EXHIBIT 10.47
AMENDMENT AGREEMENT
          THIS AMENDMENT AGREEMENT, dated as of July 31, 2007 (this
“Amendment”), among TOUSA, INC., a Delaware corporation (the “Administrative
Borrower”), each subsidiary of the Administrative Borrower listed on the
signature pages hereof as a “Subsidiary Borrower” and any other subsidiary of
the Administrative Borrower which hereafter becomes a Subsidiary Borrower (each,
a “Subsidiary Borrower” (as defined in the First Amended and Restated Credit
Agreement (as defined below)) and collectively, the “Subsidiary Borrowers”;
together with the Administrative Borrower, each, a “Borrower” and collectively,
the “Borrowers”), the Lenders (as defined in the First Amended and Restated
Credit Agreement), the Issuers (as defined in the First Amended and Restated
Credit Agreement) and CITICORP NORTH AMERICA, INC. (“CNAI”), as administrative
agent for the Lenders and the Issuers (in such capacity and including any
successor or permitted assign, the “Administrative Agent”), with respect to the
Credit Agreement dated as of March 9, 2006 (as amended by Amendment No. 1 to
Credit Agreement dated as of October 23, 2006 and Amendment No. 2 dated as of
December 20, 2006, as amended and restated as of January 30, 2007 and as
otherwise amended, supplemented or modified from time to time through the date
immediately prior to the Amendment Effective Date (as defined below) and as in
effect immediately prior to the Amendment Effective Date (as defined below), the
“First Amended and Restated Credit Agreement”) entered into by and among the
Loan Parties (as defined in the First Amended and Restated Credit Agreement),
CNAI as Administrative Agent and Swing Loan Lender, each lender from time to
time party thereto (and the lending institutions and other Persons with a
Commitment under the Second Amended and Restated Revolving Credit Agreement (as
defined below), the “Lenders”), DEUTSCHE BANK SECURITIES INC. as Syndication
Agent, JPMORGAN CHASE BANK, N.A. and WACHOVIA CAPITAL MARKETS, LLC as
Co-Documentation Agents and CITIGROUP GLOBAL MARKETS INC. and DEUTSCHE BANK
SECURITIES INC. as Joint Lead Arrangers and Joint Book Managers. Terms not
otherwise defined herein for which meanings are provided in the Second Amended
and Restated Revolving Credit Agreement (as defined below) shall have such
meanings when used in this Amendment.
W I T N E S S E T H:
          WHEREAS, the parties wish to amend and restate the First Amended and
Restated Credit Agreement in its entirety on the terms set forth in the Second
Amended and Restated Revolving Credit Agreement as set forth on Annex I hereto;
and
          WHEREAS, the parties hereto intend that (i) all Loans, Letters of
Credit or other extensions of credit outstanding under the First Amended and
Restated Credit Agreement (each as defined in the First Amended and Restated
Credit Agreement) shall continue as Loans, Letters of Credit or other extensions
of credit, as applicable, under the Second Amended and Restated Revolving Credit
Agreement, (ii) all amounts owing by the Borrowers under the First Amended and
Restated Credit Agreement to any Person in respect of accrued and unpaid
interest and fees on the Loans, Commitments and Letters of Credit (each as
defined in the First Amended and Restated Credit Agreement) shall continue to be
due and owing on such Loans, Commitments and Letters of Credit under the Second
Amended and Restated Revolving Credit Agreement and (iii) any Person entitled to
the benefits of Section 2.13(c) or 10.4 of the First Amended and Restated Credit
Agreement shall continue to be entitled to the benefits of the corresponding
provisions of the Second Amended and Restated Revolving Credit Agreement. Upon
the effectiveness of this Amendment and the Second Amended and Restated
Revolving Credit Agreement, each Loan Document (other than the First Amended and
Restated Credit Agreement and each other Loan Document that is being amended and
restated or otherwise modified in connection therewith) that was in effect
immediately prior to the Amendment Effective Date shall continue to be
effective.

 

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          NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto hereby agree as follows:
     SECTION 1. Amendment and Restatement of First Amended and Restated Credit
Agreement
          On the Amendment Effective Date, the First Amended and Restated Credit
Agreement shall be and is hereby amended and restated to read in its entirety as
set forth in Annex I hereto (as set forth in such Annex I, the “Second Amended
and Restated Revolving Credit Agreement”), and as so amended and restated is
hereby ratified, approved and confirmed in each and every respect. The rights
and obligations of the parties to the First Amended and Restated Credit
Agreement with respect to the period prior to the Amendment Effective Date shall
not be affected by such amendment and restatement. By executing this Amendment
each Lender party hereto hereby (x) consents and agrees to the amendments and
modifications (i) to the First Amended and Restated Credit Agreement contained
in this Amendment and in the Second Amended and Restated Revolving Credit
Agreement, (ii) to the other Loan Documents (as defined in the First Amended and
Restated Credit Agreement) contained in the corresponding Loan Documents (as
defined in the Second Amended and Restated Revolving Credit Agreement) and
(y) authorizes the Administrative Agent to execute and deliver the Second
Amended and Restated Revolving Credit Agreement, the Intercreditor Agreement and
each other Loan Document executed in connection with or required by the Second
Amended and Restated Revolving Credit Agreement, including any amendments or
modifications of Loan Documents (as defined in the First Amendment and Restated
Credit Agreement).
     SECTION 2. Conditions Precedent to Effectiveness
          This Amendment shall become effective when each of the conditions set
forth below shall have been satisfied or waived (the first date as of which each
such condition has been satisfied being herein called the “Amendment Effective
Date”):
          (a) Executed Counterparts. The Administrative Agent shall have
received this Amendment, duly executed by the Borrowers, the Administrative
Agent and the Requisite Lenders (as defined in the First Amended and Restated
Credit Agreement).
          (b) Fees. There shall have been paid to the Administrative Agent, for
the account of the Administrative Agent and the Lenders, as applicable, all fees
due and payable on or before the Effective Date (including all such fees
described in any fee letter referred to in Section 2.11(c) of the Second Amended
and Restated Revolving Credit Agreement and all reasonable fees and expenses of
counsel for which invoices in reasonable detail have been presented at least one
Business Day prior to the Effective Date), and all invoiced expenses due and
payable on or before the Effective Date.
          (c) Conditions in Second Amended and Restated Revolving Credit
Agreement. The conditions set forth in Section 3.1 and Section 3.2 of the Second
Amended and Restated Revolving Credit Agreement shall have been satisfied
(unless waived by the Requisite Lenders or unless the time for satisfaction
thereof has been extended by the Administrative Agent).
     SECTION 3. Acknowledgments
          (a) Each Loan Party hereby (i) expressly acknowledges the terms of the
Second Amended and Restated Revolving Credit Agreement, (ii) ratifies and
affirms after giving effect to this Amendment its obligations under the Loan
Documents (as defined in the First Amended and Restated

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Revolving Credit Agreement) as amended, amended and restated or modified in
connection with the Second Amended and Restated Revolving Credit Agreement and
executed by such Loan Party, (iii) acknowledges, renews and extends its
continued liability under all such Loan Documents and agrees such Loan Documents
(as defined in the First Amended and Restated Revolving Credit Agreement) as
amended, amended and restated or modified in connection with the Second Amended
and Restated Revolving Credit Agreement remain in full force and effect and
(iv) agrees that each of the Amended and Restated Security Agreement and Amended
and Restated Equity Pledge secures all obligations of the Loan Parties under the
Loan Documents.
          (b) Each Loan Party hereby reaffirms, as of the Amendment Effective
Date, (i) the covenants and agreements contained in each Loan Document to which
it is a party, including, in each case, such covenants and agreements as in
effect immediately after giving effect to this Amendment and the transactions
contemplated thereby, and (ii) its Guaranty, if any, of payment of the
Obligations pursuant to the Guaranties and its grant of Liens on the Collateral
to secure the Obligations pursuant to the Collateral Documents.
     SECTION 4. Reference to the Effect on the Loan Documents
          (a) As of the Amendment Effective Date, each reference in the Loan
Documents to the “Credit Agreement” or words of like import (including, without
limitation, by means of words like "thereunder,” “thereof” and words of like
import) shall mean and be a reference to the Second Amended and Restated
Revolving Credit Agreement as amended hereby, and this Amendment and the Second
Amended and Restated Revolving Credit Agreement shall be read together and
construed as a single instrument. As of the Amendment Effective Date, each
reference in the Loan Documents to the "Obligations” shall mean and be a
reference to the “Obligations” (as defined in the Second Amended and Restated
Revolving Credit Agreement). As of the Amendment Effective Date, each reference
to the “Loan Documents” or “Collateral Documents”, as applicable, shall mean and
be a reference, as applicable to the “Loan Documents” (as defined in the Second
Amended and Restated Revolving Credit Agreement) or “Collateral Documents” (as
defined in the Second Amended and Restated Revolving Credit Agreement).
          (b) Except as expressly amended hereby, all of the terms and
provisions of the First Amended and Restated Credit Agreement and all other Loan
Documents (as defined in the First Amended and Restated Revolving Credit
Agreement) are and shall remain in full force and effect and are hereby ratified
and confirmed until, with respect to the First Amended and Restated Credit
Agreement, such is superseded by the Second Amended and Restated Revolving
Credit Agreement and each other Loan Document that is being amended and restated
or otherwise modified in connection therewith.
          (c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Lenders, the Borrowers or the Administrative Agent under
any of the Loan Documents, nor constitute a waiver or amendment of any other
provision of any of the Loan Documents.
          (d) This Amendment is a Loan Document.
     SECTION 5. Execution in Counterparts
          This Amendment may be executed in any number of counterparts and by
different parties 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 agreement. Signature pages may be de- 

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tached from multiple separate counterparts and attached to a single counterpart
so that all signature pages are attached to the same document. Delivery of an
executed signature page of this Amendment by facsimile, .pdf or other electronic
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Amendment signed by all parties
shall be lodged with the Administrative Borrower and the Administrative Agent.
     SECTION 6. Governing Law
          THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
     SECTION 7. Section Titles
          The section titles contained in this Amendment are and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement among the parties hereto, except when used to reference a
section. Any reference to the number of a clause, subclause or subsection hereof
or in any other Loan Document immediately followed by a reference in parenthesis
to the title of the section hereof or such other Loan Document containing such
clause, subclause or subsection is a reference to such clause, subclause or
subsection and not to the entire section; provided, however, that, in case of
direct conflict between the reference to the title and the reference to the
number of such section hereof or such other Loan Document, the reference to the
title shall govern absent manifest error. If any reference to the number of a
section (but not to any clause, subclause or subsection hereof or thereof) of
this Amendment or any other Loan Document is followed immediately by a reference
in parenthesis to the title of a section hereof or any other Loan Document, the
title reference shall govern in case of direct conflict absent manifest error.
     SECTION 8. Notices
          All communications and notices hereunder shall be given as provided in
the Second Amended and Restated Revolving Credit Agreement.
     SECTION 9. Severability
          The fact that any term or provision of this Amendment is held invalid,
illegal or unenforceable as to any person in any situation in any jurisdiction
shall not affect the validity, enforceability or legality of the remaining terms
or provisions hereof or the validity, enforceability or legality of such
offending term or provision in any other situation or jurisdiction or as applied
to any person.
     SECTION 10. Successors
          The terms of this Amendment shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors and assigns.
[SIGNATURE PAGES FOLLOW]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first written above.

            ADMINISTRATIVE BORROWER:

TOUSA, INC.,
     as the Administrative Borrower
      By:   /s/ Stephen Wagman         Name:   Stephen Wagman        Title:  
Executive Vice President     

[Amendment Agreement]

 

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SUBSIDIARY BORROWERS:
ENGLE HOMES RESIDENTIAL CONSTRUCTION, L.L.C.
ENGLE HOMES COMMERCIAL CONSTRUCTION, LLC
ENGLE SIERRA VERDE P4, LLC
ENGLE/JAMES LLC
LB/TE #1, LLC
LORTON SOUTH CONDOMINIUM, LLC
MCKAY LANDING LLC
NEWMARK HOMES PURCHASING, L.P.
NEWMARK HOMES, L.L.C.
NEWMARK HOMES, L.P.
PREFERRED BUILDERS REALTY, INC.
REFLECTION KEY, LLC
SILVERLAKE INTERESTS, L.C.
TOI, LLC
TOUSA/WEST HOLDINGS, INC.
TOUSA ASSOCIATES SERVICES COMPANY
TOUSA HOMES ARIZONA, LLC
TOUSA HOMES COLORADO, LLC
TOUSA FLORIDA,L.P.
TOUSA HOMES INVESTMENT #1, INC.
TOUSA HOMES INVESTMENT #2, INC.
TOUSA HOMES INVESTMENT #2, LLC
TOUSA HOMES MID-ATLANTIC HOLDING, LLC
TOUSA HOMES MID-ATLANTIC, LLC
TOUSA HOMES NEVADA, LLC
TOUSA HOMES, INC.
TOUSA HOMES, L.P.
TOUSA INVESTMENT #2, INC.
TOUSA MID-ATLANTIC INVESTMENT, LLC
TOUSA REALTY, INC.
TOUSA, LLC

                  By:   /s/ Stephen Wagman         Name:   Stephen Wagman       
Title:   Executive Vice President     

[Amendment Agreement]

 

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            NEWMARK HOMES BUSINESS TRUST
      By:   /s/ Paul Berkowitz         Name:   Paul Berkowitz        Title:  
Co-Managing Trustee of the Trust              By:   /s/ Stephen Wagman        
Name:   Stephen Wagman        Title:   Co-Managing Trustee of the Trust         
    By:   /s/ Russell Devendorf         Name:   Russell Devendorf       
Title:   Co-Managing Trustee of the Trust     

[Amendment Agreement]

 

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            ENGLE HOMES DELAWARE, INC.

TOUSA DELAWARE, INC.

TOUSA FUNDING, LLC
      By:   /s/ Paul Berkowitz         Name:   Paul Berkowitz        Title:  
President     

[Amendment Agreement]

 

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            CITICORP NORTH AMERICA, INC.,
     as Administrative Agent
      By:   /s/ Svetoslav Nikov         Name:   Svetoslav Nikov        Title:  
Vice President        CITIBANK, N.A.,
     as an Issuer
      By:   /s/ Svetoslav Nikov         Name:   Svetoslav Nikov        Title:  
Vice President     

[Amendment Agreement]

 

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            DEUTSCHE BANK TRUST COMPANY AMERICAS,
     as a Lender
      By:   /s/ Mark B. Cohen         Name:   Mark B. Cohen        Title:  
Managing Director              By:   /s/ Dusan Lazarov         Name:   Dusan
Lazaro        Title:   Vice President     

[Amendment Agreement]

 

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            WACHOVIA BANK, N.A.,
     as a Lender
      By:   /s/ R. Scott Holtzapple         Name:   R. Scott Holtzapple       
Title:   Senior Vice President     

 

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            GUARANTY BANK,
     as a Lender
      By:   /s/ Dan Killian         Name:   Dan Killian        Title:   Senior
Vice President     

[Amendment Agreement]

 

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            QUADRANGLE MASTER FUNDING LTD.
      By:   /s/ Christopher Santana         Name:   Christopher Santana       
Title:   Managing Principal, Quadrangle
Debt Recovery Advisors LP, its
investment advisor     

[Amendment Agreement]

 

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            WASHINGTON MUTUAL,
     as a Lender
      By:   /s/ Gordon Kovacs         Name:   Gordon Kovacs        Title:  
Senior Vice President     

[Amendment Agreement]

 

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            PNC Bank, National Association,
     as a Lender
      By:   /s/ Douglas G. Paul         Name:   Douglas G. Paul        Title:  
Senior Vice President     

[Amendment Agreement]

 

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            COMERICA BANK,
     as a Lender
      By:   /s/ Charles Weddell         Name:   Charles Weddell        Title:  
Vice President     

[Amendment Agreement]

 

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            NATIXIS,
     as a Lender
      By:   /s/ Marie-Edith Dugeny         Name:   Marie-Edith Dugeny       
Title:   Managing Director Real Estate Finance              By:   /s/ Timothée
Delpont         Name:   Timothée Delpont        Title:   Associate Real Estate
Finance     

[Amendment Agreement]

 

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            Sovereign Bank, as a Lender
      By:   /s/ T. Gregory Donohue         Name:   T. Gregory Donohue       
Title:   Senior Vice President     

[Amendment Agreement]

 

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            COMPASS BANK,
as a Lender
      By:   /s/ Johanna Duke Paley         Name:   Johanna Duke Paley       
Title:   Senior Vice President     

[Amendment Agreement]

 

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            RAYMOND JAMES BANK, FSB,
     as a Lender
      By:   /s/ William J. Hindman         Name:   William J. Hindman       
Title:   Vice President     

[Amendment Agreement]

 

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            U.S. Bank National Association,
     as a Lender
      By:   /s/ Greg Wilson         Name:   Greg Wilson        Title:   VP     

[Amendment Agreement]

 

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            National City Bank,
     as a Lender
      By:   David W. Olenik         Name:   David W. Olenik        Title:   SVP 
   

[Amendment Agreement]

 

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            GOLDMAN SACHS CREDIT PARTNERS, L.P.,
     as a Lender
      By:   /s/ Philip F. Green         Name:   Philip F. Green        Title:  
Authorized Signatory     

[Amendment Agreement]

 

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            CITIBANK, N.A.,
     as a Lender
      By:   /s/ Thomas A. Neville         Name:   Thomas A. Neville       
Title:   Attorney-In-Fact     

[Amendment Agreement]

 

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            Grand Central Asset Trust, SAN Series,
     as a Lender
      By:   /s/ Pam Gwin         Name:   Pam Gwin        Title:  
Attorney-in-Fact     

[Amendment Agreement]

 

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            BANK OF AMERICA, N.A.,
     as a Lender
      By:   /s/ Jonathan M. Barnes         Name:   Jonathan M. Barnes       
Title:   Vice President     

[Amendment Agreement]

 

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            QUATTRO SPECIAL SITUATIONS, LLC,
     as a Lender
      By:   /s/ Patrick Criscillo         Name:   Patrick Criscillo       
Title:   CFO     

[Amendment Agreement]

 

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ANNEX I to
Amendment Agreement
SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
[SEE ATTACHED]
[Amendment Agreement]

 

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SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Among
TOUSA, Inc. (f/k/a Technical Olympic, Inc.)
and the other Entities Party Hereto From Time to Time,
as Borrowers,
and
The Lenders and Issuers Party Hereto
and
Citicorp North America, Inc.,
as Administrative Agent,
Citigroup Global Markets Inc.,
as Sole Lead Arranger and Book Running Manager
 
Dated as of July 31, 2007
 
$700,000,000
 

 

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TABLE OF CONTENTS

              Page
ARTICLE I
       
 
       
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
       
 
       
Section 1.1 Defined Terms
    2  
Section 1.2 Computation of Time Periods
    46  
Section 1.3 Accounting Terms and Principles
    46  
Section 1.4 Certain Terms
    46  
 
       
ARTICLE II
       
 
       
THE REVOLVING CREDIT FACILITY
       
 
       
Section 2.1 The Revolving Credit Commitments
    47  
Section 2.2 Borrowing Procedures
    47  
Section 2.3 Swing Loans
    49  
Section 2.4 Letters of Credit
    51  
Section 2.5 Reduction and Termination of the Revolving Credit Commitments
    56  
Section 2.6 Repayment of Loans
    56  
Section 2.7 Evidence of Debt
    56  
Section 2.8 Prepayments
    57  
Section 2.9 Interest
    58  
Section 2.10 Conversion/Continuation Option
    59  
Section 2.11 Fees
    60  
Section 2.12 Payments and Computations
    60  
Section 2.13 Special Provisions Governing Eurodollar Rate Loans
    63  
Section 2.14 Capital Adequacy
    65  
Section 2.15 Taxes
    65  
Section 2.16 Substitution of Lenders
    67  
Section 2.17 Revolving Credit Facility Extension
    68  
Section 2.18 Revolving Credit Facility Increase
    70  
Section 2.19 Certain Accounts
    70  
 
       
ARTICLE III
       
 
       
CONDITIONS TO LOANS AND LETTERS OF CREDIT
       
 
       
Section 3.1 Conditions Precedent to the Effectiveness of This Agreement
    71  
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit
    75  

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              Page
ARTICLE IV
       
 
       
REPRESENTATIONS AND WARRANTIES
       
 
       
Section 4.1 Existence; Compliance with Law
    76  
Section 4.2 Power; Authorization; Enforceable Obligations
    76  
Section 4.3 Ownership of Subsidiaries
    77  
Section 4.4 Financial Statements
    78  
Section 4.5 Material Adverse Change
    79  
Section 4.6 Litigation
    79  
Section 4.7 Taxes
    79  
Section 4.8 Full Disclosure
    80  
Section 4.9 Margin Regulations
    80  
Section 4.10 No Burdensome Restrictions; No Defaults
    80  
Section 4.11 Investment Company Act
    81  
Section 4.12 Use of Proceeds
    81  
Section 4.13 Insurance
    81  
Section 4.14 Labor Matters
    81  
Section 4.15 ERISA
    82  
Section 4.16 Environmental Matters
    82  
Section 4.17 Intellectual Property
    83  
Section 4.18 Title; Real Property
    83  
Section 4.19 Anti-Terrorism Laws
    83  
Section 4.20 Solvency
    84  
Section 4.21 Collateral Documents
    85  
Section 4.22 Related Documents
    85  
Section 4.23 Subordinated Indebtedness
    85  
 
       
ARTICLE V
       
 
       
FINANCIAL COVENANTS
       
 
       
Section 5.1 Adjusted Consolidated Tangible Net Worth
    86  
Section 5.2 Maximum Total Leverage Ratio
    86  
Section 5.3 Minimum Interest Coverage Ratio
    86  
Section 5.4 Total Land to Adjusted Consolidated Tangible Net Worth
    87  
Section 5.5 Unsold Units to Units Closed
    87  
Section 5.6 Maximum Land Supply
    88  
 
       
ARTICLE VI
       
 
       
AFFIRMATIVE COVENANTS
       
 
       
Section 6.1 Reporting Requirements
    88  
Section 6.2 Preservation of Corporate Existence, Etc
    93  
Section 6.3 Compliance with Laws, Etc
    93  

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              Page
Section 6.4 Conduct of Business
    93  
Section 6.5 Payment of Taxes, Etc
    93  
Section 6.6 Maintenance of Insurance
    93  
Section 6.7 Asset Sales
    94  
Section 6.8 Access
    94  
Section 6.9 Keeping of Books
    95  
Section 6.10 Maintenance of Properties, Etc
    95  
Section 6.11 Application of Proceeds
    95  
Section 6.12 Environmental
    95  
Section 6.13 Additional Subsidiary Borrowers; Additional Collateral
    95  
Section 6.14 Security Interests; Further Assurances
    97  
Section 6.15 Information Regarding Collateral
    98  
Section 6.16 Designation of Restricted and Unrestricted Subsidiaries
    98  
Section 6.17 Mortgage Requirements
    100  
Section 6.18 Release of Mortgaged Property; Subordination; Consent
    102  
Section 6.19 Appraised Value Percentage
    103  
Section 6.20 Designated Account Deposits
    104  
Section 6.21 Maintenance of Ratings
    105  
Section 6.22 Post-Closing Requirements
    105  
 
       
ARTICLE VII
       
 
       
NEGATIVE COVENANTS
       
 
       
Section 7.1 Liens, Etc
    105  
Section 7.2 Investments
    107  
Section 7.3 Restricted Payments
    110  
Section 7.4 Limitation on Indebtedness
    111  
Section 7.5 Restriction on Fundamental Changes
    112  
Section 7.6 Change in Nature of Business
    113  
Section 7.7 Transactions with Affiliates
    113  
Section 7.8 Restrictions on Subsidiary Distributions; No New Negative Pledge
    113  
Section 7.9 Sale/Leasebacks
    114  
Section 7.10 Compliance with ERISA
    114  
Section 7.11 Environmental
    115  
Section 7.12 Designated Account Proceeds
    115  
Section 7.13 Limitation on Issuance of Stock
    115  
Section 7.14 Prepayments of Second Lien Loans; Modifications of Constituent
Documents and Other Documents
    116  
Section 7.15 Fiscal Year
    116  

iii

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              Page
ARTICLE VIII
       
 
       
EVENTS OF DEFAULT
       
 
       
Section 8.1 Events of Default
    116  
Section 8.2 Remedies
    119  
Section 8.3 Actions in Respect of Letters of Credit
    119  
Section 8.4 Rescission
    119  
 
       
ARTICLE IX
       
 
       
THE ADMINISTRATIVE AGENT
       
 
       
Section 9.1 Authorization and Action
    120  
Section 9.2 Administrative Agent’s Reliance, Etc
    121  
Section 9.3 The Administrative Agent Individually
    121  
Section 9.4 Lender Credit Decision
    123  
Section 9.5 Indemnification
    124  
Section 9.6 Successor Administrative Agent
    124  
 
       
ARTICLE X
       
 
       
MISCELLANEOUS
       
 
       
Section 10.1 Amendments, Waivers, Etc. by Lenders
    125  
Section 10.2 Assignments and Participations
    127  
Section 10.3 Costs and Expenses
    130  
Section 10.4 Indemnities
    131  
Section 10.5 Limitation of Liability
    132  
Section 10.6 Right of Set-off
    133  
Section 10.7 Sharing of Payments, Etc
    133  
Section 10.8 Notices, Etc
    134  
Section 10.9 No Waiver; Remedies
    135  
Section 10.10 Binding Effect
    135  
Section 10.11 Governing Law
    135  
Section 10.12 Submission to Jurisdiction; Service of Process
    135  
Section 10.13 Waiver of Jury Trial
    136  
Section 10.14 Section Titles
    136  
Section 10.15 Execution in Counterparts
    137  
Section 10.16 Entire Agreement
    137  
Section 10.17 Confidentiality
    137  
Section 10.18 USA Patriot Act
    138  
Section 10.19 Agent Communications
    138  
Section 10.20 Joint and Several Liability
    139  
Section 10.21 Administrative Borrower
    141  
Section 10.22 No Release
    142  
Section 10.23 Intercreditor Agreement
    142  

iv

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Schedules
       
 
       
Schedule I
  -   Revolving Credit Commitments
Schedule II
  -   Applicable Lending Offices and Addresses for Notices
Schedule 1.1(a)
  -   Refinancing Indebtedness to be Repaid
Schedule 1.1(b)
  -   Land Supply Ratio Adjustments
Schedule 3.1(a)(viii)
  -   Local Counsel
Schedule 2.4
  -   Existing Letters of Credit
Schedule 4.2
  -   Consents
Schedule 4.3
  -   Ownership of Subsidiaries; Investments
Schedule 4.4
  -   Material Obligations
Schedule 4.6
  -   Litigation
Schedule 4.7
  -   Taxes
Schedule 4.13(a)
  -   Insurance
Schedule 4.13(b)
  -   Insurance
Schedule 6.22
  -   Bank Accounts of the Transeastern JV Entities
Schedule 7.1
  -   Existing Liens
Schedule 7.2
  -   Existing Investments
Schedule 7.4(b)
  -   Existing Indebtedness
Schedule 7.8
  -   Restrictions on Subsidiary Distributions

     
Exhibits
   
 
   
Exhibit A
  Form of Assignment and Acceptance
Exhibit B
  Form of Assumption Agreement
Exhibit C
  Form of Revolving Credit Note
Exhibit D
  Form of Notice of Borrowing
Exhibit E
  Form of Borrowing Base Certificate
Exhibit F
  Form of Notice of Conversion or Continuation
Exhibit G
  Form of Credit Agreement Supplement
Exhibit H
  Form of Amended and Restated Guaranty
Exhibit I
  Form of Solvency Certificate
Exhibit J
  Form of Intercreditor Agreement
Exhibit K
  Form of Amended and Restated Security Agreement
Exhibit L
  Form of Compliance Certificate
Exhibit M
  Form of Amendment Agreement
Exhibit N
  Form of Deposit Account Security Agreement

v

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          SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of
July 31, 2007, among TOUSA, INC. (f/k/a Technical Olympic, Inc.), a Delaware
corporation (the “Administrative Borrower”), each subsidiary of the
Administrative Borrower listed on the signature pages hereof as a “Subsidiary
Borrower” and any other subsidiary of the Administrative Borrower which
hereafter becomes a Subsidiary Borrower pursuant to the terms hereof (each, a
“Subsidiary Borrower” and collectively, the “Subsidiary Borrowers”; together
with the Administrative Borrower, each a “Borrower” and collectively, the
“Borrowers”), the Lenders (as defined below), the Issuers (as defined below) and
CITICORP NORTH AMERICA, INC. (“CNAI”), as agent for the Lenders and the Issuers
(in such capacity and including any successor or permitted assign, the
“Administrative Agent”).
PRELIMINARY STATEMENTS
          (1) The Administrative Borrower, the Lenders (or their predecessors in
interest), the Issuer, the Administrative Agent, the syndication agent and the
co-documentation agents are parties to the Amended and Restated Credit
Agreement, dated as of January 30, 2007 (as amended, supplemented or otherwise
modified from time to time through the Effective Date (as defined below), the
“January 2007 Credit Agreement”), under which the Lenders provided the Revolving
Credit Facility in the aggregate principal amount of $800,000,000 for the making
of Revolving Loans and Swing Loans and the Issuance of Letters of Credit.
          (2) The Administrative Borrower has requested that the Lenders consent
to the amendments to the January 2007 Credit Agreement contained herein and
continue making Revolving Loans and Swing Loans and issue Letters of Credit from
time to time in accordance herewith in an aggregate principal amount not to
exceed $700,000,000 (as such amount may be increased from time to time pursuant
to Section 2.18). The proceeds of the Loans and the Letters of Credit are to be
used in accordance with Section 4.12.
          (3) The Administrative Borrower shall enter into (i) the First Lien
Term Loan Credit Agreement providing for First Lien Term Loans in the aggregate
principal amount of $200,000,000 simultaneously herewith and (ii) the Second
Lien Credit Agreement providing for Second Lien Loans in the aggregate principal
amount of $300,000,000 simultaneously herewith.
          (4) The agreement by the Lenders to amend and restate the January 2007
Credit Agreement and to continue making Revolving Loans and Swing Loans
hereunder is expressly conditioned upon the amendments contained herein.
          NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties hereto agree to amend and restate the January 2007 Credit Agreement as
follows:

 

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ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
          Section 1.1 Defined Terms.
          As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
          “Acquisition” means (i) the contribution by the Administrative
Borrower to the Transeastern JV Entities of an amount necessary to discharge all
amounts of outstanding Indebtedness of the Transeastern JV Entities listed on
Schedule 1.1(a) on terms and conditions set forth in the Settlement Documents
and (ii) the cancellation of Falcone/Ritchie’s membership interests in TE/TOUSA,
LLC as contemplated in Section 1 of the Falcone Settlement Agreement resulting
in TE/TOUSA, LLC becoming a Wholly-Owned Subsidiary of the Administrative
Borrower.
          “Adjusted Consolidated Tangible Net Worth” means, with respect to the
Administrative Borrower and its Restricted Subsidiaries on a Consolidated basis,
as of any date, the sum of (a) Tangible Net Worth, plus (b) the lowest of
(i) fifty percent (50%) of the aggregate principal amount of all then
outstanding Subordinated Indebtedness of the Administrative Borrower and its
Restricted Subsidiaries having no amortization and a maturity date later than
one year following the Scheduled Second Lien Term Loan Termination Date,
(ii) twenty percent (20%) of Tangible Net Worth and (iii) $200,000,000.
          “Administrative Agent” has the meaning assigned to such term in the
preamble hereto.
          “Administrative Borrower” has the meaning assigned to such term in the
preamble hereto.
          “Affected Lender” has the meaning assigned to such term in
Section 2.16.
          “Affiliate” means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person, each officer, director, general partner or joint-venturer of
such Person, and each Person who is the beneficial owner of 10% or more of any
class of Voting Stock of such Person. For the purposes of this definition,
“control” means the possession of the power to direct or cause the direction of
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. Solely for purposes of Section 7.7,
Affiliates of the Borrowers shall include Unrestricted Subsidiaries of the
Administrative Borrower and Joint Ventures.
          “Affiliated Title Company” means Universal Land Title, Inc., a Florida
corporation, and any of its Subsidiaries or Affiliates authorized under
applicable Requirement of Law to conduct business as an agent for a title
insurance company.

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          “Agreement” means the January 2007 Amended and Restated Credit
Agreement as amended and restated by this Second Amended and Restated Revolving
Credit Agreement, as further amended, amended and restated, supplemented, waived
or otherwise modified from time to time, except that, except as otherwise
provided, any reference to the date of this Agreement shall mean the date of
this Second Amended and Restated Revolving Credit Agreement.
          “Amendment Agreement” means the amendment agreement substantially in
the form of Exhibit M, dated as of the Effective Date, executed by the Required
Lenders and the Administrative Borrower.
          “Anti-Terrorism Laws” has the meaning assigned to such term in Section
4.19(a).
          “Applicable Lending Office” means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan, and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
          “Applicable Margin” means, as of any date of determination, a per
annum rate equal to the rate set forth below for the applicable type of Loan or
Letter of Credit and the Total Leverage Ratio and Ratings set forth below for
each such date of determination (i) until delivery of the Compliance Certificate
pursuant to Section 6.1(c) for the first full fiscal quarter commencing on or
after the Effective Date shall be at Level 5 set forth below, and
(ii) thereafter, the following percentages per annum:

                                      Total Leverage       Eurodollar     Base
Rate     Letters of   Level   Ratio   Ratings   Rate Loans     Loans     Credit
 
1
  Less than or equal to 1.0   Ba1/BB+ or higher     1.50 %     -0-       1.50 %
2
  Greater than 1.0 but less than or equal to 1.25   Ba2/BB     1.60 %     -0-  
    1.60 %
3
  Greater than 1.25 but less than or equal to 1.50   Ba3/BB-     2.00 %     1.00
%     2.00 %
4
  Greater than 1.50 but less than or equal to 1.75   B1/B+     2.50 %     1.50 %
    2.50 %
5
  Greater than 1.75 but less than or equal to 2.75   B2/B or lower     4.00 %  
  3.00 %     4.00 %
6
  Greater than 2.75   B2/B or lower     4.25 %     3.25 %     4.25 %

     For purposes of the above grid, “Ratings” means (i) at any time at which
Moody’s, S&P and Fitch all publicly announce ratings of the Administrative
Borrower’s senior unsecured non-credit enhanced long-term debt, the second
highest of such three ratings and (ii) at any time at which Moody’s and S&P
publicly announce ratings of the Administrative Borrower’s

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senior unsecured non-credit enhanced long-term debt but Fitch does not, the
higher of such two ratings (i.e., lower pricing).
          In the case of the Total Leverage Ratio, the Applicable Margin shall
be determined upon delivery of the Compliance Certificate pursuant to
Section 6.1(c), after the end of each fiscal quarter, commencing with the
Compliance Certificate delivered for the fiscal quarter ending June 30, 2007.
The Applicable Margin shall be adjusted to the rate corresponding to the Total
Leverage Ratio set forth in the grid above or, if the Administrative Borrower
shall fail to deliver such Compliance Certificate under Section 6.1(c) when due,
shall be adjusted to the rate corresponding to Level 6 until the delivery of the
Compliance Certificate. Such adjustment shall take effect on the last day that
the Compliance Certificate was required to be delivered and shall remain in
effect until subsequently adjusted in accordance herewith upon the delivery of a
subsequent Compliance Certificate.
          In the case of the Ratings, the Applicable Margin shall be determined
upon any change in such Ratings. The Applicable Margin shall automatically be
adjusted to the rate corresponding to the Ratings set forth in the grid above.
Such automatic adjustment shall take effect as of the next Business Day
following the date of such change in the Ratings.
          In the event of a difference of one pricing level between (x) the
Ratings and the Total Leverage Ratio, or (y) the Ratings, the pricing for the
higher level shall apply (e.g., if the applicable Total Leverage Ratio is Level
1 and the applicable Ratings are Level 2, the pricing for Level 1 shall apply).
In the event such difference is of more than one level between (x) the Ratings
and the Total Leverage Ratio or (y) the Ratings, the pricing for the level that
is one level lower than the higher level pricing shall apply (e.g., if the
applicable Total Leverage Ratio is Level 1 and the applicable Ratings are Level
4, the pricing for Level 2 shall apply).
          Notwithstanding anything to the contrary contained above in this
definition or elsewhere in this Agreement, if it is subsequently determined that
the Total Leverage Ratio set forth in any Compliance Certificate delivered to
the Administrative Agent pursuant to Section 6.1(c) or otherwise provided to the
Administrative Agent is inaccurate for any reason and the result thereof is that
the Lenders received interest or fees for any period based on an Applicable
Margin that is less than that which would have been applicable had the Total
Leverage Ratio been accurately determined, then, for all purposes of this
Agreement, the “Applicable Margin” for any day occurring within the period
covered by such Compliance Certificate shall retroactively be deemed to be the
relevant percentage as based upon the accurately determined Total Leverage Ratio
for such period, and any shortfall in the interest or fees theretofore paid by
the Administrative Borrower for the relevant period pursuant to this Agreement
as a result of the misreporting or miscalculation of the Total Leverage Ratio
shall be deemed to be (and shall be) due and payable under the relevant
provisions of this Agreement, as applicable, at the time the interest or fees
for such period were required to be paid (and shall remain due and payable until
paid in full, together with all amounts owing under Section 2.9(c), in
accordance with the terms of this Agreement).
          “Applicable Person” has the meaning assigned to such term in
Section 6.17(a).

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          “Applicable Unused Revolving Commitment Fee Rate” means, as of any
date of determination, a per annum rate equal to the corresponding Unused
Revolving Commitment Percentage set forth below:

              Unused Revolving Unused Revolving Commitment Percentage  
Commitment Fee Rate
Higher than 66 2/3%
    0.50 %
Higher than 33 1/3% and lower than or equal to 66 2/3%
    0.375 %
Lower or equal to 33 1/3%
    0.25 %

          “Appraised Value” means, as of any date, with respect to Completed
Unsold Homes, Land/Lots Under Development, Unimproved Land and Unsold Homes
Under Construction (x) the value of such Completed Unsold Homes, Land/Lots Under
Development, Unimproved Land or Unsold Homes Under Construction, as the case may
be, determined in accordance with GAAP multiplied by (y) the applicable
Appraised Value Percentage.
          “Appraised Value Percentage” means, as of any date, with respect to
Completed Unsold Homes, Land/Lots Under Development, Unimproved Land and Unsold
Homes Under Construction, the applicable fraction (expressed as a decimal) as
set forth in the most recent report of the Appraiser delivered in accordance
with Section 6.19.
          “Appraiser” means Crown Appraisal Group or any other third party
independent appraiser meeting FIRREA requirements selected by the Administrative
Agent (for the account of the Lenders) from time to time with, so long as no
Event of Default has occurred and is continuing, the consent of the
Administrative Borrower (not to be unreasonably withheld or delayed).
          “Approved Fund” means, with respect to any Fund that is a fund that
invests in bank loans and is advised or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or Affiliate of an entity that
administers or manages a Lender.
          “Arranger” means Citigroup Global Markets Inc., in its capacity as
sole lead arranger and book manager.
          “Asset Sale” means (a) any conveyance, sale, lease, sublease,
assignment, transfer or other disposition (including by way of merger or
consolidation and including any sale and leaseback transaction) of any property,
by the Administrative Borrower or any of its Subsidiaries excluding
(i) inventory (which shall include land, spec homes and Model Homes) sold in the
ordinary course of business, (ii) any sale or discount, in each case without
recourse, of accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof, (iii) dispositions
of cash and Cash Equivalents, (iv) conveyances, sales, leases, subleases,
assignments, transfers, exchanges or dispositions between the Loan Parties so
long as the Administrative Agent continues to have a perfected first priority
Lien (subject only to Customary Permitted Liens and pari passu Liens permitted
pursuant to Section 7.1(b)(i)) on such property after giving effect to such
sale, transfer or disposition, and (v) a swap exchange of

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assets of the Administrative Borrower or any of its Subsidiaries for similar
assets), and (b) any issuance or sale of any Stock of any Subsidiary of the
Administrative Borrower, in the case of clause (a) or (b), to any Person other
than any other Borrower.
          “Assignment and Acceptance” means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, substantially in the form of Exhibit A.
          “Assumption Agreement” means an assumption agreement entered into by a
Lender or an Eligible Assignee, and accepted by the Administrative Agent,
substantially in the form of Exhibit B.
          “Available Credit” means, at any time after the Effective Date, an
amount equal to the lesser of (i) the aggregate outstanding principal amount of
all First Lien Term Loans at such time plus the aggregate amount of Revolving
Credit Commitments and (ii) the Borrowing Base.
          “Available Revolving Credit” means, at any time, an amount equal to
     (i) the lesser of (a) the aggregate Revolving Credit Commitments at such
time and (b) the amount, if any, by which the Borrowing Base at such time
exceeds the then aggregate outstanding principal amount of all First Lien Term
Loans (including First Lien Term Loans being made substantially simultaneously
with any proposed Revolving Loan or Swing Loan) minus
     (ii) the aggregate Revolving Credit Outstandings at such time.
          “Bankruptcy Code” means Title 11, United States Code, as amended from
time to time.
          “Base Rate” means the greater of (i) the interest rate per annum
announced from time to time by the Administrative Agent at its Domestic Lending
Office as its then base rate, or (ii) the Federal Funds Rate plus 0.50% per
annum.
          “Base Rate Loan” means any Revolving Loan during any period in which
it bears interest based on the Base Rate.
          “Board of Directors” means the board of directors of the
Administrative Borrower or any committee thereof authorized with respect to any
particular matter to exercise the power of the board of directors of the
Administrative Borrower.
          “Borrower” and “Borrowers” have the meaning assigned to such terms in
the preamble hereto.
          “Borrowing” means a borrowing consisting of Loans of the same Class
and Type made on the same date and, in the case of Eurodollar Rate Loans, as to
which a single Interest Period is in effect.

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          “Borrowing Base” means, at any time, a dollar amount equal to (i) the
sum of, without duplication:
     (a) the product of (x) 0.90 and (y) the sum of (i) Escrow Proceeds
Receivables of the Borrowers and (ii) Unrestricted Cash of the Borrowers, to the
extent such Escrow Proceeds Receivables or Unrestricted Cash, as the case may
be, constitute Borrowing Base Assets;
     (b) the product of (x) 0.85 and (y) the value of Sold Homes owned by a
Borrower (as determined in accordance with the definition of “Sold Homes”), to
the extent such Sold Homes constitute Borrowing Base Assets;
     (c) the product of (x) 0.75 and (y) the value of Completed Unsold Homes
owned by a Borrower (as determined in accordance with the definition of
“Completed Unsold Homes”), to the extent such Completed Unsold Homes constitute
Borrowing Base Assets;
     (d) the product of (x) 0.65 and (y) the value of Unsold Homes Under
Construction owned by a Borrower (as determined in accordance with the
definition of “Unsold Homes Under Construction”), to the extent such Unsold
Homes Under Construction constitute Borrowing Base Assets;
     (e) the product of (x) 0.45 and (y) the value of Land/Lots Under
Development owned by a Borrower (as determined in accordance with the definition
of “Land/Lots Under Development”), to the extent such Land/Lots Under
Development constitute Borrowing Base Assets;
     (f) the product of (x) 0.35 and (y) the value of Unimproved Land owned by a
Borrower (as determined in accordance with the definition of “Unimproved Land”),
to the extent such Unimproved Land constitutes Borrowing Base Assets; and
     (g) solely with respect to any Borrowing Base Assets of the Transeastern JV
Entities which have not been appraised after the Effective Date and (i) without
duplication of clause (a), the product of (x) 0.90 and (y) the sum of (A) Escrow
Proceeds Receivables with respect to the Real Property owned by the Transeastern
JV Entities prior to the Effective Date and (B) Unrestricted Cash of
Transeastern JV Entities and (ii) without duplication of clauses (b) through (f)
above, the product of (x) 0.55 and (y) the book value of the Transeastern
Property;
          minus (ii) the aggregate amount of payments any Borrower would have to
make under all Secured Hedging Contracts existing at the time of calculation of
the Borrowing Base if settlements were to be made under such Hedging Contracts;
provided that (x) no Real Property of Transeastern shall be included in the
calculation of clauses (b) — (f) above until the Appraised Value of such assets
is determined in accordance with Section 6.19 and (y) on or after the 91st day
after the Effective Date, no assets under clause (g) above shall be included in
the Borrowing Base.

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          Notwithstanding the foregoing, the total aggregate amounts calculated
under clauses (e) and (f) hereof shall not comprise more than 30% of the
Borrowing Base at any time.
          The Borrowing Base at any time shall be determined by reference to the
most recent Borrowing Base Certificate theretofore delivered to the
Administrative Agent.
          “Borrowing Base Assets” means the following assets to the extent
satisfying the following terms and conditions and included in the calculation of
the Borrowing Base:
     (a) (i) Escrow Proceeds Receivables of a Borrower but only to the extent
that (A) if such Escrow Proceeds Receivables are held by any Affiliated Title
Company, such Affiliated Title Company has entered into a written agreement with
the Administrative Agent acknowledging the security interests granted under the
Security Agreement and agreeing that any Escrow Proceeds Receivables released or
paid by such Affiliated Title Company shall be paid solely to a Designated
Account or (B) if such Escrow Proceeds Receivables are held by any title
insurance company, title agent, escrow company or similar entity authorized
under applicable Requirement of Law to conduct business as an agent for a title
insurance company that is not an Affiliated Title Company, the applicable
Borrower has instructed such entity in writing to pay any Escrow Proceeds
Receivables to be released or paid to such Borrower solely to a Designated
Account maintained by Wachovia Bank, National Association (or other Designated
Account approved by the Administrative Agent) and in the case of clause (A),
provided that no event or condition of the nature referred to in Section 8.1(f),
(g) or (h) has occurred and is continuing with respect to such Affiliated Title
Company or, in the case of clause (B), provided that such Borrower has not
received notice, and a Responsible Officer of the Administrative Borrower has no
knowledge, that an event or condition of the nature referred to in
Section 8.1(g) has occurred and is continuing with respect to such other title
insurance company, title agent, escrow company or similar entity, and
(ii) Unrestricted Cash but only to the extent on deposit in a Designated
Account;
     (b) Sold Homes owned by a Borrower but only to the extent that (i) the
Contract for Sale for such Sold Home and related rights are subject to a first
priority perfected security interest as contemplated by the Security Agreement
and (ii) such Sold Home is subject to a Mortgage and all Mortgage Requirements
with respect to such Mortgage have been satisfied;
     (c) Completed Unsold Homes owned by a Borrower but only to the extent that
(i) each Completed Unsold Home is subject to a Mortgage and all Mortgage
Requirements with respect to such Mortgage have been satisfied and (ii) no
Completed Unsold Home has been “completed” (within the meaning of the definition
of Completed Unsold Home) for more than 180 days other than a Completed Unsold
Home being used as a Model Home;
     (d) Unsold Homes Under Construction owned by a Borrower but only to the
extent that such Unsold Homes Under Construction are subject to a Mortgage and
all Mortgage Requirements with respect to such Mortgage have been satisfied;

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     (e) Land/Lots Under Development owned by a Borrower but only to the extent
that such Land/Lots Under Development are subject to a Mortgage and all Mortgage
Requirements with respect to such Mortgage have been satisfied;
     (f) Unimproved Land owned by a Borrower but only to the extent that such
Unimproved Land is subject to a Mortgage and all Mortgage Requirements with
respect to such Mortgage have been satisfied; and
     (g) Real Property (or other assets of the type described in clauses (a)
through (f) above) owned by the Transeastern JV Entities on or prior to the
Effective Date but only to the extent that such Real Property is subject to a
Mortgage and all Mortgage Requirements with respect to such Mortgage have been
satisfied (any such Real Property, “Transeastern Property”).
          “Borrowing Base Certificate” means a certificate of the Administrative
Borrower, substantially in the form of Exhibit E.
          “Business Day” means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to notices, determinations, fundings and payments in connection with the
Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in Dollar
deposits are also carried on in the London interbank market.
          “Capital Assets” means, with respect to any person, all equipment,
fixed assets or improvements (other than Real Property) of such person, or
replacements or substitutions therefor or additions thereto, that, in accordance
with GAAP, have been or should be reflected as additions to property, plant or
equipment on the balance sheet of such person.
          “Capital Expenditures” means, for any period, without duplication, all
expenditures made directly or indirectly by the Administrative Borrower and its
Restricted Subsidiaries during such period for Capital Assets (whether paid in
cash or other consideration, financed by the incurrence of Indebtedness or
accrued as a liability).
          “Capital Lease” means, with respect to any Person, any lease of, or
other arrangement conveying the right to use, property by such Person as lessee
that would be accounted for as a capital lease on a balance sheet of such Person
prepared in conformity with GAAP.
          “Capital Lease Obligations” means, with respect to any Person, the
capitalized amount of all obligations of such Person or any of its Restricted
Subsidiaries under Capital Leases, as determined on a Consolidated basis in
conformity with GAAP.
          “Cash Equivalents” means
     (a) securities issued or fully guaranteed or insured by the United States
government or any agency thereof;

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     (b) certificates of deposit, eurodollar time deposits, overnight bank
deposits and bankers’ acceptances of any commercial bank organized under the
laws of the United States, any state thereof, the District of Columbia, any
foreign bank, or its branches or agencies (fully protected against currency
fluctuations) which, at the time of acquisition, are rated at least “A-1” by S&P
or “P-1” by Moody’s;
     (c) commercial paper of an issuer rated at least “A-1” by S&P, “P-1” by
Moody’s or “1” by the National Association of Investors Corporation;
     (d) short-term repurchase agreements, municipal trusts and obligations with
a term of not more than 30 days for underlying securities of the types described
in clause (a) above entered into with any bank meeting the qualifications
specified in clause (b) above; and
     (e) shares of any money market fund that (i) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (a),
(b), (c) and (d) above, (ii) has net assets of not less than $500,000,000 and
(iii) is rated at least “A-1” by S&P, “P-1” by Moody’s or “1” by the National
Association of Investors Corporation;
provided, however, that the maturities of all obligations of the type specified
in clauses (a), (b), (c) and (d) above shall not exceed 180 days.
          “Cash Interest Incurred” means, for any period, Consolidated Interest
Incurred for such period, less the sum of (a) interest on any debt paid by the
increase in the principal amount of such debt including by issuance of
additional debt of such kind and (b) gross interest income of Borrower and its
Restricted Subsidiaries for such period.
          “Casualty Event” means any involuntary loss of title, any involuntary
loss of, damage to or any destruction of, or any condemnation or other taking
(including by any Governmental Authority) of, any property of the Administrative
Borrower or any of its Subsidiaries. “Casualty Event” shall include but not be
limited to any taking of all or any part of any Real Property of any Person or
any part thereof, in or by condemnation or other eminent domain proceedings
pursuant to any Requirement of Law, or by reason of the temporary requisition of
the use or occupancy of all or any part of any Real Property of any Person or
any part thereof by any Governmental Authority, civil or military, or any
settlement in lieu thereof.
          “Change of Control” means the occurrence of any of the following
events:
     (a) any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act or any successor provisions to either of the
preceding), including any group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, other than any one or more of the Permitted Holders, becomes
the “beneficial owner,” directly or indirectly, of 40% or more of the total
voting power of the Voting Stock of the Administrative Borrower; or

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     (b) any of the Permitted Holders or any Person controlling or under common
control with the Permitted Holders, either individually or acting together,
becomes the “beneficial owner,” directly or indirectly, of 75% or more of the
total voting power of the Voting Stock of the Administrative Borrower; or
     (c) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election or appointment by such board of directors or whose
nomination for election by the holders of the Stock of the Administrative
Borrower was approved by a vote of not less than two-thirds of the board of
directors or other governing body then still in office who were either directors
(or analogous governing Persons) at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors or other governing
body then in office; or
     (d) the holders of the Stock of the Administrative Borrower shall have
approved any plan of liquidation or dissolution of the Administrative Borrower;
or the shares of the Administrative Borrower shall cease to be listed on at
least one of the New York Stock Exchange, American Stock Exchange or Nasdaq
National Market System for any reason; or
     (e) any “change of control” as defined in the First Lien Term Loan Credit
Agreement, the Second Lien Credit Agreement, the indentures governing any of the
Existing Notes or the Settlement Subordinated Debt or the certificate of
designation governing the Settlement Preferred Stock.
          For the purposes of this definition of “Change of Control,” the term
“beneficial owner” shall be as defined in Rule 13d-3 under the Exchange Act,
except that a person will be deemed to have “beneficial ownership” of all shares
that any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time. For the purposes of clauses
(a) and (b) of this definition of “Change of Control,” a person or group shall
be deemed to beneficially own any Voting Stock of a corporation or other Person
held by any other corporation or other Person (the “parent entity”) so long as
such person or group beneficially owns, directly or indirectly, in the aggregate
a majority of the total voting power of the Voting Stock of such parent entity.
          “Citibank” means Citibank, N.A., a national banking association.
          “Class,” when used in reference to any Loan, refers to whether such
Loan is a Revolving Loan or a Swing Loan.
          “CNAI” has the meaning assigned to such term in the preamble hereto.
          “Code” means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.

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          “Collateral” means all Mortgaged Property and “Collateral” as referred
to in the Collateral Documents and all other property that is or is intended to
be subject to any Lien in favor of the Administrative Agent for the benefit of
the Secured Parties and will include, without limitation, all Borrowing Base
Assets.
          “Collateral Documents” means the Security Agreement, the Intercreditor
Agreement, the Deposit Account Security Agreement, the Deposit Account Control
Agreements, the Mortgages, the Equity Pledge Agreement and each Pledge Agreement
delivered in accordance with applicable local or foreign law to grant a valid,
perfected security interest in any Collateral securing the Obligations, and all
UCC or other financing statements or instruments of perfection required by this
Agreement, the Security Agreement, any Mortgage or any other such security
document or Pledge Agreement to be filed with respect to the security interests
in property and fixtures created pursuant to the Security Agreement or any
Mortgage and any other document or instrument utilized to pledge or grant or
purport to pledge or grant a security interest or Lien on any Collateral to
secure the Obligations.
          “Communications” has the meaning assigned to such term in
Section 10.19(a).
          “Completed Unsold Homes” means all Units (including all Model Homes)
for which construction has been “completed” but for which there is in existence
no written Contract for Sale, the value of which is the lesser of (x) value
determined in conformity with GAAP and (y) the Appraised Value. Construction
will be considered “completed” when a temporary certificate of occupancy,
certificate of occupancy or similar certificate has been issued by the
applicable Governmental Authority or, if the applicable Governmental Authority
does not issue such a certificate until a purchaser has been identified or no
Governmental Authority issues such a certificate with respect to such Unit, when
construction of such Unit has been substantially completed (exclusive of items
of a punchlist nature) in compliance with all applicable building codes and
other Requirements of Law, and such Unit has satisfied the Administrative
Borrower’s criteria for and has been classified by the Administrative Borrower
as “complete” in its accounting system.
          “Compliance Certificate” has the meaning assigned to such term in
Section 6.1(c).
          “Consenting Lenders” has the meaning assigned to such term in
Section 2.17(a).
          “Consolidated” means, with respect to any Person, the consolidation of
accounts of such Person and its Subsidiaries or Restricted Subsidiaries, as the
case may be, in conformity with GAAP.
          “Consolidated Current Assets” means, as at any date of determination,
without duplication, inventory plus accounts receivable from unconsolidated
joint ventures, in each case as set forth on a consolidated balance sheet of the
Borrowers and their Restricted Subsidiaries in accordance with GAAP; provided
that inventory not owned shall not constitute a Consolidated Current Asset.

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          “Consolidated Current Liabilities” means, as at any date of
determination, without duplication, homebuilding accounts payable and other
liabilities which may properly be classified as current liabilities plus
customer deposits, in each case on a consolidated balance sheet of Borrower and
its Restricted Subsidiaries in accordance with GAAP; provided that solely for
the purposes of calculating Excess Cash Flow for the Excess Cash Flow Period
ending on December 31, 2007, accruals related to the provision for settlement of
loss contingency related to the Transeastern JV Entities taken at December 31,
2006 shall be excluded from the definition of “Consolidated Current
Liabilities”.
          “Consolidated Net Income” means, for any Person for any period, the
net income (or loss) of such Person and its Restricted Subsidiaries, as the case
may be, for such period, determined on a Consolidated basis in conformity with
GAAP.
          “Constituent Documents” means, with respect to any Person, (a) the
articles of incorporation, certificate of incorporation or certificate of
formation (or the equivalent organizational documents) of such Person, (b) the
by-laws or operating agreement (or the equivalent governing documents) of such
Person and (c) any document setting forth the manner of election and duties of
the directors or managing members of such Person (if any) and the designation,
amount or relative rights, limitations and preferences of any class or series of
such Person’s Stock.
          “Contaminant” means any material, substance, chemical, constituent,
waste, contaminant or pollutant, including, without limitation, any petroleum or
petroleum-derived substance or waste, asbestos and polychlorinated biphenyls
regulated or which can give rise to liability under any Environmental Law.
          “Contract for Sale” means a written sale and purchase agreement for
one or more Units and/or Land/Lots Under Development between the Administrative
Borrower or any of its Restricted Subsidiaries and an unrelated third party
purchaser, who has been pre-qualified by the Administrative Borrower, one of its
Restricted Subsidiaries or an institutional lender.
          “Contractual Obligation” of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its property is subject.
          “Credit Agreement Supplement” means a supplement to this Agreement
substantially in the form of Exhibit G, pursuant to which each Subsidiary of the
Administrative Borrower named therein becomes an additional Subsidiary Borrower
under this Agreement.
          “Customary Permitted Liens” means, with respect to any Person, any of
the following Liens:
     (a) Liens with respect to the payment of taxes, assessments, or
governmental charges, including liens securing community development district
bonds or similar bonds issued by any Governmental Authority to accomplish
similar purposes, in each case that

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are not yet due or that are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other appropriate
provisions are being maintained to the extent required by GAAP;
     (b) Liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other liens
imposed by law and/or created in the ordinary course of business for amounts not
yet due or that are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate provisions are
being maintained to the extent required by GAAP;
     (c) deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance or other types of social security
benefits;
     (d) Liens or deposits to secure the performance of bids, tenders, sales,
options, contingent payments to sellers of real property, contracts (other than
for the repayment of borrowed money), participation agreements, joint
development agreements, surety, stay, appeal, customs, indemnity, performance
obligations or other similar bonds or obligations (not constituting
Indebtedness), arising in the ordinary course of business;
     (e) encumbrances arising by reason of zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements, building
restrictions and other similar encumbrances on the use of real property which do
not materially detract from the value of such real property or interfere with
the ordinary conduct of the business conducted and proposed to be conducted at
such real property;
     (f) encumbrances arising under leases or subleases of real property which
do not in the aggregate materially detract from the value of such real property
or interfere with the ordinary conduct of the business conducted and proposed to
be conducted at such real property;
     (g) financing statements with respect to a lessor’s rights in and to
personal property leased to such Person in the ordinary course of such Person’s
business;
     (h) Mortgages or Deeds of Trust securing the payment to a seller or master
developer of premium participation payments, marketing fees and/or deferred
consideration; and
     (i) encumbrances not otherwise permitted hereby to the extent described as
an exception to coverage under any policy of title insurance insuring a
Mortgage.
          “Debt Issuance” means the incurrence by the Administrative Borrower or
any of its Restricted Subsidiaries of any Indebtedness after the Effective Date
(other than as permitted by Section 7.4).
          “Debt Service” means, with respect to the Administrative Borrower and
its Restricted Subsidiaries on a consolidated basis for any period, Cash
Interest Incurred for such

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period plus scheduled principal amortization of all Indebtedness and fees paid
in respect of Letters of Credit for such period paid in cash in such period.
          “Default” means any event which is, or with the lapse of a grace
period or the giving of notice or both would become, an Event of Default.
          “Deposit Account” has the meaning assigned to such term in the
Security Agreement.
          “Deposit Account Control Agreement” means an agreement among the bank
maintaining a Designated Account, the Borrower that is the owner of such
Designated Account and such bank’s customer, and the Administrative Agent as
secured party, in form and substance reasonably satisfactory to the
Administrative Agent.
          “Deposit Account Security Agreement” means that certain Deposit
Account Security Agreement substantially in the form of Exhibit N dated as of
the Effective Date between the Administrative Borrower and certain of its
Subsidiaries, as grantors, and the Administrative Agent, in its capacity as
First Priority Representative (as defined in the Intercreditor Agreement), as
secured party, as amended, modified or supplemented from time to time.
          “Designated Account” means a Deposit Account or Securities Account
maintained with a bank or other financial institution and owned by a Borrower to
the extent such Deposit Account or Securities Account, as applicable, is subject
to the first priority perfected security interest contemplated by the Deposit
Account Security Agreement or the Security Agreement, as applicable.
          “Disclosure Documents” means, collectively: (i) the Administrative
Borrower’s annual report on Form 10-K for the fiscal year ended December 31,
2006 as filed with the SEC on March 20, 2007, (ii) the Administrative Borrower’s
quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2007 as
filed with the SEC on May 10, 2007 and (iii) the Administrative Borrower’s
current Reports on Form 8-K filed with the Securities and Exchange Commission
prior to the Effective Date (but subsequent to filing of the SEC Report
described in clause (ii) above).
          “Disqualified Capital Stock” means any Stock of a Person or a
Subsidiary thereof issued after the Effective Date which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder), or upon the happening of any event
other than a change of control, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, or would require the mandatory payment of
cash dividends prior to the date that is six months after Scheduled Second Lien
Term Loan Termination Date, for cash or securities constituting Indebtedness or
other Disqualified Capital Stock (other than to the extent the payment of such
dividends is permitted under this Agreement). Without limitation of the
foregoing, Disqualified Capital Stock shall be deemed to include any preferred
stock of a Person or a Subsidiary of such Person, with respect to which, under
the terms of such preferred stock, by agreement or otherwise, such Person or
Subsidiary is obligated to pay current dividends or

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distributions in cash during the period prior to the Scheduled Second Lien Term
Loan Termination Date; provided, however, that preferred stock of a Person that
is issued with the benefit of provisions requiring a change of control offer to
be made for such preferred stock in the event of a change of control of such
Person will not be deemed to be Disqualified Capital Stock solely by virtue of
such provisions. In no event shall “Disqualified Capital Stock” include the
Settlement Preferred Stock (or any pay-in-kind dividends thereon) issued in
connection with the Transactions.
          “Disqualified Capital Stock Issuance” means the issuance or sale by
the Administrative Borrower or any of its Subsidiaries of any Disqualified
Capital Stock after the Effective Date.
          “Dollars” and the sign “$” each mean the lawful money of the United
States of America.
          “Domestic Lending Office” means, with respect to any Lender, the
office of such Lender specified as its “Domestic Lending Office” opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender or such other office of such Lender as such Lender may from time to time
specify to the Administrative Borrower and the Administrative Agent.
          “Domestic Subsidiary” means any Subsidiary of a Borrower organized
under the laws of any state of the United States of America or the District of
Columbia.
          “Early Maturity Date” means the date that is six months before the
maturity dates of each of (i) the 9% Senior Notes due 2010 of the Administrative
Borrower, (ii) the 71/2% Senior Subordinated Notes due 2011 of the
Administrative Borrower, (iii) the 81/4% Senior Notes due 2011 of the
Administrative Borrower and (iv) the 103/8% Senior Subordinated Notes due 2012
of the Administrative Borrower, in each case if such series of notes has not
been Refinanced on or prior to such date in its entirety with Permitted
Refinancing Indebtedness having a final maturity date at least six months after
the Scheduled Second Lien Term Loan Termination Date.
          “EBITDA” means, for the Administrative Borrower and its Restricted
Subsidiaries for the twelve (12) month period ending on any date of
determination, an amount equal to (a) the Consolidated Net Income for such
period, plus (b) cash dividends from Unrestricted Subsidiaries paid to the
Administrative Borrower during such period, plus (c) the sum of (i) any
provision for income taxes for such period, (ii) Interest Expense deducted in
the calculation of Consolidated Net Income for such period in conformity with
GAAP (including, without duplication, previously capitalized Interest Expense
which would be included in “cost of goods sold” and deducted from Consolidated
revenues in determining Consolidated Net Income), (iii) the amount of
depreciation and amortization for such period, (iv) any write-off of goodwill,
(v) the amount of any non-cash charges (including without limitation, land
impairment or abandonment charges, abandonment charges relating to option
agreements with respect to land or interests in land entered into in the
ordinary course of business and impairment of investments) in such period (other
than any non-cash charges that represent an accrual or reserve for potential
cash items in the future), (vi) expenses and charges related to the Transactions
incurred on or prior to the Effective Date or within 90 days thereafter,
(vii) certain other cash charges related to the

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termination of any option agreements with respect to land or interests in land
entered into in the ordinary course of business, (viii) any expenses, fees,
premiums or charges paid in cash in connection with any Asset Sales,
investments, acquisitions, Permitted Acquisitions, issuance of debt, equity
securities or any refinancing transaction or any amendment or other modification
of any debt instrument permitted hereunder, (ix) restructuring charges and
expenses related to the closure of office facilities and severance costs and
litigation costs and professional fees related to the foregoing, in each case to
the extent included in the calculation of Consolidated Net Income for such
period in conformity with GAAP, but without duplication and (x) any non-cash
charges related to embedded derivatives or stock-based compensation expense
under SFAS No. 123R in each case for which the Administrative Borrower or its
Restricted Subsidiaries are not obligated to settle in cash (provided that
EBITDA shall be decreased by any related cash settlements made during such
period); provided that extraordinary gains or extraordinary losses shall be
excluded from the computation of EBITDA (including any extraordinary gains or
extraordinary losses from Asset Sales). In the case of any Person that becomes a
Restricted Subsidiary during any period of calculation, EBITDA shall, for the
purposes of the foregoing calculations, be adjusted by increasing, if positive,
or decreasing, if negative, EBITDA by the EBITDA of such Subsidiary during such
period of calculation occurring prior to the date such Subsidiary became a
Restricted Subsidiary.
          Other than for purposes of calculating Excess Cash Flow, Consolidated
EBITDA shall be calculated on a pro forma basis to give effect to the
Acquisition, any Permitted Acquisition and Asset Sales consummated at any time
on or after the first day of the measurement period and prior to the date of
determination as if the Acquisition and each such Permitted Acquisition had been
effected on the first day of such period and as if each such Asset Sale had been
consummated on the day prior to the first day of such period.
          “Effective Date” has the meaning assigned to such term in Section 3.1.
          “Eligible Assignee” means (a) a Lender or any Affiliate or Approved
Fund of such Lender; (b) a commercial bank having total assets in excess of
$5,000,000,000; (c) a finance company, insurance company, or any other financial
institution or fund, in each case reasonably acceptable to the Administrative
Agent and regularly engaged in making, purchasing or investing in loans, and
having a net worth, determined in conformity with GAAP, in excess of
$250,000,000 (or, to the extent net worth is less than such amount, a finance
company, insurance company, other financial institution or fund, reasonably
acceptable to the Administrative Agent) or (d) a savings and loan association or
savings bank organized under the laws of the United States or any State thereof
having a net worth, determined in conformity with GAAP, in excess of
$250,000,000.
          “Entitled Land” means all land owned by the Administrative Borrower or
any of its Restricted Subsidiaries, as part of their respective real estate
development business that has all requisite residential zoning approvals (other
than approvals which are solely ministerial and non-discretionary in nature).
          “Environmental Laws” means all applicable Requirements of Law now or
hereafter in effect, as amended or supplemented from time to time, relating to
pollution or the

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regulation and protection of human health, safety, the environment or natural
resources, including any applicable Requirements of Law relating to the
protection of areas of particular environmental concern, including wetlands,
areas inhabited by endangered species, and areas above protected aquifers.
          “Environmental Lien” means any Lien in favor of any Governmental
Authority for environmental liabilities and costs.
          “Equity Issuance” means, without duplication, (i) any issuance or sale
by the Administrative Borrower after the Effective Date of any Stock in the
Administrative Borrower (including any Stock issued upon exercise of any warrant
or option) or any warrants or options to purchase Stock or (ii) any contribution
to the capital of the Administrative Borrower; provided, however, that an Equity
Issuance shall not include (w) any Disqualified Capital Stock Issuance or Debt
Issuance, (x) any issuance permitted by Section 7.3(c), (y) any issuance to any
director, officer, manager or employee or (z) issuance of Stock in connection
with the consummation of the Transactions.
          “Equity Pledge Agreement” means the certain Amended and Restated
Pledge and Security Agreement, dated the Effective Date, amending and restating
that certain Pledge and Security Agreement dated as of February 6, 2007, under
which each Loan Party shall pledge in favor of the Administrative Agent all of
the equity interests held by such Loan Party in all of its presently existing
and after-acquired direct Domestic Subsidiaries and 66% of the Stock of “first
tier” Foreign Subsidiaries (other than any Unaffiliated Joint Ventures).
          “ERISA” means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time.
          “ERISA Affiliate” means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414(b), (c),
(m) or (o) of the Code.
          “ERISA Event” means (a) a reportable event described in Section
4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a
Title IV Plan, with respect to which the notice requirement has not been waived
pursuant to applicable regulations; (b) the withdrawal of the Administrative
Borrower, any of its Subsidiaries or any ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of the Administrative Borrower, any of its
Subsidiaries or any ERISA Affiliate from any Multiemployer Plan; (d) notice of
reorganization or insolvency of a Multiemployer Plan; (e) the filing of a notice
of intent to terminate a Title IV Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (f) the institution of proceedings to
terminate a Title IV Plan by the PBGC; (g) the failure of the Administrative
Borrower, any of its Subsidiaries or any ERISA Affiliate to make any required
contribution to a Title IV Plan or Multiemployer Plan; (h) the imposition of a
lien under Section 412 of the Code or Section 302 of ERISA on the Administrative
Borrower or any of its Subsidiaries or any ERISA Affiliate; or (i) any other
event or condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for

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the termination of, or the appointment of a trustee to administer, any Title IV
Plan or the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA.
          “Escrow Proceeds Receivables” means, with respect to the
Administrative Borrower and any of its Restricted Subsidiaries, the aggregate
amount of funds held in escrow by a title company or escrow agent which are
payable (without any requirement of the satisfaction or waiver of any further
condition) to the Administrative Borrower or such Restricted Subsidiary and
which constitute net proceeds of sales of Units, Land/Lots Under Development and
Unimproved Land.
          “Eurocurrency Liabilities” has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
          “Eurodollar Base Rate” means, with respect to any Interest Period for
any Eurodollar Rate Loan, the rate determined by the Administrative Agent to be
the offered rate for deposits in Dollars for the applicable Interest Period
appearing on the Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, two
Business Days prior to the first day of each Interest Period. In the event that
such rate does not appear on the Reuters Screen LIBOR01 Page (or otherwise on
the Reuters screen), the Eurodollar Base Rate for the purposes of this
definition shall be determined by reference to such other comparable publicly
available service for displaying eurodollar rates as may be selected by the
Administrative Agent.
          “Eurodollar Lending Office” means, with respect to any Lender, the
office of such Lender specified as its “Eurodollar Lending Office” opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Lender as such Lender may from time to time specify to the
Administrative Borrower and the Administrative Agent.
          “Eurodollar Rate” means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b) a percentage equal to
100% minus the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities that includes deposits by reference to
which the Eurodollar Rate is determined) having a term equal to such Interest
Period.
          “Eurodollar Rate Loan” means any Revolving Loan that, for an Interest
Period, bears interest based on the Eurodollar Rate.
          “Event of Default” has the meaning assigned to such term in
Section 8.1.

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          “Excess Cash Flow” means, for any Excess Cash Flow Period, EBITDA for
such Excess Cash Flow Period, minus, without duplication:
     (a) Debt Service, plus, to the extent not otherwise included in Debt
Service, letter of credit fees, commitment fees and any premiums paid in cash in
connection with the repayment of any Indebtedness during such Excess Cash Flow
Period;
     (b) Capital Expenditures made in cash and lease payments made in respect of
Capital Lease Obligations during such Excess Cash Flow Period, other than
amounts already reflected in Debt Service, to the extent such Capital
Expenditures or lease payments were financed with Internally Generated Funds;
     (c) Capital Expenditures committed to be made but not made during such
Excess Cash Flow Period, provided that the Administrative Borrower shall deliver
a certificate to the Administrative Agent not later than 90 days after the end
of such Excess Cash Flow Period, signed by a Responsible Officer of the
Administrative Borrower and certifying that such Capital Expenditures and the
delivery of the related equipment will be made within 180 days after the end of
such Excess Cash Flow Period, to the extent such Capital Expenditures will be
financed with Internally Generated Funds;
     (d) taxes of the Administrative Borrower and its Subsidiaries that were
paid in cash during such Excess Cash Flow Period or will be paid within six
months after the end of such Excess Cash Flow Period (as reasonably determined
in good faith by the Administrative Borrower) and for which reserves have been
established;
     (e) the difference, if negative, of the amount of Net Working Capital at
the end of the prior Excess Cash Flow Period (or the beginning of the Excess
Cash Flow Period in the case of the first Excess Cash Flow Period) over the
amount of Net Working Capital at the end of such Excess Cash Flow Period;
     (f) amounts paid in cash during such Excess Cash Flow Period on account of
(x) items that were accounted for as non-cash reductions of Consolidated Net
Income in determining EBITDA of the Administrative Borrower and its Subsidiaries
in a prior Excess Cash Flow Period, (y) reserves or accruals established in
purchase accounting and (z) other reserves with respect to long-term
liabilities;
     (g) to the extent not deducted in the computation of Net Cash Proceeds in
respect of any asset disposition or condemnation giving rise thereto, the amount
of any mandatory prepayment of Indebtedness (other than Indebtedness created
hereunder or under any other Loan Document), together with any interest, premium
or penalties required to be paid (and actually paid) in connection therewith;
     (h) the amount related to items that were added to or not deducted from
Consolidated Net Income in calculating EBITDA to the extent either (x) such
items represented a cash payment (which had not reduced Excess Cash Flow upon
the accrual thereof in a prior Excess Cash Flow Period), or an accrual for a
cash payment, by the

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Administrative Borrower and its Subsidiaries or (y) such items did not represent
cash received by the Administrative Borrower and its Subsidiaries, in each case
on a Consolidated basis during such Excess Cash Flow Period;
     (i) losses excluded from the calculation of EBITDA as a result of Asset
Sales or extraordinary losses that are paid in cash during such Excess Cash Flow
Period;
     (j) restructuring charges paid in cash during such Excess Cash Flow Period
to the extent added to or not deducted from Consolidated Net Income in
determining EBITDA;
     (k) solely with respect to each of the first two Excess Cash Flow Periods,
fees and expenses paid in connection with the Transactions and the settlement of
the Transeastern Events during such Excess Cash Flow Period (including all fees
paid to financial institutions, legal fees, accountant fees, advisor fees and
consulting fees (whether or not retained by the Administrative Borrower or one
of its Subsidiaries or by another Person in connection with the Transactions but
paid by the Administrative Borrower or one of its Subsidiaries)), to the extent
added to or not deducted from Consolidated Net Income in determining EBITDA;
     (l) any expenses, fees, premiums or charges paid in cash in connection with
any Asset Sales, investments, acquisitions, Permitted Acquisitions, issuance of
debt, equity securities or any refinancing transaction or any amendment or other
modification of any debt instrument during such Excess Cash Flow Period; and
     (m) permitted investments made in cash during such Excess Cash Flow Period
in Unaffiliated Joint Ventures or Unaffiliated Unrestricted Subsidiaries, to the
extent such investments were financed with Internally Generated Funds;
provided that any amount deducted pursuant of any of the foregoing clauses that
will be paid after the close of such Excess Cash Flow Period shall not be
deducted again in a subsequent Excess Cash Flow Period; provided further that
extraordinary non-cash gains or extraordinary non-cash losses shall be excluded
from the computation of Excess Cash Flow;
plus, without duplication:
     (i) the difference, if positive, of the amount of Net Working Capital at
the end of the prior Excess Cash Flow Period (or the beginning of the Excess
Cash Flow Period in the case of the first Excess Cash Flow Period) over the
amount of Net Working Capital at the end of such Excess Cash Flow Period;
     (ii) any return received in cash (other than from a Restricted Subsidiary)
during such Excess Cash Flow Period from permitted investments, Unaffiliated
Joint Ventures or Unaffiliated Unrestricted Subsidiaries;
     (iii) income or gain excluded from the calculation of Consolidated Net
Income as a result of Asset Sales or extraordinary gains that is realized in
cash during such

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Excess Cash Flow Period (except to the extent such gain is subject to the
mandatory prepayments section of the First Lien Term Loan Credit Agreement or
the Second Lien Credit Agreement);
     (iv) to the extent any permitted Capital Expenditures and the corresponding
delivery of equipment referred to in clause (c) above do not occur in the
180-day period specified in the certificate of the Administrative Borrower
provided pursuant to clause (c) above, the amount of such Capital Expenditures
that were not so made in the Excess Cash Flow Period of the Administrative
Borrower specified in such certificate;
     (v) amounts received in cash during such Excess Cash Flow Period on account
of items that were accounted for as non-cash increases of Consolidated Net
Income in determining EBITDA of the Administrative Borrower and its Subsidiaries
in a prior Excess Cash Flow Period;
     (vi) the amount related to items that were deducted from or not added to
Consolidated Net Income in calculating EBITDA to the extent either (x) such
items represented cash received by the Administrative Borrower or any Subsidiary
or (y) does not represent cash paid by the Administrative Borrower or any
Subsidiary, in each case on a consolidated basis during such Excess Cash Flow
Period; and
     (vii) if deducted in the computation of EBITDA, interest income.
          “Excess Cash Flow Period” means (i) the period taken as one accounting
period from January 1, 2007 and ending on December 31, 2007 and (ii) each fiscal
year of the Administrative Borrower thereafter.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended.
          “Excluded Real Property” means any Entitled Land of the Borrowers
(i) for which preliminary subdivision approval has been obtained but a
subdivision plat, map or similar instrument has not yet been filed of record;
(ii) those phases within Entitled Land being developed as a phased development
condominium where a master declaration of condominium has been filed of record,
but the supplemental declaration creating individual condominium units has not
yet been recorded; and (iii) Entitled Land in Pennsylvania that would otherwise
constitute Unimproved Land that is being developed under a master or common
subdivision approval process with respect to which no subdivision plat, map or
similar instrument has yet been filed of record.
          “Excluded Taxes” means, with respect to the Administrative Agent and
any Lender (a) taxes imposed on or measured by its overall net income and
franchise taxes imposed on it (in lieu of net income taxes) by a jurisdiction
(or any political subdivision thereof) as a result of a present or former
connection between the recipient and the jurisdiction of the Governmental
Authority imposing such tax or any taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document), (b) any
branch profits taxes imposed by a jurisdiction described

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in clauses (a) and (c) in the case of a Non-U.S. Lender (other than an assignee
pursuant to a request by any Borrower under Section 2.16), any U.S. federal
withholding tax (i) that is imposed on amounts payable to such Non-U.S. Lender
at the time such Non-U.S. Lender becomes a party hereto (or designates a new
lending office), except to the extent that such Non-U.S. Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Loan Parties
pursuant to Section 2.15 or (ii) that is attributable to such Non-U.S. Lender’s
failure to comply with Section 2.15(f).
          “Executive Order” has the meaning assigned to such term in
Section 4.19(a).
          “Existing Letters of Credit” means each letter of credit set forth on
Schedule 2.4 that was previously issued for the account of the Administrative
Borrower under the January 2007 Credit Agreement that was outstanding on the
Original Effective Date.
          “Existing Notes” means the Senior Notes and the Subordinated Notes.
          “Extension Request” has the meaning assigned to such term in
Section 2.17(a).
          “Facility Information” has the meaning assigned to such term in
Section 10.17(b).
          “Fair Market Value” means (a) with respect to any asset or group of
assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm’s length, and (b) with
respect to any marketable Security at any date, the closing sale price of such
Security on the Business Day next preceding such date, as appearing in any
published list of any national securities exchange or the Nasdaq Stock Market
or, if there is no such closing sale price of such Security, the final price for
the purchase of such Security at face value quoted on such business day by a
financial institution of recognized standing which regularly deals in securities
of such type selected by the Administrative Agent.
          “Falcone Ritchie” has the meaning assigned to such term in the
definition of “Settlement Documents.”
          “Falcone Settlement Agreement” has the meaning assigned to such term
in the definition of “Settlement Documents.”
          “Federal Funds Rate” means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average rate (rounded upward, if necessary, to
a whole multiple of 1/100 of 1%) charged to the Administrative Agent on such day
on such transactions as determined by the Administrative Agent.
          “Federal Reserve Board” means the Board of Governors of the Federal
Reserve System, or any successor thereto.

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          “Financial Statements” means the financial statements of the
Administrative Borrower and its Subsidiaries delivered in accordance with
Sections 4.4 and 6.1.
          “FIRREA” means the Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
          “First Lien Term Loan Administrative Agent” means CNAI, in its
capacity as administrative agent under the First Lien Term Loan Credit
Agreement, and its successors and assigns.
          “First Lien Term Loan Commitments” means the “Commitments” as defined
in the First Lien Term Loan Agreement.
          “First Lien Term Loan Credit Agreement” means (i) that certain first
lien term loan credit agreement dated as of the Effective Date among the
Borrowers, the lenders party thereto and CNAI as administrative agent for the
First Lien Secured Parties, as amended, restated, supplemented or modified from
time to time to the extent permitted by this Agreement and the Intercreditor
Agreement and (ii) any other credit agreement, loan agreement, note agreement,
promissory note, indenture or other agreement or instrument evidencing or
governing the terms of any indebtedness or other financial accommodation that
has been incurred to extend (subject to the limitations set forth herein and in
the Intercreditor Agreement) or refinance or replace in whole or in part the
Indebtedness and other obligations outstanding under the credit agreement or
credit agreements referred to in clauses (i) and (ii) unless such agreement or
instrument expressly provides that it is not intended to be and is not a “First
Lien Term Loan Credit Agreement” hereunder. Any reference to the First Lien Term
Loan Credit Agreement hereunder shall be deemed a reference to any First Lien
Term Loan Credit Agreement then in existence.
          “First Lien Term Loan Documents” means the First Lien Term Loan Credit
Agreement and the other “Loan Documents” as defined in the First Lien Term Loan
Credit Agreement, including each mortgage and other security documents,
guaranties and the notes (if any) issued thereunder.
          “First Lien Term Loans” means the senior secured first lien term loans
under the First Lien Term Loan Credit Agreement.
          “First Lien Term Loan Secured Parties” means the First Lien Term Loan
Administrative Agent and each Person that is a lender under the First Lien Term
Loan Credit Agreement.
          “Fitch” means Fitch, Inc. or any successor to the rating agency
business thereof.
          “Five Year Projections” means those Consolidated financial projections
provided to the Administrative Agent on or prior to the Effective Date and
covering each fiscal quarter ending in 2007 and 2008 and each fiscal year from
2007 through and including 2012.
          “Foreign Subsidiary” means any Subsidiary other than a Domestic
Subsidiary.

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          “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 in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination; provided that with respect to determining compliance with any
financial covenant (including related definitions), “GAAP” shall be determined
based upon those accounting principles referred to above as of the Original
Effective Date.
          “Governmental Authority” means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
          “Guarantor” means each Restricted Subsidiary of the Administrative
Borrower party to the Guaranty.
          “Guaranty” means the Amended and Restated Guaranty Agreement
substantially in the form of Exhibit H dated as of the Original Effective Date
and amended and restated as of the Effective Date, executed by each Restricted
Subsidiary of the Administrative Borrower named therein or that has executed a
joinder to the Guaranty.
          “Hedging Contracts” means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements, and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
          “Hedging Obligations” means obligations under or with respect to
Hedging Contracts.
          “Indebtedness” of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments that bear
interest (including trust preferred securities), (c) all reimbursement and all
other obligations with respect to letters of credit, bankers’ acceptances, bank
guarantees, surety bonds and performance bonds, (d) all indebtedness for the
deferred purchase price of property or services, other than trade payables
incurred in the ordinary course of business that are no more than 90 days
overdue and accrued expenses, (e) all indebtedness of such Person created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (f) all Capital Lease Obligations of
such Person and the present value of future rental

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payments under all synthetic leases, (g) all guaranty obligations of such Person
with respect to obligations of another Person that would otherwise constitute
Indebtedness in clauses (a) through (f) and (h) through (j) herein, (h) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
acquire for value any Disqualified Capital Stock of such Person valued at the
greater of its voluntary liquidation preference and its involuntary liquidation
preference plus accrued and unpaid dividends, (i) all payments that such Person
would have to make in the event of an early termination on the date Indebtedness
of such Person is being determined in respect of Hedging Contracts of such
Person and (j) all Indebtedness of the type referred to above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and general intangibles) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness but only to the
extent of the lesser of (x) the amount of such Indebtedness and (y) the Fair
Market Value of the property securing such Indebtedness. Notwithstanding the
foregoing, “Indebtedness” shall not include (i) the face amount of any undrawn
Performance Letters of Credit or the amount of any obligations in respect of
surety bonds or performance bonds, in each case to the extent unmatured,
(ii) Indebtedness Associated with Assets Not Owned or (iii) obligations with
respect to options to purchase real property that have not been exercised, or
(iv) any sale-leaseback transactions to the extent the lease or sublease
thereunder is not required to be recorded under GAAP as a Capital Lease.
          “Indebtedness Associated with Assets Not Owned” means any Indebtedness
of any land bank or similar institution, or any other third party Indebtedness
that would be required to be included on the balance sheet or financial
statements of the Administrative Borrower or any of its Subsidiaries pursuant to
any accounting rule requiring such consolidation, including Indebtedness of any
Joint Venture or Indebtedness of any Unrestricted Subsidiary, except to the
extent that such Indebtedness would otherwise fall under clause (g) of the
definition of “Indebtedness” with respect to the Administrative Borrower or a
Restricted Subsidiary.
          “Indemnified Matter” has the meaning assigned to such term in
Section 10.4.
          “Indemnified Taxes” means all Taxes other than Excluded Taxes.
          “Indemnitees” has the meaning assigned to such term in Section 10.4.
          “Intercreditor Agreement” means that certain intercreditor agreement
contemplated by Section 3.1(a)(vi) and substantially in the form of Exhibit J,
dated as of the Effective Date among the Administrative Agent, the First Lien
Term Loan Administrative Agent and the Second Lien Administrative Agent, as the
same may be amended, modified or supplemented from time to time.
          “Interest Coverage Ratio” means, with respect to the Administrative
Borrower and its Restricted Subsidiaries for any period, the ratio of (a) EBITDA
for such period to (b) the Consolidated Interest Incurred for such period.
          “Interest Expense” means, for any Person for any period, total
interest expense of such Person and its Restricted Subsidiaries plus all
dividend payments on any series of Disqualified

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Capital Stock of such Person or any of its Restricted Subsidiaries (other than
dividend payments to the Administrative Borrower or any of its Restricted
Subsidiaries) for such period determined on a Consolidated basis in conformity
with GAAP. Notwithstanding that GAAP may otherwise provide, the Administrative
Borrower shall not be required to include in Interest Expense the amount of any
premium paid to prepay Indebtedness.
          Interest Expense shall be calculated on a pro forma basis to give
effect to any Indebtedness (other than Indebtedness incurred for ordinary course
working capital needs under ordinary course revolving credit facilities)
incurred, assumed or permanently repaid or extinguished at any time on or after
the first day of the measurement period and prior to the date of determination
in connection with the Acquisition, any Permitted Acquisitions, any Asset Sales
and any Equity Issuances, in each case as if such incurrence, assumption,
repayment or extinguishing had been effected on the first day of such period.
          “Interest Incurred” means, for any period, the aggregate amount
(without duplication and determined in each case in conformity with GAAP) of
interest incurred and all dividend payments made on any series of Disqualified
Capital Stock of such Person or any of its Restricted Subsidiaries (other than
dividend payments to the Administrative Borrower or any of its Restricted
Subsidiaries) during such period, whether such interest or dividend payment was
expensed or capitalized, paid, accrued, or scheduled to be paid or accrued by
the Administrative Borrower and its Restricted Subsidiaries during such period,
including (a) original issue discount and non-cash interest payments of accruals
on any Indebtedness, (b) the interest portion of all deferred payment
obligations, and (c) all commissions, discounts, and other fees and charges owed
with respect to bankers’ acceptance and letter of credit and similar financings
and Interest Rate Contracts. For purposes of this definition, (i) interest on
any Capital Lease Obligations shall be deemed to accrue at an interest rate
reasonably determined by the Administrative Borrower to be the rate of interest
implicit in such obligations in conformity with GAAP, and (ii) interest expense
attributable to any Indebtedness represented by the guaranty of an obligation of
another Person shall be deemed to be the interest expense attributable to the
Indebtedness so guaranteed.
          Interest Incurred shall be calculated on a pro forma basis to give
effect to any Indebtedness (other than Indebtedness incurred for ordinary course
working capital needs under ordinary course revolving credit facilities)
incurred, assumed or permanently repaid or extinguished at any time on or after
the first day of the measurement period and prior to the date of determination
in connection with the Acquisition, any Permitted Acquisitions, any Asset Sales
and any Equity Issuances, in each case as if such incurrence, assumption,
repayment or extinguishing had been effected on the first day of such period.
          “Interest Period” means, in the case of any Eurodollar Rate Loan,
(a) initially, the period commencing on the date such Eurodollar Rate Loan is
made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two, three or six months thereafter as selected by the
Administrative Borrower in its Notice of Borrowing or Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.2 or 2.10,
and (b) thereafter, if such Loan is continued, in whole or in part, as a
Eurodollar Rate Loan pursuant to Section 2.10, a period commencing on the last
day of the immediately preceding Interest

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Period therefor and ending one, two, three or six months thereafter as selected
by the Administrative Borrower in its Notice of Conversion or Continuation given
to the Administrative Agent pursuant to Section 2.10; provided, however, that
all of the foregoing provisions relating to Interest Periods in respect of
Eurodollar Rate Loans are subject to the following:
     (i) if any Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless the result of such extension would be to extend such
Interest Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding Business Day;
     (ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;
     (iii) the Administrative Borrower may not select any Interest Period in
respect of Loans having an aggregate principal amount of less than $5,000,000;
     (iv) there shall be outstanding at any one time no more than ten Interest
Periods in the aggregate; and
     (v) any Interest Period that would end after the Scheduled Revolving Credit
Termination Date shall end on the Scheduled Revolving Credit Termination Date.
          “Interest Rate Contracts” means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.
          “Internally Generated Funds” means any amount expended by the
Administrative Borrower and its Restricted Subsidiaries and not representing
(i) a reinvestment by the Administrative Borrower or any Restricted Subsidiaries
of the Net Cash Proceeds of any Asset Sale outside the ordinary course of
business or Casualty Event, (ii) the proceeds of any issuance of Indebtedness of
the Administrative Borrower or any Restricted Subsidiary or (iii) any credit
received by the Administrative Borrower or any Restricted Subsidiary with
respect to any trade in of property for substantially similar property or any
“like kind exchange” of assets.
          “Investment” means, with respect to any Person, (a) any purchase or
other acquisition by such Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by such Person of all
or a significant part of the assets of a business conducted by another Person or
all or substantially all of the assets constituting the business of a division,
branch or other unit operation of any other Person, and (c) any loan, advance
(other than deposits with financial institutions available for withdrawal on
demand, prepaid expenses, accounts receivable and similar items made or incurred
in the ordinary course of business as presently conducted), or capital
contribution by such Person to any other Person, including all Indebtedness of
any other Person to such Person arising from a sale of property by such Person
other than in the ordinary course of its

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business, (d) any guaranty obligation incurred by such Person in respect of
Indebtedness of any other Person and (e) any derivative instrument or other
contract providing for the economic equivalent of all or any part of any
investment referred to in clause (a), (b), (c) or (d) above.
          “IRS” means the Internal Revenue Service of the United States or any
successor thereto.
          “Issue” means, with respect to any Letter of Credit, to issue, extend
the expiry of, renew or increase the maximum stated amount (including by
deleting or reducing any scheduled decrease in such maximum stated amount) of,
such Letter of Credit. The terms “Issued” and “Issuance” shall have a
corresponding meaning.
          “Issuer” means (a) each Lender or Affiliate of a Lender that is listed
on the signature pages hereof as an “Issuer”, (b) each Lender or Affiliate of a
Lender that hereafter becomes an Issuer with the approval of the Administrative
Agent and the Administrative Borrower by agreeing pursuant to an agreement with
and in form and substance satisfactory to the Administrative Agent and the
Administrative Borrower to be bound by the terms hereof applicable to Issuers or
(c) solely with respect to an Existing Letter of Credit (and any amendment,
renewal or extension thereof in accordance with this Agreement), the Lender that
issued such Existing Letter of Credit.
          “January 2007 Credit Agreement” has the meaning assigned to such term
in the recitals hereto.
          “Joint Venture” means any Person (other than a Subsidiary) in which
the Administrative Borrower or a Restricted Subsidiary holds any Investment
(other than an Investment described in clause (b) or (d) of the definition
thereof); provided that such Joint Venture (i) is formed for and is or will be
engaged in real estate activities and (ii) shall only involve assets located in
the Permitted Markets.
          “Joint Venture Acquisitions” means the acquisition by the
Administrative Borrower or any of its Restricted Subsidiaries of all of the
assets or Stock of any Joint Venture not owned prior to such acquisition or of
any operating division thereof, or the merger of such Joint Venture with or into
the Administrative Borrower or any Restricted Subsidiary of the Administrative
Borrower (with the Administrative Borrower, in the case of a merger with the
Administrative Borrower, being the surviving corporation); provided that such
(i) Joint Venture Acquisition shall only involve assets located in the Permitted
Markets and only for use in the lines of business of the Administrative Borrower
or its Restricted Subsidiaries existing on the Effective Date and (ii) upon any
such Joint Venture Acquisition, such Joint Venture shall constitute a Restricted
Subsidiary hereunder and comply with Section 6.13.
          “Land/Lots Under Development” means Entitled Land where site
improvements have commenced and either are continuing or have been completed
(including utilities and all major infrastructure) and for which no Contract for
Sale is in effect, plus the community site development costs incurred with
respect to owned lots included in such Entitled Land, the value of which is the
lesser of (x) value determined in conformity with GAAP (provided that such value

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for any owned lot included in such Entitled Land shall not exceed the budgeted
finished lot cost with respect to such owned lot) or (y) the Appraised Value.
          “Land Supply Ratio” means, with respect to the Administrative Borrower
and its Restricted Subsidiaries for any period, the ratio of (a) the number of
lots owned to (b) the number of Units Closed for such period. The Land Supply
Ratio shall be calculated on a pro forma basis to give effect to the delivery of
Sold Homes or lots acquired or disposed of at any time on or after the first day
of the measurement period and prior to the date of determination in connection
with the Acquisition, any Permitted Acquisitions and Asset Sales as if such
incurrence, assumption, repayment or extinguishing had been effected on the
first day of such period; provided that the Land Supply Ratio shall give pro
forma effect to the Acquisition as set forth on Schedule 1.1(b).
          “Lender” means each financial institution or other entity that (a) is
set forth on Schedule I hereto or (b) from time to time becomes a party hereto
by execution of an Assignment and Acceptance.
          “Letter of Credit” means any letter of credit issued or deemed issued
pursuant to Section 2.4 (including any Existing Letter of Credit).
          “Letter of Credit Obligations” means, at any time, the aggregate of
all liabilities at such time of the Borrowers to all Issuers with respect to
Letters of Credit, whether or not any such liability is contingent, and includes
the sum of (a) the Reimbursement Obligations at such time and (b) the Letter of
Credit Undrawn Amounts at such time.
          “Letter of Credit Request” has the meaning assigned to such term in
Section 2.4(c).
          “Letter of Credit Undrawn Amounts” means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
          “Lien” means, with respect to any property, asset or right, any
mortgage, lien, pledge, collateral assignment, charge, security interest, levy,
execution, seizure, attachment, garnishment, or other encumbrance of any kind in
the nature of the foregoing in respect of such property, asset or right, whether
or not choate, vested or perfected.
          “Linked Deposit Accounts” means the following Deposit Accounts
maintained by Wachovia Bank National Association: (a) Account No. 200003341735
in the name of Engle Homes Delaware, Inc.; (b) Account No. 2000012137765 in the
name of TOUSA Delaware Inc.; and (c) Account No. 2000029799620 in the name of
TOUSA Funding LLC.
          “Loan” means any Revolving Loan or Swing Loan.
          “Loan Documents” means, collectively, this Agreement, the Revolving
Credit Notes (if any), the Amendment Agreement, the Guaranty, the Collateral
Documents, and each certificate, agreement or document executed by a Loan Party
and delivered to the Administrative Agent or any Lender in connection with or
pursuant to any of the foregoing.

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          “Loan Party” means each Borrower, each Guarantor and each other
Restricted Subsidiary of the Administrative Borrower that executes and delivers
a Loan Document (other than any Restricted Subsidiary that only executes and
delivers an acknowledgement of the pledge of its Stock to the Administrative
Agent for the benefit of the Secured Parties).
          “Management Services Agreement” means the Amended and Restated
Management Services Agreement, dated as of June 13, 2003, between the
Administrative Borrower and TOSI as amended, amended and restated, supplemented
or otherwise modified from time to time, provided that the terms thereof are no
more adverse to the Lenders than the terms as of the Original Effective Date.
          “Material Adverse Change” means a material adverse change in the
business, prospects, performance, assets, operations, condition (financial or
otherwise), contingent and other liabilities or material agreements of the
Administrative Borrower and the other Loan Parties, taken as a whole.
          “Material Adverse Effect” means a material adverse effect on any of
(a) the business, prospects, performance, assets, operations, condition
(financial or otherwise), contingent and other liabilities or material
agreements of the Administrative Borrower and the other Loan Parties, taken as a
whole, or (b) the ability of the Administrative Borrower and the other Loan
Parties, taken as a whole, to pay the Obligations when due or (c) the validity
or enforceability of any of the Loan Documents or the rights or remedies of the
Administrative Agent or the Lenders thereunder.
          “Model Homes” means all Units which are used as models, sales offices,
or design centers to market a particular real estate development project and the
contents therein.
          “Moody’s” means Moody’s Investors Service, Inc. or any successor to
the rating agency business thereof.
          “Mortgage” means a mortgage, deed of trust, trust deed or similar
instrument (including any spreader, amendment, amendment and restatement or
similar modification of any existing Mortgage) in form and substance reasonably
satisfactory to the Administrative Agent creating a Lien on any Completed Unsold
Home, Unsold Home Under Construction, Sold Home, Land/Lots Under Development or
Unimproved Land and other Real Property in a principal amount of at least the
then aggregate Commitments and, if such Mortgage also secures the First Lien
Term Loan Credit Agreement, then the aggregate First Lien Term Loan Commitments
or aggregate principal amount of outstanding First Lien Term Loans.
          “Mortgaged Property” means all “Mortgaged Property” referred to in the
Mortgages and shall include all Real Property of the Borrowers (other than
Excluded Real Property).
          “Mortgage Requirements” means, with respect to each individual
Mortgaged Property, the following conditions:
     (i) the Mortgage has been recorded in the appropriate land records of the
applicable Governmental Authority, provided that in connection with such
recording,

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subject to the prior approval of the Administrative Agent, the Borrowers may
undertake customary procedures to reduce mortgage recording, transfer,
documentary stamp, intangible and similar taxes to be imposed as a result of
such recording;
     (ii) a Phase I environmental report and, to the extent the relevant Phase I
environmental report reveals conditions that would reasonably suggest that a
Phase II environmental report should be obtained, a Phase II environmental
report, with respect to such Mortgaged Property reviewed (and, as appropriate,
updated) by an independent environmental consultant retained by the
Administrative Agent on behalf of the Lenders, each in form and substance
reasonably satisfactory to the Administrative Agent;
     (iii) a fully paid ALTA lender’s policy of title insurance (which may
initially be in the form of a “marked-up” title commitment or pro forma policy,
provided that the final policy is delivered within a reasonable time thereafter)
in an amount equal to the Required Title Insurance Amount, showing no exceptions
that would materially impair the value of the applicable Mortgaged Property,
containing customary endorsements and otherwise in form and substance reasonably
satisfactory to the Administrative Agent, insuring the applicable Mortgage to be
a valid first and subsisting Lien on the applicable Mortgaged Property; and
     (iv) a certificate of property insurance covering such Mortgaged Property
naming the Administrative Agent or any third-party security agent as loss payee
under property casualty coverages (excluding any such Mortgaged Property
constituting Land/Lots Under Development or Unimproved Land), and in all cases,
a certificate of liability insurance naming the Administrative Agent and any
third party security agent, the Lenders and the Issuers as additional insureds
under liability coverages.
          “Multiemployer Plan” means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Administrative Borrower, any of its
Restricted Subsidiaries or any ERISA Affiliate has any obligation or liability,
contingent or otherwise.
          “Net Cash Proceeds” means:
     (a) with respect to any Asset Sale (other than any issuance or sale of
Stock), the cash proceeds received by the Administrative Borrower or any of its
Subsidiaries (including cash proceeds subsequently received (as and when
received by the Administrative Borrower or any of its Subsidiaries) in respect
of non-cash consideration initially received) net of (i) selling expenses
(including reasonable brokers’ fees or commissions, legal, accounting and other
professional and transactional fees, transfer and similar taxes and the
Administrative Borrower’s good faith estimate of any other taxes paid or payable
in connection with such sale) and other expenses incurred or amounts paid to any
person other than the Administrative Borrower or any Restricted Subsidiary in
connection with such Asset Sale; (ii) amounts provided as a reserve, in
accordance with GAAP, or amounts placed in a funded escrow against (x) any
liabilities under any indemnification obligations associated with such Asset
Sale or (y) any other liabilities retained by the Administrative Borrower or any
of its Subsidiaries associated with the properties sold in

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such Asset Sale (provided that, to the extent and at the time any such amounts
are released from such reserve, such amounts shall constitute Net Cash
Proceeds); (iii) the Administrative Borrower’s good faith estimate of payments
required to be made with respect to unassumed liabilities relating to the
properties sold within 120 days of such Asset Sale (provided that, to the extent
such cash proceeds are not used to make payments in respect of such unassumed
liabilities within 120 days of such Asset Sale, such cash proceeds shall
constitute Net Cash Proceeds); and (iv) the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness for borrowed
money which is secured by a Lien on the properties sold in such Asset Sale (so
long as such Lien was permitted to encumber such properties under the Loan
Documents at the time of such sale) and which is repaid with such proceeds
(other than any such Indebtedness assumed by the purchaser of such properties);
     (b) with respect to any Debt Issuance, any Equity Issuance or any other
issuance or sale of Stock by the Administrative Borrower or by any of its
Subsidiaries (other than a Borrower), the cash proceeds thereof, net of
customary fees, commissions, costs and other expenses payable to any person
other than the Administrative Borrower or any Restricted Subsidiary and incurred
in connection therewith; and
     (c) with respect to any Casualty Event, the cash insurance proceeds (other
than business interruption insurance), condemnation awards and other
compensation received in respect thereof, net of all reasonable costs and
expenses payable to any person other than the Administrative Borrower or any
Restricted Subsidiary and incurred in connection with the collection of such
proceeds, awards or other compensation in respect of such Casualty Event and
awards or other compensation and repayment of Indebtedness for borrowed money
which is secured by a senior Lien on the property subject to such Casualty Event
and which is repaid with such proceeds in respect of such Casualty Event.
          “Net Working Capital” means, at any time, Consolidated Current Assets
at such time minus Consolidated Current Liabilities at such time.
          “Non-Consenting Lender” has the meaning assigned to such term in
Section 10.1(c) and Section 10.1A(b).
          “Non-Funding Lender” has the meaning assigned to such term in Section
2.2(d).
          “Non-U.S. Lender” means each Lender or Administrative Agent that is
not a United States person as defined in Section 7701(a)(30) of the Code.
          “Notice of Borrowing” has the meaning assigned to such term in
Section 2.2(a).
          “Notice of Conversion or Continuation” has the meaning assigned to
such term in Section 2.10(a).
          “Obligations” means, without duplication, the Loans, the Letter of
Credit Obligations and all other amounts owing by the Borrowers to the
Administrative Agent, any Lender, any Issuer, any Affiliate of any of them or
any Indemnitee of every type and description, present

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or future, arising under this Agreement or any other Loan Document, whether
direct or indirect, including all letter of credit and other fees, interest
(including interest accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrowers,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), charges, expenses, attorneys’ fees and disbursements and other
sums chargeable to the Borrowers under this Agreement or any other Loan
Document.
          “Officers’ Certificate” means, with respect to any Person, a
certificate executed by the chairman of the Board of Directors (if an officer),
the chief executive officer or the president and one of the financial officers
of such Person, each in his or her official (and not individual) capacity.
          “Original Effective Date” means March 9, 2006.
          “Other Taxes” has the meaning assigned to such term in
Section 2.15(b).
          “PBGC” means the Pension Benefit Guaranty Corporation or any successor
thereto.
          “Performance Letters of Credit” means any letter of credit issued
(a) on behalf of a Person in favor of a Governmental Authority, including,
without limitation, any utility, water, or sewer authority, or other similar
entity, for the purpose of assuring such Governmental Authority that such Person
or an Affiliate of such Person will properly and timely complete work it has
agreed to perform for the benefit of such Governmental Authority; or (b) in lieu
of other contract performance, including, without limitation, bid and
performance bonds.
          “Permit” means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
          “Permitted Acquisition” means the acquisition by the Administrative
Borrower or any of its Restricted Subsidiaries of all or substantially all of
the assets or Stock of any Person or of any operating division thereof (the
“Target”), or the merger of the Target with or into the Administrative Borrower
or any Restricted Subsidiary of the Administrative Borrower (with the
Administrative Borrower, in the case of a merger with the Administrative
Borrower, being the surviving corporation) (each, an “Acquisition”); provided
that such Acquisition shall only involve assets located in the Permitted Markets
and only for use in the lines of business of the Administrative Borrower or its
Restricted Subsidiaries existing on the Effective Date.
          “Permitted Holders” means (a) TOSA or any Person of which TOSA
“beneficially owns” (as defined in Rule 13d-3 under the Exchange Act),
individually or collectively, at least a majority of the total voting power of
the Voting Stock of such Person or (b) Deutsche Bank Securities Inc., Highland
Capital or any of their respective Affiliates, solely with respect to any Voting
Stock owned by any of them converted from the Settlement Preferred Stock or
Warrants issued in connection with the Transactions.

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          “Permitted Markets” means housing markets located in the continental
United States of America.
          “Permitted Refinancing Indebtedness” means any Indebtedness issued in
exchange for, or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund (collectively, to “Refinance”), the Indebtedness
being Refinanced (or previous Refinancings thereof constituting Permitted
Refinancing Indebtedness); provided that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing Indebtedness does not exceed
the principal amount (or accreted value, if applicable) of the Indebtedness so
Refinanced (plus unpaid accrued interest, closing costs, expenses, fees and
premium thereon), (b) the final maturity and average life to maturity of such
Permitted Refinancing Indebtedness is greater than or equal to that of the
Indebtedness being Refinanced, (c) the covenants, events of default,
subordination and other provisions thereof (including any guarantees thereof)
shall be, in the aggregate, no less favorable to the Lenders than those
contained in the Indebtedness being renewed or refinanced, (d) if the
Indebtedness being Refinanced is subordinated in right of payment to the
Obligations under this Agreement, such Permitted Refinancing Indebtedness shall
be subordinated in right of payment to such Obligations on terms at least as
favorable to the Lenders as those contained in the documentation governing the
Indebtedness being Refinanced, and (e) no Permitted Refinancing Indebtedness
shall have different obligors, or greater guarantees or security, than the
Indebtedness being Refinanced.
          “Person” means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, Joint Venture or other entity, or a Governmental
Authority.
          “Platform” has the meaning assigned to such term in Section 10.19(b).
          “Pledge Agreement” means a pledge agreement in form and substance
reasonably satisfactory to the Administrative Agent, executed by the
Administrative Borrower or any Restricted Subsidiary of the Administrative
Borrower, as applicable, owning the equity interest in the applicable
Unaffiliated Joint Venture or Unaffiliated Unrestricted Subsidiary, pursuant to
which shall be pledged to the Administrative Agent all of the Administrative
Borrower’s or such Restricted Subsidiary’s (as the case may be) equity ownership
interest in such Unaffiliated Joint Venture or Unaffiliated Unrestricted
Subsidiary.
          “Previous Scheduled Revolving Credit Termination Date” has the meaning
assigned such term in Section 2.17(c).
          “Proposed Change” has the meaning assigned to such term in
Section 10.1(c) and Section 10.1A(b).
          “Purchasing Lender” has the meaning assigned to such term in
Section 10.7(a).
          “Qualified Capital Stock” means all Stock of the Administrative
Borrower (other than Disqualified Capital Stock).

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          “Ratable Portion” or “ratably” means, with respect to any Lender, the
percentage obtained by dividing (a) the Revolving Credit Commitment of such
Lender by (b) the aggregate Revolving Credit Commitments of all Lenders (or, at
any time after the Revolving Credit Termination Date, the percentage obtained by
dividing the aggregate outstanding principal balance of the Revolving Credit
Outstandings owing to such Lender by the aggregate outstanding principal balance
of the Revolving Credit Outstandings owing to all Lenders).
          “Real Property” means all of those plots, pieces or parcels of land
now owned, leased or hereafter acquired or leased by a Borrower (the “Land”),
together with the right, title and interest of such Borrower in and to the
streets, the land lying in the bed of any streets, roads or avenues, opened or
proposed, in front of, the air space and development rights pertaining to the
Land and the right to use such air space and development rights, all rights of
way, privileges, liberties, tenements, hereditaments and appurtenances belonging
or in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land necessary for the residential development of such Land,
together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto.
          “Register” has the meaning assigned to such term in Section 10.2(c).
          “Reimbursement Date” has the meaning assigned to such term in
Section 2.4(g).
          “Reimbursement Obligations” means all matured reimbursement or
repayment obligations of the Borrowers to any Issuer with respect to amounts
drawn under Letters of Credit.
          “Rejecting Lenders” has the meaning assigned to such term in
Section 2.17(b).
          “Release” means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property owned or operated by such
Person, including the movement of Contaminants through or in the air, soil,
surface water, ground water or property.
          “Remedial Action” means all actions required to (a) clean up, remove,
treat or in any other way address any Contaminant in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of a Contaminant so that it does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pursuant to Environmental Laws pre-remedial studies
and investigations and post-remedial monitoring and care.
          “Replacement Lenders” has the meaning assigned to such term in Section
2.17(b).
          “Required Title Insurance Amount” means with respect to any Mortgage
75% of the aggregate value of the Mortgaged Property then covered by such
Mortgage determined in conformity with GAAP.

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          “Requirement of Law” means, with respect to any Person, the common law
and all federal, state, local and foreign laws, rules and regulations, orders,
judgments, decrees and other determinations of any Governmental Authority or
arbitrator, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject (including, without
limitation, any Environmental Law).
          “Requisite Lenders” means, collectively, Lenders having a majority of
the aggregate outstanding amount of the Revolving Credit Commitments or, after
the Revolving Credit Termination Date, a majority of the aggregate Revolving
Credit Outstandings. No Non-Funding Lender nor any Affiliate of any Loan Party
that is a Lender shall be included in the calculation of “Requisite Lenders.”
          “Responsible Officer” means, with respect to any Person, any of the
principal executive officers, managing members or general partners of such
Person, but in any event, with respect to financial matters, the chief financial
officer, chief accounting officer, treasurer, assistant treasurer, vice
president of finance or controller of such Person.
          “Restricted Payment” means (a) any dividend, distribution or any other
payment whether direct or indirect, on account of any Stock or Stock Equivalents
of the Administrative Borrower or any of its Restricted Subsidiaries now or
hereafter outstanding, (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Stock or Stock Equivalents of the Administrative Borrower now or hereafter
outstanding and (c) any payment of principal or premium on, the Existing Notes,
the Settlement Subordinated Debt, any other Senior Unsecured Indebtedness or any
other Subordinated Indebtedness, in each case prior to the stated maturity
thereof.
          “Restricted Subsidiary” means each Subsidiary of the Administrative
Borrower, other than (i) those that have been properly designated pursuant to
Section 6.16 as an Unrestricted Subsidiary and (ii) those Subsidiaries engaged
primarily in the business of originating residential home loans, title insurance
and reinsurance.
          “Revolving Credit Commitment” means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans and acquire interests in other
Revolving Credit Outstandings in the aggregate principal amount outstanding not
to exceed the amount set forth opposite such Lender’s name on Schedule I under
the caption “Revolving Credit Commitment,” as amended to reflect each Assignment
and Acceptance or Assumption Agreement executed by such Lender and as such
amount may be increased or reduced pursuant to this Agreement.
          “Revolving Credit Facility” means the Revolving Credit Commitments and
the provisions herein related to the Revolving Loans, Swing Loans and Letters of
Credit.
          “Revolving Credit Facility Increase” has the meaning assigned to such
term in Section 2.18.

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          “Revolving Credit Facility Increase Effective Date” has the meaning
assigned to such term in Section 2.18.
          “Revolving Credit Note” means a promissory note of the Borrowers
substantially in the form of Exhibit C, payable to the order of any Lender in a
principal amount equal to the amount of such Lender’s Revolving Credit
Commitment evidencing the aggregate Indebtedness of the Borrowers to such Lender
resulting from the Revolving Loans owing to such Lender.
          “Revolving Credit Outstandings” means, at any particular time, the sum
of (a) the principal amount of the Revolving Loans outstanding at such time plus
(b) the Letter of Credit Obligations outstanding at such time plus (c) the
principal amount of the Swing Loans outstanding at such time.
          “Revolving Credit Termination Date” means the earliest of (a) the
Scheduled Revolving Credit Termination Date, (b) the date of termination of the
Revolving Credit Commitments pursuant to Section 2.5, (c) the date on which the
Obligations become due and payable pursuant to Section 8.2 and (d) the Early
Maturity Date.
          “Revolving Loan” has the meaning assigned to such term in Section 2.1.
          “S&P” means Standard & Poor’s Rating Services or any successor to the
rating agency business thereof.
          “Scheduled First Lien Term Loan Termination Date” means the “Scheduled
Termination Date” as defined in the First Lien Term Loan Credit Agreement as in
effect on the Effective Date.
          “Scheduled Revolving Credit Termination Date” means, as to each
Lender, March 9, 2010, subject to the provisions for the extension of the
Scheduled Revolving Credit Termination Date, as to such Lender, set forth in
Section 2.17.
          “Scheduled Second Lien Term Loan Termination Date” means the
“Scheduled Termination Date” as defined in the Second Lien Credit Agreement as
in effect on the Effective Date.
          “SEC” means the Securities and Exchange Commission.
          “Second Lien Administrative Agent” means CNAI, in its capacity as
administrative agent under the Second Lien Credit Agreement, and its successors
and assigns.
          “Second Lien Credit Agreement” means (i) that certain second lien term
loan credit agreement dated as of the Effective Date among the Borrowers, the
lenders party thereto and CNAI as administrative agent for the Second Lien
Secured Parties, as amended, restated, supplemented or modified from time to
time to the extent permitted by this Agreement and the Intercreditor Agreement
and (ii) any other credit agreement, loan agreement, note agreement, promissory
note, indenture or other agreement or instrument evidencing or governing the
terms of any indebtedness or other financial accommodation that has been
incurred to extend (subject

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to the limitations set forth herein and in the Intercreditor Agreement) or
refinance or replace in whole or in part the Indebtedness and other obligations
outstanding under the credit agreement or credit agreements referred to in
clauses (i) and (ii) unless such agreement or instrument expressly provides that
it is not intended to be and is not a “Second Lien Credit Agreement” hereunder.
Any reference to the Second Lien Credit Agreement hereunder shall be deemed a
reference to any Second Lien Credit Agreement then in existence.
          “Second Lien Loans” means the senior secured second lien term loans
under the Second Lien Credit Agreement.
          “Second Lien Loan Documents” means the Second Lien Credit Agreement
and the other “Loan Documents” as defined in the Second Lien Credit Agreement,
including each mortgage and other security documents, guaranties and the notes
(if any) issued thereunder.
          “Second Lien Secured Parties” means the Second Lien Administrative
Agent and each Person that is a lender under the Second Lien Credit Agreement.
          “Secured Hedging Contract” means any Hedging Contract between any Loan
Party and a Lender or a lender under the First Lien Term Loan Agreement or an
Affiliate of a Lender or a lender under the First Lien Term Loan Agreement or
any Person that was a Lender or a lender under the First Lien Term Loan
Agreement or an Affiliate of a Lender or a lender under the First Lien Term Loan
Agreement at the time such agreement was entered into.
          “Secured Parties” means the Administrative Agent, the Lenders and the
Issuers.
          “Securities Account” has the meaning assigned to such term in the
Security Agreement.
          “Security” means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.
          “Security Agreement” means that certain Amended and Restated Security
Agreement substantially in the form of Exhibit K dated as of the Original
Effective Date and amended and restated as of the Effective Date between the
Administrative Borrower, and certain of its Subsidiaries, as grantors, and the
Administrative Agent, as secured party, as amended, modified or supplemented
from time to time.
          “Selling Lender” has the meaning assigned to such term in
Section 10.7(a).
          “Senior Notes” means, collectively, (i) the 9% Senior Notes due 2010
issued by the Administrative Borrower pursuant to the Indenture dated as of
February 3, 2003 between the Administrative Borrower and Wells Fargo Bank, N.A.
(as successor by consolidation to Wells Fargo Bank Minnesota, National
Association), as trustee, and the Indenture dated as of June 25, 2002, between
the Administrative Borrower and Wells Fargo Bank, N.A. (as successor by con

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solidation to Wells Fargo Bank Minnesota, National Association), as trustee, and
(ii) the 81/4% Senior Notes due 2011 issued by the Administrative Borrower
pursuant to the Indenture dated as of April 12, 2006 between the Administrative
Borrower and Wells Fargo Bank, N.A. (as successor by consolidation to Wells
Fargo Bank Minnesota, National Association), as trustee or any Permitted
Refinancing Indebtedness of any Indebtedness identified in clause (i) or (ii).
          “Senior Unsecured Indebtedness” means, at any time, the Indebtedness
of the Administrative Borrower and its Subsidiaries comprised of (a) the
outstanding principal amount of the Senior Notes outstanding at such time and
(b) the outstanding principal amount of all other unsecured Indebtedness which
is pari passu to the Senior Notes other than trade payables that are not more
than 90 days past the original invoice date thereof.
          “Settlement Documents” means (i) each of the settlement and release
documents and/or payoff letters, (ii) each exhibit, schedule, annex or other
attachment thereto and (iii) each agreement, certificate, instrument,
registration rights agreement, letter or other document contemplated thereby or
any item referred to in clause (ii) to be entered into (including without
limitation various mutual release and/or consent agreements contemplated
thereby), executed or delivered or to become effective in connection with the
Acquisition or the settlement of claims with respect to the Transeastern Events
or otherwise entered into, executed or delivered in connection with the
Acquisition or the settlement of claims with respect to the Transeastern Events,
and including each certificate, agreement or document executed in connection
with or pursuant to any of the foregoing, relating to the Acquisition or the
settlement of claims with respect to the Transeastern Events and providing for a
release and discharge of all claims and obligations relating thereto, including,
without limitation, all liabilities relating to certain guarantees issued in
connection with the Transeastern JV Credit Agreements (as defined below),
entered into by TOUSA, Inc., TOUSA LLC, TOUSA Homes, L.P., and TOI, LLC and the
Transeastern JV Entities, on the one hand, with each of the following parties,
on the other hand:
     (a) Falcone/TEP Holdings, LLC, f/k/a Falcone/Ritchie LLC (“Falcone
Ritchie”), TEP Holdings, Inc., f/k/a Transeastern Properties, Inc., Arthur J.
Falcone; Edward W. Falcone; and certain affiliates of the foregoing dated as of
May 30, 2007 (as extended and amended by that certain letter agreement, dated as
of June 29, 2007, the “Falcone Settlement Agreement”);
     (b) Kendall Land Development, LLC, Boschetti Capital Partners LLC, Prestige
Builders Capital Investments, LLC, Jose Boschetti, Sylvia Boschetti, Martin
Caparros, Jr. and Patricia Caparros dated as of June 29, 2007;
     (c) the lenders party to the Transeastern Credit Agreement and the CIT
Group/Business Credit, Inc., as administrative agent, dated as of June 29, 2007;
     (d) the lenders party to the Transeastern Senior Mezzanine Credit
Agreement, Deutsche Bank, as Administrative Agent, and Deutsche Bank Securities
Inc., as Sole Lead Arranger and Sole Book Running Manager and plaintiff in the
action commenced on March 26, 2007 in the Commercial Division of the Supreme
Court for the State of New York, County of New York, styled Deutsche Bank
Securities Inc. v. Technical

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Olympic USA, Inc., EH/Transaction, LLC and TE/TOUSA Senior, LLC, Index
No. 600974/07 (the “DBSI Action”), dated as of June 29, 2007; and
     (e) the lenders party to the Transeastern Junior Mezzanine Credit
Agreement, Deutsche Bank, as Administrative Agent, and Deutsche Bank Securities
Inc., as Sole Lead Arranger and Sole Book Running Manager and plaintiff in the
DBSI Action, dated as of June 29, 2007.
          “Settlement Preferred Stock” means the 8% Series A Convertible
Pay-in-Kind Preferred Stock issued by the Administrative Borrower pursuant to
that certain certificate of designation filed with Secretary of State of the
state of Delaware on the Effective Date.
          “Settlement Subordinated Debt” means the 14.75% Senior Subordinated
PIK Election Notes due 2015 issued by the Administrative Borrower pursuant to
the Indenture dated as of July 31, 2007 between the Administrative Borrower, the
subsidiary guarantors and Wells Fargo Bank, National Association, as trustee.
          “Sold Homes” means all Entitled Land (other than Unimproved Land) on
which a Unit has been, is being or will be constructed pursuant to a Contract
for Sale and for which such Contract for Sale is in effect, the value of which
is determined in conformity with GAAP.
          “Stock” means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) or other
equity equivalents of any nature of or in a corporation, partnership, limited
liability company or equivalent entity, whether voting or non-voting.
          “Stock Equivalents” means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
          “Subordinated Indebtedness” means any Indebtedness of the
Administrative Borrower and its Restricted Subsidiaries that is subordinated to
the Obligations on terms and conditions not materially less favorable to the
Lenders than the terms and conditions of the Subordinated Notes.
          “Subordinated Notes” means, collectively, (i) the 103/8% Senior
Subordinated Notes due 2012 issued by the Administrative Borrower pursuant to
the Indenture dated as of June 25, 2002, between the Administrative Borrower and
Wells Fargo Bank, N.A. (as successor by consolidation to Wells Fargo Bank
National Association), as trustee, (ii) the 71/2% Senior Subordinated Notes due
2011 issued by the Administrative Borrower pursuant to the Indenture dated as of
March 10, 2004 between the Administrative Borrower and Wells Fargo Bank, N.A.
(as successor by consolidation to Wells Fargo Bank Minnesota, National
Association), as trustee, and (iii) the 71/2% Senior Subordinated Notes due 2015
issued by the Administrative Borrower pursuant to the Indenture dated as of
December 21, 2004 between the Administrative Borrower and Wells Fargo Bank, N.A.
(as successor by consolidation to Wells Fargo Bank Minnesota, Na

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tional Association), as trustee; or any Permitted Refinancing Indebtedness of
any Indebtedness identified in clauses (i), (ii) or (iii).
          “Subsidiary” means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which an
aggregate of over 50% of the outstanding Voting Stock is, at the time, directly
or indirectly, owned or controlled by such Person and/or one or more
Subsidiaries of such Person.
          “Subsidiary Borrower” and “Subsidiary Borrowers” have the meanings
assigned to such terms in the preamble hereto.
          “Swing Loan” has the meaning assigned to such term in Section 2.3(a).
          “Swing Loan Borrowing” means a Borrowing consisting of a Swing Loan.
          “Swing Loan Lender” means CNAI or any other Lender that becomes the
Administrative Agent or that agrees with the approval of the Administrative
Agent and the Administrative Borrower to act as the Swing Loan Lender hereunder.
          “Swing Loan Request” has the meaning assigned to such term in
Section 2.3(b).
          “Tangible Net Worth” means, with respect to the Administrative
Borrower and its Restricted Subsidiaries, the net worth of the Administrative
Borrower and its Restricted Subsidiaries, determined in conformity with GAAP,
less all intangible assets of the Administrative Borrower and its Restricted
Subsidiaries but excluding any non-cash gain or loss resulting from any
mark-to-market adjustments made directly to the net worth of the Administrative
Borrower and its Restricted Subsidiaries on a Consolidated basis as a result of
fluctuations in the value of financial instruments owned by the Administrative
Borrower and its Restricted Subsidiaries as required under SFAS 133.
          “Tax Affiliate” means, with respect to any Person, (a) any Subsidiary
of such Person, and (b) any Affiliate of such Person with which such Person
files or is eligible to file Consolidated, combined or unitary tax returns.
          “Tax Allocation Agreement” means the Tax Allocation Agreement dated as
of March 15, 2000 between Technical Olympic, Inc. and the Administrative
Borrower, as amended, amended and restated or otherwise modified from time to
time, provided that the terms thereof (other than any statutory change in tax
rates) are no more adverse to the Lenders than the terms as of the Original
Effective Date.
          “Tax Return” has the meaning assigned to such term in Section 4.7(a).
          “Taxes” means any and all present or future taxes, duties, levies,
imposts, assessments, deductions, withholdings or other similar charges imposed
by any Governmental Authority whether computed on a separate, consolidated,
unitary, combined or other basis and any interest, fines, penalties or additions
to tax with respect to the foregoing.

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          “Title IV Plan” means a pension plan, other than a Multiemployer Plan,
covered by Title IV of ERISA and to which the Borrower, any of its Restricted
Subsidiaries or any ERISA Affiliate has any obligation or liability (contingent
or otherwise).
          “TOSA” means Technical Olympic SA, a Greek publicly traded company.
          “TOSI” means Technical Olympic Services, Inc., a Delaware corporation.
          “Total Assets” of any Person means, at any date, (a) the total assets
of such Person and its Restricted Subsidiaries at such date determined on a
Consolidated basis in conformity with GAAP minus (b) any Securities issued by
such Person or its Subsidiaries held as treasury securities.
          “Total Land” means Unimproved Land and Land/Lots Under Development.
          “Total Leverage Ratio” means, with respect to the Administrative
Borrower at any date of determination, the ratio of (a) all Indebtedness of the
Administrative Borrower and its Restricted Subsidiaries as of such date less
(i) Unrestricted Cash in excess of $10,000,000 and (ii) any Escrow Proceeds
Receivables in connection with Contracts for Sale to (b) Adjusted Consolidated
Tangible Net Worth of the Administrative Borrower and its Restricted
Subsidiaries at such date.
          For purposes of this definition, whenever pro forma effect is to be
given to a transaction, the pro forma calculations shall be made in good faith
by a responsible financial or accounting officer of the Administrative Borrower.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest on such Indebtedness shall be calculated as if the
rate in effect on the date of calculation of the Total Leverage Ratio had been
the applicable rate for the entire period (taking into account any Hedging
Obligations applicable to such Indebtedness). Interest on a Capital Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by a responsible financial or accounting officer of the Administrative Borrower
in accordance with GAAP. For purposes of making the computation referred to
above, interest on any Indebtedness under a revolving credit facility computed
on a pro forma basis shall be computed based upon the average daily balance of
such Indebtedness during the applicable period. Interest on Indebtedness that
may optionally be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then based
upon such optional rate chosen as the Administrative Borrower may designate.
          “Total Revolving Credit Commitment” means, as of any date, the sum of
all Revolving Credit Commitments for all Lenders then in effect, which sum shall
not exceed $700,000,000 unless the Total Revolving Credit Commitment is
increased pursuant to Section 2.18.
          “Transactions” means the settlement of the Transeastern Events, the
Acquisition, the repayment of Indebtedness listed on Schedule 1.1(a), the
issuance of the Settlement Preferred Stock warrants, and the execution, delivery
and negotiation of the Loan Documents, the First

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Lien Term Loan Documents and the Second Lien Loan Documents and the initial
borrowings hereunder and thereunder.
          “Transeastern Credit Agreement” means that certain $450,000,000 Credit
Agreement, and all ancillary documents related thereto (the “Senior Debt”),
dated as of August 1, 2005, by and among EH/Transeastern, LLC (“EHT”) and
TE/TOUSA Senior, LLC (“TE/TOUSA Senior”), as borrowers, the lenders from time to
time party thereto, Deutsche Bank Trust Company Americas (“Deutsche Bank”), as
administrative agent, and Deutsche Bank Securities Inc., as Sole Lead Arranger
and Sole Book Running Manager, which Senior Debt is secured by first liens on
substantially all the assets of EHT and a pledge of the membership interests in
EHT held by TE/TOUSA Senior.
          “Transeastern Events” means the matters disclosed by the
Administrative Borrower in its report on Form 10-Q for the quarter ending
March 31, 2007 filed with the SEC on May 9, 2007 relating to EH/Transeastern,
LLC and the Transeastern JV Entities.
          “Transeastern Junior Mezzanine Credit Agreement” means that certain
$87,500,000 Junior Mezzanine Credit Agreement, and all ancillary documents
related thereto (the “Junior Mezz Debt”), dated as of August 1, 2005, by and
among TE/TOUSA Mezzanine Two, LLC (“TE/TOUSA Mezz Two”), as borrower, the
lenders from time to time a party thereto, Deutsche Bank Trust Company Americas,
as administrative agent, and Deutsche Bank Securities Inc., as Sole Lead
Arranger and Sole Book Running Manager, which Junior Mezz Debt is secured by a
pledge of the membership interests of TE/TOUSA Mezzanine, LLC and TE/TOUSA Mezz
Two held, respectively, by TE/TOUSA Mezz Two and TE/TOUSA, LLC.
          “Transeastern JV Credit Agreements” means the Transeastern Credit
Agreement, the Transeastern Senior Mezzanine Credit Agreement, the Transeastern
Junior Mezzanine Credit Agreement and all ancillary documents related thereto.
          “Transeastern JV Entities” means TE/TOUSA, LLC and each of its
subsidiaries.
          “Transeastern Property” has the meaning set forth in the definition of
“Borrowing Base Assets.”
          “Transeastern Senior Mezzanine Credit Agreement” means that certain
$137,500,000 Senior Mezzanine Credit Agreement, and all ancillary agreements
related thereto (the “Senior Mezz Debt”) dated as of August 1, 2005, by and
among TE/TOUSA Mezzanine, LLC, as borrower, the lenders from time to time a
party thereto, Deutsche Bank Trust Company Americas, as administrative agent,
and Deutsche Bank Securities Inc., as Sole Lead Arranger and Sole Book Running
Manager, which Senior Mezz Debt is secured by a pledge of the membership
interests of TE/TOUSA Senior, LLC held by TE/TOUSA Mezzanine, LLC.
          “Type,” when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Eurodollar Base Rate or the Base
Rate.

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          “UCC” means the Uniform Commercial Code then in effect for the State
of New York, or such other jurisdiction as the context may require.
          “Unaffiliated” means, with respect to a Joint Venture or an
Unrestricted Subsidiary, as the case may be, an entity for which all of the
ownership or equity interests that are not owned by the Administrative Borrower
or any Restricted Subsidiary of the Administrative Borrower are owned by persons
who are not Permitted Holders or Affiliates of Permitted Holders.
          “Unimproved Land” means all Entitled Land not included in any other
category of Borrowing Base Assets, the value of which is the lesser of (x) value
determined in conformity with GAAP and (y) the appraised value determined, from
time to time in accordance with the Mortgage Requirements.
          “Unit” means a single or multi-family residential unit, including a
condominium and townhouse unit located on Entitled Land that would, but for the
existence of such Unit, constitute Land/Lots Under Development.
          “Units Closed” means a Unit for which the purchase price therefor has
been paid and the title therefor has been delivered to a purchaser in accordance
with a Contract for Sale for such Unit.
          “Unrestricted Cash” means all cash and Cash Equivalents of the
Administrative Borrower and its Restricted Subsidiaries that is not subject to a
Lien or other restriction other than Liens in favor of the Administrative Agent,
any Lender, any Issuer, any Affiliate of any of them or any Indemnitee.
          “Unrestricted Subsidiary” means any Subsidiary of the Administrative
Borrower designated as an “Unrestricted Subsidiary” in accordance with
Section 6.16 and which is not a Restricted Subsidiary.
          “Unsold Homes Under Construction” means all Units for which building
permits have been issued and construction has commenced, but not completed, and
for which there is no Contract for Sale is in effect, the value of which is the
lesser of (x) value determined in conformity with GAAP and (y) the Appraised
Value.
          “Unsold Units” means Unsold Homes Under Construction and Completed
Unsold Homes.
          “Unused Revolving Commitment” means, as of any date, the amount by
which (a) the Total Revolving Credit Commitments on such date exceed (b) the
Revolving Credit Outstandings as of such date.
          “Unused Revolving Commitment Percentage” means, as of any date, the
Unused Revolving Commitment divided by the total Revolving Credit Commitment.
          “USA Patriot Act” has the meaning assigned to such term in
Section 4.19(a).

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          “U.S. Bank Accounts” means the following custodial accounts maintained
by U.S. Bank: (a) Account No. 6728003659 in the name of Engle Homes Delaware,
Inc.; (b) Account No. 6728020649 in the name of TOUSA Delaware Inc.; and
(c) Account No. 6728020426 in the name of TOUSA Funding LLC.
          “Voting Stock” means Stock of any Person having ordinary power to vote
in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
          “Warrants” has the meaning assigned to such term in Section 3.1(c)(v).
          “Wholly-Owned Subsidiary” means, in respect of any Person, any
Subsidiary of such Person, all of the Stock of which (other than director’s
qualifying shares as may be required by law) is owned by such Person either
directly or indirectly through one or more Wholly-Owned Subsidiaries of Such
Person.
          Section 1.2 Computation of Time Periods.
          In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding” and the
word “through” means “to and including.”
          Section 1.3 Accounting Terms and Principles.
          Except as set forth below, all accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
          Section 1.4 Certain Terms.
          (a) The words “herein,” “hereof” and “hereunder” and similar words
refer to this Agreement as a whole, and not to any particular Article, Section,
subsection or clause in this Agreement.
          (b) Unless otherwise expressly indicated herein, references in this
Agreement to an Exhibit, Schedule, Article, Section, subsection or clause refer
to the appropriate Exhibit or Schedule to, or Article, Section, subsection or
clause in this Agreement.
          (c) Each agreement defined in this Article I or otherwise referred to
herein or in any other Loan Document shall include all appendices, exhibits and
schedules thereto. Unless the prior written consent of the Requisite Lenders is
required hereunder for an amendment, restatement, supplement or other
modification to any such agreement and such consent is not obtained, references
in this Agreement to any such agreement shall be to such agreement as so
amended, restated, supplemented, modified or replaced.

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          (d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.
          (e) The term “including” when used in any Loan Document means
“including without limitation” except when used in the computation of time
periods.
          (f) The terms “Lender,” “Issuer” and “Administrative Agent” include
their respective successors.
          (g) Upon the appointment of any successor Administrative Agent
pursuant to Section 9.6, references to CNAI in Section 9.3 shall be deemed to
refer to the financial institution then acting as the Administrative Agent or
one of its Affiliates if it so designates.
          (h) Unless otherwise defined herein or in any other Loan Document,
terms used in this Agreement that are defined in the UCC shall have the meanings
given to such terms in the UCC.
          (i) Unless otherwise expressly indicated herein, references in this
Agreement to interest shall include default interest.
ARTICLE II
THE REVOLVING CREDIT FACILITY
          Section 2.1 The Revolving Credit Commitments.
          On the terms and subject to the conditions contained in this
Agreement, each Lender severally agrees to make loans (each, a “Revolving Loan”)
in Dollars to the Borrowers from time to time on any Business Day during the
period from and including the Effective Date until the Revolving Credit
Termination Date in an aggregate principal amount not to exceed at any time
outstanding for all such loans by such Lender such Lender’s Revolving Credit
Commitment, which Revolving Credit Commitments as of the Effective Date are set
forth in Schedule I hereto; provided, however, that at no time shall any Lender
be obligated to make a Revolving Loan in excess of such Lender’s Ratable Portion
of the Available Revolving Credit. Within the limits of each Lender’s Revolving
Credit Commitment and the Available Revolving Credit, amounts of Revolving Loans
repaid may be reborrowed under this Section 2.1.
          Section 2.2 Borrowing Procedures.
          (a) Each Borrowing shall be made on written notice (or verbal notice
followed by written notice within six hours of such verbal notice) given by the
Administrative Borrower on behalf of the Borrowers to the Administrative Agent
not later than 1:00 p.m. (New York City time) (i) one Business Day, in the case
of a Borrowing of Base Rate Loans and (ii) three Business Days, in the case of a
Borrowing of Eurodollar Rate Loans, prior to the date of the proposed Borrowing.
Each written notice shall be in substantially the form of Exhibit D (a “Notice
of Borrowing”) specifying (A) the date of such proposed Borrowing, (B) the
aggregate amount of such proposed Borrowing, (C) whether any portion of the
proposed Borrowing will be

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of Base Rate Loans or Eurodollar Rate Loans, (D) the initial Interest Period or
Periods for any such Eurodollar Rate Loans, and (E) the Available Revolving
Credit (after giving effect to the proposed Borrowing). The Revolving Loans
shall be made as Base Rate Loans unless, subject to Section 2.13, the Notice of
Borrowing specifies that all or a portion thereof shall be Eurodollar Rate
Loans. Notwithstanding anything to the contrary contained in Section 2.3(a), if
any Notice of Borrowing requests a Borrowing of Base Rate Loans, the
Administrative Agent may, in its sole discretion, make a Swing Loan available to
the Borrower in an aggregate amount not to exceed such proposed Borrowing, and
the aggregate amount of the corresponding proposed Borrowing shall be reduced
accordingly by the principal amount of such Swing Loan. Each Borrowing of
Eurodollar Rate Loans shall be in an aggregate amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and each
Borrowing of Base Rate Loans shall be in an aggregate amount of not less than
$1,000,000 or an integral multiple of $1,000,000 in excess thereof, or the
remaining Available Revolving Credit, if less.
          (b) The Administrative Agent shall give to each Lender prompt notice
of the Administrative Agent’s receipt of a Notice of Borrowing and, if
Eurodollar Rate Loans are properly requested in such Notice of Borrowing, the
applicable interest rate determined pursuant to Section 2.13(a). Each Lender
shall, before 11:00 a.m. (New York City time) on the date of the proposed
Borrowing, make available to the Administrative Agent at its address referred to
in Section 10.8, in immediately available funds, such Lender’s Ratable Portion
of such proposed Borrowing. After the Administrative Agent’s receipt of such
funds and upon fulfillment of the applicable conditions set forth in Section 3.1
and Section 3.2, the Administrative Agent shall make such funds available to the
Borrowers.
          (c) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any proposed Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s Ratable Portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.2 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such Ratable Portion available to the Administrative Agent, such Lender (on
the one hand) and the Borrowers (on the other hand) severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrowers until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrowers, the interest rate applicable at the
time to the Loans comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate for the first Business Day and thereafter at the interest
rate applicable at the time to the Loans comprising such Borrowing. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
corresponding amount so repaid shall constitute such Lender’s Loan as part of
such Borrowing for purposes of this Agreement. If the Borrowers shall repay to
the Administrative Agent such corresponding amount, such payment shall not
relieve such Lender of any obligation it may have hereunder to the Borrowers.
          (d) The failure of any Lender to make the Loan or any payment required
by it on the date specified (each such Lender. unless otherwise agreed by the
Administrative Agent

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and the Administrative Borrower (or any other Lender that has notified the
Administrative Agent or the Administrative Borrower in writing of its intention
not to make any future Loan or other payment required by it or which the
Administrative Agent reasonably determines does not intend to make any future
Loan or other payment required by it), a “Non-Funding Lender”), including any
payment in respect of its participation in Swing Loans and Letter of Credit
Obligations, shall not relieve any other Lender of its obligations to make such
Loan or payment on such date, but no such other Lender shall be responsible for
the failure of any Non-Funding Lender to make a Loan or payment required under
this Agreement.
          Section 2.3 Swing Loans.
          (a) On the terms and subject to the conditions contained in this
Agreement, the Swing Loan Lender may in its sole discretion make loans (each, a
“Swing Loan”) otherwise available to the Borrowers under the Revolving Credit
Facility from time to time on any Business Day during the period from the
Effective Date until the Revolving Credit Termination Date in an aggregate
amount at any time outstanding (together with the aggregate principal amount of
any other Swing Loans) at any time not to exceed the lesser of $20,000,000 and
the Available Revolving Credit at such time; provided, however, that the Swing
Loan Lender shall not make any Swing Loan to the extent that, after giving
effect to such Swing Loan, the Available Revolving Credit would be less than
zero. The Swing Loan Lender shall be entitled to rely on the most recent
Borrowing Base Certificate delivered to the Administrative Agent. Each Swing
Loan shall be a Base Rate Loan and must be repaid in full within seven days of
its making or, if sooner, upon any Borrowing hereunder and shall in any event
mature no later than the Revolving Credit Termination Date. Within the limits
set forth in the first sentence of this Section 2.3(a), amounts of Swing Loans
repaid may be reborrowed under this Section 2.3(a).
          (b) In order to request a Swing Loan, the Administrative Borrower
shall telecopy to the Administrative Agent a duly completed request setting
forth the date, the requested amount and date of the Swing Loan (a “Swing Loan
Request”), to be received by the Administrative Agent not later than 12:00 noon
(New York City time) on the day of the proposed borrowing. The Administrative
Agent shall promptly notify the Swing Loan Lender of the details of the
requested Swing Loan. Subject to the terms of this Agreement, the Swing Loan
Lender shall make a Swing Loan (other than the Ratable Portion of any Swing Loan
associated with any Non-Funding Lender) available to the Administrative Agent,
which will make such amounts available to the Borrowers on the date of the
relevant Swing Loan Request. The Swing Loan Lender shall not make any Swing Loan
in the period commencing on the first Business Day after it receives written
notice from the Requisite Lenders or the Administrative Agent (if a Person other
than the Swing Loan Lender) that one or more of the conditions precedent
contained in Section 3.2 shall not on such date be satisfied, and ending when
such conditions are satisfied or waived. The Swing Loan Lender shall not
otherwise be required to determine that, or take notice whether, the conditions
precedent set forth in Section 3.2 have been satisfied in connection with the
making of any Swing Loan.
          (c) The Swing Loan Lender shall notify the Administrative Agent in
writing (which may be by telecopy) weekly, by no later than 10:00 a.m. (New York
City time) on the

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first Business Day of each week, of the aggregate principal amount of Swing
Loans then outstanding.
          (d) The Swing Loan Lender may demand at any time during the
continuance of an Event of Default that each Lender pay to the Administrative
Agent, for the account of the Swing Loan Lender, in the manner provided in
clause (e) below, such Lender’s Ratable Portion of all or a portion of the
outstanding Swing Loans, which demand shall be made through the Administrative
Agent, shall be in writing and shall specify the outstanding principal amount of
Swing Loans demanded to be paid.
          (e) The Administrative Agent shall forward each notice referred to in
clause (c) above and each demand referred to in clause (d) above to each Lender
on the day such notice or such demand is received by the Administrative Agent
(except that any such notice or demand received by the Administrative Agent
after 2:00 p.m. (New York City time) on any Business Day or any such demand
received on a day that is not a Business Day shall not be required to be
forwarded to the Lenders by the Administrative Agent until the next succeeding
Business Day), together with a statement prepared by the Administrative Agent
specifying the amount of each Lender’s Ratable Portion of the aggregate
principal amount of the Swing Loans stated to be outstanding in such notice or
demanded to be paid pursuant to such demand, and, notwithstanding whether or not
the conditions precedent set forth in Section 3.2 shall have been satisfied
(which conditions precedent the Lenders hereby irrevocably waive) provided that
the Swing Loan Lender has not received the notice referred to in the penultimate
sentence of clause (b) above prior to any such Swing Loan (and the condition
referred to in such notice has not been waived in accordance with this
Agreement), each Lender shall, before 11:00 a.m. (New York City time) on the
Business Day next succeeding the date of such Lender’s receipt of such written
demand, make available to the Administrative Agent, in immediately available
funds, for the account of the Swing Loan Lender, the amount specified in such
demand. Upon such payment by a Lender, such Lender shall, except as provided in
clause (f) below, be deemed to have made a Revolving Loan to the Borrowers. The
Administrative Agent shall use such funds to repay the Swing Loans to the Swing
Loan Lender. To the extent that any Lender fails to make such payment available
to the Administrative Agent for the account of the Swing Loan Lender, the
Borrowers shall repay such Swing Loan on demand.
          (f) Upon the occurrence of a Default under Section 8.1(g), each Lender
shall acquire, without recourse or warranty, an undivided participation in each
Swing Loan otherwise required to be repaid by such Lender pursuant to clause (e)
above, which participation shall be in a principal amount equal to such Lender’s
Ratable Portion of such Swing Loan, by paying to the Swing Loan Lender on the
date on which such Lender would otherwise have been required to make a payment
in respect of such Swing Loan pursuant to clause (e) above, in immediately
available funds, an amount equal to such Lender’s Ratable Portion of such Swing
Loan. If all or part of such amount is not in fact made available by such Lender
to the Swing Loan Lender on such date, the Swing Loan Lender shall be entitled
to recover any such unpaid amount on demand from such Lender together with
interest accrued from such date at the Federal Funds Rate for the first Business
Day after such payment was due and thereafter at the rate of interest then
applicable to Base Rate Loans.

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          (g) From and after the date on which any Lender is deemed to have made
a Revolving Loan pursuant to clause (e) above with respect to any Swing Loan or
purchases an undivided participation interest in a Swing Loan pursuant to clause
(f) above, the Swing Loan Lender shall promptly distribute to such Lender such
Lender’s Ratable Portion of all payments of principal of and interest received
by the Swing Loan Lender on account of such Swing Loan other than those received
from a Lender pursuant to clause (e) or (f) above.
          Section 2.4 Letters of Credit.
          (a) Each Existing Letter of Credit is deemed to be a Letter of Credit
issued hereunder for all purposes of this Agreement and the other Loan
Documents. On the terms and subject to the conditions contained in this
Agreement, each Issuer agrees to Issue one or more Letters of Credit at the
request of the Administrative Borrower from time to time on any Business Day
during the period commencing on the Effective Date and ending on the earlier of
(x) the Revolving Credit Termination Date and (y) the day that is 30 days prior
to the Scheduled Revolving Credit Termination Date; provided, however, that no
Issuer shall be under any obligation to Issue any Letter of Credit if:
     (i) any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuer from
Issuing such Letter of Credit or any Requirement of Law applicable to such
Issuer or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over such Issuer shall prohibit, or
request that such Issuer refrain from, the Issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon such
Issuer with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuer is not otherwise compensated) not in
effect on the Original Effective Date or result in any unreimbursed loss, cost
or expense (for which such Issuer is not otherwise compensated) that was not
applicable, in effect or known to such Issuer as of the Original Effective Date
and that such Issuer in good faith deems material to it;
     (ii) such Issuer shall have received written notice from the Administrative
Agent, the Requisite Lenders or the Administrative Borrower, on or prior to the
requested date of Issuance of such Letter of Credit, that one or more of the
applicable conditions contained in Section 3.2 and this Section 2.4 is not then
satisfied;
     (iii) after giving effect to the Issuance of such Letter of Credit, the
Available Revolving Credit would be less than zero;
     (iv) after giving effect to the Issuance of such Letter of Credit, the
Letter of Credit Obligations at such time exceed 50% of the aggregate Revolving
Credit Commitments;
     (v) any fees due in connection with a requested Issuance have not been
paid;

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     (vi) such Letter of Credit is requested to be Issued in a form that is not
reasonably acceptable to such Issuer; or
     (vii) such Letter of Credit does not provide that any beneficiary under
such Letter of Credit is prohibited from waiving any rights of subrogation
against the Administrative Borrower or any Subsidiary of the Administrative
Borrower for whose benefit such Letter of Credit was issued.
          None of the Lenders (other than the Issuers in their capacity as such)
shall have any obligation to Issue any Letter of Credit.
          (b) In no event shall the expiration date of any Letter of Credit,
(i) be more than one year after the date of Issuance thereof, or (ii) except as
provided below, be less than thirty days prior to the Scheduled Revolving Credit
Termination Date; provided, however, that any Letter of Credit with a one-year
term may provide for the renewal thereof, prior to the Scheduled Revolving
Credit Termination Date, for additional one-year periods (which shall in no
event extend beyond the expiry date referred to in clause (ii) above).
          (c) In connection with the Issuance of each Letter of Credit, the
Administrative Borrower shall give the relevant Issuer and the Administrative
Agent at least two Business Days’ prior written notice, in such written or
electronic form as is acceptable to the Issuer, of the requested Issuance of
such Letter of Credit (a “Letter of Credit Request”). Such notice shall be
irrevocable and shall specify (i) the Issuer of such Letter of Credit, (ii) the
stated amount of the Letter of Credit requested, which stated amount shall not
be less than $10,000, (iii) the date of Issuance of such requested Letter of
Credit (which day shall be a Business Day), (iv) the date on which such Letter
of Credit is to expire (which date shall be a Business Day), (v) the Person for
whose benefit the requested Letter of Credit is to be Issued and (vi) the
Available Revolving Credit after giving effect to the Issuance of such Letter of
Credit. Such notice, to be effective, must be received by the relevant Issuer
and the Administrative Agent not later than 11:00 a.m. (New York City time) on
the second Business Day prior to the requested Issuance of such Letter of
Credit.
          (d) Subject to the satisfaction of the conditions set forth in this
Section 2.4, the relevant Issuer shall, on the requested date, Issue a Letter of
Credit on behalf of the Administrative Borrower and, if applicable, one of its
Subsidiaries (including any other Borrower) in accordance with such Issuer’s
usual and customary business practices. If the Person for whose benefit the
requested Letter of Credit is to be issued is not a Borrower, the Administrative
Borrower shall cause such Person to be a co-applicant with the Administrative
Borrower with respect to such Letter of Credit. No Issuer shall Issue any Letter
of Credit in the period commencing on the first Business Day after it receives
written notice from any Lender or the Administrative Agent that one or more of
the conditions precedent contained in Section 3.2 shall not on such date be
satisfied, and ending when such conditions are satisfied. The relevant Issuer
shall not otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Section 3.2 have been satisfied in connection
with the Issuance of any Letter of Credit.
          (e) Each Issuer shall comply with the following:

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     (i) give the Administrative Agent written notice (or telephonic notice
confirmed promptly thereafter in writing, which writing may be by telecopier) of
the Issuance of a Letter of Credit Issued by it and the stated amount thereof,
of all drawings under a Letter of Credit Issued by it, and of the payment (or
the failure to pay when due) by the Borrowers of any Reimbursement Obligation
when due (which notice the Administrative Agent shall promptly transmit by
telecopy or similar transmission to each Lender);
     (ii) upon the request of any Lender, furnish to such Lender copies of such
other documentation as may reasonably be requested by such Lender; and
     (iii) no later than 10 Business Days following the last day of each
calendar month, provide to the Administrative Agent (and the Administrative
Agent shall provide a copy to each Lender requesting the same) and the
Administrative Borrower, a schedule in form and substance reasonably
satisfactory to the Administrative Agent, setting forth the aggregate Letter of
Credit Obligations outstanding at the end of each month and any information
requested by the Administrative Borrower or the Administrative Agent relating
thereto.
          (f) Immediately upon the Issuance by an Issuer of a Letter of Credit
in accordance with the terms and conditions of this Agreement, such Issuer shall
be deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender’s Ratable Portion, in such Letter of Credit and the
obligations of the Borrowers with respect thereto (including all Letter of
Credit Obligations with respect thereto) and any security therefor and guaranty
pertaining thereto.
          (g) The Borrowers agree to pay to the Issuer of any Letter of Credit
the amount of all Reimbursement Obligations owing to such Issuer under any
Letter of Credit Issued for its account no later than the date that is the next
succeeding Business Day after the Administrative Borrower receives written
notice from such Issuer that payment has been made under such Letter of Credit
(the “Reimbursement Date”), irrespective of any claim, set-off, defense or other
right that any Borrower may have at any time against such Issuer or any other
Person. In the event that any Issuer makes any payment under any Letter of
Credit and the Borrowers shall not have repaid such amount to such Issuer
pursuant to this clause (g) on or before 11:00 a.m. (New York City time) on the
next Business Day following the Administrative Borrower’s receipt of the
aforesaid notice, then (i) the relevant Issuer shall notify the Administrative
Agent of such failure to repay, (ii) such Reimbursement Obligation shall be
payable on demand with interest thereon computed from the date on which such
Reimbursement Obligation arose to the date of repayment in full at the rate of
interest applicable to past due Revolving Loans bearing interest at a rate based
on the Base Rate during such period, (iii) the Borrowers shall be deemed to have
elected (if a formal notice of Borrowing has not been received by the
Administrative Agent in respect of such Reimbursement Obligation) to have the
Reimbursement Obligation satisfied by the Borrowing of a Base Rate Loan in an
amount equal to such Reimbursement Obligation and (iv) each Lender shall, except
during the continuance of a Default or Event of Default under Section 8.1(g) and
notwithstanding whether or not the conditions precedent set forth in Section 3.2
shall have been satisfied (which conditions precedent the Lenders hereby
irrevocably waive),

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provided that such Issuer has not received the notice referred to in the
penultimate sentence of clause (d) above (and the condition referred to in such
notice has not been waived in accordance with this Agreement), pay to the
Administrative Agent for the account of such Issuer the amount of such Lender’s
Ratable Portion of such Reimbursement Obligations and be deemed to have made a
Revolving Loan to the Borrowers in the principal amount of such payment. Prior
to the funding of such Revolving Loan, if the Administrative Agent so notifies
such Lender prior to 11:00 a.m. (New York City time) on any Business Day, such
Lender shall make available to the Administrative Agent for the account of such
Issuer its Ratable Portion of the amount of such payment on such Business Day in
immediately available funds. Whenever any Issuer receives from the Borrowers a
payment of a Reimbursement Obligation as to which the Administrative Agent has
received for the account of such Issuer any payment from a Lender pursuant to
this clause (g), such Issuer shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Lender, in immediately available
funds, an amount equal to such Lender’s Ratable Portion of the amount of such
payment adjusted, if necessary, to reflect the respective amounts the Lenders
have paid in respect of such Reimbursement Obligation. The Borrowers shall be
required to cash collateralize in accordance with Section 8.3 the Ratable
Portion of any Letter of Credit associated with any Non-Funding Lender. To the
extent any Lender becomes a Non-Funding Lender after an obligation arises to pay
to the Administrative Agent such Lender’s Ratable Portion of any Reimbursement
Obligation, the Borrowers shall immediately pay to the Administrative Agent for
the account of the relevant Issuer the amount of such Non-Funding Lender’s
Ratable Portion of such Reimbursement Obligation (and no Revolving Loan will be
deemed made with respect to such Non-Funding Lender’s Ratable Portion of such
Reimbursement Obligation).
          (h) The Borrowers’ obligation to pay each Reimbursement Obligation and
the obligations of the Lenders to make payments to the Administrative Agent for
the account of the Issuers with respect to Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
including the occurrence of any Default or Event of Default, and irrespective
of:
     (i) any lack of validity or enforceability of any Letter of Credit or any
Loan Document, or any term or provision therein;
     (ii) any amendment or waiver of or any consent to departure from all or any
of the provisions of any Letter of Credit or any Loan Document;
     (iii) the existence of any claim, set off, defense or other right that any
Borrower, any other party guaranteeing, or otherwise obligated with, any
Borrower, any Subsidiary or other Affiliate thereof or any other Person may at
any time have against the beneficiary under any Letter of Credit, any Issuer,
the Administrative Agent or any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction;

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     (iv) any draft or other document presented under a Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
     (v) payment by the Issuer under a Letter of Credit against presentation of
a draft or other document that does not comply with the terms of such Letter of
Credit; and
     (vi) any other act or omission to act or delay of any kind of any Issuer,
the Lenders, the Administrative Agent or any other Person or any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.4, constitute a legal or
equitable discharge of the Borrowers’ obligations hereunder (other than
payment).
          Any action taken or omitted to be taken by the relevant Issuer (or its
officers, directors or employees) under or in connection with any Letter of
Credit, if taken or omitted in the absence of gross negligence or willful
misconduct, shall not put such Issuer under any resulting liability to any
Borrower or any Lender. In determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof, the Issuer may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit, the Issuer may rely exclusively on the documents presented to it under
such Letter of Credit as to any and all matters set forth therein, including
reliance on the amount of any draft presented under such Letter of Credit,
whether or not the amount due to the beneficiary thereunder equals the amount of
such draft and whether or not any document presented pursuant to such Letter of
Credit proves to be insufficient in any respect, if such document on its face
appears to be in compliance with the terms of the applicable Letter of Credit,
and whether or not any other statement or any other document presented pursuant
to such Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever and any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute willful misconduct or gross negligence of the Issuer.
          (i) If and to the extent such Lender shall not have so made its
Ratable Portion of the amount of the payment required by clause (g) above
available to the Administrative Agent for the account of such Issuer, such
Lender agrees to pay to the Administrative Agent for the account of such Issuer
forthwith on demand any such unpaid amount together with interest thereon, for
the first Business Day after payment was first due at the Federal Funds Rate,
and thereafter until such amount is repaid to the Administrative Agent for the
account of such Issuer, at the rate per annum applicable to Base Rate Loans
under the Revolving Credit Facility. The failure of any Lender to make available
to the Administrative Agent for the account of such Issuer its Ratable Portion
of any such payment shall not relieve any other Lender of its obligation
hereunder to make available to the Administrative Agent for the account of such
Issuer its Ratable Portion of any payment on the date such payment is to be
made, but no Lender shall be responsible for the failure of any other Lender to
make available to the Administrative Agent for the account of the Issuer such
other Lender’s Ratable Portion of any such payment.

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          (j) From time to time, the Administrative Borrower may by notice to
the Administrative Agent designate an additional Lender (in addition to CNAI)
that agrees (in its sole discretion) to act in such capacity as an Issuer. Each
such additional Issuer shall execute a counterpart of this Agreement upon the
approval of the Administrative Agent (which approval shall not be unreasonably
withheld) and shall thereafter be an Issuer hereunder for all purposes.
          Section 2.5 Reduction and Termination of the Revolving Credit
Commitments.
          The Administrative Borrower may, upon same Business Day’s notice to
the Administrative Agent, terminate in whole or reduce in part ratably the
unused portions of the respective Revolving Credit Commitments of the Lenders;
provided, however, that (x) each partial reduction shall be in an aggregate
amount of not less than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and (y) no such termination or reduction of the Revolving Credit
Commitments shall be permitted if, after giving effect thereto and to any
repayments of the Revolving Loans made on the effective date thereof, the
aggregate Revolving Credit Outstandings would exceed the Total Revolving Credit
Commitment.
          Section 2.6 Repayment of Loans.
          The Borrowers promise to repay the entire unpaid principal amount of
the Revolving Loans, the Swing Loans and any Reimbursement Obligations (unless
required to be paid sooner hereunder), and cash collateralize all outstanding
Letters of Credit in accordance with Section 8.3, on the Revolving Credit
Termination Date.
          Section 2.7 Evidence of Debt.
          (a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing Indebtedness of the Borrowers to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
          (b) The Administrative Agent shall maintain accounts in accordance
with its usual practice in which it shall record (i) the amount of each Loan
made and, if a Eurodollar Rate Loan, the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable by the Borrowers to
each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from the Borrowers, whether such sum constitutes
principal or interest, fees, expenses or other amounts due under the Loan
Documents and each Lender’s Ratable Portion thereof, if applicable.
          (c) The entries made in the accounts maintained pursuant to clauses
(a) and (b) of this Section 2.7 shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the obligations
recorded therein; provided, however, that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligations of the Borrowers to repay the Loans in
accordance with their terms.

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          (d) Notwithstanding any other provision of the Agreement, in the event
that any Lender requests that the Borrowers execute and deliver a promissory
note or notes payable to such Lender in order to evidence the Indebtedness owing
to such Lender by the Borrowers hereunder, the Borrowers will promptly execute
and deliver a Revolving Credit Note or Revolving Credit Notes to such Lender
evidencing any Revolving Loans of such Lender, substantially in the form of
Exhibit C.
          Section 2.8 Prepayments.
          (a) Optional Prepayments of Loans. The Borrowers may prepay the
outstanding principal amount of any Class of Loans in whole or in part;
provided, however, that (i) if any prepayment of any Eurodollar Rate Loan is
made by the Borrowers other than on the last day of an Interest Period for such
Loan, the Borrowers shall also pay any amounts owing pursuant to
Section 2.13(e), (ii) each partial prepayment of Eurodollar Rate Loans shall be
in an aggregate principal amount not less than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof (or the remaining balance of the Loans,
if less) and each partial prepayment of Base Rate Loans shall be in an aggregate
principal amount not less than $1,000,000 or an integral multiple of $1,000,000
in excess thereof (or the remaining balance of the Loans, if less) and (iii) the
Borrowers may prepay the outstanding principal amount of any Swing Loan in whole
or in part, with no minimum partial prepayment requirement. Upon the giving of
such notice of prepayment, the principal amount and Class of Loans specified to
be prepaid shall become due and payable on the date specified for such
prepayment (except that any notice of prepayment in connection with the
refinancing of all of the Loans may be contingent upon the consummation of such
refinancing).
          (b) Mandatory Prepayments of Loans. If at any time the Revolving
Credit Outstandings plus the aggregate outstanding principal amount of all First
Lien Term Loans exceed the Available Credit, the Borrowers shall, at their
option, prepay First Lien Term Loans or Loans, or cash collateralize outstanding
Letters of Credit, in accordance with Section 8.3, in an amount equal to such
excess.
          (c) Excess Cash Flow. No later than five Business Days after the date
on which the financial statements with respect to such fiscal year in which such
Excess Cash Flow Period occurs are or are required to be delivered pursuant to
Section 6.1(a), the Administrative Borrower shall make prepayments of Loans
(without reducing Revolving Credit Commitments) in accordance with
Sections 2.8(d) and (e) in an aggregate amount equal to (i) 75% of Excess Cash
Flow for the Excess Cash Flow Period then ended, minus (ii) any voluntary
prepayments of First Lien Term Loans and any voluntary prepayments of Second
Lien Loans, other than in each case voluntary prepayments funded directly or
indirectly with the proceeds of Indebtedness, minus (iii) the difference, if
positive, of the amount of Revolving Loans and Swing Loans outstanding at the
end of the prior Excess Cash Flow Period (or the beginning of the Excess Cash
Flow Period in the case of the first Excess Cash Flow Period) over the amount of
Revolving Loans and Swing Loans outstanding at the end of such Excess Cash Flow
Period; provided that the percentage in this clause (c) shall be reduced to 50%
if the Total Leverage Ratio shall not exceed 1.50:1.00 and the Interest Coverage
Ratio shall not be less than 1.75:1.00, in each case as of the last day of such
fiscal year.

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          (d) Application of Prepayments. Prior to any optional or mandatory
prepayment hereunder, the Administrative Borrower shall select the Borrowing or
Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to Section 2.8(e), subject to the provisions of this clause
(d). Notwithstanding anything to the contrary in this clause (d), during the
continuance of an Event of Default, optional and mandatory prepayments shall be
applied in accordance with Section 2.12(f).
          (e) Notice of Prepayment. The Administrative Borrower shall notify the
Administrative Agent (and, in the case of prepayment of a Swing Loan, the Swing
Loan Lender) by written notice (including by facsimile or electronic
transmission) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Rate Borrowing, not later than 11:00 a.m. (New York City time) three
Business Days before the date of prepayment, (ii) in the case of prepayment of
an Base Rate Borrowing, not later than 11:00 a.m. (New York City time) one
Business Day before the date of prepayment and (iii) in the case of prepayment
of a Swing Loan, not later than 11:00 a.m. (New York City time) on the date of
prepayment. Each such notice shall be irrevocable (except that any notice of
prepayment in connection with the refinancing of all of the Loans may be
contingent upon the consummation of such refinancing). Each such notice shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment. Promptly following
receipt of any such notice (other than a notice relating solely to Swing Loans),
the Administrative Agent shall advise the Lenders of the contents thereof.
          Section 2.9 Interest.
          (a) Rate of Interest. All Loans and the outstanding amount of all
other Obligations shall bear interest, in the case of Loans, on the unpaid
principal amount thereof from the date such Loans are made and, in the case of
such other Obligations, from the date such other Obligations are due and payable
until, in all cases, paid in full, except as otherwise provided in
Section 2.9(c), as follows:
     (i) if a Base Rate Loan or such other Obligation, at a rate per annum equal
to the sum of (A) the Base Rate as in effect from time to time, plus (B) the
Applicable Margin; and
     (ii) if a Eurodollar Rate Loan, at a rate per annum equal to the sum of
(A) the Eurodollar Rate determined for the applicable Interest Period, plus
(B) the Applicable Margin in effect from time to time during such Interest
Period.
          (b) Interest Payments. (i) Interest accrued on each Base Rate Loan
(other than Swing Loans) shall be payable in arrears (A) on the last day of each
calendar quarter, commencing on the first such day following the making of such
Base Rate Loan and (B) if not previously paid in full, at maturity (whether by
acceleration or otherwise) of such Base Rate Loan; (ii) interest accrued on
Swing Loans shall be payable in arrears on the last day of each calendar
quarter; (iii) interest accrued on each Eurodollar Rate Loan shall be payable in
arrears (A) on the last day of each Interest Period applicable to such Loan and
if such Interest Period has a duration

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of more than three months, on each day during such Interest Period occurring
every three months from the first day of such Interest Period, (B) upon the
payment or prepayment thereof in full or in part and (C) if not previously paid
in full, at maturity (whether by acceleration or otherwise) of such Eurodollar
Rate Loan; and (iv) interest accrued on the amount of all other Obligations
shall be payable on written demand from and after the time such Obligation
becomes due and payable (whether by acceleration or otherwise).
          (c) Default Interest. Notwithstanding the rates of interest specified
in Section 2.9(a) or elsewhere herein, effective immediately upon the occurrence
of an Event of Default, and for as long thereafter as such Event of Default
shall be continuing, (i) the principal balance of all Loans then due and payable
shall bear interest at a rate that is 2% per annum in excess of the rate of
interest applicable to such Loans pursuant to clause (a)(i) or (a)(ii) above
from time to time and (ii) to the fullest extent permitted by law, the amount of
any interest, fee or other amount payable hereunder that is not paid when due,
from the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and promptly
following demand, at a rate per annum equal at all times to 2% per annum above
the rate per annum required to be paid on Base Rate Loans pursuant to clause
(a)(i) above.
          Section 2.10 Conversion/Continuation Option.
          (a) The Administrative Borrower may elect (i) at any time on any
Business Day to convert Base Rate Loans (other than Swing Loans) or any portion
thereof to Eurodollar Rate Loans, and (ii) at the end of any applicable Interest
Period, to convert Eurodollar Rate Loans or any portion thereof into Base Rate
Loans or to continue such Eurodollar Rate Loans or any portion thereof for an
additional Interest Period; provided, however, that the aggregate amount of the
Eurodollar Rate Loans of any Class for each Interest Period must be in the
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof.
Each conversion or continuation shall be allocated among the Loans of each
Lender of such Class in accordance with each applicable Lender’s Ratable
Portion. Each such election shall be in substantially the form of Exhibit F (a
“Notice of Conversion or Continuation”) and shall be made by giving the
Administrative Agent at least three Business Days’ prior written notice
specifying (A) the amount, type and Class of Loan being converted or continued,
(B) in the case of a conversion to or a continuation of Eurodollar Rate Loans,
the applicable Interest Period, and (C) in the case of a conversion, the date of
conversion.
          (b) The Administrative Agent shall promptly notify each Lender of its
receipt of a Notice of Conversion or Continuation and of the options selected
therein. Notwithstanding the foregoing, no conversion in whole or in part of
Base Rate Loans to Eurodollar Rate Loans, and no continuation in whole or in
part of Eurodollar Rate Loans upon the expiration of any applicable Interest
Period, shall be permitted at any time at which (i) a Default or Event of
Default shall have occurred and be continuing or (ii) the continuation of, or
conversion into Eurodollar Rate Loans, would violate or otherwise not be
permitted under any of the provisions of Section 2.13. If, within the time
period required under the terms of this Section 2.10, the Administrative Agent
does not receive a Notice of Conversion or Continuation from the Administrative
Borrower containing a permitted election to continue any Eurodollar Rate Loans
for an additional Interest Period or to convert any such Loans, then, upon the
expiration of the applicable Interest

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Period, such Loans shall be automatically converted to Base Rate Loans. Each
Notice of Conversion or Continuation shall be irrevocable.
          Section 2.11 Fees.
          (a) Applicable Unused Revolving Commitment Fee. The Borrowers agree to
pay to each Lender a commitment fee on the daily average amount of the Unused
Revolving Commitments (which for the purpose of calculation of the Commitment
Fee only shall not include Swing Loans in the calculation of Revolving Credit
Outstandings) from the Original Effective Date until the Revolving Credit
Termination Date at the Applicable Unused Revolving Commitment Fee Rate, payable
in arrears (i) on the last day of each calendar quarter, commencing on the first
such day following the Original Effective Date and (ii) on the Revolving Credit
Termination Date.
          (b) Letter of Credit Fees. The Borrowers agree to pay the following
amounts with respect to Letters of Credit issued by any Issuer:
     (i) to the Administrative Agent for the account of each Issuer of a Letter
of Credit, with respect to each Letter of Credit issued by such Issuer, an
issuance fee equal to 0.10% per annum of the maximum amount available from time
to time to be drawn under such Letter of Credit, payable in arrears (A) on the
last day of each calendar quarter, commencing on the first such day following
the issuance of such Letter of Credit and (B) on the Revolving Credit
Termination Date; and
     (ii) to the Administrative Agent for the ratable benefit of the Lenders,
with respect to each Letter of Credit, a fee accruing at a rate per annum equal
to the Applicable Margin for Letters of Credit of the maximum amount available
from time to time to be drawn under such Letter of Credit, payable in arrears
(A) on the last day of each calendar quarter, commencing on the first such day
following the issuance of such Letter of Credit and (B) on the Revolving Credit
Termination Date; provided, however, that during the continuance of an Event of
Default, such fee shall be increased by two percent per annum and shall be
payable on demand.
          (c) Additional Fees. The Borrowers agree to pay to the Administrative
Agent and the Arrangers additional fees, the amount and dates of payment of
which are embodied in a separate fee letter entered into between or among such
parties.
          Section 2.12 Payments and Computations.
          (a) The Borrowers shall make each payment of Revolving Loans hereunder
(including fees and expenses) not later than 1:00 p.m. (New York City time) on
the day when due, in Dollars, to the Administrative Agent at its address
referred to in Section 10.8 in immediately available funds without deduction,
set-off or counterclaim. The Administrative Agent will promptly thereafter cause
to be distributed immediately available funds relating to the payment of
principal or interest or fees to the Lenders, in accordance with the application
of payments set forth in clauses (e) and (f) of this Section 2.12, as
applicable, for the account of their respective

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Applicable Lending Offices; provided, however, that amounts payable pursuant to
Section 2.13(c), Section 2.13(e), Section 2.14 or Section 2.15 shall be paid
only to the affected Lender or Lenders and amounts payable with respect to Swing
Loans shall be paid only to the Swing Loan Lender. Payments received by the
Administrative Agent after 1:00 p.m. (New York City time) shall be deemed to be
received on the next Business Day.
          (b) All computations of interest based on the Base Rate shall be made
by the Administrative Agent on the basis of a year of 365/366 days, as the case
may be, and all computations of all other interest and all fees shall be made by
the Administrative Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest and fees are payable. Each
determination by the Administrative Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
          (c) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and such extension of time shall in such case
be included in the computation of payment of interest or fees, as the case may
be; provided, however, that if such extension would cause payment of interest on
or principal of any Eurodollar Rate Loan to be made in the next calendar month,
such payment shall be made on the immediately preceding Business Day. All
repayments of any Loans shall be applied as follows: first, to repay such Loans
outstanding as Base Rate Loans and then to repay such Loans outstanding as
Eurodollar Rate Loans, with those Eurodollar Rate Loans having earlier expiring
Interest Periods being repaid prior to those having later expiring Interest
Periods.
          (d) Unless the Administrative Agent shall have received notice from
the Administrative Borrower to the Lenders prior to the date on which any
payment is due hereunder that the Borrowers will not make such payment in full,
the Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrowers shall not have made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon at the Federal Funds Rate, for the first Business Day, and,
thereafter, at the rate applicable to Base Rate Loans, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent.
          (e) Subject to the provisions of Section 2.12(f) (and except as
otherwise provided in Section 2.8), all payments and any other amounts received
by the Administrative Agent from or for the benefit of the Borrowers shall be
applied as follows: first, to pay principal of and interest on any portion of
the Loans that the Administrative Agent may have advanced pursuant to the
express provisions of this Agreement on behalf of any Lender, for which the
Administrative Agent has not then been reimbursed by such Lender or the
Borrowers, second, to pay all other Obligations then due and payable, and third,
as the Administrative Borrower so designates. Payments in respect of Swing Loans
received by the Administrative Agent shall be distributed to

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the Swing Loan Lender; payments in respect of Revolving Loans received by the
Administrative Agent shall be distributed to each Lender in accordance with such
Lender’s Ratable Portion; and all payments of fees and all other payments in
respect of any other Obligation shall be allocated among such of the Lenders and
Issuers as are entitled thereto, and, for such payments allocated to the
Lenders, in proportion to their respective Ratable Portions.
          (f) During the continuance of an Event of Default, the Borrowers
hereby irrevocably waive the right to direct the application of any and all
payments in respect of the Obligations and agree that, notwithstanding the
provisions of clause (e) above, the Administrative Agent may, and shall upon
either (A) the written direction of the Requisite Lenders or (B) the
acceleration of the Obligations pursuant to Section 8.2, subject to the terms of
the Intercreditor Agreement, apply all payments (subject in any event to the
restrictions set forth in Section 8.3 in respect of the application of amounts
funded to a cash collateral account in respect of outstanding Letter of Credit
Obligations) in respect of any Obligations and all funds on deposit in any cash
collateral account in the following order (after first paying all expenses
incurred by the Administrative Agent in the performance of its duties and in the
enforcement of the rights of the Lenders and the Issuers under the Loan
Documents, including, without limitation, all costs and expenses of collection,
reasonable attorneys’ fees (including all allocated costs of internal counsel)
and other professional fees, court costs and other amounts in respect of expense
reimbursement and indemnities then due the Administrative Agent in connection
therewith):
     (i) first, ratably, pay any advances, fees, indemnities, expense
reimbursements or other liabilities then due and owing to the Administrative
Agent from any Borrower (other than in connection with any Secured Hedging
Contracts);
     (ii) second, to pay any expense reimbursements then due and owing to the
Issuer, the Swing Loan Lender or the Lenders from the Borrowers (other than in
connection with any Secured Hedging Contracts) to the extent such obligations
are secured by the Collateral, ratably;
     (iii) third, to pay interest due and payable in respect of the Loans and
fees with respect to Letters of Credit to the extent such obligations are
secured by the Collateral, ratably;
     (iv) fourth, to prepay principal on the Loans and unpaid Reimbursement
Obligations and any amounts owing with respect to Secured Hedging Contracts, in
each case to the extent such obligations are secured by the Collateral, ratably;
     (v) fifth, to the payment of any other Secured Obligation due and owing to
the Agent or any Lender that are secured by the Collateral; and
     (vi) sixth, to the applicable Loan Party or as the Administrative Borrower
shall direct.
provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any Obligation described in any of clauses (i)
through (vi), the available funds being

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applied with respect to any such Obligation (unless otherwise specified in such
clause) shall be allocated to the payment of such Obligations ratably, based on
the proportion of the Administrative Agent’s and each Lender’s or Issuer’s
interest in the aggregate outstanding Obligations described in such clauses. The
order of priority set forth in clauses (i) through (vi) of this clause (f) may
at any time and from time to time be changed by the agreement of all Lenders
without necessity of notice to or consent of or approval by any Borrower or any
other Person. The order of priority set forth in clauses (i) through (v) of this
clause (f) may be changed only with the prior written consent of the
Administrative Agent in addition to all Lenders. Each Lender and each Loan Party
acknowledges and agrees to the relative rights, priorities and agreements of the
First Lien Term Loan Secured Parties, the Second Lien Secured Parties and the
Secured Parties, as set forth in the Intercreditor Agreement and this Agreement,
including as set forth in this Section 2.12 and Section 10.23.
          (g) At the option of the Administrative Agent, principal on the Swing
Loans, Reimbursement Obligations, interest, fees, expenses and other sums due
and payable in respect of the Loans may be paid from the proceeds of Swing Loans
or Revolving Loans. The Borrowers hereby authorize the Swing Loan Lender to make
Swing Loans pursuant to Section 2.3(a), and the Lenders to make Revolving Loans
pursuant to Section 2.2(a), from time to time in the Swing Loan Lender’s, or
such Lender’s discretion, that are in the amounts of any and all principal
payable with respect to the Swing Loans and interest, fees, expenses and other
sums payable in respect of the Loans, and further authorize the Administrative
Agent to give the Lenders notice of any Borrowing with respect to such Swing
Loans and Revolving Loans and to distribute the proceeds of such Swing Loans and
Revolving Loans to pay such amounts. The Borrowers agree that all such Swing
Loans and Revolving Loans so made shall be deemed to have been requested by them
(irrespective of the satisfaction of the conditions in Section 3.2, which
conditions the Lenders irrevocably waive) and direct that all proceeds thereof
shall be used to pay such amounts.
          Section 2.13 Special Provisions Governing Eurodollar Rate Loans.
          (a) Determination of Interest Rate. The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the
Administrative Agent pursuant to the procedures set forth in the definition of
“Eurodollar Rate.” The Administrative Agent’s determination shall be presumed to
be correct, absent manifest error, and shall be binding on the Borrowers.
          (b) Interest Rate Unascertainable, Inadequate or Unfair. In the event
that: (i) the Administrative Agent determines that adequate and fair means do
not exist for ascertaining the applicable interest rates by reference to which
the Eurodollar Rate then being determined is to be fixed; or (ii) the Requisite
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period will not adequately reflect the cost to the Lenders of such
Class of making or maintaining such Loans for such Interest Period, the
Administrative Agent shall forthwith so notify the Administrative Borrower and
the Lenders, whereupon each Eurodollar Loan shall automatically, on the last day
of the current Interest Period for such Loan, convert into a Base Rate Loan and
the obligations of the Lenders of such Class to make Eurodollar Rate Loans or to
convert Base Rate Loans into Eurodollar Rate Loans shall be suspended until the

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Administrative Agent shall notify the Administrative Borrower that the Requisite
Lenders have determined that the circumstances causing such suspension no longer
exist.
          (c) Increased Costs. If at any time after the Original Effective Date
any Lender determines that the introduction of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
(other than (i) any change by way of imposition or increase of reserve
requirements included in determining the Eurodollar Rate and (ii) any change in
the rate of tax on the overall net income of such Lender or its lending office
imposed by the jurisdiction in which such Lender’s principal executive office or
lending office is located) or the compliance by such Lender with any guideline,
request or directive from any central bank or other Governmental Authority
(whether or not having the force of law), shall have the effect of increasing
the cost to such Lender of agreeing to make or making, funding or maintaining
any Eurodollar Rate Loans, then the Borrowers shall from time to time, upon
demand by such Lender delivered to the Administrative Borrower (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to the Administrative Borrower and the Administrative Agent by
such Lender, shall be conclusive and binding for all purposes, absent manifest
error.
          (d) Illegality. Notwithstanding any other provision of this Agreement,
if any Lender determines that the introduction of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the Original Effective Date shall make it unlawful, or any central bank or
other Governmental Authority shall assert that it is unlawful, for any Lender or
its Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to
fund or maintain Eurodollar Rate Loans, then, on notice thereof and demand
therefor by such Lender to the Administrative Borrower through the
Administrative Agent, (i) the obligation of such Lender to make or to continue
Eurodollar Rate Loans and to convert Base Rate Loans into Eurodollar Rate Loans
shall be suspended, and each such Lender shall make a Base Rate Loan as part of
any requested Borrowing of Eurodollar Rate Loans and (ii) if the affected
Eurodollar Rate Loans are then outstanding, the Administrative Borrower shall
immediately convert each such Loan into a Base Rate Loan. If at any time after a
Lender gives notice under this Section 2.13(d) such Lender determines that it
may lawfully make Eurodollar Rate Loans, such Lender shall promptly give notice
of that determination to the Administrative Borrower and the Administrative
Agent, and the Administrative Agent shall promptly transmit the notice to each
other Lender. The Administrative Borrower’s right to request, and such Lender’s
obligation, if any, to make Eurodollar Rate Loans shall thereupon be restored.
          (e) Breakage Costs. In addition to all amounts required to be paid by
the Borrowers pursuant to Section 2.9, the Borrowers shall compensate each
Lender, upon demand made to the Administrative Borrower, for all losses,
expenses and liabilities (including any loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain such Lender’s Eurodollar Rate Loans to the Borrowers
but excluding any loss of the Applicable Margin on the relevant Loans) which
that Lender may sustain (i) if for any reason a proposed Borrowing, conversion
into or continuation of Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Conversion or Continuation
given by the Administrative Borrower or in a telephonic request by

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it for borrowing or conversion or continuation or a successive Interest Period
does not commence after notice therefor is given pursuant to Section 2.10,
(ii) if for any reason any Eurodollar Rate Loan is repaid or converted into a
Base Rate Loan on a date which is not the last day of the applicable Interest
Period, (iii) as a consequence of a required conversion of a Eurodollar Rate
Loan to a Base Rate Loan as a result of any of the events indicated in Section
2.13(d), or (iv) as a consequence of any failure by the Borrowers to repay
Eurodollar Rate Loans when required by the terms hereof. The Lender making
demand for such compensation shall deliver to the Administrative Borrower
concurrently with such demand a written statement as to such losses, expenses
and liabilities, and this statement shall be conclusive as to the amount of
compensation due to such Lender, absent manifest error.
          Section 2.14 Capital Adequacy.
          If at any time any Lender determines that (a) the adoption of or any
change in or in the interpretation of any law, treaty or governmental rule,
regulation or order after the Original Effective Date regarding capital
adequacy, (b) compliance with any such law, treaty, rule, regulation, or order,
or (c) compliance with any guideline or request or directive from any central
bank or other Governmental Authority (whether or not having the force of law)
after the Original Effective Date shall have the effect of reducing the rate of
return on such Lender’s (or any corporation controlling such Lender’s) capital
as a consequence of its obligations hereunder or under or in respect of any
Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such adoption, change, compliance or interpretation,
then, upon written demand from time to time by such Lender made to the
Administrative Borrower (with a copy of such demand to the Administrative
Agent), the Borrowers shall pay to the Administrative Agent for the account of
such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to
such amounts submitted to the Administrative Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes absent
manifest error.
          Section 2.15 Taxes.
          (a) Any and all payments by any Loan Party under each Loan Document
shall be made free and clear of and without deduction or withholding for any
Indemnified Taxes; provided that if any Indemnified Taxes shall be required by
law to be deducted or withheld from or in respect of any sum paid under any Loan
Document to any Lender or the Administrative Agent (w) the sum payable shall be
increased as may be necessary so that after making all required deductions or
withholdings (including deductions or withholdings applicable to additional sums
payable under this Section 2.15) such Lender or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions or withholdings been made, (x) the relevant Loan Party shall
make such deductions or withholdings, (y) the relevant Loan Party shall pay the
full amount deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law, and (z) the relevant Loan Party
shall deliver to the Administrative Agent evidence of such payment.
          (b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise, property or similar taxes,
charges or levies of the United

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States or any political subdivision thereof or any applicable foreign
jurisdiction, and all interest, penalties and other liabilities with respect
thereto, which arise from any payment made under any Loan Document or from the
execution, delivery, enforcement or registration of, or otherwise with respect
to, any Loan Document (collectively, “Other Taxes”).
          (c) The Borrowers will indemnify each Lender and the Administrative
Agent for the full amount of Indemnified Taxes and Other Taxes (including any
Indemnified Taxes and Other Taxes imposed by any jurisdiction on amounts payable
under this Section 2.15) paid by such Lender or the Administrative Agent (as the
case may be) and any liability (including for penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be made
within 30 days from the date such Lender or the Administrative Agent (as the
case may be) makes written demand therefor to the Administrative Borrower. A
certificate setting forth the amount of such payment or liability delivered to
the Administrative Borrower by a Lender or the Administrative Agent shall be
conclusive absent manifest error.
          (d) Within 30 days after the date of any payment of Indemnified Taxes
or Other Taxes by any Loan Party, the Administrative Borrower shall furnish to
the Administrative Agent, at its address referred to in Section 10.8, the
original or a certified copy of a receipt evidencing payment thereof.
          (e) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in this Section 2.15 shall survive the payment in full of the Obligations.
          (f) To the extent it is legally entitled to do so, on or prior to the
Effective Date in the case of each Non-U.S. Lender that is a signatory hereto,
and on the date of the Assignment and Acceptance pursuant to which it becomes a
Lender in the case of each other Non-U.S. Lender and from time to time
thereafter if requested by the Administrative Borrower or the Administrative
Agent, each Non-U.S. Lender that is entitled at such time to an exemption from
United States federal withholding tax, or that is subject to such tax at a
reduced rate under an applicable tax treaty, shall provide the Administrative
Agent and the Administrative Borrower with two completed originals of whichever
of the following is applicable: (i) Form W-8ECI (claiming exemption from
withholding because the income is effectively connected with a U.S. trade or
business) (or any successor form); (ii) Form W-8BEN (claiming exemption from, or
a reduction of, withholding tax under an income tax treaty) (or any successor
form); (iii) in the case of a Non-U.S. Lender claiming exemption under Sections
871(h) or 881(c) of the Code, a Form W-8BEN (claiming exemption from withholding
under the portfolio interest exemption) or any successor form; or (iv) any other
applicable form, certificate or document prescribed by the IRS certifying as to
such Non-U.S. Lender’s entitlement to such exemption from United States federal
withholding tax or reduced rate with respect to payments to be made to such
Non-U.S. Lender under the Loan Documents. Unless the Administrative Borrower and
the Administrative Agent have received forms or other documents satisfactory to
them indicating that payments under any Loan Document to or for a Non-U.S.
Lender are not subject to United States federal withholding tax or are subject
to such tax at a rate reduced by an applicable tax treaty, the Borrowers or the
Administrative Agent shall withhold amounts required to be withheld by
applicable Requirements

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of Law from such payments at the applicable statutory rate (which amounts may be
grossed up pursuant to clause (a) if applicable).
          (g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.15 shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) at the Administrative Borrower’s
expense to change the jurisdiction of its Applicable Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that would be payable or may thereafter accrue and would
not, in the sole determination of such Lender, be disadvantageous to such
Lender.
          Section 2.16 Substitution of Lenders.
          In the event that (a) (i) any Lender makes a claim under
Section 2.13(c) or Section 2.14, or (ii) it becomes illegal for any Lender to
continue to fund or make any Eurodollar Rate Loan and such Lender notifies the
Administrative Borrower pursuant to Section 2.13(d), or (iii) the Borrowers are
required to make any payment pursuant to Section 2.15 that is attributable to
any Lender, or (iv) any Lender is a Non-Funding Lender, or (v) any Lender is a
Rejecting Lender pursuant to Section 2.17, (b) in the case of clause (a)(i)
above, as a consequence of increased costs in respect of which such claim is
made, the effective rate of interest payable to such Lender under this Agreement
with respect to its Loans materially exceeds the effective average annual rate
of interest payable to the Requisite Lenders under this Agreement and
(c) Lenders holding at least 75% of the Revolving Credit Commitments are not
subject to such increased costs or illegality, payment or proceedings (any such
Lender, an “Affected Lender”), the Administrative Borrower may substitute
another financial institution for such Affected Lender hereunder, upon
reasonable prior written notice (which written notice must be given within
90 days following the occurrence of any of the events described in clause
(a)(i), (ii), (iii) or (iv)) by the Administrative Borrower to the
Administrative Agent and the Affected Lender that the Administrative Borrower
intends to make such substitution, which substitute financial institution must
be an Eligible Assignee and, if not a Lender, reasonably acceptable to the
Administrative Agent; provided, however, that if more than one Lender claims
increased costs, illegality or right to payment arising from the same act or
condition and such claims are received by the Administrative Borrower within 30
days of each other, then the Administrative Borrower may substitute all, but not
(except to the extent the Administrative Borrower has already substituted one of
such Affected Lenders before the Administrative Borrower’s receipt of the other
Affected Lenders’ claim) less than all, Lenders making such claims. In the event
that the proposed substitute financial institution or other entity is reasonably
acceptable to the Administrative Agent and the written notice was properly
issued under this Section 2.16, the Affected Lender shall sell and the
substitute financial institution or other entity shall purchase at par, pursuant
to an Assignment and Acceptance, all rights and claims of such Affected Lender
under the Loan Documents and the substitute financial institution or other
entity shall assume and the Affected Lender shall be relieved of the Revolving
Credit Commitments and all other prior unperformed obligations of the Affected
Lender under the Loan Documents (other than in respect of any damages (other
than exemplary or punitive damages, to the extent permitted by applicable law)
in respect of any such unperformed obligations). Upon the effectiveness of such
sale, purchase and assumption (which, in any event shall be conditioned upon the
payment in full by the Borrowers to the Affected Lender in cash of all fees,
unreimbursed costs and expenses and indemnities accrued and unpaid through

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such effective date), the substitute financial institution or other entity shall
become a “Lender” hereunder for all purposes of this Agreement having a
Revolving Credit Commitment in the amount of such Affected Lender’s Revolving
Credit Commitment assumed by it and such Revolving Credit Commitment of the
Affected Lender shall be terminated, provided that all indemnities under the
Loan Documents shall continue in favor of such Affected Lender.
          Section 2.17 Revolving Credit Facility Extension.
          (a) Extension Requests. The Administrative Borrower may request a
one-year extension of the Scheduled Revolving Credit Termination Date by
submitting a request for an extension to the Administrative Agent no more than
120 days nor less than 90 days prior to the Scheduled Revolving Credit
Termination Date then in effect. At the time of or prior to the delivery of such
request, the Administrative Borrower shall propose to the Administrative Agent
the amount of the fees that the Borrowers agree to pay with respect to such
one-year extension if approved by Lenders (such request for an extension,
together with the fee proposal, being herein referred to as the “Extension
Request”). Promptly upon (but not later than five (5) Business Days after)
receipt of the Extension Request, the Administrative Agent shall notify each
Lender of the contents thereof and shall request each Lender to approve the
Extension Request. Each Lender approving the Extension Request (the “Consenting
Lenders”) shall deliver its written approval no later than sixty (60) days after
the date of the Extension Request. If the approval of all Lenders is received by
the Administrative Agent within sixty (60) days after the date of the Extension
Request (or as otherwise provided in Section 2.17(b)), the Administrative Agent
shall promptly so notify the Administrative Borrower and each Lender, and the
Scheduled Revolving Credit Termination Date shall be extended by one (1) year,
and in such event the Administrative Borrower may thereafter request further
extension(s) of the then scheduled Scheduled Revolving Credit Termination Date
in accordance with this Section 2.17. If any Lender does not deliver to the
Administrative Agent such Lender’s written approval to any Extension Request
within sixty (60) days after the date of such Extension Request, the Scheduled
Revolving Credit Termination Date shall not be extended, except as otherwise
provided in Section 2.17(b) or 2.17(c).
          (b) Full Assignment. If the aggregate Revolving Credit Commitments of
all Consenting Lenders are equal to or greater than 75% of the Total Revolving
Credit Commitment in effect immediately prior to the Extension Request, then the
Administrative Borrower may arrange for all rights and obligations of each
Lender under this Agreement and under the other Loan Documents (including,
without limitation, their Revolving Credit Commitment and all Loans owing to
them) who has not given its written approval within sixty (60) days after the
date of such Extension Request (the “Rejecting Lenders”) to be assigned, within
ninety (90) days after the date of such Extension Request, in accordance with
Section 2.16 or 10.2, as applicable, to one or more Consenting Lenders or new
replacement Lenders who shall have approved in writing such Extension Request at
the time of such assignment (such Consenting Lenders, together with any new
replacement Lenders, the “Replacement Lenders”), and upon the assignment in full
of the aggregate Revolving Credit Commitments, outstanding Loans and all
Reimbursement Obligations of Rejecting Lenders to Replacement Lenders, the
Administrative Agent shall promptly so notify the Administrative Borrower and
each Consenting Lender and Replacement Lender, and the Scheduled Revolving
Credit Termination Date shall be extended by one (1) year, and in

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such event the Administrative Borrower may thereafter request further
extension(s) as provided in Section 2.17(a).
          (c) Partial Assignment. If on the date that is ninety (90) days after
the date of such Extension Request, less than all of the rights and obligations
of the Rejecting Lenders under this Agreement and under the other Loan Documents
(including, without limitation, their Revolving Credit Commitment and all Loans
owing to them) have been assigned to Replacement Lenders in accordance with
Section 2.17(b), the Administrative Agent shall promptly notify the
Administrative Borrower, each Consenting Lender, each Replacement Lender and
each Rejecting Lender, and the Scheduled Revolving Credit Termination Date shall
be extended by one (1) year solely in respect of the aggregate Revolving Credit
Commitments of the Consenting Lenders and the Replacement Lenders and (i) the
aggregate Revolving Credit Commitment shall be automatically reduced, effective
as of the Scheduled Revolving Credit Termination Date immediately prior to such
extension (the “Previous Scheduled Revolving Credit Termination Date”) to an
amount equal to the Revolving Credit Commitments of the Consenting Lenders and
the Replacement Lenders; (ii) all rights and obligations of such Rejecting
Lenders under this Agreement and under the other Loan Documents (including,
without limitation, their Revolving Credit Commitment and all Loans owing to
them) shall be terminated, effective as of the Previous Scheduled Revolving
Credit Termination Date (or such earlier date as the Administrative Borrower and
the Administrative Agent may designate, in which case the reduction of the
aggregate Revolving Credit Commitment provided for in clause (i) above shall
occur on such earlier date); and (iii) the Borrowers shall pay to Administrative
Agent on the date of such termination, solely for the account of each such
Rejecting Lender, all amounts due and owing such Rejecting Lender hereunder or
under any other Loan Document, including without limitation the aggregate
outstanding principal amount of the Loans owed to such Rejecting Lender with
respect to the terminated Revolving Credit Commitment, together with accrued
interest thereon through the date of such termination, all amounts payable under
Section 2.13 and 2.14 with respect to such Rejecting Lender and all fees payable
to such Rejecting Lender hereunder with respect to the terminated Revolving
Credit Commitment (and payment of such amount may not be waived except with the
consent of each Rejecting Lender, as more specifically provided in
Sections 10.1(a)(ii) and 10.1(a)(v)); and upon such Rejecting Lender’s
termination, such Rejecting Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.13, 2.14 and 2.15 and
Sections 10.3 and 10.4, as well as to any fees accrued hereunder and not yet
paid, and shall continue to be obligated under Section 9.5 with respect to
obligations and liabilities accruing prior to such termination of such Rejecting
Lender’s Revolving Credit Commitment.
          (d) Approval of Extension. Within ten (10) days after the
Administrative Agent’s notice to the Administrative Borrower that all (or some,
as applicable) of the Lenders have approved an Extension Request (whether
pursuant to Section 2.17(a), (b) or (c)), the Borrowers shall pay to the
Administrative Agent for the account of each Consenting Lender and/or
Replacement Lender, as applicable, an extension fee in the amount provided in
the Extension Request.
          (e) No Default. Notwithstanding anything to the contrary contained
herein, no extension of the Scheduled Revolving Credit Termination Date may be
effected under this Section 2.17 if (x) a Default or Event of Default shall be
in existence on the effective date of

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such extension or would occur after giving effect thereto or (y) any
representation or warranty made or deemed made by any Borrower in any Loan
Document or any Guarantor in the Guaranty is not or would not be true or correct
in any material respect on the effective date of such increase (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 be true and
correct in all material respects on and as of such earlier date).
          Section 2.18 Revolving Credit Facility Increase.
          The Administrative Borrower may at any time after the completion of
the primary syndication of the First Lien Term Loans and the Second Lien Loans
(as determined by the Arranger but shall be no more than 60 days after the
Effective Date) request, in writing, an increase in the aggregate Revolving
Credit Commitments by up to the sum of (x) $150,000,000 and (y) the aggregate
amount of the Revolving Credit Commitments of the Rejecting Lenders that have
been terminated on their Scheduled Revolving Credit Termination Date (the
“Revolving Credit Facility Increase”); provided, however, that such increase
will only become effective if (i) the Administrative Borrower shall have given
the Administrative Agent at least 10 Business Days’ notice of its intention to
effect a Revolving Credit Facility Increase and the desired amount of such
Revolving Credit Facility Increase, (ii) at the time of and after giving effect
to such increase, the Administrative Borrower is in pro forma compliance with
the financial covenants set forth in Article V, (iii) at the time of and after
giving effect to such increase, the Total Leverage Ratio shall not exceed
1.25:1.00, (iv) no Default or Event of Default has occurred and is continuing or
would result therefrom, and (v) the conditions precedent to a Borrowing set
forth in Section 3.2 are satisfied as of such date. The Administrative Borrower
shall have the right to offer such increase to (x) the existing Lenders, and
each existing Lender shall have the right, but not the obligation, to commit to
all or a portion of the proposed increase or (y) other Eligible Assignees
acceptable to the Administrative Agent and each Issuer in its respective sole
and absolute discretion; provided, however, that the minimum Revolving Credit
Commitment of each such new Eligible Assignee accepting a Revolving Credit
Commitment as part of such Revolving Credit Facility Increase equals or exceeds
$5,000,000, and such Lender or Eligible Assignee executes an Assumption
Agreement pursuant to which such Lender agrees to commit to all or a portion of
such Revolving Credit Facility Increase and, in the case of an Eligible
Assignee, to be bound by the terms of this Agreement as a Lender. On the
effective date provided for in the Assumption Agreement providing for a
Revolving Credit Facility Increase (each, a “Revolving Credit Facility Increase
Effective Date”), the Revolving Credit Commitments shall be increased by the
amount committed to by each Lender or Eligible Assignee on the Revolving Credit
Facility Increase Effective Date. In the event there are Lenders and Eligible
Assignees that have committed to a Revolving Credit Facility Increase in excess
of the maximum amount requested (or permitted), then the Administrative Agent
shall have the right to allocate such commitments, first to Lenders and then to
Eligible Assignees, on whatever basis the Administrative Agent determines is
appropriate in consultation with the Administrative Borrower.
          Section 2.19 Certain Accounts.
          Notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents, no Loan Party shall be required to cause any U.S. Bank
Account to be subject

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to a Deposit Account Control Agreement so long as (i) such U.S. Bank Account is
and continues to be a custodial account and does not constitute a Deposit
Account or Securities Account and (ii) the custodian of such U.S. Bank Account
remains under written instruction by an authorized officer of the customer of
such U.S. Bank Account to automatically transfer any cash that is deposited in
such U.S. Bank Account to a Linked Deposit Account (or such other Deposit
Account as to which the Administrative Agent shall have entered into an
agreement which provides the Administrative Agent with “control” (as such term
is defined under the UCC) with respect to such Deposit Account).
ARTICLE III
CONDITIONS TO LOANS AND LETTERS OF CREDIT
          Section 3.1 Conditions Precedent to the Effectiveness of This
Agreement.
          This Agreement shall be effective on the date (the “Effective Date”)
on which all of the following conditions precedent have been first satisfied
(unless waived by the Requisite Lenders or unless the time for satisfaction
thereof has been extended by the Administrative Agent):
     (a) Certain Documents. The Administrative Agent shall have received on the
Effective Date each of the following, each dated the Effective Date unless
otherwise indicated or agreed to by the Administrative Agent, in form and
substance reasonably satisfactory to the Administrative Agent and (except for
any Revolving Credit Notes) in sufficient copies for each Lender:
     (i) this Agreement, duly executed and delivered by the Borrowers and each
other party hereto, and, for the account of each Lender requesting the same a
reasonable time prior to the Effective Date, a Revolving Credit Note or
Revolving Credit Notes of the Borrowers conforming to the requirements set forth
herein;
     (ii) the Amendment Agreement duly executed and delivered by the
Administrative Borrower and the Required Lenders;
     (iii) the Amended and Restated Security Agreement, substantially in the
form of Exhibit K, and the Deposit Account Security Agreement, substantially in
the form of Exhibit N, in each case duly executed and delivered by the
applicable Loan Parties;
     (iv) the Amended and Restated Guaranty duly executed and delivered by the
applicable Loan Parties;
     (v) the First Lien Credit Agreement, duly executed by the Borrowers and
each other party thereto;
     (vi) the Second Lien Credit Agreement, duly executed by the Borrowers and
each other party thereto;

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     (vii) the Intercreditor Agreement, duly executed and delivered by each
party thereto, substantially in the form of Exhibit J and in full force and
effect as of the Effective Date;
     (viii) an opinion of (i) Kirkland and Ellis LLP, counsel to the Loan
Parties, (ii) Greenberg Traurig, LLP, local counsel to the Loan Parties, and
(iii) the firms listed in Schedule 3.1(a)(viii), each in form and substance
reasonably satisfactory to the Administrative Agent;
     (ix) a good standing certificate of each Loan Party, certified as of a
recent date by the Secretary of State of the state of organization or formation
of such Loan Party;
     (x) a certificate of the Secretary or an Assistant Secretary of each Loan
Party certifying (A) the names and true signatures of each officer of such Loan
Party who has been authorized to execute and deliver any Loan Document or other
document required hereunder to be executed and delivered by or on behalf of such
Loan Party, (B) that attached thereto are the certificate of incorporation (or
equivalent Constituent Document) and by-laws (or equivalent Constituent
Document) of such Loan Party as in effect and delivered to the Administrative
Agent certified (to the extent applicable) as of a recent date by the Secretary
of State of the state of its organization and (C) that attached thereto are the
resolutions of such Loan Party’s board of directors (or equivalent governing
body) approving and authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party;
     (xi) a certificate of a Responsible Officer to the effect that (A) there is
no Default or Event of Default which has occurred and is continuing under this
Agreement, (B) the representations and warranties set forth in Article IV and in
the other Loan Documents are true and correct in all material respects as of the
Effective Date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties were true and correct on and as of such earlier date (except that any
representation or warranty that is qualified by “materiality” or “Material
Adverse Effect” shall be true and correct in all respects) and (C) except for
any demands that have been settled pursuant to the Settlement Documents, no
Joint Venture of the Administrative Borrower or any of its Subsidiaries and no
creditor of any such Joint Venture has made a demand, monetary or otherwise,
against the Administrative Borrower or any of its Subsidiaries;
     (xii) a solvency certificate confirming the solvency of the Administrative
Borrower and its subsidiaries on a consolidated basis substantially in the form
of Exhibit I, signed by the chief financial officer of the Administrative
Borrower;
     (xiii) a Borrowing Base Certificate for the period ending June 30, 2007,
certifying an Available Revolving Credit after giving effect to all Loans and
all

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First Lien Term Loans made on the Effective Date of not less than $175,000,000;
provided, however, that for the purposes of such Borrowing Base Certificate, no
Mortgage delivered on the Effective Date shall be required to have satisfied
clause (i) of the definition of “Mortgage Requirements”;
     (xiv) the financial statements described in Section 4.4 and the Five Year
Projections;
     (xv) an opinion of solvency of AlixPartners, LLP in form and substance
reasonably satisfactory to the Administrative Agent; and
     (xvi) such other certificates, documents, agreements and information
respecting any Loan Party as any Lender through the Administrative Agent may
reasonably request.
     (b) Collateral Requirements.
     (i) Subject to Section 6.22, the Administrative Agent shall have received
on the Effective Date (A) an executed counterpart to the Equity Pledge Agreement
executed by each Loan Party, (B) original stock or equivalent ownership
certificates evidencing the equity interests pledged pursuant to the Equity
Pledge Agreement (to the extent such equity interests are certificated),
together with stock (or equivalent) powers undated and executed in blank by a
Responsible Officer of such Loan Party, (C) UCC financing statements in
appropriate form for filing under the UCC, filings with the United States Patent
and Trademark Office and United States Copyright Office and such other
agreements and documents, including Deposit Account Control Agreements, under
applicable Requirements of Law in each jurisdiction as may be necessary or
appropriate or, in the reasonable opinion of the Administrative Agent, necessary
to perfect the Liens created, or purported to be created, by the Collateral
Documents and (D) all intercompany notes valued in excess of $1,000,000 owing
from the Administrative Borrower or any of its Subsidiaries to any other Loan
Party and notes valued in excess of $500,000 owing from any other Person to any
Loan Party, in each case, together with instruments of transfer executed and
delivered in blank by a duly authorized officer of such Loan Party; and
     (ii) The Administrative Agent shall have received on the Effective Date
Mortgages on all Real Property of the Loan Parties and the Mortgage Requirements
set forth in clauses (iii) and (iv) of the definition of “Mortgage
Requirements”, shall have been satisfied with respect to each Mortgage at the
expense of the Loan Parties; (provided that there shall be excluded from this
clause (ii)(A) Excluded Real Property, (B) any Borrowing Base Assets acquired by
a Loan Party less than 90 days prior to the Effective Date (other than as
successor by merger, directly or indirectly, to any of the Transeastern JV
Entities)) and (C) any Real Property acquired by the Transeastern JV Entities
less than 90 days prior to the Effective Date, but including the Real Property
previously identified to the Administrative Agent as “Independence” and “Live
Oak”, which are being acquired by the EH/Transeastern, LLC on the Effective
Date).

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     (c) Certain Transactions.
     (i) The Settlement Documents shall be in full force and effect and shall be
reasonably satisfactory in form and substance to the Administrative Agent.
     (ii) The Acquisition shall have been consummated or shall be consummated
simultaneously on the Effective Date, in each case in all material respects in
accordance with the terms hereof and the terms of the Falcone Settlement
Agreement, without the waiver or amendment of any such terms not approved by the
Administrative Agent and the Arrangers.
     (iii) The refinancing and exchange of Indebtedness under the Transeastern
JV Credit Agreements shall have been consummated in full to the satisfaction of
the Lenders with all Liens in favor of the existing lenders being terminated and
discharged; the Administrative Agent shall have received a “pay-off” letter in
form and substance reasonably satisfactory to the Administrative Agent with
respect to all Indebtedness being refinanced under the Transeastern JV Credit
Agreement; and the Administrative Agent shall have received such UCC termination
statements, mortgage satisfactions and other instruments, in each case in proper
form for recording, as the Administrative Agent shall have reasonably requested
to terminate the Liens securing such Indebtedness.
     (iv) $20,000,000 in aggregate principal amount of the Settlement
Subordinated Debt and $117,500,000 of the Settlement Preferred Stock shall have
been issued (or shall be issued contemporaneously with the Effective Date) to
holders of Indebtedness under the Transeastern Senior Mezzanine Credit Agreement
in exchange for the termination of all obligations under the Transeastern Senior
Mezzanine Credit Agreement and all fees and expenses payable by the
Administrative Borrower pursuant to the Settlement Documents shall have been
satisfied.
     (v) $16,250,000 of Warrants (the “Warrants”) to acquire shares of the
common stock of the Administrative Borrower shall have been issued (or shall be
issued contemporaneously with the Effective Date) by the Administrative Borrower
to the holders of Indebtedness under the Transeastern Junior Mezzanine Credit
Agreement in exchange for the termination of all obligations under the
Transeastern Junior Mezzanine Credit Agreement and all fees and expenses payable
by the Administrative Borrower pursuant to the Settlement Documents shall have
been satisfied.
     (vi) The Administrative Borrower shall have received (or shall receive
contemporaneously with the Effective Date) $200,000,000 in gross proceeds from
borrowings under the First Lien Term Loan Agreement.
     (vii) The Administrative Borrower shall have received (or shall receive
contemporaneously with the Effective Date) $300,000,000 in gross proceeds from
borrowings under the Second Lien Credit Agreement.

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     (d) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent and the
Lenders, as applicable, all fees due and payable on or before the Effective Date
(including all such fees described in any fee letter referred to in
Section 2.11(c) and all reasonable fees and expenses of counsel for which
invoices in reasonable detail have been presented at least one Business Day
prior to the Effective Date), and all invoiced expenses due and payable on or
before the Effective Date.
     (e) Consents, Etc. Each Borrower shall have received all material consents
and authorizations required pursuant to any material Contractual Obligation with
any other Person (including the consent of the Requisite Lenders as required by
Section 10.1) and shall have obtained all material consents and authorizations
of, and effected all notices to and filings with, any Governmental Authority, in
each case, as may be necessary to allow each Borrower lawfully to execute,
deliver and perform, in all material respects, its respective obligations
hereunder, and under the other Loan Documents to which each of them,
respectively, is, or shall be, a party and each other agreement or instrument to
be executed and delivered by each of them, respectively, pursuant thereto or in
connection herewith or therewith.
          Section 3.2 Conditions Precedent to Each Loan and Letter of Credit.
          The obligation of each Lender on any date (including the Effective
Date) to make any Loan and of each Issuer on any date (including the Effective
Date) to Issue any Letter of Credit is subject to the satisfaction of each of
the following conditions precedent:
     (a) Request for Borrowing or Issuance of Letter of Credit. With respect to
any Loan, the Administrative Agent shall have received a duly executed Notice of
Borrowing (or, in the case of Swing Loan, a duly executed Swing Loan Request)
and with respect to any Letter of Credit, the Administrative Agent and the
Issuer shall have received a duly executed Letter of Credit Request.
     (b) Representations and Warranties; No Defaults. The following statements
shall be true on and as of the date of such Loan or Issuance, both before and
after giving effect thereto and, in the case of any Loan, to the application of
the proceeds therefrom:
     (i) the representations and warranties set forth in Article IV and in the
other Loan Documents are true and correct on and as of the Effective Date and
are true and correct in all material respects (except that any representation
and warranty that is qualified as to “materiality” or “Material Adverse Effect”
shall be true and correct in all respects) on and as of any such date after the
Effective Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to an
earlier date, in which case such representation, and warranties were true and
correct in all material respects (except that any representation and warranty
that is qualified as to “materiality” or “Material Adverse Effect” shall be true
and correct in all respects) on and as of such earlier date; and

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     (ii) no Default or Event of Default has occurred and is continuing.
          Each submission by the Administrative Borrower to the Administrative
Agent of a Notice of Borrowing or a Swing Loan Request and the acceptance by the
Borrowers of the proceeds of each Loan requested therein, and each submission by
the Administrative Borrower to an Issuer of a Letter of Credit Request and the
Issuance of each Letter of Credit requested therein, shall be deemed to
constitute a representation and warranty by the Borrowers as to the matters
specified in Section 3.2(b) on and as of the date of the making of such Loan or
the Issuance of such Letter of Credit.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
          To induce the Lenders, the Issuers and the Administrative Agent to
enter into this Agreement, each Borrower represents and warrants to the Lenders,
the Issuers and the Administrative Agent, on and as of the Effective Date after
giving effect to the Transactions and on and as of each date as required by
Section 3.2(b)(i):
          Section 4.1 Existence; Compliance with Law.
          Each of the Administrative Borrower and its Restricted Subsidiaries
(a) is duly organized or incorporated, validly existing and (to the extent
applicable) in good standing under the laws of the jurisdiction of its
organization; (b) is duly qualified to do business as a foreign corporation or
entity and in good standing under the laws of each jurisdiction where such
qualification is necessary, except where the failure to be so qualified or in
good standing could not, in the aggregate, be reasonably expected to result in a
Material Adverse Effect; (c) has all requisite power and authority and the legal
right to own, pledge, mortgage and operate its properties, to lease the property
it operates under lease and to conduct its business as now or currently proposed
to be conducted; (d) is in compliance with its Constituent Documents; (e) is in
compliance with all applicable Requirements of Law except where the failure to
be in compliance could not, in the aggregate, be reasonably expected to result
in a Material Adverse Effect; and (f) has all necessary licenses, permits,
consents or approvals from or by, has made all necessary filings with, and has
given all necessary notices to, each Governmental Authority having jurisdiction,
to the extent required for such ownership, operation and conduct, except for
licenses, permits, consents, approvals or filings that can be obtained or made
by the taking of ministerial action to secure the grant or transfer thereof or
the failure to obtain or make could not, in the aggregate, be reasonably
expected to result in a Material Adverse Effect.
          Section 4.2 Power; Authorization; Enforceable Obligations.
          (a) The execution, delivery and performance by each Loan Party of the
Loan Documents to which it is a party and the consummation of the transactions
contemplated thereby:

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     (i) are within such Loan Party’s corporate, limited liability company,
partnership or other similar powers, as applicable;
     (ii) have been or, at the time of delivery thereof pursuant to Article III,
will have been duly authorized by all necessary corporate or other entity
action, including the consent of shareholders, partners and members where
required;
     (iii) do not and will not (A) contravene any Loan Party’s or any of its
Subsidiaries’ respective Constituent Documents, (B) violate any other
Requirement of Law applicable to any Loan Party (including Regulations T, U and
X of the Federal Reserve Board), or any order or decree of any Governmental
Authority or arbitrator applicable to any Loan Party, (C) conflict with or
result in the breach of, or constitute a default under, or result in or permit
the termination or acceleration of, any Contractual Obligation of any Loan
Party, or (D) result in the creation or imposition of any Lien upon any of the
property of any Loan Party (other than any Lien securing the Obligations or
Customary Permitted Liens), except in the case of clauses (B) and (C), where
such violation could not reasonably be expected to result in a Material Adverse
Effect; and
     (iv) do not require the consent of, authorization by, approval of, notice
to, or filing or registration with, any Governmental Authority or any other
Person, other than those listed on Schedule 4.2 and which have been prior to the
Original Effective Date, obtained or made, copies of which have been delivered
to the Administrative Agent and each of which is in full force and effect.
          (b) This Agreement and the Guaranty have been, and each of the other
Loan Documents will have been upon delivery thereof pursuant to the terms of
this Agreement, duly executed and delivered by each Loan Party thereto. This
Agreement and the Guaranty are, and the other Loan Documents will be, when
delivered hereunder, the legal, valid and binding obligation of each Loan Party
thereto, enforceable against such Loan Party in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally.
          Section 4.3 Ownership of Subsidiaries.
          Set forth on Schedule 4.3 is a complete and accurate list showing, as
of the Effective Date, all Restricted Subsidiaries of the Administrative
Borrower and, as to each such Subsidiary, the jurisdiction of its organization,
the number of shares of each class of Stock authorized (if applicable), the
number outstanding on the Effective Date and the number and percentage of the
outstanding shares of each such class owned (directly or indirectly) by the
Administrative Borrower. Except as set forth on Schedule 4.3, no Stock of any
Restricted Subsidiary of the Administrative Borrower is subject to any
outstanding option, warrant, right of conversion or purchase or any similar
right. All of the outstanding Stock of each Restricted Subsidiary of the
Administrative Borrower owned (directly or indirectly) by the Administrative
Borrower has been validly issued, is fully paid and non-assessable (to the
extent applicable) and, as of the Effective Date, is owned by the Administrative
Borrower or a Restricted Subsidiary of the Administrative Borrower, free and
clear of all Liens (other than Liens securing the Obligations, Liens securing

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the obligations under the First Lien Term Loan Credit Agreement and the Second
Lien Credit Agreement and Customary Permitted Liens created pursuant to any
applicable law). Neither the Administrative Borrower nor any such Restricted
Subsidiary is a party to, or has knowledge of, any agreement restricting the
transfer or hypothecation of any Stock of any such Restricted Subsidiary, other
than (i) the Loan Documents and (ii) such customary restrictions related to the
interest of the Administrative Borrower and its Restricted Subsidiaries in the
Constituent Documents governing the Administrative Borrower or such Restricted
Subsidiary.
          Section 4.4 Financial Statements.
          (a) The Consolidated statement of financial position of the
Administrative Borrower and its Subsidiaries as at December 31, 2006 and
March 31, 2007, and the related Consolidated statements of operations and cash
flows of the Administrative Borrower and its Subsidiaries for the fiscal year or
fiscal quarter, as the case may be, then ended (and the December 31, 2006
financial statements certified by Ernst & Young LLP), copies of which have been
furnished to each Lender, fairly present in all material respects the
Consolidated financial condition of the Administrative Borrower and its
Subsidiaries as at such date and the Consolidated results of the operations of
the Administrative Borrower and its Subsidiaries for the period ended on such
date, all in conformity with GAAP (subject, in the case of the financial
statements as of and for the period ended March 31, 2007, to normal year-end
adjustments and to the absence of all footnotes required for annual financial
statements).
          (b) Except as set forth on Schedule 4.4, neither the Administrative
Borrower nor any of its Restricted Subsidiaries has any material obligation,
material contingent liability or material liability for taxes, material
long-term leases or unusual forward or long-term material commitment that is not
reflected in the Financial Statements referred to in clause (a) above or in the
notes thereto and not otherwise permitted by this Agreement.
          (c) The pro forma consolidated balance sheet of the Administrative
Borrower as of March 31, 2007 was prepared giving effect to the Transactions as
if the Transactions had occurred on such date. Such pro forma consolidated
balance sheet (i) was prepared in good faith based on assumptions set forth
therein that were reasonable at the time made and at the time such pro forma
consolidated balance sheet was delivered to the Arranger, (ii) accurately
reflects in all material respects all adjustments necessary to give effect to
the Transactions and (iii) presents fairly in all material respects the pro
forma consolidated financial position of the Administrative Borrower, as of the
date on which the balance sheets were prepared, as if the Transactions had
occurred on such date.
          (d) The Five Year Projections were prepared by the Administrative
Borrower in light of the past operations of its business, and reflect
projections for (i) the two-year period beginning on January 1, 2007 on a
quarterly basis and (ii) the five-year period beginning on January 1, 2007 on an
annual basis. The Five Year Projections are based upon estimates and assumptions
stated therein, that the Administrative Borrower believes in each case to be
reasonable and fair in light of current conditions and current facts known to
the Administrative Borrower on the Effective Date and, as of the Effective Date,
reflect the Administrative Borrower’s good faith and reasonable estimates of the
future financial performance of the Administrative Borrower and

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its Restricted Subsidiaries and of the other information projected therein for
the periods set forth therein; it being recognized and agreed by the Lenders
that whether such projections or forward-looking statements are in fact achieved
will depend upon future events which are not in the control of the Loan Parties,
and such projections and forward-looking statements may be affected by known or
unknown risks and uncertainties. Accordingly, actual results may vary from the
projections and forward-looking statements, and such variances may be material.
          Section 4.5 Material Adverse Change.
          There has been no Material Adverse Change and there have been no
events or developments (other than the Transeastern Events) that in the
aggregate have had a Material Adverse Effect since December 31, 2006.
          Section 4.6 Litigation.
          Except as set forth on Schedule 4.6, there are no pending or, to the
knowledge of the Administrative Borrower, threatened actions, investigations or
proceedings affecting the Administrative Borrower or any of its Restricted
Subsidiaries before any court, Governmental Authority or arbitrator other than
those that in the aggregate are not reasonably likely to be determined adversely
to any Loan Party and, if so determined, could not, in the aggregate, be
reasonably expected to result in a Material Adverse Effect. The performance of
any action by any Loan Party required or contemplated by any Loan Documents is
not restrained or enjoined (either temporarily, preliminarily or permanently).
          Section 4.7 Taxes.
          (a) All federal, state, local and foreign income and franchise and
other material tax returns, reports and statements (collectively, the “Tax
Returns”) required to be filed by the Administrative Borrower or any of its Tax
Affiliates have been timely filed (including any extensions) with the
appropriate Governmental Authorities in all jurisdictions in which such Tax
Returns are required to be filed, all such Tax Returns are true and correct in
all material respects, and all taxes, charges and other impositions reflected
therein have been paid prior to the date on which any fine, penalty, interest,
late charge or loss may be added thereto for non-payment thereof except where
contested in good faith and by appropriate proceedings if adequate reserves
therefor have been established on the books of the Administrative Borrower or
such Tax Affiliate in conformity with GAAP. Except as set forth on Schedule 4.7,
no Tax Return is under audit or examination by any Governmental Authority and no
written notice of such an audit or examination or any assertion of any claim for
Taxes has been given or made by any Governmental Authority except to the extent
such audits or examinations could not, in the aggregate, be reasonably expected
to result in a Material Adverse Effect. Proper and accurate amounts have been
withheld by the Administrative Borrower and each of its Tax Affiliates from
their respective employees for all periods in full and complete compliance with
the tax, social security and unemployment withholding provisions of applicable
Requirements of Law and such withholdings have been timely paid to the
respective Governmental Authorities.

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          (b) Except as set forth on Schedule 4.7, none of the Administrative
Borrower or any of its Tax Affiliates has on or before the Effective Date
(i) incurred any obligation under any tax sharing agreement or arrangement other
than those of which the Administrative Agent has received a copy prior to the
Effective Date, or (ii) been a member of an affiliated, combined or unitary
group other than the group of which the Administrative Borrower (or its Tax
Affiliate) is the common parent.
          (c) None of the Administrative Borrower or any of its Tax Affiliates
has ever “participated” in a “listed transaction” within the meaning of Treasury
Regulation Section 1.6011-4, except as would not, individually or in the
aggregate, have a Material Adverse Effect.
          Section 4.8 Full Disclosure.
          (a) The information (other than projections, other forward-looking
information or third-party general industry data) prepared or furnished by or on
behalf of any Loan Party in connection with this Agreement, the other Loan
Documents or the consummation of the transactions contemplated hereby or
thereby, including the information contained in the Disclosure Documents (when
taken as a whole), does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained therein
or herein not misleading.
          (b) The Administrative Borrower has delivered to the Administrative
Agent (or has publicly filed) a true, complete and correct copy of the
Disclosure Documents. The Disclosure Documents comply as to form in all material
respects with all applicable requirements of all applicable state and Federal
securities laws.
          Section 4.9 Margin Regulations.
          No Borrower is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Federal Reserve Board), and no proceeds of any Loan or
Letter of Credit will be used to purchase or carry any such margin stock or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock in contravention of Regulation T, U or X of the Federal Reserve
Board.
          Section 4.10 No Burdensome Restrictions; No Defaults.
          (a) Neither the Administrative Borrower nor any of its Restricted
Subsidiaries (i) is a party to any Contractual Obligation the performance of
which by any thereof, either unconditionally or upon the happening of an event,
would result in the creation of a Lien (other than a Lien permitted under
Section 7.1) on the property or assets of any thereof or (ii) is subject to any
restrictions in their respective Constituent Documents that could, in the
aggregate, be reasonably expected to result in a Material Adverse Effect.
          (b) Neither the Administrative Borrower nor any of its Restricted
Subsidiaries is in default under or with respect to any Contractual Obligation.
As of the Effective Date, no other party is, and from and after the Effective
Date, to the knowledge of the Administrative Borrower, no other party is, in
default under or with respect to any Contractual Obligation owed to

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any Loan Party, other than, in either case, those defaults that, in the
aggregate, could not be reasonably expected to result in a Material Adverse
Effect.
          (c) There are no Requirements of Law applicable to any Loan Party the
compliance with which by such Loan Party could, in the aggregate, be reasonably
expected to result in a Material Adverse Effect.
          Section 4.11 Investment Company Act.
          Neither the Administrative Borrower nor any of its Restricted
Subsidiaries is an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an “investment company,” as such
terms are defined in the Investment Company Act of 1940, as amended.
          Section 4.12 Use of Proceeds.
          The proceeds of the Loans and the Letters of Credit have been prior to
the Effective Date used by the Administrative Borrower solely in accordance with
the January 2007 Credit Agreement. On and after the Effective Date, the proceeds
of the Loans and the Letters of Credit shall be used for current operating
obligations of the Borrowers incurred in the ordinary course of business as
conducted on the Effective Date; provided that no proceeds of any Loans shall be
used to repay First Lien Term Loans or Second Lien Term Loans.
          Section 4.13 Insurance.
          Except as set forth on Schedule 4.13(a), all policies of insurance of
any kind or nature of the Administrative Borrower or any of its Restricted
Subsidiaries, including policies of life, fire, theft, product liability, public
liability, property damage, other casualty, employee fidelity, workers’
compensation and employee health and welfare insurance, are in full force and
effect and are of a nature and provide such coverage as is customarily carried
by, and to the best knowledge and belief of the Administrative Borrower is
sufficient for, businesses of the size and character of such Person. Except as
set forth on Schedule 4.13(b), none of the Administrative Borrower or any of its
Restricted Subsidiaries has in the three years preceding the Effective Date been
refused insurance for any material coverage for which it had applied or had any
policy of insurance terminated (other than at its request).
          Section 4.14 Labor Matters.
          (a) There are no strikes, work stoppages, slowdowns or lockouts
pending or threatened against or involving the Administrative Borrower or any of
its Subsidiaries, other than those that, in the aggregate, could not be
reasonably expected to result in a Material Adverse Effect.
          (b) There are no unfair labor practices, grievances or complaints
pending, or, to the Administrative Borrower’s knowledge, threatened, against or
involving the Administrative Borrower or any of its Restricted Subsidiaries, nor
are there any pending or, to the Administrative Borrower’s knowledge, threatened
arbitrations or grievances involving the Administrative

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Borrower or any of its Restricted Subsidiaries, other than those that, in the
aggregate, are reasonably likely to be resolved adversely and, if resolved
adversely to the Administrative Borrower or such Restricted Subsidiary, could
not, in the aggregate, be reasonably expected to result in a Material Adverse
Effect.
          Section 4.15 ERISA.
          Each Title IV Plan is in compliance in all material respects with
applicable provisions of ERISA, the Code and other Requirements of Law except
for non-compliances that in the aggregate could not be reasonably expected to
result in a Material Adverse Effect. There has been no, nor is there reasonably
expected to occur, any ERISA Event other than those that, in the aggregate,
could not be reasonably expected to result in a Material Adverse Effect. Neither
the Administrative Borrower nor any ERISA Affiliate has contributed or been
obligated to contribute to, any Multiemployer Plan within the last six years.
          Section 4.16 Environmental Matters.
          (a) The Real Property and operations of each Borrower and each of its
Subsidiaries have been and are in compliance with all Environmental Laws, other
than non-compliances that individually or in the aggregate could not be
reasonably expected to result in a Material Adverse Effect.
          (b) There are no facts, circumstances or conditions which could
reasonably be expected to give rise to liability under any Environmental Laws
arising out of or relating to the operations of any Borrower or any of its
Subsidiaries, or any Real Property now or formerly owned, operated or leased by
any Borrower or any of its Subsidiaries which are not specifically included in
the information furnished to the Lenders other than those that individually or
in the aggregate could not be reasonably expected to result in a Material
Adverse Effect.
          (c) There is no complaint, claim, action, suit, demand, notice or
proceeding pending, or to the knowledge of any Borrower or any of its
Subsidiaries threatened, based on or resulting from any alleged violation of or
liability under any Environmental Law, other than any such matters which could
not reasonably be expected to result in a Material Adverse Effect.
          (d) No Borrower or any of its Subsidiaries is conducting or paying
for, in whole or in part, any Remedial Action at any location other than any
such action that could not reasonably be expected to result in a Material
Adverse Effect.
          (e) No Borrower or any of its Subsidiaries is subject or a party to
any judgment, injunction, decree, or agreement which imposes any obligation
under any Environment Law, or has assumed any obligation under any Environmental
Law under any contract, except for any such obligation which could not
reasonably be expected to result in a Material Adverse Effect.
          (f) This Section 4.16 sets forth the only representations and
warranties of Borrowers and each Subsidiary relating to Environmental Laws and
Contaminants.

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          Section 4.17 Intellectual Property.
          The Administrative Borrower and its Restricted Subsidiaries own or
license or otherwise have the right to use all licenses, permits, patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, copyright applications, franchises, authorizations and other
intellectual property rights that are material for the operations of their
respective businesses, without infringement upon or conflict with the rights of
any other Person with respect thereto, including all trade names associated with
any private label brands of the Administrative Borrower or any of its Restricted
Subsidiaries except for those the failure to own, license or otherwise have the
right to use, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect. To the Administrative Borrower’s knowledge,
no slogan or other advertising device, product, process, method, substance, part
or component, or other material now employed, or now contemplated to be
employed, by the Administrative Borrower or any of its Restricted Subsidiaries
infringes upon or conflicts with any rights owned by any other Person, and no
action, proceeding, claim or litigation regarding any of the foregoing is
pending or threatened.
          Section 4.18 Title; Real Property.
          (a) Each of the Administrative Borrower and its Restricted
Subsidiaries has good and marketable title to, or valid leasehold interests in,
all Real Property and good title to all material personal property in each case
that is purported to be owned or leased by it, including those reflected on the
most recent Financial Statements delivered by the Administrative Borrower, and
none of such properties and assets is subject to any Lien, except Liens
permitted under Section 7.1.
          (b) All Permits required to have been issued or appropriate to enable
all Real Property of the Administrative Borrower or any of its Restricted
Subsidiaries to be lawfully occupied and used for all of the purposes for which
they are currently occupied and used have been lawfully issued and are in full
force and effect, other than those that, in the aggregate, could not be
reasonably expected to result in a Material Adverse Effect.
          (c) None of the Borrower or any of its Restricted Subsidiaries has
received any notice, or has any knowledge, of any pending, threatened or
contemplated condemnation proceeding affecting any Real Property of the Borrower
or any of its Subsidiaries or any part thereof, except those that, in the
aggregate, could not be reasonably expected to result in a Material Adverse
Effect.
          Section 4.19 Anti-Terrorism Laws.
          (a) Neither the Administrative Borrower nor, to the knowledge of any
of the Loan Parties, any of its Affiliates is in violation of any laws relating
to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive
Order No. 13224 on Terrorist Financing, effective September 23, 2001 (the
“Executive Order”), and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56 (signed into law on October 26, 2001) (the “USA Patriot Act”).

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          (b) Neither the Administrative Borrower nor, to the knowledge of any
of Loan Parties, any of its Affiliates acting or benefiting in any capacity in
connection with the Loans is any of the following:
     (i) a Person or entity that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order;
     (ii) a Person or entity owned or controlled by, or acting for or on behalf
of, any Person or entity that is listed in the annex to, or is otherwise subject
to the provisions of, the Executive Order;
     (iii) a Person or entity with which any Lender is prohibited from dealing
or otherwise engaging in any transaction by any Anti-Terrorism Law;
     (iv) a Person or entity that commits, threatens or conspires to commit or
supports “terrorism” as defined in the Executive Order; or
     (v) a Person or entity that is named as a “specially designated national
and blocked person” on the most current list published by the U.S. Treasury
Department Office of Foreign Assets Control at its official website or any
replacement website or other replacement official publication of such list.
          (c) Neither the Administrative Borrower nor, to the knowledge of any
Loan Party, any of its Affiliates acting in any capacity in connection with the
Loans (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Person
described in clause (b) above, (ii) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order, or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.
          Section 4.20 Solvency.
          On the Effective Date and immediately after the consummation of the
transactions to occur on the Effective Date (including the Transactions), and
immediately following the making of each Loan and after giving effect to the
application of the proceeds of each Loan, (a) the fair value of the assets of
the Loan Parties (on a Consolidated basis with their Subsidiaries) will exceed
its debts and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the assets of the Administrative Borrower (on a
Consolidated basis with its Subsidiaries) will be greater than the amount of its
debts and other liabilities, subordinated, contingent or otherwise; (c) the
Administrative Borrower (on a Consolidated basis with its Subsidiaries) will be
able to pay its debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (d) the
Administrative Borrower (on a Consolidated basis with its Subsidiaries) will not
have unreasonably small capital with which to conduct its business in which it
is engaged as such business is now conducted and will be conducted following the
Effective Date.

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          Section 4.21 Collateral Documents.
          Except as otherwise provided in the applicable Collateral Documents,
the provisions of the Collateral Documents create legal and valid first priority
Liens on all the Collateral in favor of the Administrative Agent, for the
benefit of the Secured Parties; and upon the proper filing of (x) UCC financing
statements in the applicable jurisdictions (and payment of the applicable fees),
(y) any Mortgages with respect to Mortgaged Properties (and payment of the
applicable fees) and (z) the Security Agreement (or a short form thereof) with
the United States Patent and Trademark Office or the United States Copyright
Office (as applicable), such Liens constitute first priority perfected and
continuing Liens on the Collateral, securing the Obligations, enforceable
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law)) against the applicable Loan Party
and all third parties, and having priority over all other Liens, including Liens
created in favor of the Second Lien Administrative Agent and for the benefit of
the Second Lien Secured Parties, on the Collateral except in the case of
(a) Liens permitted by clauses (a), (c), (d), (e) and (f) of Section 7.1, to the
extent any such Liens would have priority over the Liens in favor of the Agent
pursuant to any applicable law and Customary Permitted Liens to the extent
having priority by provisions of applicable law and (b) Liens perfected only by
possession or notation (including possession or notation of any certificate of
title) to the extent the Administrative Agent has not obtained or does not
maintain possession of or notation on such Collateral.
          Section 4.22 Related Documents.
          The Arranger has been furnished true and complete copies of each
material Settlement Document to the extent filed and/or executed and delivered,
as the case may be, on or prior to the Effective Date. All representations and
warranties of any Loan Party set forth in any Settlement Document were true and
correct in all material respects as of the time such representations and
warranties were made and shall be true and correct in all material respects as
of the Effective Date as if such representations and warranties were made on and
as of such date, unless stated to relate to a specific earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date.
          Section 4.23 Subordinated Indebtedness.
          The Obligations constitute “Senior Indebtedness” (or similar term)
referring to the Obligations under the Subordinated Notes or any other
Subordinated Indebtedness and the subordination provisions relating to the
Subordinated Notes and such other Subordinated Indebtedness are effective, valid
and enforceable, exist for the benefit of the Administrative Agent, the Lenders
and each Issuer and all payments of principal of or premium and interest on the
Subordinated Notes or any other Subordinated Indebtedness, or realized from the
liquidation of any property of any Loan Party, shall be subject to any of such
subordination provisions.

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ARTICLE V
FINANCIAL COVENANTS
          As long as any of the Obligations or the Revolving Credit Commitments
remain outstanding (other than contingent indemnification obligations), unless
the Requisite Lenders otherwise consent in writing, the Borrowers agree with the
Lenders and the Administrative Agent that:
          Section 5.1 Adjusted Consolidated Tangible Net Worth.
          The Administrative Borrower shall maintain Adjusted Consolidated
Tangible Net Worth measured as of the last day of each fiscal quarter ending
after June 30, 2007 of (a) $500,000,000 plus (b) 50% of the Consolidated Net
Income (without deduction for losses sustained during any fiscal quarter) of the
Administrative Borrower for each full fiscal quarter starting after June 30,
2007 plus (c) 50% of the aggregate increase in shareholders’ equity of the
Administrative Borrower after the Effective Date by reason of an Equity Issuance
(including upon conversion of Indebtedness into such capital stock but excluding
(i) Stock issued in connection with an employee stock ownership plan, an
employee stock option plan, an employee stock purchase plan, and (ii) any
portion of such increase in shareholders’ equity attributable to goodwill
recognized in connection with a Permitted Acquisition).
          Section 5.2 Maximum Total Leverage Ratio.
          The Administrative Borrower shall maintain a Total Leverage Ratio,
measured as of the last day of each fiscal quarter set forth below, of not more
than the ratio set forth below opposite such fiscal quarter:

              Maximum Total Fiscal Quarter Ending   Leverage Ratio
September 30, 2007 to and including September 30, 2008
    3.20 to 1.0  
December 31, 2008
    3.05 to 1.0  
March 31, 2009 to and including June 30, 2009
    3.00 to 1.0  
September 30, 2009
    2.75 to 1.0  
December 31, 2009
    2.25 to 1.0  

          Section 5.3 Minimum Interest Coverage Ratio.
          The Administrative Borrower shall maintain an Interest Coverage Ratio,
measured as of the last day of each fiscal quarter set forth below, for the four
fiscal quarter period ending on such day, of not less than the ratio set forth
below opposite such fiscal quarter:

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              Minimum Interest Fiscal Quarter Ending   Coverage Ratio
September 30, 2007
    1.25 to 1.0  
December 31, 2007
    0.80 to 1.0  
March 31, 2008 to and including June 30, 2008
    0.55 to 1.0  
September 30, 2008
    0.70 to 1.0  
December 31, 2008 to and including March 31, 2009
    0.80 to 1.0  
June 30, 2009
    0.95 to 1.0  
September 30, 2009
    1.20 to 1.0  
December 31, 2009
    1.50 to 1.0  

          Section 5.4 Total Land to Adjusted Consolidated Tangible Net Worth.
          The Administrative Borrower shall maintain a ratio, measured as of the
last day of each fiscal quarter set forth below, of (a) Total Land of the
Administrative Borrower and its Restricted Subsidiaries, the value of which is
determined in conformity with GAAP, to (b) Adjusted Consolidated Tangible Net
Worth of not more than (x) 2.00 to 1.00 for the fiscal quarter ending
September 30, 2007 to and including the fiscal quarter ending June 30, 2008,
(y) 1.90 to 1.00 for the fiscal quarter ending September 30, 2008 to and
including the fiscal quarter ending June 30, 2009 and (z) 1.75 to 1.00 for the
fiscal quarter ending September 30, 2009 and the fiscal quarter ending
December 31, 2009.
          Section 5.5 Unsold Units to Units Closed.
          The Administrative Borrower shall maintain a ratio, measured as of the
last day of each fiscal quarter ending after June 30, 2007, of (a) the aggregate
number of Units owned by the Administrative Borrower and its Restricted
Subsidiaries that constitute Unsold Units to (b) Units Closed by the
Administrative Borrower and its Restricted Subsidiaries, determined as of the
last day of each calendar month, for the twelve months ending on such day, of
not more than 1.00 to 4.00; provided that for any fiscal quarter in which the
Total Leverage Ratio of the Administrative Borrower shall be less than 1.50 to
1.00 and the Interest Coverage Ratio shall not be less than 1.75:1.00, the
Administrative Borrower shall maintain a ratio of Unsold Units to Units Closed
as of the last day of such fiscal quarter of not more than 1.00 to 3.00. For the
avoidance of doubt, for any period, the calculation of the ratio of Unsold Units
to Units Closed shall give pro forma effect to the Unsold Units and Units Closed
acquired by the Administrative Borrower or its Restricted Subsidiaries in
connection with a Permitted Acquisition consummated during such period.

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          Section 5.6 Maximum Land Supply.
          The Administrative Borrower shall maintain a Land Supply Ratio,
measured as of the last day of each fiscal quarter set forth below, of less than
(x) 4.00 to 1.00 for the fiscal quarter ending December 31, 2007 to and
including the fiscal quarter ending June 30, 2009, (y) 3.65 to 1.00 for the
fiscal quarter ending September 30, 2009 and (z) 3.00 to 1.00 for the fiscal
quarter ending December 31, 2009.
ARTICLE VI
AFFIRMATIVE COVENANTS
          As long as the Obligations or the Revolving Credit Commitments remain
outstanding (other than contingent indemnification obligations), unless the
Requisite Lenders otherwise consent in writing, the Borrowers agree with the
Lenders and the Administrative Agent that:
          Section 6.1 Reporting Requirements.
          The Administrative Borrower shall furnish to the Administrative Agent
and the Lenders each of the following:
     (a) Quarterly Reports. Within 45 days after the end of each fiscal quarter
(other than fiscal quarters ending December 31) (or such earlier date on which
the Administrative Borrower is required to file a Form 10-Q under the Exchange
Act (including all permitted extensions)), financial information regarding the
Administrative Borrower and its Subsidiaries consisting of Consolidated and
consolidating unaudited balance sheets as of the close of such quarter and the
related statements of income and cash flow for such quarter and that portion of
the fiscal year ending as of the close of such quarter, setting forth in
comparative form the figures for the corresponding period in the prior year and
the figures contained in the Five Year Projections, or, if applicable the latest
business plan provided pursuant to clause (d) below, for the current fiscal
year, in each case certified by the Chief Financial Officer of the
Administrative Borrower as fairly presenting in all material respects the
Consolidated and consolidating financial position of the Administrative Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP
(subject to the absence of footnote disclosure and normal year-end audit
adjustments). To the extent the information set forth in this clause (a) is
included in the Administrative Borrower’s Quarterly Report on Form 10-Q as filed
with the SEC, such information shall be deemed delivered for the purposes
hereof.
     (b) Annual Reports. Within 90 days after the end of each fiscal year (or
such earlier date on which the Administrative Borrower is required to file a
Form 10-K under the Exchange Act (including all permitted extensions)),
financial information regarding the Administrative Borrower and its Subsidiaries
consisting of Consolidated and consolidating balance sheets of the
Administrative Borrower and its Subsidiaries as of the end of

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such year and related statements of income and cash flows of the Administrative
Borrower and its Subsidiaries for such fiscal year, all prepared in conformity
with GAAP and certified, in the case of such Consolidated Financial Statements,
without qualification as to the scope of the audit or as to the Administrative
Borrower being a going concern by Ernst & Young LLP or another nationally
recognized independent certified public accountant, together with the report of
such accounting firm stating that (i) such Financial Statements fairly present
in all material respects the Consolidated financial position of the
Administrative Borrower and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except for
changes with which such independent certified public accountants shall concur
and which shall have been disclosed in the notes to the Financial Statements)
and (ii) the examination by such accountants in connection with such
Consolidated Financial Statements has been made in accordance with generally
accepted auditing standards, and accompanied by a certificate stating that in
the course of the regular audit of the business of the Administrative Borrower
and its Subsidiaries such accounting firm has obtained no knowledge that a
Default or Event of Default in respect of the financial covenant contained in
Article V has occurred and is continuing or, if in the opinion of such
accounting firm, a Default or Event of Default has occurred and is continuing in
respect of such financial covenant, a statement as to the nature thereof. To the
extent the information set forth in this clause (b) is included in the
Administrative Borrower’s Annual Report on Form 10-K as filed with the SEC, such
information shall be deemed delivered for the purposes hereof.
     (c) Compliance Certificate. Together with each delivery of any report
pursuant to clauses (a) and (b) of this Section 6.1,
     (i) a certificate of a Responsible Officer of the Administrative Borrower
(each, a “Compliance Certificate”) (A) showing in reasonable detail the
calculations used in determining the Total Leverage Ratio (for purposes of
determining the Applicable Margin and the Applicable Unused Revolving Commitment
Fee Rate) and demonstrating compliance with each of the financial covenants
contained in Article V as of the end of such quarter, (B) showing such
information and calculations reasonably requested by the Administrative Agent
relating to (x) Indebtedness Associated with Assets Not Owned of the
Administrative Borrower and its Restricted Subsidiaries or with respect to which
the Administrative Borrower or any of its Restricted Subsidiaries has options
(or similar rights) to purchase land and (y) Adjusted Consolidated Tangible Net
Worth and the aggregate amount of Investments made pursuant to Section 7.2(i),
(C) stating that no Default or Event of Default has occurred and is continuing
or, if a Default or an Event of Default has occurred and is continuing, stating
the nature thereof and the action that the Administrative Borrower proposes to
take with respect thereto and (D) solely with respect to each delivery of any
report pursuant to clause (b) of this Section 6.1, setting forth the
Administrative Borrower’s calculation of Excess Cash Flow and the amount, if
any, applied to pay Loans and First Lien Term Loans; and

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     (ii) summary Consolidated and consolidating financial statements for each
of (A) the Unrestricted Subsidiaries as a group and (B) the Administrative
Borrower and the Restricted Subsidiaries as a group.
     (d) Projections/Business Plan. Not later than 45 days following the end of
each fiscal year, and containing substantially the types of financial
information contained in the Five Year Projections, business and financial plans
of the Administrative Borrower for the next succeeding fiscal year presented on
a quarterly basis.
     (e) Default Notices. As soon as practicable, and in any event within five
Business Days after a Responsible Officer of any Loan Party has actual knowledge
of the existence of any Default, Event of Default or other event or condition
having had a Material Adverse Effect, including a Default, Event of Default or
other event or condition having had a Material Adverse Effect under the First
Lien Term Loan Credit Agreement or the Second Lien Credit Agreement, the
Administrative Borrower shall give the Administrative Agent notice specifying
the nature of such Default or Event of Default or other event or condition,
including the anticipated effect thereof, which notice, if given by telephone,
shall be promptly confirmed in writing on the next Business Day.
     (f) Notice of Litigation. Promptly after the commencement thereof, the
Administrative Borrower shall give the Administrative Agent written notice of
the commencement of all actions, suits and proceedings before any domestic or
foreign Governmental Authority or arbitrator, affecting the Administrative
Borrower or any of its Restricted Subsidiaries, that, in the reasonable judgment
of the Administrative Borrower, expose the Administrative Borrower or such
Restricted Subsidiary to liability which, if adversely determined, could
reasonably be expected to result in (i) a Material Adverse Effect or (ii) a
liability in excess of $10,000,000.
     (g) ERISA Matters. The Administrative Borrower shall furnish the
Administrative Agent the following:
     (a) promptly and in any event within 10 days after the Administrative
Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know that any ERISA Event reasonably likely to result in a liability of the
Administrative Borrower or its Subsidiaries in excess of $1,000,000 has
occurred, a written statement of a Responsible Officer of the Administrative
Borrower describing such ERISA Event and the action, if any, that the
Administrative Borrower, its Subsidiaries and ERISA Affiliates propose to take
with respect thereto and a copy of any notice filed by the Administrative
Borrower, any of its Subsidiaries or any ERISA Affiliate with the PBGC or the
IRS pertaining thereto; and
     (b) promptly following any request therefor, copies of (i) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by the
Administrative Borrower or any ERISA Affiliate with the IRS with respect to each
Title IV Plan; (ii) the most recent actuarial valuation report for each Title IV
Plan; (iii) all notices received by the Administrative Borrower or any ERISA

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Affiliate from a Multiemployer Plan sponsor or any governmental agency
concerning an ERISA Event; and (iv) such other documents or governmental reports
or filings relating to any Title IV Plan (or employee benefit plan sponsored or
contributed to by the Administrative Borrower or any of its Subsidiaries) as the
Administrative Agent shall reasonably request.
     (h) Environmental Matters. The Administrative Borrower shall provide to the
Administrative Agent promptly after receipt by the Administrative Borrower or
any Restricted Subsidiary, a copy of (i) any written notice or claim to the
effect that the Administrative Borrower or any Subsidiary, or any Joint Venture
managed by any of them, is or may be liable to any Person as a result of a
Release or threatened Release of any toxic or hazardous waste or substance into
the environment and (ii) any notice alleging any violation of any Environmental
Law by the Administrative Borrower or any Restricted Subsidiary, or any Joint
Venture managed by any of them, which, in the case of either clause (i) or (ii),
could reasonably be expected to result in a Material Adverse Effect.
     (i) Borrowing Base Determination.
     (i) No later than the last day of each calendar month, the Administrative
Borrower shall provide a Borrowing Base Certificate as of the last day of the
prior month executed by a Responsible Officer of the Administrative Borrower;
provided that (i) satisfaction of Mortgage Requirements with respect to
Borrowing Base Assets included in such Borrowing Base Certificate shall be
determined as of the date of such Borrowing Base Certificate and not as of the
last day of the prior month and (ii) such Borrowing Base Certificate shall give
pro forma effect to the exclusion of any Borrowing Base Asset excluded from the
Borrowing Base pursuant to a Borrowing Base Certificate delivered in accordance
with Section 6.1(i)(ii) after the last day of the prior month. In addition, if
the Administrative Borrower performs any impairment calculation due to GAAP
requirements or otherwise and such impairment calculation shows a decline in the
Borrowing Base of more than $35,000,000 from that shown on the most recently
delivered Borrowing Base Certificate, the Administrative Borrower shall provide
a Borrowing Base Certificate executed by a Responsible Officer of the
Administrative Borrower within five Business Days of such impairment calculation
giving effect to such impairment calculation.
     (ii) No later than five Business Days following the receipt of any Net Cash
Proceeds from an Asset Sale by the Administrative Borrower or any of its
Subsidiaries, the Administrative Borrower shall provide a Borrowing Base
Certificate based upon the Borrowing Base Certificate most recently in effect
but giving effect to such Asset Sale, including the use of proceeds thereof,
executed by a Responsible Officer of the Administrative Borrower;
     (iii) The Administrative Agent may (prior to the occurrence of an Event of
Default, at its sole cost and expense and with 14 days’ prior written notice to
the Administrative Borrower and, after and during the continuance of an Event of
Default, at the Borrowers’ sole cost and expense) make physical verifications of
the Borrowing Base Assets

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in any manner and through any medium that the Administrative Agent considers
advisable, and the Administrative Borrower shall furnish all such assistance and
information as the Administrative Agent may require in connection therewith.
     (j) Cash Flow Projections. Together with the Borrowing Base Certificate
delivered by the Administrative Borrower in the calendar months of January,
April, July and October, or more frequently as reasonably requested by the
Administrative Agent, the Administrative Borrower shall deliver to the
Administrative Agent monthly cash flow projections covering the calendar quarter
in which such Borrowing Base Certificate was delivered, each of which shall be
in a form reasonably acceptable to the Administrative Agent.
     (k) Recourse Obligations; Joint Venture Disclosures. The Administrative
Borrower shall deliver to the Administrative Agent (i) no later than 45 days
after the end of each fiscal quarter, or more frequently as reasonably requested
by the Administrative Agent, (A) a schedule of guarantee, indemnity and similar
undertakings and other contingent obligations of the Administrative Borrower and
its Restricted Subsidiaries, with respect to Joint Ventures and other third
parties (other than any such undertakings and obligations of the Administrative
Borrower with respect to any Restricted Subsidiary), including, in each case, a
description of such undertakings and obligations (including the face amount
thereof) and the conditions giving rise to claims in respect thereof and
(B) reports (1) with respect to all Joint Ventures covering the subject matter
of the representations and warranties set forth in Sections 4.5, 4.6, 4.10,
4.14, 4.15, 4.16, 4.17 and 4.18, and (2) solely with respect to Joint Ventures
managed by the Administrative Borrower or any Restricted Subsidiary and Joint
Ventures owing Indebtedness or with respect to which the Administrative Borrower
or any Restricted Subsidiary has contingent obligations, covering the subject
matter of the representations and warranties set forth in Sections 4.3 and 4.4
(to the extent and in the form delivered to the Administrative Borrower), in
each case as applied to the Joint Ventures (with schedules of exceptions, if
necessary) and (ii) concurrently with the delivery thereof to the agent or
lenders under any agreement governing Indebtedness of any Joint Venture, a copy
of any certificate of compliance required to be delivered thereunder.
     (l) Material Developments with Respect to Joint Ventures. The
Administrative Borrower shall deliver to the Administrative Agent reports with
respect to its Joint Ventures covering material developments affecting any Joint
Venture that would be required to be disclosed in a Form 8-K filing with the SEC
if such Joint Venture were a public company, such reports to be delivered
promptly following such material development.
     (m) Other Information. The Administrative Borrower will provide the
Administrative Agent or any Lender with such other information respecting the
business, properties, condition, financial or otherwise, or operations of the
Administrative Borrower, any of its Restricted Subsidiaries, and Joint Ventures
managed by any of them, as the Administrative Agent or any Lender through the
Administrative Agent may from time to time reasonably request.

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          Section 6.2 Preservation of Corporate Existence, Etc.
          The Administrative Borrower shall, and shall cause each of its
Restricted Subsidiaries, and Joint Ventures managed by any of them, to preserve
and maintain its legal existence, rights (charter and statutory) and franchises,
except as permitted by Section 7.5.
          Section 6.3 Compliance with Laws, Etc.
          The Administrative Borrower shall, and shall cause each of its
Restricted Subsidiaries, and Joint Ventures managed by any of them, to, comply
with all applicable Requirements of Law, Contractual Obligations and Permits,
except where the failure so to comply could not, in the aggregate, be reasonably
expected to result in a Material Adverse Effect.
          Section 6.4 Conduct of Business.
          The Administrative Borrower shall, and shall cause each of its
Subsidiaries, and Joint Ventures managed by any of them, to, (a) conduct its
business in the ordinary course, (b) use its reasonable efforts, in the ordinary
course and consistent with past practice, to preserve its business and the
goodwill and business of the customers, advertisers, suppliers and others having
business relations with the Administrative Borrower or any of its Restricted
Subsidiaries, and Joint Ventures managed by any of them and (c) pay when due any
amounts owed by them to suppliers, mechanics, materialmen, contractors or other
Persons, the non-payment of which could lead to the imposition of a Lien in
favor of such Person or promptly bond any unpaid amounts; provided that the
amount of unpaid amounts that have not been bonded on customary terms within ten
Business Days of the incurrence thereof shall not exceed $20,000,000 in the
aggregate at any time outstanding, except where the failure to comply with the
covenants in each of clauses (a) and (b) above could not, in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
          Section 6.5 Payment of Taxes, Etc.
          The Administrative Borrower shall, and shall cause each of its
Subsidiaries to, pay and discharge before the same shall become delinquent, all
material governmental claims, taxes, assessments, charges and levies, except
where contested in good faith, by proper proceedings and adequate reserves
therefor have been established on the books of the Administrative Borrower or
the appropriate Subsidiary in conformity with GAAP.
          Section 6.6 Maintenance of Insurance.
          The Administrative Borrower shall maintain for, and cause to be
maintained by, each of its Restricted Subsidiaries, and Joint Ventures managed
by any of them, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Administrative Borrower or such Restricted
Subsidiary or Joint Venture operates, and such other insurance as may be
reasonably requested by the Administrative Agent or the Requisite Lenders. If
any portion of any structures or improvements constituting part of the Mortgaged
Property is located in a federally-designated

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special flood hazard area, the Administrative Borrower shall maintain for, and
cause to be maintained by the applicable Restricted Subsidiary, flood insurance
to the extent required by any applicable Governmental Authority and shall
furnish evidence of the same to the Administrative Agent at all times during
which such structures or improvements constitute part of the Mortgaged Property.
          Section 6.7 Asset Sales.
          The Administrative Borrower shall not and shall not permit any
Restricted Subsidiary to make any Asset Sale or series of related Asset Sales of
any property or enter into any agreement to make any Asset Sale or series of
related Asset Sales of any property unless (i) such Asset Sale, series of
related Asset Sales or such agreement shall be for no less than the Fair Market
Value of such property at the time the binding agreement with respect to such
Asset Sale was entered into and (ii) the Net Cash Proceeds in connection with
such Asset Sale are wire transferred by the purchaser directly to a Designated
Account and are held by the applicable Borrower in a Designated Account until
applied in accordance with the terms of this Agreement.
          Section 6.8 Access.
          The Administrative Borrower shall from time to time permit the
Administrative Agent (and the Lenders accompanying the Administrative Agent), or
any agents or representatives thereof, promptly after written notification of
the same (except that during the continuance of an Event of Default, no such
notice shall be required) during normal business hours to (a) examine and make
copies of and abstracts from the records and books of account of the
Administrative Borrower and each of its Subsidiaries and Joint Ventures,
(b) visit the properties of the Administrative Borrower and each of its
Subsidiaries and Joint Ventures, (c) discuss the affairs, finances and accounts
of the Administrative Borrower and each of its Subsidiaries and Joint Ventures
with any of their respective officers or directors and (d) communicate directly
with any of the Administrative Borrower’s certified public accountants and other
professionals retained by the Administrative Borrower, its Subsidiaries and
Joint Ventures controlled or managed by any of them and hereby instructs (on
behalf of itself, its Subsidiaries and Joint Ventures controlled or managed by
any of them) such accountants and other professionals to cooperate with and
provide information to the Administrative Agent (other than any such
communication which is subject to attorney-client privilege or binding
confidentiality agreements). The Administrative Borrower shall authorize its
independent certified public accountants to disclose to the Administrative Agent
(and the Administrative Agent to disclose to any Lender) during the continuance
of an Event of Default of the type described in Section 8.1(a), (b) or (g) any
and all Financial Statements and other information of any kind as the
Administrative Agent reasonably requests from the Administrative Borrower and
that such accountants may have with respect to the business, financial or other
condition, assets, liabilities, results of operations or other affairs of the
Administrative Borrower or any of its Subsidiaries and Joint Ventures.
Provisions in this Section 6.8 with respect to Joint Ventures shall apply to
Joint Ventures managed by the Administrative Borrower or any of its Subsidiaries
and in all other cases shall apply only to the extent of information received by
the Administrative Borrower or any of its Subsidiaries from the applicable Joint
Venture; provided that a representative of the Administrative Borrower shall be
given the

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opportunity to be present for any communication with the Administrative
Borrower’s independent public accountants.
          Section 6.9 Keeping of Books.
          The Administrative Borrower shall, and shall cause each of its
Subsidiaries and each Joint Venture managed by any of them to keep proper books
of record and account, in which full and correct entries shall be made in
conformity with GAAP (to the extent GAAP is applicable thereto) of all financial
transactions and the assets and business of the Administrative Borrower and each
such Subsidiary.
          Section 6.10 Maintenance of Properties, Etc.
          The Administrative Borrower shall, and shall cause each of its
Restricted Subsidiaries, and Joint Ventures managed by any of them, to, maintain
and preserve, (a) all of its properties (tangible and intangible) which are
necessary in the conduct of its business in good working order and condition,
subject to ordinary wear and tear, casualty and condemnation excepted, (b) all
rights, permits, licenses, approvals and privileges (including all Permits) used
or useful or necessary in the conduct of its business and (c) all registered
patents, trademarks, trade names, copyrights, service marks and other
intellectual property with respect to its business; except in each case where
the failure to so maintain and preserve could not, in the aggregate, be
reasonably expected to result in a Material Adverse Effect.
          Section 6.11 Application of Proceeds.
          The Borrowers shall use the entire amount of the proceeds of the Loans
and Letters of Credit as provided in Section 4.12.
          Section 6.12 Environmental.
          The Administrative Borrower shall, and shall cause each of its
Restricted Subsidiaries, and Joint Ventures managed by any of them, to comply in
all material respects with Environmental Laws and, without limiting the
foregoing, the Administrative Borrower shall, at its (or if applicable, such
Joint Venture’s) sole cost and expense, upon receipt of any notification or
otherwise obtaining knowledge of any Release or other event that individually or
in the aggregate could reasonably be expected to result in a Material Adverse
Effect, (a) conduct or pay (or, if applicable, cause such Joint Venture to pay)
for consultants to conduct, tests or assessments of environmental conditions at
such operations or properties, including the investigation and testing of
subsurface conditions and (b) take such Remedial Action, and undertake such
investigation or other action as required by Environmental Laws or as any
Governmental Authority requires or as is appropriate and consistent with good
business practice to address the Release or event and otherwise ensure
compliance with Environmental Laws.
          Section 6.13 Additional Subsidiary Borrowers; Additional Collateral.
          (a) To the extent not delivered to the Administrative Agent on or
before the Effective Date, the Administrative Borrower promptly shall, and shall
cause each of its

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Restricted Subsidiaries promptly to, in the case of any Restricted Subsidiary
that is a Domestic Subsidiary owning 5% or more of the Total Assets of the
Administrative Borrower and its Restricted Subsidiaries or contributing 5% or
more of the Consolidated Net Income of the Administrative Borrower and its
Restricted Subsidiaries for the immediately preceding four fiscal quarters,
cause such Restricted Subsidiary to become a party hereto as an additional
Subsidiary Borrower. Notwithstanding anything herein to the contrary, in the
event that at any time the Subsidiaries of the Administrative Borrower (other
than those Subsidiaries engaged in the business of originating residential home
loans, title insurance and reinsurance) that are not Borrowers own, in the
aggregate for all such Subsidiaries, 5% or more of the Total Assets of the
Administrative Borrower and its Restricted Subsidiaries or contribute 5% or more
of the Consolidated Net Income of the Administrative Borrower and its Restricted
Subsidiaries for the immediately preceding four fiscal quarters, the
Administrative Borrower shall promptly cause such number of its Subsidiaries to
become a party hereto as additional Subsidiary Borrowers so that the
Subsidiaries of the Administrative Borrower that are not Subsidiary Borrowers do
not own, in the aggregate for all such Subsidiaries, 5% or more of the Total
Assets of the Administrative Borrower and its Restricted Subsidiaries or
contribute 5% or more of the Consolidated Net Income of the Administrative
Borrower and its Restricted Subsidiaries for the immediately preceding four
fiscal quarters. Prior to any Subsidiary of the Administrative Borrower
incurring, or having outstanding (including, without limitation, the Senior
Notes or the Subordinated Notes) any guaranty obligation in respect of other
Indebtedness of the Administrative Borrower or any Restricted Subsidiary, the
Administrative Borrower shall promptly cause such Subsidiary to become a party
hereto as an additional Subsidiary Borrower. Each of the Borrowers agrees that,
if, pursuant to this Section 6.13, the Administrative Borrower shall be required
to cause any Subsidiary that is not a Subsidiary Borrower to become an
additional Subsidiary Borrower, or if for any reason the Administrative Borrower
desires any such Subsidiary to become an additional Subsidiary Borrower, such
Subsidiary shall execute and deliver to the Administrative Agent (i) a Credit
Agreement Supplement and (ii) a joinder agreement to any applicable Collateral
Document shall thereafter for all purposes be a party to this Agreement and have
the same rights, benefits and obligations as a Borrower on the Effective Date.
          (b) With respect to any Person that is or becomes a Subsidiary of any
Loan Party or any Unrestricted Subsidiary that is designated a Restricted
Subsidiary after the Effective Date, the Administrative Borrower shall, subject
to Section 10.23(b) and the Intercreditor Agreement, promptly (and in any event
within 30 days after such person becomes a Subsidiary or such Unrestricted
Subsidiary is designated a Restricted Subsidiary) (i) deliver to the
Administrative Agent the certificates, if any, representing all of the Stock of
such Subsidiary, together with undated stock powers or other appropriate
instruments of transfer executed and delivered in blank by a duly authorized
officer of the holder(s) of such Stock, and all intercompany notes valued in
excess of $1,000,000 owing from such Subsidiary to any Loan Party together with
instruments of transfer executed and delivered in blank by a duly authorized
officer of such Loan Party and (ii) to the extent such Subsidiary does not
become a Subsidiary Borrower pursuant to clause (a) above, cause such Subsidiary
(A) to execute a joinder agreement or such comparable documentation to the
Guaranty to become a Subsidiary Guarantor and a joinder agreement to the
applicable Collateral Documents, substantially in the forms annexed thereto or,
in the case of a Foreign Subsidiary, execute a security agreement compatible
with the laws of such Foreign Subsidiary’s

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jurisdiction in form and substance reasonably satisfactory to the Administrative
Agent, and (B) to take all actions necessary or advisable in the opinion of the
Administrative Agent to cause the Lien created by the applicable Collateral
Document to be duly perfected to the extent required by such agreement in
accordance with all applicable Requirements of Law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent. Notwithstanding the foregoing, (1) the Stock required to
be delivered to the Administrative Agent pursuant to clause (i) of this Section
6.13(b) shall not include any Stock of a Foreign Subsidiary created or acquired
after the Effective Date and (2) no Foreign Subsidiary shall be required to take
the actions specified in clause (ii) of this Section 6.13(b), if, in the case of
either clause (1) or (2), doing so would constitute an investment of earnings in
United States property under Section 956 (or a successor provision) of the Code,
which investment would or could reasonably be expected to trigger an increase in
the net income of a United States shareholder of such Subsidiary pursuant to
Section 951 (or a successor provision) of the Code, as reasonably determined by
the Administrative Agent and the Administrative Borrower; provided that this
exception shall not apply to (A) Voting Stock of any Subsidiary which is a
first-tier controlled foreign corporation (as defined in Section 957(a) of the
Code) representing 66% of the total voting power of all outstanding Voting Stock
of such Subsidiary and (B) 100% of the Stock not constituting Voting Stock of
any such Subsidiary, except that any such Stock constituting “stock entitled to
vote” within the meaning of Treasury Regulation Section 1.956-2(c)(2), as
reasonably determined by the Administrative Agent and the Administrative
Borrower, shall be treated as Voting Stock for purposes of this Section 6.13(b).
          Section 6.14 Security Interests; Further Assurances.
          Subject to the terms of the Intercreditor Agreement, the
Administrative Borrower shall promptly, upon the reasonable request of the
Administrative Agent or any Lender, at the Administrative Borrower’s expense,
execute, acknowledge and deliver, or cause the execution, acknowledgment and
delivery of, and thereafter register, file or record, or cause to be registered,
filed or recorded, in an appropriate governmental office, any document or
instrument supplemental to or confirmatory of the Collateral Documents or
otherwise deemed by the Administrative Agent reasonably necessary or desirable
for the continued validity, perfection and first priority of the Liens on the
Collateral covered thereby subject to no other Liens except as permitted by the
applicable Collateral Document, or obtain any consents or waivers as may be
necessary or appropriate in connection therewith. Subject to the terms of the
Intercreditor Agreement, the Administrative Borrower shall promptly deliver or
cause to be delivered to the Administrative Agent from time to time such other
documentation, consents, authorizations, approvals and orders in form and
substance reasonably satisfactory to the Administrative Agent as the
Administrative Agent shall reasonably deem necessary to perfect or maintain the
Liens on the Collateral pursuant to the Collateral Documents. Upon the exercise
by the Administrative Agent or any Lender of any power, right, privilege or
remedy pursuant to any Loan Document which requires any consent, approval,
registration, qualification or authorization of any Governmental Authority, the
Administrative Borrower shall promptly execute and deliver all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may require. Within 30 days following the
last calendar day of each quarter, the Administrative Borrower shall deliver a
determination of the appraised value of any Mortgaged Property that is a
Borrowing Base Asset at such time by a third party independent appraiser meeting
FIRREA

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requirements and selected by the Administrative Agent (for the account of the
Lenders) based upon FIRREA requirements, including, where appropriate, standards
for mass appraisals, and otherwise in form and substance satisfactory to the
Administrative Agent and consistent with appraisals delivered by the
Administrative Borrower on the Effective Date.
          Section 6.15 Information Regarding Collateral.
          No Loan Party shall effect any change (i) in any Loan Party’s legal
name, (ii) in the location of any Loan Party’s chief executive office, (iii) in
any Loan Party’s identity or organizational structure, (iv) in any Loan Party’s
Federal Taxpayer Identification Number or organizational identification number,
if any, or (v) in any Loan Party’s jurisdiction of organization (in each case,
including by merging with or into any other entity, reorganizing, dissolving,
liquidating, reorganizing or organizing in any other jurisdiction), until (A) it
shall have given the Administrative Agent not less than 30 days’ prior written
notice (in the form of an Officers’ Certificate), or such lesser notice period
agreed to by the Administrative Agent, of its intention so to do, clearly
describing such change and providing such other information in connection
therewith as the Administrative Agent may reasonably request and (B) it shall
have taken all action reasonably satisfactory to the Administrative Agent to
maintain the validity, perfection and first priority (subject only to Liens
securing obligations under the First Lien Term Loan Credit Loan Documents and
Customary Permitted Liens to the extent created pursuant to any applicable law)
ranking of the security interest of the Administrative Agent for the benefit of
the Secured Parties in the Collateral, if applicable, to the extent required by
the Loan Documents. Each Loan Party agrees to promptly provide the
Administrative Agent with certified Constituent Documents reflecting any of the
changes described in the preceding sentence. Each Loan Party also agrees to
promptly notify the Administrative Agent of any change in the location of any
office in which it maintains books or records relating to Collateral owned by it
or any office or facility at which Collateral is located (including the
establishment of any such new office or facility), other than changes in
location to a Mortgaged Property.
          Section 6.16 Designation of Restricted and Unrestricted Subsidiaries.
          The Board of Directors may designate any Subsidiary of the
Administrative Borrower to be an Unrestricted Subsidiary if (i) immediately
after giving pro forma effect to such designation, no Default or Event of
Default shall have occurred and be continuing or would result therefrom and
(ii) the Subsidiary to be so designated:
     (a) does not own any Stock or Indebtedness of, or own or hold any Lien on
any property of, the Administrative Borrower or any other Restricted Subsidiary
or is not otherwise required by the terms of this Agreement to be a Restricted
Subsidiary, a Borrower or a Guarantor;
     (b) has no Indebtedness other than Indebtedness:
     (1) as to which neither the Administrative Borrower nor any of its
Restricted Subsidiaries (A) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness), (B) is

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directly or indirectly liable as a guarantor or otherwise, or (C) constitutes
the lender; provided, however, that the designation of any Subsidiary as an
Unrestricted Subsidiary shall constitute an Investment by the Administrative
Borrower and its Restricted Subsidiaries at the date of such designation and the
Administrative Borrower or a Restricted Subsidiary may, to the extent permitted
by Section 7.2(i), make an Investment in an Unrestricted Subsidiary at any time
on or following the date such Subsidiary is designated as an Unrestricted
Subsidiary in accordance with this Section 6.16; and
     (2) no default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted Subsidiary)
would permit upon notice, lapse of time or both any holder of any other
Indebtedness (other than any guarantee permitted by the proviso to the preceding
clause (1)) of the Administrative Borrower or any of its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity;
     (c) is not party to any agreement, contract, arrangement or understanding
with the Administrative Borrower or any Restricted Subsidiary of the
Administrative Borrower unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Administrative
Borrower or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Administrative Borrower;
     (d) is a Person with respect to which neither the Administrative Borrower
nor any of its Restricted Subsidiaries has any direct or indirect obligation
(1) to subscribe for additional Stock or (2) to maintain or preserve such
Person’s financial condition or to cause such Person to achieve any specified
levels of operating results;
     (e) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Administrative Borrower or any of its
Restricted Subsidiaries; and
     (f) has at least one director on its board of directors that is not a
director or executive officer of the Administrative Borrower or any of its
Restricted Subsidiaries and has at least one executive officer that is not a
director or executive officer of the Administrative Borrower or any of its
Restricted Subsidiaries.
          Unless so designated as an Unrestricted Subsidiary, any Person that is
or becomes a Subsidiary of the Borrower will be classified as a Restricted
Subsidiary.
          Upon designation of a Restricted Subsidiary as an Unrestricted
Subsidiary in compliance with this covenant, such Restricted Subsidiary shall be
automatically released from the Guaranty previously made by such Restricted
Subsidiary and, if such Restricted Subsidiary is a Borrower, shall be
automatically released from the Loan Documents (but the pledge and grant of
security interest in the Stock of such Restricted Subsidiary shall not be
released upon such

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designation). The Administrative Agent (or any other representative holding
security in Collateral) will, at the Administrative Borrower’s expense, execute
and deliver to the Administrative Borrower such documents as the Administrative
Borrower may reasonably request to evidence such release.
          The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary, if, immediately after giving pro forma effect to such
designation, no Default or Event of Default shall have occurred and be
continuing or would result therefrom and the provisions of Section 6.13 shall be
applicable to such newly-designated Restricted Subsidiary.
          Any such designation or redesignation by the Board of Directors will
be evidenced to the Administrative Agent by filing with the Administrative Agent
(within five Business Days after adoption of such resolution) a board resolution
giving effect to such designation or redesignation and an officers’ certificate
signed by two Responsible Officers that:
     (a) certifies that such designation or redesignation complies with the
preceding provisions; and
     (b) gives the effective date of such designation or redesignation.
          The Administrative Borrower shall not enter into, or permit a
Restricted Subsidiary to enter into, any transaction with an Unrestricted
Subsidiary that, if in effect at the time of designation of such Subsidiary as
an Unrestricted Subsidiary, would be inconsistent with the above restrictions as
to designation of Restricted Subsidiaries as Unrestricted Subsidiaries.
          Section 6.17 Mortgage Requirements.
          (a) With respect to any Real Property (other than Excluded Real
Property) acquired after the Effective Date and owned in fee by a Loan Party,
within 90 days of the acquisition thereof, such Loan Party shall deliver to the
Administrative Agent or its designee (such Person, the “Applicable Person”) a
security interest in and Mortgage on each Real Property owned in fee by such
Loan Party and, with respect to any Excluded Real Property described in clause
(i) or clause (ii) of the definition thereof, within 90 days of the filing or
recording of a subdivision plat, map or similar instrument, or the supplemental
declaration, as the case may be, with respect to the applicable Entitled Land,
the applicable Loan Party shall deliver to the Applicable Person a security
interest in and Mortgage on such Entitled Land (which, in the case of such
clause (ii) shall cover individual condominium units) and such Entitled Land
shall no longer constitute Excluded Real Property.
          (b) The Administrative Borrower shall use its commercially reasonable
efforts to cause each such Mortgage to be recorded in the appropriate land
records of the applicable Governmental Authority within 30 days of the date of
delivery of such Mortgage pursuant to Section 6.17(a). At the time the
Administrative Borrower delivers a monthly Borrowing Base Certificate to the
Administrative Agent, the Administrative Borrower shall also provide or cause to
be provided to the Administrative Agent a reasonably detailed status report of
the recording process with respect to such Mortgages.

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          (c) The Administrative Borrower shall use its commercially reasonable
efforts to cause the Mortgage Requirements (other than clause (ii) of the
definition of “Mortgage Requirements”) with respect to each Mortgage delivered
pursuant to Section 6.17(a) to be fully satisfied, at the sole expense of the
Loan Parties, within 60 days of the date of delivery of such Mortgage.
          (d) Simultaneously with delivery of a Borrowing Base Certificate
calculated as of the end of each March, June, September and December, the
Administrative Borrower shall provide a recalculation of the Required Title
Insurance Amount with respect to each ALTA lender’s policy of title insurance
insuring a Mortgage (other than a Mortgage of Real Property located in the state
of Texas) and if the amount of such policy is less than the Required Title
Insurance Amount for such policy taking into account applicable tie-in
endorsements, the Administrative Borrower shall within 30 days of the end of
such month increase the amount of such policy as necessary to equal the then
Required Title Insurance Amount for such policy.
          (e) If on March 15th of each calendar year after the Effective Date,
the Current Title Insurance Value (as defined below) of Mortgaged Property
located in Texas covered by any First Mortgage Group exceeds by $2,000,000 or
more the sum of (i) the aggregate policy amounts of the applicable First
Mortgage Group Title Policies (as defined below), taking into account the tie-in
endorsements with respect thereto, plus (ii) the aggregate policy amounts of all
ALTA lender’s policies of title insurance which have been issued on the same
date as such First Mortgage Group Title Policies with tie-in endorsements
insuring any group of then outstanding deeds of trust covering such Mortgaged
Property and securing the Second Lien Loans, then no later than April 15 of such
calendar year, the Administrative Borrower shall, at its cost and expense,
deliver to the Applicable Person new ALTA policies of title insurance covering
each Mortgage in such First Mortgage Group in a policy amount equal to the
Required Title Insurance Amount with respect to such Mortgage determined as of
January 31st of such calendar year, and otherwise satisfying the requirements of
clause (ii) of the definition of “Mortgage Requirements”, with tie-in
endorsements to all other such policies then being issued. For the purposes of
this Section 6.17(e), the following terms shall have the following meanings:
(i) “Current Title Insurance Value” means the aggregate value of the Mortgaged
Property located in Texas covered by a First Mortgage Group, determined as of
January 31st of the applicable calendar year in conformity with GAAP.
(ii) “First Mortgage Group” means any group of then outstanding Mortgages that
have been delivered on or prior to March 15th of the applicable calendar year
and after March 16 of the prior calendar year (or, in the case of March 15,
2008, after the Effective Date) (excluding Mortgages covering Mortgaged Property
located in Texas that appears for the first time in the Borrowing Base for the
month ending January 31st of such calendar year), with respect to which First
Mortgage Group Title Policies have been issued.
(iii) “First Mortgage Group Title Policies” means policies of title insurance
satisfying the requirements of clause (ii) of the definition of “Mortgage

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Requirements” have been issued on the same date with tie-in endorsements
insuring the Mortgages in any First Mortgage Group.
          (f) The Administrative Borrower shall use its best efforts to cause
each Mortgage delivered on the Effective Date to be recorded in the appropriate
land records of the applicable Governmental Authority within 30 days of the
Effective Date.
          Section 6.18 Release of Mortgaged Property; Subordination; Consent.
     (a) A Loan Party may, without the consent of any Lender, the Administrative
Agent or any other Person, (i) make immaterial dispositions (including, but not
limited to, lot line adjustments) of portions of the Mortgaged Property for
dedication or public use to, or permit the creation of Liens to secure the levy
of special assessments in favor of, Governmental Authorities, community
development districts and property owners’ associations, (ii) make immaterial
dispositions of portions of the Mortgaged Property to third parties for the
purpose of resolving any encroachment issues, (iii) grant easements,
restrictions, covenants, reservations and rights-of-way for resolving minor
encroachment issues or for access, water and sewer lines, telephone, cable and
internet lines, electric lines or other utilities or for other similar purposes,
and (iv) consent to or join in any land use or other development approval
documents (including subdivision plats, easements and the like) provided that
such disposition, grant or consent is usual and customary in the normal course
of the Administrative Borrower’s development business or otherwise does not
materially impair the value, utility or operation of the applicable Mortgaged
Property. In connection with any disposition or creation of any Lien or any
grant or consent permitted pursuant to this Section 6.18(a), the Applicable
Person shall execute and deliver any instrument reasonably necessary or
appropriate in the case of the dispositions referred to above to release the
portion of the Mortgaged Property affected by such disposition from the Lien of
the applicable Mortgage, or to subordinate the Lien of the applicable Mortgage,
or acknowledge that the Lien of any Mortgage is subordinate, to such Liens,
easements, restrictions, covenants, reservations and rights-of-way or other
similar grants, or to evidence such consent or joinder, in each case upon
receipt by the Applicable Person of (A) 5 Business Days’ prior written notice
thereof; (B) a copy of the applicable instrument or instruments of disposition
or subordination; and (C) a certificate from a Responsible Officer stating that
such disposition is usual and customary in the normal course of the
Administrative Borrower’s development business or otherwise does not materially
impair the value, utility or operation of the applicable Mortgaged Property.
     (b) Mortgaged Property included in any Contract for Sale entered into in
the ordinary course of business shall be released by the Applicable Person from
the Lien of the applicable Mortgage or Mortgages upon delivery to the Applicable
Person or its designee of the following:
     (i) At least 5 Business Days prior to the requested date of release, a
notice identifying the applicable Mortgage or Mortgages and the portion of the
Mortgaged Property that such Loan Party is seeking to be released; and
     (ii) A copy of the settlement statement showing the amount of net sales

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proceeds; provided that with respect to any Contract for Sale closed between
July 1, 2007 and July 20, 2007, the Administrative Borrower may deliver a
certification of a Responsible Officer that such sales have occurred in lieu of
the settlement statement, in which event the Administrative Borrower shall
deliver copies of settlement statements with respect to such sales as soon as
reasonably practicable.
Upon receipt of the foregoing, the Applicable Person or its designee shall
promptly cause the partial release of the applicable Mortgage with respect to
the portion of the applicable Mortgaged Property requested by the Administrative
Borrower. Such partial release shall be without recourse and without any
warranty, express or implied.
     (c) Mortgaged Property included in any Asset Sale shall be released by the
Applicable Person from the Lien of the applicable Mortgage upon delivery to the
Applicable Person of the following:
     (i) At least 5 Business Days prior to the requested date of release, a
notice identifying the applicable Mortgage or Mortgages and the portion of the
Mortgaged Property that such Loan Party is seeking to be released in connection
with such Asset Sale;
     (ii) A certification of a Responsible Officer dated the date of the release
that no Event of Default has occurred and is continuing and that no Default or
Event of Default will result from giving effect to the requested release;
     (iii) A pro forma Borrowing Base Certificate giving effect to such Asset
Sale; and
     (iv) A copy of the settlement statement or closing statement showing the
amount of Net Sales Proceeds in connection with such Asset Sale.
     (d) In no event shall any release of any mortgage, deed of trust, trust
deed or similar instrument securing the January 2007 Credit Agreement that is
delivered on the Effective Date be effective until after the recording of the
Mortgage delivered on the Effective Date in replacement of such mortgage, deed
of trust, trust deed or similar instrument.
          Section 6.19 Appraised Value Percentage.
          (a) Not later than each February 1, May 1, August 1 and November 1 of
each calendar year from August 1, 2007, through the Scheduled Revolving Credit
Termination Date, the Appraiser shall deliver to the Administrative Agent and
the Administrative Borrower a report determining the Appraised Value Percentage
with respect to Completed Unsold Homes, Land/Lots Under Development, Unimproved
Land and Unsold Homes Under Construction in accordance with Section 6.19(b).
          (b) The respective Appraised Value Percentage of (i) Completed Unsold
Homes, Land/Lots Under Development and Unimproved Land shall be a fraction
(expressed as a decimal) (x) the numerator of which shall be the appraised value
(determined in accordance with

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Section 6.19(c)) of a portion of the Completed Unsold Homes, Land/Lots Under
Development or Unimproved Land, as the case may be, included in the most recent
Borrowing Base Certificate delivered by the Administrative Borrower and selected
by the Appraiser as a representative sample of the value of all such Completed
Unsold Homes, Land/Lots Under Development or Unimproved Land, as the case may
be, and (y) the denominator of which shall be the value determined in conformity
with GAAP (net of any impairment charges taken with respect to such Completed
Unsold Homes, Land/Lots Under Development or Unimproved Land, as the case may
be) of the Completed Unsold Homes, Land/Lots Under Development or Unimproved
Land, as the case may be, appraised by the Appraiser in accordance with
subclause (x) of this clause (i), and (ii) Unsold Homes Under Construction shall
be a fraction (expressed as a decimal) (x) the numerator of which shall be the
appraised value (determined in accordance with Section 6.19(c)) of a portion of
the Unsold Homes Under Construction included in the most recent Borrowing Base
Certificate delivered by the Administrative Borrower and selected by the
Appraiser as a representative sample of the value of all such Unsold Homes Under
Construction, and (y) the denominator of which shall be the total budget on an
“as-completed” basis of the Unsold Homes Under Construction appraised by the
Appraiser in accordance with subclause (x) of this clause (ii).
          (c) The appraised values of Completed Unsold Homes, Land/Lots Under
Development, Unimproved Land and Unsold Homes Under Construction utilized in
Section 6.19(b) shall be determined by the Appraiser (i) as of a date not
earlier than the end of the calendar quarter prior to the date of the applicable
report described in Section 6.19(a), (ii) in accordance with applicable FIRREA
requirements, including standards for mass appraisals, and (iii) otherwise in
accordance with an appraisal methodology reasonable acceptable to the
Administrative Agent from time to time. In the case of Unsold Homes Under
Construction, the appraised values shall be determined on a completed value
basis.
          (d) The respective Appraised Value Percentages to be utilized by the
Administrative Borrower in preparation of the Borrowing Base Certificate
referred to in Section 3.1(a)(xii) shall be based upon a report delivered by the
Appraiser to the Administrative Agent and the Administrative Borrower prior to
the Effective Date determining the respective Appraised Value Percentages in
accordance with Section 6.19(b), based upon appraised values as of June 30,
2007.
          Section 6.20 Designated Account Deposits.
          (a) The Administrative Borrower shall, and shall cause each Subsidiary
Borrower to, cause all of its Unrestricted Cash to be paid into and maintained
in a Designated Account or in a Deposit Account or Securities Account which,
upon execution and delivery of a Deposit Account Control Agreement and
compliance with Section 6.22, will constitute a Designated Account.
          (b) The Administrative Borrower shall, and shall cause each Subsidiary
Borrower to, (i) cause all payments made to the Administrative Borrower or such
Subsidiary Borrower, as the case may be, to be deposited directly into a
Designated Account, and (ii) instruct each Affiliated Title Company to make all
payments constituting Escrow Proceeds Receivable payable by such Affiliated
Title Company by wire or intrabank transfer into a Designated

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Account or into a Deposit Account or Securities Account which, upon execution
and delivery of a Deposit Account Control Agreement and compliance with
Section 6.22, will constitute a Designated Account.
          Section 6.21 Maintenance of Ratings. Each Loan Party shall use
commercially reasonable efforts to cause the Loans and Administrative Borrower’s
corporate credit to continue to be rated by Standard & Poor’s Ratings Group and
Moody’s Investors Service Inc. (but not to maintain a specific rating).
          Section 6.22 Post-Closing Requirements.
          (a) Subject to Section 6.22(b), with respect to each Deposit Account
and each Securities Account maintained by any Loan Party and in respect of which
the Deposit Account Security Agreement or the Security Agreement, as applicable,
requires the Administrative Agent to obtain “control”, such Loan Party deliver
to the Administrative Agent, within 30 days of the Effective Date (as such date
may be extended by the Administrative Agent in its sole discretion), a Deposit
Account Control Agreement (or an amendment to the existing Deposit Account
Control Agreement then in effect) executed by such Loan Party and the depositary
bank or securities intermediary maintaining such Deposit Account or Securities
Account together with an opinion of Kirkland and Ellis LLP, counsel to the Loan
Parties, with respect thereto, each in form and substance reasonably
satisfactory to the Administrative Agent.
          (b) The Administrative Borrower shall deliver to the Administrative
Agent, within 30 days of the Effective Date, either (i) satisfactory evidence
that the bank accounts of the Transeastern JV Entities listed on Schedule 6.22
shall have been closed or (ii) an executed Deposit Account Control Agreement
with respect to such accounts.
          (c) The Administrative Borrower shall deliver to the Administrative
Agent, within 30 days of the Effective Date (as such date may be extended by the
Administrative Agent in its sole discretion), agreements in an appropriate form
for recording in the applicable federal office executed by each Loan Party that
owns any intellectual property required to be pledged pursuant to the Security
Agreement.
ARTICLE VII
NEGATIVE COVENANTS
          As long as any of the Obligations (other than contingent
indemnification obligations) or the Revolving Credit Commitments remain
outstanding, unless the Requisite Lenders otherwise consent in writing, the
Borrowers agree with the Lenders and the Administrative Agent that:
          Section 7.1 Liens, Etc.
          The Administrative Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, create or suffer to exist, any Lien upon or with
respect to any of its properties or

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assets, whether now owned or hereafter acquired, or assign, or permit any of its
Restricted Subsidiaries to assign, any right to receive income, except for:
     (a) Liens (other than Customary Permitted Liens and purchase money Liens)
granted by the Administrative Borrower or any Restricted Subsidiary of the
Administrative Borrower existing on the Effective Date and disclosed on
Schedule 7.1;
     (b) Liens securing obligations of the Loan Parties under (i) the First Lien
Term Loan Documents and (ii) the Second Lien Loan Documents, but only to the
extent that all Liens securing the obligations of the Loan Parties under the
Second Lien Loan Documents are at all times subordinated to the Liens created
under the Collateral Documents on the terms set forth in the Intercreditor
Agreement;
     (c) Customary Permitted Liens of the Administrative Borrower and its
Restricted Subsidiaries;
     (d) Liens securing Indebtedness permitted to be incurred pursuant to
Section 7.4(e), limited to the property purchased with the proceeds of such
purchase money Indebtedness or subject to such Capital Lease; provided, however,
that no Lien that attaches to any Borrowing Base Asset shall be permitted by
this clause (d);
     (e) any Lien securing the renewal, extension, refinancing or refunding of
any Indebtedness secured by any Lien permitted by clause (a), (b), (d) or (e) of
this Section 7.1 without any material change in the assets subject to such Lien;
     (f) Liens on its interest in Joint Ventures securing Indebtedness of such
Joint Ventures;
     (g) Liens securing the Obligations and Liens securing Secured Hedging
Contracts to the extent secured by the Collateral;
     (h) any attachment or judgment Liens which do not constitute an Event of
Default;
     (i) Liens (i) of a collection bank arising under Section 4-0210 of the
Uniform Commercial Code on items in the course of collection; and (ii) in favor
of a banking institution arising as a matter of law encumbering deposits
(including the right of set-off) and which are within the general parameters
customary in the banking industry;
     (j) Liens on insurance proceeds paid by an insurer (or its agent) and
deposits held by an insurer (or its agent) arising in the ordinary course of
business in connection with the financing of insurance premiums payable to such
insurer (or its agent);
     (k) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by any Loan Party or
Restricted Subsidiary in the ordinary course of business in accordance with the
past practices of such Loan Party or Restricted Subsidiary;

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     (l) any interest or title of a licensor, sublicensor, lessor or sublessor
under any license or operating or true lease agreement in which a Loan Party or
Restricted Subsidiary is the licensee or lessee;
     (m) Liens arising by operation of law under Article 2 of the UCC in favor
of reclaiming seller of goods or buyer of goods;
     (n) Liens on securities which are the subject of repurchase agreements
incurred in the ordinary course of business in connection with an investment in
a Cash Equivalent;
     (o) security given to a public or private utility or any Governmental
Authority as required in the ordinary course of business;
     (p) Liens in the nature of the right of setoff in favor of counterparties
to contractual agreements with the Loan Parties and Restricted Subsidiaries in
the ordinary course of business;
     (q) deposits or security provided to land banks or other third parties in
connection with the purchase of land;
     (r) Liens attaching solely to cash earnest money deposits in connection
with any letter of intent or purchase agreement in connection with a Permitted
Acquisition; and
     (s) Liens securing obligations (including Indebtedness) not in excess of
$15,000,000 at any time outstanding;
provided that at the time any Liens are incurred pursuant to clause (f), (q) or
(s), and after giving effect thereto, the then Available Revolving Credit shall
be greater than $50,000,000.
          Section 7.2 Investments.
          The Administrative Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly make or maintain any
Investment except for:
     (a) Investments existing on the Effective Date and disclosed on
Schedule 7.2;
     (b) Investments in cash and Cash Equivalents;
     (c) Investments in accounts, contract rights and chattel paper (each as
defined in the UCC), notes receivable and similar items arising or acquired in
the ordinary course of business consistent with the past practice of the
Administrative Borrower and its Subsidiaries;

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     (d) Investments received in settlement of amounts due to the Administrative
Borrower or any Subsidiary of the Administrative Borrower effected in the
ordinary course of business;
     (e) Investments by (i) the Administrative Borrower in any Subsidiary
Borrower, or by any Subsidiary Borrower in the Administrative Borrower or any
other Subsidiary Borrower, (ii) a Subsidiary that is not a Subsidiary Borrower
in the Administrative Borrower or any Restricted Subsidiary or (iii) after the
Effective Date, the Administrative Borrower or any Subsidiary Borrower in the
Administrative Borrower’s Subsidiaries engaged in the business of originating
residential home loans, title insurance and reinsurance not to exceed in the
aggregate at any time 5% of Adjusted Consolidated Tangible Net Worth; provided
that any Investment in the form of a loan or advance in excess of $1,000,000
shall be evidenced by an intercompany note and, in the case of a loan or advance
by a Loan Party, pledged by such Loan Party as Collateral pursuant to the
Collateral Documents;
     (f) loans or advances to employees of the Administrative Borrower or any of
its Subsidiaries in the ordinary course of business in an aggregate outstanding
amount at any time not to exceed $3,000,000;
     (g) advances on sales commissions to the sales agents in the ordinary
course of business of the Administrative Borrower or any of its Restricted
Subsidiaries;
     (h) Investments in the same line of business as, or a complementary line of
business to, the financial services, insurance services or brokerage businesses
engaged in by certain of the Administrative Borrower’s Subsidiaries on the
Effective Date that are not otherwise permitted hereby in an aggregate
outstanding amount at any time not to exceed $25,000,000 plus the amount of Net
Cash Proceeds retained in connection with an Equity Issuance;
     (i) net cash Investments (including letters of credit) made in, and
contributions and loans made to, Unaffiliated Joint Ventures and Unaffiliated
Unrestricted Subsidiaries after the Effective Date in an aggregate amount not to
exceed at any one time outstanding, after giving effect to such Investment,
12.5% of Adjusted Consolidated Tangible Net Worth plus all cash returns, cash
dividends and cash distributions (or the fair market value of any non-cash
returns, dividends and distributions) received by the Administrative Borrower or
any of its Restricted Subsidiaries with respect to Unaffiliated Joint Ventures
or Unaffiliated Unrestricted Subsidiaries; provided that it shall be a condition
to any Investment pursuant to this clause (i) that the Administrative Borrower,
a Subsidiary Borrower and or any other Restricted Subsidiary acquiring such
Investment (1) shall pledge and grant a security interest in its equity
ownership interest in, or instruments evidencing Indebtedness owing to it by,
such Unaffiliated Joint Venture or such Unaffiliated Unrestricted Subsidiary in
favor of the Administrative Agent for the ratable benefit of the Lenders by
executing and/or delivering a Pledge Agreement, other related documents and
instruments and an opinion of legal counsel for such pledgor, each in form and
substance satisfactory to the Administrative Agent, except that the forgoing

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shall not apply to such Investments of up to $25,000,000 in the aggregate if the
Unaffiliated Joint Venture is one listed on Schedule 7.2 and (2) shall not
become a general partner of any such Unaffiliated Joint Venture or Unaffiliated
Restricted Subsidiary on or after the Effective Date;
     (j) Investments in Permitted Acquisitions; provided that after giving
effect to any such Investment, the Total Leverage Ratio of the Administrative
Borrower would not exceed 1.25:1.00 and the Interest Coverage Ratio would not be
less than 1.75:1.00, in each case as of the last day of the most recently
completed fiscal quarter;
     (k) Investments under deferred compensation agreements;
     (l) extensions of trade in the ordinary course of business;
     (m) Investments and contingent obligations permitted by Section 7.4;
     (n) the Acquisition;
     (o) Investments in non-cash consideration (x) constituting inventory
received in connection with dispositions of assets in the ordinary course of
business or (y) in connection with an exchange of like assets (to the extent
allowable under Section 1031 of the Code (or comparable or successor provision))
of the Administrative Borrower or any of its Subsidiaries;
     (p) any Investment resulting from entry into any Secured Hedging Contract
permitted herein;
     (q) customary security deposits made by the Borrower and its Subsidiaries
under leases and with utility companies;
     (r) make prepayments and deposits to suppliers in the ordinary course of
business;
     (s) earnest money required in connection with and to the extent permitted
by Permitted Acquisitions;
     (t) Investments to the extent such Investments reflect an increase in the
value of Investments otherwise permitted under this Section 7.2;
     (u) Investments in deposit accounts or securities accounts opened in the
ordinary course of business so long as such deposit accounts or securities
accounts are subject to deposit account control agreements or securities account
control agreements if required hereunder;
     (v) Loan Parties may capitalize or forgive any Indebtedness owed to it by
other Loan Parties;

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     (w) Investments in connection with securing deposits provided in connection
with the acquisition of land; and
     (x) Investments in Joint Venture Acquisitions to the extent made with the
proceeds of any Equity Issuance or the portion of Excess Cash Flow not required
to be used to repay Indebtedness pursuant to Section 2.8(c) or to repay First
Lien Term Loans or Second Lien Loans;
provided, however, that for purposes of determining the amount of any Investment
hereunder, the amount of any Investment of any Person outstanding at any time
shall be the aggregate amount of cash expended to make such Investment (or, if
non-cash property was utilized, the fair market value thereof), less (i) all
cash returns, cash dividends and cash distributions (or the fair market value of
any non-cash returns, dividends and distributions) received by such Person
(including as a result of making such Joint Venture into a Borrower or a
Guarantor), less (ii) all liabilities expressly assumed by another Person in
connection with the sale of such Investment.
          Section 7.3 Restricted Payments.
          The Administrative Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Payment except for:
     (a) Restricted Payments by any Subsidiary of the Administrative Borrower to
the Administrative Borrower or any Restricted Subsidiary;
     (b) [reserved];
     (c) other dividends and distributions (i) not to exceed the sum of (A)
$2,000,000 in any fiscal year plus (B) 5% of cumulative Consolidated Net Income
since July 1, 2007 if the Total Leverage Ratio of the Administrative Borrower
would be not more than 1.25:1.00 and the Interest Coverage Ratio would not be
less than 1.75:1.00, in each case as of the last day of the most recently
completed fiscal quarter after giving effect to such dividend or distribution
plus (C) 1.0% per annum of proceeds actually received from the sale of Qualified
Capital Stock of the Administrative Borrower or (ii) paid solely in shares of
the common Stock of the Administrative Borrower;
     (d) any payment made with respect to the Transactions on or before the
Effective Date; and
     (e) AHYDO Catch-Up Payments (as defined in the Second Lien Credit Agreement
as in effect on the Effective Date).
provided, however, that the Restricted Payments described in clause (b) or
(c)(i) above shall not be permitted if either (A) an Event of Default or Default
shall have occurred and be continuing at the date of declaration or payment
thereof or would result therefrom or (B) such Restricted Payment is prohibited
under the terms of any Indebtedness (other than the Obligations) of the
Administrative Borrower or any of its Subsidiaries; provided, further, that
(i) the Restricted

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Payments described in clause (b) or (c)(i) above shall not be permitted unless
before and after giving effect to such Restricted Payments, the Administrative
Borrower shall be in compliance with the financial covenants contained in
Article V on a pro forma basis.
          Section 7.4 Limitation on Indebtedness.
          The Administrative Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, incur, create, assume or
permit to exist, directly or indirectly, any Indebtedness, except for:
     (a) Indebtedness incurred under this Agreement and the other Loan
Documents;
     (b) (i) Indebtedness outstanding on the Effective Date and listed on
Schedule 7.4(b); (ii) Permitted Refinancing Indebtedness of any Indebtedness
described in clause (i); (iii) Indebtedness incurred pursuant to the First Lien
Term Loan Agreement as in effect on the Effective Date; and (iv) Indebtedness
incurred pursuant to the Second Lien Credit Agreement as in effect on the
Effective Date; provided that, in the case of any replacement or refinancing
after the Effective Date, (x) the First Lien Administrative Agent and the Second
Lien Administrative Agent shall enter into the Intercreditor Agreement with the
Administrative Agent to the extent the Obligations are outstanding, (y) the
aggregate principal amount of the replacement or refinancing Indebtedness shall
be less than or equal to the principal amount (including any accreted or
capitalized amount) then outstanding of Indebtedness being refinanced, plus any
required premiums and other reasonable amounts paid, and fees and expenses
reasonably incurred, in connection with such modification, refinancing,
refunding, renewal or extension and any amount equal to any existing commitments
unutilized thereunder; and (z) none of the First Lien Term Loan Documents or the
Second Lien Loan Documents shall include any provisions, terms or conditions
that would not be permitted, under Article 6 of the Intercreditor Agreement, in
any amendment of the First Lien Term Loan Documents or the Second Lien Loan
Documents, respectively;
     (c) Indebtedness under Hedging Obligations with respect to interest rates
not entered into for speculative purposes; provided that if such Hedging
Obligations relate to interest rates, (i) such Hedging Obligations relate to
payment obligations on Indebtedness otherwise permitted to be incurred by the
Loan Documents and (ii) the notional principal amount of such Hedging
Obligations at the time incurred does not exceed the principal amount of the
Indebtedness to which such Hedging Obligations relate;
     (d) Indebtedness in respect of purchase money obligations and Capital Lease
Obligations, and refinancings in any amount not to exceed $10,000,000 at any
time outstanding and any extensions, replacements or renewals thereof;
     (e) Indebtedness in respect of bid, performance or surety bonds, workers’
compensation claims, self-insurance obligations and bankers acceptances issued
for the account of any Loan Party in the ordinary course of business, including
guarantees or

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obligations of any Loan Party with respect to letters of credit supporting such
bid, performance or surety bonds, workers’ compensation claims, self-insurance
obligations and bankers acceptances (in each case other than for an obligation
for money borrowed);
     (f) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is extinguished
within five Business Days of incurrence;
     (g) Indebtedness arising in connection with endorsement of instruments for
deposit in the ordinary course of business;
     (h) Indebtedness in an aggregate principal amount not to exceed $75,000,000
at any time outstanding;
     (i) Indebtedness between any Borrower and any other Borrower;
     (j) Contingent obligations in respect of Indebtedness otherwise permitted
under this Section 7.4; provided that such contingent obligations are
subordinated to the Obligations to the same extent as the Indebtedness to which
it relates is subordinated to the Obligations;
     (k) Indebtedness incurred in connection with financing insurance premiums;
and
     (l) Indebtedness incurred in connection with sale and leaseback
transactions permitted pursuant to Section 7.9;
provided, however, that carve-out guaranties, completion guaranties or any other
guaranty obligations with respect to Indebtedness of Joint Ventures of the
Administrative Borrower or any of its Subsidiaries shall not constitute
permitted Indebtedness under this Section 7.4 (other than pursuant to
Section 7.4(b) or (h)).
          Section 7.5 Restriction on Fundamental Changes.
          The Administrative Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to enter into an agreement to affect, or effect, a
Permitted Acquisition, if at the time thereof and after giving effect thereto,
there would be a Default or Event of Default. Except for Permitted Acquisitions,
the Administrative Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to (a) merge with any Person other than any Restricted
Subsidiary into the Administrative Borrower or any Subsidiary Borrower, as long
as the surviving entity of such merger is the Administrative Borrower or a
Subsidiary Borrower, (b) consolidate with any Person other than any Restricted
Subsidiary into the Administrative Borrower or any Subsidiary Borrower, as long
as the surviving entity of such consolidation is the Administrative Borrower or
a Subsidiary Borrower, (c) acquire all or substantially all of the Stock or
Stock Equivalents of any Person, (d) acquire all or substantially all of the
assets of any Person or all or substantially all of the assets constituting the
business of a division, branch or other unit operation of any

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Person, (e) enter into any Joint Venture or partnership with any Person, other
than pursuant to an Investment made pursuant to Section 7.2, or (f) create any
Restricted Subsidiary unless, (I) after giving effect to such creation or
acquisition, (x) no Default or Event of Default shall have occurred or be
continuing, and (y) the Administrative Borrower is in compliance with
Section 6.13, and (II) such Restricted Subsidiary is either (i) a Wholly-Owned
Restricted Subsidiary, or (ii) created in connection with an Investment
permitted pursuant to Section 7.2; provided that (i) any Subsidiary with assets
(excluding goodwill) with a Fair Market Value less than $50,000 may liquidate,
dissolve, or wind up its affairs or (ii) any Subsidiary may liquidate, dissolve
or wind-up to the extent its assets are transferred to a Borrower; and provided,
further, that nothing in this Section 7.5 shall prohibit the Administrative
Borrower or any of its Restricted Subsidiaries from the sale of its assets in
compliance with this Agreement.
     Section 7.6 Change in Nature of Business.
     The Administrative Borrower shall not, and shall not permit any of its
Subsidiaries to, make any material change in the nature or conduct of its
business as carried on at the Effective Date; provided that engaging in
reasonably related businesses shall not constitute a material change.
     Section 7.7 Transactions with Affiliates.
     The Administrative Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, except as otherwise expressly permitted herein, do
any of the following: (a) make any Investment in an Affiliate of the
Administrative Borrower that is not a Restricted Subsidiary of the
Administrative Borrower; (b) transfer, sell, lease, assign or otherwise dispose
of any asset to any Affiliate of the Administrative Borrower that is not a
Restricted Subsidiary of the Administrative Borrower; (c) merge into or
consolidate with or purchase or acquire assets from any Affiliate of the
Administrative Borrower that is not a Restricted Subsidiary of the
Administrative Borrower; (d) repay any Indebtedness to any Affiliate of the
Administrative Borrower that is not a Restricted Subsidiary of the
Administrative Borrower; or (e) enter into any other transaction directly or
indirectly with or for the benefit of any Affiliate of the Administrative
Borrower that is not a Subsidiary Borrower (including guaranties and assumptions
of obligations of any such Affiliate), except for (i) transactions in the
ordinary course of business on a basis no less favorable to the Administrative
Borrower or such Subsidiary Borrower as would be obtained in an arm’s length
transaction with a Person not an Affiliate, (ii) salaries and other director or
employee compensation or benefits to officers or directors of the Administrative
Borrower or any of its Subsidiaries commensurate with current compensation and
benefits levels, and (iii) indemnities of officers, directors and employees of
the Administrative Borrower and its Subsidiaries permitted by their respective
organizational documents and by applicable law; provided, however, that the
Administrative Borrower shall not be prohibited under this Section 7.7 from
(x) making payments of up to $2,000,000 per fiscal year to TOSI under the
Management Services Agreement (or another similar agreement) or (y) performing
its obligations under the Tax Allocation Agreement.
     Section 7.8 Restrictions on Subsidiary Distributions; No New Negative
Pledge.

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          The Administrative Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, (a) except (i) as set forth on Schedule 7.8,
(ii) the Loan Documents, (iii) the First Lien Term Loan Documents or (iv) the
Second Lien Loan Documents, agree to enter into or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of such Restricted Subsidiary to pay dividends or make any other distribution or
transfer of funds or assets or make loans or advances to or other Investments
in, or pay any Indebtedness owed to, the Administrative Borrower or any other
Restricted Subsidiary of the Administrative Borrower, except for customary
profit allocation provisions or (b) enter into or suffer to exist or become
effective any agreement (except the Loan Documents, the First Lien Term Loan
Documents or the Second Lien Loan Documents) prohibiting or limiting the ability
of the Administrative Borrower or any Restricted Subsidiary of the
Administrative Borrower to create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, to secure the Obligations, including any agreement requiring any other
Indebtedness or Contractual Obligation of the Administrative Borrower or any of
its Restricted Subsidiaries to be equally and ratably secured with the
Obligations other than in the case of clauses (a) or (b)(i) any agreements
governing any purchase money Liens or Capital Lease Obligations or other secured
Indebtedness otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby),
(ii) customary restrictions on the assignment of leases and licenses entered
into in the ordinary course of business, (iii) any agreement relating to the
sale of any property pending the consummation of such sale, (iv) any agreement
in effect at the time a Person becomes a Subsidiary of the Borrower, so long as
such agreement was not entered into in contemplation of such Person becoming a
Subsidiary of the Borrower, (v) in the case of any joint venture which is not a
Loan Party, such Person’s organizational or governing documents or pursuant to
any joint venture agreement or stockholders agreements solely to the extent of
the Equity Interests of or assets held in the subject joint venture or other
entity or (vi) customary restrictions on the assignment of leases and licenses
entered into in the ordinary course of business.
          Section 7.9 Sale/Leasebacks.
          The Administrative Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, enter into any sale and leaseback transaction
covering any property with an aggregate Fair Market Value in excess of
$10,000,000; provided, however, that the Administrative Borrower and its
Restricted Subsidiaries may sell Model Homes in the ordinary course of business
and leaseback such Model Homes so long as none of the Administrative Borrower or
any of its Subsidiaries has any obligation to repurchase the leased Model Homes
at the end of the lease term.
          Section 7.10 Compliance with ERISA.
          The Administrative Borrower shall not cause or permit to occur, and
shall not permit any of its Restricted Subsidiaries to cause or permit to occur,
or cause or permit any ERISA Affiliate to cause or permit to occur (a) an event
which could result in the imposition of a Lien under Section 412 of the IRC or
Section 302 or 4068 of ERISA or (b) an ERISA Event that could be reasonably
expected to result in a Material Adverse Effect.

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          Section 7.11 Environmental.
          The Administrative Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, allow a Release of any Contaminant in violation of
any Environmental Law, or otherwise violate any Environmental Law if such
violation shall remain unremedied for 30 days after the earlier of (x) the date
on which a Responsible Officer of any Loan Party obtains actual knowledge of
such violation and (y) the date on which written notice thereof shall have been
given to the Administrative Borrower by the Administrative Agent or any Lender;
provided, however, that the Administrative Borrower shall not be deemed in
violation of this Section 7.11 if, all such violations could not reasonably be
expected to result in a Material Adverse Effect.
          Section 7.12 Designated Account Proceeds.
          The Administrative Borrower shall not, and shall not permit any
Subsidiary Borrower, to withdraw or to instruct the transfer of any amounts from
a Designated Account except for (i) transfers to another Designated Account and
(ii) payments or withdrawals from a Designated Account solely for the purpose of
paying current operating obligations of the Administrative Borrower and the
Subsidiary Borrowers then due and payable incurred in the ordinary course of
business as currently conducted and each such withdrawal or payment shall be
deemed a representation by the Borrowers of compliance with such covenant;
provided, however, that transfers may be made from a Designated Account to, and
payments and withdrawals of the type described in clause (ii) may be made from,
“zero-balance” payment accounts currently maintained by the Administrative
Borrower and certain of the Subsidiary Borrowers with Wachovia Bank, National
Association and linked to Designated Accounts maintained with Wachovia Bank,
National Association, so long as (x) such accounts are not “deposit accounts”
within the meaning of the UCC or (y) each such account is subject to a Deposit
Account Control Agreement perfecting the Administrative Agent’s security
interest in such account within a reasonable period of time after the Effective
Date but in no event later than 30 days after notice from the Administrative
Agent to the Administrative Borrower.
          Section 7.13 Limitation on Issuance of Stock
          The Administrative Borrower shall not permit any Subsidiary Borrower
to issue any Stock or Stock Equivalent (including by way of sales of treasury
stock), except (i) for stock splits, stock dividends and additional issuances of
Stock which do not decrease the percentage ownership of any Subsidiaries in any
class of the Stock of such Subsidiary and (ii) Subsidiaries of the
Administrative Borrower formed after the Effective Date may issue Stock to a
Borrower or the Subsidiary of a Borrower which is to own such Stock. All Stock
issued in accordance with this Section 7.13(b) shall, to the extent required by
Section 6.13 or any Pledge Agreement, be delivered to the Administrative Agent
for pledge pursuant to the applicable Pledge Agreement.

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          Section 7.14 Prepayments of Second Lien Loans; Modifications of
Constituent Documents and Other Documents
          The Administrative Borrower shall not, and shall not permit any
Subsidiary Borrower to:
     (a) make (or give any notice in respect thereof) any voluntary or optional
payment on or redemption or acquisition for value of, or any prepayment or
redemption as a result of any asset sale, change of control or similar event of,
any Second Lien Loans, except as otherwise permitted by Section 7.4(b).
     (b) amend or modify, or permit the amendment or modification of, any
provision of any Settlement Document or any document governing any Indebtedness
(other than any First Lien Term Loan Document or the Second Lien Loan Document,
which may be amended or modified in accordance with the Intercreditor Agreement)
having a principal amount of $10,000,000 or more in any manner that is adverse
in any material respect to the interests of the Lenders; or
     (c) terminate, amend or modify any of its Constituent Documents or any
agreement to which it is a party with respect to its Stock (including any
stockholders’ agreement), or enter into any new agreement with respect to its
Stock, other than any such amendments or modifications or such new agreements
which are not adverse in any material respect to the interests of the Lenders.
          Section 7.15 Fiscal Year.
          The Administrative Borrower shall not change its fiscal year-end to a
date other than December 31.
ARTICLE VIII
EVENTS OF DEFAULT
          Section 8.1 Events of Default.
          Each of the following events shall be an Event of Default:
     (a) the Borrowers shall fail to pay any principal of any Loan or any
Reimbursement Obligation when the same becomes due and payable; or
     (b) the Borrowers shall fail to pay any interest on any Loan or
Reimbursement Obligation, any fee under any of the Loan Documents or any other
Obligation (other than one referred to in clause (a) above) and such non-payment
continues for a period of five calendar days after the due date therefor; or
     (c) any representation or warranty made or deemed made by any Loan Party in
any Loan Document or by any Loan Party (or any of its officers) in connection
with

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any Loan Document shall prove to have been incorrect in any material respect
when made or deemed made; or
     (d) any Loan Party shall fail to perform or observe any term, covenant or
agreement contained in Article V, Section 6.1(e), Section 6.1(i)(i), Section 6.2
(which, with respect to any Person other than the Administrative Borrower,
continues for a period of ten Business Days), Section 6.11, Section 6.15 (which
continues for a period of ten Business Days), Section 6.18, Section 8.3 or
Article VII.
     (e) any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or in any other Loan Document,
if such failure shall remain unremedied for 30 days after the earlier of (x) the
date on which a Responsible Officer of any Loan Party obtains actual knowledge
of such default and (y) the date on which written notice thereof shall have been
given to the Administrative Borrower by the Administrative Agent or any Lender;
or
     (f) (i) the Administrative Borrower or any of its Restricted Subsidiaries
shall fail to make any payment on any Indebtedness (other than the Obligations)
of the Administrative Borrower or any such Restricted Subsidiary, and in each
such case, such failure relates to Indebtedness having a principal amount of
$10,000,000 or more, when the same becomes due and payable beyond any applicable
grace or cure period (and after giving effect to any amendments or waivers
thereof) (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise); or (ii) any other event shall occur or condition shall
exist under any agreement or instrument relating to any Indebtedness of the
Administrative Borrower or any of its Restricted Subsidiaries having a principal
amount of $10,000,000 or more, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness
beyond any applicable grace or cure period (and after giving effect to any
amendments or waivers thereof); or (iii) any Indebtedness of the Administrative
Borrower and any of its Restricted Subsidiaries having a principal amount of
$10,000,000 or more shall become or be declared to be due and payable, or be
required to be prepaid, defeased, redeemed or repurchased (other than by a
regularly scheduled required prepayment) or require an offer to prepay, defease,
redeem or repurchase such Indebtedness to be made, prior to the stated maturity
thereof; or
     (g) (i) the Administrative Borrower or any of its Restricted Subsidiaries
shall generally not pay its debts as such debts become due, (ii) the
Administrative Borrower or any of its Restricted Subsidiaries shall admit in
writing its inability to pay its debts generally or shall make a general
assignment for the benefit of creditors, (iii) any proceeding shall be
instituted by or against the Administrative Borrower or any of its Restricted
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any Requirement of Law relating
to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a custodian, receiver,
trustee or other similar official for it or for any substantial part of its
property; provided, however, in the case of any such proceedings instituted
against

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the Administrative Borrower or any of its Restricted Subsidiaries (but not
instituted by the Administrative Borrower or any of its Restricted
Subsidiaries), either such proceedings shall remain undismissed or unstayed for
a period of 30 days or any of the actions sought in such proceedings shall
occur, or (iv) the Administrative Borrower or any of its Restricted Subsidiaries
shall take any corporate action to authorize any of the actions set forth above
in clauses (i), (ii) and (iii) of this clause (g); or
     (h) (i) any final judgment or order (or other similar process) involving,
in any single case or in the aggregate, an amount in excess of $10,000,000 (to
the extent not covered by insurance by a nationally recognized insurer that has
not denied or disclaimed responsibility or a third party indemnification
agreement as to which the indemnifying party has not denied or disclaimed
responsibility), or that could reasonably be expected to have a Material Adverse
Effect, shall be rendered against one or more of the Administrative Borrower and
its Restricted Subsidiaries by a court having jurisdiction, and such judgment or
order shall continue unsatisfied and in effect for a period of thirty days
without being vacated, discharged, satisfied, or stayed or bonded pending
appeal, or enforcement proceedings shall have been commenced by any creditor
upon such judgment or order, or (ii) one or more of the Administrative Borrower
and its Restricted Subsidiaries shall be party to a settlement agreement
tantamount to such a judgment (to the extent not covered by insurance by a
nationally recognized insurer that has not denied or disclaimed responsibility)
that could reasonably be expected to have a Material Adverse Effect; or
     (i) an ERISA Event shall occur and the amount of all liabilities and
deficiencies resulting therefrom that are or are reasonably likely to be imposed
on the Administrative Borrower, any Restricted Subsidiary of the Administrative
Borrower or any ERISA Affiliate, whether or not assessed, exceeds $5,000,000 in
the aggregate; or
     (j) any material provision of this Agreement, any Collateral Document or
any other Loan Document shall for any reason cease to be valid and binding on,
or enforceable against, any Loan Party thereto, or any Lien granted under any
Collateral Document (other than with respect to items of Collateral which, taken
as a whole, are not material relative to the Collateral taken as a whole) shall
cease to be enforceable and of the same effect and priority purported to be
created thereby or any Loan Party shall so state in writing; or
     (k) there shall occur any Change of Control; or
     (l) one or more of the Administrative Borrower and its Restricted
Subsidiaries shall have entered into one or more consent or settlement decrees
or agreements or similar arrangements with a Governmental Authority or one or
more judgments, orders, decrees or similar actions shall have been entered
against one or more of the Administrative Borrower and its Restricted
Subsidiaries based on or arising from the violation of or pursuant to any
Environmental Law, or the generation, storage, transportation, treatment,
disposal or Release of any Contaminant and, in connection with all the
foregoing, the Administrative Borrower and its Restricted Subsidiaries are
likely to incur environmental liabilities and costs in excess of $15,000,000 in
the aggregate.

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          Section 8.2 Remedies.
          During the continuance of any Event of Default, the Administrative
Agent may, and at the request of the Requisite Lenders shall, by written notice
to the Administrative Borrower (a) declare that all or any portion of the
Revolving Credit Commitments be terminated, whereupon the obligation of each
Lender to make any Loan and each Issuer to Issue any Letter of Credit shall
immediately be decreased or terminate, as the case may be, and (b) declare the
Loans, all interest thereon and all other amounts and Obligations payable under
this Agreement to be forthwith due and payable, whereupon the Loans, all such
interest and all such amounts and Obligations shall immediately become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrowers;
provided, however, that upon the occurrence of the Events of Default specified
in clauses (ii), (iii) or (iv) of Section 8.1(g), the Revolving Credit
Commitments of each Lender to make Loans and the commitments of each Lender and
Issuer to Issue or participate in Letters of Credit shall each automatically be
terminated and the Loans, all such interest and all such amounts and Obligations
shall automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrowers.
          Section 8.3 Actions in Respect of Letters of Credit.
          If at any time the Revolving Credit Commitments terminate while any
Letters of Credit are outstanding or any Event of Default shall have occurred
and be continuing, the Borrowers shall (x) within two Business Days after the
occurrence thereof, pay to the Administrative Agent in immediately available
funds at the Administrative Agent’s office referred to in Section 10.8, for
deposit in a cash collateral account, an amount equal to 102.5% of the sum of
all outstanding Letter of Credit Obligations or (y) if the Requisite Lenders
consent thereto, within such period as the Requisite Lenders shall specify, make
such other arrangements in respect of outstanding Letters of Credit as shall be
acceptable to the Requisite Lenders. Amounts held in such cash collateral
account shall be invested at the Administrative Borrower’s direction in cash or
U.S. Treasury securities and shall be applied by the Administrative Agent to the
payment of Reimbursement Obligations. The unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied in accordance with clause (f) of Section 2.12. The Administrative Agent
shall promptly give notice of any such application; provided, however, that the
failure to give such written notice shall not invalidate any such application.
Promptly after all such Letters of Credit shall have expired or been fully drawn
upon and all other obligations of the Borrowers hereunder and under the Notes
shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Borrowers.
          Section 8.4 Rescission.
          If at any time after termination of the Revolving Credit Commitments
and/or acceleration of the maturity of the Loans, the Borrowers shall pay all
arrears of interest and all payments on account of principal of the Loans and
Reimbursement Obligations that shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified herein) and all Events of Default and

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Defaults (other than non-payment of principal of and accrued interest on the
Loans due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to Section 10.1, then upon the written consent of the Requisite
Lenders and written notice to the Administrative Borrower, the termination of
the Revolving Credit Commitments and/or the acceleration and their consequences
may be rescinded and annulled; provided, however, that such action shall not
affect any subsequent Event of Default or Default or impair any right or remedy
consequent thereon. The provisions of the preceding sentence are intended merely
to bind the Lenders and the Issuers to a decision that may be made at the
election of the Requisite Lenders; and such provisions are not intended to
benefit the Borrowers and do not give the Borrowers the right to require the
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are met.
ARTICLE IX
THE ADMINISTRATIVE AGENT
          Section 9.1 Authorization and Action.
          (a) Each Lender and each Issuer hereby appoints CNAI as the
Administrative Agent hereunder and each Lender and each Issuer authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Administrative Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limiting the foregoing, each Lender
and each Issuer hereby authorizes the Administrative Agent to execute and
deliver, and to perform its obligations under, each of the Loan Documents to
which the Administrative Agent is a party, act as agent for purposes of
perfection under applicable law, and to exercise all rights, powers and remedies
that the Administrative Agent may have under such Loan Documents pursuant to
which the Administrative Agent is acting as agent for the Lenders and the
Issuers.
          (b) As to any matters not expressly provided for by this Agreement and
the other Loan Documents (including enforcement or collection), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite Lenders, and such instructions shall be binding upon all Lenders
and each Issuer; provided, however, that the Administrative Agent shall not be
required to take any action that (i) the Administrative Agent in good faith
believes exposes it to personal liability unless the Administrative Agent
receives an indemnification satisfactory to it from the Lenders and the Issuers
with respect to such action or (ii) is contrary to this Agreement or applicable
law. The Administrative Agent agrees to give to each Lender and each Issuer
prompt notice of each notice given to it by any Loan Party pursuant to the terms
of this Agreement or the other Loan Documents.
          (c) In performing its functions and duties hereunder and under the
other Loan Documents, the Administrative Agent is acting solely on behalf of the
Lenders and the Issuers and its duties are entirely administrative in nature.
The Administrative Agent does not assume and shall not be deemed to have assumed
any obligation other than as expressly set forth herein

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and in the other Loan Documents or any other relationship as the agent,
fiduciary or trustee of or for any Lender, Issuer or holder of any other
Obligation. The Administrative Agent may perform any of its duties under any
Loan Document by or through its agents (which shall include, without limitation,
any third party mortgage servicers) or employees.
     Section 9.2 Administrative Agent’s Reliance, Etc.
     None of the Administrative Agent, any of its Affiliates or any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it, him, her or them under or in
connection with this Agreement or the other Loan Documents, except for its, his,
her or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Administrative Agent (a) may treat the payee of any Revolving
Credit Note as its holder until such Revolving Credit Note has been assigned in
accordance with Section 10.2, (b) may rely on the Register to the extent set
forth in Section 10.2(c), (c) may consult with legal counsel (including counsel
to the Administrative Borrower or any other Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts, (d) makes no warranty or
representation to any Lender or Issuer and shall not be responsible to any
Lender or Issuer for any statements, warranties or representations made by or on
behalf of any Borrower or any of its Subsidiaries in or in connection with this
Agreement or any other Loan Document, (e) shall not have any duty to ascertain
or to inquire either as to the performance or observance of any terms, covenant
or condition of this Agreement or any other Loan Document, as to the financial
condition of any Loan Party or as to the existence or possible existence of any
Default or Event of Default; (f) shall not be responsible to any Lender or
Issuer for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the attachment, perfection or priority of any Lien
created or purported to be created under or in connection with, this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; and (g) shall incur no liability under or in respect of this
Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be a telecopy or
electronic mail) or any telephone message believed by it to be genuine and
signed or sent by the proper party or parties.
     Section 9.3 The Administrative Agent Individually.
     (a) The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity. Such Person and its Affiliates may
accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Borrowers or any Subsidiary or other Affiliate thereof as if such Person
were not the Administrative Agent hereunder and without any duty to account
therefor to the Lenders.
     (b) Each Lender and each Issuer understands that the Person serving as
Administrative Agent, acting in its individual capacity, and its Affiliates
(collectively, the “Agent’s

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Group”) are engaged in a wide range of financial services and businesses
(including investment management, financing, securities trading, corporate and
investment banking and research) (such services and businesses are collectively
referred to in this Section 9.3 as “Activities”) and may engage in the
Activities with or on behalf of one or more of the Loan Parties or their
respective Affiliates. Furthermore, the Agent’s Group may, in undertaking the
Activities, engage in trading in financial products or undertake other
investment businesses for its own account or on behalf of others (including the
Loan Parties and their Affiliates and including holding, for its own account or
on behalf of others, equity, debt and similar positions in any of the Borrowers,
another Loan Party or their respective Affiliates), including trading in or
holding long, short or derivative positions in securities, loans or other
financial products of one or more of the Loan Parties or their Affiliates. Each
Lender and each Issuer understands and agrees that in engaging in the
Activities, the Agent’s Group may receive or otherwise obtain information
concerning the Loan Parties or their Affiliates (including information
concerning the ability of the Loan Parties to perform their respective
Obligations hereunder and under the other Loan Documents) which information may
not be available to any of the Lenders that are not members of the Agent’s
Group. None of the Administrative Agent nor any member of the Agent’s Group
shall have any duty to disclose to any Lender or use on behalf of the Lenders,
and shall not be liable for the failure to so disclose or use, any information
whatsoever about or derived from the Activities or otherwise (including any
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any Loan Party or any Affiliate of
any Loan Party) or to account for any revenue or profits obtained in connection
with the Activities, except that the Administrative Agent shall deliver or
otherwise make available to each Lender such documents as are expressly required
by any Loan Document to be transmitted by the Administrative Agent to the
Lenders.
          (c) Each Lender and each Issuer further understands that there may be
situations where members of the Agent’s Group or their respective customers
(including the Loan Parties and their Affiliates) either now have or may in the
future have interests or take actions that may conflict with the interests of
any one or more of the Lenders (including the interests of the Lenders hereunder
and under the other Loan Documents). Each Lender and each Issuer agrees that no
member of the Agent’s Group is or shall be required to restrict its activities
as a result of the Person serving as Administrative Agent being a member of the
Agent’s Group, and that each member of the Agent’s Group may undertake any
Activities without further consultation with or notification to any Lender or
any Issuer. None of (i) this Agreement nor any other Loan Document, (ii) the
receipt by the Agent’s Group of information (including Information) concerning
the Loan Parties or their Affiliates (including information concerning the
ability of the Loan Parties to perform their respective Obligations hereunder
and under the other Loan Documents) nor (iii) any other matter shall give rise
to any fiduciary, equitable or contractual duties (including without limitation
any duty of trust or confidence) owing by the Administrative Agent or any member
of the Agent’s Group to any Lender including any such duty that would prevent or
restrict the Agent’s Group from acting on behalf of customers (including the
Loan Parties or their Affiliates) or for its own account.

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          Section 9.4 Lender Credit Decision.
          (a) Each Lender confirms to the Administrative Agent, each other
Lender and each of their respective Affiliates and their and their Affiliates’
respective partners, directors, officers, employees, agents, fund managers and
advisors (collectively, such Lender’s “Related Parties”) that it (i) possesses
(individually or through its Related Parties) such knowledge and experience in
financial and business matters that it is capable, without reliance on the
Administrative Agent, any other Lender or any of their respective Related
Parties, of evaluating the merits and risks (including tax, legal, regulatory,
credit, accounting and other financial matters) of (x) being party to this
Agreement, (y) making Loans and other extensions of credit hereunder and under
the other Loan Documents and (z) in taking or not taking actions hereunder and
thereunder, (ii) is financially able to bear such risks and (iii) has determined
that being party to this Agreement and making Loans and other extensions of
credit hereunder and under the other Loan Documents is suitable and appropriate
for it.
          (b) Each Lender acknowledges that (i) it is solely responsible for
making its own independent appraisal and investigation of all risks arising
under or in connection with this Agreement and the other Loan Documents, (ii) it
has, independently and without reliance upon the Administrative Agent, any other
Lender or any of their respective Related Parties, made its own appraisal and
investigation of all risks associated with, and its own credit analysis and
decision to enter into, this Agreement based on such documents and information,
as it has deemed appropriate and (iii) it will, independently and without
reliance upon the Administrative Agent, any other Lender or any of their
respective Related Parties, continue to be solely responsible for making its own
appraisal and investigation of all risks arising under or in connection with,
and its own credit analysis and decision to take or not take action under, this
Agreement and the other Loan Documents based on such documents and information
as it shall from time to time deem appropriate, which may include, in each case:
     (i) the financial condition, status and capitalization of the Borrowers and
each other Loan Party;
     (ii) the legality, validity, effectiveness, adequacy or enforceability of
this Agreement and each other Loan Document and any other agreement, arrangement
or document to which such Lender or any other Person is a party, entered into,
made or executed in anticipation of, under or in connection with any Loan
Document;
     (iii) determining compliance or non-compliance with any condition hereunder
to the making of a Loan or the issuance of a Letter of Credit and the form and
substance of all evidence delivered in connection with establishing the
satisfaction of each such condition;
     (iv) the adequacy, accuracy and/or completeness of the Information
Memorandum and any other information delivered by the Administrative Agent, any
other Lender or by any of their respective Related Parties under or in
connection with this Agreement or any other Loan Document, the transactions
contemplated hereby and thereby or any other agreement, arrangement or document
to which such Lender or any other Person is a

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party, entered into, made or executed in anticipation of, under or in connection
with any Loan Document.
          (c) Notwithstanding anything herein to the contrary, each Lender also
acknowledges that the Lien and security interest granted to the Administrative
Agent pursuant to the Collateral Documents and the exercise of any right or
remedy by the Administrative Agent hereunder or thereunder are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of the Intercreditor Agreement and this Agreement or any other
Collateral Document, the terms of the Intercreditor Agreement shall govern and
control.
          Section 9.5 Indemnification.
          Each Lender agrees to indemnify the Administrative Agent and each of
its Affiliates, and each of their respective directors, officers, employees,
agents and advisors (to the extent not reimbursed by the Borrowers), from and
against such Lender’s aggregate Ratable Portion of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements (including reasonable fees, expenses and
disbursements of financial and legal advisors) of any kind or nature whatsoever
that may be imposed on, incurred by, or asserted against, the Administrative
Agent or any of its Affiliates, directors, officers, employees, agents and
advisors in any way relating to or arising out of this Agreement or the other
Loan Documents or any action taken or omitted by the Administrative Agent under
this Agreement or the other Loan Documents; provided, however, that no Lender
shall be liable to the Administrative Agent and any of its Affiliates, and any
of their respective directors, officers, employees, agents and advisors for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such
Administrative Agent’s, Affiliates’, directors’, officers’, employees’, agents’
or advisors’ gross negligence or willful misconduct. Without limiting the
foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
reasonable fees, expenses and disbursements of financial and legal advisors)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of its rights or responsibilities under, this Agreement or the
other Loan Documents, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrowers or another Loan Party.
          Section 9.6 Successor Administrative Agent.
          The Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and the Administrative Borrower. Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent’s giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, selected from among the
Lenders. In either case, such appointment shall be subject to the prior written
approval of the Administrative Borrower (which

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approval may not be unreasonably withheld and shall not be required upon the
occurrence and during the continuance of an Event of Default). Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. Prior to any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the retiring Administrative Agent shall take such action
as may be reasonably necessary to assign to the successor Administrative Agent
its rights as Administrative Agent under the Loan Documents. After such
resignation, the retiring Administrative Agent shall continue to have the
benefit of this Article IX as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents. Anything herein to the contrary notwithstanding, the Administrative
Agent shall resign if at any time the Administrative Agent is not a Lender
having a Revolving Credit Commitment of at least $10,000,000 (or such ratably
lesser amount if the Revolving Credit Commitments have been reduced in
accordance with this Agreement).
ARTICLE X
MISCELLANEOUS
          Section 10.1 Amendments, Waivers, Etc.
          (a) No amendment or waiver of any provision of this Agreement or any
other Loan Document nor consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Requisite Lenders (or by the Administrative Agent with the consent of the
Requisite Lenders) and, in the case of any amendment, by the Borrowers, and then
any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by each Lender affected
thereby, in addition to the Requisite Lenders, do any of the following:
     (i) increase the Revolving Credit Commitment of such Lender or subject such
Lender to any additional obligation; provided, however, that, except as provided
in Section 2.18, any such increase in the Revolving Credit Commitment of such
Lender shall require the consent of all Lenders;
     (ii) extend the then scheduled final maturity of any Loan owing to such
Lender, except as provided in Section 2.17;
     (iii) reduce the principal amount of any Loan or Reimbursement Obligation
owing to such Lender (other than by the payment or prepayment thereof);
     (iv) reduce the rate of interest on any Loan or Reimbursement Obligations
outstanding to such Lender or any fee payable hereunder to such Lender;

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     (v) postpone any scheduled date fixed for payment of such interest or fees
owing to such Lender;
     (vi) change the aggregate Ratable Portions of Lenders required for any or
all Lenders to take any action hereunder;
     (vii) release any Borrower from its payment obligation to such Lender under
this Agreement or the Revolving Credit Notes owing to such Lender (if any) or
release any Guarantor from its obligations under the Guaranty except in
connection with sale or other disposition of a Subsidiary Borrower or a
Guarantor (or all or substantially all of the assets thereof) or as otherwise
specifically provided herein; or
     (viii) amend this Section 10.1 or the definition of the term “Requisite
Lenders”;
and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent, the Issuer or the Swing Loan
Lender, as the case may be, in addition to the Lenders required above to take
such action, affect the rights or duties of the Administrative Agent, the Issuer
or the Swing Loan Lender, as the case may be, under this Agreement or the other
Loan Documents.
          (b) The Administrative Agent may, but shall have no obligation to,
with the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on any Borrower in any case shall entitle
such Borrower to any other or further notice or demand in similar or other
circumstances.
          (c) If, in connection with any proposed amendment, modification,
waiver or termination (a “Proposed Change”) requiring the consent of all
affected Lenders, the consent of Requisite Lenders is obtained, but the consent
of other Lenders whose consent is required is not obtained (any such Lender
whose consent is not obtained as described in this Section 10.1 being referred
to as a “Non-Consenting Lender”), then, so long as the Lender that is acting as
the Administrative Agent is not a Non-Consenting Lender, at the Administrative
Borrower’s request, each other Lender shall have a right to purchase its pro
rata share of such Non-Consenting Lender’s Revolving Credit Commitment and
Revolving Credit Outstandings, and if such Lenders do not purchase all of such
Non-Consenting Lender’s Revolving Credit Commitment or Revolving Credit
Outstandings, an Eligible Assignee acceptable to the Administrative Agent shall
have the right with the Administrative Agent’s consent and in the Administrative
Agent’s sole discretion (but shall have no obligation) to purchase from such
Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon
the Administrative Agent’s request, sell and assign to the Lender acting as the
Administrative Agent or such Eligible Assignee, all of the Revolving Credit
Commitments, and Revolving Credit Outstandings of such Non-Consenting Lender for
an amount equal to the principal balance of all Loans held by the Non-Consenting
Lender and all accrued interest and fees with respect thereto and all other
amounts through the date of sale, provided, however, that such purchase and sale
shall not be effective until the Administrative Agent shall have received from
such Eligible Assignee an agreement in form and substance satisfactory

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to the Administrative Agent and the Administrative Borrower whereby such
Eligible Assignee shall agree to be bound by the terms hereof. Each Lender
agrees that, if it becomes a Non-Consenting Lender, it shall execute and deliver
to the Administrative Agent an Assignment and Acceptance to evidence such sale
and purchase and shall deliver to the Administrative Agent any Revolving Credit
Note (if the assigning Lender’s Loans are evidenced by a Revolving Credit Note)
subject to such Assignment and Acceptance; provided, however, that the failure
of any Non-Consenting Lender to execute an Assignment and Acceptance shall not
render such sale and purchase (and the corresponding assignment) invalid.
          Section 10.2 Assignments and Participations.
          (a) Each Lender may sell, transfer, negotiate or assign to one or more
Eligible Assignees all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Revolving
Loans, the Swing Loans and the Letters of Credit); provided, however, that
(i) if any such assignment shall be of the assigning Lender’s Revolving Credit
Outstandings and Revolving Credit Commitments, such assignment shall cover the
same percentage of such Lender’s Revolving Credit Outstandings and Revolving
Credit Commitments, (ii) the aggregate amount being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event (if less than the Assignor’s
entire interest) be less than $5,000,000 or an integral multiple of $1,000,000
in excess thereof, except, (A) with the consent of the Administrative Agent or
(B) if such assignment is being made to a Lender or an Affiliate or Approved
Fund of such Lender, and (iii) if such Eligible Assignee is not, prior to the
date of such assignment, a Lender or an Affiliate or Approved Fund of a Lender,
such assignment shall be subject to the prior consent of the Administrative
Agent, the Swing Loan Lender and each Issuer (which consent shall not be
unreasonably withheld or delayed).
          (b) The parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording, an Assignment and
Acceptance, together with any Revolving Credit Note (if the assigning Lender’s
Loans are evidenced by a Revolving Credit Note) subject to such assignment. In
addition, any Lender or Eligible Assignee assuming a Revolving Credit Commitment
in connection with a Revolving Credit Facility Increase shall execute an
Assumption Agreement in accordance with Section 2.18. Upon such execution,
delivery, acceptance and recording of any Assignment and Acceptance or
Assumption Agreement, as the case may be, and, other than in respect of
assignment made pursuant to Section 2.16 and Section 10.1(c), the receipt by the
Administrative Agent from the assignee of an assignment/assumption fee in the
amount of $3,500 (with only one such fee payable in connection with simultaneous
assignments to or by two or more separate Approved Funds), then from and after
the effective date specified in such Assignment and Acceptance or Assumption
Agreement, as the case may be, (i) the assignee thereunder shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance
or assumed by such assuming party pursuant to such Assumption Agreement, have
the rights and obligations of a Lender, and, in the case of an assignment, if
such Lender were an Issuer, of such Issuer hereunder and thereunder, and
(ii) the assignor under an Assignment and Acceptance shall, to the extent that
rights and obligations under this Agreement have been assigned by it pursuant to
such Assignment and Acceptance,

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relinquish its rights (except for those surviving the payment in full of the
Obligations) and be released from its obligations under the Loan Documents,
other than those relating to events or circumstances occurring prior to such
assignment (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender’s rights and obligations under the Loan
Documents, such Lender shall cease to be a party hereto).
          (c) The Administrative Agent shall maintain at its address referred to
in Section 10.8 a copy of each Assignment and Acceptance and each Assumption
Agreement delivered to and accepted by it and a register for the recording of
the names and addresses of the Lenders and the Revolving Credit Commitments of
and principal amount of and accrued and unpaid interest on the Loans and Letter
of Credit Obligations owing to each Lender from time to time (the “Register”).
Any assignment pursuant to this Section 10.2 shall not be effective until such
assignment is recorded in the Register. The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Loan
Parties, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as a Lender for all purposes of this Agreement.
The Register shall be available for inspection by the Administrative Borrower,
the Administrative Agent or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
          (d) Notwithstanding anything to the contrary contained in clause
(b) above, the Loans (including the Revolving Credit Notes evidencing such
Loans) are registered obligations and the right, title, and interest of the
Lenders and their assignees in and to such Loans shall be transferable only upon
notation of such transfer in the Register. A Revolving Credit Note shall only
evidence the Lender’s or an assignee’s right, title and interest in and to the
related Loan, and in no event is any such Revolving Credit Note to be considered
a bearer instrument or obligation. This Section 10.2 shall be construed so that
the Loans are at all times maintained in “registered form” within the meaning of
Sections 163(f), 871(h)(2) and 881(c)(2) of the Code or such regulations. Solely
for purposes of this and for tax purposes only, the Administrative Agent shall
act as the Borrowers’ agent for purposes of maintaining such notations of
transfer in the Register.
          (e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee or an Assumption Agreement executed by the
Administrative Borrower and a Lender or an Eligible Assignee, the Administrative
Agent shall, if such Assignment and Acceptance or Assumption Agreement has been
completed, (i) accept such Assignment and Acceptance or Assumption Agreement,
(ii) record the information contained therein in the Register and (iii) in the
case of an Assignment and Acceptance, give prompt notice thereof to the
Administrative Borrower. Within five Business Days after its receipt of such
notice, the Borrowers at their own expense, shall, if requested by such
assignee, execute and deliver to the Administrative Agent, new Revolving Credit
Notes to the order of such assignee in an amount equal to the Revolving Credit
Commitments assumed by it pursuant to such Assignment and Acceptance or
Assumption Agreement and, if the assigning Lender, in the case of an Assignment
and Acceptance, has surrendered any Revolving Credit Note for exchange in
connection with the assignment and has retained Revolving Credit Commitments
hereunder, new Revolving Credit Notes to the order of the assigning Lender in an
amount equal to the Revolving Credit

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Commitments retained by it hereunder. Such new Revolving Credit Notes shall be
dated the same date as the surrendered Revolving Credit Notes and be in
substantially the form of Exhibit C.
          (f) In addition to the other assignment rights provided in this
Section 10.2, each Lender may collaterally assign, as collateral or otherwise,
any of its rights under this Agreement, whether now owned or hereafter acquired
(including rights to payments of principal or interest on the Loans), to (x) any
Federal Reserve Bank pursuant to Regulation A of the Federal Reserve Board
without notice to or consent of the Borrowers or (y) in the case of any Lender
that is a Fund, any holders of obligations owed or Securities issued by such
Lender as security for such obligations or Securities or any trustee for, or
other representative of, such holders, and this Section 10.1 shall not apply to
any such pledge or grant of a security interest; provided, however, that no such
assignment shall release the assigning Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
          (g) Each Lender may sell participations to one or more Persons in or
to all or a portion of its rights and obligations under the Loan Documents
(including all its rights and obligations with respect to the Revolving Loans
and Letters of Credit). The terms of such participation shall not, in any event,
require the participant’s consent to any amendments, waivers or other
modifications of any provision of any Loan Documents, the consent to any
departure by any Loan Party therefrom, or to the exercising or refraining from
exercising any powers or rights such Lender may have under or in respect of the
Loan Documents (including the right to enforce the obligations of the Loan
Parties), except if any such amendment, waiver or other modification or consent
would reduce the amount, or postpone any date fixed for, any amount (whether of
principal, interest or fees) payable to such participant under the Loan
Documents, to which such participant would otherwise be entitled under such
participation. In the event of the sale of any participation by any Lender,
(w) such Lender’s obligations under the Loan Documents shall remain unchanged,
(x) such Lender shall remain solely responsible to the other parties for the
performance of such obligations, (y) such Lender shall remain the holder of such
Obligations for all purposes of this Agreement, and (z) the Borrowers, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Each Lender that sells a participation shall,
acting solely for this purpose as a non-fiduciary agent of the Borrowers,
maintain a register on which it enters the name and address of each participant
and the principal amounts (and accrued and unpaid interest) of each
participant’s interest in the Loans or Letters of Credit held by it (the
“Participant Register”). 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 Loan or other
obligation hereunder and as the owner thereof for all purposes of this Agreement
notwithstanding any notice to the contrary. Each participant shall be entitled
to the benefits of Section 2.14 and Section 2.15 and of Section 2.13(c) as if it
were a Lender; provided, however, that anything herein to the contrary
notwithstanding, the Borrowers shall not, at any time, be obligated to make any
payment under Section 2.14, Section 2.15 or Section 2.13(c) to the participant
in the rights and obligations of any Lender (together with such Lender) in
excess of the amount the Borrowers would have been obligated to pay to such
Lender in respect of such interest had such participation not been sold unless
the sale of the participation is made with the Administrative Borrower’s prior
written consent or the right to a greater

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payment results from a change in law (including any statute, treaty or
regulation) after such participant becomes a participant.
          (h) Any Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Administrative Borrower, the Administrative Agent, such
Issuer and such Eligible Assignee. If any Issuer ceases to be a Lender hereunder
by virtue of any assignment made pursuant to this Section 10.2, then, as of the
effective date of such cessation, such Issuer’s obligations to Issue Letters of
Credit pursuant to Section 2.4 shall terminate and such Issuer shall be an
Issuer hereunder only with respect to outstanding Letters of Credit issued prior
to such date.
          Section 10.3 Costs and Expenses.
          (a) The Borrowers agree within 10 days of written demand to pay, or
reimburse the Administrative Agent for, all of the Administrative Agent’s
reasonable internal and external audit, legal, appraisal, valuation, filing,
document duplication and reproduction and investigation expenses and for all
other reasonable out-of-pocket costs and expenses of every type and nature
(including, without limitation, after receipt of invoice documentation, the
reasonable fees, expenses and disbursements of the Administrative Agent’s
external counsel, local legal counsel, auditors, accountants, appraisers,
printers, insurance and environmental advisors, financial advisors and other
consultants and agents) incurred by the Administrative Agent in connection with
any of the following: (i) the Administrative Agent’s audit and investigation of
the Administrative Borrower and its Subsidiaries in connection with the
preparation, negotiation or execution of any Loan Document, (ii) the
preparation, negotiation, execution or interpretation of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any conditions set forth in Article III), any Loan Document or any proposal
letter or commitment letter issued in connection therewith or the making of the
Loans hereunder, (iii) the ongoing administration of this Agreement and the
Loans, including consultation with attorneys in connection therewith and with
respect to the Administrative Agent’s rights and responsibilities hereunder and
under the other Loan Documents, (iv) the protection, collection or enforcement
of any Obligation or the enforcement of any Loan Document, (v) the commencement,
defense or intervention in any court proceeding relating in any way to the
Obligations, any Loan Party, any of the Administrative Borrower’s Subsidiaries,
this Agreement or any other Loan Document, (vi) the response to, and preparation
for, any subpoena or request for document production with which the
Administrative Agent is served or deposition or other proceeding in which the
Administrative Agent is called to testify, in each case relating in any way to
the Obligations, any Loan Party, any of the Administrative Borrower’s
Subsidiaries, this Agreement or any other Loan Documents or (vii) any amendment,
consent, waiver, assignment, restatement, or supplement to any Loan Document or
the preparation, negotiation, and execution of the same.
          (b) The Borrowers further agree to pay or reimburse the Administrative
Agent and each of the Lenders and Issuers within 10 days of written demand for
all out-of-pocket costs and expenses, including, without limitation, reasonable
attorneys’ fees (including allocated costs of internal counsel and costs of
settlement), incurred by the Administrative Agent, such Lenders or Issuers in
connection with any of the following: (i) in enforcing any Loan Document or
Obligation or any security therefor or exercising or enforcing any other right
or remedy available by

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reason of an Event of Default, (ii) in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
“work-out” or in any insolvency or bankruptcy proceeding, (iii) in commencing,
defending or intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding relating to the
Obligations, any Loan Party, any of the Administrative Borrower’s Subsidiaries
and related to or arising out of the transactions contemplated hereby or by any
other Loan Document or (iv) in taking any other action in or with respect to any
suit or proceeding (bankruptcy or otherwise) described in clause (i), (ii) or
(iii) above.
          Section 10.4 Indemnities.
          (a) The Borrowers agree to indemnify and hold harmless the
Administrative Agent, each Arranger, each Lender and each of their respective
Affiliates, and each of the directors, officers, employees, agents,
representatives, attorneys, consultants and advisors of or to any of the
foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any condition set forth in Article III (each such
Person being an “Indemnitee”) from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses of any kind or nature (including fees, disbursements
and expenses of financial and legal advisors to any such Indemnitee) that may be
imposed on, incurred by or asserted against any such Indemnitee in connection
with or arising out of any investigation, litigation or proceeding, whether or
not any such Indemnitee is a party thereto, whether direct, indirect, or
consequential and whether based on any federal, state or local law or other
statutory regulation, securities or commercial law or regulation, or under
common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of this Agreement, any other Loan Document, any
Obligation, any Letter of Credit, the Disclosure Documents, the Revolving Credit
Notes or any act, event or transaction related or attendant to any thereof, or
the use or intended use of the proceeds of the Loans or Letters of Credit or in
connection with any investigation of any potential matter covered hereby
(collectively, the “Indemnified Matters”); provided, however, that the Borrowers
shall not have any obligation under this Section 10.4 to an Indemnitee with
respect to any Indemnified Matter caused by or resulting primarily from the
gross negligence or willful misconduct of that Indemnitee, as determined by a
court of competent jurisdiction in a final non-appealable judgment or order.
Without limiting the foregoing, Indemnified Matters include (i) all liabilities
and costs arising under any Environmental Law relating to or connected with the
past, present or future operations of the Administrative Borrower or any of its
Subsidiaries or damage to real or personal property or natural resources or harm
or injury alleged to have resulted from any Release of Contaminants; (ii) any
costs or liabilities incurred in connection with any Remedial Action concerning
the Administrative Borrower or any of its Subsidiaries; (iii) any costs or
liabilities incurred in connection with any Environmental Lien; and (iv) any
costs or liabilities incurred in connection with any other matter under any
Environmental Law, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (49 U.S.C. 9601 et seq.) as amended and
applicable state property transfer laws, except, with respect to those matters
referred to in clauses (i), (ii), (iii) and (iv) above, to the extent
attributable to the gross negligence or willful action of the Administrative
Agent, such Lender or such Issuer or any agent on behalf of the Administrative
Agent, such Lender or such Issuer. In the case of an investigation, litigation
or other proceeding to which the indemnity in this Section 10.4 applies, such
indemnity shall be effective whether or not such

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investigation, litigation or proceeding is brought by any Borrower, any of its
directors, securityholders or creditors, an Indemnitee or any other person, or
an Indemnitee is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated; provided that to the extent no conflict
exists, the Loan Parties shall only be obligated to reimburse fees and expenses
of one legal counsel for all Indemnified Persons in each relevant jurisdiction.
     (b) The Borrowers shall indemnify the Administrative Agent, the Lenders and
each Issuer for, and hold the Administrative Agent, the Lenders and each Issuer
harmless from and against, any and all claims for brokerage commissions, fees
and other compensation made against the Administrative Agent, the Lenders and
the Issuers for any broker, finder or consultant with respect to any agreement,
arrangement or understanding made by or on behalf of any Loan Party or any of
its Subsidiaries in connection with the transactions contemplated by this
Agreement.
     (c) The Administrative Borrower, at the request of any Indemnitee, shall
have the obligation to defend against such investigation, litigation or
proceeding or requested Remedial Action and the Administrative Borrower, in any
event, may participate in the defense thereof with legal counsel of the
Administrative Borrower’s choice. In the event that such Indemnitee requests the
Administrative Borrower to defend against such investigation, litigation or
proceeding or requested Remedial Action, the Administrative Borrower shall
promptly do so and such Indemnitee shall have the right to have legal counsel of
its choice participate in such defense. No action taken by legal counsel chosen
by such Indemnitee in defending against any such investigation, litigation or
proceeding or requested Remedial Action, shall vitiate or in any way impair the
Borrowers’ obligation and duty hereunder to indemnify and hold harmless such
Indemnitee.
     (d) The Borrowers agree that any indemnification or other protection
provided to any Indemnitee pursuant to this Agreement (including pursuant to
this Section 10.4) or any other Loan Document shall (i) survive payment in full
of the Obligations and (ii) inure to the benefit of any Person that was at any
time an Indemnitee under this Agreement or any other Loan Document.
     Section 10.5 Limitation of Liability.
     The Borrowers agree that no Indemnitee shall have any liability (whether in
contract, tort or otherwise) to any Loan Party or any of their respective
Subsidiaries or any of their respective equity holders or creditors for or in
connection with the transactions contemplated hereby and in the other Loan
Documents, except for direct damages (as opposed to special, indirect,
consequential or punitive damages (including, without limitation, any loss of
profits, business or anticipated savings)) determined in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnitee’s (or its officer’s, agent’s, consultant’s, director’s or employee’s)
gross negligence or willful misconduct. The Borrowers hereby waive, release and
agree (each for itself and on behalf of its Subsidiaries) not to sue upon any
such claim for any special, indirect, consequential or punitive damages, whether
or not accrued and whether or not known or suspected to exist in its favor.

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     Section 10.6 Right of Set-off.
Subject to the terms of the Intercreditor Agreement, upon the occurrence and
during the continuance of any Event of Default each Lender and each Affiliate of
a Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender or its Affiliates to or for the
credit or the account of any Borrower against any and all of the Obligations now
or hereafter existing whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and to the extent such
Obligations are matured or are owed to a branch office of such Lender or the
Issuer different from the branch or office holding such deposit or obligated on
such Indebtedness. Each Lender agrees promptly to notify the Administrative
Borrower after any such set-off and application made by such Lender or its
Affiliates; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
under this Section 10.6 are in addition to the other rights and remedies
(including other rights of set-off) that such Lender may have.
     Section 10.7 Sharing of Payments, Etc.
     (a) If any Lender obtains any payment (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) of the Loans owing to
it, any interest thereon, fees in respect thereof or amounts due pursuant to
Section 10.3 or Section 10.4 (other than payments pursuant to Section 2.14,
Section 2.15 or Section 2.16 in excess of its Ratable Portion of all payments of
such Obligations obtained by all the Lenders, such Lender (a “Purchasing
Lender”) shall forthwith purchase from the other Lenders (each, a “Selling
Lender”) such participations in their Loans or other Obligations as shall be
necessary to cause such Purchasing Lender to share the excess payment ratably
with each of them.
     (b) If all or any portion of any payment received by a Purchasing Lender is
thereafter recovered from such Purchasing Lender, such purchase from each
Selling Lender shall be rescinded and such Selling Lender shall repay to the
Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender’s ratable share (according to the
proportion of (i) the amount of such Selling Lender’s required repayment in
relation to (ii) the total amount so recovered from the Purchasing Lender) of
any interest or other amount paid or payable by the Purchasing Lender in respect
of the total amount so recovered.
     (c) The Borrowers agree that any Purchasing Lender so purchasing a
participation from a Selling Lender pursuant to this Section 10.7 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrowers in the amount of such
participation.

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          Section 10.8 Notices, Etc.
          All notices, demands, requests and other communications provided for
in this Agreement shall be given in writing, or by any telecommunication device
capable of creating a written record (including electronic mail), and addressed
to the party to be notified as follows:
     (a) if to any Borrower:
TOUSA, Inc.
4000 Hollywood Boulevard
Suite 500 N.
Hollywood, Florida 33021
Attention: Paul Berkowitz, Executive Vice President and Chief of Staff
Telecopy no: (954) 364-4010
E-Mail Address: pberkowitz@tousa.com
with a copy (which shall not constitute notice) to:
Kirkland & Ellis LLP
Citigroup Center
153 East 53rd Street
New York, New York 10022
Attention: Jason S. Kanner
Telecopy no: (212) 446-4902
E-Mail Address: jkanner@kirkland.com
     (b) if to any Lender, at its Domestic Lending Office specified opposite its
name on Schedule II or on the signature page of any applicable Assignment and
Acceptance;
     (c) if to any Issuer, at the address set forth under its name on
Schedule II; and
     (d) if to the Administrative Agent or the Swing Loan Lender:
Citicorp North America, Inc.
Two Penns Way, Suite 200
New Castle, Delaware 19720
Attention: David G. Maffett
Telecopy no: (212) 994-0961
E-Mail Address: david.g.maffett@citi.com
Citicorp North America, Inc.
388 Greenwich Street, 21st Floor
New York, New York 10013
Attention: David G. Maffett
Telecopy no: (212) 994-0961
E-Mail Address: david.g.maffett@citi.com

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with a copy (which shall not constitute notice) to:
Cahill Gordon & Reindel llp
80 Pine Street
New York, NY 10005
Attention: Michael E. Michetti and Ann Makich
Telephone: (212) 701-3000
Telecopy: (212) 269-5420
E-Mail Address: mmichetti@cahill.com and amakich@cahill.com
or at such other address as shall be notified in writing (x) in the case of any
Borrower, the Administrative Agent and the Swing Loan Lender to the other
parties and (y) in the case of all other parties, to the Administrative Borrower
and the Administrative Agent. All such notices and communications shall be
effective upon personal delivery (if delivered by hand, including any overnight
courier service), when deposited in the mails (if sent by mail), or when
properly transmitted (if sent by a telecommunications device or through the
Internet); provided, however, that notices and communications to the
Administrative Agent pursuant to Article II or IX shall not be effective until
received by the Administrative Agent.
          Section 10.9 No Waiver; Remedies.
          No failure on the part of any Lender, any Issuer or the Administrative
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
          Section 10.10 Binding Effect.
          This Agreement shall become effective when it shall have been executed
by the Borrowers and the Administrative Agent and when the Administrative Agent
shall have been notified by each Lender and Issuer that such Lender or Issuer
has executed it and thereafter shall be binding upon and inure to the benefit of
the Borrowers, the Administrative Agent and each Lender and Issuer and, in each
case, their respective successors and assigns, provided, however, that no
Borrower shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of each Lender.
          Section 10.11 Governing Law.
          This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.
          Section 10.12 Submission to Jurisdiction; Service of Process.
          (a) Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State of New York
sitting in the City of New York or of the United States of America for the
Southern District of New York, and, by

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execution and delivery of this Agreement, each Borrower hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including any objection to the laying of venue or based on
the grounds of forum non conveniens, that any of them may now or hereafter have
to the bringing of any such action or proceeding in such respective
jurisdictions.
          (b) Each Borrower irrevocably consents to the service of any and all
process in such action or proceeding arising out of or in connection with this
Agreement or any Loan Document by the mailing (by registered or certified mail,
postage prepaid) of copies of such process to an appointed process agent or the
Borrower at its address specified in Section 10.8. Each Borrower agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
          (c) Nothing contained in this Section 10.12 shall affect the right of
the Administrative Agent or any Lender to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against any
Borrower or any other Loan Party in any other jurisdiction.
          (d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
          Section 10.13 Waiver of Jury Trial.
          TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE ADMINISTRATIVE
AGENT, THE LENDERS, THE ISSUERS AND THE BORROWERS IRREVOCABLY WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT.
          Section 10.14 Section Titles.
          The section titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto, except when used to reference a
section. Any reference to the number of a clause, sub-clause or subsection
hereof immediately followed by a reference in parenthesis to the title of the
Section containing such clause, sub-clause or subsection is a reference to such
clause, sub-clause or subsection and not to the entire Section; provided,
however, that, in case of direct conflict between the reference to the title and
the reference to the number of such Section, the reference to the title shall
govern absent manifest error. If any reference to the number of a Section (but
not to any clause, sub-clause or subsection thereof) is followed immediately by
a reference

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in parentheses to the title of a Section, the title reference shall govern in
case of direct conflict absent manifest error.
          Section 10.15 Execution in Counterparts.
          This Agreement may be executed in any number of counterparts and by
different parties 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 agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are attached to the same document. Delivery of an executed signature page of
this Agreement by facsimile, .pdf or other electronic transmission shall be as
effective as delivery of a manually executed counterpart hereof. A set of the
copies of this Agreement signed by all parties shall be lodged with the
Administrative Borrower and the Administrative Agent.
          Section 10.16 Entire Agreement.
          This Agreement, together with all of the other Loan Documents and all
certificates and documents delivered hereunder or thereunder, embodies the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof.
          Section 10.17 Confidentiality.
          (a) None of the Administrative Agent or any Lender may disclose to any
Person any confidential, proprietary or non-public information of the
Administrative Borrower and its Subsidiaries furnished to the Administrative
Agent or the Lenders by the Administrative Borrower (such information being
referred to collectively herein as the “Borrower Information”), except that the
Administrative Agent and each of the Lenders may disclose Borrower Information
(i) to its and its Affiliates’ employees, officers, directors, agents and
advisors on a need to know basis (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Borrower Information and instructed to keep such Borrower Information
confidential on substantially the same terms as provided herein), (ii) to the
extent requested by any regulatory authority or any self regulatory
organization, (iii) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (iv) to any other party to this
Agreement, (v) if reasonably necessary in connection with the exercise of any
remedies hereunder or under any other Loan Document or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (vi) subject to an agreement
containing provisions substantially the same as those of this Section 10.17, to
any assignee of or participant in, or any prospective assignee of or participant
in, any of its rights or obligations under this Agreement or any pledge referred
to in Section 10.2(f) or any derivatives counter party, (vii) to the extent such
Borrower Information (A) is or becomes generally available to the public on a
non-confidential basis other than as a result of a breach of this Section 10.17
by the Administrative Agent or such Lender, or (B) is or becomes available to
the Administrative Agent or such Lender on a nonconfidential basis from a source
other than a Borrower and (viii) with the prior written consent of the
Administrative Borrower.

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          (b) No Borrower may disclose to any Person the amount or terms of any
fees payable to the Administrative Agent, the Arrangers or any Lender (such
information being collectively referred to herein as the “Facility
Information”), except that the Administrative Borrower may disclose the Facility
Information (i) to its and its respective Affiliates’ employees, officers,
directors, agents and advisors who have a need to know the Facility Information
in connection with this Agreement and the transactions contemplated hereby or
(ii) to the extent required by applicable laws or regulations or by any subpoena
or similar legal process.
          Section 10.18 USA Patriot Act.
          Each Lender hereby notifies each Loan Party that pursuant to the
requirements of the USA Patriot Act, it is required to obtain, verify and record
information that identifies each Loan Party, which information includes the name
and address of each Loan Party and other information that will allow the Lenders
to identify such Loan Party in accordance with the USA Patriot Act.
          Section 10.19 Agent Communications.
          (a) Each Loan Party hereby agrees that it will provide to the
Administrative Agent all information, documents and other materials that it is
obligated to furnish to the Administrative Agent pursuant to the Loan Documents,
including, without limitation, all notices, requests, financial statements,
financial and other reports, certificates and other information material, but
excluding any such communication that (i) relates to a request for a new, or a
conversion of an existing, Borrowing or other extension of credit (including any
election of an interest rate or interest period relating thereto), (ii) relates
to the payment of any principal or other amount due under this Agreement prior
to the scheduled date therefor, (iii) provides notice of any Default under this
Agreement or (iv) is required to be delivered to satisfy any condition precedent
to the effectiveness of this Agreement and/or any borrowing or other extension
of credit hereunder (all such non-excluded communications being referred to
herein collectively as “Communications”), by transmitting the Communications in
an electronic/soft medium in a format acceptable to the Administrative Agent to
oploanswebadmin@citi.com or such other addressee as may be designated by the
Administrative Agent. In addition, each Loan Party agrees to continue to provide
the Communications to the Administrative Agent in the manner specified in the
Loan Documents but only to the extent requested by the Administrative Agent.
          (b) Each Loan Party further agrees that the Administrative Agent may
make the Communications available to the Lenders by posting the Communications
on Intralinks (the “Platform”). Each Loan Party acknowledges that the
distribution of material through an electronic medium is not necessarily secure
and that there are confidentiality and other risks associated with such
distribution.
          (c) THE PLATFORM IS PROVIDED “AS IS” “AS AVAILABLE”. THE AGENT PARTIES
(AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY
FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR

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STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE AGENT PARTIES IN
CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE
ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO THE LOAN PARTIES, ANY
LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT
LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE
LOAN PARTIES’ OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS
THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS
FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION
TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
          (d) The Administrative Agent agrees that the receipt of the
Communications by the Administrative Agent at its e-mail address set forth above
shall constitute effective delivery of the Communications to the Administrative
Agent for purposes of the Loan Documents. Each Lender agrees that notice to it
(as provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the Communications
to such Lender for purposes of the Loan Documents. Each Lender agrees to notify
the Administrative Agent in writing (including by electronic communication) from
time to time of such Lender’s e-mail address to which the foregoing notice may
be sent by electronic transmission and (ii) that the foregoing notice may be
sent to such e-mail address.
          (e) Nothing herein shall prejudice the right of the Administrative
Agent or any Lender to give any notice or other communication pursuant to any
Loan Document in any other manner specified in such Loan Document.
          Section 10.20 Joint and Several Liability.
          (a) Each Borrower states and acknowledges that: (i) pursuant to this
Agreement the Borrowers desire to utilize their borrowing potential on a
Consolidated basis to the same extent possible as if they were merged into a
single corporate entity and that this Agreement reflects the establishment of
credit facilities which would not otherwise be available to such Borrower if
each Borrower were not jointly and severally liable for payment of the
Obligations; (ii) it has determined that it will benefit specifically and
materially from the advances of credit contemplated by this Agreement; (iii) it
is both a condition precedent to the obligations of each Lender hereunder and a
desire of the Borrowers that each Borrower execute and deliver to each Lender
this Agreement; and (iv) the Borrowers have requested and bargained for the
structure and terms of and security for the advances contemplated by this
Agreement.

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          (b) Each Borrower shall be liable for all amounts due to the
Administrative Agent and/or any Lender from any Borrower under this Agreement,
regardless of which Borrower actually receives Loans, the benefit of any Letter
of Credit Issuance or other extensions of credit hereunder (all such extensions
of credit being, collectively, “Extensions of Credit”) or the amount of such
Extensions of Credit received by any Borrower or the manner in which the
Administrative Agent and/or such Lender accounts for such Extensions of Credit
on its books and records (without limiting the foregoing, each Borrower shall be
liable for Extensions of Credit made to each other Borrower). Each Borrower’s
Obligation with respect to Extensions of Credit made to it, and each Borrower’s
Obligations arising as a result of the joint and several liability of such
Borrower hereunder, with respect to Extensions of Credit made to another
Borrower hereunder, shall be separate and distinct obligations, but all such
Obligations shall be primary obligations of such Borrower.
          (c) Each Borrower’s Obligations arising as a result of the joint and
several liability of such Borrower hereunder with respect to Extensions of
Credit made to another Borrower hereunder shall, to the fullest extent permitted
by law, be unconditional irrespective of (i) the validity or enforceability,
avoidance or subordination of the Obligations if any other Borrower or of any
promissory note or other document evidencing all or any part of the Obligations
of any other Borrower, (ii) the absence of any attempt to collect the
Obligations from any other Borrower, any other guarantor, or any other security
therefor, or the absence of any other action to enforce the same, (iii) the
waiver, consent, extension, forbearance or granting of any indulgence by the
Administrative Agent and/or any Lender with respect to any provisions of any
instrument evidencing the Obligations of any other Borrower, or any part
thereof, or any other agreement now or hereafter executed by any other Borrower
and delivered to the Administrative Agent and/or any Lender, (iv) the failure by
the Administrative Agent and/or any Lender to take any steps to perfect and
maintain its security interest in, or to preserve its rights to, any security or
collateral for the Obligations of any other Borrower, (v) the Administrative
Agent’s and/or any Lender’s election, in any proceedings instituted under the
Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy
Code, (vi) any borrowing or grant of a security interest by any other Borrower,
as debtor-in-possession under Section 364 of the Bankruptcy Code, (vii) the
disallowance of all or any portion of the Administrative Agent’s and/or any
Lender’s claim(s) for the repayment of the Obligations of any other Borrower
under Section 502 of the Bankruptcy Code, or (viii) any other circumstances
which might constitute a legal or equitable discharge or defense of a guarantor
or of any other Borrower (other than the indefeasible payment of the
Obligations). With respect to each Borrower’s Obligations arising as a result of
the joint and several liability of such Borrower hereunder with respect to
Extensions of Credit made to any Borrower hereunder, such Borrower waives, until
the Obligations shall have been paid in full and this Agreement shall have been
terminated, any right to enforce any right to subrogation or any remedy which
the Administrative Agent and/or any Lender now has or may hereafter have against
any other Borrower, any endorser or any guarantor of all or any part of the
Obligations, and any benefit of, and any right to participate in, any security
or collateral given to the Administrative Agent and/or any Lender to secure
payment of the Obligations or any other liability of any other Borrower to the
Administrative Agent and/or any Lender.
          (d) Each Borrower agrees if such Borrower’s joint and several
liability hereunder, or if any Liens securing such joint and several liability,
would, but for the application of

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this sentence, be unenforceable under applicable law, such joint and several
liability and each such Lien shall be valid and enforceable to the maximum
extent that would not cause such joint and several liability or such Lien to be
unenforceable under applicable law, and such joint and several liability and
such Lien shall be deemed to have been automatically amended accordingly at all
relevant times.
          (e) Upon the occurrence and during the continuance of any Event of
Default, the Administrative Agent may proceed directly and at once, without
notice, against a Borrower to collect and recover the full amount, or any
portion of the Obligations, without first proceeding against any other Borrower
or any other Person, or against any security or collateral for the Obligations.
Each Borrower consents and agrees that the Administrative Agent shall be under
no obligation to marshal any assets in favor of such Borrower or against or in
payment of any or all of the Obligations.
          (f) The Borrowers are obligated to repay the Obligations as joint and
several obligors under this Agreement. To the extent that any Borrower shall,
under this Agreement as a joint and several obligor, repay any of the
Obligations constituting Extensions of Credit made to another Borrower hereunder
or other Obligations incurred directly and primarily by any other Borrower (an
“Accommodation Payment”), then the Borrower making such Accommodation Payment
shall be entitled to contribution and indemnification from, and be reimbursed
by, each of the other Borrowers in an amount, for each of such other Borrowers,
equal to a fraction of such Accommodation Payment, the numerator of which
fraction is such other Borrower’s “Allocable Amount” (as defined below) and the
denominator of which is the sum of the Allocable Amounts of all of the
Borrowers. As of any date of determination, the “Allocable Amount” of each
Borrower shall be equal to the maximum amount of liability for Accommodation
Payments which could be asserted against such Borrower hereunder without
(i) rendering such Borrower “insolvent” within the meaning of Section 101
(31) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act
(“UFTA”) or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”),
(ii) leaving such Borrower with unreasonably small capital or assets, within the
meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or
Section 5 of the UFCA, or (iii) leaving such Borrower unable to pay its debts as
they become due within the meaning of Section 548 of the Bankruptcy Code or
Section 4 of the UFTA, or Section 5 of the UFCA. All rights and claims of
contribution, indemnification and reimbursement under this Section shall be
subordinate in right of payment to the prior payment in full of the Obligations.
The provisions of this Section 10.20 shall, to the extent expressly inconsistent
with any provision in any Loan Document, supersede such inconsistent provision.
          Section 10.21 Administrative Borrower.
          Each of the other Borrowers appoints the Administrative Borrower as
its agent for all purposes relevant to this Agreement and the other Loan
Documents, including the giving and receipt of notices and execution and
delivery of all documents, instruments and certificates contemplated herein and
all modifications hereto. Any acknowledgement, consent, direction, certificate
or other action which might otherwise be valid or effective only if given or
taken by all of the Borrowers or acting singly, shall be valid and effective if
given or taken only by the Administrative Borrower, whether or not any of the
other Borrowers joins therein.

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          Section 10.22 No Release.
          (a) The Administrative Borrower acknowledges and agrees that this
Agreement shall in no way constitute a release of the Administrative Borrower
from any of its payment obligations under the January 2007 Credit Agreement or
the Revolving Credit Notes (if any) owing to any Lender.
          (b) Each Subsidiary Borrower acknowledges and agrees that this
Agreement shall in no way constitute a release of such Subsidiary Borrower’s
obligations as a Guarantor under the Guaranty, and each Subsidiary Borrower
hereby reaffirms its obligations under the Guaranty in all respects.
          Section 10.23 Intercreditor Agreement.
          (a) Each Lender hereby irrevocably appoints, designates and authorizes
the Administrative Agent to enter into the Intercreditor Agreement on its behalf
and to take such action on its behalf under the provisions thereof. Each Lender
further agrees to be bound by the terms and conditions of the Intercreditor
Agreement and agrees that it shall not take any action that is prohibited by or
inconsistent with the terms of the Intercreditor Agreement. Each Lender hereby
agrees that the terms, conditions and provisions contained in this Agreement and
each other Loan Document are subject to the terms, conditions and provisions of
the Intercreditor Agreement. Each holder of the Obligations, by its acceptance
hereof, irrevocably agrees to be bound by the terms, conditions and provisions
of the Intercreditor Agreement.
          (b) The delivery of any Collateral (as defined in any Loan Document)
or any certificates, titles, Instruments, Chattel Paper or Documents evidencing
or in connection with such Collateral to any First Priority Agent (as defined in
the Intercreditor Agreement) under and in accordance with the First Priority
Documents (as defined in the Intercreditor Agreement) the granting of “control”
over Collateral, the execution and delivery of control agreements and/or the
assignment of any Collateral (as defined in any Loan Document) to any First
Priority Agent under and in accordance with the Revolving Credit Loan Documents
and the First Lien Term Loan Documents, as applicable, shall constitute
compliance by the Loan Parties with the provisions of this Agreement or any
other Loan Document which require delivery, possession, control and/or
assignment of certain types of Collateral (as defined in any Loan Document) by
the Administrative Agent or delivery of control agreements to the Administrative
Agent so long as such First Priority Documents are in full force and effect, the
First Priority Obligations Payment Date has not occurred, and the Loan Parties
are in compliance with the applicable provisions thereof with respect to such
Collateral. Capitalized terms used in this clause (b) not otherwise defined in
this Agreement shall have the meanings provided in the UCC.
[Signature Pages Follow]

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            ADMINISTRATIVE BORROWER:

TOUSA, INC.,
     as the Administrative Borrower
      By:           Name:   Stephen Wagman        Title:   Executive Vice
President     

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            SUBSIDIARY BORROWERS:

ENGLE HOMES RESIDENTIAL CONSTRUCTION, L.L.C.
ENGLE HOMES COMMERCIAL CONSTRUCTION, LLC
ENGLE SIERRA VERDE P4, LLC
ENGLE/JAMES LLC
LB/TE #1, LLC
LORTON SOUTH CONDOMINIUM, LLC
MCKAY LANDING LLC
NEWMARK HOMES PURCHASING, L.P.
NEWMARK HOMES, L.L.C.
NEWMARK HOMES, L.P.
PREFERRED BUILDERS REALTY, INC.
REFLECTION KEY, LLC
SILVERLAKE INTERESTS, L.C.
TOI, LLC
TOUSA/WEST HOLDINGS, INC.
TOUSA ASSOCIATES SERVICES COMPANY
TOUSA HOMES ARIZONA, LLC
TOUSA HOMES COLORADO, LLC
TOUSA HOMES FLORIDA, L.P.
TOUSA HOMES INVESTMENT #1, INC
TOUSA HOMES INVESTMENT #2, INC.
TOUSA HOMES INVESTMENT #2, LLC
TOUSA HOMES MID-ATLANTIC HOLDING, LLC
TOUSA HOMES MID-ATLANTIC, LLC
TOUSA HOMES NEVADA, LLC
TOUSA HOMES, INC.
TOUSA HOMES, L.P.
TOUSA INVESTMENT #2, INC.
TOUSA MID-ATLANTIC INVESTMENT, LLC
TOUSA REALTY, INC.
TOUSA VENTURES, LLC
TOUSA, LLC
      By:           Name:   Stephen Wagman        Title:   Executive Vice
President     

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            NEWMARK HOMES BUSINESS TRUST
      By:           Name:   Paul Berkowitz        Title:   Co-Managing Trustee
of the Trust              By:           Name:   Stephen Wagman        Title:  
Co-Managing Trustee of the Trust              By:           Name:   Russell
Devendorf        Title:   Co-Managing Trustee of the Trust     

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            ENGLE HOMES DELAWARE, INC.
TOUSA DELAWARE, INC.
TOUSA FUNDING, LLC
      By:           Name:           Title:      

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            CITICORP NORTH AMERICA, INC.,
     as Administrative Agent
      By:           Name:           Title:           CITIBANK, N.A., as an
Issuer
      By:           Name:           Title:        

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