Issuer, evidencing the appointment of such
successor Beneficiary; provided that the Borrower shall not be required to
indemnify any Lender, any LC Issuer or the Designated Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by (x) the willful misconduct or gross negligence of an LC Issuer
in determining whether a request presented under any Facility LC complied with
the terms of such Facility LC or (y) an LC Issuer’s failure to pay under any
Facility LC after the presentation to it of a request strictly complying with
the terms and conditions of such Facility LC. Nothing in this Section 2.19(i) is
intended to limit the obligations of the Borrower under any other provision of
this Agreement.

 

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(j)     Lenders’ Indemnification. Each Lender shall, ratably in accordance with
its Pro Rata Share, indemnify each LC Issuer, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees’ gross negligence or willful
misconduct or such LC Issuer’s failure to pay under any Facility LC issued by it
after the presentation to it of a request strictly complying with the terms and
conditions of such Facility LC) that such indemnitees may suffer or incur in
connection with this Section 2.19 or any action taken or omitted by such
indemnitees hereunder.

 

(k)     Facility LC Collateral Account. The Borrower agrees that it will, upon
the request of the Designated Agent or the Required Lenders and until the final
expiration date of any Facility LC and thereafter as long as any amount is
payable to any LC Issuer or the Lenders in respect of any Facility LC, maintain
a special collateral account pursuant to arrangements satisfactory to the
Designated Agent (the “Facility LC Collateral Account”), in the name of the
Borrower but under the sole dominion and control of the Designated Agent, for
the benefit of the Lenders and in which the Borrower shall have no interest
other than as set forth in Section 8.1. The Borrower hereby pledges, assigns and
grants to the Designated Agent, on behalf of and for the ratable benefit of the
Lenders and the LC Issuers, a security interest in all of the Borrower’s right,
title and interest in and to all funds which may from time to time be on deposit
in the Facility LC Collateral Account to secure the prompt and complete payment
and performance of the Obligations. The Designated Agent will invest any funds
on deposit from time to time in the Facility LC Collateral Account in
certificates of deposit of U.S. Bank having a maturity not exceeding thirty (30)
days. Nothing in this Section 2.19(k) shall either (i) obligate Borrower to
deposit any funds in the Facility LC Collateral Account, (ii) obligate the
Designated Agent to require the Borrower to deposit any funds in the Facility LC
Collateral Account or (iii) limit the right of the Designated Agent to release
any funds held in the Facility LC Collateral Account, in each case other than as
required by Section 2.2, Section 2.19(l), Section 2.22 or Section 8.1.

 

(l)     Cash Collateralization. If the expiration date of any Facility Letter of
Credit is (i) later than the Facility Termination Date, (ii) in the case of a
Facility LC issued by a Declining Lender, later than its Declining Lender’s
Termination Date or such date on which such Declining Lender is replaced
pursuant to Section 2.20, (iii) in the case of a Facility LC issued by a
Defaulting Lender, which Defaulting Lender is replaced pursuant to Section 2.20
or (iv) in the case of a Facility LC otherwise issued by an Affected Lender that
is replaced pursuant to Section 2.20, later than the date of such replacement,
the Borrower shall (x) in the case of clause (i) above, either, (A) Cash
Collateralize such Facility LC not less than thirty (30) days prior to the
Facility Termination Date or (B) if acceptable to the applicable LC Issuer in
its sole discretion, provide collateral or other alternatives acceptable to such
LC Issuer in its sole discretion (in the case of clause (B), “Non-Cash
Collateralized Letters of Credit”) (provided that the obligations of the Lenders
to make payments to the Designated Agent for the account of an LC Issuer under
Section 2.19(e) in respect of Non-Cash Collateralized Letters of Credit and the
obligation of the Borrower to pay the LC Fees and other fees required under
Section 2.19(d) hereof in respect of Non-Cash Collateralized Letters of Credit
shall in each case terminate on the Facility Termination Date and the Non-Cash
Collateralized Letters of Credit shall cease to be Facility LCs hereunder) or
(y) in the case of clause (ii) above, Cash Collateralize such Facility LC no
later than the date of replacement of such Declining Lender or, if not so
replaced, Cash Collateralize such Facility LC no later than thirty (30) days
prior to such Declining Lender’s Termination Date or (z) in the case of clause
(iii) or (iv) above, Cash Collateralize such Facility LC no later than the date
of replacement of a Defaulting Lender or Affected Lender pursuant to Section
2.20.  In addition, the Borrower shall Cash Collateralize Facility LCs when
required by and in accordance with Section 2.2, Section 2.22 and Section 8.1.

 

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(m)     Rights as a Lender. In its capacity as a Lender, each LC Issuer shall
have the same rights and obligations as any other Lender.

 

2.20.     Replacement of Lender. If (a) the Borrower is required pursuant to
Sections 3.1, 3.2 or 3.5 to make any additional payment to any Lender or (b) if
any Lender’s obligation to make or continue, or to convert Base Rate Advances
into Eurocurrency Advances shall be suspended pursuant to Section 3.3 or (c) if
any Lender defaults in its obligation to make a Loan, reimburse the LC Issuers
pursuant to Section 2.19(e) or (d) if any Lender declines to approve an
amendment or waiver that is approved by the Required Lenders or (e) if any
Lender is a Declining Lender or (f) if any Lender otherwise becomes a Defaulting
Lender (any Lender so affected, an “Affected Lender”), the Borrower may elect,
if the circumstances resulting in such Lender being an Affected Lender continue,
to replace such Affected Lender as a Lender party to this Agreement, provided
that no Default or Event of Default shall have occurred and be continuing at the
time of such replacement, and provided further that, concurrently with such
replacement, (i) another bank or other entity which is reasonably satisfactory
to the Borrower, the Co-Administrative Agents and which is either a Qualified
Bank or reasonably satisfactory to each LC Issuer (a “Replacement Lender”) shall
agree, as of such date, to purchase for cash at par the Advances and other
Obligations due to the Affected Lender under this Agreement and the other Loan
Documents pursuant to an assignment substantially in the form of Exhibit C and
to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments; (ii) the
Borrower shall pay to such Affected Lender in same day funds on the day of such
replacement (A) all interest, fees and other amounts then accrued but unpaid to
such Affected Lender by the Borrower hereunder to and including the date of
termination, including without limitation payments due to such Affected Lender
under Sections 3.1, 3.2, 3.4 and 3.5, and (B) an amount, if any, equal to the
payment which would have been due to such Lender under Section 3.4 on the day of
such replacement had the Loans of such Affected Lender been prepaid on such date
rather than sold to the replacement Lender; and (iii) in the case of an
assignment by a Declining Lender under this Section 2.20, the Replacement Lender
that is the assignee of the Declining Lender shall agree at the time of such
assignment to the extension to the Extension Date of the Facility Termination
Date, which agreement shall be set forth in a written instrument delivered and
satisfactory to the Borrower and the Designated Agent.

 

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2.21.     Limitation of Interest. The Borrower, the Designated Agent and the
Lenders intend to strictly comply with all applicable laws, including applicable
usury laws. Accordingly, the provisions of this Section 2.21 shall govern and
control over every other provision of this Agreement or any other Loan Document
which conflicts or is inconsistent with this Section 2.21, even if such
provision declares that it controls. As used in this Section 2.21, the term
“interest” includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other than
the use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal parts during the full term
of this Agreement. In no event shall the Borrower or any other Person be
obligated to pay, or any Lender have any right or privilege to reserve, receive
or retain, (a) any interest in excess of the maximum amount of nonusurious
interest permitted under the applicable laws (if any) of the United States or of
any applicable state, or (b) total interest in excess of the amount which such
Lender could lawfully have contracted for, reserved, received, retained or
charged had the interest been calculated for the full term of this Agreement at
the Highest Lawful Rate. On each day, if any, that the interest rate (the
“Stated Rate”) called for under this Agreement or any other Loan Document
exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall
automatically be fixed by operation of this sentence at the Highest Lawful Rate
for that day, and shall remain fixed at the Highest Lawful Rate for each day
thereafter until the total amount of interest accrued equals the total amount of
interest which would have accrued if there were no such ceiling rate as is
imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate
unless and until the Stated Rate again exceeds the Highest Lawful Rate when the
provisions of the immediately preceding sentence shall again automatically
operate to limit the interest accrual rate. The daily interest rates to be used
in calculating interest at the Highest Lawful Rate shall be determined by
dividing the applicable Highest Lawful Rate per annum by the number of days in
the calendar year for which such calculation is being made. None of the terms
and provisions contained in this Agreement or in any other Loan Document which
directly or indirectly relate to interest shall ever be construed without
reference to this Section 2.21, or be construed to create a contract to pay for
the use, forbearance or detention of money at an interest rate in excess of the
Highest Lawful Rate. If the term of any Loan or any other Obligation outstanding
hereunder or under the other Loan Documents is shortened by reason of
acceleration of maturity as a result of any Event of Default or by any other
cause, or by reason of any required or permitted prepayment, and if for that (or
any other) reason any Lender at any time, including but not limited to, the
stated maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Highest Lawful Rate, then and in any such event all
of any such excess interest shall be canceled automatically as of the date of
such acceleration, prepayment or other event which produces the excess, and, if
such excess interest has been paid to such Lender, it shall be credited pro
tanto against the then-outstanding principal balance of the Borrower’s
Obligations to such Lender, effective as of the date or dates when the event
occurs which causes it to be excess interest, until such excess is exhausted or
all of such principal has been fully paid and satisfied, whichever occurs first,
and any remaining balance of such excess shall be promptly refunded to its
payor.

 

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2.22.     Defaulting Lenders.

 

(a)     Defaulting Lender Adjustments. 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)

Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove
any amendment, waiver or consent with respect to this Agreement shall be
restricted as set forth in the definition of Required Lenders.

 

 

(ii)

Defaulting Lender Waterfall. Any payment of principal, interest, fees or other
amounts received by the Designated Agent for the account of such Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or
otherwise) or received by the Designated Agent from a Defaulting Lender pursuant
to Section 11.1 shall be applied at such time or times as may be determined by
the Designated Agent as follows: first, to the payment of any amounts owing by
such Defaulting Lender to the Designated Agent hereunder; second, to the payment
on a pro rata basis of any amounts owing by such Defaulting Lender to any LC
Issuer hereunder; third, to Cash Collateralize each LC Issuer’s Fronting
Exposure with respect to such Defaulting Lender in accordance with Section
2.22(d); 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 Designated Agent; fifth, if so determined by the Designated
Agent and the Borrower, to be held in a deposit account (including the Facility
LC Collateral 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 each LC Issuer’s future Fronting
Exposure with respect to such Defaulting Lender with respect to future Facility
LCs issued under this Agreement, in accordance with Section 2.22(d); sixth, to
the payment of any amounts owing to the Lenders or the LC Issuers as a result of
any judgment of a court of competent jurisdiction obtained by any Lender or any
LC Issuer 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; eighth, if so determined by the
Designated Agent, distributed to the Lenders other than the Defaulting Lender
until the ratio of the Outstanding Credit Exposures of such Lenders to the
Aggregate Outstanding Exposure of all Lenders equals such ratio immediately
prior to the Defaulting Lender’s failure to fund any portion of any Loans or
participations in Facility LCs; and ninth, 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 Facility LC
issuances in respect of which such Defaulting Lender has not fully funded its
appropriate share, and (y) such Loans were made or the related Facility LCs were
issued at a time when the conditions set forth in Section 4.2 were satisfied or
waived, such payment shall be applied solely to pay the Credit Extensions of all
Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment
of any Credit Extensions of such Defaulting Lender until such time as all Loans
and funded and unfunded participations in LC Obligations are held by the Lenders
pro rata in accordance with the Commitments without giving effect to Section
2.22(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 2.22(a)(ii) shall be
deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents hereto. If there is more than one LC Issuer, amounts in
respect of the Fronting Exposure of each LC Issuer under this Section
2.22(a)(ii) shall be determined on a pro rata basis based on the respective
Fronting Exposures of each such LC Issuer.

 

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(iii)

Certain Fees. (A) No Defaulting Lender shall be entitled to receive any
Commitment Fee 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 LC Fees for any
period during which that Lender is a Defaulting Lender only to the extent
allocable to its ratable share of the stated amount of Facility LCs for which it
has provided Cash Collateral pursuant to Section 2.22(d).

 

(C)     With respect to any Commitment Fee or LC Fee 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 LC Obligations that has been reallocated to such Non-Defaulting
Lender pursuant to clause (iv) below, (y) pay to each LC Issuer, as applicable,
the amount of any such fee otherwise payable to such Defaulting Lender to the
extent allocable to such LC Issuer’s Fronting Exposure to such Defaulting
Lender, and (z) not be required to pay the remaining amount of any such fee.

 

 

(iv)

Reallocation of Participations to Reduce Fronting Exposure. All or any part of
such Defaulting Lender’s participation in LC Obligations shall be reallocated
among the Non-Defaulting Lenders in accordance with their respective Pro Rata
Shares (calculated without regard to such Defaulting Lender’s Commitment) but
only to the extent that (x) the conditions set forth in Section 4.2 are
satisfied at the time of such reallocation (and, unless the Borrower shall have
otherwise notified the Designated 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 aggregate Outstanding
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.

 

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(v)

Cash Collateral. 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, Cash Collateralize each
LC Issuer’s Fronting Exposure in accordance with the procedures set forth in
Section 2.22(d).

 

(b)     Defaulting Lender Cure. If the Borrower, the Designated Agent and the LC
Issuers agree in writing that a Lender is no longer a Defaulting Lender, the
Designated 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
Designated Agent may determine to be necessary to cause the Loans and funded and
unfunded participations in Facility LCs to be held pro rata by the Lenders in
accordance with the Commitments (without giving effect to Section 2.22(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 Facility LCs. So long as any Lender is a Defaulting Lender, no LC
Issuer shall be required to issue, extend, renew or increase any Facility LC
unless it is satisfied that it will have no Fronting Exposure after giving
effect thereto.

 

(d)     Cash Collateral. At any time that there shall exist a Defaulting Lender,
within one (1) Business Day following the written request of the Designated
Agent or any LC Issuer (with a copy to the Designated Agent) the Borrower shall
Cash Collateralize each LC Issuer’s Fronting Exposure with respect to such
Defaulting Lender (determined after giving effect to Section 2.22(a)(iv) and any
Cash Collateral provided by such Defaulting Lender) in an amount not less than
the Minimum Collateral Amount.

 

 

(i)

Grant of Security Interest. The Borrower, and to the extent provided by any
Defaulting Lender, such Defaulting Lender, hereby grant(s) to the Designated
Agent, for the benefit of the LC Issuers, and agree(s) to maintain, a first
priority security interest in all such Cash Collateral as security for the
Defaulting Lender’s obligation to fund participations in respect of LC
Obligations, to be applied pursuant to clause (ii) below. If at any time the
Designated Agent determines that Cash Collateral is subject to any right or
claim of any Person other than the Designated Agent and the LC Issuers as herein
provided, or that the total amount of such Cash Collateral is less than the
Minimum Collateral Amount, the Borrower will, promptly upon demand by the
Designated Agent, pay or provide to the Designated Agent additional Cash
Collateral in an amount sufficient to eliminate such deficiency (after giving
effect to any Cash Collateral provided by the Defaulting Lender).

 

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(ii)

Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under this Section 2.22 in respect of
Facility LCs shall be applied to the satisfaction of the Defaulting Lender’s
obligation to fund participations in respect of LC 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.

 

 

(iii)

Termination of Requirement. Cash Collateral (or the appropriate portion thereof)
provided to reduce an LC Issuer’s Fronting Exposure shall no longer be required
to be held as Cash Collateral pursuant to this Section 2.22(d) 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 Designated Agent and the applicable LC Issuers that there exists excess Cash
Collateral; provided that, subject to this Section 2.22 the Person providing
Cash Collateral and the applicable LC Issuer may agree that Cash Collateral
shall be held to support future anticipated Fronting Exposure or other
obligations.

 

(e)     Borrower’s Rights. Without limitation of the foregoing, Borrower shall
have such rights and remedies against a Defaulting Lender as are available at
law or in equity.

 

2.23.     Term-Out Period.

 

(a)     Commencement of Term-Out Period. If pursuant to the provisions of
Section 6.19(a) or Section 6.19(b)(v) the Term-Out Period shall commence, then
effective as of the applicable Term-Out Date the provisions of this Section 2.23
shall apply.

 

(b)     Term-Out Period. From and after one (1) calendar quarter after the
Term-Out Date, the Aggregate Commitment (and each Lender’s Commitment) in effect
as of the Term-Out Date shall be reduced on the first day after the end of each
calendar quarter period by a percentage of such Aggregate Commitment amount (or
such Lender’s Commitment amount) as follows:

 

Period

 

Percentage
of Commitment
  Reduction  

 

Percentage
of Commitment
  Remaining  

         

One calendar quarter after

       

Term-Out Date

 

16.666%

 

83.334%

         

Two calendar quarters after

       

Term-Out Date

 

16.667%

 

66.667%

         

Three calendar quarters after

       

Term-Out Date

 

16.667%

 

50.000%

         

Four calendar quarters after

       

Term-Out Date

 

16.666%

 

33.334%

         

Five calendar quarters after

       

Term-Out Date

 

16.667%

 

16.667%

         

Six calendar quarters after

       

Term-Out Date

 

16.667%

 

0%

 

The commencement of the Term-Out Period shall not extend the Facility
Termination Date.

 

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2.24.     Increase Option. Provided that the Term-Out Period has not commenced,
the Borrower may from time to time elect to increase the Commitments, in each
case in integral multiples of $5,000,000 (but not less than $25,000,000) or such
lower amount as the Borrower and the Designated Agent agree upon, so long as,
after giving effect thereto, the aggregate amount of the Commitments does not
exceed $1,250,000,000. The Borrower may arrange for any such increase to be
provided by one or more Lenders (each Lender so agreeing to an increase in its
Commitment, an “Increasing Lender”), or by one or more new banks, financial
institutions or other entities that are Eligible Assignees (each such new bank,
financial institution or other entity, an “Augmenting Lender”), to increase
their existing Commitments, or provide new Commitments, as the case may be;
provided that (i) each Augmenting Lender shall be subject to the approval of the
Borrower and the Co-Administrative Agents, in each case not to be unreasonably
withheld, and shall be either a Qualified Bank or approved by each LC Issuer,
such approval not to be unreasonably withheld, and (ii) (x) in the case of an
Increasing Lender, the Borrower and such Increasing Lender execute an agreement
substantially in the form of Exhibit G hereto, and (y) in the case of an
Augmenting Lender, the Borrower and such Augmenting Lender execute an agreement
substantially in the form of Exhibit H hereto. No consent of any Lender (other
than the Lenders participating in the increase) shall be required for any
increase in Commitments pursuant to this Section 2.24. Increases and new
Commitments created pursuant to this Section 2.24 shall become effective on the
date agreed by the Borrower and the relevant Increasing Lenders or Augmenting
Lenders and upon reasonable prior written notice to the Designated Agent, and
the Designated Agent shall notify each Lender thereof. Notwithstanding the
foregoing, no increase in the Commitments (or in the Commitment of any Lender)
shall become effective under this paragraph unless, (1) on the proposed date of
the effectiveness of such increase, the conditions set forth in paragraphs (a)
and (b) of Section 4.2 shall be satisfied (or waived by the Required Lenders)
and the Designated Agent shall have received a certificate to that effect dated
such date and executed by an Authorized Officer of the Borrower and (2) the
Designated Agent shall have received documents consistent with those delivered
on the Effective Date as to the corporate power and authority of the Borrower to
borrow hereunder after giving effect to such increase, as well as such documents
as the Designated Agent may reasonably request (including, without limitation,
customary opinions of counsel and affirmations of Loan Documents). On the
effective date of any increase in the Commitments, (i) each relevant Increasing
Lender and Augmenting Lender shall make available to the Designated Agent such
amounts in immediately available funds as the Designated Agent shall determine,
for the benefit of the other Lenders, as being required in order to cause, after
giving effect to such increase and the use of such amounts to make payments to
such other Lenders, each Lender’s portion of the outstanding Revolving Loans of
all the Lenders to equal its Pro Rata Share of such outstanding Revolving Loans,
and (ii) the Borrower shall be deemed to have repaid and reborrowed all
outstanding Revolving Loans as of the date of any increase in the Commitments
(with such reborrowing to consist of the Types of Revolving Loans, with related
Interest Periods if applicable, specified in a notice delivered by the Borrower,
in accordance with the requirements of Section 2.8). The deemed payments made
pursuant to clause (ii) of the immediately preceding sentence shall be
accompanied by payment of all accrued interest on the amount prepaid and, in
respect of each Eurocurrency Loan, shall be subject to indemnification by the
Borrower pursuant to the provisions of Section 3.4 if the deemed payment occurs
other than on the last day of the related Interest Periods. Nothing contained in
this Section 2.24 shall constitute, or otherwise be deemed to be, a commitment
on the part of any Lender to increase its Commitment hereunder at any time.

 

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2.25.     Returned Payments. If after receipt of any payment which is applied to
the payment of all or any part of the Obligations, the Designated Agent or any
Lender is for any reason compelled to surrender such payment or proceeds to any
Person because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any other reason,
then the Obligations or part thereof intended to be satisfied shall be revived
and continued and this Agreement shall continue in full force as if such payment
or proceeds had not been received by the Designated Agent or such Lender. The
provisions of this Section 2.25 shall be and remain effective notwithstanding
any contrary action which may have been taken by the Designated Agent or any
Lender in reliance upon such payment or application of proceeds. The provisions
of this Section 2.25 shall survive the termination of this Agreement.

 

2.26.     Extension of Facility Termination Date. Provided that the Term-Out
Period has not commenced, the Borrower may request, but not more than once in
each fiscal year of the Borrower and on no more than two occasions in the
aggregate after the Effective Date, an extension of the Facility Termination
Date by submitting a request for an extension to the Designated Agent (an
“Extension Request”). The Extension Request must specify the new Facility
Termination Date requested by the Borrower with respect thereto (“Extension
Date”), which shall be not more than five (5) years from the effective date such
extension becomes effective in accordance with the provisions of this Section. 
The Extension Request shall be accompanied by a certificate, signed by an
Authorized Officer, stating that on the date of the Extension Request, no
Default or Event of Default has occurred and is continuing and that all of the
representations and warranties in Article V are true and correct in all material
respects (except  (i) to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case such representation or
warranty shall have been true and correct in all material respects on and as of
such earlier date and (ii) to the extent already qualified by materiality, in
which case said representations and warranties are true and correct in all
respects).  On the Extension Date, the Borrower shall deliver a certificate,
signed by an Authorized Officer,  stating that on the Extension Date, no Default
or Event of Default has occurred and is continuing and that all of the
representations and warranties in Article V are true and correct in all material
respects (except  (i) to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case such representation or
warranty shall have been true and correct in all material respects on and as of
such earlier date and (ii) to the extent already qualified by materiality, in
which case said representations and warranties are true and correct in all
respects).  Promptly upon receipt of an Extension Request, the Designated Agent
shall notify each Lender of the contents thereof and shall request each Lender
to approve the Extension Request (which approval may be given or withheld by
each Lender in its sole discretion). Each Lender may, at its election, approve
or deny an extension of the Facility Termination Date (it being understood that
no Lender shall be under any obligation to approve an extension of the Facility
Termination Date).  Each Lender approving an Extension Request shall deliver its
written approval no later than 75 days following such Extension Request.  If
written approval of the Required Lenders is not received by the Designated Agent
within such 75-day period, the Extension Request shall be denied.  If such
written approval of the Required Lenders is received by the Designated Agent
within such 75-day period, the Facility Termination Date shall be extended to
the Extension Date specified in the Extension Request but only with respect to
the Commitments of the Lenders that have given such written approval.  Except to
the extent that a Lender that did not give its written approval to such
Extension Request (“Declining Lender”) is replaced prior to its Declining
Lender’s Termination Date as provided in Section 2.20, then (a) the Aggregate
Commitment shall be decreased by the Commitment of each such Declining Lender,
which Declining Lender’s Commitment shall terminate on (and the Aggregate
Commitment shall decrease effective as of) the Facility Termination Date, as
determined prior to such Extension Request (the “Declining Lender’s Termination
Date”) and (b) the Loans and all interest, fees and other amounts owed to such
Declining Lender shall be paid in full on each such Declining Lender’s
Termination Date; provided, however, if prior to the Declining Lender’s
Termination Date, a Declining Lender that has not been replaced as provided in
Section 2.20 subsequently determines to extend its Commitment, that Lender (at
its option and with the written consent of the Borrower but without the consent
of any other person) may extend the maturity of its commitment to the Extension
Date pursuant to a supplement to this Agreement executed by such Lender and the
Borrower and delivered to the Designated Agent prior to the applicable Declining
Lender Termination Date, in which case (a) the Aggregate Commitment shall not be
decreased by that Lender’s Commitment, (b) there will be no “Declining Lender’s
Termination Date” for such Lender and (c) such Lender’s Commitment shall
terminate on the most recently effective Extension Date.

 

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ARTICLE III

YIELD PROTECTION; TAXES

 

3.1.     Yield Protection. If, after the date of this Agreement, there occurs
any adoption of or change in any law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) or in the interpretation, promulgation, implementation
or administration thereof by any Governmental or quasi-Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, including, notwithstanding the foregoing, all requests,
rules, guidelines or directives (x) in connection with the Dodd-Frank Wall
Street Reform and Consumer Protection Act or (y) promulgated by the Bank for
International Settlements, the Basel Committee on Banking Regulations and
Supervisory Practices (or any successor or similar authority) or the United
States financial regulatory authorities, in each case of clauses (x) and (y),
regardless of the date enacted (subject to Section 3.7 below), adopted, issued,
promulgated or implemented, or compliance by any Lender or applicable Lending
Installation or any LC Issuer with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency (any of the foregoing, a “Change in Law”) which:

 

(a)     subjects any Lender or any applicable Lending Installation, any LC
Issuer, or the Designated Agent to any Taxes (other than with respect to
Indemnified Taxes, Excluded Taxes, and Other Taxes) on its loans, loan
principal, letters of credit, commitments, or other obligations, or its
deposits, reserves, other liabilities or capital attributable thereto, or

 

(b)     imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation or LC Issuer (other than reserves and
assessments taken into account in determining the interest rate applicable to
Eurocurrency Advances), or

 

(c)     imposes any other condition (other than Taxes) the result of which is to
increase the cost to any Lender or any applicable Lending Installation or LC
Issuer of making, funding or maintaining its Eurocurrency Loans, or of issuing
or participating in Facility LCs, or reduces any amount receivable by any Lender
or any applicable Lending Installation or LC Issuer in connection with its
Eurocurrency Loans, Facility LCs or participations therein, or requires any
Lender or any applicable Lending Installation or LC Issuer to make any payment
calculated by reference to the amount of Eurocurrency Loans, Facility LCs or
participations therein held or interest or LC Fees received by it, by an amount
deemed material by such Lender or LC Issuer, as the case may be,

 

and the result of any of the foregoing is to increase the cost to such Person of
making or maintaining its Loans or Commitment or of issuing or participating in
Facility LCs or to reduce the amount received by such Person in connection with
such Loans or Commitment, Facility LCs or participations therein, then, within
fifteen (15) days after demand by such Person, the Borrower shall pay such
Person, as the case may be, such additional amount or amounts as will compensate
such Person for such increased cost or reduction in amount received.

 

3.2.     Changes in Capital Adequacy Regulations. If a Lender or LC Issuer
determines that the amount of capital or liquidity required or expected to be
maintained by such Lender or LC Issuer, any Lending Installation of such Lender
or LC Issuer, or any corporation or holding company controlling such Lender or
LC Issuer is increased as a result of (i) a Change in Law or (ii) any change
after the date of this Agreement in the Risk-Based Capital Guidelines, then,
within fifteen (15) days after demand by such Lender or LC Issuer, the Borrower
shall pay such Lender or the LC Issuer the amount necessary to compensate for
any shortfall in the rate of return on the portion of such increased capital or
liquidity which such Lender or LC Issuer determines is attributable to this
Agreement, its Outstanding Credit Exposure or its Commitment to make Loans and
issue or participate in Facility LCs, as the case may be, hereunder (after
taking into account such Lender’s or LC Issuer’s policies as to capital adequacy
or liquidity), in each case that is attributable to such Change in Law or change
in the Risk-Based Capital Guidelines, as applicable.

 

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3.3.        Availability of Types of Advances; Adequacy of Interest Rate. If the
Designated Agent or the Required Lenders determine that deposits of a type and
maturity appropriate to match fund Eurocurrency Advances are not available to
such Lenders in the relevant market or the Designated Agent, in consultation
with the Lenders, determines that the interest rate applicable to Eurocurrency
Advances is not ascertainable or does not adequately and fairly reflect the cost
of making or maintaining Eurocurrency Advances, then the Designated Agent shall
suspend the availability of Eurocurrency Advances and require any affected
Eurocurrency Advances to be repaid or converted to Base Rate Advances, subject
to the payment of any funding indemnification amounts required by Section 3.4.

 

3.4.        Funding Indemnification. If (a) any payment of a Eurocurrency
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, (b) a
Eurocurrency Advance is not made on the date specified by the Borrower for any
reason other than default by the Lenders, (c) a Eurocurrency Loan is converted
other than on the last day of the Interest Period applicable thereto, (d) the
Borrower fails to borrow, convert, continue or prepay any Eurocurrency Loan on
the date specified in any notice delivered pursuant hereto, or (e) any
Eurocurrency Loan is assigned other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to Section
2.20, the Borrower will indemnify each Lender for such Lender’s costs, expenses
and Interest Differential (as determined by such Lender) incurred as a result of
such prepayment. The term “Interest Differential” shall mean that sum equal to
the greater of zero or the financial loss incurred by the Lender resulting from
prepayment, calculated as the difference between the amount of interest such
Lender would have earned (from the investments in money markets as of the
Borrowing Date of such Advance) had prepayment not occurred and the interest
such Lender will actually earn (from like investments in money markets as of the
date of prepayment) as a result of the redeployment of funds from the
prepayment. Because of the short-term nature of this facility, the Borrower
agrees that Interest Differential shall not be discounted to its present value.

 

3.5.        Taxes.

 

(a) Any and all payments by or on account of any obligation of any Loan Party
under any Loan Document shall be made without deduction or withholding for any
Taxes, except as required by applicable law. If any applicable law requires the
deduction or withholding of any Tax from any such payment, then the applicable
Loan Party shall be entitled to make such deduction or withholding and shall
timely pay the full amount deducted or withheld to the relevant Governmental
Authority in accordance with applicable law and, if such Tax is an Indemnified
Tax or Other Tax, then the sum payable by the applicable Loan Party shall be
increased as necessary so that after such deduction or withholding has been made
(including such deductions and withholdings applicable to additional sums
payable under this Section 3.5) the applicable Lender, LC Issuer or the
Designated Agent receives an amount equal to the sum it would have received had
no such deduction or withholding been made.

 

(b) The Loan Parties shall timely pay to the relevant Governmental Authority in
accordance with applicable law or at the option of the Designated Agent timely
reimburse it for the payment of, any Other Taxes.

 

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(c) The Loan Parties shall indemnify each Lender, LC Issuer or the Designated
Agent, within fifteen (15) days after demand therefor, for the full amount of
any Indemnified Taxes and Other Taxes (including Indemnified Taxes and Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section 3.5) payable or paid by such Lender, LC Issuer or the Designated Agent
or required to be withheld or deducted from a payment to such Lender, LC Issuer
or the Designated Agent and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes and 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 or LC Issuer (with a copy to the Designated Agent), or by
the Designated Agent on its own behalf or on behalf of a Lender or LC Issuer,
shall be conclusive absent manifest error.

 

(d) Each Lender shall severally indemnify the Designated Agent, within fifteen
(15) days after demand therefor, for (i) any Indemnified Taxes and Other Taxes
attributable to such Lender (but only to the extent that any Loan Party has not
already indemnified the Designated Agent for such Indemnified Taxes and Other
Taxes and without limiting the obligation of the Loan Parties to do so), (ii)
any Taxes attributable to such Lender’s failure to comply with the provisions of
Section 12.2(c) relating to the maintenance of a Participant Register, and (iii)
any Excluded Taxes attributable to such Lender, in each case, that are payable
or paid by the Designated 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 Designated Agent shall be conclusive
absent manifest error. Each Lender hereby authorizes the Designated 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 Designated Agent to the Lender from
any other source against any amount due to the Designated Agent under this
paragraph (d).

 

(e) As soon as practicable after any payment of Taxes by any Loan Party to a
Governmental Authority pursuant to this Section 3.5, such Loan Party shall
deliver to the Designated Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Designated Agent.

 

(f)(i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Designated Agent, at the time or times
reasonably requested by the Borrower or the Designated Agent, such properly
completed and executed documentation reasonably requested by the Borrower or the
Designated Agent as will permit such payments to be made without withholding or
at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Designated Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Designated Agent as will enable the Borrower or the Designated
Agent to determine whether or not such Lender is subject to backup withholding
or information reporting requirements. Notwithstanding anything to the contrary
in the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 3.5(f)(ii)(A),
(ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable
judgment such completion, execution or submission would subject such Lender to
any material unreimbursed cost or expense or would materially prejudice the
legal or commercial position of such Lender.

 

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(ii) Without limiting the generality of the foregoing,

 

(A) any Lender that is a United States Person for U.S. federal income Tax
purposes shall deliver to the Borrower and the Designated Agent on or prior to
the date on which such Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of the Borrower or the
Designated Agent), executed originals of IRS Form W-9 certifying that such
Lender is exempt from U.S. federal backup withholding Tax;

 

(B) any Non-U.S. Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Designated Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Non-U.S. Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Designated Agent),
whichever of the following is applicable:

 

(1) in the case of a Non-U.S. Lender claiming the benefits of an income Tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form
W-8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such Tax treaty and (y)
with respect to any other applicable payments under any Loan Document, IRS Form
W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “business profits” or “other
income” article of such Tax treaty;

 

(2) executed originals of IRS Form W-8ECI;

 

(3) in the case of a Non-U.S. Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Non-U.S. Lender is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the
meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code and (y) executed
copies of IRS Form W-8BEN or IRS Form W-8BEN-E; or

 

(4) to the extent a Non-U.S. Lender is not the beneficial owner, executed copies
of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form
W-8BEN-E, IRS Form W-8IMY or IRS Form W-9, and/or other certification documents
from each beneficial owner, as applicable.

 

(C) any Non-U.S. Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Designated Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Non-U.S. Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Designated Agent),
executed originals of any other form prescribed by applicable 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 law to permit the Borrower or the Designated Agent to determine
the withholding or deduction required to be made; and

 

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(D) 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 Designated Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Designated 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 the Designated
Agent as may be necessary for the Borrower and the Designated Agent to comply
with their obligations under FATCA and to determine that such Lender has
complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this clause
(D), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

 

(iii)     Each Lender agrees that if any form or certification it previously
delivered expires or becomes obsolete or inaccurate in any respect, it shall
update such form or certification or promptly notify the Borrower and the
Designated Agent in writing of its legal inability to do so.

 

(g)     If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this Section 3.5 (including by the payment of additional amounts
pursuant to this Section 3.5), it shall pay to the indemnifying party an amount
equal to such refund (but only to the extent of indemnity payments made under
this Section with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) of such indemnified party and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this paragraph (g) (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this paragraph (g), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this paragraph (g) the payment of which would
place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the indemnification payments or
additional amounts giving rise to such refund had never been paid. This
paragraph shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

 

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(h)     Each party’s obligations under this Section 3.5 shall survive the
resignation or replacement of the Designated Agent or any assignment of rights
by, or the replacement of, a Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all obligations under any Loan Document.

 

(i)     For purposes of Section 3.5(d) and (f), the term “Lender” includes each
LC Issuer.

 

(j)     For purposes of determining withholding Taxes imposed under FATCA, from
and after the Second Amendment Effective Date, the Borrower, the other Loan
Parties and the Designated Agent shall treat (and the Lenders hereby authorize
the Designated Agent to treat) the Loans and the Facility LCs as not qualifying
as a “grandfathered obligation” within the meaning of Treasury Regulation
Section 1.1471-2(b)(2)(i).

 

3.6.     Selection of Lending Installation; Mitigation Obligations; Lender
Statements; Survival of Indemnity. To the extent reasonably possible, each
Lender shall designate an alternate Lending Installation with respect to its
Eurocurrency Loans to reduce any liability of the Borrower to such Lender under
Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurocurrency
Advances under Section 3.3, so long as such designation is not, in the judgment
of such Lender, disadvantageous to such Lender. Each Lender shall deliver a
written statement of such Lender to the Borrower (with a copy to the Designated
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurocurrency Loan shall
be calculated as though each Lender funded its Eurocurrency Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurocurrency Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be due within ten
(10) days after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4, 3.5 and 3.7 shall
survive payment of the Obligations and termination of this Agreement.

 

3.7.     Cutoff. Failure or delay on the part of the Designated Agent or any
Lender, Lending Installation, or LC Issuer to demand compensation pursuant to
Section 3.1 or 3.2 shall not constitute a waiver of such Person’s right to
demand such compensation; provided that Borrower shall not be required to
compensate any such Person for any increased costs or reductions incurred more
than 360 days prior to the date that such Person notifies Borrower of the event
giving rise to such increased costs or reductions and of such Person’s intention
to claim compensation therefor; provided further that, if the event giving rise
to such increased costs or reductions is retroactive, then the 360-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

 

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ARTICLE IV

CONDITIONS PRECEDENT

 

4.1.        Initial Credit Extension. The Lenders shall not be required to make
the initial Credit Extension hereunder unless each of the following conditions
is satisfied:

 

(a)     The Designated Agent shall have received executed counterparts of each
of this Agreement and the Guaranty.

 

(b)     The Designated Agent shall have received a certificate, signed by the
chief financial officer of the Borrower, stating that on the date of the initial
Credit Extension (1) no Default or Event of Default has occurred and is
continuing and (2) the representations and warranties contained in Article V are
true and correct in all material respects (except to the extent already
qualified by materiality, in which case said representations and warranties are
true and correct in all respects) as of such date except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been true and correct in
all material respects (except to the extent already qualified by materiality, in
which case said representations and warranties are true and correct in all
respects) on and as of such earlier date.

 

(c)     The Designated Agent shall have received a written opinion of the
Borrower’s counsel (which may include in-house counsel), addressed to the
Lenders, in the form of Exhibit A.

 

(d)     The Designated Agent shall have received any Notes requested by a Lender
pursuant to Section 2.13 payable to the order of each such requesting Lender.

 

(e)     The Designated Agent shall have received such documents and certificates
relating to the organization, existence and good standing of the Borrower and
each initial Guarantor, the authorization of the transactions contemplated
hereby and any other legal matters relating to the Borrower and such Guarantors,
the Loan Documents or the transactions contemplated hereby, all in form and
substance satisfactory to the Designated Agent and its counsel and as further
described in the list of closing documents attached as Exhibit I.

 

(f)     If the initial Credit Extension will be the issuance of a Facility LC,
the applicable LC Issuer shall have received a properly completed Facility LC
Application.

 

(g)     The Designated Agent shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder.

 

(h)     There shall not have occurred a material adverse change (x) in the
business, Property, liabilities (actual and contingent), operations or condition
(financial or otherwise), results of operations, or prospects of the Borrower
and the Guarantors taken as a whole, since December 31, 2012 or (y) in the facts
and information regarding such entities as represented by such entities to date.

 

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(i)     The Designated Agent shall have received evidence of all governmental,
equity holder and third party consents and approvals (if any) necessary in
connection with the contemplated financing and all applicable waiting periods
shall have expired without any action being taken by any authority that would be
reasonably likely to restrain, prevent or impose any material adverse conditions
on the Borrower and the Guarantors, taken as a whole, and no law or regulation
shall be applicable which in the reasonable judgment of the Designated Agent
could have such effect.

 

(j)     No action, suit, investigation or proceeding is pending or, to the
knowledge of the Borrower, threatened in any court or before any arbitrator or
Governmental Authority that would reasonably be expected to result in a Material
Adverse Effect or which seeks to prevent, enjoin or delay the making of any
Credit Extensions.

 

(k)     The Designated Agent shall have received: (i) pro forma financial
statements giving effect to the initial Credit Extensions contemplated hereby,
which demonstrate, in the Designated Agent’s reasonable judgment, together with
all other information then available to the Designated Agent, that the Borrower
can repay its debts and satisfy its other obligations as and when they become
due, and can comply with the financial covenants and tests set forth in Section
6.19, (ii) such information as the Designated Agent may reasonably request to
confirm the tax, legal, and business assumptions made in such pro forma
financial statements, (iii) unaudited consolidated financial statements of the
Borrower and its Subsidiaries for the fiscal quarter ended September 30, 2013,
and (iv) audited consolidated financial statements of the Borrower and its
Subsidiaries for the fiscal year ended 2012.

 

4.2.        Each Credit Extension. The Lenders shall not be required to make any
Credit Extension unless on the applicable Borrowing Date:

 

(a)     There exists no Default or Event of Default, nor would a Default or
Event of Default result from such Credit Extension.

 

(b)     The representations and warranties contained in Article V are true and
correct in all material respects (except to the extent already qualified by
materiality, in which case said representations and warranties are true and
correct in all respects) as of such Borrowing Date except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been true and correct in
all material respects (except to the extent already qualified by materiality, in
which case said representations and warranties are true and correct in all
respects) on and as of such earlier date.

 

Each Borrowing Notice or request for issuance of a Facility LC with respect to
each such Credit Extension shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 4.2(a) and (b) have been
satisfied.

 

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ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Lenders that:

 

5.1.     Existence and Standing. Each of the Borrower and Guarantors is a
corporation or (in the case of Guarantors only) partnership or limited liability
company duly and properly incorporated or formed, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted (except to the extent that a failure to maintain
such existence, good standing or authority would not reasonably be expected to
have and does not have a Material Adverse Effect).

 

5.2.     Authorization and Validity. The Borrower has the corporate power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by the Borrower of the Loan Documents to which it is a party and the performance
of its obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents to which the Borrower is a party constitute
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors’ rights generally and general principles of equity. Each Guarantor has
the corporate, limited liability company or limited partnership (as applicable)
power and authority to execute and deliver the Guaranty delivered by it and to
perform its obligations thereunder. The execution and delivery by each Guarantor
of such Guaranty and the performance of its obligations thereunder have been
duly authorized, and each Guaranty constitutes the legal, valid and binding
obligations of such Guarantor enforceable against such Guarantor in accordance
with its terms, subject to bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally and general principles of equity.

 

5.3.     No Conflict; Government Consent. Neither the execution and delivery by
the Borrower or any Guarantor of the Loan Documents to which it is a party, nor
the consummation of the transactions therein contemplated, nor compliance with
the provisions thereof will violate in any material respect (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any Guarantor or (ii) the Borrower’s or any Guarantor’s articles or
certificate of incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating or other
management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which the Borrower or any Guarantor is a
party or is subject, or by which it, or its Property, is bound, or conflict with
or constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of the Borrower or any
Guarantor pursuant to the terms of any such indenture, instrument or agreement.
No order, consent, adjudication, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, or other action
in respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Borrower or any Guarantor, is
required to be obtained by the Borrower or any Guarantor in connection with the
execution and delivery of the Loan Documents, the borrowings under this
Agreement, the payment and performance by the Borrower or any Guarantor of the
Obligations or the legality, validity, binding effect or enforceability of any
of the Loan Documents.

 

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5.4.     Financial Statements. The December 31, 2012 audited consolidated
financial statements of the Borrower and its Subsidiaries, and their unaudited
financial statements dated as of September 30, 2013, heretofore delivered to the
Lenders were prepared in accordance with GAAP in effect on the date such
statements were prepared and fairly present, in all material respects, the
consolidated financial condition and operations of the Borrower and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended, subject to (in the case of such unaudited financial
statements) final audit adjustments.

 

5.5.     Material Adverse Change. Since the date of the most recent audited
financial statements of the Borrower delivered to the Designated Agent, there
has been no change in the business, Property, condition (financial or otherwise)
or results of operations of the Borrower and the Guarantors which could
reasonably be expected to have a Material Adverse Effect.

 

5.6.     Taxes. The Borrower and Guarantors have filed all United States federal
and state income Tax returns and all other material Tax returns which are
required to be filed by them and have paid all United States federal and state
income Taxes and all other material Taxes due from the Borrower and Guarantors
pursuant to such returns or pursuant to any assessment received by the Borrower
or any Guarantor, except such Taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided. No Tax Liens have
been filed and no claims are being asserted with respect to any such Taxes that
have had or would reasonably be expected to have a Material Adverse Effect. The
charges, accruals and reserves on the books of the Borrower and the Guarantors
in respect of any Taxes or other governmental charges are adequate.

 

5.7.     Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any Senior Officer, threatened against or affecting the
Borrower or any Guarantor which would reasonably be expected to have a Material
Adverse Effect or which seeks to prevent, enjoin or delay the making of any
Credit Extensions. Other than any liability incident to such litigation,
arbitration or proceedings which would not reasonably be expected to have a
Material Adverse Effect, the Borrower has no material Contingent Obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.

 

5.8.     Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of September 29, 2017, setting forth their
respective jurisdictions of organization and the percentage of their respective
capital stock or other ownership interests owned by the Borrower or other
Subsidiaries. All of the issued and outstanding shares of capital stock or other
ownership interests of such Subsidiaries have been (to the extent such concepts
are relevant with respect to such ownership interests) duly authorized and
validly issued and are fully paid and non-assessable. The Guarantors include all
of the Significant Homebuilding Subsidiaries.

 

5.9.     ERISA. With respect to each Plan, the Borrower and all ERISA Affiliates
have paid all required minimum contributions and installments on or before the
due dates provided under Section 430(j) of the Code and could not reasonably be
subject to a lien under Section 430(k) of the Code or Title IV of ERISA. Neither
the Borrower nor any ERISA Affiliate has filed, pursuant to Section 412(c) of
the Code or Section 302(c) of ERISA, an application for a waiver of the minimum
funding standard. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability
is reasonably expected to occur, would reasonably be expected to result in a
Material Adverse Effect.

 

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5.10.     Accuracy of Information. No information, exhibit or report furnished
by the Borrower or any of its Guarantors (taken as a whole) to the Designated
Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents (taken as a whole) contained any material misstatement
of fact or omitted to state a material fact or any fact necessary to make the
statements (taken as a whole) contained therein not misleading at the time the
statements are furnished or dated.

 

5.11.     Regulation U. Margin stock (as defined in Regulation U) constitutes
less than 25% of the value of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.

 

5.12.     Material Agreements. Neither the Borrower nor any Guarantor is a party
to any agreement or instrument or subject to any charter or other corporate
limited liability company or partnership restriction which would reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any
Guarantor is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in (i) any agreement to which
it is a party or (ii) any agreement or instrument evidencing or governing
Indebtedness, which default would reasonably be expected to have a Material
Adverse Effect.

 

5.13.     Compliance With Laws. The Borrower and the Guarantors are in
compliance with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, the violation of which
would reasonably be expected to have a Material Adverse Effect.

 

5.14.     Ownership of Properties. On the date of this Agreement, the Borrower
and the Guarantors will have good title, free of all Liens other than those
permitted by Section 6.15, to all of the Property and assets reflected in the
Borrower’s most recent consolidated financial statements provided to the
Designated Agent as owned by the Borrower and its Subsidiaries (except to the
extent that (i) they may have been disposed of in a manner permitted by Section
6.13(a) or (ii) the failure to have such title has not had and would not
reasonably be expected to have a Material Adverse Effect).

 

5.15.     Plan Assets; Prohibited Transactions. The Borrower is not an entity
deemed to hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101, as
modified by Section 3(42) of ERISA, of an employee benefit plan (as defined in
Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within
the meaning of Section 4975 of the Code) which is subject to Section 4975 of the
Code, and neither the execution of this Agreement nor the making of Credit
Extensions hereunder gives rise to a prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Code.

 

5.16.     Environmental Matters. In the ordinary course of its business, the
officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded its Property and operations and those of its Subsidiaries are in
material compliance with applicable Environmental Laws and that none of the
Borrower or any of its Subsidiaries is subject to any liability under
Environmental Laws that individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any
Subsidiary has received any notice to the effect that its Property and/or
operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any Hazardous Material, which non-compliance or remedial action would
reasonably be expected to have a Material Adverse Effect.

 

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5.17.     Investment Company Act. Neither the Borrower nor any Guarantor is an
“investment company” or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended.

 

5.18.     Insurance. The Borrower maintains, and has caused each Guarantor to
maintain, with financially sound and reputable insurance companies insurance on
all their Property, liability insurance and environmental insurance in such
amounts, subject to such deductibles and self-insurance retentions and covering
such Properties and risks as is consistent with sound business practice.

 

5.19.     Subordinated Indebtedness. As of the date of this Agreement, neither
the Borrower nor any Guarantor has any Subordinated Indebtedness.

 

5.20.     Solvency.

 

(a)     Immediately after the consummation of the transactions to occur on the
Effective Date and immediately following the making of each Credit Extension, if
any, made on the Effective Date and after giving effect to the application of
the proceeds of such Credit Extensions, (a) the fair value of the assets of the
Borrower and its Subsidiaries on a consolidated basis, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or otherwise, of the
Borrower and its Subsidiaries on a consolidated basis; (b) the present fair
value of the Property of the Borrower and its Subsidiaries on a consolidated
basis will be greater than the amount that will be required to pay the probable
liability of the Borrower and its Subsidiaries on a consolidated basis on their
debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become due and matured; (c) the Borrower and its
Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become due and matured; and (d) the Borrower and its Subsidiaries on
a consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the Effective Date.

 

(b)     The Borrower does not intend to, or to permit any of its Guarantors to,
and does not believe that it or any of its Guarantors will, incur debts beyond
its ability to pay such debts as they mature, taking into account the timing of
and amounts of cash to be received by it or any such Guarantor and the timing of
the amounts of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Guarantor.

 

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5.21.     No Default. No Default or Event of Default has occurred and is
continuing.

 

5.22.     Anti-Corruption Laws; Sanctions; Anti-Terrorism Laws.

 

(a)     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 the Borrower, any Subsidiary or to the knowledge of the
Borrower or such Subsidiary any of their respective directors, officers or
employees, is a Sanctioned Person. No Loan or Facility LC, use of the proceeds
of any Loan or Facility LC or other transactions contemplated hereby will
violate Anti-Corruption Laws or applicable Sanctions.

 

(b)     Neither the making of the Loans hereunder nor the use of the proceeds
thereof will violate the PATRIOT Act, the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto or successor statute
thereto. The Borrower and its Subsidiaries are in compliance in all material
respects with the PATRIOT Act.

 

ARTICLE VI

COVENANTS

 

During the term of this Agreement, unless the Required Lenders shall otherwise
consent in writing:

 

6.1.     Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with GAAP, and furnish to the Designated Agent and the Lenders:

 

(a)     Within 100 days after the close of each of its fiscal years, an audit
report, which report shall not be subject to any “going concern” qualification
or qualification as to the scope of such audit report, certified by one of the
“Big Four” accounting firms or other nationally recognized independent certified
public accountants reasonably acceptable to the Lenders, prepared in accordance
with GAAP on a consolidated and consolidating basis (consolidating statements
need not be certified by such accountants) for itself and its Subsidiaries,
including balance sheets as of the end of such period, related profit and loss
and stockholders’ equity statement, and a statement of cash flows, accompanied
by any management letter prepared by said accountants.

 

(b)     Within 60 days after the close of the first three (3) quarterly periods
of each of its fiscal years, for itself and its Subsidiaries, consolidated and
consolidating unaudited balance sheets as at the close of each such period and
consolidated and consolidating profit and loss and stockholders’ equity
statement and a statement of cash flows for the period from the beginning of
such fiscal year to the end of such quarter, all certified by its chief
financial officer or other Authorized Officer.

 

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(c)     Together with the financial statements required under Sections 6.1(a)
and (b), a compliance certificate in substantially the form of Exhibit B signed
by its chief financial officer or other Authorized Officer showing the
calculations necessary to determine compliance with this Agreement (including
Sections 6.19(a) through (e)) and stating that no Default or Event of Default
exists, or if any Default or Event of Default exists, stating the nature and
status thereof.

 

(d)     By the forty-fifth (45th) day of each fiscal quarter of each fiscal year
(and without regard to whether the Borrower has a Leverage Ratio in excess of
55%), a Borrowing Base Certificate of an Authorized Officer of the Borrower,
with respect to the Inventory Valuation Date occurring on the last day of the
immediately preceding fiscal quarter.

 

(e)     Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements so
furnished.

 

(f)     Promptly upon the filing thereof, copies of all registration statements
(except Form S-8) and annual, quarterly, or other periodic reports, with the
exception of exhibits (unless otherwise requested by the Designated Agent),
which the Borrower or any of its Subsidiaries files with the U.S. Securities and
Exchange Commission.

 

(g)     Such other information (including additional financial information (such
as, by way of example and without limitation, the plan and forecast for the next
fiscal year and a projected consolidated and consolidating balance sheet, income
statement and statement of cash flows of the Borrower for the next fiscal year),
non-financial information and environmental reports) as the Designated Agent or
any Lender may from time to time reasonably request.

 

Any financial statement required to be furnished pursuant to Section 6.1(a) or
Section 6.1(b) or any document required to be delivered pursuant to Section
6.1(e) or Section 6.1(f) shall be deemed to have been furnished on the date on
which the Lenders receive notice that the Borrower has filed such financial
statement with the U.S. Securities and Exchange Commission and is available on
the EDGAR website on the Internet at www.sec.gov or any successor government
website that is freely and readily available to the Designated Agent and the
Lenders without charge; provided that the Borrower shall give notice of any such
filing to the Designated Agent (who shall then give notice of any such filing to
the Lenders). Notwithstanding the foregoing, the Borrower shall deliver paper or
electronic copies of any such financial statement to the Designated Agent if the
Designated Agent requests the Borrower to furnish such paper or electronic
copies until written notice to cease delivering such paper or electronic copies
is given by the Designated Agent. If any information which is required to be
furnished to the Lenders under this Section 6.1 is required by law or regulation
to be filed by the Borrower with a government body on an earlier date, then the
information required hereunder shall be furnished to the Lenders at such earlier
date.

 

6.2.     Use of Proceeds. The Borrower will, and will cause each Subsidiary to,
use the proceeds of the Credit Extensions for general corporate purposes. The
Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds
of the Advances to purchase or carry any “margin stock” (as defined in
Regulation U). The Borrower will not request any Loan or Facility LC, and the
Borrower shall not use, and the Borrower shall ensure that its Subsidiaries and
its or their respective directors, officers, employees and agents shall not use,
the proceeds of any Loan or Facility LC (i) 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 or (ii) in
any manner that would result in the violation of any applicable Sanctions.

 

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6.3.     Notice of Material Events. The Borrower will, and will cause each
Guarantor to, give notice in writing to the Designated Agent and each Lender,
promptly and in any event within ten (10) days after a Senior Officer of the
Borrower obtains knowledge thereof, of the occurrence of any of the following:

 

(a)     any Default or Event of Default;

 

(b)     the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority (including pursuant to any
applicable Environmental Laws) against or affecting the Borrower or any
Guarantor that, if adversely determined, would reasonably be expected to result
in a Material Adverse Effect or which seeks to prevent, enjoin or delay the
making of any Credit Extensions;

 

(c)     with respect to a Plan, (i) any failure to pay all required minimum
contributions and installments on or before the due dates provided under Section
430(j) of the Code or (ii) the filing pursuant to Section 412(c) of the Code or
Section 302(c) of ERISA, of an application for a waiver of the minimum funding
standard;

 

(d)     the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, would reasonably be expected to result in a
Material Adverse Effect; and

 

(e)     any other development, financial or otherwise, which would reasonably be
expected to have a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of
an officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.

 

6.4.     Conduct of Business. Except as otherwise permitted under this
Agreement, the Borrower will, and will cause each Guarantor to, carry on and
conduct business in the same general manner and in substantially the same fields
of enterprise as presently conducted and to do all things necessary to remain
duly incorporated, validly existing and in good standing as a domestic
corporation, limited liability company or limited partnership (as applicable) in
their respective jurisdictions of incorporation or formation and maintain all
requisite authority to conduct business in each jurisdiction in which business
is conducted, except where the failure to maintain such authority would not
reasonably be expected to have a Material Adverse Effect; provided, however,
that nothing contained herein shall prohibit the dissolution of any Guarantor as
long as the Borrower or another Guarantor succeeds to the assets, liabilities
and business of the dissolved Guarantor.  Without limitation of the foregoing,
the Borrower shall at all times engage principally in the Related Businesses.

 

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6.5.     Taxes. The Borrower will, and will cause each Guarantor to, timely file
complete and correct United States federal and applicable foreign, state and
local tax returns required by law and pay when due all taxes, assessments and
governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings,
with respect to which adequate reserves have been set aside in accordance with
GAAP, and which would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.

 

6.6.     Insurance. The Borrower will, and will cause each Guarantor to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to Designated Agent upon
request full information as to the insurance carried.

 

6.7.     Compliance with Laws and Material Contractual Obligations. The Borrower
will, and will cause each Guarantor to, (i) comply in all material respects with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject including, without limitation, all
Environmental Laws, Anti-Corruption Laws and applicable Sanctions and (ii)
perform its obligations under material agreements to which it is a party, except
where the failure to perform such obligations would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. The
Borrower will 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.

 

6.8.     Maintenance of Properties. The Borrower and each Guarantor will do all
things necessary to maintain, preserve, protect and keep its Property in good
repair, working order and condition, except to the extent that the failure to do
so would not reasonably be expected to have and does not have a Material Adverse
Effect.

 

6.9.     Books and Records; Inspection. The Borrower will, and will cause each
of the Guarantors to, keep proper books of record and account in which full,
true and correct entries are made of all dealings and transactions in relation
to its business and activities. The Borrower will, and will cause each Guarantor
to, permit the Designated Agent and the Lenders, by their respective
representatives and agents to inspect any of the Property, books and financial
records of the Borrower and each Guarantor, to examine and make copies of the
books of accounts and other financial records of the Borrower and each
Guarantor, and to discuss the affairs, finances and accounts of the Borrower and
each Guarantor with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Designated Agent or any
Lender may designate. At any time that a Default exists, such inspections and
examinations shall be at Borrower’s expense.

 

6.10.     Payment of Obligations. The Borrower will, and will cause each
Guarantor to, pay its obligations, including Tax liabilities, that, if not paid,
would reasonably be expected to result in a Material Adverse Effect before the
same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, and
(b) the Borrower or such Guarantor has set aside on its books adequate reserves
with respect thereto in accordance with GAAP.

 

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6.11.       Intentionally Omitted.

 

6.12.       Merger. Neither the Borrower nor any Guarantor will merge or
consolidate with or into any other Person, unless:

 

 

(i)

(A) any Guarantor is merging with any other Guarantor; (B) any Guarantor is
merging with the Borrower, and the Borrower is the continuing corporation; (C)
any Guarantor is merging with a Person that is not a Subsidiary of the Borrower
and (x) if the Guarantor is not the continuing corporation, such transaction is
in compliance with the provisions of Section 6.13(b) or (y) if the Guarantor is
the continuing corporation, such transaction is a Permitted Acquisition; or (D)
a Non-Guarantor Subsidiary is merging with the Borrower or any Guarantor, and
the Borrower or a Guarantor, as applicable, is the continuing corporation; and

 

 

(ii)

no Event of Default shall exist or shall occur after giving effect to such
transaction; and

 

 

(iii)

after giving effect to such transaction, the Borrower shall be in compliance
with the Consolidated Tangible Net Worth Test and the Leverage Test; and

 

 

(iv)

the transaction is not otherwise prohibited under this Agreement.

 

6.13.       Sale of Assets.

 

(a)     Neither the Borrower nor any Guarantor will lease, sell or otherwise
dispose of its Property, in a single transaction or a series of transactions, to
any other Person (other than the Borrower or another Guarantor) except for (i)
sales or leases in the ordinary course of business, (ii) leases, sales or other
dispositions of its Property that, together with all other Property of the
Borrower and Guarantors previously leased, sold or disposed of (other than in
the ordinary course of business) as permitted by this Section during the month
in which any such lease, sale or other disposition occurs, do not constitute a
Material Portion of the Property of the Borrower and Guarantors (taken as a
whole) and (iii) transfers of assets by a Guarantor to another Guarantor
(including any Subsidiary that becomes a Guarantor by executing and delivering a
Guaranty to Administrative Agent at the time at which such assets are
transferred to such Subsidiary).

 

(b)     The Borrower shall not sell or transfer or cause to be sold or
transferred (other than to the Borrower or another Guarantor), in a single
transaction or a series of transactions (i) all or substantially all of the
assets of any Guarantor or (ii) such securities or other ownership interests in
a Guarantor as would result in such Guarantor ceasing to be a Subsidiary of the
Borrower (whether by merger, consolidation, sale, assignment or otherwise)
unless (A) any such transaction is (and, if it were the sale of all of the
assets of such Guarantor, such transaction would be) in compliance with the
provisions of Section 6.13(a) and (B) following such transaction and the release
of such Guarantor provided for below, the Borrower would be in compliance with
its obligations under this Agreement.  Upon not less than 30 days’ prior written
request from the Borrower, accompanied by a certificate of the Borrower
certifying as to the foregoing, Designated Agent shall deliver, at the time of
the consummation of such transaction, a release of such Guarantor from its
obligations under the Guaranty, and such entity shall cease to be a Guarantor
hereunder.

 

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(c)     For purposes of this Section 6.13, “Material Portion” means, with
respect to the Property of the Borrower and Guarantors (taken as a whole),
Property which represents more than 25% of the book value of all assets of the
Borrower and Guarantors (taken as a whole).  If a Material Portion of the
Property of the Borrower and Guarantors (taken as a whole) is leased, sold or
disposed of in violation of this Section 6.13, the Borrower shall pay to
Administrative Agent for the benefit of Lenders at the time of such lease, sale
or disposal, all amounts owed by the Borrower pursuant to Section 2.2, taking
into account the effect of such lease, sale or disposal.

 

6.14.     Investments and Acquisitions. Neither the Borrower nor any Guarantor
will make or suffer to exist any Investments (including without limitation,
loans and advances to, and other Investments in, Subsidiaries), or commitments
therefor, or to create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any Acquisition of any Person, except:

 

 

(i)

Investments in Cash Equivalents and/or Marketable Securities.

 

 

(ii)

Loans or advances made to officers, directors or employees of the Borrower or
any Guarantor or any Subsidiary.

 

 

(iii)

Carryback loans made in the ordinary course of business in conjunction with the
sale of Property of the Borrower or such Guarantor.

 

 

(iv)

Investments in interests in issuances of collateralized mortgage obligations,
mortgages, mortgage loan servicing or other mortgage related assets.

 

 

(v)

Investments in contract rights granted by, entitlements granted by, interests in
securities issued by, or tangible assets of, political subdivisions or
enterprises thereof related to the home building or real estate operations of
the Borrower or any Guarantor or any Subsidiary, including without limitation
Investments in special districts.

 

 

(vi)

Investments in existing Subsidiaries (subject, in the case of Non-Guarantor
Subsidiaries, to the provisions of Section 6.14(vii)) and other Investments in
existence on the date hereof.

 

 

(vii)

Investments in (A) Non-Guarantor Subsidiaries or (B) other Persons whose primary
business is not a Related Business, in an amount (in the aggregate for both
clause (A) and clause (B)) outstanding at any one time not to exceed 30% of
Adjusted Consolidated Tangible Net Worth, provided that retained earnings of
such Non-Guarantor Subsidiaries and Persons described in clause (B) shall not be
deemed part of such Investment.

 

 

(viii)

The Acquisition of or Investment in a business or entity engaged primarily in a
Related Business, provided that (a) immediately upon the consummation of any
such Acquisition or Investment the Borrower and each Guarantor is in compliance
with the terms, covenants and conditions of this Agreement (including without
limitation the Consolidated Tangible Net Worth Test and Leverage Test and the
provisions of Section 6.14(vii)), and (b) the Borrower shall deliver to
Administrative Agent a certificate, signed by an Authorized Officer, certifying
to the best knowledge of the Borrower, that, on the date of, and taking into
account, the consummation of such Acquisition, and based on the reasonable
assumptions set forth in such Certificate, no Event of Default has occurred and
is continuing, and the Borrower is in compliance with the Consolidated Tangible
Net Worth Test and Leverage Test.

 

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(ix)

The creation of new Subsidiaries engaged primarily in a Related Business (or the
purpose of which is principally to preserve the use of a name in which such
business is conducted), subject to the limitations contained in Section
6.14(vii).

 

 

(x)

Stock, obligations or securities received in satisfaction of debts owing to the
Borrower or any Guarantor in the ordinary course of business.

 

 

(xi)

Pledges or deposits in cash by the Borrower or a Guarantor to support surety
bonds, performance bonds or guarantees of completion in the ordinary course of
business.

 

 

(xii)

Loans representing intercompany Indebtedness between the Borrower, any Guarantor
and/or any Subsidiary, subject to the limitations contained in Section
6.14(vii).

 

 

(xiii)

Investments pursuant to the Borrower’s or a Guarantor’s employment compensation
plans or agreements.

 

 

(xiv)

Payments on account of the purchase, redemption or other acquisition or
retirement for value, or any payment in respect of any amendment (in
anticipation of or in connection with any such retirement, acquisition or
defeasance) in whole or in part, of any shares of capital stock or other
securities of the Borrower, but only to the extent the same is permitted under
the Indenture.

 

 

(xv)

Investments, in addition to those enumerated above in this Section 6.14, in an
aggregate amount outstanding at any time not to exceed $25,000,000.

 

6.15.     Liens. Neither the Borrower nor any Guarantor will create, incur, or
suffer to exist any Lien in, of or on the Property of the Borrower or any
Guarantor, except:

 

 

(i)

Permitted Liens.

 

 

(ii)

Liens for taxes, assessments or governmental charges or levies which solely
encumber property abandoned or in the process of being abandoned and with
respect to which there is no recourse to the Borrower or any Guarantor or any
Subsidiary.

 

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(iii)

Purchase-money Liens on any Property hereafter acquired or the assumption of any
Lien on Property existing at the time of such acquisition (and not created in
contemplation of such acquisition), or a Lien incurred in connection with any
conditional sale or other title retention or a Capitalized Lease; provided that:

 

(a)     Any Property subject to any of the foregoing is acquired by the Borrower
or any Guarantor in the ordinary course of its respective business and the Lien
on any such Property attaches to such asset concurrently or within ninety (90)
days after the acquisition thereof;

 

(b)     Each Lien shall attach only to the Property so acquired.

 

 

(iv)

Liens existing on the date hereof (and not otherwise permitted under this
Section 6.15) and described in Schedule 6.15 hereto and Liens securing
Refinancing Indebtedness with respect thereto, but only to the extent such Liens
encumber the same collateral in whole or in part as the previous Liens securing
the Indebtedness being refunded, refinanced or extended.

 

 

(v)

Liens incurred in the ordinary course of business not otherwise permitted by
this covenant, provided that the aggregate amount of Indebtedness secured by
such Liens outstanding at any time shall not exceed $60,000,000.

 

 

(vi)

Judgments and similar Liens arising in connection with court proceedings;
provided the execution or enforcement thereof is stayed and the claim is being
contested in good faith, with adequate reserves therefor being maintained by the
Borrower or such Guarantor in accordance with GAAP.

 

 

(vii)

Liens securing Non-Recourse Indebtedness of the Borrower or any Guarantor, where
the amount of such Indebtedness is greater than fifty percent (50%) of the fair
market value of the Property encumbered by the Liens.

 

 

(viii)

Liens existing with respect to Indebtedness of a Person acquired in an
Acquisition permitted by this Agreement.

 

 

(ix)

Liens arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or retirement
benefits, or similar legislation.

 

 

(x)

Liens incurred or deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, progress payments,
government contracts, utility services and other obligations of like nature in
each case incurred in the ordinary course of business.

 

 

(xi)

Leases or subleases granted to others not materially interfering with the
ordinary course of business of the Borrower or any Guarantor.

 

 

(xii)

Any interest in or title of a lessor to property subject to any Capitalized
Lease Obligations.

 

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(xiii)

Liens in favor of the trustee named therein arising under the Indenture and
liens for trustee’s fees and similar costs under any Refinancing Indebtedness of
the Senior Notes.

 

 

(xiv)

Any option, contract or other agreement to sell or purchase an asset or
participate in the income or revenue derived therefrom.

 

 

(xv)

Any legal right of, or right granted in good faith to, a lender or lenders to
which the Borrower or a Guarantor may be indebted to offset against, or
appropriate and apply to the payment of, such Indebtedness any and all balances,
credits, deposits, accounts, or monies of the Borrower or a Guarantor with or
held by such lender or lenders.

 

 

(xvi)

Any pledge or deposit of cash or property by the Borrower or any Guarantor in
conjunction with obtaining surety and performance bonds and Letters of Credit
required to engage in constructing on-site and off-site improvements or as
otherwise required by political subdivisions or other governmental authorities
in the ordinary course of business.

 

 

(xvii)

Liens incurred in the ordinary course of business as security for the Borrower’s
or any Guarantor’s obligations with respect to indemnification in favor of title
insurance providers.

 

 

(xviii)

Letters of Credit, bonds or other assets pledged to secure insurance in the
ordinary course of business.

 

 

(xix)

Liens on assets securing warehouse lines of credit and repurchase agreements and
other credit facilities to finance the operations of the Borrower’s mortgage
lending Subsidiaries, insurance subsidiaries and/or financial asset management
Subsidiaries and Liens related to issuances of CMOs and mortgage-related
securities, so long as such assets are owned by such mortgage lending
Subsidiaries and financial asset Subsidiaries.

 

 

(xx)

Liens on real property that is not related to Housing Units or Land Under
Development and that is owned by the Borrower or a Guarantor, which Liens secure
Indebtedness of the Borrower or such Guarantor, provided (A) each such Lien
attaches only to such real property and (B) the obligation secured by such Lien
is limited to such Indebtedness.

 

 

(xxi)

From and after, but not prior to, the Term-Out Date, Liens incurred in the
ordinary course of business not otherwise permitted by this covenant,
encumbering real property owned by the obligor of the Indebtedness secured
thereby, provided that the Borrower or any Guarantor may be the obligor of such
Indebtedness and the Borrower or any Guarantor may guarantee such Indebtedness.

 

Notwithstanding anything herein to the contrary, neither the Borrower nor any
Guarantor will, create, incur, or suffer to exist any Lien in, of or on the
capital stock of any Guarantor.

 

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6.16.       Affiliates. Neither the Borrower nor any Guarantor will 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
(other than a Subsidiary) except (i) in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower’s or such Guarantor’s
business 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, (ii) Investments permitted under Section 6.14, (iii)
pursuant to employment compensation plans and agreements, and (iv) with
officers, directors and employees of the Borrower or any Subsidiary so long as
the same are duly authorized pursuant to the articles of incorporation or bylaws
(or procedures conducted in accordance therewith) of Guarantor or the Borrower.

 

6.17.       Modification of Certain Indebtedness. Neither the Borrower nor any
Guarantor will make any amendment or modification to the subordination
provisions of any indenture, note or other agreement evidencing or governing (i)
as to the Borrower, any Subordinated Indebtedness, and (ii) as to any Guarantor,
Indebtedness that has been subordinated to Guarantor’s obligations under the
Guaranty.

 

6.18.       Restricted Payment; Repurchase of Stock. The Borrower will not,
directly or indirectly, declare, make or pay, or incur any liability to make or
pay, or cause or permit to be declared, made or paid, any Restricted Payment, or
purchase, or incur any obligation to purchase, any capital stock of the Borrower
either (a) during the Term-Out Period or (b) if, prior to or after giving effect
to the declaration and payment of any Restricted Payment or purchase of such
stock, there shall exist any Event of Default under this Agreement or any
violation of the Consolidated Tangible Net Worth Test or Leverage Test (without
regard to whether the Term-Out Period has commenced).

 

6.19.       Financial Covenants and Tests.

 

(a)     Consolidated Tangible Net Worth Test. The Borrower will not permit
Consolidated Tangible Net Worth, determined as of the last day of each fiscal
quarter of the Borrower, to be less than (i) $800,000,000 plus (ii) 50% of the
cumulative Consolidated Net Income for each fiscal quarter commencing after
September 30, 2013 (excluding any quarter in which there is a loss but applying
Consolidated Net Income thereafter first to such loss before determining 50% of
such amount for purposes of this calculation) plus (iii) 50% of the aggregate
proceeds received by the Borrower (net of reasonable fees and expenses) in
connection with any offering of stock or equity in each fiscal quarter after
September 30, 2013, minus (iv) the lesser of (A) the amount paid by the Borrower
after September 30, 2013 to repurchase its common stock and (B) $160,000,000
(the “Consolidated Tangible Net Worth Test”). Notwithstanding the foregoing, in
the event that the Borrower shall at any time engage in an Acquisition for a
purchase price equaling or exceeding $100,000,000, the Borrower may irrevocably
elect to adjust the minimum Consolidated Tangible Net Worth for the Consolidated
Tangible Net Worth Test to the following amount: (i) 75% of the Consolidated
Tangible Net Worth immediately following the closing of such Acquisition, plus
(ii) 50% of the cumulative Consolidated Net Income earned after the closing of
such Acquisition (excluding any quarter in which there is a loss but applying
Consolidated Net Income thereafter first to such loss before determining 50% of
such amount for purposes of this calculation), plus (iii) 50% of the aggregate
proceeds received by the Borrower (net of reasonable fees and expenses) in
connection with any offering of stock or equity after the closing of such
Acquisition, minus (iv) the lesser of (A) the aggregate amount paid by the
Borrower after such Acquisition to repurchase its common stock and (B) the
amount (but not less than zero) obtained by subtracting from $160,000,000 the
aggregate amount (if any) paid by the Borrower to repurchase its common stock
after September 30, 2013 and prior to such Acquisition. The Borrower may make
the election under the preceding sentence only if it makes the corresponding
election with respect to the Consolidated Tangible Net Worth Covenant at the
same time. The Borrower’s failure to satisfy the Consolidated Tangible Net Worth
Test shall not constitute an Event of Default or Default; provided, however,
that, if the Borrower fails to satisfy the Consolidated Tangible Net Worth Test
for two (2) consecutive quarters, then the Term-Out Period shall commence (if it
has not already commenced) on the applicable Term-Out Date.

 

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(b)     Leverage Test; Interest Coverage Test.

 

 

(i)

Leverage Test. Borrower shall not permit the Leverage Ratio, determined as of
the last day of each fiscal quarter of the Borrower, to exceed the then
applicable Permitted Leverage Ratio (the “Leverage Test”).

 

 

(ii)

Interest Coverage Test; Decrease of Permitted Leverage Ratio. If the Borrower
shall fail to maintain, for any two (2) consecutive fiscal quarters, determined
as of the last day of each fiscal quarter of the Borrower, an Interest Coverage
Ratio equaling or exceeding the then applicable Minimum Interest Coverage Ratio
(the “Interest Coverage Test”), then the Permitted Leverage Ratio for the same
fiscal quarter with respect to which the Borrower shall have so failed the
Interest Coverage Test (i.e., the second of any such two (2) consecutive fiscal
quarters, which quarter is herein referred to as the “Coverage Test Failure
Quarter”), shall be decreased as follows:  (i) if the Permitted Leverage Ratio
for the fiscal quarter preceding such Coverage Test Failure Quarter was 60%, the
Permitted Leverage Ratio shall be decreased by 5% to 55%; and (ii) if the
Permitted Leverage Ratio for the fiscal quarter preceding such Coverage Test
Failure Quarter was less than 60%, the Permitted Leverage Ratio shall be
decreased by 2.5%.

 

 

(iii)

Increase of Permitted Leverage Ratio.  If the Permitted Leverage Ratio,
determined as of the last day of a fiscal quarter of the Borrower, is less than
60%, the Borrower shall satisfy the Interest Coverage Test (which for purposes
of this Section 6.19(b)(iii) shall be deemed satisfied only if, on the same day
on which Borrower satisfies the Interest Coverage Test, Borrower is also in
compliance with the Leverage Test), then the Permitted Leverage Ratio, effective
as of the fiscal quarter immediately following the fiscal quarter with respect
to which the Borrower shall have so satisfied the Interest Coverage Test, shall
be increased as follows:  (i) upon satisfaction of the Interest Coverage Test at
the end of a fiscal quarter for which the Permitted Leverage Ratio is 55%, the
Permitted Leverage Ratio for the next fiscal quarter shall be increased to 60%;
and (ii) upon satisfaction of the Interest Coverage Test at the end of a fiscal
quarter for which the Permitted Leverage Ratio is less than 55%, the Permitted
Leverage Ratio for the next fiscal quarter shall be increased by 2.5%.  In no
event shall the Permitted Leverage Ratio exceed 60%.

 

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(iv)

Effectiveness of Change in Permitted Leverage Ratio.  Any decrease of the
Permitted Leverage Ratio provided for in Section 6.19(b)(ii) shall be effective
as of each Coverage Test Failure Quarter as provided in Section 6.19(b)(ii), and
the Permitted Leverage Ratio (as so decreased) shall remain in effect thereafter
unless and until adjusted as provided in Section 6.19(b)(ii) or (iii).  Any
increase in the Permitted Leverage Ratio provided for in Section 6.19(b)(iii)
shall be effective as of the fiscal quarter next succeeding the fiscal quarter
in which Borrower satisfies the Interest Coverage Test as provided in Section
6.19(b)(iii), and the Permitted Leverage Ratio (as so increased) shall remain in
effect thereafter unless and until adjusted as provided in Section 6.19(b)(ii)
or (iii).

 

 

(v)

Effect of Failure to Satisfy Leverage Test or Interest Coverage Test .  A
failure to satisfy the Leverage Test or the Interest Coverage Test shall not
constitute an Event of Default or Default; provided, however, if the Borrower
fails to satisfy the Leverage Test for two (2) consecutive fiscal quarters (the
first of which may be a Coverage Test Failure Quarter), then the Term-Out Period
shall commence (if it has not already commenced) on the applicable Term-Out Date

 

(c)     Spec Unit Inventory Test. At any time at which the Leverage Ratio,
determined as of the last day of the most recent fiscal quarter, exceeds 55%,
the Borrower shall not permit the aggregate number of Spec Units owned by the
Borrower or any Guarantor to exceed the greater of (i) 50% of the number of
Housing Unit Closings during the preceding twelve (12) months or (ii) 100% of
the number of Housing Unit Closings during the preceding six (6) months (the
“Spec Unit Inventory Test”). A failure to comply with the Spec Unit Inventory
Test shall not be an Event of Default or a Default, but there shall be excluded
from the Borrowing Base, as of the last day of the quarter in which such
non-compliance occurs, any excess Spec Units as selected by Borrower.

 

(d)     Land Owned Test. At any time at which the Leverage Ratio, determined as
of the last day of the most recent fiscal quarter, exceeds 55%, the Borrower
will not permit the ratio of (i) the Adjusted Book Value of Land Owned to (ii)
Adjusted Consolidated Tangible Net Worth, to exceed 1.25 to 1.00 (the
“Land-Owned Test”). The Borrower’s failure to comply with the Land-Owned Test
shall not constitute an Event of Default or Default, but there shall be excluded
from the Borrowing Base, as of the last day of the quarter in which such
noncompliance with the Land-Owned Test occurs, Land Under Development, Entitled
Land and/or Finished Lots (as selected by the Borrower) having an aggregate book
value equal to the amount by which the Adjusted Book Value of Land Owned would
be required to be reduced to bring the Borrower into compliance with the
Land-Owned Test as of such day.

 

(e)     Consolidated Tangible Net Worth Covenant. The Borrower will maintain
Consolidated Tangible Net Worth, determined as of the last day of each fiscal
quarter of the Borrower, of not less than (i) $565,900,000 plus (ii) 50% of the
cumulative Consolidated Net Income for each fiscal quarter commencing after
September 30, 2013 (excluding any quarter in which there is a loss but applying
Consolidated Net Income thereafter first to such loss before determining 50% of
such amount for purposes of this calculation) plus (iii) 50% of the aggregate
proceeds received by the Borrower (net of reasonable fees and expenses) in
connection with any offering of stock or equity in each fiscal quarter after
September 30, 2013, minus (iv) the lesser of (A) the amount paid by the Borrower
after the Effective Date to repurchase its common stock and (B) $160,000,000
(the “Consolidated Tangible Net Worth Covenant”). Notwithstanding the foregoing,
in the event that the Borrower shall at any time engage in an Acquisition for a
purchase price equaling or exceeding $100,000,000, the Borrower may irrevocably
elect to adjust the minimum Consolidated Tangible Net Worth for the Consolidated
Tangible Net Worth Covenant to the following amount:  (i) 50% of the
Consolidated Tangible Net Worth immediately following the closing of such
Acquisition, plus (ii) 50% of the cumulative Consolidated Net Income earned
after the closing of such Acquisition (excluding any quarter in which there is a
loss but applying Consolidated Net Income thereafter first to such loss before
determining 50% of such amount for purposes of this calculation), plus (iii) 50%
of the aggregate proceeds received by the Borrower (net of reasonable fees and
expenses) in connection with any offering of stock or equity after the closing
of such Acquisition, minus (iv) the lesser of (A) the aggregate amount paid by
the Borrower after the closing of such Acquisition to repurchase its common
stock and (B) the amount (but not less than zero) obtained by subtracting from
$160,000,000 the aggregate amount (if any) paid by the Borrower to repurchase
its common stock after September 30, 2013 and prior to such Acquisition. The
Borrower may make the election under the preceding sentence only if it makes the
corresponding election with respect to the Consolidated Tangible Net Worth Test
at the same time.  For the avoidance of doubt, the Event of Default for breach
of this covenant shall occur upon the breach of this covenant determined as of
the last day of any single fiscal quarter.

 

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6.20.       Guaranty.

 

(a)     Guaranty by Significant Homebuilding Subsidiaries. As promptly as
possible but in any event within thirty (30) days (or such later date as may be
agreed by the Designated Agent in its sole discretion) after a Significant
Homebuilding Subsidiary is organized or acquired, or any Person becomes a
Significant Homebuilding Subsidiary pursuant to the definition thereof, the
Borrower shall provide the Designated Agent with written notice thereof setting
forth information in reasonable detail describing the material assets of such
Significant Homebuilding Subsidiary and shall cause each such Subsidiary to
deliver to the Designated Agent a joinder to the Guaranty in the form
contemplated thereby) pursuant to which such Significant Homebuilding Subsidiary
agrees to be bound by the terms and provisions thereof, each such Guaranty
joinder to be accompanied by an updated Schedule 5.8 hereto designating such
Significant Homebuilding Subsidiary as such, appropriate corporate or limited
liability company resolutions, other corporate or limited liability company
documentation and legal opinions, in each case in form and substance reasonably
satisfactory to the Designated Agent and its counsel, and such other
documentation as the Designated Agent may reasonably request.

 

(b)     Release of Guarantor. The Designated Agent is authorized to and shall
release and discharge from the Guaranty any Guarantor requested in writing by
the Borrower, provided that:

 

 

(i)

no Default or Event of Default exists or would result from release of such
Guarantor;

 

 

(ii)

the Guarantor being released has a Net Worth of less than $5,000,000; and

 

 

(iii)

the Guarantor is released from its guarantee(s) under all other Indebtedness
ranking pari passu with the Obligations (other than by reason of payment under
such guarantees);

 

provided further that, in each such case, the Borrower has delivered to the
Designated Agent a certificate of an Authorized Officer and an opinion of
counsel, each stating that all conditions precedent provided for in this Section
have been complied with and that such release is authorized and permitted under
the Agreement.

 

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6.21.     Negative Pledge. Neither the Borrower nor any Guarantor will directly
or indirectly enter into any agreement (other than (A) this Agreement, (B) the
Indenture and any indenture or similar agreement executed in connection with any
Refinancing Indebtedness of the Senior Notes and (C) any indenture or similar
agreement executed in connection with any Public Indebtedness) with any Person
that prohibits or restricts or limits the ability of the Borrower or Guarantors
to create, incur, pledge or suffer to exist any Lien in favor of Lenders granted
pursuant to the terms of this Agreement upon any real property assets of the
Borrower or any Guarantor; provided, however, that those agreements creating
Liens permitted under Sections 6.15(iii), (iv), (vii), (viii), (xix), (xx) and
(xxi) may prohibit, restrict or limit other Liens on those assets encumbered by
the Liens created by such agreements.

 

6.22.     PATRIOT Act Compliance. The Borrower shall, and shall cause each
Subsidiary to, provide such information and take such actions as are reasonably
requested by the Designated Agent or any Lender in order to assist the
Designated Agent and the Lenders in maintaining compliance with the PATRIOT Act.

 

ARTICLE VII

DEFAULTS

 

The occurrence of any one or more of the following events shall constitute an
Event of Default (each, an “Event of Default”):

 

7.1.     Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Guarantors to the Lenders or the Designated Agent
under or in connection with this Agreement, any Credit Extension, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be materially false on the date made or confirmed and,
with respect to any matter which is reasonably capable of being cured, Borrower
or such Guarantor, as applicable, shall have failed to cure the occurrence
causing the representation or warranty to be materially false within thirty (30)
days after notice thereof by Designated Agent to Borrower.

 

7.2.     Nonpayment of (i) principal of any Loan when due or (ii) any
Reimbursement Obligation, interest upon any Loan, any Commitment Fee or LC Fee
within five (5) days of written notice (which may include the invoice therefor)
from Designated Agent or the applicable LC Issuer or Lender and (iii), or any
other obligation under any of the Loan Documents within five (5) days after
written notice (which may include the invoice therefor) from Designated Agent
that the same is due.

 

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7.3.     The breach of the Consolidated Tangible Net Worth Covenant, or any of
the covenants set forth in Section 6.2.

 

7.4.     The breach by the Borrower (other than a breach which constitutes an
Event of Default under another Section of this Article VII) of any of the terms
or provisions of this Agreement which is not remedied within thirty (30) days
after the earlier of (i) any Senior Officer becoming aware of any such breach
and (ii) the Designated Agent notifying the Borrower of any such breach.

 

7.5.     Failure of the Borrower or any Guarantor to pay when due any payment of
principal or interest or any other material amount in respect of any Material
Indebtedness within fifteen (15) days (or such greater applicable grace period
as is provided in the applicable Material Indebtedness Agreement) of the date
when due; or the default by the Borrower or any Guarantor in the performance
(beyond the greater of thirty (30) days or the applicable grace period with
respect thereto, if any, provided in such Material Indebtedness) of any material
term, provision or condition contained in any Material Indebtedness Agreement if
the effect of which default is to permit the holder(s) of such Material
Indebtedness or the lender(s) under any Material Indebtedness Agreement to cause
ten percent (10%) or more of such Material Indebtedness to become due prior to
its stated maturity or any commitment to lend under any Material Indebtedness
Agreement to be terminated prior to its stated expiration date; or ten percent
(10%) or more of the Material Indebtedness of the Borrower or any Guarantor
shall be declared to be due and payable or required to be prepaid or repurchased
(other than by a regularly scheduled payment) prior to the stated maturity
thereof; or the Borrower or any Guarantor shall not pay, or shall admit in
writing its inability to pay, its debts generally as they become due.

 

7.6.     The Borrower or any Guarantor shall (i) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (ii) make an assignment for the benefit of creditors, (iii) apply
for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate, limited liability company or partnership action to authorize
or effect any of the foregoing actions set forth in this Section 7.6 or (vi)
fail to contest in good faith any appointment or proceeding described in Section
7.7.

 

7.7.     Without the application, approval or consent of the Borrower or any
Guarantor, a receiver, trustee, examiner, liquidator or similar official shall
be appointed for the Borrower or any Guarantor or any Substantial Portion of
their Property, or a proceeding described in Section 7.6(iv) shall be instituted
against the Borrower or any Guarantor and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of sixty (60) consecutive days.

 

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7.8.     Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of the Borrower and the Guarantors which, when taken together with all
other Property of the Borrower and the Guarantors so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month period
ending with the month in which any such action occurs, constitutes a Substantial
Portion.

 

7.9.     The Borrower or any Guarantor shall fail within thirty (30) days to
pay, obtain a stay with respect to, or otherwise discharge one or more (i)
judgments or orders for the payment of money in excess of $40,000,000 (or the
equivalent thereof in currencies other than Dollars) in the aggregate, or (ii)
nonmonetary judgments or orders which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, which judgment(s), in
any such case, is/are not stayed on appeal or otherwise being appropriately
contested in good faith, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of the Borrower or any Guarantor to
enforce any such judgment.

 

7.10.     (a) With respect to a Plan, the Borrower or an ERISA Affiliate is
subject to a lien in excess of $10,000,000 pursuant to Section 430(k) of the
Code or Section 302(c) of ERISA or Title IV of ERISA, or (b) an ERISA Event
shall have occurred that, in the opinion of the Required Lenders, when taken
together with all other ERISA Events that have occurred, would reasonably be
expected to result in a Material Adverse Effect.

 

7.11.     Any Change in Control shall occur.

 

7.12.     The occurrence of any “default”, as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement or other than a breach which
constitutes an Event of Default under another Section of this Article VII),
which default or breach continues beyond (A) thirty (30) days after the earlier
of (i) any Senior Officer becoming aware of any such breach and (ii) the
Designated Agent notifying the Borrower of any such breach or, (B) if greater,
any period of grace provided in such Loan Document.

 

7.13.     Any Loan Document shall fail to remain in full force or effect or any
action shall be taken by any Guarantor to discontinue or to assert the
invalidity or unenforceability of any Guaranty, or any Guarantor shall deny that
it has any further liability under any Guaranty to which it is a party, or shall
give notice to such effect.

 

7.14.     No Defaults. The occurrence of any of the following events shall
specifically not be an Event of Default or a Default under this Agreement:

 

(a)     The breach of the Leverage Test, Interest Coverage Test or the
Consolidated Tangible Net Worth Test (except that the breach by the Borrower of
the Consolidated Tangible Net Worth Covenant shall constitute an Event of
Default, notwithstanding that it also constitutes a breach of the Consolidated
Tangible Net Worth Test).

 

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(b)     The breach of the Spec Unit Inventory Test (except that the same shall
result in the exclusion of certain assets from the Borrowing Base to the extent
provided for in Section 6.19(c)).

 

(c)     The breach of the Land-Owned Test (except that the same shall result in
the exclusion of certain assets from the Borrowing Base to the extent provided
for in Section 6.19(d)).

 

(d)     If any Guarantor shall apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or for a Significant Amount of its Property, or if a receiver,
custodian, trustee, examiner, liquidator or similar official shall be appointed
for any Guarantor without its application, approval or consent for it or for a
Significant Amount of its Property; provided, however, that upon the occurrence
and during the continuation of the foregoing, all Property of such Guarantor
shall be automatically excluded from the Borrowing Base; and provided further,
that upon any such appointment for any Property of any Guarantor that is not a
Significant Amount of its Property (which appointment shall not be an Event of
Default or a Default under this Agreement), such Property shall be automatically
excluded from the Borrowing Base. “Significant Amount” means, with respect to
the Property of such Guarantor and its Subsidiaries, taken as a whole, Property
that (i) has a value in excess of $3,000,000 or (ii) represents more than 10% of
the book value of the assets of such Guarantor as would be shown on the
financial statements of such Guarantor as of the beginning of the fiscal quarter
in which such determination is made, all as determined in accordance with
Agreement Accounting Principles.

 

ARTICLE VIII

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

 

8.1.     Acceleration; Remedies. If any Event of Default described in Section
7.6 or 7.7 occurs with respect to the Borrower, the obligations of the Lenders
to make Loans hereunder and the obligation and power of the LC Issuers to issue
Facility LCs shall automatically terminate and the Obligations under this
Agreement and the other Loan Documents shall immediately become due and payable
without any election or action on the part of the Designated Agent, any LC
Issuer or any Lender and the Borrower will be and become thereby unconditionally
obligated, without any further notice, act or demand, to pay to the Designated
Agent an amount in immediately available funds, which funds shall be held in the
Facility LC Collateral Account, equal to the difference of (x) the amount of LC
Obligations at such time, less (y) the amount on deposit in the Facility LC
Collateral Account at such time which is free and clear of all rights and claims
of third parties and has not been applied against the Obligations under this
Agreement and the other Loan Documents (such difference, the “Collateral
Shortfall Amount”). If any other Event of Default occurs, the Designated Agent
may, and at the request of the Required Lenders shall, (a) terminate or suspend
the obligations of the Lenders to make Loans hereunder and the obligation and
power of the LC Issuers to issue Facility LCs, or declare the Obligations under
this Agreement and the other Loan Documents to be due and payable, or both,
whereupon the Obligations under this Agreement and the other Loan Documents
shall become immediately due and payable, without presentment, demand, protest
or notice of any kind, all of which the Borrower hereby expressly waives, and
(b) upon notice to the Borrower and in addition to the continuing right to
demand payment of all amounts payable under this Agreement, make demand on the
Borrower to pay, and the Borrower will, forthwith upon such demand and without
any further notice or act, pay to the Designated Agent the Collateral Shortfall
Amount, which funds shall be deposited in the Facility LC Collateral Account.

 

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(a)     If at any time while any Event of Default is continuing, the Designated
Agent determines that the Collateral Shortfall Amount at such time is greater
than zero, the Designated Agent may make demand on the Borrower to pay, and the
Borrower will, forthwith upon such demand and without any further notice or act,
pay to the Designated Agent the Collateral Shortfall Amount, which funds shall
be deposited in the Facility LC Collateral Account.

 

(b)     The Designated Agent may at any time or from time to time after funds
are deposited in the Facility LC Collateral Account, apply such funds to the
payment of the Obligations under this Agreement and the other Loan Documents and
any other amounts as shall from time to time have become due and payable by the
Borrower to the Lenders or the LC Issuers under the Loan Documents, as provided
in Section 8.2.

 

(c)     At any time while any Event of Default is continuing, neither the
Borrower nor any Person claiming on behalf of or through the Borrower shall have
any right to withdraw any of the funds held in the Facility LC Collateral
Account. After all of the Obligations under this Agreement and the other Loan
Documents have been indefeasibly paid in full and the Aggregate Commitment has
been terminated, any funds remaining in the Facility LC Collateral Account shall
be returned by the Designated Agent to the Borrower or paid to whomever may be
legally entitled thereto at such time.

 

(d)     If, within thirty (30) days after acceleration of the maturity of the
Obligations under this Agreement and the other Loan Documents or termination of
the obligations of the Lenders to make Loans and the obligation and power of the
LC Issuers to issue Facility LCs hereunder as a result of any Event of Default
(other than any Event of Default as described in Section 7.6 or 7.7 with respect
to the Borrower) and before any judgment or decree for the payment of the
Obligations due under this Agreement and the other Loan Documents shall have
been obtained or entered, the Required Lenders (in their sole discretion) shall
so direct, the Designated Agent shall, by notice to the Borrower, rescind and
annul such acceleration and/or termination.

 

(e)      Upon the occurrence and during the continuation of any Event of
Default, the Designated Agent may, and at the request of the Required Lenders
shall, exercise all rights and remedies under the Loan Documents and enforce all
other rights and remedies under applicable law.

 

8.2.     Application of Funds. After the exercise of remedies provided for in
Section 8.1 (or after the Obligations under this Agreement and the other Loan
Documents have automatically become immediately due and payable as set forth in
the first sentence of Section 8.1(a)), any amounts received by the Designated
Agent on account of the Obligations shall be applied by the Designated Agent in
the following order:

 

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(a)     First, to payment of fees, indemnities, expenses and other amounts
(including fees, charges and disbursements of counsel to the Designated Agent
and amounts payable under Article III) payable to the Designated Agent in its
capacity as such;

 

(b)     Second, to payment of fees, indemnities and other amounts (other than
principal, interest, LC Fees and Commitment Fees) payable to the Lenders and the
LC Issuers (including fees, charges and disbursements of counsel to the
respective Lenders and the LC Issuers as required by Section 9.6 and amounts
payable under Article III);

 

(c)     Third, to payment of accrued and unpaid LC Fees, Commitment Fees and
interest on the Loans and Reimbursement Obligations, ratably among the Lenders
and the LC Issuers in proportion to the respective amounts described in this
Section 8.2(c) payable to them;

 

(d)     Fourth, to payment of all Obligations ratably among the Lenders;

 

(e)     Fifth, to the Designated Agent for deposit to the Facility LC Collateral
Account in an amount equal to the Collateral Shortfall Amount (as defined in
Section 8.1(a)), if any; and

 

(f)     Last, the balance, if any, to the Borrower or as otherwise required by
law;

 

provided, however, that, notwithstanding anything to the contrary set forth
above, Excluded Swap Obligations with respect to any Guarantor shall not be paid
with amounts received from such Guarantor or its assets, but appropriate
adjustments shall be made with respect to payments from other Loan Parties to
preserve the allocation to Obligations otherwise set forth above in this Section
8.2.

 

8.3.     Amendments. Subject to the provisions of this Section 8.3, the Required
Lenders (or the Designated Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to this Agreement or the Guaranty
or changing in any manner the rights of the Lenders or the Borrower hereunder or
thereunder or waiving any Default or Event of Default hereunder; provided,
however, that no such supplemental agreement shall:

 

(a)     without the consent of each Lender directly affected thereby, extend the
final maturity of any Loan, or extend the expiry date of any Facility LC to a
date after the Facility Termination Date or postpone any regularly scheduled
payment of principal of any Loan or forgive all or any portion of the principal
amount thereof or any Reimbursement Obligation related thereto, or reduce the
rate or extend the time of payment of interest or fees thereon or Reimbursement
Obligations related thereto or increase the amount of the Commitment of such
Lender hereunder.

 

(b)     without the consent of all of the Lenders, reduce the percentage
specified in the definition of Required Lenders.

 

(c)     without the consent of all of the Lenders, amend this Section 8.3.

 

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(d)     without the consent of all of the Lenders, release all or substantially
all of the Guarantors of the Obligations (except as provided in Section
6.20(b)).

 

No amendment of any provision of this Agreement relating to the Designated Agent
shall be effective without the written consent of the Designated Agent, and no
amendment of any provision relating to the LC Issuers shall be effective without
the written consent of the LC Issuers. The Designated Agent may waive payment of
the fee required under Section 12.3(c) without obtaining the consent of any
other party to this Agreement. Without limitation of the foregoing, the
Designated Agent may, with the consent of the Borrower only, amend, modify or
supplement this Agreement or any of the other Loan Documents to cure any
ambiguity, omission, mistake, defect or inconsistency of a technical or
immaterial nature, as determined in good faith by the Designated Agent.

 

8.4.     Preservation of Rights. No delay or omission of the Lenders, the LC
Issuers or the Designated Agent to exercise any right under the Loan Documents
shall impair such right or be construed to be a waiver of any Event of Default
or an acquiescence therein, and the making of a Credit Extension notwithstanding
the existence of an Event of Default or the inability of the Borrower to satisfy
the conditions precedent to such Credit Extension shall not constitute any
waiver or acquiescence. Any single or partial exercise of any such right shall
not preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.3, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Designated Agent, the LC Issuers and the Lenders until the Obligations
have been paid in full.

 

ARTICLE IX

GENERAL PROVISIONS

 

9.1.     Survival of Representations. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.

 

9.2.     Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, neither any LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.

 

9.3.     Headings. Section headings in the Loan Documents are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of the Loan Documents.

 

9.4.     Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Designated Agent, any LC Issuer and the
Lenders and supersede all prior agreements and understandings among the
Borrower, the Designated Agent, the LC Issuer and the Lenders relating to the
subject matter thereof other than those contained in the Fee Letters which shall
survive and remain in full force and effect during the term of this Agreement.

 

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9.5.     Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Designated Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided, however, that
the parties hereto expressly agree that the Arrangers shall enjoy the benefits
of the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set
forth therein and shall have the right to enforce such provisions on its own
behalf and in its own name to the same extent as if it were a party to this
Agreement.

 

9.6.     Expenses; Indemnification. (a) The Borrower shall reimburse the
Co-Administrative Agents (which, for purposes of this Section 9.6, shall also
include the Designated Agent in its capacity as such) upon demand for all
reasonable out-of-pocket expenses paid or incurred by the Co-Administrative
Agents, including, without limitation, filing and recording costs and fees,
costs of any environmental review, and consultants’ fees, travel expenses, cusip
costs and reasonable fees, charges and disbursements of outside counsel to the
Co-Administrative Agents and/or the allocated costs of in-house counsel incurred
from time to time, in connection with the due diligence, preparation,
administration, negotiation, execution, delivery, syndication, distribution
(including, without limitation, via DebtX and any other internet service
selected by the Co-Administrative Agents), review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to reimburse the
Co-Administrative Agents, the LC Issuers and the Lenders for any costs, internal
charges and out-of-pocket expenses, including, without limitation, filing and
recording costs and fees, costs of any environmental review, and consultants’
fees, travel expenses and reasonable fees, charges and disbursements of outside
counsel to the Co-Administrative Agents, the LC Issuers and the Lenders and/or
the allocated costs of in-house counsel incurred from time to time, paid or
incurred by the Co-Administrative Agents, any LC Issuer or any Lender in
connection with the collection and enforcement of the Loan Documents. Expenses
being reimbursed by the Borrower under this Section include, without limitation,
costs and expenses incurred in connection with the Reports described in the
following sentence. The Borrower acknowledges that from time to time Designated
Agent may prepare and may distribute to the Lenders (but shall have no
obligation or duty to prepare or to distribute to the Lenders) certain audit
reports (the “Reports”) pertaining to the Borrower’s assets for internal use by
Designated Agent from information furnished to it by or on behalf of the
Borrower, after Designated Agent has exercised its rights of inspection pursuant
to this Agreement.

 

(b)     The Borrower hereby further agrees to indemnify and hold harmless the
Co-Administrative Agents, the Arrangers, each LC Issuer, each Lender, their
respective affiliates, and each of their directors, officers and employees,
agents and advisors against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, reasonable attorneys’
fees, charges and disbursements and settlement costs (including, without
limitation, all expenses of litigation or preparation therefor) whether or not
the Co-Administrative Agents, the Arrangers, any LC Issuer, any Lender or any
affiliate is a party thereto) which any of them may pay or incur arising out of
or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby, any actual or alleged presence or release of Hazardous
Materials on or from any Property owned or operated by the Borrower or any of
its Subsidiaries, any environmental liability related in any way to the Borrower
or any of its Subsidiaries, or any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower or any of its Subsidiaries, or the direct or indirect application or
proposed application of the proceeds of any Credit Extension hereunder except to
the extent that they are determined in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification. The obligations of the
Borrower under this Section 9.6 shall survive the termination of this Agreement.

 

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9.7.     Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Designated Agent with sufficient
counterparts so that the Designated Agent may furnish one to each of the
Lenders.

 

9.8.     Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP applied on a basis consistent
with the consolidated audited financial statements of Borrower as of
December 31, 2012 (“Agreement Accounting Principles”). If any change in GAAP
from the principles used in preparing such statements would have a material
effect upon the results of any calculation required by or compliance with any
provision of this Agreement, then such calculation shall be made or calculated
and compliance with such provision shall be determined using accounting
principles used in preparing the consolidated audited financial statements of
Borrower as of December 31, 2012.

 

9.9.     Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.

 

9.10.     Nonliability of Lenders. The relationship between the Borrower on the
one hand and the Lenders, the LC Issuer and the Designated Agent on the other
hand shall be solely that of the borrower and lender. Neither the Designated
Agent, the Arrangers, any LC Issuer nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither the Designated Agent, the Arrangers,
any LC Issuer nor any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any phase of the
Borrower’s business or operations. The Borrower agrees that neither the
Designated Agent, the Arrangers, any LC Issuer nor any Lender shall have
liability to the Borrower (whether sounding in tort, contract or otherwise) for
losses suffered by the Borrower in connection with, arising out of, or in any
way related to, the transactions contemplated and the relationship established
by the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined in a final non-appealable judgment by a court
of competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Designated Agent, the Arrangers, any LC Issuer nor any Lender shall have any
liability with respect to, and the Borrower hereby waives, releases and agrees
not to sue for, any special, indirect, consequential or punitive damages
suffered by the Borrower in connection with, arising out of, or in any way
related to the Loan Documents or the transactions contemplated thereby. It is
agreed that the Arrangers shall, in its capacity as such, have no duties or
responsibilities under the Agreement or any other Loan Document. Each Lender
acknowledges that it has not relied and will not rely on the Arrangers in
deciding to enter into the Agreement or any other Loan Document or in taking or
not taking any action.

 

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9.11.     Confidentiality. The Designated Agent and each Lender agrees to hold
any confidential information which it may receive from the Borrower in
connection with this Agreement in confidence, except for disclosure (i) to its
Affiliates and to the Designated Agent and any other Lender and their respective
Affiliates (it being understood that the Persons to whom disclosure is made will
be informed of the confidential nature of such information and instructed to
keep such information confidential (“Confidentiality Direction”)), (ii) to legal
counsel, accountants, and other professional advisors to the Designated Agent or
such Lender, who will receive the Confidentiality Direction, (iii) as provided
in Section 12.3(e), (iv) to regulatory officials, (v) to any Person as requested
pursuant to or as required by law, regulation, or legal process, (vi) to any
Person in connection with any legal proceeding to which it is a party, (vii) to
its direct or indirect contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparties, who
will receive the Confidentiality Direction, (viii) to Rating Agencies if
requested or required by such Rating Agencies in connection with a rating
relating to the Advances hereunder (it being understood that, prior to any such
disclosure, such Rating Agency shall undertake to preserve the confidentiality
of the information), (ix) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, to the
extent reasonably necessary, and (x) to the extent such information (1) becomes
publicly available other than as a result of a breach of this Section or
(2) becomes available to the Designated Agent, any LC Issuer or any other Lender
on a non-confidential basis from a source other than the Borrower. Without
limiting Section 9.4, the Borrower agrees that the terms of this Section 9.11
shall set forth the entire agreement between the Borrower and the Designated
Agent and each Lender with respect to any confidential information previously or
hereafter received by the Designated Agent or such Lender in connection with
this Agreement, and this Section 9.11 shall supersede any and all prior
confidentiality agreements entered into by the Designated Agent or any Lender
with respect to such confidential information.

 

9.12.     Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U) for the repayment of
the Credit Extensions provided for herein.

 

9.13.     Disclosure. The Borrower and each Lender hereby acknowledge and agree
that U.S. Bank and/or its Affiliates from time to time may hold investments in,
make other loans to or have other relationships with the Borrower and its
Affiliates.

 

9.14.     USA PATRIOT ACT NOTIFICATION. The following notification is provided
to the Borrower pursuant to Section 326 of the PATRIOT Act:

 

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Each Lender that is subject to the requirements of the PATRIOT Act hereby
notifies the Borrower and each other Loan Party that pursuant to the
requirements of the PATRIOT Act, it is required to obtain, verify and record
information that identifies such Loan Party, which information includes the name
and address of such Loan Party and other information that will allow such Lender
to identify such Loan Party in accordance with the PATRIOT Act.

 

9.15.     Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
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, to the extent such liability is unsecured, 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
undertaking, 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.

 

ARTICLE X

THE DESIGNATED AGENT

 

10.1.     Appointment; Nature of Relationship. U.S. Bank National Association is
hereby appointed by each of the Lenders as its contractual representative
(herein referred to as the “Designated Agent”) hereunder and under each other
Loan Document, and each of the Lenders irrevocably authorizes the Designated
Agent to act as the contractual representative of such Lender with the rights
and duties expressly set forth herein and in the other Loan Documents. The
Designated Agent agrees to act as such contractual representative upon the
express conditions contained in this Article X. Notwithstanding the use of the
defined term “Designated Agent,” it is expressly understood and agreed that the
Designated Agent shall not have any fiduciary responsibilities to any Lender by
reason of this Agreement or any other Loan Document and that the Designated
Agent is merely acting as the contractual representative of the Lenders with
only those duties as are expressly set forth in this Agreement and the other
Loan Documents. In its capacity as the Lenders’ contractual representative, the
Designated Agent (i) does not hereby assume any fiduciary duties to any of the
Lenders and (ii) is acting as an independent contractor, the rights and duties
of which are limited to those expressly set forth in this Agreement and the
other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Designated Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender hereby
waives.

 

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10.2.     Powers. The Designated Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Designated Agent
by the terms of each thereof, together with such powers as are reasonably
incidental thereto. The Designated Agent shall have no implied duties to the
Lenders, or any obligation to the Lenders to take any action thereunder except
any action specifically provided by the Loan Documents to be taken by the
Designated Agent.

 

10.3.     General Immunity. Neither the Designated Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.

 

10.4.     No Responsibility for Loans, Recitals, etc. Neither the Designated
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (a) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (b) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Designated Agent;
(d) the existence or possible existence of any Default or Event of Default; (e)
the validity, enforceability, effectiveness, sufficiency or genuineness of any
Loan Document or any other instrument or writing furnished in connection
therewith; (f) the value, sufficiency, creation, perfection or priority of any
Lien in any collateral security; or (g) the financial condition of the Borrower
or any guarantor of any of the Obligations or of any of the Borrower’s or any
such guarantor’s respective Subsidiaries.

 

10.5.     Action on Instructions of Lenders. The Designated Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Designated Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders. The Designated Agent shall be fully
justified in failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its satisfaction by
the Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.

 

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10.6.     Employment of Agents and Counsel. The Designated Agent may execute any
of its duties as Designated Agent hereunder and under any other Loan Document by
or through employees, agents, and attorneys-in-fact and shall not be answerable
to the Lenders, except as to money or securities received by it or its
authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Designated Agent
shall be entitled to advice of counsel concerning the contractual arrangement
between the Designated Agent and the Lenders and all matters pertaining to the
Designated Agent’s duties hereunder and under any other Loan Document.

 

10.7.     Reliance on Documents; Counsel. The Designated Agent shall be entitled
to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex, electronic mail message, statement, paper or
document believed by it to be genuine and correct and to have been signed or
sent by the proper Person or Persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Designated Agent, which counsel may be
employees of the Designated Agent. For purposes of determining compliance with
the conditions specified in Sections 4.1 and 4.2, each Lender that has signed
this Agreement shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Designated Agent shall have received notice from such Lender prior to the
applicable date specifying its objection thereto.

 

10.8.     Designated Agent’s Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Designated Agent ratably in proportion to
their respective Pro Rata Shares (disregarding, for the avoidance of doubt, the
exclusion of Defaulting Lenders therein) (i) for any amounts not reimbursed by
the Borrower for which the Designated Agent is entitled to reimbursement by the
Borrower under the Loan Documents, (ii) for any other expenses incurred by the
Designated Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Designated
Agent in connection with any dispute between the Designated Agent and any Lender
or between two or more of the Lenders) and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Designated Agent in any way relating to
or arising out of the Loan Documents or any other document delivered in
connection therewith or the transactions contemplated thereby (including,
without limitation, for any such amounts incurred by or asserted against the
Designated Agent in connection with any dispute between the Designated Agent and
any Lender or between two or more of the Lenders), or the enforcement of any of
the terms of the Loan Documents or of any such other documents, provided that
(i) no Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Designated Agent and (ii) any indemnification required pursuant to Section
3.5(d) shall, notwithstanding the provisions of this Section 10.8, be paid by
the relevant Lender in accordance with the provisions thereof. The obligations
of the Lenders under this Section 10.8 shall survive payment of the Obligations
and termination of this Agreement.

 

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10.9.     Notice of Event of Default. The Designated Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Designated Agent has received written 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 Designated Agent receives such a notice, the Designated Agent shall give
prompt notice thereof to the Lenders; provided that, except as expressly set
forth in the Loan Documents, the Designated Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Designated Agent or any of its Affiliates in any
capacity.

 

10.10.     Rights as a Lender. In the event the Designated Agent is a Lender,
the Designated Agent shall have the same rights and powers hereunder and under
any other Loan Document with respect to its Commitment and its Loans as any
Lender and may exercise the same as though it were not the Designated Agent, and
the term “Lender” or “Lenders” shall, at any time when the Designated Agent is a
Lender, unless the context otherwise indicates, include the Designated Agent in
its individual capacity. The Designated Agent and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of trust, debt,
equity or other transaction, in addition to those contemplated by this Agreement
or any other Loan Document, with the Borrower or any of its Subsidiaries in
which the Borrower or such Subsidiary is not restricted hereby from engaging
with any other Person.

 

10.11.     Lender Credit Decision, Legal Representation.

 

(a)     Each Lender acknowledges that it has, independently and without reliance
upon the Designated Agent, the Arrangers or any other Lender and based on the
financial statements prepared by the Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Designated Agent, the Arrangers 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 decisions in taking or not taking action under this Agreement and the
other Loan Documents. Except for any notice, report, document or other
information expressly required to be furnished to the Lenders by the Designated
Agent or Arrangers hereunder, neither the Designated Agent nor the Arrangers
shall have any duty or responsibility (either initially or on a continuing
basis) to provide any Lender with any notice, report, document, credit
information or other information concerning the affairs, financial condition or
business of the Borrower or any of its Affiliates that may come into the
possession of the Designated Agent or Arrangers (whether or not in their
respective capacity as Designated Agent or Arrangers) or any of their
Affiliates.

 

(b)     Each Lender further acknowledges that it has had the opportunity to be
represented by legal counsel in connection with its execution of this Agreement
and the other Loan Documents, that it has made its own evaluation of all
applicable laws and regulations relating to the transactions contemplated
hereby, and that the counsel to the Co-Administrative Agents represents only the
Co-Administrative Agents and not the Lenders in connection with this Agreement
and the transactions contemplated hereby.

 

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10.12.     Successor Designated Agent. The Designated Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower, such
resignation to be effective upon the appointment of a successor Designated Agent
or, if no successor Designated Agent has been appointed, thirty (30) days after
the retiring Designated Agent gives notice of its intention to resign. The
Designated Agent may be removed as Designated Agent by the Required Lenders upon
thirty (30) days' prior written notice if the Designated Agent (i) is found by a
court of competent jurisdiction in a final, non-appealable judgment to have
committed gross negligence or willful misconduct in the course of performing its
duties hereunder or (ii) is a Defaulting Lender and remains a Defaulting Lender
until replaced as hereinafter provided. Upon any such resignation or removal,
the Required Lenders shall have the right to appoint, on behalf of the Borrower
and the Lenders, a successor Designated Agent. If no successor Designated Agent
shall have been so appointed by the Required Lenders within fifteen (15) days
after the resigning Designated Agent’s giving notice of its intention to resign,
then the resigning Designated Agent may appoint, on behalf of the Borrower and
the Lenders, a successor Designated Agent. Notwithstanding the previous
sentence, the Designated Agent may at any time without the consent of the
Borrower or any Lender, appoint any of its Affiliates which is a commercial bank
as a successor Designated Agent hereunder. If the Designated Agent has resigned
or been removed and no successor Designated Agent has been appointed, the
Lenders may perform all the duties of the Designated Agent hereunder and the
Borrower shall make all payments in respect of the Obligations to the applicable
Lender and for all other purposes shall deal directly with the Lenders. No
successor Designated Agent shall be deemed to be appointed hereunder until such
successor Designated Agent has accepted the appointment. Any such successor
Designated Agent shall be a commercial bank having capital and retained earnings
of at least $100,000,000. Upon the acceptance of any appointment as Designated
Agent hereunder by a successor Designated Agent, such successor Designated Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Designated Agent. Upon the effectiveness
of the resignation of the Designated Agent, the resigning Designated Agent shall
be discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation of an Designated Agent,
the provisions of this Article X shall continue in effect for the benefit of
such Designated Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Designated Agent hereunder and under the other
Loan Documents. In the event that there is a successor to the Designated Agent
by merger, or the Designated Agent assigns its duties and obligations to an
Affiliate pursuant to this Section 10.12, then the term “Prime Rate” as used in
this Agreement shall mean the prime rate, base rate or other analogous rate of
the new Designated Agent.

 

10.13.     Designated Agent and Arrangers Fees. The Borrower agrees to pay (a)
to the Designated Agent, the Co-Administrative Agents and U.S. Bank and
Citigroup Global Markets Inc., in their capacities as Arrangers, for their
respective accounts, the fees agreed to by them and the Borrower, pursuant to
that certain letter agreement dated as of November 12, 2013 between them and the
Borrower, (b) to PNC Bank, National Association in its capacities as
Co-Syndication Agent and on behalf of PNC Capital Markets, LLC as Arranger the
fees agreed to by it and the Borrower pursuant to that certain letter agreement
dated as of November 14, 2013 between it and the Borrower and (c) to SunTrust
Robinson Humphrey, Inc. in its capacity as Arranger the fees agreed to by it and
the Borrower pursuant to that certain letter agreement dated as of November 15,
2013 between it and the Borrower (the foregoing letter agreements being herein
referred to as the “Fee Letters”), or (in each case) as otherwise agreed from
time to time.

 

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10.14.     Delegation to Affiliates. The Borrower and the Lenders agree that the
Designated Agent may delegate any of its duties under this Agreement to any of
its Affiliates. Any such Affiliate (and such Affiliate’s directors, officers,
agents and employees) which performs duties in connection with this Agreement
shall be entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Designated Agent is entitled under Articles
IX and X.

 

10.15.     Co-Administrative Agents, Co-Syndication Agents, etc. Neither any of
the Lenders identified in this Agreement as a Co-Administrative Agent or
Co-Syndication Agent shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such, provided, however, that (a) nothing in this Section 10.15 shall
affect the rights, powers, obligations, liabilities, responsibilities or duties
of the Designated Agent in such capacity under this Agreement and the other Loan
Documents and (b) nothing in this Section 10.15 shall affect the rights, powers,
obligations, liabilities, responsibilities or duties of the Co-Administrative
Agents in such capacity under this Agreement. Without limiting the foregoing,
none of such Lenders shall have or be deemed to have a fiduciary relationship
with any Lender. Each Lender hereby makes the same acknowledgments with respect
to such Lenders as it makes with respect to the Designated Agent in Section
10.11.

 

10.16.     No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and
other services regarding this Agreement provided by the Lenders are arm’s-length
commercial transactions between the Borrower and its Affiliates, on the one
hand, and the Lenders, on the other hand, (B) the Borrower has consulted its own
legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate, and (C) the Borrower is capable of evaluating, and understands and
accepts, the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents; (ii) (A) each of the Lenders is and has been
acting solely as a principal and, except as expressly agreed in writing by the
relevant parties, has not been, is not, and will not be acting as an advisor,
agent or fiduciary for the Borrower or any of its Affiliates, or any other
Person and (B) no Lender has any obligation to the Borrower or any of its
Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents; and
(iii) each of the Lenders and their respective Affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of the
Borrower and its Affiliates, and no Lender has any obligation to disclose any of
such interests to the Borrower or its Affiliates.  To the fullest extent
permitted by law, the Borrower hereby waives and releases any claims that it may
have against each of the Lenders with respect to any breach or alleged breach of
agency or fiduciary duty in connection with any aspect of any transaction
contemplated hereby.

 

ARTICLE XI

RATABLE PAYMENTS

 

11.1.     Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral or other protection ratably in proportion to their respective Pro
Rata Shares of the Aggregate Outstanding Credit Exposure. In case any such
payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.

 

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ARTICLE XII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

 

12.1.     Successors and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of the Borrower and the Lenders
and their respective successors and assigns permitted hereby, except that (i)
the Borrower shall not have the right to assign its rights or obligations under
the Loan Documents without the prior written consent of each Lender, (ii) any
assignment by any Lender must be made in compliance with Section 12.3, and (iii)
any transfer by participation must be made in compliance with Section 12.2. Any
attempted assignment or transfer by any party not made in compliance with this
Section 12.1 shall be null and void, unless such attempted assignment or
transfer is treated as a participation in accordance with the terms of this
Agreement. The parties to this Agreement acknowledge that clause (ii) of this
Section 12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
(x) any pledge or assignment by any Lender of all or any portion of its rights
under this Agreement and any Note to a Federal Reserve Bank or (y) in the case
of a Lender which is a Fund, any pledge or assignment of all or any portion of
its rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Designated Agent may treat the Person which
made any Loan or which holds any Note as the owner thereof for all purposes
hereof unless and until such Person complies with Section 12.3; provided,
however, that the Designated Agent may in its discretion (but shall not be
required to) follow instructions from the Person which made any Loan or which
holds any Note to direct payments relating to such Loan or Note to another
Person. Any assignee of the rights to any Loan or any Note agrees by acceptance
of such assignment to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder or assignee of the
rights to such Loan.

 

12.2.     Participations.

 

(a)     Permitted Participants; Effect. Any Lender may at any time sell to one
or more entities (“Participants”) participating interests in any Outstanding
Credit Exposure owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of participating interests
to a Participant, such Lender’s obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the owner of its Outstanding Credit Exposure and the holder of any Note issued
to it in evidence thereof for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and the
Designated Agent shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under the Loan Documents.

 

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(b)     Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents provided that each such Lender may agree in
its participation agreement with its Participant that, without the consent of
such Participant, such Lender will not vote to approve any amendment,
modification or waiver with respect to any Outstanding Credit Exposure or
Commitment in which such Participant has an interest which would require consent
of all of the Lenders pursuant to the terms of Section 8.3 or of any other Loan
Document.

 

(c)     Benefit of Certain Provisions. The Borrower further agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4, 3.5,
9.6 and 9.10 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.3, provided that (i) a Participant
shall not be entitled to receive any greater payment under Section 3.1 or 3.2
than the Lender who sold the participating interest to such Participant would
have received had it retained such interest for its own account, unless the sale
of such interest to such Participant is made with the prior written consent of
the Borrower, (ii) each Participant shall be subject to the provisions of
Section 3.7 and (iii) a Participant shall not be entitled to receive any greater
payment under Section 3.5 than the Lender who sold the participating interest to
such Participant would have received had it retained such interest for its own
account (A) except to the extent such entitlement to receive a greater payment
results from a change in treaty, law or regulation (or any change in the
interpretation or administration thereof by any Governmental Authority) that
occurs after the Participant acquired the applicable participation and (B), in
the case of any Participant that would be a Non-U.S. Lender if it were a Lender,
such Participant agrees to comply with the provisions of Section 3.5 to the same
extent as if it were a Lender (it being understood that the documentation
required under Section 3.5(f) shall be delivered to the participating 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 any Outstanding Credit Exposure, any Note, any
Commitment or any 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 (including the identity of any
Participant or any information relating to a Participant's interest in any
Outstanding Credit Exposure, any Note, any Commitment or any other obligations
under the Loan Documents) to any Person except to the extent that such
disclosure is necessary to establish that such Outstanding Credit Exposure, any
Note, any Commitment or any other obligations under the Loan Documents 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 Designated Agent (in its capacity as Designated Agent) shall have
no responsibility for maintaining a Participant Register.

 

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12.3.       Assignments.

 

(a)     Permitted Assignments. Any Lender may at any time assign to one or more
Eligible Assignees (“Purchasers”) all or any part of its rights and obligations
under the Loan Documents. Such assignment shall be substantially in the form of
Exhibit C or in such other form reasonably acceptable to the Designated Agent as
may be agreed to by the parties thereto. Each such assignment with respect to a
Purchaser which is not a Lender or an Affiliate of a Lender or an Approved Fund
shall either be in an amount equal to the entire applicable Commitment and
Outstanding Credit Exposure of the assigning Lender or (unless each of the
Borrower and the Designated Agent otherwise consents) be in an aggregate amount
not less than $5,000,000. The amount of the assignment shall be based on the
Commitment or Outstanding Credit Exposure (if the Commitment has been
terminated) subject to the assignment, determined as of the date of such
assignment or as of the “Trade Date,” if the “Trade Date” is specified in the
assignment.

 

(b)     Consents. The consent of the Borrower shall be required prior to an
assignment becoming effective unless the Purchaser is a Lender, an Affiliate of
a Lender or an Approved Fund, provided that the consent of the Borrower shall
not be required if an Event of Default has occurred and is continuing; provided
further that the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the Designated
Agent within five (5) Business Days after having received notice thereof. The
consent of the Co-Administrative Agents and (unless the Purchaser is a Qualified
Bank) each LC Issuer shall be required prior to an assignment of a Commitment
becoming effective. Any consent required under this Section 12.3(b) shall not be
unreasonably withheld or delayed.

 

(c)     Effect; Assignment Effective Date. Upon (i) delivery to the Designated
Agent of an assignment, together with any consents required by Sections 12.3(a)
and 12.3(b), and (ii) payment of a $3,500 fee to the Designated Agent for
processing such assignment (unless such fee is waived by the Designated Agent),
such assignment shall become effective on the effective date specified in such
assignment. The assignment shall contain a representation by the Purchaser to
the effect that none of the consideration used to make the purchase of the
Commitment and Outstanding Credit Exposure under the applicable assignment
agreement constitutes “plan assets” as defined under ERISA and that the rights
and interests of the Purchaser in and under the Loan Documents will not be “plan
assets” under ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this Agreement and any
other Loan Document executed by or on behalf of the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party thereto, and the transferor Lender shall
be released with respect to the Commitment and Outstanding Credit Exposure
assigned to such Purchaser without any further consent or action by the
Borrower, the Lenders or the Designated Agent. In the case of an assignment
covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a Lender hereunder but shall continue
to be entitled to the benefits of, and subject to, those provisions of this
Agreement and the other Loan Documents which survive payment of the Obligations
and termination of the applicable agreement. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 12.3 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
Section 12.2. Upon the consummation of any assignment to a Purchaser pursuant to
this Section 12.3(c), the transferor Lender, the Designated Agent and the
Borrower shall, if the transferor Lender or the Purchaser desires that its Loans
be evidenced by Notes, make appropriate arrangements so that new Notes or, as
appropriate, replacement Notes are issued to such transferor Lender and new
Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Commitments, as
adjusted pursuant to such assignment.

 

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(d)     Register. The Designated Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in the United States
of America, 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 amounts (and stated interest) of the Loans owing
to, each Lender, and participations of each Lender in Facility LCs, pursuant to
the terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and the Borrower, the Designated Agent and the Lenders may
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 each Lender at any reasonable time and from time to time upon
reasonable prior notice.

 

(e)     Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a “Transferee”) and any
prospective Transferee any and all information in such Lender’s possession;
provided that each Transferee and prospective Transferee agrees to be bound by
Section 9.11 of this Agreement.

 

ARTICLE XIII

NOTICES

 

13.1.       Notices; Effectiveness; Electronic Communication.

 

(a)       Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile as
follows:

 

(i)     if to the Borrower, to it at M.D.C. Holdings, Inc., 4350 S. Monaco St.,
Denver, CO 80237, Attention: Treasurer, Facsimile: 720-977-4301 with a copy to
M.D.C. Holdings, Inc., 4350 S. Monaco St., Denver, CO 80237, Attention: General
Counsel, Facsimile: 720-977-4304;

 

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(ii)     if to the Designated Agent, to it at U.S. Bank N.A., Agency Services,
800 Nicollet Mall, Minneapolis, MN 55402, Attention: Soua R. Yang, Facsimile:
612-303-3851 with a copy to U.S. Bank N.A., Commercial Real Estate, 950 17th
Street, 3rd Floor, Denver, CO 80202, Attention: James Payne, Vice President,
Facsimile: 303-585-4198;

 

(iii)     if to a Lender or LC Issuer, to it at its address (or facsimile
number) set forth in its Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).

 

(b)     Electronic Communications. Notices and other communications to the
Lenders and the LC Issuers hereunder may be delivered or furnished by electronic
communication (including e-mail and internet or intranet websites) pursuant to
procedures approved by the Designated Agent or as otherwise determined by the
Designated Agent, provided that the foregoing shall not apply to notices to any
Lender or LC Issuer pursuant to Article II if such Lender or LC Issuer, as
applicable, has notified the Designated Agent that it is incapable of receiving
notices under such Article by electronic communication. The Designated Agent or
the Borrower may, in its respective discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to
procedures approved by it or as it otherwise determines, provided that such
determination or approval may be limited to particular notices or
communications.

 

Unless the recipient otherwise prescribes pursuant to the preceding paragraph,
(i) notices and other communications sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such notice or
other communication is not given during the normal business hours of the
recipient, such notice or communication shall be deemed to have been given at
the opening of business on the next Business Day for the recipient, and (ii)
notices or communications posted to an Internet or intranet website shall be
deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

 

(c)     Change of Address, Etc. Any party hereto may change its address or
facsimile number for notices and other communications hereunder by notice to the
other parties hereto given in the manner set forth in this Section 13.1.

 

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ARTICLE XIV

COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION

 

14.1.     Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Article IV, this
Agreement shall become effective when it shall have been executed by the
Designated Agent, and when the Designated Agent shall have received counterparts
hereof which, when taken together, bear the signatures of each of the parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

14.2.     Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any assignment and assumption agreement
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, or any other state laws based on the Uniform Electronic
Transactions Act.

 

14.3.     Electronic Records. The Borrower hereby acknowledges the receipt of a
copy of this Agreement and all other Loan Documents. The Designated Agent and
each Lender may create a microfilm or optical disk or other electronic image of
this Agreement and any or all of the Loan Documents. The Designated Agent and
each Lender may store the electronic image of this Agreement and Loan Documents
in its electronic form and then destroy the paper original as part of the
Designated Agent’s and each Lender’s normal business practices, with the
electronic image deemed to be an original and of the same legal effect, validity
and enforceability as the paper originals. The Designated Agent and each Lender
are authorized, when appropriate, to convert any note into a “transferable
record” under the Uniform Electronic Transactions Act.

 

ARTICLE XV

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

 

15.1.     CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.

 

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15.2.     CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT
SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE DESIGNATED AGENT, ANY LC ISSUER OR ANY LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE DESIGNATED AGENT, ANY LC ISSUER
OR ANY LENDER OR ANY AFFILIATE OF THE DESIGNATED AGENT, ANY LC ISSUER OR ANY
LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT
IN NEW YORK, NEW YORK.

 

15.3.     WAIVER OF JURY TRIAL. THE BORROWER, THE DESIGNATED AGENT, EACH LC
ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

 

[Signature Pages Follow]

 

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[SIGNATURE PAGES ON FILE WITH THE DESIGNATED AGENT]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to

M.D.C. Holdings, Inc. Credit Agreement

 

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PRICING SCHEDULE

 

The Applicable Margin and Applicable Fee Rate shall be determined in accordance
with the following table based on (a) the Borrower’s Leverage Ratio as reflected
in the then most recent Financials and (b) the Borrower’s then-current Ratings:

 

 

Level

 

Ratings:

S&P/Moody’s

/Fitch

   

Leverage

Ratio

   

Applicable

Margin
(Eurocurrency)

   

Applicable

Margin
(Base Rate)

   

Applicable

Fee
Rate

   

I

 

>BBB+/Baa1/BBB+

   

<30%

   

1.125%

   

0.125%

   

0.15%

   

II

 

BBB/Baa2/BBB

   

>30%, <40%

   

1.25%

   

0.25%

   

0.20%

   

III

 

BBB-/Baa3/BBB-

   

>40%, <50%

   

1.50%

   

0.50%

   

0.25%

   

IV

 

BB+/Ba1/BB+

   

>50%

   

1.75%

   

0.75%

   

0.30%

   

V

 

<BB/Ba2/BB or no Rating

   

>50%

   

2.00%

   

1.00%

   

0.35%

 

 

In the event of a difference of one level between the Leverage Ratio and the
Ratings, the lower pricing shall apply. In the event of a difference of more
than one level between the Leverage Ratio and the Ratings, the pricing that is
one level lower than the higher pricing level shall apply.

 

In the event of a difference in the Ratings among the Rating Agencies, the
second highest of the three Ratings shall apply, unless the difference is more
than one level, in which case the level that is one level higher than the lowest
Rating shall apply.

 

The Applicable Margin and Applicable Fee Rate, to the extent determined on the
basis of the Ratings, shall be based on the Ratings in effect at the close of
business on the applicable date. The Borrower shall notify the Designated Agent
of any change in the Ratings within five (5) Business Days thereof.

 

Adjustments, if any, to the Applicable Margin or Applicable Fee Rate, to the
extent determined on the basis of the Leverage Ratio, shall be effective from
and after the first day of the first fiscal month immediately following the date
on which the delivery of the Financials is required until the first day of the
first fiscal month immediately following the next such date on which delivery of
such Financials of the Borrower is so required. If the Borrower fails to deliver
the Financials to the Designated Agent at the time required pursuant to Section
6.1, then the Applicable Margin and Applicable Fee Rate shall be the highest
Applicable Margin and Applicable Fee Rate set forth in the foregoing table until
five (5) days after such Financials are so delivered. Notwithstanding the
foregoing or anything to the contrary set forth herein, Level III shall be in
effect as of the Second Amendment Effective Date; provided, that upon the
Designated Agent’s receipt of the Financials for the fiscal quarter ending
September 30, 2017, the level then in effect shall thereafter change in
accordance with the preceding paragraphs.

 

 

Pricing Schedule

 

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“Financials” means the annual or quarterly financial statements of the Borrower
delivered pursuant to Section 6.1(a) or (b).

 

 

Pricing Schedule

 

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SCHEDULE 1

 

COMMITMENTS

 

 

 

Lender

 

 

Commitment

 

U.S. Bank, National Association

 

 

$125,000,000

 

Citibank, N.A.

 

 

$125,000,000

 

PNC Bank, National Association

 

 

$125,000,000

 

SunTrust Bank

 

 

$125,000,000

 

Bank of West

 

 

$75,000,000

 

Regions Bank

 

 

$75,000,000

 

ZB, N.A. dba Vectra Bank Colorado

 

 

$50,000,000

 

Aggregate Commitment

 

 

$700,000,000

 

 

 

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SCHEDULE 3

 

Guarantors

 

Subsidiary Name

 

State of Incorporation

 

Ownership %

         

M.D.C. Land Corporation

 

Colorado

 

100%

RAH of Florida, Inc.

 

Colorado

 

100%

Richmond American Construction, Inc.

 

Delaware

 

100%

Richmond American Homes of Arizona, Inc.

 

Delaware

 

100%

Richmond American Homes of Colorado, Inc.

 

Delaware

 

100%

Richmond American Homes of Florida, LP

 

Colorado

 

100%

Richmond American Homes of Illinois, Inc.

 

Colorado

 

100%

Richmond American Homes of Maryland, Inc.

 

Maryland

 

100%

Richmond American Homes of Nevada, Inc.

 

Colorado

 

100%

Richmond American Homes of New Jersey, Inc.

 

Colorado

 

100%

Richmond American Homes of Oregon, Inc.

(f/k/a Richmond American Homes of Delaware, Inc.)

 

Colorado

 

100%

Richmond American Homes of Pennsylvania, Inc.

 

Colorado

 

100%

Richmond American Homes of Utah, Inc.

 

Colorado

 

100%

Richmond American Homes of Virginia, Inc.

 

Virginia

 

100%

Richmond American Homes of Washington, Inc.

 

Colorado

 

100%

 

 

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SCHEDULE 5.8

 

Subsidiaries

 

Subsidiary Name

 

State of Incorporation

 

Ownership %

         

Allegiant Insurance Company, Inc., A Risk Retention Group

 

Hawaii

 

*

American Home Insurance Agency, Inc.

 

Colorado

 

100%

American Home Title and Escrow Company

 

Colorado

 

100%

HomeAmerican Mortgage Corporation

 

Colorado

 

100%

M.D.C. Land Corporation

 

Colorado

 

100%

MDC/Wood, Inc.

 

Delaware

 

100%

RAH Aviation, LLC (f/k/a Sterling Ranch II, LLC)

 

Colorado

 

100%

RAH of Florida, Inc.

 

Colorado

 

100%

RAH of Texas, LP

 

Colorado

 

100%

RAH Texas Holdings, LLC

 

Colorado

 

100%

Richmond American Construction, Inc.

 

Delaware

 

100%

Richmond American Homes Corporation

 

Colorado

 

100%

Richmond American Homes of Arizona, Inc.

 

Delaware

 

100%

Richmond American Homes of Colorado, Inc.

 

Delaware

 

100%

Richmond American Homes of Florida, LP

 

Colorado

 

100%

Richmond American Homes of Illinois, Inc.

 

Colorado

 

100%

Richmond American Homes of Maryland, Inc.

 

Maryland

 

100%

Richmond American Homes of Nevada, Inc.

 

Colorado

 

100%

Richmond American Homes of New Jersey, Inc.

 

Colorado

 

100%

Richmond American Homes of Oregon, Inc.

(f/k/a Richmond American Homes of Delaware, Inc.)

 

Colorado

 

100%

Richmond American Homes of Pennsylvania, Inc.

 

Colorado

 

100%

Richmond American Homes of Texas, Inc.

 

Colorado

 

100%

Richmond American Homes of Utah, Inc.

 

Colorado

 

100%

Richmond American Homes of Virginia, Inc.

 

Virginia

 

100%

Richmond American Homes of Washington, Inc.

 

Colorado

 

100%

         

Richmond American Homes Three, Inc.

 

Colorado

 

100%

Richmond American Homes Four, Inc.

 

Colorado

 

100%

Richmond American Homes Five, Inc.

 

Colorado

 

100%

Richmond American Homes Six, Inc.

 

Colorado

 

100%

Richmond American Homes Seven, Inc.

 

Colorado

 

100%

Richmond Realty, Inc.

 

Colorado

 

100%

Richmond Realty of Washington, Inc.

 

Colorado

 

100%

StarAmerican Insurance Ltd.

 

Hawaii

 

100%

Yosemite Financial, Inc.

 

Colorado

 

100%

 

 

*      Class A Common Shares: M.D.C. Holdings, Inc. and Subsidiaries; Class B
Common Shares: homebuilding subcontractors of M.D.C. Subsidiaries (each
participating subcontractor required to purchase only one Class B Share).

 

 

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EXHIBIT D

FORM OF BORROWING NOTICE

 

TO:     U.S. Bank National Association, as Designated Agent (the “Designated
Agent”) under that certain Credit Agreement (as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), dated as of
December 13, 2013 among M.D.C. Holdings, Inc. (the “Borrower”), the financial
institutions party thereto, as lenders (the “Lenders”), and the Designated
Agent.

 

Capitalized terms used herein shall have the meanings ascribed to such terms in
the Credit Agreement.

 

The Borrower hereby gives to the Designated Agent a request for borrowing
pursuant to Section 2.8 of the Credit Agreement, and the Borrower hereby
requests to borrow on [___________________], 20[__] (the “Borrowing Date”):

 

(a) from the Lenders, on a pro rata basis, an aggregate principal Dollar Amount
of $[________________] in Revolving Loans as:

 

1. ☐     a Base Rate Advance

 

2. ☐     a Eurocurrency Advance with an Interest Period of [_________] month(s)

 

The undersigned hereby certifies to the Designated Agent and the Lenders that
(i) the representations and warranties contained in Article V of the Credit
Agreement are true and correct in all material respects (except to the extent
already qualified by materiality, in which case said representations and
warranties are true and correct in all respects) as of such date except to the
extent any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall have been true
and correct in all material respects (except to the extent already qualified by
materiality, in which case said representations and warranties are true and
correct in all respects) on and as of such earlier date; (ii) at the time of and
immediately after giving effect to such Advance, no Default or Event of Default
shall have occurred and be continuing; and (iii) all other relevant conditions
set forth in Section 4.2 of the Credit Agreement have been satisfied.

 

 

 

******

 

 

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IN WITNESS WHEREOF, the undersigned has caused this Borrowing Notice to be
executed by its authorized officer as of the date set forth below.

 

Dated: [_______________], 20[__]

 

M.D.C. HOLDINGS, INC.

a Delaware corporation

 

 

 

By: ______________________________

Name: ____________________________

Title: _____________________________

 

 

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EXHIBIT B

 

CONSENT AND AGREEMENT OF GUARANTORS

 

 

THIS CONSENT AND AGREEMENT OF GUARANTORS (“Consent”) is executed and delivered
as of September 29, 2017 by the undersigned (the “Guarantors”), in favor of the
“Lenders” under that certain Credit Agreement dated December 13, 2013 (as the
same has been amended and as the same may be further amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among M.D.C. Holdings, Inc., the Lenders and U.S. Bank, National Association, in
its capacity as Designated Agent. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to them in the Credit
Agreement.

 

W I T N E S S E T H:

 

WHEREAS, the Guarantors have executed and delivered a Guaranty dated December
13, 2013 in favor of the Lenders under the Credit Agreement (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
“Guaranty”); and

 

WHEREAS, the Borrower, the Administrative Agent and the Lenders have entered
into that certain Third Amendment to Credit Agreement of even date herewith
amending the Credit Agreement (the “Amendment”) to extend the Facility
Termination Date to December 16, 2022, to increase the Aggregate Commitment to
$700,000,000 and to amend the Credit Agreement in certain other respects as
therein provided; and

 

WHEREAS, it is a condition to the Amendment that the Guarantors shall have
executed this Consent;

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Guarantors hereby consent to the
Amendment, ratify the terms of the Guaranty and agree that the Guaranty
continues in full force and each Guarantor affirms its duties and obligations
under each Loan Document (including, without limitation, the Guaranty) to which
it is a party.

 

 

 

The remainder of this page is intentionally blank.

 

 

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IN WITNESS WHEREOF, this Consent has been duly executed by the Guarantors as of
the day and year first set forth above.

 

 

M.D.C. Land Corporation, a Colorado

corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

 

RAH of Florida, Inc., a Colorado corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

 

 

Richmond American Construction, Inc., a

Delaware corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

 

 

Richmond American Homes of Arizona, Inc., a

Delaware corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

John J. Heaney

 

 

 

 

Richmond American Homes of Colorado, Inc., a

Delaware corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

Signature Page to Consent and Agreement of Guarantors

 

 

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Richmond American Homes of Oregon, Inc., a

Colorado corporation (f/k/a Richmond American

Homes of Delaware, Inc.)

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

 

Richmond American Homes of Florida, LP, a

Colorado limited partnership

 

  By: RAH of Florida, Inc., its general partner  

 

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

 

John J. Heaney

 

 

 

 

Vice President and Treasurer

 

 

 

Richmond American Homes of Illinois, Inc., a

Colorado corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

 

Richmond American Homes of Maryland, Inc., a

Maryland corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

 

Richmond American Homes of Nevada, Inc., a

Colorado corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

 

Richmond American Homes of New Jersey, Inc., a

Colorado corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

Signature Page to Consent and Agreement of Guarantors

 

 

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Richmond American Homes of Pennsylvania,

Inc., a Colorado corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

 

Richmond American Homes of Utah, Inc., a

Colorado corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

 

Richmond American Homes of Virginia, Inc., a

Virginia corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

 

Richmond American Homes of Washington,

Inc., a Colorado corporation

 

 

 

 

 

 

By:

/s/ John J. Heaney

 

 

 

John J. Heaney

 

 

 

Vice President and Treasurer

 

 

Signature Page to Consent and Agreement of Guarantors

 

 

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EXHIBIT C

 

LIST OF CLOSING DOCUMENTS

 

 

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LIST OF CLOSING DOCUMENTS

 

 

M.D.C. HOLDINGS, INC.

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

September 29, 2017

 

A.     LOAN DOCUMENTS

 

1.

Third Amendment to Credit Agreement dated as of September 29, 2017, among M.D.C.
Holdings, Inc., a Delaware corporation (the “Borrower”), the Lenders party
thereto, U.S. Bank National Association, as Designated Agent (in such capacity,
the “Designated Agent”) and U.S. Bank National Association and Citibank, N.A.,
as Co-Administrative Agents. Capitalized terms used herein and not defined
herein have the meanings provided in the Credit Agreement.

 

EXHIBIT

 

Exhibit A – Amended Credit Agreement and Schedule 1, Schedule 3, Schedule 5.8
and Exhibit D to the Credit Agreement.

 

Exhibit B – Consent and Agreement of Guarantors

 

Exhibit C – List of Closing Documents

 

2.

Consent and Agreement of Guarantors executed by the Guarantors.

 

B.    CORPORATE DOCUMENTS

 

3

Certificate of Secretary of Borrower certifying as of the date of the Third
Amendment as follows: (1) attached thereto as Annex A is a true and correct copy
of the Certificate of Incorporation of the Borrower, with all amendments to
date, certified as of a recent date by the Secretary of State of Delaware, which
has not been amended and remains in full force and effect; (2) the By-Laws of
the Borrower, with all amendments to date, previously provided with a
Certificate of Secretary dated December 13, 2013, have not been amended and
remains in full force and effect; (3) attached thereto as Annex B is a true and
correct copy of certain resolutions duly adopted by the Board of Directors of
the Borrower by consent resolution as of September 1, 2017 and such resolutions
have not been rescinded or modified; (4) attached thereto as Annex C is a good
standing certificate for the Borrower from the Secretary of State of Delaware;
and (5) attached thereto as Annex D is an Incumbency Certificate bearing the
names of officers of the Borrower authorized to sign the documents on behalf of
the Borrower.

 

 

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4.

Certificate of Secretary of each of the Guarantors listed on Schedule I attached
thereto and Secretary of the General Partner of the Guarantor listed on Schedule
II attached thereto, certifying as of the date of the certificate as follows:
(1) attached thereto as Annex A is a true and correct copy of each Certificate
of Incorporation, Articles of Organization or similar document of formation of
each of the Guarantors, together with all amendments to date, certified as of a
recent date by the applicable Secretary of State of such Guarantor’s
jurisdiction of formation, which have not been amended and remain in full force
and effect; (2) the By-laws, Operating Agreement or similar governing document
of each of the Guarantors, with all amendments to date, previously provided with
the Certificate of the Secretary of the Guarantors dated December 13, 2013, have
not been amended and remain in full force and effect; except as stated therein,
(3) true and correct copies of the resolutions duly adopted by the Board of
Directors, Members or Partners of each of the Guarantors by consent resolution
as of September 18, 2017 are attached as Annex B and such resolutions have not
been rescinded or modified; (4) attached thereto as Annex C is a good standing
certificate for each of the Guarantors from the Secretary of State of the
jurisdiction of its formation; and (5) attached thereto as Annex D is an
incumbency certificate for each of the Guarantors bearing the names of the
officers of the Guarantor, or of the General Partner of the Guarantor,
authorized to sign the documents on behalf of the Guarantor.

 

C.     OPINION

 

5.

Opinion of Senior Vice President and General Counsel of Borrower, and Secretary
and Corporate Counsel of Borrower.

 

D.     CLOSING CERTIFICATE

 

6.

Certificate of Authorized Officer by Treasurer of the Borrower, certifying that
on the date of the Third Amendment: (1) no Default or Event of Default has
occurred and is continuing and (2) the representations and warranties contained
in Article V of the Credit Agreement are true and correct in all material
respects (except to the extent already qualified by materiality, in which case
said representations and warranties are true and correct in all respects) as of
the Third Amendment Effective Date except to the extent any such representation
or warranty is stated to relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct in all material
respects (except to the extent already qualified by materiality, in which case
said representations and warranties are true and correct in all respects) on and
as of such earlier date.