Exhibit 10.1

CREDIT AGREEMENT

by and among

D.R. HORTON, INC.,

and

THE LENDERS PARTY HERETO

and

THE ROYAL BANK OF SCOTLAND PLC,

as Administrative Agent

 

 

Dated as of September 7, 2012

 

 

RBS SECURITIES INC.,

as Sole Lead Arranger and Bookrunner

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

TABLE OF CONTENTS

 

             Page      

ARTICLE I

      

DEFINITIONS

  

1.1.

 

Defined Terms

     1   

1.2.

 

Other Interpretative Provisions

     26   

1.3.

 

Accounting Terms

     26   

1.4.

 

References to Agreements and Laws

     26   

1.5.

 

Time References

     27       

ARTICLE II

      

THE CREDITS

  

2.1.

 

The Revolving Credit Facility

     27     

2.1.1.

  Revolving Credit Facility      27     

2.1.2.

  Reserved      28     

2.1.3.

  Payment      28   

2.2.

 

Revolving Credit Ratable Advances

     28     

2.2.1.

  Revolving Credit Ratable Advances      28     

2.2.2.

  Ratable Advance Rate Options      28     

2.2.3.

  Method of Selecting Rate Options and Interest Periods for Revolving Credit
Ratable Advances      28     

2.2.4.

  Conversion and Continuation of Outstanding Revolving Credit Ratable Advances
     29     

2.2.5.

  Limitations      29     

2.2.6.

  Interest Period      29   

2.3.

 

Competitive Bid Advances

     29     

2.3.1.

  Competitive Bid Option      29     

2.3.2.

  Competitive Bid Quote Request      30     

2.3.3.

  Invitation for Competitive Bid Quotes      30     

2.3.4.

  Submission and Contents of Competitive Bid Quotes      31     

2.3.5.

  Notice to Borrower      32     

2.3.6.

  Acceptance and Notice by Borrower      32     

2.3.7.

  Allocation by Competitive Bid Agent      32     

2.3.8.

  Limitations      33     

2.3.9.

  Administration Fee      33     

2.3.10.

  Revolving Credit Declining Lender      33   

2.4.

 

Undrawn Fee; Reductions in Aggregate Revolving Credit Commitment

     33   

2.5.

 

Minimum Amount of Each Revolving Credit Advance; Maximum Number of Revolving
Credit Advances

     34   

2.6.

 

Optional Principal Payments

     34   

2.7.

 

Funding

     34   

2.8.

 

Changes in Interest Rate, Etc.

     35   

2.9.

 

Rates Applicable After Default

     35   

2.10.

 

Method and Allocation of Payments

     35   

2.11.

 

Noteless Agreement; Evidence of Indebtedness

     36   

2.12.

 

Telephonic Notices

     37   

 

i

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

 

         Page  

2.13.

  Interest Payment Dates; Interest and Fee Basis      37   

2.14.

  Notification of Revolving Credit Advances, Interest Rates, Prepayments and
Revolving Credit Commitment Reductions      37   

2.15.

  Lending Installations      37   

2.16.

  Non-Receipt of Funds by the Administrative Agent      38   

2.17.

  Extension of Revolving Credit Facility Termination Dates      38   

2.18.

  Facility Increase      39   

2.19.

  Swing Line      40   

2.20.

  Mitigation Obligations; Replacement of a Lender      41   

2.21.

  Termination of Revolving Credit Commitment of Revolving Credit Declining
Lender or Non-Consenting Lender      42   

2.22.

  Defaulting Lenders      43      ARTICLE III     

INCREASED COSTS; TAXES

  

3.1.

  Increased Costs Generally      45   

3.2.

  Capital Adequacy      46   

3.3.

  Certificates for Reimbursement      46   

3.4.

  Delay in Requests      46   

3.5.

  Availability of Certain Revolving Credit Advances; Illegality      47   

3.6.

  Funding Indemnification      47   

3.7.

  Taxes      47     

ARTICLE IV

    

THE LETTER OF CREDIT FACILITY

  

4.1.

  Letters of Credit      50   

4.2.

  Limitations      50   

4.3.

  Conditions      51   

4.4.

  Procedure for Issuance of Letters of Credit      51   

4.5.

  Duties of Issuing Bank      52   

4.6.

  Participation      52   

4.7.

  Compensation for Letters of Credit      54   

4.8.

  Issuing Bank Reporting Requirements      55   

4.9.

  Indemnification; Nature of Issuing Bank’s Duties      55   

4.10.

  Cash Collateralization.      56   

4.11.

  No Obligation      57   

4.12.

  Alternative Letters of Credit      57   

4.13.

  Additional Provisions Regarding Issuance and Amendment of Letters of Credit   
  58     

ARTICLE V

    

CONDITIONS PRECEDENT

  

5.1.

  Closing Conditions      58   

5.2.

  Each Revolving Credit Advance      59   

 

ii

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

              Page  

ARTICLE VI

  

REPRESENTATIONS AND WARRANTIES

  

6.1.   Existence and Standing      60   

6.2.

 

Authorization and Validity

     60   

6.3.

 

No Conflict Consent

     60   

6.4.

 

Financial Statements

     60   

6.5.

 

Material Adverse Change

     61   

6.6.

 

Taxes

     61   

6.7.

 

Litigation

     61   

6.8.

 

Subsidiaries

     61   

6.9.

 

Accuracy of Information

     61   

6.10.

 

Regulation U

     62   

6.11.

 

Material Agreements

     62   

6.12.

 

Compliance with Laws

     62   

6.13.

 

Ownership of Inventory

     62   

6.14.

 

ERISA

     62     

6.14.1.

   Plan Assets; Prohibited Transactions      62     

6.14.2.

   Liabilities      62     

6.14.3.

   Plans and Benefit Arrangements      62   

6.15.

 

Investment Company Act

     63   

6.16.

 

Insurance

     63   

6.17.

 

[Reserved]

     63   

6.18.

 

Environmental Matters

     63   

6.19.

 

Senior Debt Status

     64   

6.20.

 

OFAC

     64   

6.21.

 

PATRIOT Act

     64   

ARTICLE VII

  

COVENANTS   

7.1.

 

Financial Reporting

     64   

7.2.

 

Use of Proceeds

     66   

7.3.

 

Notice of Default

     66   

7.4.

 

Conduct of Business

     66   

7.5.

 

Taxes

     66   

7.6.

 

Insurance

     66   

7.7.

 

Compliance with Laws

     67   

7.8.

 

Maintenance of Properties

     67   

7.9.

 

[Reserved]

     67   

7.10.

 

Mergers; Consolidations; Dissolutions

     67   

7.11.

 

Distributions, Repurchases of Stock, Etc.

     68   

7.12.

 

Disposition of Assets

     68   

7.13.

 

[Reserved]

     69   

7.14.

 

Investments

     69   

7.15.

 

Liens

     69   

7.16.

 

Additional Guarantors

     69   

7.17.

 

Release of a Guarantor

     69   

7.18.

 

Inspection and Appraisal

     70   

7.19.

 

[Reserved]

     70   

7.20.

 

Other Debt Agreements

     70   

7.21.

 

[Reserved]

     71   

7.22.

 

Plans and Benefit Arrangements

     71   

7.23.

 

[Reserved]

     72   

 

iii

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

              Page  

7.24.

 

Compliance with Environmental Matters

     72   

7.25.

 

[Reserved]

     72   

7.26.

  Senior Debt Status      72   

7.27.

  Financial Covenants      72     

7.27.1.

   Leverage Ratio      72     

7.27.2.

   Borrowing Base      72     

7.27.3.

   Tangible Net Worth      72   

7.28.

  Financial Contracts      73   

ARTICLE VIII

  

DEFAULTS   

ARTICLE IX

  

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES   

9.1.

 

Acceleration

     75   

9.2.

 

Amendments

     75   

9.3.

 

Preservation of Rights

     76   

ARTICLE X

  

GENERAL PROVISIONS   

10.1.

 

Survival of Representations

     77   

10.2.

 

Governmental Regulation

     77   

10.3.

 

Headings

     77   

10.4.

 

Entire Agreement

     77   

10.5.

 

Several Obligations Benefits of This Agreement

     77   

10.6.

 

Expenses; Indemnification

     77   

10.7.

 

Numbers of Documents

     79   

10.8.

 

[Reserved]

     79   

10.9.

 

Severability of Provisions

     79   

10.10.

 

Nonliability of Lenders

     79   

10.11.

 

Confidentiality

     80   

10.12.

 

Nonreliance

     81   

10.13.

 

USA PATRIOT ACT

     81    ARTICLE XI    THE ADMINISTRATIVE AGENT   

11.1.

 

Appointment and Authority

     81   

11.2.

 

Rights as a Lender

     81   

11.3.

 

Exculpatory Provisions

     82   

11.4.

 

Reliance by Administrative Agent

     82   

11.5.

 

Delegation of Duties

     83   

11.6.

 

Resignation of Administrative Agent

     83   

11.7.

 

Non-Reliance on Administrative Agent and Other Lenders

     84   

11.8.

 

No Other Duties, Etc.

     84   

11.9.

 

Administrative Agent May File Proofs of Claim

     84   

11.10.

 

Withholding Tax

     85   

11.11.

 

Notice of Default

     85   

11.12.

 

Administrative Agent’s Fee

     85   

11.13.

 

Delegation to Affiliates

     85   

11.14.

 

Arranger’s Responsibilities and Duties

     86   

 

iv

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

              Page  

ARTICLE XII

  

SETOFF; RATABLE PAYMENTS   

12.1.

 

Setoff

     86   

12.2.

 

Ratable Payments

     86   

ARTICLE XIII

  

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS   

13.1.

 

Participations

     87     

13.1.1.

   Permitted Participants; Effect      87     

13.1.2.

   Voting Rights; Participant Register      87   

13.2.

 

Assignments

     88   

13.3.

 

Dissemination of Information

     91   

ARTICLE XIV

  

NOTICES   

14.1.

 

Notices

     91   

14.2.

 

Change of Address

     92   

ARTICLE XV

  

COUNTERPARTS   

15.1.

 

Counterparts; Integration; Effectiveness

     93   

15.2.

 

Electronic Execution of Assignments

     93   

ARTICLE XVI

  

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

16.1.

 

GOVERNING LAW

     93   

16.2.

 

CONSENT TO JURISDICTION

     93   

16.3.

 

WAIVER OF JURY TRIAL

     94   

16.4.

 

WAIVER OF VENUE

     94   

16.5.

 

SERVICE OF PROCESS

     94   

 

v

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

EXHIBITS AND SCHEDULES

Pricing Schedule

 

Exhibit A

  Form of Revolving Credit Note

Exhibit B

  Form of Swing Line Note

Exhibit C

  Form of Commitment and Acceptance

Exhibit D

  Form of Assignment and Assumption

Exhibit E

  Form of U.S. Tax Compliance Certificate

Exhibit F

 

[Reserved]

Exhibit G

  [Reserved]

Exhibit H

  Form of Guaranty

Exhibit I

  Form of Compliance Certificate

Exhibit J

  Form of Inventory Summary Report

Exhibit K

  Form of Competitive Bid Note

Exhibit L

  Form of Competitive Bid Quote

Exhibit M

  Form of Competitive Bid Quote Request

Exhibit N

  Form of Invitation for Competitive Bid Quotes

Schedule 1

  Lenders and Commitments

Schedule 2

  Permitted Liens

Schedule 3

  Litigation

Schedule 4

  Guarantors

Schedule 5

  Environmental Matters

 

vi

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

CREDIT AGREEMENT

This Credit Agreement, dated as of September 7, 2012, is among D.R. Horton,
Inc., a Delaware corporation, the Lenders party hereto and The Royal Bank of
Scotland plc, as Administrative Agent (the “Administrative Agent”).

AGREEMENT

NOW THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby covenant and agree, as follows:

ARTICLE I

DEFINITIONS

1.1. Defined Terms . As used in this Agreement, the following terms shall have
the meanings set forth below:

“ABR Advance” means a Revolving Credit Advance that bears interest at the
Alternate Base Rate.

“Absolute Rate” means, with respect to an Absolute Rate Loan made by a Revolving
Credit Lender for the relevant Competitive Bid Interest Period, the rate of
interest per annum (rounded to the nearest 1/100 of 1%) offered by such
Revolving Credit Lender and accepted by the Borrower.

“Absolute Rate Advance” means a borrowing hereunder consisting of the aggregate
amount of the several Absolute Rate Loans made by some or all of the Revolving
Credit Lenders to the Borrower at the same time and for the same Competitive Bid
Interest Period.

“Absolute Rate Auction” means a solicitation of Competitive Bid Quotes setting
forth Absolute Rates pursuant to Section 2.3.

“Absolute Rate Loan” means a Loan that bears interest at the Absolute Rate.

“Additional Lender” means a New Revolving Credit Lender (approved by the
Administrative Agent and the Arranger, which approval shall not be unreasonably
withheld or delayed) or an existing Lender that elects, upon request by the
Borrower, to issue a Revolving Credit Commitment, or to increase its existing
Revolving Credit Commitment, pursuant to Section 2.18.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Advance or Eurodollar
Bid Rate Advance for the relevant Eurodollar Interest Period or, with respect to
the determination of clause (iii) of the definition of Alternate Base Rate, for
a Eurodollar Interest Period of one month, an interest rate per annum (rounded
upwards, if necessary, to the next 1/100th of 1%) equal to (a) the LIBO Rate for
such Eurodollar Interest Period multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means RBS, in its capacity as contractual representative
of the Lenders pursuant to Article XI, and not in its individual capacity as a
Lender, and any successor Administrative Agent appointed pursuant to Article XI.

 

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

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
stock, by contract or otherwise.

“Agent Parties” is defined in Section 14.1(b)

“Aggregate Available Revolving Credit” means at any time the amount by which
(a) the Aggregate Revolving Credit Commitment exceeds (b) the sum of (i) the
principal amount of all outstanding Revolving Credit Advances (provided that for
purposes of determining the Undrawn Fee under Section 2.4 only, Revolving Credit
Advances shall not include Competitive Bid Advances and Swing Line Advances),
plus (ii) the Letter of Credit Obligations.

“Aggregate Revolving Credit Commitment” means the aggregate of the Revolving
Credit Commitments of all the Revolving Credit Lenders, as increased or reduced
from time to time pursuant to the terms hereof. As of the date hereof, the
Aggregate Revolving Credit Commitment is $125,000,000.

“Aggregate Revolving Credit Facility Limit” means $500,000,000.

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

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to
the sum of (a) the greatest of (i) the Prime Rate in effect on such day,
(ii) the Federal Funds Effective Rate in effect on such day plus  1/2 of 1% per
annum and (iii) the Adjusted LIBO Rate applicable for an interest period of one
month as offered by the principal London office of The Royal Bank of Scotland
plc in immediately available funds in the London interbank market at
approximately 11:00 a.m. (London Time) on such day, plus 1.00% and (b) the
Applicable Base Rate Margin.

“Alternative Letter of Credit” means any Letter of Credit that is Cash
Collateralized in accordance with Section 4.12.

“Applicable Base Rate Margin” means with respect to an ABR Advance under the
Revolving Credit Facility, the percentage rate per annum applicable to such
Revolving Credit Advance, as determined with respect to the Revolving Credit
Facility pursuant to the Pricing Schedule.

“Applicable Eurodollar Margin” means, with respect to a Eurodollar Advance under
the Revolving Credit Facility, the percentage rate per annum applicable to the
Revolving Credit Ratable Advance, as determined with respect to the Revolving
Credit Facility pursuant to the Pricing Schedule.

“Applicable Fee Rate” means, at any time the percentage rate per annum at which
Undrawn Fees are accruing on the average daily Aggregate Available Revolving
Credit at such time as determined pursuant to the Pricing Schedule.

“Applicable Law” means, with respect to any Person, all laws and provisions of
constitutions, statutes, rules, regulations, and orders of governmental bodies
or regulatory agencies applicable to such Person, including, without limitation,
all orders and decrees of all courts and arbitrators in proceedings or actions
to which the Person in question is a party or by which it is bound.

 

2

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

“Applicable Letter of Credit Rate” means, at any time, (i) with respect to
Standard Letters of Credit, the Applicable Eurodollar Margin under the Revolving
Credit Facility at such time as determined pursuant to the Pricing Schedule and
(ii) with respect to Alternative Letters of Credit, 0.50%.

“Applicable Margins” means the Applicable Eurodollar Margin for the Revolving
Credit Facility, the Applicable Base Rate Margin for the Revolving Credit
Facility and the Applicable Fee Rate, as applicable.

“Application” means, with respect to a Letter of Credit, such form of
application therefor and other documents related thereto (whether in a single or
several documents, taken together) as an Issuing Bank may employ in the ordinary
course of business for its own account, with such modifications thereto as may
be agreed upon by such Issuing Bank and the Borrower and as are not materially
adverse (in the reasonable judgment of such Issuing Bank and the Administrative
Agent) to the interests of the Revolving Credit Lenders; provided, however, in
the event of any conflict between the terms of any Application and this
Agreement, the terms of this Agreement shall control.

“Approved Bank” means any commercial bank having total Tier 1 capital of at
least $5 billion as most recently reported by Bloomberg L.P. (or if such source
does not provide such information, any other authoritative public source
designated by the Administrative Agent) and any Fund that is administered or
managed by (a) such a bank, (b) an Affiliate of such a bank or (c) an entity or
an Affiliate of an entity that administers or manages such a bank.

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

“Arranger” means RBS Securities Inc. and its successors.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 13.3), and accepted by the Administrative Agent, in
substantially the form of Exhibit D or any other form approved by the
Administrative Agent.

“Assumed Purchase Money Loans” means at any time (a) the outstanding amount of
all loans secured by assets purchased by any Loan Party and assumed or entered
into by such Loan Party within 180 days after the date of purchase, provided
that (i) the amount of any such loan does not exceed the purchase price of the
applicable asset and (ii) such loan may only be secured by a security interest
on such asset and improvements constructed thereon in the normal course of the
Loan Parties’ homebuilding business and (b) any amendment, modification,
extension or refinancing of such loans, provided that with respect to the loans,
as amended, modified, extended, or refinanced (A) the aggregate amount thereof
shall not exceed the purchase price of the applicable asset and (B) such loans
and refinancings shall not be secured by any assets of any Loan Party other than
those initially purchased by the applicable Loan Party and improvements
constructed thereon in the normal course of the Loan Parties’ homebuilding
business.

“Authorized Officers” means those Persons designated by written notice to the
Administrative Agent from the applicable Loan Party, authorized to execute
notices, reports and other documents required hereunder. The Loan Parties may
amend such list of Persons from time to time by giving written notice of such
amendment to the Administrative Agent.

 

3

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

“BBA LIBOR” has the meaning ascribed to such term in the definition of “LIBO
Rate”.

“BB Compliance Date” is defined in Section 7.27.2(i).

“Benefit Arrangement” means at any time an “employee benefit plan,” within the
meaning of Section 3(3) of ERISA, which is neither a Plan nor a Multiemployer
Plan and which is maintained, sponsored or otherwise contributed to by any
member of the Controlled Group.

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

“Book Value” means, with respect to any asset, the net book value thereof as
included in the Borrower’s most recent consolidated financial statements
delivered pursuant to Section 7.1.

“Borrower” means D.R. Horton, Inc., a Delaware corporation, and its successors.

“Borrowing Base” means at any time the sum (without duplication) of the
following:

(i) 100% of Unrestricted Homebuilding Cash in excess of $25,000,000;

(ii) 90% of the sum of the Book Value of all funds in escrow payable to, but not
yet received by, a Loan Party following, and related to, a Dwelling Unit
closing;

(iii) 85% of the sum of the Book Value of all Dwelling Lots included in the Loan
Inventory;

(iv) 65% of the sum of the Book Value of all Developed Lots included in the Loan
Inventory;

(v) 65% of the sum of the Book Value of all Lots Under Development which are
included in the Loan Inventory; provided that if, after a parcel of land is
designated a Lot Under Development, development of such parcel has commenced and
thereafter ceases for forty-five (45) calendar days or more (other than by
reason of a Force Majeure Delay), at the discretion of Administrative Agent,
such parcel may be categorized as Unimproved Land until development of such Lot
Under Development is resumed; and

(vi) 40% of the sum of the Book Value of all Unimproved Land which is included
in the Loan Inventory;

provided that (a) to the extent the sum of (iv), (v) and (vi) would exceed 50%
of the Borrowing Base, such excess shall be disregarded in the calculation of
the Borrowing Base, (b) no asset that is not wholly owned by a Loan Party shall
be included in the Borrowing Base and (c) no asset that is subject to any Lien
(other than Liens described in clause (i), (ii), (iii), (iv), (v), (vii),
(viii), (x), (xx), (xxii) or (xxvi) of the definition of “Permitted Liens”)
shall be included in the Borrowing Base.

“Borrowing Base Requirement” has the meaning set forth in Section 7.27.2(i).

“Borrowing Date” means a date on which a Revolving Credit Advance is made
hereunder.

“Borrowing Notice” is defined in Section 2.2.3.

 

4

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

“Business Day” means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in New York for the conduct of substantially all
of their commercial lending activities and on which dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in New York for the conduct of substantially all of their commercial
lending activities.

“Capitalized Lease” of a Person means any lease of Property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP; provided, that any lease entered into after the date of
this Agreement that would have been considered an operating lease under the
provisions of GAAP in effect as of the date hereof shall be treated as an
operating lease for all purposes under this Agreement.

“Cash Collateralize” means to pledge subject to an exclusive perfected security
interest, and deposit with or deliver to, the Administrative Agent, for the
benefit of one or more of the Issuing Banks or Lenders, as collateral for Letter
of Credit Obligations or obligations of Lenders to fund participations in
respect of Letter of Credit Obligations, cash or deposit account balances, in
each case in amounts and pursuant to documentation in form and substance
satisfactory to the Administrative Agent and each applicable Issuing Bank. “Cash
Collateral” shall have a meaning correlative to the foregoing and shall include
the proceeds of such cash collateral and other credit support.

“Cash Equivalents” means cash and cash equivalents, as defined under GAAP.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

“Change of Control” means the occurrence of any one or more of the following
events:

(i) any sale, lease, or other transfer (in one transaction or a series of
transactions) of all or substantially all of the consolidated assets of the
Borrower to any Person (other than any Subsidiary of the Borrower), provided
that a transaction where the holders of all classes of Voting Stock of Borrower
immediately prior to such transaction own, directly or indirectly, Voting Stock
representing more than 50% of the voting power of all the Voting Stock of such
Person immediately after such transaction shall not be a Change of Control;

(ii) a “person” or “group” (within the meaning of Section 13(d) of the Exchange
Act (other than (x) the Borrower or (y) Donald R. Horton, Terrill J. Horton, or
their respective wives, children, grandchildren and other descendants, or any
trust or other entity formed or controlled by any of such individuals)) publicly
discloses, including, without limitation, by filing a Schedule 13D or Schedule
TO, or the Borrower or any of its Subsidiaries publicly discloses, including
without limitation, by filing any other schedule, form or report under the
Exchange Act (including, without limitation, a Current Report on Form 8-K),
facts indicating that such person or group has become the ultimate “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) of Voting Stock of the
Borrower representing 50% or more of the voting power of the Voting Stock of the
Borrower; or

 

5

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

(iii) the stockholders of Borrower approve any plan or proposal for the
liquidation or dissolution of Borrower; provided that a liquidation or
dissolution of Borrower which is part of a transaction that does not constitute
a Change of Control under the proviso contained in clause (i) above shall not
constitute a Change of Control.

“Closing Date” means the Business Day on which the conditions set forth in
Section 5.1 are satisfied or waived.

“Code” means the Internal Revenue Code of 1986.

“Commitment and Acceptance” is defined in Section 2.18(b).

“Communications” is defined in Section 14.1(b).

“Consolidated Net Income” means, with reference to any period, the net income
(or loss) of the Loan Parties calculated on a consolidated basis for such period
in accordance with GAAP. For the avoidance of doubt, “Consolidated Net Income”
shall not include the net income of Non-Loan Parties.

“Competitive Bid Advance” means a borrowing hereunder consisting of the
aggregate amount of the several Competitive Bid Loans made by one or more of the
Revolving Credit Lenders to the Borrower at the same time and for the same
Interest Period.

“Competitive Bid Agent” means, with respect to a Competitive Bid Quote Request,
either the Administrative Agent or the Borrower, as specified in such
Competitive Bid Quote Request as provided in Section 2.3.2.

“Competitive Bid Borrowing Notice” is defined in Section 2.3.6.

“Competitive Bid Interest Period” means, in the case of a Eurodollar Bid Rate
Advance, a Eurodollar Interest Period and, in the case of an Absolute Rate
Advance, a period of not less than 14 nor more than 360 days, in each case as
selected by the Borrower pursuant to this Agreement. If such Competitive Bid
Interest Period would end on a day which is not a Business Day, such Competitive
Bid Interest Period shall end on the next succeeding Business Day (except as
otherwise provided in the definition of “Eurodollar Interest Period”).

“Competitive Bid Loan” means a Eurodollar Bid Rate Loan or an Absolute Rate
Loan, or both, as the case may be.

“Competitive Bid Margin” means the margin above or below the applicable Adjusted
LIBO Rate offered for a Eurodollar Bid Rate Loan, expressed as a percentage
(rounded to the nearest 1/100 of 1%) to be added or subtracted from such
Eurodollar Bid Rate.

“Competitive Bid Note” means a promissory note in substantially the form of
Exhibit K hereto, with appropriate insertions, duly executed and delivered to
the Administrative Agent by the Borrower for the account of a Revolving Credit
Lender and payable to the order of such Revolving Credit Lender, including any
amendment, modification, renewal or replacement of such promissory note.

 

6

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

“Competitive Bid Quote” means a Competitive Bid Quote substantially in the form
of Exhibit L hereto completed and delivered by a Revolving Credit Lender to the
Competitive Bid Agent in accordance with Section 2.3.4.

“Competitive Bid Quote Request” means a Competitive Bid Quote Request
substantially in the form of Exhibit C hereto completed and delivered by the
Borrower to the Administrative Agent in accordance with Section 2.3.2.

“Competitive Bid Sublimit” means, at any time, an amount equal to fifty percent
(50%) of the Aggregate Revolving Credit Commitment, as such Aggregate Revolving
Credit Commitment may increase or decrease from time to time hereunder.

“Compliance Certificate” means a Compliance Certificate, in substantially the
form of Exhibit I, required to be delivered pursuant to Section 7.1

“Consolidated Net Worth” means at any time the consolidated stockholders’ equity
of the Loan Parties calculated on a consolidated basis as of such time in
accordance with GAAP. For the avoidance of doubt, “Consolidated Net Worth” shall
not include the stockholders’ equity attributable to Non-Loan Parties.

“Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person guarantees or in effect guarantees any
Indebtedness of any other Person in any manner, whether directly or indirectly.

“Controlled Group” means all members of a controlled group of corporations or
other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.

“Credit Facilities” means, collectively, each of the credit facilities and lines
of credit of the Borrower or one or more Guarantors in existence on the date of
this Agreement and one or more future facilities or lines of credit among or
between the Borrower or one or more Guarantors and one or more lenders pursuant
to which the Borrower or any Guarantor may incur indebtedness for working
capital and general corporate purposes (including acquisitions), as any such
facility or line of credit may be amended, restated, supplemented or otherwise
modified from time to time, and includes any agreement extending the maturity
of, increasing the amount of, or restructuring, all or any portion of the
Indebtedness under such facility or line of credit or any successor facilities
or lines of credit and includes any facility or line of credit with one or more
lenders refinancing or replacing all or any portion of the Indebtedness under
such facility or line of credit or any successor facility or line of credit,
provided, in each case, that such credit facility shall provide for commitments,
or there shall be loans or other extensions of credit outstanding thereunder, in
each case in excess of $50 million.

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

“Default” means an event described in Article VIII.

 

7

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

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

“Developed Lots” means, as of any date of determination, subdivision lots that
are wholly-owned by any Loan Party, subject to a recorded plat and which are in
substantial compliance with Applicable Laws and are suitable for the
construction thereon of foundations for a Dwelling Unit, which Borrower has
designated as “Developed Lots” in the most recently delivered Inventory Summary
Report (exclusive of any Dwelling Lot). An individual Developed Lot is sometimes
referred to herein as a “Developed Lot.”

“Disqualified Equity Interests” means any equity interest that, by its terms (or
by the terms of any security or other equity interests into which it is
convertible or for which it is exchangeable at the election of the holder
thereof), or upon the happening of any event or condition (a) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(except as a result of a change of control or asset sale so long as any rights
of the holders thereof upon the occurrence of a change of control or asset sale
event shall be subject to the prior repayment in full of the Loans and all other
Obligations that are accrued and payable and the termination of the Revolving
Credit Commitment and all outstanding Letters of Credit), (b) is redeemable at
the option of the holder thereof, in whole or in part, (c) provides for the
scheduled payments of dividends in cash, or (d) is or becomes convertible into
or exchangeable for Indebtedness prior to the date that is ninety-one (91) days
after the earliest Revolving Credit Facility Termination Date at the time such
Disqualified Equity Interests are issued; provided that if such equity interests
are issued pursuant to a plan for the benefit of employees of the Borrower or
its Subsidiaries or by any such plan to such employees,

 

8

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

such equity interests shall not constitute Disqualified Equity Interests solely
because it may be required to be repurchased by the Borrower or the Subsidiaries
in order to satisfy applicable statutory or regulatory obligations.

“Distribution” means the payment of any dividend or other distribution (whether
in cash or other tangible property) on any capital stock or other equity
interest of Borrower or any Subsidiary, to any Person or Persons other than any
Loan Party.

“Dwelling Lot” means, as of any date of determination, Developed Lots with
Dwelling Units which any Loan Party has designated as “Dwelling Lots” in the
most recently delivered Inventory Summary Report. The term “Dwelling Lot”
includes the Dwelling Unit located thereon. An individual Dwelling Lot is
sometimes referred to herein as a “Dwelling Lot.”

“Dwelling Unit” means, as of any date of determination, a house which any Loan
Party has constructed or is constructing on a Developed Lot which any Loan Party
has designated as “Dwelling Units” in the most recently delivered Inventory
Summary Report.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 13.2(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 13.2(b)(iii)).

“Embargoed Person” means any party that (i) is publicly identified on the most
current list of “Specially Designated Nationals and Blocked Persons” (“SDN
List”) published by the U.S. Treasury Department’s Office of Foreign Assets
Control (“OFAC”), (ii) is a Person who is otherwise the target of U.S. economic
sanctions laws such that a U.S. Person cannot deal or otherwise engage in
business transactions with such Person, or (iii) is controlled by, or acts,
directly or indirectly, for or on behalf of, any Person on the SDN List or a
foreign government that is the subject of U.S. economic sanctions prohibitions.

“Encumbered Inventory” means any Inventory that secures any Indebtedness.

“Environment” means ambient air, indoor air and any workplace, surface water,
groundwater, drinking water, soil, land surface and subsurface strata, and
natural resources such as wetlands, flora and fauna.

“Environmental Laws” means all applicable treaties, rules, regulations, codes,
permit or license conditions, ordinances, judgments, orders, decrees and other
applicable requirements of law, and all applicable injunctions or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, in each instance relating to the protection of the Environment, to
the Release or threatened Release of Regulated Substances or, to human health
and safety with regard to exposure to Regulated Substances.

“Environmental Liability” means any liability, obligation, loss, claim, damage,
action, order or cost, contingent or otherwise, of the Borrower and its
Subsidiaries, resulting from or based upon (a) any actual or alleged violation
of Environmental Law, (b) exposure to any Regulated Substances, (c) the Release
or threatened Release of any Regulated Substances or (d) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing items (a) – (c).

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

 

9

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

“Eurodollar Advance” means a Revolving Credit Ratable Advance which bears
interest at a Eurodollar Rate requested by the Borrower pursuant to Section 2.2.

“Eurodollar Auction” means a solicitation of Competitive Bid Quotes setting
forth Competitive Bid Margins pursuant to Section 2.3.

“Eurodollar Bid Rate” means, with respect to a Eurodollar Bid Rate Loan made by
a given Revolving Credit Lender for the relevant Eurodollar Interest Period, the
sum of (a) the Adjusted LIBO Rate applicable to such Eurodollar Interest Period,
plus or minus (b) the Competitive Bid Margin offered by such Revolving Credit
Lender and accepted by the Borrower. The Eurodollar Bid Rate shall be rounded to
the next higher multiple of 1/100 of 1 % if the rate is not such a multiple.

“Eurodollar Bid Rate Advance” means a Competitive Bid Advance which bears
interest at a Eurodollar Bid Rate.

“Eurodollar Bid Rate Loan” means a Competitive Bid Loan which bears interest at
the Eurodollar Bid Rate.

“Eurodollar Interest Period” means, with respect to a Eurodollar Advance, a
period of one, two, three or six months or one or two weeks (or, subject to
approval by all Lenders under the Revolving Credit Facility, nine or twelve
months) or, with respect to a Eurodollar Bid Rate Advance, a period of one, two,
three, six, nine or twelve months, in each case commencing on a Business Day
selected by the Borrower pursuant to this Agreement. Such Eurodollar Interest
Period shall end on the day which corresponds numerically to such date one, two,
three, six, nine or twelve months thereafter, provided, however, that if there
is no such numerically corresponding day in such next, second, third, sixth,
ninth or twelfth succeeding month, such Eurodollar Interest Period shall end on
the last Business Day of such next, second, third, sixth, ninth or twelfth
succeeding month. If a Eurodollar Interest Period would otherwise end on a day
which is not a Business Day, such Eurodollar Interest Period shall end on the
next succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Eurodollar Interest Period
shall end on the immediately preceding Business Day.

“Eurodollar Loan” means a Eurodollar Bid Rate Loan or a Loan which bears
interest at a Eurodollar Rate.

“Eurodollar Rate” means, with respect to a Eurodollar Advance under the
Revolving Credit Facility for the relevant Eurodollar Interest Period, a rate
per annum (rounded upwards, if necessary, to the next 1/100th of 1%) equal to
the sum of (i) the Adjusted LIBO Rate applicable to such Eurodollar Interest
Period, plus (ii) the Applicable Eurodollar Margin in effect two Business Days
prior to such Revolving Credit Advance.

“Evergreen Letter of Credit” is defined in Section 4.4(d).

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

“Excluded Taxes” means, respect to the Administrative Agent, any Lender, any
Issuing Bank, or any other recipient of any payment made by or on account of any
obligation of any Loan Party under any Loan Document, (a) any Taxes imposed on
or measured by such recipient’s net income (however denominated), franchise
Taxes (imposed in lieu of net income Taxes), and branch profits Taxes, in each
case, imposed as a result of such recipient being organized under the laws of,
or having its principal office or, in the case of any Lender, its applicable
lending office, located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or imposed by any jurisdiction as a result of a connection
between the recipient and such jurisdiction (other than a connection resulting
from negotiating, executing, delivering,

 

10

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

becoming a party to or performing its obligations or receiving a payment under,
receiving or perfecting a security interest under, engaging in any other
transaction pursuant to or enforcing, any Loan Document), (b) in the case of a
Lender (other than an assignee pursuant to an assignment request by the Borrower
under Section 2.20(b)), any U.S. federal withholding Taxes imposed on amounts
payable to or for the account of such Lender with respect to an applicable
interest in a Loan or Revolving Credit Commitment pursuant to a law in effect
immediately prior to the date on which such Lender becomes a party to this
Agreement (or designates a new lending office), except in each case to the
extent that, pursuant to Section 3.7, amounts with respect to such Taxes were
payable either to such Lender’s assignor immediately before such Lender became a
party hereto or to such Lender immediately before it designated a new lending
office, (c) any withholding Taxes attributable to such recipient’s failure to
comply with Section 3.7(g) and (d) any U.S. federal withholding Taxes imposed
under FATCA.

“Extended Revolving Credit Commitments” is defined in Section 2.17.

“Extended Revolving Credit Lenders” is defined in Section 2.17.

“Extension Date” is defined in Section 2.17.

“Extension Request” is defined in Section 2.17.

“Facility Increase” is defined in Section 2.18.

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

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100th of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100th of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

“Fee Letter” means that certain letter agreement dated September 7, 2012 among
the Borrower, the Administrative Agent and the Arranger.

“Financial Contract” of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, and (ii) any agreements, devices or
arrangements providing for payments related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, interest rate
exchange agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate options.

“Fixed Rate” means the Eurodollar Rate, the Eurodollar Bid Rate or the Absolute
Rate.

“Fixed Rate Advance” means a Revolving Credit Advance that bears interest at a
Fixed Rate.

“Fixed Rate Loan” means a Loan that bears interest at a Fixed Rate.

 

11

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

“Force Majeure Delay” means a delay to the development of a Lot Under
Development or a delay to the construction of a Dwelling which is caused by
fire, earthquake, or other Acts of God, strike, lockout, acts of public enemy,
riot, insurrection, or governmental regulation of the sale or transportation of
materials, supplies, or labor; provided that (i) Borrower furnishes
Administrative Agent with written notice of any such delay within ten (10) days
from the commencement of any such delay and (ii) the period of the Force Majeure
Delay shall not exceed the period of delay caused by such event.

“Foreign Lender” means a Lender that is not a U.S. Person.

“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 activities.

“GAAP” means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board which (a) with respect to the covenants
contained in Section 7.27 (and, to the extent used in or relating to such
covenants, any defined terms) are in effect on the date hereof, unless amended
pursuant to Section 1.3, and (b) for all other purposes hereunder, are
applicable from time to time.

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

“Guarantors” means any Subsidiary of the Borrower that has executed the Guaranty
Agreement and has not been released therefrom in accordance therewith.

“Guaranty Agreement” means the guaranty agreement of even date herewith executed
and delivered by the Borrower and the Guarantors to the Administrative Agent for
the benefit of the Lenders, as such guaranty agreement may be amended or
modified (including, without limitation, by delivery of a Supplemental Guaranty)
and in effect from time to time.

“Increase Date” is defined in Section 2.18(c).

“Indebtedness” means (without duplication), for any Person, the sum of the
following: (a) all liabilities, obligations, and indebtedness of such Person for
money borrowed; (b) all liabilities, obligations, and indebtedness of such
Person which are evidenced by bonds, notes, debentures, or other similar
instruments, or by Capitalized Leases; (c) all obligations of such Person issued
or assumed as the deferred purchase price of property or services (but excluding
accrued expenses and trade accounts payable arising in the ordinary course of
business and any obligation to pay a contingent purchase price as long as such
obligation remains contingent or is paid within 10 days after it becomes due and
payable); (d) the face amount of all drawn letters of credit and bankers’
acceptances issued for the account of such Person, and without duplication, all
drafts drawn and unpaid thereunder; (e) all Disqualified Equity Interests;
(f) all net obligations under all Financial Contracts determined in accordance
with GAAP; and (g) all obligations of the type referred to in clauses
(a) through (f) preceding of other Persons that are either (i) guaranteed in any
manner by such Person or (ii) secured by any Lien on any property or asset of
such Person (but only to the extent of the value of such property or asset if
such obligations have not been assumed by such Person). In no event shall
Indebtedness include Indebtedness owed by one Loan Party to another Loan Party.

 

12

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

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

“Indemnitee” is defined in Section 10.6(b).

“Interest Period” means a Eurodollar Interest Period or a Competitive Bid
Interest Period (as applicable).

“Inventory” means all Land Parcels, Lots Under Development, Developed Lots, and
Dwelling Lots and all real and personal property, improvements, and fixtures
wholly-owned by a Loan Party related thereto (but excluding any of the foregoing
that is not owned by a Loan Party but is under a purchase option in favor of a
Loan Party).

“Inventory Summary Report” means the written summary of the Loan Inventory, in
substantially the form of Exhibit J, to be prepared by Borrower and submitted to
Administrative Agent in accordance with Section 7.27.2(ii).

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

“Investment Grade Rating” means a rating of (i) BBB- or higher by S&P, or
(ii) Baa3 or higher by Moody’s.

“Invitation for Competitive Bid Quotes” means an Invitation for Competitive Bid
Quotes substantially in the form of Exhibit N hereto, completed and delivered by
the Competitive Bid Agent to the Revolving Credit Lenders in accordance with
Section 2.3.3.

“IRS” means the Internal Revenue Service.

“Issuance Date” means the date on which a Letter of Credit is issued, amended or
extended (as applicable).

“Issuing Bank” means RBS and each other Revolving Credit Lender, if any,
designated by the Borrower by notice to the Administrative Agent that agrees to
serve as an Issuing Bank hereunder.

 

13

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

“Land Parcels” means parcels of land wholly-owned by a Loan Party which are, as
of the date of determination, not scheduled for commencement of development into
Developed Lots during the six (6) calendar months immediately following such
date of determination and which Borrower has designated as “Land Parcels” in the
most recently delivered Inventory Summary Report. An individual Land Parcel is
sometimes referred to as a “Land Parcel.”

“L/C Limit” means, at and for any time of determination, 50% of the Aggregate
Revolving Credit Commitments at such time or scheduled to be in effect for such
time (after giving effect to the scheduled termination of the Revolving Credit
Commitment of any Revolving Credit Declining Lender or any Facility Increase
under Section 2.18). The L/C Limit is part of, and not in addition to, the
Aggregate Revolving Credit Commitment.

“Lender” means a Revolving Credit Lender (including the Swing Line Lender).

“Lending Installation” means, with respect to a Lender or the Administrative
Agent, the office, branch, subsidiary or affiliate of such Lender or the
Administrative Agent listed on the signature pages hereof or on a Schedule or
otherwise selected by such Lender or the Administrative Agent pursuant to
Section 2.15.

“Letter of Credit” means any standby letter of credit issued by an Issuing Bank
for the account of the Borrower or another Loan Party in accordance with Article
IV. Each Letter of Credit shall be either a Standard Letter of Credit or an
Alternative Letter of Credit.

“Letter of Credit Expiration Date” means the day that is seven (7) days prior to
the Revolving Credit Facility Termination Date (or, if such day is not a
Business Day, the next preceding Business Day).

“Letter of Credit Exposure” means, with respect to a Revolving Credit Lender,
the Revolving Credit Ratable Share of such Revolving Credit Lender of all
outstanding Letter of Credit Obligations.

“Letter of Credit Fee” means, for any period, a fee, payable with respect to
each Letter of Credit issued by an Issuing Bank outstanding in such period, in
an amount per annum equal to the product of (i) the daily average Applicable
Letter of Credit Rate during such period and (ii) the daily average undrawn face
amount of such Letter of Credit, computed on the basis of the actual number of
days such Letter of Credit is outstanding in such period. If any Letter of
Credit is an Alternative Letter of Credit for any portion of such period, the
Applicable Letter of Credit Rate for such Alternative Letter of Credit shall
apply for the portion of such period during which such Letter of Credit is an
Alternative Letter of Credit.

“Letter of Credit Obligations” means at any time the sum of (i) the aggregate
undrawn face amount of all outstanding Letters of Credit, and (ii) the aggregate
amount paid by an Issuing Bank on any Letters of Credit to the extent (if any)
not reimbursed by the Borrower or the Revolving Credit Lenders under
Section 4.6.

“Leverage Ratio” means at any time the ratio of (a) (i) Total Indebtedness
(excluding Alternative Letters of Credit and outstanding letters of credit or
similar arrangements not issued under this Credit Agreement to the extent
collateralized by cash, Marketable Securities and/or Cash Equivalents), less
(ii) Permitted Nonrecourse Indebtedness, less (iii) Unrestricted Homebuilding
Cash in excess of $25,000,000, to (b) Tangible Net Worth.

“LIBO Rate” means, with respect to any Eurodollar Advance or Eurodollar Bid Rate
Advance for any Eurodollar Interest Period, the British Bankers Association
LIBOR Rate (“BBA LIBOR”) as published by Reuters (or if not quoted by Reuters,
such other commercially available source providing quotations of BBA LIBOR as
may be designated by

 

14

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

the Administrative Agent from time to time, at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of the Eurodollar Interest
Period for such Eurodollar Advance or Eurodollar Bid Rate Advance, as the rate
for dollar deposits with a maturity comparable to such Eurodollar Interest
Period. In the event that such rate is not available at such time for any
reason, then the “LIBO Rate” with respect to such Eurodollar Advance or
Eurodollar Bid Rate Advance for such Eurodollar Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Eurodollar Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Eurodollar Interest Period. Notwithstanding anything to the
contrary set forth above, in the event the rate determined pursuant to the two
preceding sentences shall be less than zero, then (for the avoidance of doubt)
the LIBO Rate shall be deemed to be zero for purposes of this Agreement.

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

“Loan” means, with respect to a Lender, a loan made by such Lender pursuant to
Article II (or any conversion or continuation thereof). For avoidance of doubt,
the term “Loan” includes each Revolving Credit Loan, Competitive Bid Loan and
Swing Line Advance.

“Loan Documents” means this Agreement, the Fee Letter, the Guaranty Agreements
and any Notes issued pursuant to Section 2.11.

“Loan Inventory” means, as of any date of determination, Unimproved Land, Lots
under Development, Developed Lots and Dwelling Lots which are not encumbered by
a Lien or Liens (other than any Permitted Liens) and which have been designated
by Borrower as “Loan Inventory” in the most recently delivered Inventory Summary
Report, but excluding any Encumbered Inventory.

“Loan Parties” means the Borrower and the Guarantors.

“Lots Under Development” means, as of any date of determination, parcels of land
which are, as of the date of determination, being developed into Developed Lots
or which are scheduled for the commencement of development into Developed Lots
within six calendar months after the date of determination, and which Borrower
has designated as “Lots Under Development” in the most recently delivered
Inventory Summary Report.

“Marketable Securities” means (i) securities with maturities of two years or
less from the date of acquisition issued or fully guaranteed or insured by the
United States or any agency or instrumentality thereof, (ii) dollar denominated
time and demand deposits and certificates of deposit with maturities of two
years or less from the date of acquisition and overnight bank deposits of any
commercial bank having total Tier 1 capital as most recently reported by
Bloomberg L.P. of at least $500,000,000 or long-term debt or deposit ratings of
A- by S&P or A3 by Moody’s, (iii) repurchase obligations of any bank satisfying
the requirements of clause (ii) of this definition, (iv) commercial paper and
variable or fixed rate notes of a domestic issuer rated at least A-2 or better
by S&P or P-2 or better by Moody’s and in either case maturing within two years
after the date of acquisition, (v) securities with maturities of two years or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States or by any political subdivision
or taxing authority of any such state, commonwealth or territory, and such
securities of such state, commonwealth, territory, political subdivision or
taxing authority, as the case may be, are rated at least A- by S&P or A3 by
Moody’s, (vi) securities with maturities of two years or less from the date of
acquisition issued or fully guaranteed by any member country of the OECD

 

15

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

that are rated at least A- by S&P or A3 by Moody’s, (vii) securities with
maturities of two years or less from the date of acquisition backed by standby
letters of credit issued by any commercial bank satisfying the requirements of
clause (ii) of this definition, (viii) shares of “money market funds” that
comply with the criteria set forth in Rule 2a-7 of the Investment Company Act of
1940, as amended, or (ix) bonds that mature within two years and that have an
Investment Grade Rating.

“Material Adverse Effect” means a material adverse effect on (i) the business,
Property, financial condition or results of operations of the Loan Parties taken
as a whole, (ii) the ability of the Loan Parties taken as a whole to perform
their material obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Administrative Agent or the Lenders thereunder.

“Material Indebtedness” is defined in Section 8.4.

“Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.

“Multiemployer Plan” means a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA and subject to Title IV of ERISA, to which the
Borrower or any member of the Controlled Group makes or is obligated to make
contributions, or during the preceding six plan years, has made or been
obligated to make contributions.

“Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including the Borrower or any member of the Controlled Group) at least
two of whom are not under common control, as such a plan is described in
Sections 4063 and 4064 of ERISA.

“New Revolving Credit Lender” means an Additional Lender that, immediately prior
to its assumption of the Revolving Credit Commitment of a Revolving Credit
Lender pursuant to Section 2.20 or its issuance of a Revolving Credit Commitment
pursuant to Section 2.18, was not a Revolving Credit Lender hereunder.

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (i) requires the approval of all Lenders in accordance
with the terms of Section 9.2 and (ii) has been approved by the Required
Lenders.

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

“Non-Loan Parties” means Subsidiaries of the Borrower, excluding the Guarantors.

“Nonrenewal Notice Date” is defined in Section 4.4(d).

“Notes” means, collectively, the Competitive Bid Notes, the Revolving Credit
Notes and the Swing Line Note; and “Note” means any one of the Notes.

“Notice” is defined in Section 14.1(c).

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, the Letter of Credit Obligations, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Loan Parties
to the Lenders or to any Lender, the Administrative Agent or any indemnified
party arising under the Loan Documents, including without limitation, the
Revolving Credit Obligations.

 

16

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

“OECD” means the Organisation for Economic Co-Operation and Development.

“OFAC” has the meaning set forth in the definition of “Embargoed Person.”

“Official Body” means any national, federal, state, local or other government or
political subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of any of the foregoing, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.

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

“Participant” is defined in Section 13.1.1.

“Participant Register” is defined in Section 13.1.2.

“PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56 (signed into Law October 26, 2001)).

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

“Permitted Liens” means

(i) Liens for Taxes that are not yet due and payable or due but not yet
delinquent and pledges or deposits made in the ordinary course of business to
secure payment of workmen’s compensation, or to participate in any fund in
connection with workmen’s compensation, unemployment insurance, pensions or
other social security programs;

(ii) statutory Liens, other Liens imposed by law and Liens of mechanics,
workmen, warehousemen, carriers, landlords and contractors, provided that the
Liens permitted by this subsection (ii) have not been filed or, if such Liens
have been filed, either (A) a stay of enforcement thereof has been obtained
within 60 days, (B) such Liens have been satisfied of record within 60 days
after the date of filing thereof or (C) such Liens are being contested in good
faith by appropriate proceedings and adequate reserves have been established
therefor in accordance with GAAP;

(iii) Liens incurred or deposits made to secure the performance of tenders,
bids, leases, statutory obligations, surety and appeal bonds, development
obligations, progress payments, government contracts, utility services,
developer’s or other obligations to make on-site or off-site improvements and
other obligations of like nature, in each case incurred in the ordinary course
of business of the Loan Parties;

(iv) encumbrances consisting of zoning restrictions, easements, rights of way,
matters of plat, minor defects or irregularities in title or other restrictions,
charges or encumbrances on the use of real property, none of which materially
impairs the use of such property or the value thereof, and none of which is
violated in any material respect by existing or proposed structures or land use;

(v) Liens, if any, in favor of the Administrative Agent for the benefit of the
Lenders;

 

17

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

(vi) Liens on cash, Cash Equivalents or Marketable Securities in favor of any
Lender or other bank or financial institution (including as agent) as security
for the obligations of any Loan Party under letters of credit not issued under
this Agreement in an aggregate face amount not exceeding $200,000,000;

(vii) Liens over a credit balance on a bank or deposit account or other funds
maintained with a creditor depository institution arising under the general
business conditions of the bank or financial institution at which the account is
held, including under any credit card, purchasing card or similar program, but
not securing Indebtedness;

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

(ix) any Lien existing on the date of this Agreement and described on Schedule 2
hereto and any Lien securing a refinancing of the Indebtedness secured by a Lien
described on Schedule 2, provided that the principal amount secured thereby is
not hereafter increased and no additional assets (except for improvements
constructed on such assets in the normal course of the Borrower’s business)
become subject to such Lien unless such change would be permitted under other
provisions hereof;

(x) the following, (A) if the validity or amount thereof is being contested in
good faith by appropriate and lawful proceedings diligently conducted so long as
the property subject to any such Liens is not yet subject to foreclosure or sale
or as to which levy and execution thereon have been stayed and continue to be
stayed or (B) if a final judgment is entered and such judgment is discharged,
stayed or bonded within thirty (30) days of entry:

(1) claims or Liens for Taxes due and payable; provided that the Loan Parties
maintain such reserves and other appropriate provisions as shall be required by
GAAP and pay all such Taxes forthwith upon the commencement of proceedings to
foreclose any such Lien; or

(2) claims, Liens or encumbrances upon, and defects of title to, real or
personal property, including any attachment of personal or real property or
other legal process prior to adjudication of a dispute on the merits;

(xi) purchase money security interests (including Capitalized Leases) in
equipment acquired or deemed to be acquired;

(xii) Liens securing Permitted Purchase Money Loans and Permitted Nonrecourse
Indebtedness described in the definitions of such terms;

(xiii) Liens securing additional Senior Indebtedness; provided such Liens are
either pari passu or subordinated to Liens in favor of the Administrative Agent
for the benefit of the Lenders and subject to an intercreditor agreement
reasonably satisfactory to the Administrative Agent;

(xiv) Liens on assets of Non-Loan Parties;

(xv) Liens on Investments in Non-Loan Parties;

(xvi) [Reserved];

 

18

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

(xvii) Liens of a Loan Party which existed prior to such entity becoming a Loan
Party (and were not incurred in anticipation of becoming a Loan Party);

(xviii) Liens to which assets were subject prior to the acquisition of such
assets by a Loan Party (and were not incurred in anticipation of becoming a Loan
Party);

(xix) judgment Liens that would not constitute a Default under Section 8.8;

(xx) Liens securing community development district bonds or similar bonds issued
by any Governmental Authority to accomplish similar purposes and Liens incurred
in connection with pollution control, industrial revenue, water, sewage or other
public improvement bonds or similar bonds in each case incurred in the ordinary
course of business of the Loan Parties;

(xxi) Liens on the assets and properties of joint ventures or limited
partnerships that are not wholly-owned Subsidiaries of the Loan Parties;

(xxii) Liens securing the Borrower’s and/or its Subsidiaries’ obligations (not
constituting Indebtedness) to third parties, in connection with joint
development agreements with such third parties, to perform and/or pay for or
reimburse the costs of construction and/or development related to or benefiting
the Borrower’s or its Subsidiaries’ property and property belonging to such
third parties, in each case incurred in the ordinary course of business of the
Loan Parties;

(xxiii) Liens on any office building owned by any Loan Party;

(xxiv) Liens on any clubhouse located in any development of a Loan Party;

(xxv) Liens on Inventory securing Indebtedness in favor of a seller of such
Inventory; provided that such Liens attach to such Inventory substantially
contemporaneously with the acquisition thereof;

(xxvi) leases or subleases granted to others not materially interfering with the
ordinary business of the Borrower and its Subsidiaries taken as whole;

(xxvii) Liens constituting the pledge or deposit of cash or other Property in
conjunction with obtaining surety, performance, completion or payment bonds and
letters of credit or other similar instruments or providing earnest money
obligations, escrows or similar purpose undertakings or indemnifications in the
ordinary course of business of the Borrower and its Subsidiaries;

(xxviii) Liens securing Indebtedness incurred to refinance any Indebtedness
secured by a Lien referred to in clauses (ix), (xi), (xvii) or (xviii); provided
the amount of Indebtedness secured thereby is not increased and the Liens do not
attach to any additional assets; and

(xxix) Liens securing other Indebtedness or obligations in an amount not in
excess of $25,000,000 in the aggregate.

“Permitted Nonrecourse Indebtedness” means with respect to any Person means
Indebtedness of such Person for which (i) (a) with respect to Indebtedness
related to the acquisition of Property, the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific Property
identified in the instruments evidencing or securing such Indebtedness (and/or
any accessions thereto and proceeds thereof) and such Property was acquired with
the proceeds of such Indebtedness or such Indebtedness was incurred within 180
days after the acquisition of such Property or (b) with respect to

 

19

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

Indebtedness related to constructing improvements on Property, the sole legal
recourse for collection of principal and interest on such Indebtedness is
against the specific Property and/or the improvements being financed and
identified in the instruments evidencing or securing such Indebtedness (and/or
any accessions thereto and proceeds thereof) and such improvements were financed
with the proceeds of such Indebtedness or such Indebtedness was incurred within
180 days after the construction of such improvements has commenced and (c) with
respect to any amendment, modification, extension or refinancing of any
Indebtedness referred to in clause (a) or (b), the sole recourse is to the
Property referred to in such clause and no other Property and (ii) no other
assets of such Person may be realized upon in collection of principal or
interest on such Indebtedness; provided that the aggregate principal amount of
Permitted Nonrecourse Indebtedness at any time outstanding shall not exceed an
amount equal to the greater of 1% of Tangible Net Worth of the Loan Parties at
such time and $35,000,000. Indebtedness which is otherwise Permitted Nonrecourse
Indebtedness will not lose its character as Permitted Nonrecourse Indebtedness
because there is recourse to the borrower, any guarantor or any other Person for
(a) environmental or tax warranties and indemnities and such other
representations, warranties, covenants and indemnities as are customarily
required in such transactions, or (b) indemnities for and liabilities arising
from fraud, misrepresentation, misapplication or non-payment of rents, profits,
insurance and condemnation proceeds and other sums actually received by the
borrower from secured assets to be paid to the lender, waste and mechanics’
Liens.

“Permitted Purchase Money Loans” means, collectively, Seller Purchase Money
Loans and Assumed Purchase Money Loans.

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

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

“Platform” is defined in Section 14.1(b).

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

“Prime Rate” means the rate of interest per annum announced from time to time by
the Administrative Agent as its prime rate in effect at its principal office,
each change in the Prime Rate shall be effective from and including the date
such change is announced as being effective.

“Prohibited Transaction” means a “prohibited transaction” within the meaning of
Section 406 of ERISA or Section 4975 of the Code for which neither a statutory
exemption, an individual exemption nor a class exemption has been issued by the
United States Department of Labor.

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

“Publicly Traded Debt Securities” means (i) any issue of debt securities of the
Borrower issued under the Indenture, dated as of May 1, 2012 or the Indenture
dated as of June 9, 1997 and (ii) any other issue of debt securities of the
Borrower or any Subsidiary originally issued in a public offering registered
with the SEC or in an offering pursuant to Rule 144A under the Securities Act
and of which issue at least $50 million aggregate principal amount is
outstanding.

 

20

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

“Quarterly Payment Date” is defined in Section 4.7(a).

“Rate Option” means the Alternate Base Rate or the Eurodollar Rate.

“Rate Option Notice” is defined in Section 2.2.4.

“RBS” means The Royal Bank of Scotland plc.

“Register” is defined in Section 13.2(c).

“Regulated Substances” means any pollutant or contaminant, waste, material,
compound, chemical or substance regulated under Environmental Laws because of
their effect or potential effect on human health and the Environment, including
without limitation, petroleum or petroleum-derived products, asbestos containing
material, toxic mold, radon gas or off-specification drywall or wallboard.

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

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

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of
such Person’s Affiliates.

“Release” means any release, spill, emission, discharge, deposit, disposal,
leaking, pumping, pouring, dumping, emptying, injecting, leaching or migrating
of Regulated Substances into or through the Environment, or into, from or
through any structure.

“Removal Effective Date” is defined in Section 11.6(b).

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA
and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event.

“Required Lenders” means (a) on any date of determination prior to termination
of the Aggregate Revolving Credit Commitment, those Lenders (other than
Defaulting Lenders) holding more than fifty percent (50%) of the Aggregate
Revolving Credit Commitment (excluding the Revolving Credit Commitments of any
Defaulting Lenders), and (b) on any date of determination occurring after the
termination of the Aggregate Revolving Credit Commitment, those Lenders (other
than Defaulting Lenders) holding more than fifty percent (50%) of the
outstanding principal amount of all Loans and the Letter of Credit Exposure
(excluding the Loans and Letter of Credit Exposure of any Defaulting Lenders);
provided that if the Aggregate Revolving Credit Commitment is held by two
Lenders (counting any Lender and its Affiliates as a single “Lender” for this
purpose), in determining Required Lenders (a) for the purposes of any amendment
or modification (i) that results in an increase in the Borrowing Base as
calculated in the definition of “Borrowing Base” or (ii) to the definition of
“Change of Control” or Section 8.11 and (b) for purposes of the approval of any
Extension Request under Section 2.17, the percentages in clauses (a) and
(b) above shall be one hundred percent (100%).

 

21

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

“Resignation Effective Date” is defined in Section 11.6(a).

“Revolving Credit Advance” means a borrowing hereunder (or conversion or
continuation thereof) consisting of the aggregate amount of the several
Revolving Credit Loans made on the same Borrowing Date (or date of conversion or
continuation) by some or all of the Revolving Credit Lenders (as applicable) to
the Borrower of the same Type (or in the same interest basis in the case of
Competitive Bid Advances) and, in the case of Fixed Rate Advances, for the same
Interest Period. For the avoidance of doubt, the term “Revolving Credit Advance”
includes each Competitive Bid Advance and Swing Line Advance.

“Revolving Credit Commitment” means, for each Revolving Credit Lender, the
obligation of such Revolving Credit Lender to make Revolving Credit Loans, to
participate in Swing Line Advances (to the extent provided for in
Section 2.19(e)) and to participate in Letters of Credit, not exceeding the
amount set forth in Schedule 1 or as set forth in any Assignment and Assumption
that has become effective pursuant to Section 13.2(b)(4) or in any Commitment
and Acceptance with respect to the Revolving Credit Facility that has become
effective pursuant to Section 2.18, as such amount may be modified from time to
time pursuant to the terms hereof.

“Revolving Credit Declining Lender” is defined in Section 2.17.

“Revolving Credit Declining Lender’s Termination Date” is defined in
Section 2.17.

“Revolving Credit Exposure” means, with respect to a Revolving Credit Lender,
the sum of (i) the Revolving Credit Loans made by such Revolving Credit Lender,
(ii) the Letter of Credit Exposure of such Revolving Credit Lender and (iii) the
Swing Line Exposure of such Revolving Credit Lender.

“Revolving Credit Facility” is defined in Section 2.1.1(a).

“Revolving Credit Facility Termination Date” means September 7, 2017 or any
later date as may be specified as the Revolving Credit Facility Termination Date
in accordance with Section 2.17 (with respect only to the Revolving Credit
Commitment of any Lender that elected to participate in the extension to such
later date) or any earlier date on which the Aggregate Revolving Credit
Commitment is reduced to zero or otherwise terminated pursuant to the terms
hereof.

“Revolving Credit Lenders” means the lending institutions identified on Schedule
1 hereto as having a Revolving Credit Commitment and, from and after the
effective date of their respective Commitments and Acceptances, any New
Revolving Credit Lenders, and the respective successors and assigns of any of
the foregoing.

“Revolving Credit Loan” means a Loan made by a Revolving Credit Lender under the
Revolving Credit Facility.

“Revolving Credit Note” means a promissory note, in substantially the form of
Exhibit A hereto, duly executed by the Borrower and payable to the order of a
Revolving Credit Lender in the amount of its Revolving Credit Commitment,
including any amendment, modification, renewal or replacement of such promissory
note.

 

22

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

“Revolving Credit Obligations” means all unpaid principal of and accrued and
unpaid interest on the Revolving Credit Loans, the Letter of Credit Obligations
and all accrued and unpaid fees and expenses, reimbursements, indemnities and
other obligations of the Loan Parties to the Revolving Credit Lenders or to any
Revolving Credit Lender or to the Administrative Agent or any indemnified party,
in each case arising under the Loan Documents in respect of the Revolving Credit
Facility.

“Revolving Credit Ratable Advance” means a borrowing hereunder consisting of the
aggregate amount of the several Revolving Credit Ratable Loans made by the
Revolving Credit Lenders to the Borrower at the same time, and (except as
otherwise provided Section 3.5) at the same Rate Option, and (in the case of a
Eurodollar Ratable Loans) for the same Interest Period.

“Revolving Credit Ratable Loan” means a Revolving Credit Loan made by a
Revolving Credit Lender pursuant to Section 2.2 hereof.

“Revolving Credit Ratable Share” means, with respect to any Revolving Credit
Lender on any date, (i) the ratio of (a) the amount of its Revolving Credit
Commitment to (b) the amount of the Aggregate Revolving Credit Commitment or
(ii) if the Aggregate Revolving Credit Commitment has been terminated, the ratio
of (a) its Total Revolving Credit Exposure to (b) the aggregate Total Revolving
Credit Exposure of all Revolving Credit Lenders.

“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Seller Purchase Money Loans” means at any time (a) outstanding purchase money
loans made to a Loan Party by the seller of improved or unimproved real estate
in a single transaction or separate transactions for the exclusive purpose of
acquiring such real estate for development and secured by a mortgage Lien on
such real estate or (b) any amendment, modification, extension or refinancing of
such loans, provided that with respect to the loans, as amended, modified,
extended, or refinanced (i) the aggregate amount thereof shall not exceed the
purchase price of the applicable asset, and (ii) such loans and refinancings
shall not be secured by any assets of any Loan Party other than those initially
purchased by the applicable Loan Party and improvements constructed thereon in
the normal course of the Loan Parties’ homebuilding business.

“Senior Executive” means the Chairman of the Board, President, Executive Vice
President, Chief Financial Officer, Chief Accounting Officer or General Counsel
of any Loan Party.

“Senior Indebtedness” means at any time, on a consolidated basis for the Loan
Parties, Total Indebtedness, less Subordinated Indebtedness.

“Single Employer Plan” means a Plan maintained by the Borrower or any member of
the Controlled Group for employees of the Borrower or any member of the
Controlled Group and no other employer.

“Standard Letter of Credit” means any Letter of Credit that is not an
Alternative Letter of Credit.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

23

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

“Subordinated Indebtedness” means any Indebtedness of a Loan Party that is
subordinated in right of payment to the Obligations on terms and conditions
reasonably satisfactory to the Administrative Agent.

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

“Substantial Portion” means, with respect to the Property of the Borrower and
its Subsidiaries, Property which represents more than 10% of the consolidated
assets of the Borrower and its Subsidiaries as would be shown in the
consolidated financial statements of the Borrower and its Subsidiaries as at the
beginning of the period of four consecutive fiscal quarters ending with the
fiscal quarter in which such determination is made.

“Successor Borrower” is defined in Section 7.10.

“Successor Guarantor” is defined in Section 7.10.

“Supplemental Guaranty” means a “Supplemental Guaranty” in the form provided for
and as defined in the Guaranty Agreement.

“Swing Line Advance” is defined in Section 2.19(a).

“Swing Line Borrowing Notice” is defined in Section 2.19(c).

“Swing Line Commitment” means the commitment of the Swing Line Lender to make
Swing Line Advances pursuant to Section 2.19(a). As of the date of this
Agreement the Swing Line Commitment is in the amount of $20,000,000.

“Swing Line Exposure” means, with respect to a Revolving Credit Lender, the
Revolving Credit Ratable Share of such Revolving Credit Lender of the aggregate
principal amount of all outstanding Swing Line Advances.

“Swing Line Lender” means RBS in its capacity as the Lender of Swing Line
Advances, and its successors and assigns.

“Swing Line Note” means a promissory note, in substantially the form of Exhibit
B hereto, duly executed by the Borrower and payable to the order of the Swing
Line Lender in the amount of the Swing Line Commitment, including any amendment,
modification, renewal or replacement of such promissory note.

“Tangible Net Worth” means at any time (i) Consolidated Net Worth less
(ii) intangible assets (as determined in accordance with GAAP) of the Loan
Parties, but excluding any non-cash gain or loss of the Loan Parties after
June 30, 2012 resulting from any mark-to-market adjustments made directly to the
net worth of Loan Parties on a consolidated basis as a result of fluctuations in
the value of financial instruments owned by a Loan Party as mandated under SFAS
133.

 

24

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

“Taxes” means any and all present or future taxes, duties, levies, imposts,
duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority, including any
interest, additions to tax or penalties applicable thereto.

“Total Indebtedness” means at any time all Indebtedness of the Loan Parties on a
consolidated basis. For the avoidance of doubt, “Total Indebtedness” shall not
include Indebtedness of Non-Loan Parties.

“Total Revolving Credit Exposure” means, at any time with respect to any
Revolving Credit Lender, the sum of (a) its outstanding Revolving Credit Loans
and (b) its Revolving Credit Ratable Share of the outstanding Letter of Credit
Obligations and Swing Line Exposure.

“Transferee” is defined in Section 13.3.

“Type” means, (a) with respect to any Revolving Credit Ratable Advance under the
Revolving Credit Facility, its nature as an ABR Advance or Eurodollar Advance
and (b) with respect to any Competitive Bid Advance, its nature as an Absolute
Rate Advance or Eurodollar Bid Rate Advance.

“Undrawn Fee” is defined in Section 2.4(a).

“Unfunded Liabilities” means the amount (if any) by which the present value of
all vested and unvested accrued benefits under all Single Employer Plans exceeds
the fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plans using the
Plan’s current actuarial assumptions for ongoing funding purposes.

“Unimproved Land” means parcels of land wholly-owned by a Loan Party which are,
as of the date of determination, held for future development or disposition (or
are being developed but do not qualify as “Lots under Development”) and (a) with
respect to which all requisite zoning requirements and land use requirements
have been satisfied, and all requisite approvals have been obtained (on a final
and unconditional basis) from all applicable Governmental Authorities (other
than approvals which are simply ministerial and non-discretionary in nature), in
order to develop the parcel as residential housing (including model homes) and
construct Dwelling Units thereon, (b) as to parcels located in California and
other jurisdictions that have comparable requirements and procedures, which are
subject to a currently effective vesting tentative map (unless a county or city
where the land is located does not grant vesting tentative maps), have received
all necessary approvals (on a final unconditional basis, other than future
conditions imposed on the development in order to obtain such approvals) by all
applicable Governmental Authorities and (c) have been designated by any Loan
Party as “Unimproved Land” in the most recently delivered Inventory Summary
Report).

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

“Unrestricted Homebuilding Cash” means cash, Cash Equivalents and Marketable
Securities of the Loan Parties that are free and clear of all Liens (other than
Permitted Liens of the type described in clause (vii) or (viii) of the
definition of “Permitted Liens”) and not subject to any restrictions on the use
thereof to pay Indebtedness and other obligations of the applicable Loan Party.

 

25

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

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” is defined in Section 3.7(g)(ii)(B)(iii).

“Voting Stock” of any specified “person” (as that term is used in
Section 13(d)(3) of the Exchange Act) as of any date means the capital stock of
such person that is at the time entitled to vote generally in the election of
the board of directors of such person.

1.2. Other Interpretative Provisions.

(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

(b) (i) The words “herein”, “hereunder”, “hereto” and “hereof” and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.

(ii) Unless otherwise specified herein, “Article”, “Section”, “Exhibit” and
“Schedule” references are to this Agreement.

(iii) The term “including” is by way of example and not limitation.

(iv) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements, and other
writings, however evidenced.

(c) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and
“until” each mean “to but excluding”; and “the word “through” means “to and
including.”

1.3. Accounting Terms. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, except as otherwise
specifically prescribed herein. If at any time any change in GAAP would affect
the computation of any financial ratio or requirement set forth in any Loan
Document, and either Borrower or the Required Lenders shall so request,
Administrative Agent, Lenders and Borrower shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in light
of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (x) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and
(y) Borrower shall provide to Administrative Agent and Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.

1.4. References to Agreements and Laws. Unless otherwise expressly provided
herein, (a) references to agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements, and other modifications thereto, but only
to the extent that such amendments, restatements, extensions, supplements, and
other modifications are not prohibited by any Loan Document; and (b) references
to any Applicable Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing, or interpreting such
Applicable Law.

 

26

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

1.5. Time References. Unless otherwise specified in the Loan Documents time
references are to Eastern Standard Time or Eastern Daylight Time (as
applicable).

ARTICLE II

THE CREDITS

2.1. The Revolving Credit Facility.

2.1.1. Revolving Credit Facility.

(a) The Revolving Credit Lenders grant to the Borrower a revolving credit
facility (the “Revolving Credit Facility”) pursuant to which, and upon the terms
and subject to the conditions herein set forth:

(i) each Revolving Credit Lender severally agrees to make Revolving Credit
Ratable Loans to the Borrower in accordance with Section 2.2;

(ii) each Revolving Credit Lender may, in its sole discretion, make bids to make
Competitive Bid Loans to the Borrower in accordance with Section 2.3; and

(iii) the Swing Line Lender agrees to make Swing Line Advances to the Borrower
in accordance with Section 2.19.

(b) The Revolving Credit Facility shall be subject to the following limitations:

(i) In no event shall the sum of (i) the aggregate principal amount of all
outstanding Revolving Credit Advances (including Revolving Credit Ratable
Advances, Competitive Bid Advances and Swing Line Advances) plus (ii) the Letter
of Credit Obligations exceed the Aggregate Revolving Credit Commitment.

(ii) In no event shall the outstanding principal amount of all outstanding
Competitive Bid Advances exceed the Competitive Bid Sublimit.

(iii) In no event shall the outstanding principal amount of all outstanding
Swing Line Advances exceed the Swing Line Commitment.

(iv) No Revolving Credit Loans shall be made to the Borrower at any time that
any Swing Line Advance is outstanding, except for a Revolving Credit Loan that
is used, in whole or in part, on the day on which made, to repay in full the
outstanding balance of the Swing Line Advances.

(c) Subject to the terms hereof, the Revolving Credit Facility is available from
the date hereof to the Revolving Credit Facility Termination Date and, upon the
Revolving Credit Facility Termination Date, the Revolving Credit Commitments to
lend hereunder shall expire. The Revolving Credit Commitment of a Revolving
Credit Declining Lender shall expire on its Revolving Credit Declining Lender’s
Termination Date unless prior thereto such Revolving Credit Declining Lender
elects, with the approval of the Borrower and the Administrative Agent, to
extend its Revolving Credit Commitment to the Revolving Credit Facility
Termination Date, which election and approval shall be evidenced by a written
instrument in a form reasonably acceptable to and executed by such Revolving
Credit Declining Lender, the Borrower and the Administrative Agent. Upon the
execution and delivery of such written instrument, such Revolving Credit Lender
shall cease to be a Revolving Credit Declining Lender.

 

27

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

(d) Any outstanding Revolving Credit Advances and all other unpaid Revolving
Credit Obligations shall be paid in full by the Borrower on the Revolving Credit
Facility Termination Date (except to the extent that, pursuant to Article IV,
Letters of Credit are permitted to have an expiration date later than the
Revolving Credit Facility Termination Date). All outstanding Revolving Credit
Loans held by, and all other unpaid Revolving Credit Obligations payable to, a
Revolving Credit Declining Lender shall be paid in full by the Borrower on its
Revolving Credit Declining Lender’s Termination Date.

2.1.2. Reserved.

2.1.3. Payment. At any time that the Borrower would not be in compliance with
the covenant set forth in Section 7.27.2(i) as of the fifth Business Day after
any BB Compliance Date, the Borrower shall, on or before such fifth Business
Days, repay Revolving Credit Advances and/or Cash Collateralize Letters of
Credit in an amount necessary to be in compliance with such Section on such
fifth Business Day.

2.2. Revolving Credit Ratable Advances.

2.2.1. Revolving Credit Ratable Advances. Each Revolving Credit Ratable Advance
hereunder shall consist of borrowings made from the several Lenders under the
Revolving Credit Facility in their respective Revolving Credit Ratable Shares
thereof. The aggregate outstanding amount of Competitive Bid Advances shall
reduce the availability of Revolving Credit Advances as provided in
Section 2.1.1 but shall not otherwise affect the obligations of the Revolving
Credit Lenders to make Revolving Credit Ratable Advances, and (without
limitation of the foregoing) no Competitive Bid Loan shall reduce the obligation
of the Revolving Credit Lender making such Competitive Bid Loan to lend its
applicable Revolving Credit Ratable Share of any future Revolving Credit Ratable
Advances.

2.2.2. Ratable Advance Rate Options. The Revolving Credit Ratable Advances may
be ABR Advances or Eurodollar Advances, or a combination thereof, selected by
the Borrower in accordance with Section 2.2.3. No Revolving Credit Ratable
Advance may mature after the Revolving Credit Facility Termination Date.

2.2.3. Method of Selecting Rate Options and Interest Periods for Revolving
Credit Ratable Advances. The Borrower shall select the Rate Option and, in the
case of each Fixed Rate Advance, the Interest Period applicable thereto, from
time to time. The Borrower shall give the Administrative Agent irrevocable
notice (a “Borrowing Notice”) not later than 11:00 a.m. (New York time) (or
11:15 a.m. (New York time) if applicable under the next succeeding sentence),
(x) on the Borrowing Date of each ABR Advance and (y) at least two Business Days
prior to the Borrowing Date of each Eurodollar Advance. The Administrative Agent
shall give prompt notice of each Borrowing Notice to each Lender. The time for
delivery of a Ratable Borrowing Notice for a ABR Advance under the Revolving
Credit Facility shall be extended by 15 minutes if the day on which such Ratable
Borrowing Notice is given is also a day on which the Borrower is required to
accept or reject one or more bids offered in connection with an Absolute Rate
Auction pursuant to Section 2.3.6, and the time for delivery of a Ratable
Borrowing Notice for a Eurodollar Advance under the Revolving Credit Facility
shall be extended by 15 minutes if the day on which such Ratable Borrowing
Notice is given is also a day on which the Borrower is required to accept or
reject one or more bids offered in connection with a Eurodollar Auction pursuant
to Section 2.3.6. A Borrowing Notice shall specify:

(i) the Borrowing Date, which shall be a Business Day, of such Revolving Credit
Ratable Advance;

(ii) the aggregate amount of such Revolving Credit Ratable Advance;

 

28

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

(iii) the Rate Option selected for such Revolving Credit Ratable Advance; and

(iv) in the case of each Eurodollar Advance, the Interest Period applicable
thereto (which shall be subject to the limitations set forth in Section 2.2.6).

2.2.4. Conversion and Continuation of Outstanding Revolving Credit Ratable
Advances. Each ABR Advance under the Revolving Credit Facility shall continue as
a ABR Advance unless and until such ABR Advance is converted into a Eurodollar
Advance in accordance with this Section 2.2.4 or is prepaid in accordance with
Section 2.6. Each Eurodollar Advance under the Revolving Credit Facility shall
continue as a Eurodollar Advance of such Type until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance shall
be automatically continued as a Eurodollar Advance with an Interest Period of
one month unless such Eurodollar Advance shall have been either (a) prepaid in
accordance with Section 2.6, (b) continued as a Eurodollar Advance for another
Interest Period in accordance with this Section 2.2.4 or (c) converted into an
ABR Advance in accordance with this Section 2.2.4. Subject to the terms of
Section 2.5, the Borrower may elect from time to time to convert and/or continue
the Rate Option applicable to all or any part of a Revolving Credit Ratable
Advance under the Revolving Credit Facility into another Rate Option; provided
that any conversion or continuation of any Eurodollar Advance shall be made on,
and only on, the last day of the Interest Period applicable thereto. The
Borrower shall give the Administrative Agent irrevocable notice (a “Rate Option
Notice”) of each conversion of a ABR Advance under the Revolving Credit Facility
into a Eurodollar Advance, or continuation of a Eurodollar Advance or the
conversion of a Eurodollar Advance, not later than 11:00 a.m. (New York time)
(x) on the Business Day of the conversion of a Eurodollar Advance into an ABR
Advance or (y) at least two Business Days prior to the date of the requested
conversion or continuation of a Revolving Credit Ratable Advance into or as a
Eurodollar Advance, specifying:

(i) the requested date, which shall be a Business Day, of such conversion or
continuation;

(ii) the aggregate amount and Rate Option applicable to the Revolving Credit
Ratable Advance which is to be converted or continued; and

(iii) the amount and Rate Option(s) of Revolving Credit Ratable Advance(s) into
which such Revolving Credit Ratable Advance is to be converted or continued and,
in the case of a conversion into or continuation of a Eurodollar Advance, the
duration of the Interest Period applicable thereto (which shall be subject to
the limitations set forth in Section 2.2.6).

2.2.5. Limitations. Revolving Credit Ratable Advances under the Revolving Credit
Facility shall be subject to the applicable limitations set forth in
Section 2.5.

2.2.6. Interest Period. The Interest Period of a Eurodollar Advance may not end
later than the Revolving Credit Facility Termination Date nor, with respect to
the portion of a Eurodollar Advance held by a Revolving Credit Declining Lender,
later than the Revolving Credit Declining Lender’s Termination Date of such
Revolving Credit Declining Lender.

2.3. Competitive Bid Advances.

2.3.1. Competitive Bid Option. In addition to Revolving Credit Ratable Advances
pursuant to Section 2.2, but subject to the terms and conditions of this
Agreement (including, without limitation, the limitation set forth in
Section 2.1.1(b)(i) as to the maximum aggregate principal amount of all
outstanding Revolving Credit Advances and Letter of Credit Obligations hereunder
and the limitation in Section 2.1.1(b)(ii) as to the maximum aggregate amount of
all outstanding Competitive Bid Advances), the

 

29

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

Borrower may, as set forth in this Section 2.3, request the Revolving Credit
Lenders, prior to the Revolving Credit Facility Termination Date, to make offers
to make Competitive Bid Advances to the Borrower. Each Revolving Credit Lender
may, but shall have no obligation to, make any such offer in the manner set
forth in this Section 2.3.

2.3.2. Competitive Bid Quote Request. When the Borrower wishes to request offers
to make Competitive Bid Loans under this Section 2.3, it shall transmit to the
Administrative Agent (whether or not it is the Competitive Bid Agent) by
telecopy a Competitive Bid Quote Request substantially in the form of Exhibit M
so as to be received no later than (i) at least five (5) Business Days prior to
the Borrowing Date proposed therein, in the case of a Eurodollar Auction or
(ii) at least two (2) Business Days (or, if so agreed by the Borrower and the
Administrative Agent, one (1) (but not less than one (1)) Business Day) prior to
the Borrowing Date proposed therein, in the case of an Absolute Rate Auction.
The Competitive Bid Quote Request shall specify whether the Borrower or the
Administrative Agent shall be the Competitive Bid Agent with respect thereto,
and, if the Administrative Agent is the Competitive Bid Agent, the Borrower
shall deliver the Competitive Bid Quote Request to the Administrative Agent not
later than 10:00 a.m. (New York time) on the day on which it is required to be
delivered. Each Competitive Bid Quote Request shall specify:

(i) the proposed Borrowing Date, which shall be a Business Day, for the proposed
Competitive Bid Advance;

(ii) the aggregate principal amount of such proposed Competitive Bid Advance,
which shall be not less than $10,000,000 and in an integral multiple of
$1,000,000 if in excess thereof;

(iii) whether the Competitive Bid Quotes requested are to set forth a
Competitive Bid Margin or an Absolute Rate; and

(iv) the Competitive Bid Interest Period applicable thereto (which may not end
after the Revolving Credit Facility Termination Date).

The Borrower may request offers to make Competitive Bid Loans for more than one
Competitive Bid Interest Period, but not more than five Competitive Bid Interest
Periods, in a single Competitive Bid Quote Request. No Competitive Bid Quote
Request shall be given within five (5) Business Days (or such other number of
days as the Borrower and the Administrative Agent may agree) of any Competitive
Bid Quote Request that did not result in a Competitive Bid Advance being made.
If the Administrative Agent is the Competitive Bid Agent, it may reject a
Competitive Bid Quote Request that does not conform substantially to the form of
Exhibit M and shall promptly notify the Borrower of such rejection by telecopy.

2.3.3. Invitation for Competitive Bid Quotes. Promptly and in any event before
the close of business on the same Business Day of delivery of a Competitive Bid
Quote Request that is not rejected pursuant to Section 2.3.2, the Competitive
Bid Agent shall send to each of the Revolving Credit Lenders (except as
otherwise provided in Section 2.3.10) by telecopy an Invitation for Competitive
Bid Quotes substantially in the form of Exhibit N hereto, which shall constitute
an invitation by the Borrower to each such Revolving Credit Lender to submit
Competitive Bid Quotes offering to make the Competitive Bid Loans to which such
Competitive Bid Quote Request relates in accordance with this Section 2.3.

 

30

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

2.3.4. Submission and Contents of Competitive Bid Quotes.

(a) Except as otherwise provided in Section 2.3.10, each Revolving Credit Lender
may, in its sole discretion, submit a Competitive Bid Quote containing an offer
or offers to make Competitive Bid Loans in response to any Invitation for
Competitive Bid Quotes. Each Competitive Bid Quote must comply with the
requirements of this Section 2.3.4 and must be submitted to the Competitive Bid
Agent by telecopy at its offices specified in or pursuant to Article XIV not
later than (i) 10:00 a.m. (New York time) at least three Business Days prior to
the proposed Borrowing Date, in the case of a Eurodollar Auction or (ii) 10:00
a.m. (New York time) on the proposed Borrowing Date, in the case of an Absolute
Rate Auction (or, in either case upon reasonable prior notice to the Revolving
Credit Lenders, such other time and date as the Borrower and the Administrative
Agent may agree); provided that, if the Administrative Agent is the Competitive
Bid Agent, Competitive Bid Quotes submitted by the Administrative Agent as a
Lender may only be submitted if the Administrative Agent notifies the Borrower
of the terms of the offer or offers contained therein not later than 30 minutes
prior to the latest time at which the relevant Competitive Bid Quotes must be
submitted by the other Revolving Credit Lenders. Subject to Articles V and IX,
any Competitive Bid Quote so made shall be irrevocable except with the written
consent of the Competitive Bid Agent given on the instructions of the Borrower
(if the Borrower is not the Competitive Bid Agent).

(b) Each Competitive Bid Quote shall be in substantially the form of Exhibit L
and shall in any case specify:

(i) the proposed Borrowing Date, which shall be the same as that set forth in
the applicable Invitation for Competitive Bid Quotes;

(ii) the principal amount of the Competitive Bid Loan for which each such offer
is being made, which principal amount (A) may be greater than, less than or
equal to the Revolving Credit Commitment of the quoting Revolving Credit Lender,
(B) must be in an integral multiple of $1,000,000 and (C) may not exceed the
principal amount of Competitive Bid Loans for which offers were requested;

(iii) in the case of a Eurodollar Auction, the Competitive Bid Margin offered
for each such Competitive Bid Loan;

(iv) the minimum amount, if any, of the Competitive Bid Loan which may be
accepted by the Borrower, which amount shall not be less than $1,000,000;

(v) in the case of an Absolute Rate Auction, the Absolute Rate offered for each
such Competitive Bid Loan;

(vi) the maximum aggregate amount, if any, of Competitive Bid Loans offered by
the quoting Revolving Credit Lender which may be accepted by the Borrower; and

(vii) the identity of the quoting Revolving Credit Lender.

(c) The Competitive Bid Agent shall reject any Competitive Bid Quote that:

(i) is not substantially in the form of Exhibit L or does not specify all of the
information required by Section 2.3.4(b);

(ii) contains qualifying, conditional or similar language, other than any such
language contained in Exhibit L;

(iii) proposes terms other than or in addition to those set forth in the
applicable Invitation for Competitive Bid Quotes; or

 

31

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

(iv) arrives after the time set forth in Section 2.3.4(a).

If any Competitive Bid Quote shall be rejected pursuant to this
Section 2.3.4(c), then the Competitive Bid Agent shall notify the relevant
Revolving Credit Lender of such rejection as soon as practical and (if the
Administrative Agent is the Competitive Bid Agent) shall promptly send a copy of
the rejected Competitive Bid Quote to the Borrower.

2.3.5. Notice to Borrower. If the Administrative Agent is the Competitive Bid
Agent, it shall promptly notify the Borrower of the terms (i) of any Competitive
Bid Quote submitted by a Revolving Credit Lender that is in accordance with
Section 2.3.4 and (ii) of any Competitive Bid Quote that amends, modifies or is
otherwise inconsistent with a previous Competitive Bid Quote submitted by such
Revolving Credit Lender with respect to the same Competitive Bid Quote Request.
Any such subsequent Competitive Bid Quote shall be disregarded by the
Competitive Bid Agent unless such subsequent Competitive Bid Quote specifically
states that it is submitted solely to correct a manifest error in such former
Competitive Bid Quote. If the Administrative Agent is the Competitive Bid Agent,
its notice to the Borrower shall specify the aggregate principal amount of
Competitive Bid Loans for which offers have been received for each Interest
Period specified in the related Competitive Bid Quote Request and the respective
principal amounts and Eurodollar Bid Rates or Absolute Rates, as the case may
be, so offered. In addition, if the Administrative Agent is the Competitive Bid
Agent, it shall send copies of each Competitive Bid Quote to the Borrower.

2.3.6. Acceptance and Notice by Borrower. Not later than (i) 11:00 a.m. (New
York time) at least three Business Days prior to the proposed Borrowing Date, in
the case of a Eurodollar Auction or (ii) 11:00 a.m. (New York time) on the
proposed Borrowing Date, in the case of an Absolute Rate Auction (or, in either
case upon reasonable prior notice to the Revolving Credit Lenders, such other
time and date as the Borrower and the Administrative Agent may agree), the
Borrower shall notify the Administrative Agent of its acceptance or rejection of
the offers received by it pursuant to Section 2.3.4 or so notified to it
pursuant to Section 2.3.5; provided, however, that the failure by the Borrower
to give such notice to the Administrative Agent shall be deemed to be a
rejection of all such offers. In the case of acceptance, such notice (a
“Competitive Bid Borrowing Notice”) shall specify the aggregate principal amount
of offers for each Interest Period that are accepted and (if the Administrative
Agent is not the Competitive Bid Agent) shall include copies of each Competitive
Bid Quote that is accepted. The Borrower may accept any Competitive Bid Quote in
whole or in part (subject to the terms of Section 2.3.4(b)(iv) and (vi));
provided that:

(i) the aggregate principal amount of each Competitive Bid Advance may not
exceed (but, within the limitations set forth in Section 2.3.2(ii), may be less
than) the applicable amount set forth in the related Competitive Bid Quote
Request;

(ii) acceptance of offers may only be made on the basis of ascending Eurodollar
Bid Rates or Absolute Rates, as the case may be; and

(iii) the Borrower may not accept any offer that is described in
Section 2.3.4(c) or that otherwise fails to comply with the requirements of this
Agreement.

2.3.7. Allocation by Competitive Bid Agent. If offers are made by two or more
Revolving Credit Lenders with the same Eurodollar Bid Rates or Absolute Rates,
as the case may be, for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
principal amount of Competitive Bid Loans in respect of which such offers are
accepted shall be allocated by the Competitive Bid Agent among such Revolving
Credit Lenders as nearly as possible (in such multiples, not greater than
$1,000,000, as the Competitive Bid Agent may deem appropriate) in

 

32

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

proportion to the aggregate principal amount of such offers; provided, however,
that no Revolving Credit Lender shall be allocated a portion of any Competitive
Bid Advance which is less than the minimum amount which such Revolving Credit
Lender has stated in its applicable Competitive Bid Quote that it is willing to
accept. Allocations by the Competitive Bid Agent of the amounts of Competitive
Bid Loans shall be conclusive in the absence of manifest error. The
Administrative Agent shall promptly, but in any event on the same Business Day,
notify each Revolving Credit Lender of its receipt of a Competitive Bid
Borrowing Notice and the aggregate principal amount of such Competitive Bid
Advance allocated to each participating Revolving Credit Lender.

2.3.8. Limitations. Competitive Bid Advances shall be subject to the applicable
limitations contained in the last sentence of Section 2.5.

2.3.9. Administration Fee. The Borrower hereby agrees to pay to the
Administrative Agent an administration fee, in the amount to be agreed, for each
Competitive Bid Quote Request transmitted by the Borrower to the Administrative
Agent pursuant to Section 2.3.2. Such administration fee shall be payable in
arrears on each Quarterly Payment Date hereafter and on the Revolving Credit
Facility Termination Date (or such earlier date on which the Aggregate Revolving
Credit Commitment shall terminate or be canceled) for any period then ending for
which such fee, if any, shall not have been theretofore paid.

2.3.10. Revolving Credit Declining Lender. Notwithstanding anything to the
contrary contained herein, (a) a Revolving Credit Declining Lender shall not be
entitled to receive an Invitation for Competitive Bid Quotes inviting an offer
for, and shall not offer to make and shall not make, a Competitive Bid Loan for
a Competitive Bid Interest Period that expires later than its Revolving Credit
Declining Lender’s Termination Date and (b) the Borrower may not request a
Competitive Bid Advance for a Competitive Bid Interest Period expiring later
than any Revolving Credit Declining Lender’s Termination Date if, following the
making of such Competitive Bid Advance, the aggregate amount of all Competitive
Bid Advances for Competitive Bid Interest Periods expiring later than such
Revolving Credit Declining Lender’s Termination Date would exceed the amount to
which the Competitive Bid Sublimit will be reduced upon such Revolving Credit
Declining Lender’s Termination Date.

2.4. Undrawn Fee; Reductions in Aggregate Revolving Credit Commitment.

(a) The Borrower agrees to pay to the Administrative Agent for the ratable
account of the Revolving Credit Lenders (other than any Defaulting Lender) an
undrawn commitment fee (“Undrawn Fee”) at a per annum rate equal to the
Applicable Fee Rate on the average daily Aggregate Available Revolving Credit
from the date hereof to and including the Revolving Credit Facility Termination
Date, payable quarterly in arrears, with such payment being due, with respect to
any calendar quarter, not later than the fifth day after submission by the
Administrative Agent to the Borrower of an invoice for such calendar quarter (or
portion thereof in the case of the quarter ending September 30, 2012) and, with
respect to each Lender, upon termination or expiration of the Revolving Credit
Commitment of such Lender. Any such Undrawn Fee shall be allocated ratably among
the Revolving Credit Lenders (other than any Defaulting Lender) ratably in
respect of their respective Revolving Credit Ratable Shares. For the avoidance
of doubt, Swing Line Advances and Competitive Bid Advances shall not be
considered usage under the Revolving Credit Facility for purposes of the Undrawn
Fee.

(b) The Borrower may permanently reduce the Aggregate Revolving Credit
Commitment in whole, or in part in integral multiples of $10,000,000, upon at
least five Business Days’ written notice to the Administrative Agent, which
notice shall specify the amount of any such reduction, provided, however, that
(i) the amount of the Aggregate Revolving Credit Commitment may not be reduced
below the sum of (A) aggregate principal amount of the outstanding Revolving
Credit Advances and Swing Line

 

33

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

Advances and (B) the Letter of Credit Obligations and (ii) any such reduction of
the Aggregate Revolving Credit Commitment shall be allocated ratably among the
Revolving Credit Commitments of the Revolving Credit Lenders (in their
respective Revolving Credit Ratable Shares); provided that the Revolving Credit
Commitments may be terminated in their entirety if all of the Revolving Credit
Ratable Advances, the Competitive Bid Advances and Swing Line Advances have been
repaid in full and no Letter of Credit Obligations are outstanding, except
undrawn Alternative Letters of Credit, which shall be governed by a
reimbursement agreement in form and substance reasonably satisfactory to the
applicable Issuing Banks.

2.5. Minimum Amount of Each Revolving Credit Advance; Maximum Number of
Revolving Credit Advances. Each Eurodollar Advance shall be in the minimum
amount of $5,000,000 (and in multiples of $1,000,000 if in excess thereof), and
each ABR Advance shall be in the minimum amount of $1,000,000 (and in multiples
of $1,000,000 if in excess thereof), provided, however, that any ABR Advance
under the Revolving Credit Facility may be in the amount of the Aggregate
Available Revolving Credit or in the amount necessary to repay a Swing Line
Advance. Each Competitive Bid Advance shall be in the minimum amount provided
for in Section 2.3. There shall be no more than five (5) Fixed Rate Advances
outstanding under the Revolving Credit Facility (in the aggregate) at any time;
provided that in the case of one or more Facility Increases pursuant to
Section 2.18, the number of Fixed Rate Advances permitted to remain outstanding
at one time hereunder shall increase by one (1) Fixed Rate Advance for every
increase of the Aggregate Revolving Credit Commitment of $12,500,000 pursuant to
such Facility Increase; provided further, however, that the total number of
Eurodollar Advances shall not exceed 10 at any time.

2.6. Optional Principal Payments. The Borrower may from time to time prepay,
without penalty or premium, all outstanding ABR Advances under the Revolving
Credit Facility, or, in a minimum aggregate amount of $1,000,000 or any integral
multiple of $1,000,000 in excess thereof, any portion of the outstanding ABR
Advances under the Revolving Credit Facility upon one Business Day’s prior
notice to the Administrative Agent. The Borrower may from time to time pay, upon
three Business Days’ prior notice to the Administrative Agent, subject to the
payment of any funding indemnification amounts required by Section 3.6 but
without penalty or premium, (i) all of a Eurodollar Advance under the Revolving
Credit Facility, or (ii) in a minimum aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof (and provided such payment
would not reduce the outstanding principal amount of such Eurodollar Advance
under the Revolving Credit Facility to less than $5,000,000) any portion of a
Eurodollar Advance under the Revolving Credit Facility. The Borrower may from
time to time pay, prior to the last day of the applicable Competitive Bid
Interest Period, upon three Business Days’ prior notice to the Administrative
Agent, all (but not less than all) of any Competitive Bid Loan having an initial
Competitive Bid Interest Period of 90 days or longer and, with the approval of
the Revolving Credit Lender holding such Competitive Bid Loan, any other
Competitive Bid Loan, subject, in any case, to payment of any funding
indemnification amounts required by Section 3.4 but without penalty or premium.

2.7. Funding. Not later than 2:00 p.m. (New York time) on the Closing Date, each
Lender shall make available its Loans in funds immediately available in New York
to the Administration Agent at its address specified pursuant to Article XIV.
Not later than or 1:00 p.m. (New York time) on any other Borrowing Date, each
Lender (other than the Swing Line Lender which shall make Swing Line Advances as
provided in Section 2.19(c)) shall make available its Loan or Loans in funds
immediately available in New York to the Administrative Agent at its address
specified pursuant to Article XIV. The Administrative Agent will make the funds
so received from the applicable Lenders available to the Borrower at the
Administrative Agent’s aforesaid address.

 

34

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

2.8. Changes in Interest Rate, Etc. Each ABR Advance shall bear interest on the
outstanding principal amount thereof, for each day from and including the date
such Revolving Credit Advance is made or is automatically converted from a Fixed
Rate Advance into a ABR Advance pursuant to Section 2.2.4, to but excluding the
date it is paid or is converted into a Fixed Rate Advance pursuant to
Section 2.2.4, at a rate per annum equal to the Alternate Base Rate for such
day. Changes in the rate of interest on that portion of any Revolving Credit
Advance maintained as an ABR Advance will take effect simultaneously with each
change in the Alternate Base Rate. Each Fixed Rate Advance shall bear interest
on the outstanding principal amount thereof from and including the first day of
the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate applicable to such Fixed Rate Advance.
No Interest Period may end after the Revolving Credit Facility Termination Date
or after the Revolving Credit Declining Lender’s Termination Date of any
Revolving Credit Declining Lender.

2.9. Rates Applicable After Default. Notwithstanding anything to the contrary
contained in Section 2.2, during the continuance of a Default or Unmatured
Default (except for (a) Unmatured Defaults that will be cured, and that the
Borrower certifies will be cured, by the use of the proceeds of a Revolving
Credit Advance that the Borrower has requested hereunder or by the issuance,
amendment or extension of a Letter of Credit that the Borrower has requested
hereunder or (b) Unmatured Defaults (other than the failure to pay any
Obligation hereunder) that are not reasonably likely to have a Material Adverse
Effect and that the Borrower certifies that it reasonably expects to cure before
the date on which the same becomes a Default) the Required Lenders may, at their
option, by notice to the Borrower (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 9.2 requiring
unanimous consent of the Lenders under the Revolving Credit Facility to changes
in interest rates under the Revolving Credit Facility), declare that no
Revolving Credit Advance may be made as, converted into or continued (after the
then applicable Interest Period therefor) as a Fixed Rate Advance. During the
continuance of a Default the Required Lenders may, at their option, declare that
(i) each Fixed Rate Advance shall bear interest at the rate otherwise applicable
to such Interest Period plus 2% per annum and (ii) each ABR Advance shall bear
interest at a rate per annum equal to the Alternate Base Rate in effect from
time to time plus 2% per annum, provided that, during the continuance of a
Default under Section 8.5 or 8.6, the interest rates set forth in clauses
(i) and (ii) above shall be applicable to all Revolving Credit Advances without
any election or action on the part of the Administrative Agent or any Lender.

2.10. Method and Allocation of Payments.

(a) All payments of the Obligations hereunder shall be made, without setoff,
deduction, or counterclaim, in immediately available funds to the Administrative
Agent at the Administrative Agent’s address specified pursuant to Article XIV,
or at any other Lending Installation of the Administrative Agent specified in
writing by the Administrative Agent to the Borrower, by 1:00 p.m. (New York
time) on the date when due. Each payment delivered to the Administrative Agent
for the account of any Lender shall be delivered promptly by the Administrative
Agent to such Lender in the same type of funds that the Administrative Agent
received at its address specified pursuant to Article XIV or at any Lending
Installation specified in a notice received by the Administrative Agent from
such Lender.

(b) Except as otherwise provided in Section 2.10(c), payments of principal and
interest on Revolving Credit Advances received by Administrative Agent shall be
allocated among the Lenders under the Revolving Credit Facility based on their
pro rata shares of such Revolving Credit Ratable Advances. Except as otherwise
provided in Section 2.10(c), payments of principal on any Competitive Bid
Advance received by the Administrative Agent shall be paid, on a pro rata basis,
to the Revolving Credit Lender or Revolving Credit Lenders holding the
Competitive Bid Loan or Loans comprising such Revolving Credit Advance and
payments of interest on such Competitive Bid Advance received by the
Administrative

 

35

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

Agent shall be allocated to the Revolving Credit Lender or Revolving Credit
Lenders that funded such Revolving Credit Advance, pro rata based on the amount
of interest due each such Revolving Credit Lender on its outstanding principal
(it being acknowledged that the rate of interest payable to Revolving Credit
Lenders on the Competitive Bid Loans may differ). Except as otherwise provided
in Section 2.10(c), payments of principal and interest on Swing Line Advances
received by the Administrative Agent shall be paid solely to the Swing Line
Lender. Payments made by the Borrower shall be applied to the Revolving Credit
Advances or interest thereon (or both, as applicable) designated by the
Borrower.

(c) Notwithstanding the provisions of Section 2.10(b), if each of the conditions
listed in Clauses (A) through (C) below exists on the date on which a payment on
any Revolving Credit Loan is made then such payment shall be allocated on a
pro-rata basis between the holders of the Competitive Bid Loans and holders of
the Revolving Credit Ratable Loans based upon the respective amounts of such
Competitive Bid Loans and Revolving Credit Ratable Loans outstanding if it is a
payment of principal and shall be allocated on a pro rata basis between holders
of the Competitive Bid Loans and holders of the Revolving Credit Ratable Loans
based on the amount of interest due to such holders if it is a payment of
interest: (A) a Default exists and is continuing and has not been waived,
(B) the Revolving Credit Loans have been accelerated or otherwise shall have
become due, and (C) the fractional share of one or more of the Revolving Credit
Lenders in the total amount of all outstanding Competitive Bid Loans does not
equal its Revolving Credit Ratable Share.

(d) If the Administrative Agent receives payments on any Business Day of any
amounts payable to any Lender hereunder and fails to pay such amount to such
Lender (i) on or before the close of business on such day if such payment was
received by 1:00 p.m. (New York time) on such day or (ii) on or before the next
succeeding Business Day if such payment was received after 1:00 p.m. (New York
time) on such day of receipt, the Administrative Agent shall pay to such Lender
interest on such unpaid amount at the Federal Funds Effective Rate until such
amount is so paid to such Lender.

2.11. Noteless Agreement; Evidence of Indebtedness.

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

(b) The Administrative Agent shall also maintain accounts in which it will
record (i) the amount of each Loan made hereunder and the Rate Option and
Interest Period with respect thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender’s share thereof.

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

(d) Any Lender may request that its Revolving Credit Ratable Loans be evidenced
by a Revolving Credit Note and that its Competitive Bid Loans be evidenced by a
Competitive Bid Note. In such event, the Borrower shall prepare, execute and
deliver to such Lender the Note or Notes payable to the order of such Lender in
a form supplied by the Administrative Agent. Thereafter, the Loans evidenced by
such Note and interest thereon shall at all times (including after any
assignment pursuant to Section 13.2) be

 

36

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

represented by one or more Notes payable to the order of the payee named therein
or any assignee pursuant to Section 13.2, except to the extent that any such
Lender or assignee subsequently returns any such Note for cancellation and
requests that such Loans once again be evidenced as described in Sections
2.11(a) and (b) above.

2.12. Telephonic Notices. The Borrower hereby authorizes the Lenders and the
Administrative Agent to extend, convert or continue Revolving Credit Advances,
effect selections of Rate Options and to transfer funds based on telephonic
notices made by any person or persons the Administrative Agent or any Lender in
good faith believes to be an Authorized Officer acting on behalf of the
Borrower. The Borrower agrees to deliver promptly to the Administrative Agent a
written confirmation of each telephonic notice signed by an Authorized Officer.
If the written confirmation differs in any material respect from the action
taken by the Administrative Agent and the Lenders, the records of the
Administrative Agent and the Lenders shall govern absent manifest error.

2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued on each
ABR Advance shall be payable monthly, with such payment being due, respect to
any calendar month, not later than the fifth day after submission by the
Administrative Agent to the Borrower of an invoice for such calendar month (or
portion thereof in the case of September 2012). Interest accrued on each Fixed
Rate Advance shall be payable on the last day of its applicable Interest Period,
on any date on which the Fixed Rate Advance is prepaid, whether due to
acceleration or otherwise, and at maturity. Interest accrued on each Fixed Rate
Advance having an Interest Period longer than three months shall also be payable
on the first day of each calendar quarter during such Interest Period. Interest
and fees under this Agreement shall be calculated for actual days elapsed on the
basis of a 360-day year except that interest on ABR Advances made at the Prime
Rate and Absolute Rate Advances shall be calculated for actual days elapsed on
the basis of a 365-day (or, if applicable, 366-day) year. Interest shall be
payable for the day a Revolving Credit Advance is made but not for the day of
any payment on the amount paid if payment is received prior to 1:00 p.m. (New
York time) at the place of payment. If any payment of principal of or interest
on a Revolving Credit Advance shall become due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day and, in the
case of a principal payment, such extension of time shall be included in
computing interest in connection with such payment.

2.14. Notification of Revolving Credit Advances, Interest Rates, Prepayments and
Revolving Credit Commitment Reductions. Promptly after receipt thereof, (a) the
Administrative Agent will notify each Revolving Credit Lender of the contents of
each Aggregate Revolving Credit Commitment reduction notice and Competitive Bid
Borrowing Notice (except as otherwise provided in Section 2.3.10), and (b) the
Administrative Agent shall notify each Revolving Credit Lender of each Borrowing
Notice, Rate Option Notice and repayment notice received by the Administrative
Agent with respect to the Revolving Credit Facility. The Administrative Agent
will notify each Lender under the Revolving Credit Facility of the interest rate
applicable to each Eurodollar Advance under the Revolving Credit Facility
promptly upon determination of such interest rate and will give each Lender
prompt notice of each change in the Alternate Base Rate.

2.15. Lending Installations. Each Lender may book its Loans under the Revolving
Credit Facility at any Lending Installation selected by such Lender and may
change its Lending Installation from time to time. All terms of this Agreement
shall apply to any such Lending Installation and the applicable Loans and Notes
issued hereunder shall be deemed held by each Lender for the benefit of such
Lending Installation. Each Lender may, by written notice to the Administrative
Agent and the Borrower in accordance with Article XIV, designate replacement or
additional Lending Installations through which Loans under the Revolving Credit
Facility will be made by it and for whose account Loan payments under the
Revolving Credit Facility are to be made.

 

37

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

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

2.17. Extension of Revolving Credit Facility Termination Dates. The Borrower may
request, but not more than once in each fiscal year of the Borrower and on no
more than five occasions in the aggregate after the Closing Date, an extension
of the Revolving Credit Facility Termination Date for all or a portion of the
Revolving Credit Commitments by submitting a request for an extension to the
Administrative Agent (an “Extension Request”). The Extension Request must be
received no earlier than 120 days and no later than 60 days before an
anniversary of the Closing Date. The Extension Request must specify the new
Revolving Credit Facility Termination Date requested by the Borrower with
respect thereto (“Extension Date”), which shall be not more than five years
after the date of the Extension Request. The Extension Request shall be
accompanied by a certificate, signed by the chief financial officer, controller
or chief accounting officer of the Borrower, stating that on the date of the
Extension Request, no Default or Unmatured Default has occurred and is
continuing and that all of the representations and warranties in Article VI are
true and correct in all material respects (except (i) to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been true and correct in
all material respects on and as of such earlier date and (ii) to the extent
already qualified by materiality, in which case said representations and
warranties are true and correct in all respects). On the Extension Date, the
Borrower shall deliver a certificate, signed by the chief financial officer,
controller or chief accounting officer of the Borrower, stating that on the
Extension Date, no Default or Unmatured Default has occurred and is continuing
and that all of the representations and warranties in Article VI are true and
correct in all material respects (except (i) to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been true and correct in
all material respects on and as of such earlier date and (ii) to the extent
already qualified by materiality, in which case said representations and
warranties are true and correct in all respects). Promptly upon receipt of an
Extension Request, the Administrative Agent shall notify each Lender under the
Revolving Credit Facility of the contents thereof and shall request each Lender
under the Revolving Credit Facility to approve the Extension Request (which
approval may be given or withheld by each Lender in its sole discretion). If an
Extension Request requests an extension of the Revolving Credit Facility
Termination Date, a Lender may, at its election, approve or deny an extension of
the Revolving Credit Facility Termination Date (it being understood that no
Lender shall be under any obligation to approve an extension of the Revolving
Credit Facility Termination Date). Each Lender approving an Extension Request
shall deliver its written approval no later than 30 days following such
Extension Request. If written approval of the Required Lenders is not received
by the Administrative Agent within such 30-day period, the Extension Request
shall be denied. If such written approval of the Required Lenders under the
Revolving Credit Facility is received by the Administrative Agent within such
30-day period, the Revolving Credit Facility Termination Date under the
Revolving Credit Facility shall be

 

38

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

extended to the Extension Date specified in the Extension Request but only with
respect to the Revolving Credit Commitments (the “Extended Revolving Credit
Commitments”) of the Lenders under the Revolving Credit Facility that have given
such written approval (the “Extending Revolving Credit Lenders”). To the extent
an extension fee is agreed among the Borrower, the Administrative Agent and the
Extending Revolving Credit Lenders, the Borrower shall pay such extension fee to
the Extending Revolving Credit Lenders, payable on the effective date of such
extension. Except to the extent that a Lender that did not give its written
approval to such Extension Request under the Revolving Credit Facility
(“Revolving Credit Declining Lender”) is replaced prior to its Revolving Credit
Declining Lender’s Termination Date as provided in Section 2.20, then (a) the
Aggregate Revolving Credit Commitment shall be decreased by the Revolving Credit
Commitment of each such Revolving Credit Declining Lender, which Revolving
Credit Declining Lender’s Revolving Credit Commitment shall terminate on the
Revolving Credit Facility Termination Date, as determined prior to such
Extension Request (the “Revolving Credit Declining Lender’s Termination Date”)
and (b) the Loans and all interest, fees and other amounts owed to such
Revolving Credit Declining Lender under the Revolving Credit Facility with
respect to which it is a Revolving Credit Declining Lender shall be paid in full
on each such Revolving Credit Declining Lender’s Termination Date.

2.18. Facility Increase.

(a) The Borrower may, at any time and from time to time, by notice to the
Administrative Agent, request an increase (“Facility Increase”) in the Aggregate
Revolving Credit Commitment (within the limitations herein provided), which
notice shall set forth the amount of such requested Facility Increase. The
Aggregate Revolving Credit Commitment may be so increased (i) by having one or
more New Revolving Credit Lenders become Lenders under the Revolving Credit
Facility and/or (ii) by having any one or more of the then existing Lenders
under the Revolving Credit Facility (at their respective election in their sole
discretion), in each case, that have been approved by the Borrower, the
Administrative Agent, each Issuing Bank and the Swing Line Lender (such
approvals by the Administrative Agent, each Issuing Bank and the Swing Line
Lender not to be unreasonably withheld or delayed), increase the amount of their
Revolving Credit Commitments, provided that (i) each Facility Increase shall be
in an amount not less than $5,000,000, (ii) after giving effect to the Facility
Increase, the Aggregate Revolving Credit Commitment shall not exceed the
Aggregate Revolving Credit Facility Limit, (iii) no Unmatured Event of Default
or Default exists or would exist after giving effect to the Facility Increase,
(iv) all financial covenants set forth in Section 7.27 would be satisfied on a
pro forma basis for the most recent determination period, assuming that the
Revolving Credit Advances outstanding on the date of effectiveness of the
Facility Increase had been outstanding on the last day of such determination
period and (v) any Facility Increase shall be on the terms and pursuant to the
documentation applicable to the Revolving Credit Facility.

(b) As a condition to a Facility Increase, (i) the Borrower and each Additional
Lender shall have executed and delivered a commitment and acceptance (the
“Commitment and Acceptance”) substantially in the form of Exhibit C hereto and
the Administrative Agent shall have accepted and executed the same; (ii) if
requested by an Additional Lender, the Borrower shall have executed and
delivered to the Administrative Agent the applicable Note payable to the order
of such Additional Lender; (iii) the Guarantors shall have consented in writing
to the Facility Increase and shall have agreed that their Guaranty Agreements
continue in full force and effect; (iv) the Borrower and each Additional Lender
shall otherwise have executed and delivered such other instruments and documents
as the Administrative Agent shall have reasonably requested in connection with
such Facility Increase; and (v) if requested by the Administrative Agent, the
Borrower shall have delivered to the Administrative Agent opinions of counsel
(substantially similar to the forms of opinions provided for in Section 5.1(ix),
modified to apply to the Facility Increase and to each Note, Commitment and
Acceptance, and other documents executed and

 

39

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

delivered in connection with such Facility Increase). The form and substance of
the documents required under clauses (i) through (v) above shall be fully
acceptable to the Administrative Agent. The Administrative Agent shall promptly
provide written notice to all of the Lenders hereunder of the Facility Increase.

(c) Upon the effective date of any Facility Increase pursuant to the provisions
hereof (the “Increase Date”), which Increase Date shall be mutually agreed upon
by the Borrower, each applicable Additional Lender and the Administrative Agent,
then: (A) such Additional Lender under the Revolving Credit Facility shall be
deemed to have irrevocably and unconditionally purchased and received, without
recourse or warranty, from the Revolving Credit Lenders party to this Agreement
immediately prior to the Increase Date, an undivided interest and participation
in any Letter of Credit then outstanding, ratably, such that each Revolving
Credit Lender (including each Additional Lender under the Revolving Credit
Facility) holds a participation interest in each such Letter of Credit in the
amount of its then Revolving Credit Ratable Share thereof; and (B) each
Additional Lender under the Revolving Credit Facility shall make its Revolving
Credit Ratable Share of all Revolving Credit Ratable Advances made on or after
such Increase Date and shall otherwise have all of the rights and obligations of
a Revolving Credit Lender hereunder on and after such Increase Date.

(d) After the Increase Date, Administrative Agent shall promptly provide to each
Lender a new Schedule 1 to this Agreement. In the event that there are any
Revolving Credit Ratable Loans outstanding after giving effect to an increase in
the Aggregate Revolving Credit Commitment pursuant to this Section 2.18, upon
notice from Administrative Agent to each Lender, the amount of such Revolving
Credit Ratable Loans owing to each Lender shall be appropriately adjusted to
reflect the new Revolving Credit Ratable Share of Lenders. If, as a result of
any such adjustment to the amount of Revolving Credit Ratable Loans owing to any
Lender, any payment of all or a portion of any Eurodollar Loan owing to any such
Lender occurs on a day which is not the last day of the applicable Interest
Period, Borrower shall pay to Administrative Agent for the benefit of the
affected Lenders any loss or cost incurred by such Lenders resulting therefrom
in accordance with Section 3.6.

(e) Nothing contained herein shall constitute, or otherwise be deemed to be, a
commitment or agreement on the part of any Lender to increase its Revolving
Credit Commitment hereunder at any time or a commitment or agreement on the part
of the Borrower or the Administrative Agent to give or grant any Lender the
right to increase its Revolving Credit Commitment hereunder at any time.

2.19. Swing Line.

(a) The Swing Line Lender agrees, on the terms and conditions hereinafter set
forth, to make advances (“Swing Line Advances”) to the Borrower from time to
time during the period from the date of this Agreement, up to but not including
the fifth (5th) day prior to the Revolving Credit Facility Termination Date, in
an aggregate principal amount not to exceed at any time outstanding the lesser
of (i) the Swing Line Commitment or (ii) the Aggregate Available Revolving
Credit. For the avoidance of doubt, Swing Line Advances will reduce availability
under the Revolving Credit Facility. Until RBS and/or any of its Affiliates
cease to be the only Lender(s) under this Agreement, Swing Line Advances will be
deemed usage for purposes of calculating the Undrawn Fee; thereafter Swing Line
Advances shall not be deemed usage for purposes of calculating the Undrawn Fee.

(b) The Swing Line Advances may, at the request of the Swing Line Lender, be
evidenced by the Swing Line Note. Each Swing Line Advance shall be in an amount
not less than five hundred thousand Dollars ($500,000) and, if in excess
thereof, in integral multiples of one hundred thousand dollars ($100,000).
Within the limits set forth in Section 2.19(a), the Borrower may borrow, repay
and reborrow under this Section 2.19.

 

40

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

(c) The Borrower shall give the Swing Line Lender (and, if the Swing Line Lender
is not also the Administrative Agent, the Administrative Agent) notice
requesting a Swing Line Advance (“Swing Line Borrowing Notice”) not later than
2:00 p.m. (New York time) on the Business Day of such Swing Line Advance,
specifying the amount of such requested Swing Line Advance. Each such Swing Line
Borrowing Notice shall be accompanied by the Borrowing Notice provided for in
Section 2.19(d). All Swing Line Borrowing Notices and Borrowing Notices given by
the Borrower under this Section 2.19(c) shall be irrevocable. Upon satisfaction
of the applicable conditions set forth in Section 5.2, the Swing Line Lender
will make the Swing Line Advance available to the Borrower in immediately
available funds. If the Swing Line Lender is not also the Administrative Agent,
the Swing Line Lender shall not advance the Swing Line Advance unless and until
the Administrative Agent shall have confirmed (by telephonic notice) that such
applicable conditions have been satisfied. Notwithstanding anything to the
contrary contained in this Section 2.19 or elsewhere in this Agreement, the
Swing Line Lender shall not be obligated to make any Swing Line Advance at a
time when a Revolving Credit Lender is a Defaulting Lender.

(d) Each Swing Line Advance shall bear interest at the Alternate Base Rate and
shall be paid in full on or before the third Business Day following the making
of such Swing Line Advance and, if not so paid by the Borrower, shall be paid in
full from the proceeds of a Revolving Credit Ratable Advance made by the
Revolving Credit Lenders pursuant to Section 2.2 on the third Business Day
following the making of such Swing Line Advance. Each Swing Line Borrowing
Notice given by the Borrower under Section 2.19(c) shall include, or if it does
not include shall be deemed to include, an irrevocable Borrowing Notice under
Section 2.2 requesting the Revolving Credit Lenders to make a Revolving Credit
Advance, on or before the third Business Day following the making of such Swing
Line Ratable Advance, of the full amount of such Swing Line Advance, unless such
Swing Line Advance is sooner paid in full by the Borrower.

(e) Provided that the applicable conditions set forth in Section 5.2 shall have
been satisfied at the time of the making of such Swing Line Advance, the
Revolving Credit Lenders irrevocably agree to make the Revolving Credit Ratable
Advance provided for in Section 2.19(d), notwithstanding any subsequent failure
to satisfy such conditions or any other facts or circumstances including
(without limitation) the existence of a Default. If and to the extent that any
Revolving Credit Lender shall fail to make a Revolving Credit Ratable Loan in
the amount of its Revolving Credit Ratable Share of such Revolving Credit
Ratable Advance, such Revolving Credit Lender shall be irrevocably deemed to
have purchased from the Swing Line Lender a participation interest in such Swing
Line Advance in an amount equal to the amount of such Revolving Credit Lender’s
Revolving Credit Ratable Share of such Revolving Credit Ratable Advance and
shall promptly pay such amount to the Swing Line Lender.

2.20. Mitigation Obligations; Replacement of a Lender.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.1 or 3.2, or requires the Borrower to pay any
Indemnified Taxes or additional amounts in respect of any Indemnified Taxes to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.7, then such Lender shall (at the request of the Borrower) use
reasonable efforts to designate a different Lending Installation for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 3.1, 3.2 or 3.7, as the case may be, in the future,
or would cause Section 3.5 to be inapplicable, and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

 

41

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

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.1, Section 3.2 or Section 3.7 (only to the extent that such Lender’s
request for compensation is in respect of Indemnified Taxes and is materially
greater than requests made by other similarly situated Lenders under
Section 3.7),or if the Borrower is required to pay any Indemnified Taxes or
additional amounts in respect of any Indemnified Taxes to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.7, or
if a Lender gives notice of illegality pursuant to Section 3.5 and, in each
case, such Lender has declined or is unable to designate a different lending
office in accordance with Section 2.20(a) or Section 3.5, as the case may be, or
if any Lender is a Defaulting Lender, a Non-Consenting Lender or a Revolving
Credit Declining Lender, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 13.2), all of its
interests, rights (other than its existing rights to payments pursuant to
Section 3.1 or Section 3.7) and obligations under this Agreement and the related
Loan Documents to an Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee
(if any) specified in Section 13.3;

(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and funded participations in Letters of
Credit, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder and under the other Loan Documents (including any amounts under
Section 3.6) from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation
under Section 3.1 or payments required to be made pursuant to Section 3.7, such
assignment will result in a reduction in such compensation or payments
thereafter;

(iv) such assignment does not conflict with Applicable Law; and

(v) in the case of any assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable assignee shall have consented to the
applicable amendment, waiver or consent, and in the case of an assignment by a
Revolving Credit Declining Lender, the applicable assignee shall agree at the
time of such assignment to the extension to the Extension Date of the Revolving
Credit Facility Termination Date with respect to the Revolving Credit Facility,
which agreement shall be set forth in a written instrument delivered and
satisfactory to the Borrower and the Administrative Agent.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

2.21. Termination of Revolving Credit Commitment of Revolving Credit Declining
Lender or Non-Consenting Lender. At any time prior to the replacement of a
Revolving Credit Declining Lender or a Non-Consenting Lender pursuant to
Section 2.20, the Borrower may, upon not less than 15 days’ prior notice to the
Administrative Agent and such Revolving Credit Declining Lender or
Non-Consenting Lender, as the case may be, terminate the Revolving Credit
Commitment of such Revolving Credit

 

42

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

Declining Lender or Non-Consenting Lender, as the case may be, as of a Business
Day (in the case of the termination of the Revolving Credit Commitments of a
Revolving Credit Declining Lender, prior to such Revolving Credit Declining
Lender’s Termination Date) set forth in such notice; provided, however, that if
such Revolving Credit Declining Lender or Non-Consenting Lender, as the case may
be, is an Issuing Bank, the termination of its Revolving Credit Commitment shall
be permitted only upon satisfaction of the requirements set forth in
Section 4.10. In the event of such termination of the Revolving Credit
Commitment, the Borrower shall pay to the Administrative Agent on the date of
termination of such Revolving Credit Commitment, for the account of such
Revolving Credit Declining Lender or Non-Consenting Lender, as the case may be,
all Loans and other sums payable to such Revolving Credit Declining Lender or
Non-Consenting Lender, as the case may be, hereunder under the Revolving Credit
Facility and all amounts (if any) payable to such Revolving Credit Declining
Lender or Non-Consenting Lender, as the case may be, under Section 3.4 under the
Revolving Credit Facility by reason of such payment. Such Revolving Credit
Declining Lender or Non-Consenting Lender, as the case may be, shall continue to
be entitled to the benefits of Sections 3.1, 3.2, 3.6, 3.7, 4.6, 4.9 and 10.6 to
the extent such Revolving Credit Declining Lender’s or Non-Consenting Lender’s,
as the case may be, entitlement to such benefit arose out of its position as a
Lender under the Revolving Credit Facility prior to the termination of its
Revolving Credit Commitment.

2.22. Defaulting Lenders. Notwithstanding anything to the contrary contained in
this Agreement or in the other Loan Documents:

(a) Defaulting Lender Adjustments. If any Lender becomes a Defaulting Lender,
then, until such time as such Lender is no longer a Defaulting Lender, to the
extent permitted by Applicable Law:

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

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VIII or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 12.1 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to any Issuing Bank or Swing Line Lender hereunder;
third, to Cash Collateralize the Issuing Banks’ Letter of Credit Exposure with
respect to such Defaulting Lender in accordance with Section 4.10; fourth, as
the Borrower may request (so long as no Default or Event of Default exists), to
the funding of any Revolving Credit Ratable Loan in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Administrative Agent; fifth, if so determined by
the Administrative Agent and the Borrower, to be held in a deposit account and
released pro rata in order to (x) satisfy such Defaulting Lender’s potential
future funding obligations with respect to Loans under this Agreement and
(y) Cash Collateralize the Issuing Banks’ future Letter of Credit Exposure with
respect to such Defaulting Lender with respect to future Letters of Credit
issued under this Agreement, in accordance with Section 4.10; sixth, to the
payment of any amounts owing to the Lenders, the Issuing Banks or Swing Line
Lenders as a result of any judgment of a court of competent jurisdiction
obtained by any Lender, the Issuing Banks or Swing Line

 

43

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

Lenders against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; seventh, so long as no Default
or Unmatured Default exists, to the payment of any amounts owing to the Borrower
as a result of any judgment of a court of competent jurisdiction obtained by the
Borrower against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; and eighth, to such Defaulting
Lender or as otherwise directed by a court of competent jurisdiction; provided
that if (x) such payment is a payment of the principal amount of any Loans or
outstanding Letters of Credit Obligations in respect of which such Defaulting
Lender has not fully funded its appropriate share, and (y) such Loans were made
or the related Letters of Credit were issued at a time when the conditions set
forth in Section 5.2 were satisfied or waived, such payment shall be applied
solely to pay the Loans of, and outstanding Letter of Credit Obligations owed
to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the
payment of any Loans of, or outstanding Letter of Credit Obligations owed to,
such Defaulting Lender until such time as all Loans and funded and unfunded
participations in Letter of Credit Obligations and Swing Line Advances are held
by the Lenders pro rata in accordance with their Revolving Credit Commitments
without giving effect to clause (iv) below. Any payments, prepayments or other
amounts paid or payable to a Defaulting Lender that are applied (or held) to pay
amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.22(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees. (A) No Defaulting Lender shall be entitled to receive any
Undrawn Fee or Letter of Credit Fee for any period during which that Lender is a
Defaulting Lender.

(B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees
for any period during which that Lender is a Defaulting Lender only to the
extent allocable to its Revolving Credit Ratable Share of the stated amount of
Letters of Credit for which it has provided Cash Collateral pursuant to
Section 4.10.

(C) With respect to any Undrawn Fee or Letter of Credit Fee not required to be
paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower
shall (x) pay to each Non-Defaulting Lender that portion of any such fee
otherwise payable to such Defaulting Lender with respect to such Defaulting
Lender’s participation in Letter of Credit Obligations or Swing Line Advances
that has been reallocated to such Non-Defaulting Lender pursuant to clause
(iv) below, (y) pay to each Issuing Bank and Swing Line Lender, as applicable,
the amount of any such fee otherwise payable to such Defaulting Lender to the
extent allocable to such Issuing Bank’s Letter of Credit Exposure or Swing Line
Lender’s Swing Line Exposure to such Defaulting Lender, and (z) not be required
to pay the remaining amount of any such fee.

(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part
of such Defaulting Lender’s participation in Letter of Credit Obligations and
Swing Line Advances shall be reallocated among the Non-Defaulting Lenders pro
rata in accordance with their respective Revolving Credit Commitments
(calculated without regard to such Defaulting Lender’s Revolving Credit
Commitment) but only to the extent that (x) no Default or Unmatured Default
shall have occurred and be then continuing (and, unless the Borrower shall have
otherwise notified the Administrative Agent at such time, the Borrower shall be
deemed to have represented and warranted that such condition is

 

44

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

satisfied at such time), and (y) such reallocation does not cause the aggregate
Revolving Credit Exposure of any Non-Defaulting Lender to exceed such
Non-Defaulting Lender’s Revolving Credit Commitment. No reallocation hereunder
shall constitute a waiver or release of any claim of any party hereunder against
a Defaulting Lender arising from that Lender having become a Defaulting Lender,
including any claim of a Non-Defaulting Lender as a result of such
Non-Defaulting Lender’s increased exposure following such reallocation.

(v) Cash Collateral, Repayment of Swing Line Advances. If the reallocation
described in clause (iv) above cannot, or can only partially, be effected, the
Borrower shall, without prejudice to any right or remedy available to it
hereunder or under law, (x) first, prepay Swing Line Advance in an amount equal
to the Swing Line Lenders’ Swing Line Exposure and (y) second, Cash
Collateralize the Issuing Banks’ Letter of Credit Exposure in accordance with
the procedures set forth in Section 4.10.

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

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

ARTICLE III

INCREASED COSTS; TAXES

3.1. Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement reflected in the Adjusted LIBO Rate) or any
Issuing Bank;

(ii) subject any Lender or Issuing Bank to any Taxes (other than (A) any
Indemnified Taxes or Other Taxes indemnified under Section 3.7 and (B) Excluded
Taxes); or

 

45

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

(iii) impose on any Lender or any Issuing Bank or the London interbank market
any other condition, cost or expense (other than Taxes) affecting this Agreement
or Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender or Issuing Bank of making, converting to, continuing or maintaining any
Loan or of maintaining its obligation to make any such Loan, or to increase the
cost to such Lender or Issuing Bank of participating in, issuing or maintaining
any Letter of Credit (or of maintaining its obligation to participate in or to
issue any Letter of Credit), or to reduce the amount of any sum received or
receivable by such Lender or Issuing Bank hereunder (whether of principal,
interest or any other amount), then, upon receipt by the Borrower of a
certificate delivered by such Lender or Issuing Bank pursuant to Section 3.3,
the Borrower will pay to such Lender or Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or Issuing Bank, as
the case may be, for such additional costs incurred or reduction suffered;
provided, in each case, that such Lender or such Issuing Bank has requested such
payments from similarly situated borrowers.

3.2. Capital Adequacy. If any Lender or Issuing Bank determines that any Change
in Law affecting such Lender or Issuing Bank or any lending office of such
Lender or such Lender’s or Issuing Bank’s holding company, if any, regarding
capital or liquidity requirements, has or would have the effect of reducing the
rate of return on such Lender’s or Issuing Bank’s capital or on the capital of
such Lender’s or Issuing Bank’s holding company, if any, as a consequence of
this Agreement, the Revolving Credit Commitments of such Lender or the Revolving
Credit Loans made by, or participations in Letters of Credit or Swing Line
Advances held by, such Lender, or the Letters of Credit issued by any Issuing
Bank, to a level below that which such Lender or Issuing Bank or such Lender’s
or Issuing Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or Issuing Bank’s policies and the
policies of such Lender’s or Issuing Bank’s holding company with respect to
capital adequacy), then, upon receipt by the Borrower of a certificate delivered
by such Lender or Issuing Bank pursuant to Section 3.3, the Borrower will pay to
such Lender or Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or Issuing Bank or such Lender’s or
Issuing Bank’s holding company for any such reduction suffered; provided, in
each case, that such Lender or such Issuing Bank has requested such payments
from similarly situated borrowers.

3.3. Certificates for Reimbursement. A certificate of a Lender or Issuing Bank
setting forth the amount or amounts necessary to compensate such Lender or
Issuing Bank or its holding company, as the case may be, as specified in
Section 3.1 or 3.2 and delivered to the Borrower, shall be conclusive absent
manifest error. The Borrower shall pay such Lender or Issuing Bank, as the case
may be, the amount shown as due on any such certificate within 10 days after
receipt thereof.

3.4. Delay in Requests. Failure or delay on the part of any Lender or Issuing
Bank to demand compensation pursuant to Section 3.1 or 3.2 shall not constitute
a waiver of such Lender’s or Issuing Bank’s right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or
Issuing Bank pursuant to Section 3.1 or 3.2 for any increased costs incurred or
reductions suffered more than six months prior to the date that such Lender or
Issuing Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions, and of such Lender’s or
Issuing Bank’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the six-month period referred to above shall be extended to include the
period of retroactive effect thereof).

 

46

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

3.5. Availability of Certain Revolving Credit Advances; Illegality. (a) If the
Required Lenders under the Revolving Credit Facility determine that (A) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (B) the Eurodollar Rate does not accurately reflect the cost of
making or maintaining Eurodollar Advances, then the Administrative Agent shall
suspend the availability of Eurodollar Advances under the Revolving Credit
Facility or (b) if, after the date of this Agreement, any Change in Law shall
make it unlawful or impossible for any Lender (or its Lending Installation) to
make, maintain or fund its Fixed Rate Advances hereunder such Lender shall so
notify the Administrative Agent and the Borrower, whereupon until such Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligation of such Lender to make
such Fixed Rate Advances shall be suspended. Before giving any notice to the
Administrative Agent and the Borrower pursuant to this Section 3.5, such Lender
shall designate a different Lending Installation if such different Lending
Installation is available to the applicable Lender, such designation will avoid
the need for giving such notice and such designation will not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such Lender. If such
Lender shall determine that it may not lawfully continue to maintain and fund
any of its outstanding Fixed Rate Advances to maturity and shall so specify in
such notice, each such Fixed Rate Advance will automatically, upon such demand,
be converted into an ABR Advance.

3.6. Funding Indemnification. If (a) (i) any payment of a Fixed Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, (ii) a Fixed Rate
Advance is not made, or (iii) any Revolving Credit Advance is not continued or
converted into a Fixed Rate Advance, on the date specified by the Borrower, in
each case, for any reason other than default by one or more of the Lenders or
(b) the assignment of any Fixed Rate Loan occurs on a date which is not the last
day of the applicable Interest Period as a result of a request by the Borrower
pursuant to Section 2.20, then the Borrower will indemnify each Lender for any
loss or cost (including any reasonable internal administrative costs) incurred
by it resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain such Fixed Rate
Advance. Determination of amounts payable under this Section 3.6 in connection
with a Fixed Rate Loan shall be calculated as though each Lender funded its
Fixed Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the interest
rate applicable to such Loan, whether in fact that is the case or not.

3.7. Taxes.

(a) For purposes of this Section 3.7, the term “Lender” includes any Issuing
Bank.

(b) Any and all payments by or on account of any obligation of any Loan Party
under any Loan Document shall be made without deduction or withholding for any
Taxes, except as required by Applicable Law. If any Applicable Law requires the
deduction or withholding of any Tax from any such payment, then the applicable
withholding agent shall make such deduction or withholding and shall timely pay
the full amount deducted or withheld to the relevant Governmental Authority in
accordance with Applicable Law and, if such Tax is an Indemnified Tax or Other
Tax, then the sum payable by the applicable Loan Party shall be increased as
necessary so that after such deduction or withholding has been made (including
such deductions and withholdings applicable to additional sums payable under
this Section 3.7) the Lender or Administrative Agent, as applicable, receives an
amount equal to the sum it would have received had no such deduction or
withholding been made.

(c) In addition, the Borrower shall timely pay to the relevant Governmental
Authority in accordance with Applicable Law, or at the option of the
Administrative Agent timely reimburse the Administrative Agent for the payment
of, any Other Taxes.

 

47

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

(d) The Borrower shall indemnify the Administrative Agent and each Lender,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes and Other Taxes (including Indemnified Taxes and Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 3.7) payable
or paid by the Administrative Agent or such Lender and any reasonable
out-of-pocket expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender, shall be conclusive absent manifest error.

(e) [Reserved].

(f) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrower to a Governmental Authority pursuant to this Section 3.7, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

(g) (i) Each Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by Applicable Law or reasonably
requested by the Borrower or the Administrative Agent as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, each Lender shall deliver such other documentation prescribed by
Applicable Law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent, as applicable, to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements. Each Lender shall, whenever a lapse in time
or change in circumstances renders any such documentation (including any
specific documentation required below in this Section 3.7(g)) obsolete, expired
or inaccurate in any material respect, deliver promptly to the Borrower and the
Administrative Agent updated or other appropriate documentation (including any
new documentation reasonably requested by the Borrower or the Administrative
Agent) or promptly notify the Borrower and the Administrative Agent of its
inability to do so.

(ii) Without limiting the generality of the foregoing:

(A) each Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), two properly
completed and duly executed originals of IRS Form W-9 (or any successor form)
certifying that such Lender is exempt from U.S. federal backup withholding;

(B) each Foreign Lender shall deliver to the Borrower and the Administrative
Agent prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of the
Borrower or the Administrative Agent), whichever of the following is applicable:

i) two properly completed and duly executed originals of IRS Form W-8BEN (or any
successor form) claiming eligibility for the applicable benefits of an income
tax treaty to which the United States is a party;

 

48

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

ii) two properly completed and duly executed originals of IRS Form W-8ECI (or
any successor form);

iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) two properly completed
and duly executed certificates substantially in the form of Exhibit E-1 (a “U.S.
Tax Compliance Certificate”) and (y) two properly completed and duly executed
originals of IRS Form W-8BEN (or any successor form); or

iv) to the extent a Foreign Lender is not the beneficial owner, two properly
completed and duly executed originals of IRS Form W-8IMY (or any successor
form), accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance
Certificate substantially in the form of Exhibit E-3 or Exhibit E-4, IRS Form
W-9, and/or other certification documents (or any successor forms) from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit E-2 on
behalf of each such direct and indirect partner;

(C) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by Applicable Law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (C), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

Notwithstanding any other provision of this Section 3.7(g), a Lender shall not
be required to deliver any documentation that such Lender is not legally
eligible to deliver.

(h) Treatment of Certain Refunds. If the Administrative Agent or any Lender
receives a refund of any Indemnified Taxes or Other Taxes as to which it has
been indemnified pursuant to this Section 3.7 (including by the payment of
additional amounts pursuant to this Section 3.7), it shall pay to the Borrower
an amount equal to such refund (but only to the extent of indemnity payments
made, or additional amounts paid, under this Section 3.7 with respect to the
Indemnified Taxes or Other Taxes giving rise to such refund), net of all
reasonable out-of-pocket expenses (including any Taxes) of the Administrative
Agent or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund), provided that the
Borrower, upon the request of the Administrative Agent or such Lender, shall
repay the amount paid over pursuant to this paragraph (h) (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender if the Administrative Agent or such Lender
is required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this paragraph (h), in no event will

 

49

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

the Administrative Agent or any Lender be required to pay any amount to the
Borrower pursuant to this paragraph (h) the payment of which would place the
Administrative Agent or such Lender in a less favorable net after-Tax position
than the Administrative Lender or such Lender would have been in if the Tax
subject to indemnification and giving rise to such refund had not been deducted,
withheld or otherwise imposed and the indemnification payments or additional
amounts with respect to such Tax had never been paid. This paragraph shall not
be construed to require the Administrative Agent or any Lender to make available
its Tax returns (or any other information relating to its Taxes that it deems
confidential) to any Loan Party or any other Person.

(i) Survival. Each party’s obligations under this Section 3.7 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

ARTICLE IV

THE LETTER OF CREDIT FACILITY

4.1. Letters of Credit. At the request of the Borrower, each Issuing Bank shall,
within the limits of the L/C Limit and on the terms and conditions set forth in
this Agreement, issue from time to time for the account of the Borrower, through
such offices or branches as it and the Borrower may jointly agree, one or more
Letters of Credit in accordance with this Article IV, during the period
commencing on the Closing Date and ending on the Business Day prior to the
Letter of Credit Expiration Date.

4.2. Limitations. No Issuing Bank shall issue, renew, amend or extend, at any
time, any Letter of Credit:

(i) if, after giving effect to the Letter of Credit or amendment or extension
thereof requested hereunder, (A) the aggregate maximum amount then available for
drawing under Letters of Credit issued by such Issuing Bank shall exceed any
limit imposed by Applicable Law upon such Issuing Bank or any L/C Participant or
(B) subject to clause (vii) below, the outstanding undrawn face amount of all
Standard Letters of Credit shall exceed the L/C Limit;

(ii) if, after giving effect to the Letter of Credit or amendment or extension
thereof requested hereunder, the sum of (A) the aggregate principal amount of
all outstanding Revolving Credit Advances (including Revolving Credit Ratable
Advances, Competitive Bid Advances and Swing Line Advances) plus (B) the Letter
of Credit Obligations exceeds the Aggregate Revolving Credit Commitment;

(iii) if such Issuing Bank receives written notice from the Administrative Agent
on the proposed Issuance Date of such Letter of Credit that the conditions
precedent contained in Sections 5.1 or 5.2, as applicable, would not on such
Issuance Date be satisfied unless such conditions are thereafter satisfied and
written notice of such satisfaction is given to such Issuing Bank by the
Administrative Agent;

(iv) that is in a currency other than United States dollars;

(v) if, subject to Section 4.4(e), the expiry date of such requested Letter of
Credit would occur more than twelve (12) months after the date of issuance or
last renewal, unless the Required Lenders have approved such expiry date;
provided that, subject to clauses (vi) and (vii) below, Alternative Letters of
Credit with an aggregate face amount of up to 50% of the L/C Limit may have
expiry dates up to 24 months after the date of issuance or last renewal;

 

50

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

(vi) if the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless the Administrative Agent and the
Issuing Banks approve and the Borrower shall have Cash Collateralized such
Letter of Credit pursuant to Section 4.10;

(vii) if, in the event that the Revolving Credit Facility Termination Date has
been extended pursuant to Section 2.17, the undrawn face amount of all Letters
of Credit outstanding at the time of such issuance, renewal, amendment or
extension (other than Letters of Credit that have already been or will
concurrently be Cash Collateralized in accordance with this clause (vii)) would,
at any time prior to the expiry date of all such Letters of Credit, exceed the
Aggregate Revolving Credit Commitment at any time prior to such expiry (after
giving effect to the expiration of the Revolving Credit Commitments of Revolving
Credit Declining Lenders), unless the Administrative Agent and the Issuing Banks
approve and the Borrower shall have Cash Collateralized such amount of Letters
of Credit pursuant to Section 4.10 such that the excess condition referred to in
this clause (vii) does not exist; or

(viii) if any Lender is a Defaulting Lender and after giving effect to the
issuance of such Letters of Credit or amendment or extension thereof, the sum of
Revolving Credit Exposures of the Non-Defaulting Lenders would exceed the sum of
the Revolving Credit Commitments of the Non-Defaulting Lenders, unless such
excess amount is Cash Collateralized by the Borrower in accordance with
Section 4.10.

4.3. Conditions. In addition to being subject to the satisfaction of the
conditions contained in Sections 5.1 and 5.2, as applicable, the issuance of any
Letter of Credit is subject to the satisfaction in full of the condition that
the Borrower shall have delivered to such Issuing Bank at such times and in such
manner as the Issuing Bank may reasonably prescribe such documents (including,
if requested, an Application) and materials as may be reasonably required
pursuant to the terms thereof, and the proposed Letter of Credit shall be
reasonably satisfactory to such Issuing Bank in form and content.

4.4. Procedure for Issuance of Letters of Credit.

(a) The Borrower shall give such Issuing Bank and the Administrative Agent not
less than five (5) Business Days’ (or such shorter period as such Issuing Bank,
the Borrower and the Administrative Agent shall agree) prior notice (in writing
or by telephonic notice confirmed promptly in writing) of any requested issuance
of a Letter of Credit under this Agreement. Such notice shall specify (i) the
stated amount of the Letter of Credit requested, (ii) the requested Issuance
Date, which shall be a Business Day, (iii) the date on which such requested
Letter of Credit is to expire, which date shall be in compliance with the
requirements of Section 4.2(vi), (iv) the purpose for which such Letter of
Credit is to be issued and (v) the Person for whose benefit the requested Letter
of Credit is to be issued. At the time such request is made, the Borrower shall
also provide such Issuing Bank with a copy of the form of the Letter of Credit
it is requesting be issued and the proposed form shall be reasonably acceptable
to the Issuing Bank.

(b) [Reserved]

(c) An Issuing Bank shall not extend (other than by operation of an automatic
renewal provision) or amend any Letter of Credit unless the requirements of this
Section 4.4 are met as though a new Letter of Credit were being requested and
issued.

(d) If Borrower so requests in any Application, then an Issuing Bank shall issue
a Letter of Credit that has automatic renewal provisions (each, an “Evergreen
Letter of Credit”); provided that any such Evergreen Letter of Credit must
permit such Issuing Bank to prevent any such renewal at least once in each
twelve (12) month period (commencing with the date of issuance of such Letter of
Credit) by giving

 

51

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

prior notice to the beneficiary thereof not later than 30 days (the “Nonrenewal
Notice Date”) prior to the last day of such twelve (12) month period. The
Issuing Bank shall use commercially reasonable efforts to advise the Borrower of
any such notice of nonrenewal. Unless otherwise directed by the applicable
Issuing Bank, Borrower shall not be required to make a specific request to such
Issuing Bank for any such renewal. Once an Evergreen Letter of Credit has been
issued, Lenders shall be deemed to have authorized (but may not require) the
applicable Issuing Bank to permit the renewal of such Letter of Credit at any
time to a date not later than the Letter of Credit Expiration Date; provided,
however, that such Issuing Bank shall not permit any such renewal if (i) such
Issuing Bank would have no obligation at such time to issue such Letter of
Credit in its renewed form under the terms hereof (except that Section 4.3(i)
shall not apply), or (ii) it has received notice (which must be in writing) on
or before the Business Day immediately preceding the Nonrenewal Notice Date from
Administrative Agent, any Lender, or Borrower that one (1) or more of the
applicable conditions specified in Section 5.2 is not then satisfied.
Notwithstanding anything to the contrary contained herein, no Issuing Bank shall
have any obligation to permit the renewal of any Evergreen Letter of Credit at
any time.

(e) Any Lender may, but shall not be obligated to, issue to the Borrower or any
Subsidiary letters of credit (that are not Letters of Credit) for its own
account, and at its own risk. None of the provisions of this Agreement shall
apply to any letter of credit that is not a Letter of Credit.

4.5. Duties of Issuing Bank. Any action taken or omitted to be taken by an
Issuing Bank under or in connection with any Letter of Credit, if taken or
omitted in the absence of willful misconduct or gross negligence as determined
by a court of competent jurisdiction in a final and non-appealable judgment,
shall not put such Issuing Bank under any resulting liability to any Revolving
Credit Lender or, provided that such Issuing Bank has complied with the
procedures specified in Section 4.4 in all material respects, relieve any
Revolving Credit Lender of its obligations hereunder to such Issuing Bank. In
determining whether to pay under any Letter of Credit, an Issuing Bank shall
have no obligation to the Lenders other than to confirm that any documents
required to be delivered under such Letter of Credit appear to have been
delivered in compliance with the requirements of such Letter of Credit.

4.6. Participation.

(a) Immediately upon issuance by an Issuing Bank of any Letter of Credit in
accordance with Section 4.4, each Revolving Credit Lender shall be deemed to
have irrevocably and unconditionally purchased and received from such Issuing
Bank, without recourse or warranty, an undivided interest and participation, in
the amount of its Revolving Credit Ratable Share of, such Letter of Credit
(including, without limitation, all obligations of the Borrower with respect
thereto other than amounts owing to such Issuing Bank under Section 3.2).
Immediately upon the Revolving Credit Declining Lender’s Termination Date of a
Revolving Credit Declining Lender or termination of the Revolving Credit
Commitment of a Revolving Credit Declining Lender pursuant to Section 2.21, each
other Revolving Credit Lender shall be deemed to have irrevocably and
unconditionally purchased and received from such Revolving Credit Declining
Lender, without recourse or warranty, a portion of each such Revolving Credit
Declining Lender’s undivided interest and participation in all outstanding
Letters of Credit (in the proportion of the Revolving Credit Ratable Shares of
such purchasing Lenders determined immediately following the termination of the
Revolving Credit Commitment of such Revolving Credit Declining Lender) such
that, upon such purchase, each Revolving Credit Lender holds an undivided
interest and participation in all outstanding Letters of Credit in the amount of
its then Revolving Credit Ratable Share thereof.

(b) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the applicable Issuing Bank shall exercise
commercially reasonable efforts to promptly notify the Borrower and the
Administrative Agent thereof and the date required for payment of

 

52

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

such drawing under such Letter of Credit. In the event that an Issuing Bank
makes any payment under any Letter of Credit, the Borrower shall unconditionally
reimburse such Issuing Bank not later than 2:00 p.m. (EST) on the next Business
Day immediately following the day on which the Borrower receives notice of such
payment from the Issuing Bank, whether payment is made through a Revolving
Credit Advance hereunder or otherwise. If the Borrower shall not have repaid
such amount to such Issuing Bank on or before the date of such payment by such
Issuing Bank, such Issuing Bank shall promptly so notify the Administrative
Agent, which shall promptly so notify each Revolving Credit Lender. Upon receipt
of such notice, each Revolving Credit Lender severally agrees that it shall
promptly and unconditionally pay to the Administrative Agent (in same day funds)
for the account of such Issuing Bank the amount of such Revolving Credit
Lender’s Revolving Credit Ratable Share of the payments so made by such Issuing
Bank, and the Administrative Agent shall promptly pay such amount, and any other
amounts received by the Administrative Agent for such Issuing Bank’s account
pursuant to this Section 4.6(b), to such Issuing Bank. If the Administrative
Agent so notifies such Revolving Credit Lender prior to 11:00 a.m. (New York
time) on any Business Day, such Revolving Credit Lender shall make available to
the Administrative Agent for the account of such Issuing Bank such Revolving
Credit Lender’s Revolving Credit Ratable Share of the amount of such payment on
such Business Day in same day funds. If and to the extent such Revolving Credit
Lender shall not have so made its Revolving Credit Ratable Share of the amount
of such payment available to the Administrative Agent for the account of such
Issuing Bank, such Revolving Credit Lender agrees to pay to the Administrative
Agent for the account of such Issuing Bank forthwith on demand such amount,
together with interest thereon, for each day from the date such payment was
first due until the date such amount is paid to the Administrative Agent for the
account of such Issuing Bank, at the Federal Funds Effective Rate. The failure
of any Revolving Credit Lender to make available to the Administrative Agent for
the account of such Issuing Bank such Revolving Credit Lender’s Revolving Credit
Ratable Share of any such payment shall not relieve any other Revolving Credit
Lender of its obligation hereunder to make available to the Administrative Agent
for the account of such Issuing Bank its Revolving Credit Ratable Share of any
payment on the date such payment is to be made.

(c) The payments made by the Revolving Credit Lenders to an Issuing Bank in
reimbursement of amounts paid by it under a Letter of Credit shall constitute,
and the Borrower hereby expressly acknowledges and agrees that such payments
shall constitute, Revolving Credit Advances hereunder and such payments shall
for all purposes be treated as Revolving Credit Advances (notwithstanding that
the amounts thereof may not comply with the provisions of Section 2.5). Such
Revolving Credit Advances shall be ABR Advances, subject to the Borrower’s
rights under Article II hereof.

(d) Upon the request of the Administrative Agent or any Revolving Credit Lender,
an Issuing Bank shall furnish to the requesting Administrative Agent or
Revolving Credit Lender copies of any Letter of Credit or Application to which
such Issuing Bank is party.

(e) The obligations of the Revolving Credit Lenders to make payments to the
Administrative Agent for the account of an Issuing Bank with respect to a Letter
of Credit and the Borrower’s reimbursement obligations in respect of Letters of
Credit hereunder shall be irrevocable, not subject to any qualification or
exception whatsoever and shall be made in accordance with, but not subject to,
the terms and conditions of this Agreement under all circumstances, including,
without limitation, the following:

(i) any lack of validity or enforceability of this Agreement or any of the other
Loan Documents;

(ii) the existence of any claim, setoff, defense or other right which the
Borrower may have at any time against a beneficiary named in a Letter of Credit
or any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), such Issuing Bank, the

 

53

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

Administrative Agent, any Revolving Credit Lender, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transactions between the Borrower or any other Loan Party and the beneficiary
named in any Letter of Credit);

(iii) any draft, certificate or any other document presented under the 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;

(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents;

(v) any failure by the Administrative Agent or an Issuing Bank to make any
reports required pursuant to Section 4.8; or

(vi) the occurrence of any Default or Unmatured Default.

(f) The Borrower’s reimbursement obligations in respect of Letters of Credit
hereunder and the obligations of Revolving Credit Lenders to make payments to
the Administrative Agent for the account of an Issuing Bank under this
Section 4.6 shall, in each case, continue until all Letters of Credit of such
Issuing Bank have expired, regardless of whether (i) such Letter of Credit has
been Cash Collateralized in accordance with Section 4.10, (ii) the Revolving
Credit Facility Termination Date has occurred or (iii) the Issuing Bank of such
Letter of Credit is a Revolving Credit Declining Lender or has been replaced
pursuant to Section 2.20.

4.7. Compensation for Letters of Credit.

(a) The Borrower agrees to pay to the Administrative Agent (except to the extent
that the Borrower shall be required to pay directly to the Revolving Credit
Lenders as provided in Section 4.7(d)), in the case of each outstanding Letter
of Credit, the Letter of Credit Fee therefor, payable quarterly in arrears as
hereinafter provided on the daily average face amount (net of permanent
reductions) of each Letter of Credit outstanding at any time during the
preceding calendar quarter. The Letter of Credit Fees shall be due and payable
quarterly in arrears (i) with respect to any calendar quarter, not later than
five days following Administrative Agent’s delivery to the Borrower of the
invoice for such calendar quarter (or portion thereof in the case of the quarter
ending September 30, 2012), (ii) on the Revolving Credit Facility Termination
Date and (iii) if any Letter of Credit remains outstanding after the Revolving
Credit Facility Termination Date, with respect to any calendar quarter
thereafter through the last calendar quarter during which the last Letter of
Credit ceases to be outstanding, not later than five days following
Administrative Agent’s delivery to the Borrower of the invoice for such calendar
quarter (each such date specified in clause (i), (ii) or (iii), a “Quarterly
Payment Date”). The Administrative Agent shall promptly remit such Letter of
Credit Fees, when received by it, to the Revolving Credit Lenders in their
Revolving Credit Ratable Shares thereof.

(b) The Borrower agrees to pay to the Administrative Agent for the account of
the applicable Issuing Bank (except to the extent that the Borrower shall be
required to pay directly to the Issuing Bank as provided in Section 4.7(d)) a
fronting fee for each Letter of Credit in an amount equal to the greater of
(a) $200 per annum, and (b) an amount equal to 0.125% per annum times the daily
undrawn amount of such Letter of Credit payable quarterly in arrears on each
Quarterly Payment Date (including, if any Letter of Credit remains outstanding
after the Revolving Credit Facility Termination Date, each Quarterly Payment
Date thereafter until the first Quarterly Payment Date after the date on which
the last outstanding Letter of Credit ceases to be outstanding); provided that
no such fee shall accrue prior to the first date on

 

54

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

which a New Revolving Credit Lender (other than an Affiliate of RBS) becomes a
party hereto pursuant to Section 2.18. The Administrative Agent shall promptly
remit such fronting fee, when received by it, to such Issuing Bank.

(c) Borrower shall pay to the applicable Issuing Bank, promptly upon demand, the
amount of any fees (in addition to the fees described in Section 4.7(a) and
4.7(b)) which such Issuing Bank customarily charges to a Person similarly
situated in the ordinary course of its business for issuing, amending or
extending Letters of Credit, for honoring drafts, and taking similar action in
connection with Letters of Credit, together with all reasonable out-of-pocket
expenses of such Issuing Bank incurred in connection therewith.

(d) After the Revolving Credit Facility Termination Date and the payment in full
of all other Obligations, the Borrower shall make on each Quarterly Payment Date
(i) payments of Letter of Credit Fees under Section 4.7(a) directly to the
Lenders in the amounts of their respective Revolving Credit Ratable Shares
thereof and (ii) payments of fronting fees under Section 4.7(b) directly to each
Issuing Bank that issued a Letter of Credit that was outstanding at any time
during the prior calendar quarter.

(e) Letter of Credit Fees and fees payable to the Issuing Bank pursuant to
Section 4.7(b) shall be calculated, on a pro rata basis for the period to which
such payment applies, for actual days elapsed during such period, on the basis
of a 360-day year.

4.8. Issuing Bank Reporting Requirements. Each Issuing Bank shall, no later than
the third (3rd) Business Day following the last day of each month, provide to
the Administrative Agent and the Borrower a schedule of the Letters of Credit
issued by it, in form and substance reasonably satisfactory to the
Administrative Agent, showing the Issuance Date, account party, original face
amount, amount (if any) paid thereunder, expiration date, the reference number
of each Letter of Credit outstanding at any time during such month, the
aggregate amount (if any) payable by the Borrower to such Issuing Bank during
the month pursuant to Section 3.2 and which Letters of Credit are Standard
Letters of Credit or Alternative Letters of Credit.

4.9. Indemnification; Nature of Issuing Bank’s Duties.

(a) In addition to amounts payable as elsewhere provided in this Article IV, the
Borrower hereby agrees to protect, indemnify, pay and save the Administrative
Agent and each Revolving Credit Lender and Issuing Bank harmless from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys’ fees) arising from the
claims of third parties against the Administrative Agent, any Issuing Bank or
any Revolving Credit Lender as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit other than, in the case of an Issuing Bank, as
a result of its willful misconduct or gross negligence as proven in a final and
non-appealable judgment of a court of competent jurisdiction, or (ii) the
failure of an Issuing Bank to honor a drawing under a Letter of Credit issued by
it as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority.

(b) As among the Borrower, the Revolving Credit Lenders, the Administrative
Agent and any Issuing Bank, the Borrower assumes all risks of the acts and
omissions of, or misuse of Letters of Credit by, the respective beneficiaries of
such Letters of Credit. In furtherance and not in limitation of the foregoing,
neither the Administrative Agent nor any Revolving Credit Lender nor (subject to
the provisions of Section 4.9(d)) an Issuing Bank shall be responsible: (i) for
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of the Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) for the validity or sufficiency of any instrument

 

55

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

transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason; (iii) for failure
of the beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon such Letter of Credit; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) for errors in interpretation of technical terms; (vi) for any loss or delay
in the transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Administrative Agent, such Issuing Bank
and the Revolving Credit Lenders including, without limitation, any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority. None of the above shall affect,
impair, or prevent the vesting of any rights or powers of an Issuing Bank under
this Section 4.9.

(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by an Issuing Bank
under or in connection with the Letters of Credit or any related certificates,
if taken or omitted in good faith, shall not put such Issuing Bank, the
Administrative Agent or any Revolving Credit Lender under any resulting
liability to the Borrower or relieve the Borrower of any of its obligations
hereunder to any such Person.

(d) Notwithstanding anything to the contrary contained in this Section 4.9, the
Borrower shall have no obligation to indemnify an Issuing Bank under this
Section 4.9 in respect of any liability incurred by such Issuing Bank arising
primarily out of the willful misconduct or gross negligence of such Issuing
Bank, as determined by a court of competent jurisdiction in a final and
non-appealable judgment, or out of the wrongful dishonor by such Issuing Bank of
a proper demand for payment made under the Letters of Credit issued by such
Issuing Bank, unless such dishonor was made at the request of the Borrower.

4.10. Cash Collateralization.

(a) In the circumstances described in Section 4.2(vi) or (vii), the Borrower
shall, or shall cause one or more of the other Loan Parties, (x) in the case of
the circumstances described in Section 4.2(vi), Cash Collateralize such Letter
of Credit not less than seven (7) days prior to the Revolving Credit Facility
Termination Date and (y) in the case of the circumstances described in
Section 4.2(vii), Cash Collateralize such Letters of Credit no later than seven
(7) days prior to each Revolving Credit Declining Lender’s Termination Date.

(b) At any time that there shall exist a Defaulting Lender, within two Business
Days following the written request of the Administrative Agent or any Issuing
Bank (with a copy to the Administrative Agent), the Borrower shall Cash
Collateralize such Defaulting Lender’s share of the Issuing Banks’ Letter of
Credit Exposure with respect to Standard Letters of Credit (determined after
giving effect to Section 2.22(a)(iv) and any Cash Collateral provided by such
Defaulting Lender).

(i) The Borrower, and to the extent provided by any Defaulting Lender, such
Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of
the Issuing Banks, and agrees to maintain, an exclusive perfected security
interest, subject only to any inchoate tax liens referred to in clause (i) of
the definition of Permitted Liens, in all such Cash Collateral as security for
the Defaulting Lenders’ obligation to fund participations in respect of Letter
of Credit Obligations, to be applied pursuant to clause (ii) below. If at any
time the Administrative Agent determines that Cash Collateral is subject to any
right or claim (other than inchoate tax liens

 

56

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

referred to in clause (i) of the definition of Permitted Liens) of any Person
other than the Administrative Agent and the Issuing Banks as herein provided,
the Borrower will, promptly upon demand by the Administrative Agent, pay or
provide to the Administrative Agent additional Cash Collateral in an amount
sufficient to eliminate such deficiency (after giving effect to any Cash
Collateral provided by the Defaulting Lender).

(ii) Notwithstanding anything to the contrary contained in this Agreement, but
subject to clause (iii) below, Cash Collateral provided under this
Section 4.10(b)(ii) or Section 2.22 in respect of Letters of Credit shall be
applied to the satisfaction of the Defaulting Lender’s obligation to fund
participations in respect of Letter of Credit Obligations (including, as to Cash
Collateral provided by a Defaulting Lender, any interest accrued on such
obligation) for which the Cash Collateral was so provided, prior to any other
application of such property as may otherwise be provided for herein.

(iii) Cash Collateral (or the appropriate portion thereof) provided to reduce
any Issuing Bank’s Letter of Credit Exposure shall no longer be required to be
held as Cash Collateral pursuant to this Section 4.10(b) or Section 2.22 and to
the extent provided by the Borrower, shall be returned to the Borrower following
(i) the elimination or reduction of the applicable Letter of Credit Exposure
(including by the termination of Defaulting Lender status of the applicable
Lender or the replacement of the Defaulting Lender as a Lender pursuant to
Section 2.20(b) or the expiration or return to the applicable Issuing Bank of
the applicable Letter of Credit), or (ii) the determination by the
Administrative Agent and each Issuing Bank that there exists excess Cash
Collateral; provided that, subject to Section 2.22, the Person providing Cash
Collateral and each Issuing Bank may agree that Cash Collateral shall be held to
support future anticipated Letter of Credit Exposure or other obligations and
provided further that to the extent that such Cash Collateral was provided by
the Borrower, such Cash Collateral held by the Administrative Agent shall remain
subject to the security interest granted pursuant to the Loan Documents.

In addition, the Borrower shall cash collateralize Standard Letters of Credit
when required by and in accordance with Section 2.22.

4.11. No Obligation. No Lender shall have any obligation hereunder to accept or
approve any request for, or to issue, amend or extend, any Letter of Credit
hereunder except for the obligations of the Revolving Credit Lenders under this
Article IV.

4.12. Alternative Letters of Credit. So long as no Default or Unmatured Default
shall have occurred and is continuing, the Borrower shall have the right to Cash
Collateralize any Letter of Credit Obligation with respect to any Letter of
Credit in accordance with this Section 4.12. In order to designate a Letter of
Credit as an Alternative Letter of Credit, the Borrower shall give the
Administrative Agent written notice of its election to so designate and deposit
Cash Collateral in a deposit account with the Administrative Agent. So long as
such Cash Collateral remains in place, such Letter of Credit shall be an
“Alternative Letter of Credit” hereunder; provided that, at the Borrower’s
election, upon at least five Business Days’ written notice to the Administrative
Agent, the Cash Collateral for such Alternative Letter of Credit shall be
released and, together with any interest accrued thereon, remitted back to the
Borrower, at which time such Letter of Credit shall cease to be “Alternative
Letter of Credit” hereunder; provided further that the redesignation of such
Letter of Credit shall not increase the Issuing Banks’ L/C Limit. For the
avoidance of doubt, the Borrower may cause a Letter of Credit that is fully Cash
Collateralized pursuant to Section 4.10 to be designated an Alternative Letter
of Credit in accordance with this Section 4.12.

 

57

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

4.13. Additional Provisions Regarding Issuance and Amendment of Letters of
Credit. Notwithstanding the foregoing or anything else to the contrary contained
herein, no Issuing Bank shall be under any obligation to issue any Letter of
Credit if any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank
from issuing such Letter of Credit, or any law applicable to such Issuing Bank
or any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over such Issuing Bank (x) shall
prohibit, or request that such Issuing Bank refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular, (y) shall
impose upon such Issuing Bank with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which such Issuing Bank is not
otherwise entitled to be compensated hereunder) not in effect on the date of
this Agreement, or (z) shall impose upon such Issuing Bank any unreimbursed
loss, cost or expense which was not applicable on the date hereof and which such
Issuing Bank in good faith deems material to it; provided that, in the cases of
clauses (y) and (z), such Issuing Bank shall have (1) provided written notice to
the Borrower of its refusal to issue any Letter of Credit and the specific
reasons therefor and the Borrower shall not have fully compensated such Issuing
Bank for the imposition of such restriction, reserve or capital requirement or
reimbursed such Issuing Bank for such loss, cost or expense, as applicable, and
(2) sought compensation from similarly situated borrowers. An Issuing Bank shall
not be obligated to amend any Letter of Credit if (A) such Issuing Bank would
have no obligation at such time to issue the Letter of Credit in its amended
form under the terms hereof, or (B) the beneficiary of the Letter of Credit does
not accept the proposed amendment to the Letter of Credit.

ARTICLE V

CONDITIONS PRECEDENT

5.1. Closing Conditions. This Agreement shall not be effective unless the
Borrower has furnished to the Administrative Agent:

(i) Copies of the articles or certificate of incorporation of the Borrower,
together with all amendments, and a certificate of good standing, each certified
by the appropriate governmental officer in its jurisdiction of incorporation.

(ii) Copies, certified by a Senior Executive of the Borrower, of the by-laws and
Board of Directors’ resolutions and resolutions or actions of any other body
authorizing the execution, delivery and performance of the Loan Documents.

(iii) An incumbency certificate, which shall identify by name and title and bear
the signatures of the Authorized Officers and any other officers of the Borrower
authorized to sign the Loan Documents, upon which certificate the Administrative
Agent and the Lenders shall be entitled to rely until informed of any change in
writing by the Borrower.

(iv) Copies of the articles or certificate of incorporation, partnership
agreement or limited liability company operating agreement of each other Loan
Party, together with all amendments, and a certificate of good standing,
certified by the appropriate governmental officer in its jurisdiction of
incorporation.

(v) Copies, certified by a Senior Executive of each other Loan Party, of its
by-laws and of its Board of Directors’ resolutions and of resolutions or actions
of any other body authorizing the execution, delivery and performance of the
Loan Documents to which such Loan Party is a party.

 

58

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

(vi) An incumbency certificate, which shall identify by name and title and bear
the signatures of the Authorized Officers and any other officers of such Loan
Party authorized to sign the Loan Documents to which such Loan Party is a party.

(vii) A certificate, signed by the chief financial officer, controller or chief
accounting officer of the Borrower, stating that on the initial Borrowing Date
no Default or Unmatured Default has occurred and is continuing and that all of
the representations and warranties in Article VI are true and correct in all
material respects (except to the extent already qualified by materiality, in
which case said representations and warranties are true and correct in all
respects).

(viii) A solvency certificate signed by the chief financial officer of the
Borrower, confirming the solvency of the Borrower and its Subsidiaries on a
consolidated basis after giving effect to any Revolving Credit Advance or
issuance of a Letter of Credit on the Closing Date.

(ix) Written opinions of Borrower’s internal and external counsel, addressed to
the Lenders in form reasonably satisfactory to the Administrative Agent.

(x) Any Notes requested by a Lender pursuant to Section 2.11 payable to the
order of each such requesting Lender.

(xi) The Guaranty Agreement duly executed by each of the Guarantors in
substantially the form of Exhibit H hereto.

(xii) Payment of all fees and expenses due to the Arranger and the Lenders
(including without limitation, expenses of counsel to the Administrative Agent
and the Arranger) required to be paid on the Closing Date.

(xiii) All documentation and other information required by regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including without limitation, the PATRIOT Act, that has
been requested prior to the Closing Date.

(xiv) Such other documents as the Arranger or the Administrative Agent or their
counsel or any Lender may have reasonably requested.

5.2. Each Revolving Credit Advance. The Lenders shall not be required to make
any Revolving Credit Advance and no Issuing Bank shall be required to issue,
amend or extend a Letter of Credit unless on the applicable Borrowing Date or
Issuance Date:

(i) There exists no Default or Unmatured Default, at the time of or after giving
effect to the use of the proceeds of such Revolving Credit Advance or the
issuance, amendment or extension of such Letter of Credit.

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

Each Borrowing Notice, Competitive Bid Borrowing Notice and Swing Line Borrowing
Notice with respect to each such Revolving Credit Advance, and each Letter of
Credit Notice with respect to the issuance, amendment or extension of each such
Letter of Credit, shall constitute a representation and warranty by the Borrower
that the conditions contained in Sections 5.2(i) and (ii) have been satisfied.

 

59

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

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lenders that:

6.1. Existence and Standing. The Borrower is (i) a corporation, duly and
properly incorporated, validly existing and in good standing under the laws of
its jurisdiction of incorporation and (ii) has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted,
except with respect to clause (ii) as could not reasonably be expected to have a
Material Adverse Effect. Each of the other Loan Parties is a corporation,
partnership, limited liability company or trust duly and properly incorporated
or organized, as the case may be, validly existing and (to the extent such
concept applies to such entity) in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted
except as could not reasonably be expected to have a Material Adverse Effect.

6.2. Authorization and Validity. Each Loan Party has the power and authority and
legal right to execute and deliver the Loan Documents to which it is a party and
to perform its obligations thereunder. The execution and delivery by each Loan
Party of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper corporate (or, in the
case of Loan Parties that are not corporations, other) proceedings, and the Loan
Documents constitute legal, valid and binding obligations of the applicable Loan
Parties enforceable against them in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally and by equitable
principles (regardless of whether enforcement is sought in equity or law).

6.3. No Conflict Consent. Neither the execution and delivery by the Loan Parties
of the Loan Documents, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (i) any
Applicable Law binding on any of the Loan Parties or their respective Property
or (ii) the articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, of the Loan
Parties, or (iii) the provisions of any indenture, instrument or agreement to
which any Loan Party is a party or is subject, or by which it, or its Property,
is bound, or conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of any
Loan Party pursuant to the terms of any such indenture, instrument or agreement
other than any such violation, conflict, default or Lien which, in the case of
each of clauses (i) and (iii) above, would not reasonably be expected to have a
Material Adverse Effect. As of the Closing Date, no order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any Official Body or any other Person that has not been obtained by any Loan
Party, is required to be obtained by any Loan Party in connection with the
execution and delivery of the Loan Documents, the borrowings and the issuance of
Letters of Credit under this Agreement, the payment and performance by the Loan
Parties of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents.

6.4. Financial Statements. The (i) September 30, 2011 consolidated financial
statements of the Borrower and its Subsidiaries and (ii) December 31,
2011, March 31, 2012 and June 30, 2012 consolidated financial statements of the
Borrower and its Subsidiaries, in each case, heretofore delivered to the Lenders
were prepared in accordance with GAAP in effect on the date such statements were
prepared and

 

60

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

fairly present the consolidated financial condition of the Borrower and its
Subsidiaries at such dates and the consolidated results of their operations and
cash flows for the periods then ended, subject, in the case of clause (ii) to
year-end audit adjustments and absence of footnotes.

6.5. Material Adverse Change. Since the date of the latest balance sheet
included in the financial statements most recently delivered prior to the
Closing Date or pursuant to Section 7.1(i) or (ii), no condition, change, event
or circumstance has occurred or shall exist that has had or could reasonably be
expected to have a Material Adverse Effect.

6.6. Taxes. Except for violations or failures that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
each of the Loan Parties and their respective Subsidiaries has timely filed all
United States federal Tax returns and all other Tax returns that are required to
be filed and has paid all Taxes (including any Taxes payable in the capacity of
a withholding agent) levied on it or its income, profits or Properties, except
such Taxes, if any, as are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been provided in accordance
with GAAP. Except as individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, no Tax Liens have been filed and no
claims are being asserted with respect to any such Taxes. As of the Closing
Date, there is no current or proposed Tax audit, Tax assessment, deficiency or
other claim against any Loan Party or their respective Subsidiaries that
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect.

6.7. Litigation. Except as set forth on Schedule 3 there is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against any of the Loan
Parties that (a) would reasonably be expected to have a Material Adverse Effect
or (b) seeks to prevent, enjoin or delay the making of any Loans except (but
only in the case of any litigation, arbitration, governmental investigation,
proceeding or inquiry described in this clause (b) arising after the Closing
Date) to the extent that the pendency of such litigation, arbitration,
governmental investigation, proceeding would reasonably be expected to have a
Material Adverse Effect.

6.8. Subsidiaries. As of the Closing Date, Schedule 4 contains an accurate list
of all of the Guarantors as of the Closing Date, setting forth their respective
jurisdictions of organization, the percentage of their respective capital stock
or other ownership interests owned directly or indirectly by the Borrower. All
of the issued and outstanding shares of capital stock or other ownership
interests of such Guarantors have been (to the extent such concepts are relevant
with respect to such ownership interests) validly issued and are fully paid and
non-assessable, except as otherwise provided by state wage claim laws of general
applicability.

6.9. Accuracy of Information. The Annual Report on Form 10-K of the Borrower for
the fiscal year ended September 30, 2011, the Quarterly Report on Form 10-Q of
the Borrower for the fiscal quarter ended June 30, 2012 and each Annual Report
on Form 10-K and each Quarterly Report on Form 10-Q of the Borrower filed with
the SEC after the Closing Date, in each case when filed with the SEC, did not
(and in the case of filings after the Closing Date will not) contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The other information (other than projections) heretofore
furnished by or on behalf of any Loan Party to any Lender or Administrative
Agent in connection with the Loan Documents when furnished was, and any such
information hereafter furnished by any Loan Party to any Lender or the
Administrative Agent when furnished will be, true and accurate in all material
respects, and projections furnished by or on behalf of any Loan Party to any
Lender or the Administrative Agent in connection with the Loan Documents were
(or in the case of projections delivered after the Closing Date will be) based
on assumptions believed by the Borrower to be reasonable at the time the
projections are delivered to such Lender or the Administrative Agent.

 

61

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

6.10. Regulation U. None of the Loan Parties holds or intends to hold margin
stock (as defined in Regulation U) in amounts such that more than 25% of the
value of the assets of any Loan Party are represented by margin stock.

6.11. Material Agreements. None of the Loan Parties is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any charter document or any agreement to which it is a
party (other than any agreement relating to Indebtedness), which default could
reasonably be expected to have a Material Adverse Effect.

6.12. Compliance with Laws. The Loan Parties have complied with all Applicable
Laws applicable to the conduct of their respective businesses or the ownership
of their respective Property, except for any failure to comply that would not
reasonably be expected to have a Material Adverse Effect.

6.13. Ownership of Inventory. On the Closing Date, the Loan Parties will have
good title, free of all Liens other than Permitted Liens, to all of its
Inventory, except for Inventory which is no longer used or useful in the conduct
of its business and Inventory the absence of which would not reasonably be
expected to have a Material Adverse Effect

6.14. ERISA.

6.14.1. Plan Assets; Prohibited Transactions. None of the Loan Parties is an
entity deemed to hold “plan assets” within the meaning of 29 C.F.R. §
2510.3-101, as modified by Section 3(42) of ERISA, of an employee benefit plan
(as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or
any plan (within the meaning of Section 4975 of the Code), and neither the
execution of this Agreement nor the making of Loans nor the issuance of Letters
of Credit hereunder gives rise to a Prohibited Transaction.

6.14.2. Liabilities. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $35,000,000. Neither the Borrower nor any other
member of the Controlled Group has incurred, or is reasonably expected to incur,
any withdrawal liability to Multiemployer Plans or Multiple Employer Plans that
individually or in the aggregate with all such withdrawal liabilities exceeds
$35,000,000.

6.14.3. Plans and Benefit Arrangements. Except to the extent a violation of the
following would not reasonably be expected to have a Material Adverse Effect:

(i) With respect to all Benefit Arrangements, Plans and Multiemployer Plans, the
Borrower and each member of the Controlled Group is in compliance with all
applicable provisions of ERISA and any other Applicable Laws. There has not been
any Prohibited Transaction or Reportable Event with respect to any Benefit
Arrangement or any Plan or, to the best knowledge of the Borrower, with respect
to any Multiemployer Plan or Multiple Employer Plan. The Borrower and all
members of the Controlled Group have made any and all payments required to be
made under any agreement relating to a Multiemployer Plan or a Multiple Employer
Plan or any Applicable Law pertaining thereto. With respect to each Plan and
Multiemployer Plan, the Borrower and each member of the Controlled Group
(i) have fulfilled their obligations under the minimum funding standards of
ERISA, (ii) have not incurred any liability to the PBGC and (iii) have not had
asserted against them any penalty for failure to fulfill the minimum funding
requirements of ERISA.

 

62

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

(ii) With respect to any Plan, no determination has been made that such Plan is
in “at-risk” status (as defined in Section 303(i)(4) of ERISA or
Section 430(i)(4) of the Code).

(iii) To the best of the Borrower’s knowledge, each Multiemployer Plan and
Multiple Employer Plan is able to pay benefits thereunder when due.

(iv) Neither the Borrower nor any other member of the Controlled Group has
instituted proceedings to terminate any Plan in other than a Standard
Termination (as defined in ERISA Section 4041(b)). Neither the Borrower nor any
other member of the Controlled Group has incurred any liability under Title IV
of ERISA with respect to the termination of any Plan.

(v) No event requiring notice to the PBGC under Section 303(k)(4)(A) of ERISA
has occurred or is reasonably expected to occur with respect to any Plan.

(vi) Neither the Borrower nor any other member of the Controlled Group has been
notified by any Multiemployer Plan or Multiple Employer Plan that such
Multiemployer Plan or Multiple Employer Plan has been reorganized or terminated
within the meaning of Title IV of ERISA or is in “endangered” or “critical”
status, within the meaning of Section 432 of the Code or Section 305 of ERISA,
and, to the best knowledge of the Borrower, no Multiemployer Plan or Multiple
Employer Plan is or shall be reasonably expected to be reorganized or
terminated, within the meaning of Title IV of ERISA.

(vii) To the extent that any Benefit Arrangement is insured, the Borrower and
all members of the Controlled Group have paid when due all premiums required to
be paid. To the extent that any Benefit Arrangement is funded other than with
insurance, the Borrower and all members of the Controlled Group have made all
contributions required to be paid for all prior periods.

(viii) Neither the Borrower nor any other member of the Controlled Group has
withdrawn from a Plan subject to Section 4063 of ERISA during a plan year in
which such entity was a “substantial employer” as defined in Section 4001(a)(2)
of ERISA, nor has a cessation of operations that is treated as such a withdrawal
under Section 4062(e) of ERISA occurred.

6.15. Investment Company Act. None of the Loan Parties is an “investment
company” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended.

6.16. Insurance. Borrower and each other Loan Party maintains, with financially
sound, responsible, and reputable insurance companies or associations, insurance
concerning its properties and businesses against such casualties and
contingencies and of such types and in such amounts as is customary in the case
of companies engaging in the same or similar businesses and owning similar
properties in the localities where the Loan Parties operate.

6.17. [Reserved]

6.18. Environmental Matters. Except with respect to any matters that, either
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect or except as set forth on Schedule 5:

 

63

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

(i) the Borrower and its Subsidiaries, and their respective operations and
properties, are in compliance with all Environmental Laws and have obtained,
maintained and are in compliance with all permits, licenses and other approvals
as required under any Environmental Law;

(ii) The Borrower and its Subsidiaries have not received any written notices or
claims alleging any Environmental Liability; and

(iii) There are no circumstances, conditions or occurrences relating to any
current or formerly owned or operated Property or operations, including the
Release or threatened Release of Regulated Substances, that would reasonably be
expected to cause the Borrower or any of its Subsidiaries to incur or be subject
to any Environmental Liability.

6.19. Senior Debt Status. The Obligations rank (a) at least pari passu in right
of payment with all other Senior Indebtedness of the Loan Parties and (b) prior
in right of payment to the Subordinated Indebtedness.

6.20. OFAC. No Loan Party (i) is a person whose property or interest in property
is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224
of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)), (ii) to any Loan Party’s knowledge, conducts any business or engages in
making or receiving any contribution of funds, goods or services to or for the
benefit of any Embargoed Person in violation of Section 2 of the Executive Order
referenced in clause (i) above, or (iii) is an Embargoed Person.

6.21. PATRIOT Act. Each Loan Party is in compliance, in all material respects,
with (i) the Trading with the Enemy Act, as amended, and each of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, and (ii) the PATRIOT Act. No part of the
proceeds of the Loans will be used, directly or indirectly, for any payments to
any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.

ARTICLE VII

COVENANTS

Until the termination of all Commitments under this Agreement and the expiration
of all Letters of Credit (or, with respect to the Letters of Credit, such
Letters of Credit are Cash Collateralized) unless the Required Lenders shall
otherwise consent in writing, the Borrower will perform and observe, and (as and
where applicable) will cause the other Loan Parties to perform and observe, the
following covenants:

7.1. Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Lenders (or
the Administrative Agent, on behalf of the Lenders), which may be by electronic
transmission:

(i) Audited Financial Statements. Within 95 days after the close of each of its
fiscal years, a consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such period, and the related consolidated statements of
earnings, stockholders’ equity and cash flows for such fiscal year (including a
footnote containing consolidating financial information for Non-Loan Parties and
Loan Parties), prepared in accordance with GAAP consistently applied and

 

64

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

audited and reported upon by PricewaterhouseCoopers LLP or other independent
certified public accountants reasonably acceptable to the Administrative Agent
(such report shall not be subject to any “going concern” qualification or
qualification as to the scope of the audit); provided that filing of such
financial statements with the SEC by the Borrower shall constitute delivery to
the Administrative Agent.

(ii) Quarterly Financial Statements. Within 50 days after the close of the first
three quarterly periods of each fiscal year of the Borrower, for the Borrower
and its Subsidiaries, consolidated unaudited balance sheets as at the close of
each such period and a related consolidated statement of earnings and cash flows
for the period from the beginning of such fiscal year to the end of such quarter
(including a footnote containing consolidating financial information for
Non-Loan Parties and Loan Parties) certified by the Borrower’s chief financial
officer, chief accounting officer or controller as fairly presenting in all
material respects the financial condition, results of operations and cash flows
of the Borrower and its Subsidiaries in accordance with GAAP, subject only to
changes resulting from audit, normal year-end adjustments and the absence of
footnotes; provided that filing of such quarterly financial statements with the
SEC by the Borrower (including officer certifications required as exhibits to
Form 10-Q) shall constitute delivery to the Administrative Agent.

(iii) Annual Plan and Forecast. Prior to the effective date of any increase in
the Aggregate Revolving Credit Commitment pursuant to Section 2.18 or the
extension of the Revolving Credit Facility Termination Date pursuant to
Section 2.17, a copy of the plan and forecast (including a projected
consolidated balance sheet, income statement and funds flow statement) of the
Borrower for such fiscal year.

(iv) Compliance Certificate. Within five (5) days after each of the dates on
which financial statements are required to be delivered under Sections 7.1(i)
and (ii), a compliance certificate in substantially the form of Exhibit I signed
by the chief financial officer, chief accounting officer or controller of the
Borrower showing the calculations necessary to determine compliance with this
Agreement and stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status thereof.

(v) Annual ERISA Statement. If applicable, within 270 days after the close of
each fiscal year, a statement of the Unfunded Liabilities of each Single
Employer Plan, certified as correct by an actuary enrolled under ERISA.

(vi) Reportable Event. As soon as practicable and in any event within 10 days
after any Loan Party knows that any Reportable Event has occurred with respect
to any Plan that would reasonably be expected to have a Material Adverse Effect,
a statement, signed by the chief financial officer, chief accounting office or
controller of the Borrower, describing said Reportable Event and the action
which the Borrower proposes to take with respect thereto (provided, however,
that the Borrower shall give the Administrative Agent notice of any failure to
meet the minimum funding standards of Section 412 of the Code or Section 302 of
ERISA, regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code).

(vii) Environmental Notices. As soon as possible and in any event within 10 days
after a Senior Executive of a Loan Party receives written notice of any
condition, event or claim where any Loan Party could reasonably be expected to
incur or be subject to any Environmental Liability, that would reasonably be
expected to have a Material Adverse Event.

 

65

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

(viii) Inventory Summary Report. At any time required under Section 7.27.2(ii),
simultaneous with the delivery of the Compliance Certificate required to be
delivered with respect to such fiscal quarter pursuant to Section 7.1(iv), an
Inventory Summary Report.

(ix) Notice of Litigation. Promptly after the commencement thereof, notice of
all actions, suits, proceedings or investigations before or by any Official Body
or any other Person against any Loan Party which would be required to be
reported by the Borrower on Forms 10-Q, 10-K or 8-K filed with the SEC.

(x) Other Information. Such other information (including non-financial
information) as the Administrative Agent may from time to time reasonably
request, including, without limitation, pursuant to any reasonable request by
any Lender.

7.2. Use of Proceeds. The Borrower and each other Loan Party will use the
proceeds of the Revolving Credit Advances for lawful, general business purposes,
including working capital support, home construction, lot acquisition, lot
development, land acquisition and acquisitions. Neither the Borrower nor any
other Loan Party will use any of the proceeds of the Revolving Credit Advances
to purchase or carry any “margin stock” (as defined in Regulation U).

7.3. Notice of Default. The Borrower will give prompt notice in writing to the
Administrative Agent of the occurrence of any Default or Unmatured Default which
the Borrower has knowledge of and of any other development that the Borrower has
knowledge of, financial or otherwise, that would reasonably be expected to have
a Material Adverse Effect.

7.4. Conduct of Business. The Loan Parties will carry on and conduct their
businesses in substantially the same manner and in substantially the same fields
of enterprise as presently conducted (and fields reasonably related, ancillary
or complimentary thereto) and, in the case of the Borrower, will do (and in the
case of any other Loan Party, to the extent that its failure to do so would
reasonably be expected to have a Material Adverse Effect, will do) all things
necessary to remain duly incorporated or organized, validly existing and (to the
extent such concept applies to such entity) in good standing as a domestic
corporation, partnership, trust or limited liability company in its jurisdiction
of incorporation or organization, as the case may be, and take all reasonable
action to maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted except to the extent that the
failure to do so would not reasonably be expected to have a Material Adverse
Effect; provided, however, that nothing herein shall be deemed to prohibit any
mergers, consolidations or dissolutions permitted under Section 7.10.

7.5. Taxes. Except for violations or failures that individually and in the
aggregate would not reasonably be expected to have a Material Adverse Effect,
Borrower and its Subsidiaries will file in a timely manner complete and correct
United States federal and any and all other applicable Tax returns required by
law, and pay when due all Taxes upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with GAAP.

7.6. Insurance. Each Loan Party will maintain with financially sound and
reputable insurance companies insurance on all Inventory in such amounts and
covering such risks as is customary for companies engaging in the same or
similar businesses and owning similar properties in the localities where the
Loan Parties operate, or to the customary extent Borrower may be self-insured.

 

66

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

7.7. Compliance with Laws. Each Loan Party will comply with all Applicable Laws
(excluding Environmental Laws, compliance with which is governed by
Section 7.24) to which it may be subject, to the extent that noncompliance would
reasonably be expected to have a Material Adverse Effect.

7.8. Maintenance of Properties. Each Loan Party will maintain, preserve, protect
and keep its Property in good repair, working order and condition (ordinary wear
and tear and casualty excepted) in accordance with the general practice of other
businesses of similar character and size, and make all necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times, except to the extent that the
failure to do so would not reasonably be expected to have a Material Adverse
Effect.

7.9. [Reserved].

7.10. Mergers; Consolidations; Dissolutions. (a) The Borrower shall not
consolidate or merge with or into, or sell, lease, convey or otherwise dispose
of all or substantially all of its assets (including by way of liquidation or
dissolution), to any Person (in each case other than in a transaction in which
the Borrower is the survivor of a consolidation or merger) unless:

(i) the Person formed by or surviving such consolidation or merger (if other
than the Borrower), or to which such sale, lease, conveyance or other
disposition will be made (collectively, the “Successor Borrower”), is a
corporation or other legal entity organized and existing under the laws of the
United States or any state thereof or the District of Columbia, and the
Successor Borrower assumes all of the obligations of the Borrower under this
Agreement, and

(ii) immediately after giving effect to such transaction, no Default or
Unmatured Default has occurred and is continuing.

Upon any such consolidation, merger, sale, lease, conveyance or other
disposition, the Successor Borrower will be substituted for the Borrower under
this Agreement. The Successor Borrower may then exercise every power and right
of the Borrower under this Agreement, and except in the case of a lease, the
Borrower will be released from all of its liabilities and obligations in respect
of this Agreement. If the Borrower leases all or substantially all of its
assets, the Borrower will not be released from its Obligations. If the Borrower
is not the Successor Borrower, such Successor Borrower shall promptly execute
and deliver to the Administrative Agent (A) an assumption of the Borrower’s
obligations under the Loan Documents and (B) such certified resolutions,
opinions of counsel and other supporting documentation as the Administrative
Agent may reasonably request, all of which shall be reasonably satisfactory to
the Administrative Agent.

(b) No Guarantor will consolidate or merge with or into, or sell, lease, convey
or otherwise dispose of all or substantially all of its assets (including by way
of liquidation or dissolution), to any Person (in each case other than in a
transaction in which the Borrower or a Guarantor is the survivor of a
consolidation or merger, or the transferee in a sale, lease, conveyance or other
disposition) unless:

(i) the Person formed by or surviving such consolidation or merger (if other
than the Borrower or a Guarantor, as the case may be), or to which such sale,
lease, conveyance or other disposition will be made (collectively, the
“Successor Guarantor”), is a corporation or other legal entity organized and
existing under the laws of the United States or any state thereof or the
District of Columbia, and the Successor Guarantor assumes all of the obligations
of the Guarantor under this Agreement and the Guarantee, and

 

67

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

(ii) immediately after giving effect to such transaction, no Default or
Unmatured Default has occurred and is continuing.

The foregoing provision shall not apply to the consolidation or merger of a
Guarantor, or the sale, lease, conveyance or other disposition of all or
substantially all of the assets of a Guarantor, which under the provisions of
Section 7.17 or the other provisions of this Credit Agreement, results in such
Guarantor being released from its Guarantee or the Successor Guarantor not being
required to become a Guarantor, as the case may be.

Upon any such consolidation, merger, sale, lease, conveyance or other
disposition, the Successor Guarantor will be substituted for the relevant
Guarantor under this Agreement and the Guarantee. The Successor Guarantor may
then exercise every power and right of the relevant Guarantor under this
Agreement, and except in the case of a lease, the relevant Guarantor will be
released from all of its liabilities and obligations in respect of this
Agreement and the Guarantee. If a Guarantor leases all or substantially all of
its assets, such Guarantor will not be released from its Obligations. If a
Guarantor is not the Successor Guarantor, such Successor Guarantor shall
promptly execute and deliver to the Administrative Agent (A) an assumption of
the Guarantor’s obligations under the Loan Documents to which it is party and
(B) such certified resolutions, opinions of counsel and other supporting
documentation as the Administrative Agent may reasonably request, all of which
shall be reasonably satisfactory to the Administrative Agent.

7.11. Distributions, Repurchases of Stock, Etc. Borrower (a) shall not, and
shall not permit any Loan Party to, declare or make, directly or indirectly, any
Distribution, and (b) shall not repurchase, redeem, retire, cancel, terminate or
otherwise acquire any of its capital stock or other equity interest in the
Borrower (including, without limitation, any instrument convertible into its
capital stock or other equity interest) or any option, warrant or other right to
acquire any such capital stock or such other equity interest, in the case of
clause (a) or (b) at any time unless (i) no Default or Unmatured Default shall
have occurred and be continuing or shall result therefrom and (ii) the Borrower
shall be in compliance with the covenants under Section 7.27 on a pro forma
basis after giving effect thereto.

7.12. Disposition of Assets. None of the Loan Parties will sell, convey, assign,
lease, abandon or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its Property (including, but not limited to, sale,
assignment, discount or other disposition of accounts, contract rights, chattel
paper, equipment or general intangibles with or without recourse or of capital
stock, shares of beneficial interest or partnership interests of another Loan
Party ) at any time unless (i) no Default shall have occurred and be continuing
or shall result therefrom and (ii) the Borrower shall be in compliance with the
covenants under Sections 7.14 and 7.27 on a pro forma basis after giving effect
thereto, except:

(i) transactions involving the sale of inventory in the ordinary course of
business;

(ii) any sale, transfer or lease of assets which are no longer necessary or
required in the conduct of the business of the Loan Parties (taken as a whole);

(iii) any sale, transfer or lease of assets to any other Loan Party;

(iv) any sale, transfer or lease of assets which are replaced by substitute
assets acquired or leased; and

(v) any sale, transfer or lease of assets of, or interests in, a Non-Loan Party
or any other Affiliate of the Borrower that is not a Loan Party.

 

68

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

7.13. [Reserved]

7.14. Investments. Borrower shall not permit the aggregate amount of its
Investments (as determined in accordance with GAAP) in Subsidiaries that are not
Loan Parties to exceed 30% of Tangible Net Worth.

7.15. Liens. None of the Loan Parties will create, incur, or suffer to exist any
Lien in, of or on any Property, except Permitted Liens.

7.16. Additional Guarantors. If any Subsidiary that is not already a Guarantor
becomes an obligor under any Credit Facilities or Publicly Traded Debt
Securities, the Borrower shall cause such Subsidiary to become a Guarantor
substantially concurrently with it becoming an obligor in respect of such Credit
Facilities or Publicly Traded Debt Securities in accordance with the provisions
of this Section 7.16. In addition, the Borrower may designate any Subsidiary
that is not a Guarantor as a Guarantor at any time in the manner provided below.
Such designation of a Subsidiary of the Borrower as a Guarantor shall be
effected by the delivery by the Borrower to the Administrative Agent of each of
the following:

(i) Notice by the Borrower identifying such Guarantor, the state of its
incorporation, and the ownership of the capital stock or other ownership
interests in such Guarantor;

(ii) A Supplemental Guaranty duly executed and delivered by such Guarantor; and

(iii) Documents with respect to such Guarantor addressing the requirements set
forth in clauses (iv), (v) and (vi) of Section 5.1.

Upon the Administrative Agent’s receipt of the foregoing, all of which shall be
reasonably satisfactory to the Administrative Agent in form and substance, such
Subsidiary of the Borrower shall be a Guarantor and a Loan Party hereunder.

7.17. Release of a Guarantor.

(a) Notwithstanding anything in this Agreement to the contrary, in the event of
(i) the sale or other disposition of capital stock of any Guarantor if as a
result of such disposition, such Person ceases to be a Subsidiary of the
Borrower, (ii) a sale or other disposition of all or substantially all of the
assets of any Guarantor (other than to the Borrower or another Guarantor) or
(iii) a merger or consolidation of a Guarantor with a Person other than the
Borrower or another Guarantor, then such Guarantor (in the case of clauses
(i) and (ii) above) will be automatically and unconditionally released and
discharged from all obligations under any of the Loan Documents, the other
provisions of any of the Loan Documents and the Person acquiring such assets (in
the case of clauses (ii) and (iii) above) shall not be required to assume such
Guarantor’s obligations under the Loan Documents, the other provisions of any of
the Loan Documents or otherwise become a Guarantor, in each case without any
further action required on the part of the Administrative Agent, the Lenders,
the Borrower or any Guarantor; provided that such sale, disposition or other
transaction is otherwise in compliance with this Agreement. Nothing contained in
this Agreement or the other Loan Documents shall prevent any consolidation or
merger of a Guarantor with or into the Borrower or another Guarantor that is
permitted under this Agreement, or shall prevent any sale, lease, conveyance or
other disposition of all or substantially assets of a Guarantor to the Borrower
or another Guarantor to the extent permitted under this Agreement. Upon any such
consolidation, merger, or disposition, the Guarantee given by such Guarantor
shall no longer have any force or effect.

 

69

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

(b) In addition, the Borrower may designate any Guarantor as a Non-Loan Party;
provided that (i) the Borrower shall be in compliance with the covenants under
Sections 7.14 and 7.27 after giving effect to such designation; (ii) no such
Subsidiary shall be an obligor under any Publicly Traded Debt Securities or
Credit Facilities; (iii) no Unmatured Default under Section 8.2 or 8.6 and no
Default shall exist after giving effect to such designation; and (iv) the
Borrower shall deliver to the Administrative Agent a certificate, signed by the
chief financial officer, controller or chief accounting officer of the Borrower,
stating its election to make such designation and certifying that the
requirements of the foregoing clauses (i), (ii) and (iii) are satisfied. The
Administrative Agent is hereby authorized by the Lenders to execute such
documents reasonably satisfactory to it to evidence the release of such
Subsidiary from the Guaranty Agreement as the Borrower requests.

7.18. Inspection and Appraisal. At all reasonable times while the Borrowing Base
Requirement is in effect, upon the reasonable request of the Administrative
Agent and subject to Section 10.11, the Borrower shall, and shall cause each
other Loan Party to, upon reasonable notice, allow Administrative Agent and
Lenders and their authorized agents to inspect any of their properties, to
review and make excerpts of reports, files, and other records maintained in the
ordinary course of business, and to discuss the affairs, finances and accounts
of the Loan Parties with their respective officers from time to time, during
reasonable business hours. Without limiting the foregoing, the Borrower shall
permit the Administrative Agent and the Lenders and their authorized agents to
enter upon the Inventory during normal working hours and as often as they
desire, for the purpose of inspecting or appraising the Loan Inventory or the
construction of the Dwelling Units.

Notwithstanding anything to the contrary in Section 10.6 below, (i) as long as
no Default exists, the Borrower shall not be required to reimburse the
Administrative Agent for the expenses of any such inspections and appraisal and
(ii) the Borrower shall not be required to reimburse any Lender that is not the
Administrative Agent for the expenses of any such inspections or appraisals.

7.19. [Reserved].

7.20. Other Debt Agreements. If any Loan Party shall obtain any senior unsecured
revolving credit facility with a scheduled commitment termination date of three
years or later after the effective date of such facility (each, an “Other
Financing”), (i) if the documentation governing such Other Financing includes a
financial covenant that is not included in this Agreement, this Agreement shall
be automatically amended to include such additional financial covenant, (ii) if
the documentation governing such Other Financing has a maximum Leverage Ratio of
less than 1.35:1.00, a minimum Tangible Net Worth requirement greater than the
then applicable requirement under Section 7.27.3 and/or a trigger for borrowing
base requirement additional to or less than the Leverage Ratio being greater
than 1.10:1.00, then the applicable provision of this Agreement shall be
automatically amended to conform to such additional or more restrictive
requirement, (iii) if the yield on the Other Financing is higher than the yield
on the Revolving Credit Facility, the Applicable Margins and the Undrawn Fees
shall be increased to the extent necessary so that the Applicable Margins and
Undrawn Fees shall be equal to the corresponding applicable interest rates and
undrawn fees in such Other Financing; provided that in determining yield under
this Agreement and such Other Financing, original issue discount (“OID”) or
upfront fees payable by the Borrower or any Subsidiary to the lenders shall be
included (with OID and upfront fees being equated to interest based on assumed
four-year life to maturity); provided that this Section 7.20 shall cease to
apply on the first date after the Aggregate Revolving Credit Commitment is
increased to at least $200,000,000 pursuant to Section 2.18 and there are at
least three Lenders (counting any Person and its Affiliates as one Lender). The
Borrower shall give notice to the Administrative Agent if this Section 7.20
becomes applicable, and the Administrative Agent is hereby authorized by the
Lenders and the Borrower to execute and deliver to the parties hereto an
amendment to this Agreement that reflects the amendments required by this
Section 7.20.

 

70

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

7.21. [Reserved]

7.22. Plans and Benefit Arrangements. Except to the extent a violation of the
following would not reasonably be expected to have a Material Adverse Effect
either individually or in the aggregate with all other violations:

(i) With respect to all Benefit Arrangements, Plans and Multiemployer Plans, the
Borrower and each member of the Controlled Group shall comply with all
applicable provisions of ERISA and any other Applicable Laws. The Borrower shall
not permit to occur any Prohibited Transaction or Reportable Event with respect
to any Benefit Arrangement or any Plan. The Borrower and all members of the
Controlled Group shall make all payments required to be made under any agreement
relating to a Multiemployer Plan or a Multiple Employer Plan or any Applicable
Law pertaining thereto. With respect to each Plan, the Borrower and each member
of the Controlled Group (i) shall fulfill their obligations under the minimum
funding standards of ERISA, (ii) shall not incur any liability to the PBGC
(other than for PBGC premiums in the ordinary course), and (iii) shall not have
asserted against them any penalty for failure to fulfill the minimum funding
requirements of ERISA.

(ii) No determination shall be made that any Plan is in “at-risk” status (as
defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code.

(iii) Neither the Borrower nor any other member of the Controlled Group shall
institute proceedings to terminate any Plan in other than a Standard Termination
(as defined in ERISA Section 4041(b)).

(iv) The Borrower shall not permit to occur any event requiring notice to the
PBGC under Section 303(k)(4)(A) of ERISA with respect to any Plan.

(v) The Unfunded Liabilities for all Single Employer Plans shall not exceed
$10,000,000.

(vi) Neither the Borrower nor any other member of the Controlled Group shall
incur any withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither the Borrower nor any other member of the Controlled Group
shall be notified by any Multiemployer Plan or Multiple Employer Plan that such
Multiemployer Plan or Multiple Employer Plan has been terminated within the
meaning of Title IV of ERISA or is in “endangered” or “critical” status, within
the meaning of Section 432 of the Code or Section 305 of ERISA, and no
Multiemployer Plan or Multiple Employer Plan shall be reorganized or terminated,
within the meaning of Title IV of ERISA.

(vii) To the extent that any Benefit Arrangement is insured, the Borrower and
all members of the Controlled Group shall pay when due all premiums required to
be paid. To the extent that any Benefit Arrangement is funded other than with
insurance, the Borrower and all members of the Controlled Group shall make all
contributions required to be paid for all prior periods.

(viii) Neither the Borrower nor any other member of the Controlled Group shall
withdraw from a Plan subject to Section 4063 of ERISA during a plan year in
which such entity is a “substantial employer” as defined in Section 4001(a)(2)
of ERISA or incur a cessation of operations that is treated as such a withdrawal
under Section 4062(e) of ERISA.

 

71

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

7.23. [Reserved]

7.24. Compliance with Environmental Matters. The Borrower will, and will cause
each other Loan Party to, (i) comply with all Environmental Laws applicable to
its operations and Properties, (ii) comply with and obtain and renew all
permits, licenses and other approvals required pursuant to Environmental Law for
its operations and Properties, and (iii) comply with all applicable requirements
of Environmental Law regarding investigation and clean-up of Releases of
Regulated Substances, except, in each case with respect to this Section 7.24, to
the extent the failure to do so would not reasonably be expected to have
individually or in the aggregate, a Material Adverse Effect.

7.25. [Reserved]

7.26. Senior Debt Status. The Obligations will at all times rank (a) at least
pari passu in right of payment with all other Senior Indebtedness of the Loan
Parties and (b) prior in right of payment to all Subordinated Indebtedness.

7.27. Financial Covenants.

7.27.1. Leverage Ratio. The Borrower will not permit the Leverage Ratio at the
end of any fiscal quarter to be greater than 1.35 to 1.00.

7.27.2. Borrowing Base.

(i) If the Leverage Ratio as of the end of a fiscal quarter for which the
Borrower has or was required to deliver Financials pursuant to Section 7.1 (the
earliest of such dates, the “BB Compliance Date”) equals or exceeds 1.10 to
1.00, at any time on or after the BB Compliance Date through the immediately
following BB Compliance Date, the Borrower will not permit the Borrowing Base
(determined (A) as of the end of such fiscal quarter and set forth on the
Inventory Summary Report required to be delivered for such fiscal quarter
pursuant to Section 7.27.2 (ii) or (B) as of the end of any fiscal month and set
forth on the Inventory Summary Report for such fiscal month delivered pursuant
to the proviso of Section 7.27.2(ii)) to be less than the aggregate principal
amount of Senior Indebtedness (excluding Permitted Nonrecourse Indebtedness and
Permitted Purchase Money Loans) outstanding at any time during such period, it
being understood that if as of the end of the immediately following fiscal
quarter the Leverage Ratio is less than 1.10 to 1.00, this Section 7.27.2(i)
shall no longer apply from and after the related BB Compliance Date until the
immediately following BB Compliance Date (the “Borrowing Base Requirement”).

(ii) Borrower shall deliver to the Administrative Agent an Inventory Summary
Report in the form of Exhibit J and incorporated herein within fifty days after
the last day of each fiscal quarter in which the Leverage Ratio exceeds 1.10 to
1:00 as of the last day of such fiscal quarter; provided that Borrower may, in
its discretion, deliver an Inventory Summary Report as of the last day of any
fiscal month. The Inventory Summary Report shall reflect Inventory that Borrower
determines in good faith to designate as Loan Inventory. Upon Administrative
Agent’s receipt of the Inventory Summary Report, Administrative Agent may
conduct inspections or reviews of the subject Inventory that Administrative
Agent deems appropriate, at the expense of the Borrower, subject to the
reimbursement limitation set forth in Section 7.18.

7.27.3. Tangible Net Worth. The Borrower will maintain at the end of each fiscal
quarter a Tangible Net Worth of not less than the sum of (a) $2,323,000,000,
(b) 50% of the sum of the Consolidated Net Income of Loan Parties for each
completed fiscal quarter commencing with the fiscal quarter ending September 30,
2012 (provided that the amount in this clause (b) may not be negative), and
(c) 50% of

 

72

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

the aggregate increase in Tangible Net Worth after June 30, 2012 by reason of
the issuance of capital stock of Borrower (including upon conversion of
Indebtedness into such capital stock but excluding (x) stock issued in
connection with an employee stock ownership, an employee stock option plan or an
employee stock purchase plan and (y) any portion of such increase in
Consolidated Net Worth attributable to goodwill recognized in connection with an
acquisition or other business combination.

7.28. Financial Contracts. No Loan Party will enter into or remain liable upon
any Financial Contract, except for Financial Contracts entered into for the
purpose of managing interest rate risks associated with Indebtedness of the
Borrower and its Subsidiaries and other risks associated with the business of
the Borrower and its Subsidiaries and not for speculative purposes.

ARTICLE VIII

DEFAULTS

The occurrence of any one or more of the following events shall constitute a
Default:

8.1. Any representation or warranty made or deemed made by or on behalf of any
Loan Party to the Lenders or the Administrative Agent under or in connection
with this Agreement, any Loan, or any certificate or information delivered in
connection with this Agreement or any other Loan Document shall be false in any
material respect on the date as of which made or deemed made.

8.2. (i) Nonpayment of principal of any Loan when due (including under
Section 2.1.3) or failure to Cash Collateralize Letters of Credit when required
under this Agreement, or (ii) nonpayment of interest upon any Loan or of any fee
or other Obligations under any of the Loan Documents within five days after
notice (which notice may include a billing statement therefor) that the same is
due.

8.3. The breach by any Loan Party (other than a breach which constitutes a
Default under another Section of this Article VIII) of any of the terms or
provisions of this Agreement or any of the other Loan Documents and, if such
breach is capable of cure, such breach is not cured within thirty days after
notice thereof given in accordance with Section 14.1 or after the date on which
any Senior Executive becomes aware of the occurrence thereof, whichever first
occurs. With respect to any breach of Section 7.27 of this Agreement, the
Borrower shall be deemed to have cured such breach prior to the expiration of
the cure period provided under this Section 8.3 if the Borrower delivers to the
Administrative Agent an updated Compliance Certificate or Inventory Summary
Report reflecting adjustments or other changes made since the last day of the
period subject to the related Compliance Certificate or Inventory Summary Report
that demonstrate compliance with the respective covenant or covenants in
Section 7.27 (if such adjustments or other changes had been made as of the last
day of such period).

8.4. Failure, after the lapse of any applicable grace periods, of any Loan Party
to pay when due any Indebtedness (other than (i) Permitted Nonrecourse
Indebtedness and (ii) guarantees of Indebtedness of Non-Loan Parties not to
exceed $100,000,000, to the extent and for so long as the payment obligation by
a Loan Party under such guarantee is being contested in good faith by
appropriate proceedings, and adequate reserves have been established therefor in
accordance with GAAP) aggregating in excess of $50,000,000 (“Material
Indebtedness”); or the default by any Loan Party in the performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or
condition contained in any agreement or agreements under which any such Material
Indebtedness was created or is governed, or any other event shall occur or
condition exist, the effect of which default or event is to cause, or to permit
the holder or holders of such Material Indebtedness to cause, such Material
Indebtedness to become due prior to its stated maturity; or any Material
Indebtedness of any Loan Party shall be declared to be due and payable or
required to be prepaid or repurchased (other than by a regularly scheduled
payment and any repurchase upon an asset sale, casualty or condemnation or
receipt of equity or debt proceeds) prior to the stated maturity thereof; or any
Loan Party shall not pay, or shall admit in writing its inability to pay, its
debts generally as they become due.

 

73

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

8.5. Any Loan Party shall (i) have an order for relief entered with respect to
it under the Federal bankruptcy laws as now or hereafter in effect, (ii) make an
assignment for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any Substantial Portion of its
Property, (iv) institute any proceeding seeking an order for relief under the
Federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate
it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (v) take any corporate,
partnership or limited liability company action to authorize or effect any of
the foregoing actions set forth in this Section 8.5 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 8.6.

8.6. Without the application, approval or consent of a Loan Party, a receiver,
trustee, examiner, liquidator or similar official shall be appointed for such
Loan Party or any Substantial Portion of the Property of the Loan Parties, or a
proceeding described in Section 8.5(iv) shall be instituted against any Loan
Party and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 60 consecutive days.

8.7. [Reserved]

8.8. The Loan Parties shall fail within 30 days to bond, pay or otherwise
discharge any one or more final judgments or orders for the payment of money
(other than in respect of Permitted Nonrecourse Indebtedness) in excess of
$50,000,000 in the aggregate (to the extent not covered by insurance provided by
an independent solvent third-party insurer who has been notified of such
judgment, order or decree and has not denied coverage), which are not stayed on
appeal or otherwise being appropriately contested in good faith.

8.9. (i) The Unfunded Liabilities of all Single Employer Plans shall exceed in
the aggregate $35,000,000 or any Reportable Event shall occur in connection with
any Plan that results in a liability exceeding $35,000,000; (ii) a trustee shall
be appointed by a United States District Court to administer any Plan that could
reasonably result in a liability exceeding $35,000,000; (iii) any Plan or trust
created under any Plan of the Borrower or any other member of the Controlled
Group shall engage in a Prohibited Transaction which would subject the Borrower
or any other member of the Controlled Group to a tax or penalty on Prohibited
Transactions imposed by Section 502 of ERISA or Section 4975 of the Code that
could reasonably result in a liability exceeding $35,000,000; (iv) the Borrower
or any other member of the Controlled Group shall have been notified by the
sponsor of a Multiemployer Plan or Multiple Employer Plan that it has incurred
withdrawal liability to such Multiemployer Plan or Multiple Employer Plan in an
amount which, when aggregated with all other amounts required to be paid to
Multiemployer Plans or Multiple Employer Plan by the Borrower or any other
member of the Controlled Group as withdrawal liability (determined as of the
date of such notification), exceeds $35,000,000 or requires payments exceeding
$15,000,000 per annum; (v) any of the Borrower or any other member of the
Controlled Group shall incur liability to the PBGC in connection with the
termination of any Single Employer Plan that could reasonably result in a
liability exceeding $35,000,000; or (vi) the Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
or Multiple Employer Plan that such Multiemployer Plan or Multiple Employer Plan
is in reorganization or is being terminated, within the meaning of Title IV of
ERISA, if as a result of such reorganization or termination the aggregate annual
contributions of the Borrower and the other members of the Controlled Group
(taken

 

74

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

as a whole) to all Multiemployer Plans and Multiple Employer Plans which are
then in reorganization or being terminated have been or will be increased over
the amounts contributed to such Multiemployer Plans and Multiple Employer Plans
for the respective plan years of each such Multiemployer Plan and Multiple
Employer Plans immediately preceding the plan year in which the reorganization
or termination occurs by an amount exceeding $35,000,000.

8.10. Any Loan Party shall (i) be the subject of any proceeding or investigation
pertaining to the release of any Regulated Substance, or (ii) violate any
Environmental Law, which, in the case of an event described in clause (i) or
clause (ii) or all such events in the aggregate, would reasonably be expected to
have a Material Adverse Effect.

8.11. Any Change in Control shall occur.

8.12. Any action shall be taken by a Loan Party to discontinue or to assert the
invalidity or unenforceability of any Guaranty Agreement, or any Guarantor shall
deny that it has any further liability under any Guaranty Agreement to which it
is a party, or shall give notice to such effect (except if such Guarantor is
being released from liability thereunder in accordance with the terms of this
Agreement or the Guaranty Agreement).

8.13. Any Loan Document shall fail to remain in full force and effect unless
released in accordance with the terms hereof.

ARTICLE IX

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

9.1. Acceleration. If any Default described in Section 8.5 or 8.6 occurs and is
continuing with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder and the obligations of the Lenders to issue, amend or extend any
Letter of Credit hereunder shall automatically terminate and the Obligations
shall immediately become due and payable without any election or action on the
part of the Administrative Agent or any Lender. If any other Default occurs and
is continuing, the Required Lenders (or the Administrative Agent with the
written consent of the Required Lenders) may terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation of any
Lender to issue, amend or extend any Letter of Credit hereunder, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives. If,
within 30 days after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans and of the Issuing
Bank(s) to issue, amend or extend Letters of Credit hereunder as a result of any
Default (other than any Default as described in Section 8.5 or 8.6 with respect
to the Borrower) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required Lenders (in
their sole discretion) shall so direct, the Administrative Agent shall, by
notice to the Borrower, rescind and annul such acceleration and/or termination.

9.2. Amendments. Subject to the provisions of this Article IX, the Required
Lenders (or the Administrative Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements for the purpose of adding or
modifying any provisions to the Loan Documents or changing in any manner the
rights of the Lenders or the Borrower hereunder or waiving any Default
hereunder; provided, however, that no such agreement or any waiver shall,
without the consent of all of the Lenders adversely affected thereby (or all of
the Lenders, in the case of clauses (iii), (iv), (v) and (vi)):

(i) Extend the final maturity of any Loan under the Revolving Credit Facility
(except as provided in Section 2.17) or forgive all or any portion of the
principal amount thereof, or reduce the rate (whether by modification of the
Pricing Schedule or otherwise) or extend the time for payment of or forgive
interest or fees thereon; or

 

75

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

(ii) Extend the Revolving Credit Facility Termination Date under the Revolving
Credit Facility (except as provided in Section 2.17), or increase the amount of
the Revolving Credit Commitment of any Lender under the Revolving Credit
Facility (except as agreed to by such Lender pursuant to the provisions of
Section 2.18); or

(iii) Permit the Borrower to assign its rights under this Agreement; or

(iv) Change, directly or indirectly, the percentage specified in the definition
of “Required Lenders,” or change any provision that calls for consent, approval
or other action by the Required Lenders, all Lenders or any particular affected
Lender; or

(v) Amend this Section 9.2 or Section 12.1; or

(vi) Release any Guarantor, except as expressly permitted by this Agreement or
the Guaranty Agreement.

No amendment of any provision of this Agreement relating to the Administrative
Agent or the Swing Line Lender shall be effective without its written consent,
and no amendment of any provision of this Agreement relating to any outstanding
Letter of Credit issued by any Issuing Bank shall be effective without its
written consent. The Administrative Agent may waive payment of the fee required
under Section 13.2(b)(vii) without obtaining the consent of any other party to
this Agreement. Notwithstanding the foregoing, with respect to amendments under
Section 9.2(i) or (ii) requiring the approval of all of the Lenders under the
Revolving Credit Facility, if all Lenders other than one or more Defaulting
Lenders approve such amendment, the failure of such Defaulting Lenders to
approve such amendment shall not prevent such amendment from becoming effective
with respect to such Lenders approving such amendment (it being understood that
such amendment will not be effective with respect to such Defaulting Lenders
that do not approve such amendment). Notwithstanding the foregoing, any
amendments to this Agreement in accordance with Section 7.20 shall be effective
upon execution and delivery thereof by the Administrative Agent to the other
parties hereto.

9.3. Preservation of Rights. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan or the issuance, amendment or extension of a
Letter of Credit notwithstanding the existence of a Default or the inability of
the Borrower to satisfy the conditions precedent to such Loan or the issuance,
amendment or extension of such Letter of Credit shall not constitute any waiver
or acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 9.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Administrative Agent and the Lenders until the Obligations have been paid
in full.

 

76

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

ARTICLE X

GENERAL PROVISIONS

10.1. Survival of Representations. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Loans and
the issuance of the Letters of Credit herein contemplated.

10.2. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.

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

10.4. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, Administrative Agent and the Lenders and
supersede all prior agreements and understandings among the Borrower, the
Administrative Agent and the Lenders relating to the subject matter thereof.

10.5. Several Obligations Benefits of This Agreement. The respective obligations
of the Lenders hereunder are several and not joint or joint and several and no
Lender shall be the partner or agent of any other (except to the extent to which
the Administrative Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns; provided,
however, that the parties hereto expressly agree that the Arranger (and, in the
case of the provisions of Section 10.6(b), any other Person indemnified by the
Borrower thereunder) shall enjoy the benefits of the provisions of Sections 10.6
and 10.10 to the extent specifically set forth therein and shall have the right
to enforce such provisions on its, his or her own behalf and in its, his or her
own name to the same extent as if it, he or she were a party to this Agreement.

10.6. Expenses; Indemnification.

(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent, the Arranger and their Affiliates (including the
reasonable fees, charges and disbursements of one firm of counsel for the
Administrative Agent), in connection with the preparation, negotiation,
execution, delivery and, subject to Section 7.18, administration of this
Agreement and the other Loan Documents, or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by any Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder, and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, any Lender or any Issuing Bank (including the fees,
charges and disbursements of one firm of counsel for the Administrative Agent
(in addition to local counsel), the Lenders and the Issuing Bank and after a
Default, other advisors and professionals retained by the Administrative Agent),
in connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under
this Section, or (B) in connection with the Loans made or Letters of Credit
issued hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.

 

77

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

(b) The Borrower shall indemnify the Administrative Agent (and any sub-agent
thereof), each Lender and each Issuing Bank, and each Related Party of any of
the foregoing Persons (each such Person being called an “Indemnitee”) against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the fees, charges and disbursements
of one firm of counsel for all Indemnitees), incurred by any Indemnitee or
asserted against any Indemnitee by any Person (including the Borrower or any
other Loan Party) other than such Indemnitee and its Related Parties arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by any Issuing
Bank to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence, Release or
threatened Release of Regulated Substances on or from any Property currently for
formerly owned or operated by the Borrower or any of its Subsidiaries, or any
other Environmental Liability related in any way to any property or the
operations of the Borrower or any of its Subsidiaries, or (iv)any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by final and non-appealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Borrower or any other Loan Party against
an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder
or under any other Loan Document, if the Borrower or such Loan Party has
obtained a final and non-appealable judgment in its favor on such claim as
determined by a court of competent jurisdiction. This Section 10.6 shall not
apply with respect to Taxes other than any Taxes that represent losses, claims,
damages, etc. arising from any non-Tax claim.

(c) To the extent that the Borrower for any reason fails to pay any amount
required under paragraph (a) or (b) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), any Issuing Bank, any Swing
Line Lender or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent), such Issuing
Bank, such Swing Line Lender or such Related Party, as the case may be, such
Lender’s Revolving Credit Ratable Share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount (including any such unpaid amount in respect of a claim asserted by such
Lender); provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent (or any such sub-agent), such Issuing
Bank or such Swing Line Lender in its capacity as such, or against any Related
Party of any of the foregoing acting for the Administrative Agent (or any such
sub-agent), such Issuing Bank or any such Swing Line Lender in connection with
such capacity. The obligations of the Lenders under this paragraph (c) are
subject to the provisions of Section 10.5.

(d) To the fullest extent permitted by Applicable Law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or Letter of Credit, or the use of the proceeds thereof. No Indemnitee referred
to in paragraph (b) above shall be liable for any damages arising from the use
by unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

 

78

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

(e) All amounts due under this Section shall be payable not later than 10 days
after demand therefor.

(f) Each party’s obligations under this Section 10.6 shall survive the
termination of the Loan Documents and payment of the obligations hereunder.

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

10.8. [Reserved].

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

10.10. Nonliability of Lenders.

(a) The relationship between the Borrower on the one hand and the Lenders and
the Administrative Agent on the other hand shall be solely that of borrower and
lender. Neither the Administrative Agent, the Arranger nor any Lender shall have
any fiduciary responsibilities to the Borrower or any other Loan Party. Neither
the Administrative Agent, any Arranger nor any Lender undertakes any
responsibility to the Borrower or any other Loan Party to review or inform the
Borrower or any other Loan Party of any matter in connection with any phase of
the Borrower’s or any other Loan Party’s business or operations. The Borrower
agrees that neither the Administrative Agent, the Arranger nor any Lender shall
have liability to the Borrower or any other Loan Party (whether sounding in
tort, contract or otherwise) for losses suffered by the Borrower, the Borrower
or any other Loan Party in connection with, arising out of, or in any way
related to, the transactions contemplated and the relationship established by
the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined in a final and non-appealable judgment by a
court of competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought.
Neither the Administrative Agent, the Arranger nor any Lender shall have any
liability with respect to, and the Borrower and each other Loan Party hereby
waives, releases and agrees not to sue for, any special, indirect or
consequential damages suffered by the Borrower or any other Loan Party in
connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.

(b) Construction and/or Development. None of Lenders, Administrative Agent, or
Issuing Banks shall be liable to any party for (i) the development of or
construction upon any of the Inventory, (ii) the failure to develop or construct
or protect improvements on the Inventory, (iii) the payment of any expense
incurred in connection with the development of or construction upon the
Inventory, (iv) the performance or nonperformance of any other obligation of any
Loan Party, or (v) Lenders’ or Administrative Agent’s exercise of any remedy
available to them. In addition, Lenders shall not be liable to Borrower or any
third party for the failure of Lenders or their authorized agents to discover or
to reject materials or workmanship during the course of Lenders’ inspections of
the Inventory.

 

79

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

(c) Dwelling Lots. None of Lenders, Administrative Agent, or Issuing Banks shall
be liable to any party for (i) the construction or completion of the Dwelling
Units, (ii) the failure to construct, complete, or protect the Dwelling Units,
(iii) the payment of any expense incurred in connection with the construction of
the Dwelling Units, (iv) the performance or nonperformance of any other
obligation of any Loan Party, or (v) Lenders’ or Administrative Agent’s exercise
of any remedy available to them. In addition, Lenders shall not be liable to
Borrower or any third party for the failure of Lenders or their authorized
agents to discover or to reject materials or workmanship during the course of
Lenders’ inspections of the Dwelling Lots.

(d) Other Lenders. The obligations of each Lender under this Agreement are
separate and independent such that no action, inaction, or responsibility of one
Lender shall be imputed to the remaining Lenders. Borrower hereby waives any
claim or demand against each Lender as to the action, inaction, or
responsibility of another.

10.11. Confidentiality. Each of the Administrative Agent and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential); (b) to the extent requested by any
regulatory authority purporting to have jurisdiction over it (in which case such
Person shall promptly notify the Borrower, in advance, to the extent lawfully
permitted to do so); (c) to the extent required by Applicable Law or by any
subpoena or similar legal process (in which case such Person shall promptly
notify the Borrower, in advance, to the extent lawfully permitted to do so);
(d) to any other party to this Agreement; (e) subject to an agreement containing
provisions substantially the same as those of this Section 10.11 (or as may
otherwise be reasonably acceptable to the Borrower), to (i) any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee or pledgee
of or Participant in, any of its rights and obligations under this Agreement, or
(ii) any actual or prospective party (or its Related Parties) to any swap,
derivative or other transaction under which payments are to be made by reference
to the Borrower and its obligations, this Agreement or payments hereunder;
(f) with the written consent of the Borrower; (g) to the extent such Information
becomes publicly available other than as a result of a breach of this
Section 10.11; (h) to any state, Federal or foreign authority or examiner
(including the National Association of Insurance Commissioners or any other
similar organization) (in which case such Person shall, except with respect to
any audit or examination conducted by bank accountants or any governmental bank
regulatory authority exercising examination or regulatory authority, promptly
notify the Borrower, in advance, to the extent lawfully permitted to do so);
(i) to any rating agency or the CUSIP Bureau when required by it (it being
understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information relating to the
Loan Parties received by it from such Lender); or (j) to the extent reasonably
necessary in connection with the exercise of any remedies hereunder or under any
other Loan Document or any action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder to
the extent reasonably necessary in connection with such enforcement. In
addition, the Administrative Agent and the Lenders may disclose the existence of
this Agreement and information about this Agreement to market data collectors,
similar service providers to the lending industry, and service providers to the
Administrative Agent and the Lenders in connection with the administration and
management of this Agreement, the other Loan Documents, the Commitments and the
Revolving Credit Advances. For the purposes of this Section 10.11, “Information”
means all information received from the Borrower or any of its Subsidiaries
relating to the Borrower or any of its Subsidiaries or its or their business,
other than any such information that is publicly available to any Administrative
Agent or any Lender prior to disclosure by the Borrower or any of its
Subsidiaries other than as a result of a breach of this Section 10.11, unless,
in the case of information received from the Borrower or any of its Subsidiaries
after the date hereof, such information is clearly identified at the time of
delivery as not confidential.

 

80

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

10.12. Nonreliance. Each Lender hereby represents that it is not relying on or
looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.

10.13. USA PATRIOT ACT. Each Lender that is subject to the PATRIOT Act and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the PATRIOT Act, it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.

ARTICLE XI

THE ADMINISTRATIVE AGENT

11.1. Appointment and Authority.

(a) Each of the Lenders and the Issuing Banks hereby irrevocably appoints RBS to
act on its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the
benefit of the Administrative Agent, the Lenders and the Issuing Banks, and
neither the Borrower nor any other Loan Party shall have rights as a third-party
beneficiary of any of such provisions. It is understood and agreed that the use
of the term “agent” herein or in any other Loan Documents (or any other similar
term) with reference to the Administrative Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any Applicable Law. Instead such term is used as a matter of market
custom, and is intended to create or reflect only an administrative relationship
between contracting parties.

(b) Each Issuing Bank shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and each
Issuing Bank shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article XI with respect to any acts taken or
omissions suffered by each Issuing Bank in connection with Letters of Credit
issued by it or proposed to be issued by it and the applications and agreements
for letters of credit pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in this Article XI and in the definition of
“Related Parties” included each Issuing Bank with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to each Issuing
Bank.

11.2. Rights as a Lender. 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, own
securities of, act as the financial advisor or in any other advisory capacity
for, and generally engage in any kind of business with, the Borrower 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.

 

81

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

11.3. Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents, and its obligations hereunder shall be administrative in nature.
Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or Applicable Laws, including for the avoidance of
doubt any action that may be in violation of the automatic stay under any Debtor
Relief Law or that may effect a forfeiture, modification or termination of
property of a Defaulting Lender in violation of any Debtor Relief Law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 9.1 and 9.2) or (ii) in the absence of its
own gross negligence or willful misconduct as determined by a court of competent
jurisdiction by final and non-appealable judgment. The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or an Issuing Bank.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article V or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

11.4. Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a

 

82

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

Loan, or the issuance, extension, renewal or increase of a Letter of Credit,
that by its terms must be fulfilled to the satisfaction of a Lender or an
Issuing Bank, the Administrative Agent may presume that such condition is
satisfactory to such Lender or an Issuing Bank unless the Administrative Agent
shall have received notice to the contrary from such Lender or an Issuing Bank
prior to the making of such Loan or the issuance of such Letter of Credit. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

11.5. Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent (other than Disqualified Institutions). The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Article shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as
Administrative Agent. The Administrative Agent shall not be responsible for the
negligence or misconduct of any sub-agents except to the extent that a court of
competent jurisdiction determines in a final and non-appealable judgment that
the Administrative Agent acted with gross negligence or willful misconduct in
the selection of such sub agents.

11.6. Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to
the Lenders, the Issuing Banks and the Borrower. Upon receipt of any such notice
of resignation, the Required Lenders shall have the right, with the consent of
the Borrower (not to be unreasonably withheld or delayed) (provided no consent
of the Borrower shall be required if a Default or Unmatured Default under
Section 8.2, 8.5 or 8.6 exists), to appoint a successor, which shall be a bank
with an office in the United States, or an Affiliate of any such bank with an
office in the United States. If no such successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation (or such
earlier day as shall be agreed by the Required Lenders) (the “Resignation
Effective Date”), then the retiring Administrative Agent may (but shall not be
obligated to), on behalf of the Lenders and the Issuing Banks, appoint a
successor Administrative Agent meeting the qualifications set forth above.
Whether or not a successor has been appointed, such resignation shall become
effective in accordance with such notice on the Resignation Effective Date.

(b) If the Person serving as Administrative Agent is a Defaulting Lender
pursuant to clause (d) of the definition thereof, the Required Lenders may, to
the extent permitted by Applicable Law, by notice in writing to the Borrower and
such Person remove such Person as Administrative Agent and, with the consent of
the Borrower (not to be unreasonably withheld or delayed), appoint a successor
(provided no consent of the Borrower shall be required if a Default or Unmatured
Default under Section 8.2, 8.5 or 8.6 exists). If no such successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days (or such earlier day as shall be agreed by the
Required Lenders) (the “Removal Effective Date”), then such removal shall
nonetheless become effective in accordance with such notice on the Removal
Effective Date.

(c) With effect from the Resignation Effective Date or the Removal Effective
Date (as applicable) (1) the retiring or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the Issuing Banks under any of
the Loan

 

83

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

Documents, the retiring or removed Administrative Agent shall continue to hold
such collateral security until such time as a successor Administrative Agent is
appointed) and (2) except for any indemnity payments owed to the retiring or
removed Administrative Agent, all payments, communications and determinations
provided to be made by, to or through the Administrative Agent shall instead be
made by or to each Lender and Issuing Bank directly, until such time, if any, as
the Required Lenders appoint a successor Administrative Agent as provided for
above. Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring or removed Administrative
Agent (other than any rights to indemnity payments owed to the retiring or
removed Administrative Agent), and the retiring or removed Administrative Agent
shall be discharged from all of its duties and obligations hereunder or under
the other Loan Documents. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
retiring or removed Administrative Agent’s resignation or removal hereunder and
under the other Loan Documents, the provisions of this Article and Section 10.6
shall continue in effect for the benefit of such retiring or removed
Administrative Agent, its sub agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the
retiring or removed Administrative Agent was acting as Administrative Agent.

11.7. Non-Reliance on Administrative Agent and Other Lenders. Each Lender and
each Issuing Bank acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and each Issuing Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.

11.8. No Other Duties, Etc. Anything herein to the contrary notwithstanding, the
Arranger shall not have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent, a Lender or an Issuing Bank hereunder.

11.9. Administrative Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, the Administrative Agent (irrespective of whether
the principal of any Loan or Letter of Credit Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered (but not obligated) by intervention in such
proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, Letter of Credit Obligations and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders, the
Issuing Banks and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the Issuing Banks and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders, the Issuing Banks and the
Administrative Agent under Sections 2.4, 4.7 and 10.6) allowed in such judicial
proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

 

84

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and Issuing Bank to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the Issuing Banks, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.4
and 10.6.

11.10. Withholding Tax. To the extent required by any Applicable Law, the
Administrative Agent may withhold from any payment to any Lender an amount
equivalent to any applicable withholding Tax. Without limiting or expanding the
provisions of Section 3.7, each Lender shall indemnify and hold harmless the
Administrative Agent against, and shall make payable in respect thereof within
10 days after demand therefor, any and all Taxes and any and all related losses,
claims, liabilities and expenses (including fees, charges and disbursements of
any counsel for the Administrative Agent) incurred by or asserted against the
Administrative Agent by the IRS or any other Governmental Authority as a result
of the failure of the Administrative Agent to properly withhold Tax from amount
paid to or for the account of such Lender for any reason (including, without
limitation, because the appropriate form was not delivered or not properly
executed, or because such Lender failed to notify the Administrative Agent of a
change in circumstance that rendered the exemption from, or reduction of,
withholding Tax ineffective), whether or not such Tax was correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender under this Agreement or any other Loan
Document against any amount due the Administrative Agent under this
Section 11.10. The agreements in this Section 11.10 shall survive the
resignation and/or replacement of the Administrative Agent, any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all other Obligations. For the
avoidance of doubt, a “Lender” shall, for purposes of this Section 11.10,
include any Issuing Bank.

11.11. Notice of Default. The Administrative Agent shall not be deemed to have
actual knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder (other than a Default under Section 8.2) unless the Administrative
Agent has received written notice from a Lender or the Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a “notice of default” or that such notice is delivered pursuant
to Section 7.3 hereof. In the event that the Administrative Agent receives such
a notice, the Administrative Agent shall give prompt notice thereof to the
Lenders.

11.12. Administrative Agent’s Fee. The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees agreed to by the Borrower
and the Administrative Agent pursuant to the Fee Letter or as otherwise agreed
by them from time to time.

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

 

85

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

11.14. Arranger’s Responsibilities and Duties. The Arranger shall have not any
responsibilities hereunder in any capacity or be deemed to have any agency or
fiduciary relationship with the Borrower or any Lender.

ARTICLE XII

SETOFF; RATABLE PAYMENTS

12.1. Setoff. If a Default shall have occurred and be continuing, each Lender,
each Issuing Bank, and each of their respective Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by Applicable
Law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final, in whatever currency) at any time held, and other
obligations (in whatever currency) at any time owing, by such Lender, such
Issuing Bank or any such Affiliate, to or for the credit or the account of the
Borrower or any other Loan Party against any and all of the obligations of the
Borrower or such Loan Party now or hereafter existing under this Agreement or
any other Loan Document to such Lender or such Issuing Bank or their respective
Affiliates, irrespective of whether or not such Lender, Issuing Bank or
Affiliate shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower or such Loan Party may be
contingent or unmatured or are owed to a Lending Installation or Affiliate of
such Lender or such Issuing Bank different from the Lending Installation or
Affiliate holding such deposit or obligated on such indebtedness; provided that
in the event that any Defaulting Lender shall exercise any such right of setoff,
(x) all amounts so set off shall be paid over immediately to the Administrative
Agent for further application in accordance with the provisions of Section 2.22
and, pending such payment, shall be segregated by such Defaulting Lender from
its other funds and deemed held in trust for the benefit of the Administrative
Agent, the Issuing Banks, and the Lenders, and (y) the Defaulting Lender shall
provide promptly to the Administrative Agent a statement de-scribing in
reasonable detail the Obligations owing to such Defaulting Lender as to which it
exercised such right of setoff. The rights of each Lender, each Issuing Bank and
their respective Affiliates under this Section are in addition to other rights
and remedies (including other rights of setoff) that such Lender, such Issuing
Bank or their respective Affiliates may have. Each Lender and Issuing Bank
agrees to notify the Borrower and the Administrative Agent promptly after any
such setoff and application; provided that the failure to give such notice shall
not affect the validity of such setoff and application.

12.2. Ratable Payments. If any Lender under the Revolving Credit Facility shall,
by exercising any right of setoff or counterclaim or otherwise, obtain payment
in respect of any principal of or interest on any of its Loans under the
Revolving Credit Facility resulting in such Lender receiving payment of a
proportion of the aggregate amount of its Loans under the Revolving Credit
Facility and accrued interest thereon or other such obligations greater than its
pro rata share thereof as provided herein, then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in such Loans, or make such
other adjustments as shall be equitable, so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Loans and other
amounts owing them; provided that:

(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest; and

(ii) the provisions of this paragraph shall not be construed to apply to (x) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement (including the application of funds arising from the
existence of a Defaulting Lender), or (y)

 

86

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

any payment obtained by a Lender as consideration for the assignment of or sale
of a participation in any of its Loans or participations in outstanding Letters
of Credit to any assignee or participant, other than to the Borrower or any
Subsidiary thereof (as to which the provisions of this paragraph shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under Applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.

ARTICLE XIII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

13.1. Participations.

13.1.1. Permitted Participants; Effect. Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural Person or the Borrower or any
of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or
a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent, the Issuing Banks and Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. For the avoidance of doubt, each Lender shall
be responsible for the indemnity under Section 10.6(b) with respect to any
payments made by such Lender to its Participant(s).

13.1.2. Voting Rights; Participant Register. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the proviso to Section 9.2 that affects such Participant. The
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.1, 3.6 and 3.7 (subject to the requirements and limitations therein,
including the requirements under Section 3.7(g) (it being understood that the
documentation required under Section 3.7(g) shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 13.2(b); provided that
such Participant (A) agrees to be subject to the provisions of Section 2.20 as
if it were an assignee under Section 13.2(b); and (B) shall not be entitled to
receive any greater payment under Sections 3.1 or 3.7, with respect to any
participation, than its participating Lender would have been entitled to
receive, except to the extent the participation was sold with the Borrower’s
prior written consent (not to be unreasonably withheld or delayed). Each Lender
that sells a participation agrees, at the Borrower’s request and expense, to use
reasonable efforts to cooperate with the Borrower to effectuate the provisions
of Section 2.20(b) with respect to any Participant. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 12.1 as
though it were a Lender; provided that (A) such Participation was sold with the
Borrower’s prior written consent (not to be unreasonably withheld or delayed)
and (B) such Participant agrees to be subject to Section 12.2 as though it were
a Lender. Each Lender that sells a participation shall, acting solely for this
purpose as an agent of the Borrower, maintain a register on which it enters the
name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Loan Documents (the “Participant Register”); provided that no Lender shall
have any obligation to

 

87

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

disclose all or any portion of the Participant Register (including the identity
of any Participant or any information relating to a Participant’s interest in
any commitments, loans, letters of credit or its other obligations under any
Loan Document) to any Person except to the extent that such disclosure is
necessary in connection with a Tax audit or other proceeding to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

13.2. Assignments.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that that the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Administrative Agent and each Lender, and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of
paragraph (b) of this Section, (ii) by way of participation in accordance with
the provisions of Section 13.1, or (iii) by way of pledge or assignment of a
security interest, including any pledge or assignment to secure obligations to a
Federal Reserve Bank or its foreign equivalent; provided that no such pledge or
assignment under this clause (iii) shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in Section 13.1 and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Revolving Credit Commitment and the Loans at
the time owing to it); provided that any such assignment shall be subject to the
following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Revolving Credit Commitment and/or the Loans at the time owing to it or
contemporaneous assignments to related Approved Funds that equal at least the
amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund, no minimum amount need be assigned; and

(B) in any case not described in paragraph (b)(i)(A) of this Section, the
aggregate amount of the Revolving Credit Commitment (which for this purpose
includes, without duplication, the Revolving Credit Loans outstanding
thereunder) or, if the applicable Revolving Credit Commitment is not then in
effect, the principal outstanding balance of the Revolving Credit Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such

 

88

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

assignment is delivered to the Administrative Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date) shall not be
less than $5,000,000 unless each of the Administrative Agent and, so long as no
Default or Unmatured Default under Section 8.2, 8.5 or 8.6 has occurred and is
continuing, the Borrower consents (each such consent not to be unreasonably
withheld or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Revolving Credit Loan or
the Revolving Credit Commitment assigned.

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed, it being understood that withholding consent for an assignment to any
Person that is not an Approved Bank shall not be deemed unreasonable) shall be
required unless (x) a Default under Section 8.2 or a Default or Unmatured
Default under Section 8.5 or 8.6 has occurred and is continuing at the time of
such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender
or an Approved Fund; provided that the Borrower shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Administrative Agent within 10 Business Days after having received
notice thereof;

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of the
Revolving Credit Facility if such assignment is to a Person that is not a Lender
with a Revolving Credit Commitment, an Affiliate of such Lender or an Approved
Fund with respect to such Lender;

(C) the consent of each Issuing Bank and Swing Line Lender shall be required for
any assignment in respect of the Revolving Credit Facility.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500; provided that the Administrative
Agent may, in its sole discretion, elect to waive such processing and
recordation fee in the case of any assignment. The assignee, if it is not a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

(v) No Assignment to Certain Persons. No such assignment shall be made to
(A) the Borrower or any of the Borrower’s Affiliates or Subsidiaries or (B) to
any Defaulting Lender or any of its Subsidiaries, or any Person who, upon
becoming a Lender hereunder, would constitute any of the foregoing Persons
described in this clause (B).

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural Person.

(vii) Certain Additional Payments. In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the

 

89

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

assignee of participations or subparticipations, or other compensating actions,
including funding, with the consent of the Borrower and the Administrative
Agent, the applicable pro rata share of Loans previously requested but not
funded by the Defaulting Lender, to each of which the applicable assignee and
assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment
liabilities then owed by such Defaulting Lender to the Administrative Agent,
each Issuing Bank, each Swing Line Lender and each other Lender hereunder (and
interest accrued thereon), and (y) acquire (and fund as appropriate) its full
pro rata share of all Loans and participations in Letters of Credit and Swing
Line Advances in accordance with its Revolving Credit Ratable Share.
Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under
Applicable Law without compliance with the provisions of this paragraph, then
the assignee of such interest shall be deemed to be a Defaulting Lender for all
purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Article III and Section 10.6 with respect to facts and
circumstances occurring prior to the effective date of such assignment;
provided, that except to the extent otherwise expressly agreed by the affected
parties, no assignment by a Defaulting Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 13.1.

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Revolving Credit Commitments of,
and principal amounts (and stated interest) of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive absent manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower and any Lender (solely to the extent of the provisions related
to such Lender), as to its commitment only, at any reasonable time and from time
to time upon reasonable prior notice.

(d) Swing Line Commitment. The Swing Line Commitment may be assigned only to an
Affiliate of the Administrative Agent or to a successor Administrative Agent.

(e) Resignation as Issuing Bank or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time RBS or
any other Issuing Bank assigns all of its Revolving Credit Commitment and
Revolving Credit Loans pursuant to Section 13.2, such Person may, (i) upon 30
days’ notice to the Borrower and the Lenders, resign as Issuing Bank and/or
(ii) upon 30 days’ notice to the Borrower, resign as Swing Line Lender. In the
event of any such resignation as Issuing Bank or Swing Line Lender, the Borrower
shall be entitled to appoint from among the Lenders a successor Issuing Bank or
Swing Line Lender hereunder; provided, however, that no failure by the Borrower
to appoint any such successor shall affect the resignation of RBS or such other
Issuing Bank as Issuing Bank

 

90

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

or Swing Line Lender, as the case may be. If RBS or another Issuing Bank resigns
as Issuing Bank, it shall retain all the rights, powers, privileges and duties
of an Issuing Bank hereunder with respect to all Letters of Credit outstanding
as of the effective date of its resignation as Issuing Bank and all Letter of
Credit Obligations with respect thereto (including the right to require the
Lenders to make Alternate Base Rate Loans or fund participations in unreimbursed
amounts pursuant to Section 4.6(b)). If RBS resigns as Swing Line Lender, it
shall retain all the rights of the Swing Line Lender provided for hereunder with
respect to Swing Line Advance made by it and outstanding as of the effective
date of such resignation, including the right to require the Lenders to make
Alternate Base Rate Loans or fund participations in outstanding Swing Line
Advance pursuant to Section 2.19(d). Upon the appointment of a successor Issuing
Bank and/or Swing Line Lender, (a) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
Issuing Bank or Swing Line Lender, as the case may be, and (b) the successor
Issuing Bank shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other
arrangements satisfactory to or such other resigning Issuing Bank to effectively
assume the obligations of RBS or such Person with respect to such Letters of
Credit.

13.3. Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or assignee or any other Person acquiring an
interest in the Loan Documents by operation of law (each a “Transferee”) and any
prospective Transferee any and all information in such Lender’s possession
concerning the creditworthiness of the Borrower, the Borrower and its
Subsidiaries; provided that each Transferee and prospective Transferee agrees in
writing to be bound by Section 10.11 of this Agreement.

ARTICLE XIV

NOTICES

14.1. Notices.

(a) Except as otherwise permitted by Section 2.12, all notices, requests and
other communications to any party hereunder shall be in writing (including
electronic transmission, facsimile transmission or similar writing) and shall be
given to such party: (x) in the case of the Borrower, the Borrower or the
Administrative Agent, at the address(es) or facsimile number(s) set forth on the
signature pages hereof, (y) in the case of any Lender, at its address or
facsimile number set forth in its administrative questionnaire delivered to the
Administrative Agent or (z) in the case of any party, at such other address or
facsimile number as such party may hereafter specify for the purpose by notice
to the Administrative Agent and the Borrower in accordance with the provisions
of this Section 14.1. Each such notice, request or other communication shall be
effective (i) if given by facsimile transmission, when transmitted to the
facsimile number specified in this Section during the applicable recipient’s
normal business hours and confirmation of receipt is received, (ii) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, (iii) if sent to an email
address, upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), (iv) if posted to an Internet
or intranet website, upon the deemed receipt by the intended recipient during
the recipient’s normal business hours, at its e-mail address as described in the
foregoing clause (iii), of notification that such notice or communication is
available and identifying the website address therefor or (v) if given by any
other means, when delivered at the address specified in this Section; provided
that notices to the Administrative Agent or Swing Line Lender under Article II
or an Issuing Bank or the Administrative Agent under Article IV shall not be
effective until received during its normal business hours.

 

91

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

(b) So long as RBS or any of its Affiliates is the Administrative Agent, such
materials as the Borrower and the Administrative Agent may agree in their sole
discretion shall be delivered to the Administrative Agent in an electronic/soft
medium in a format acceptable to the Administrative Agent and the Lenders by
e-mail at agencyops@rbs.com. The Borrower agrees that the Administrative Agent
may make such materials, as well as any other written information, documents,
instruments and other material relating to the Borrower, any of its Subsidiaries
or any other materials or matters relating to this Agreement, the Notes or any
of the transactions contemplated hereby (other than any Notice of Borrowing,
Competitive Bid Notice, Letter of Credit Notice, Borrowing Notice, Rate Option
Notice, Swing Line Borrowing Notice, request for Conversion or continuation of
any Revolving Credit Advance, Revolving Credit Ratable Advances or notices
constituting service of process or relating to legal process) (collectively, the
“Communications”) available to the Lenders by posting such notices on
Debtdomain, IntraLinks, SyndTrak or a substantially similar electronic system
(the “Platform”). The Borrower acknowledges that (i) the distribution of
material through an electronic medium is not necessarily secure and that there
are confidentiality and other risks associated with such distribution, (ii) the
Platform is provided “as is” and “as available” and (iii) no Agent Party (as
defined below) warrants the accuracy, adequacy or completeness of the
Communications or the Platform and each expressly disclaims liability for errors
or omissions in the Communications or the Platform. No warranty of any kind,
express, implied or 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 any Agent
Party 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, the “Agent Parties”) have any liability to the Borrower, any
Lender or any other person or entity for damages of any kind, including, without
limitation, direct or indirect, special, indirect or consequential damages,
losses or expenses (whether in tort, contract or otherwise) arising out of the
Borrower’s 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 and non-appealable judgment by a court of competent jurisdiction to have
resulted primarily from such Agent Party’s gross negligence or willful
misconduct.

(c) 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 Agent for purposes of the Loan
Documents. Each Lender agrees that notice to it (as provided in the next
sentence) (a “Notice”) specifying that any Communications have been posted to
the Platform shall constitute effective delivery of such information, documents
or other materials to such Lender for purposes of this Agreement; provided that,
if requested by any Lender, the Administrative Agent shall deliver a copy of the
Communications to such Lender by e-mail or facsimile. Each Lender agrees (i) to
notify the Administrative Agent in writing of such Lender’s e-mail address(es)
to which a Notice may be sent by electronic transmission (including by
electronic communication) on or before the date such Lender becomes a party to
this Agreement (and from time to time thereafter to ensure that the
Administrative Agent has on record an effective e-mail address for such Lender)
and (ii) that any Notice may be sent to such e-mail address(es) as such Lender
shall instruct. The Administrative Agent agrees that it will, upon any Lender’s
reasonable request, furnish materials posted on the Platform to such Lender in
hard copy to such Lender’s address set forth on the signature pages hereof.

(d) 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.

14.2. Change of Address. The Borrower, the Borrower, the Administrative Agent
and any Lender may each change the address for service of notice upon it by a
notice in writing to the other parties hereto.

 

92

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

ARTICLE XV

COUNTERPARTS

15.1. Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Section 5.2, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”)
format shall be effective as delivery of a manually executed counterpart of this
Agreement.

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

ARTICLE XVI

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

16.1. GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIMS,
CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR
OTHERWISE BASED UPON, ARISING UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY
SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

16.2. CONSENT TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLE AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION,
LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY,
WHETHER IN CONTRACT OR TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY
LENDER, ANY ISSUING BANK, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF
NEW YORK SITTING IN NEW YORK COUNTRY, AND OF THE UNITED STATES DISTRICT COURT OF
THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND
EACH OF THE PARTIES HERETO IRREVOCABLE AND UNCONDITIONALLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE

 

93

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

ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY ISSUING BANK
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

16.3. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

16.4. WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN SECTION 16.2. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF ANY INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

16.5. SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR IN SECTION 14.1 NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW.

[Signature Pages to Follow]

 

94

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

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

D.R. HORTON INC. By:   /s/ Bill W. Wheat   Name: Bill W. Wheat   Title:
Executive Vice President and Chief Financial Officer Address for the Borrower:

D.R. Horton, Inc.

301 Commerce Street, Suite 500

Fort Worth Texas, 76102 Attention: Bill W. Wheat D.R. Horton, Inc. 301 Commerce
Street, Suite 500 Fort Worth Texas, 76102 Attention: Ted I. Harbour

[Signature Page to Credit Agreement]

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

 

THE ROYAL BANK OF SCOTLAND PLC,

as Administrative Agent Issuing Bank and Lender

By:   /s/ Andrew Rothstein   Name: Andrew Rothstein   Title: Managing Director
The Royal Bank of Scotland plc 600 Washington Blvd. Stamford CT, 06901
Attention: Agency Services Email Address: GBMNAAgency@rbs.com Fax No.
203-873-5300 The Royal Bank of Scotland plc 600 Washington Blvd. Stamford CT,
06901 Attention: Richard Emmich and Marchette Major Email Address:
Richard.Emmich@rbs.com; Marchette.Major@rbs.com Fax No. 203-873-3569

[Signature Page to Credit Agreement]

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

PRICING SCHEDULE

 

     Level I    Level II    Level III    Level IV    Level V

Leverage Ratio

   £ 0.25x    > 0.25x and £ 0.50x    > 0.50x and £ 0.75x    > 0.75x and £ 1.00x
   >1.00x

Applicable Eurodollar Margin

   2.25%    2.50%    2.75%    3.00%    3.25%

Undrawn Fee

   0.30%    0.35%    0.40%    0.45%    0.50%

Applicable Base Rate Margin

   1.25%    1.50%    1.75%    2.00%    2.25%

For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:

“Financials” means the annual or quarterly financial statements of the Borrower
delivered pursuant to Section 6.4 or Section 7.1(i) or (ii).

“Level” means the level (whether I, II, III, IV or V) in the foregoing table
that corresponds to an applicable item in any other column in the foregoing
table. For purposes of comparing Levels, Level I is referred to as the lowest
Level and Level V as the highest Level.

“Pricing Level” means, with respect to the Applicable Margins, at any date, the
Level in the foregoing table that corresponds to the current Level of the
Leverage Ratio.

The Applicable Margins shall be determined in accordance with the foregoing
table based on the then current Pricing Level; provided that prior to the
delivery of the first Compliance Certificate under Section 7.1(iv), the Pricing
Level will be at Level II. Adjustments, if any, in the Applicable Margins
resulting from a change in the Leverage Ratio shall be effective five Business
Days after the Administrative Agent has received the applicable Financials. If
the Borrower fails to deliver the Financials to the Administrative Agent at the
time required pursuant to Section 7.1, then, until five days after such
Financials are so delivered, the Applicable Margins shall be at the highest
Pricing Level set forth in the foregoing table.

 

Pricing Schedule-1

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

EXHIBIT A

FORM OF REVOLVING CREDIT NOTE

 

$                 [                    ], 2012

D.R. Horton, Inc., a Delaware corporation (the “Borrower”), promises to pay
                    (the “Lender”), or its registered assigns, the lesser of the
principal sum of             Dollars or the aggregate unpaid principal amount of
all Revolving Credit Loans made by the Lender to the Borrower pursuant to
Article II of the Credit Agreement (as hereinafter defined), in immediately
available funds at the main office of The Royal Bank of Scotland plc, in the
United States, as Administrative Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the Credit
Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Revolving Credit Loans in full on the Revolving Credit Facility
Termination Date.

This Revolving Credit Note is one of the Revolving Credit Notes issued pursuant
to, and is entitled to the benefits of, the Credit Agreement dated as of
September 7, 2012 (which, as it may be amended, restated, amended and restated,
supplemented or otherwise modified from time to time, is herein called the
“Credit Agreement”), among the Borrower, the lenders party thereto, including
the Lender, and The Royal Bank of Scotland plc, as Administrative Agent, to
which Credit Agreement reference is hereby made for a statement of the terms and
conditions governing this Note, including the terms and conditions under which
this Note may be prepaid or its maturity date accelerated. Capitalized terms
used herein and not otherwise defined herein have the meanings attributed to
them in the Credit Agreement.

 

D.R. HORTON, INC.

By:

 

 

 

Name:

 

Title:

 

A-1

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

EXHIBIT B

FORM OF SWING LINE NOTE

 

$20,000,000     [            ], 2012

D.R. Horton, Inc., a Delaware corporation (the “Borrower”), promises to pay The
Royal Bank of Scotland plc (the “Swing Line Lender”), or its registered assigns,
the lesser of the principal sum of $20,000,000) or the aggregate unpaid
principal amount of all Swing Line Advances made by the Swing Line Lender to the
Borrower pursuant to Section 2.19 of the Credit Agreement (as hereinafter
defined), in immediately available funds at the main office of The Royal Bank of
Scotland plc in the United States as Administrative Agent, together with
interest on the unpaid principal amount hereof at the rates and on the dates set
forth in the Credit Agreement. The Borrower shall pay the principal of each
Swing Line Advance in full on the first to occur of (a) the third Business Day
following the making of such Swing Line Advance and (b) the Revolving Credit
Facility Termination Date.

This Note (Swing Line Advances) is one of the Notes issued pursuant to, and is
entitled to the benefits of, the Credit Agreement dated as of September 7, 2012
(which, as it may be amended, restated, amended and restated, supplemented or
otherwise modified from time to time, is herein called the “Credit Agreement”),
among the Borrower, the lenders party thereto, including the Swing Line Lender,
and The Royal Bank of Scotland plc, as Administrative Agent, to which Credit
Agreement reference is hereby made for a statement of the terms and conditions
governing this Note, including the terms and conditions under which this Note
may be prepaid or its maturity date accelerated. Capitalized terms used herein
and not otherwise defined herein have the meanings attributed to them in the
Credit Agreement.

 

D.R. HORTON, INC.

By:

 

 

 

Name:

 

Title:

 

B-1

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

EXHIBIT C

FORM OF COMMITMENT AND ACCEPTANCE

This Commitment and Acceptance (this “Commitment and Acceptance”) dated as of
                    ,             entered into among the parties listed on the
signature pages hereof. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to them in the Credit Agreement (as
defined below).

PRELIMINARY STATEMENTS

Reference is made to that certain Credit Agreement dated as of September 7, 2012
by and among D.R. Horton, Inc., a Delaware corporation (the “Borrower”), The
Royal Bank of Scotland plc, as Administrative Agent, and the Lenders that are
parties thereto (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”).

Pursuant to Section 2.18 of the Credit Agreement, the Borrower has requested an
increase in the Aggregate Revolving Credit Commitment from $             to
$            . Such increase in the Aggregate Revolving Credit Commitment is to
become effective on                     (the “Increase Date”).1 In connection
with such requested increase in the Aggregate Revolving Credit Commitment, the
Borrower, the Administrative Agent and                     (the “Accepting
Lender”) hereby agree as follows:

ACCEPTING LENDER’S REVOLVING CREDIT COMMITMENT. Effective as of the Increase
Date, [the Accepting Lender shall become a party to the Credit Agreement as a
Lender, shall have (subject to the provisions of Section 2.18 of the Credit
Agreement) all of the rights and obligations of a Lender thereunder, agrees to
be bound by the terms and provisions thereof and shall thereupon have a
Revolving Credit Commitment under and for purposes of the Credit Agreement in an
amount equal to the] [the Revolving Credit Commitment of the Accepting Lender
under the Credit Agreement shall be increased from $             to the] amount
set forth opposite the Accepting Lender’s name on the signature pages hereof.

[REPRESENTATIONS AND AGREEMENTS OF ACCEPTING LENDER. The Accepting Lender
(a) represents and warrants that (i) it has full power and authority, and has
taken all action necessary, to execute and deliver this Commitment and
Acceptance and to consummate the transactions contemplated hereby and to become
a Revolving Credit Lender under the Credit Agreement, (ii) from and after the
Increase Date, it shall be bound by the provisions of the Credit Agreement as a
Revolving Credit Lender thereunder and, to the extent of its Revolving Credit
Commitment, shall have the obligations of a Revolving Credit Lender thereunder
and (iii) it has received a copy of the Credit Agreement, together with copies
of the most recent financial statements delivered pursuant to Section 7.1
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Commitment and Acceptance on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender, attached to this Commitment
and Acceptance is any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement, duly completed and executed by the Accepting
Lender; and (b) agrees that (i) it will, independently and without reliance on
the Administrative

 

1  This date is to be agreed upon by the Borrower, the Administrative Agent and
the Accepting Lender. See Section 2.18(c) of the Credit Agreement.

 

C-1

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

Agent, or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Revolving Credit
Lender.]2

REPRESENTATIONS OF BORROWER. The Borrower hereby represents and warrants that,
as of the date hereof and as of the Increase Date, (a) no Unmatured Event of
Default or Default exists or would exist after giving effect to the Facility
Increase, (b) after giving effect to the Facility Increase, the Aggregate
Revolving Credit Commitment shall not exceed the Aggregate Revolving Credit
Facility Limit, (c) all financial covenants set forth in Section 7.27 would be
satisfied on a pro forma basis for the most recent determination period,
assuming that the Revolving Credit Advances outstanding on the date of
effectiveness of the Facility Increase had been outstanding on the last day of
such determination period and (d) the representations and warranties contained
in Article VI of the Credit Agreement are true and correct in all material
respects (except to the extent any such representation or warranty is stated to
relate solely to an earlier date).

GOVERNING LAW. This Commitment and Acceptance shall be governed by the internal
law, and not the law of conflicts, of the State of New York.

 

2  Paragraph 2 is to be included only if the Accepting Lender is not already a
Revolving Credit Lender prior to the Increase Date.

 

C-2

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

IN WITNESS WHEREOF, the parties hereto have executed this Commitment and
Acceptance by their duly authorized officers as of the date first above written.

 

 

D.R. HORTON, INC.

 

By:

 

 

   

Name:

   

Title:

 

THE ROYAL BANK OF SCOTLAND PLC, as

Administrative Agent

 

By:

 

 

    Name:     Title: $               [NAME OF ACCEPTING LENDER]  

By:

 

 

    Name:     Title:

 

C-3

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

EXHIBIT D

FORM OF ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each]3 Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each]4 Assignee identified in item 2 below ([the][each, an]
“Assignee”). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]5 hereunder are several and not joint.]6
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as the same may be amended,
restated, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged
by [the][each] Assignee. The Standard Terms and Conditions set forth in Annex 1
attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Credit Agreement and
any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities identified below (including without limitation
any letters of credit, guarantees, and swingline loans included in such
facilities), and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of [the Assignor
(in its capacity as a Lender)][the respective Assignors (in their respective
capacities as Lenders)] against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses
(i) and (ii) above being referred to herein collectively as [the][an] “Assigned
Interest”). Each such sale and assignment is without recourse to [the][any]
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by [the][any] Assignor.

 

3  For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.

4  For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language. If the assignment is to multiple Assignees, choose the
second bracketed language.

5  Select as appropriate.

6  Include bracketed language if there are either multiple Assignors or multiple
Assignees.

 

D-1

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

1. Assignor[s]:                                         

 

[Assignor [is] [is not] a Defaulting Lender]

 

2. Assignee[s]:                                         

 

 

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]

 

3. Borrower: D.R. Horton, Inc.

 

4. Administrative Agent:             , as the administrative agent under the
Credit Agreement

 

5. Credit Agreement: Credit Agreement dated as of September 7, 2012 among D.R.
Horton, Inc., the Lenders parties thereto, The Royal Bank of Scotland plc, as
Administrative Agent, and the other agents parties thereto]

 

6. Assigned Interest[s]:

 

Assignor[s]7

   Assignee[s]8    Facility
Assigned9    Aggregate Amount of
Commitment/Loans for
all Lenders10      Amount of
Commitment/Loans
Assigned8      Percentage
Assigned of
Commitment/
Loans11    CUSIP
Number          $                    $                    %             $
                   $                    %             $                    $
                   %   

 

[7.

Trade Date:                                         ]12

 

7  List each Assignor, as appropriate.

8  List each Assignee, as appropriate.

9  Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g., “Revolving
Credit Commitment,” “Term Loan Commitment,” etc.)

10  Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.

11  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.

12  To be completed if the Assignor(s) and the Assignee(s) intend that the
minimum assignment amount is to be determined as of the Trade Date.

 

D-2

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

Effective Date:                     , 20    [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR13 [NAME OF ASSIGNOR] By:  

 

  Title: [NAME OF ASSIGNOR] By:  

 

  Title: ASSIGNEE14 [NAME OF ASSIGNEE] By:  

 

  Title: [NAME OF ASSIGNEE] By:  

 

  Title:

 

13  Add additional signature blocks as needed. Include both Fund/Pension Plan
and manager making the trade (if applicable).

14  Add additional signature blocks as needed. Include both Fund/Pension Plan
and manager making the trade (if applicable).

 

D-3

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

[Consented to and]15 Accepted:

[NAME OF ADMINISTRATIVE AGENT],

as Administrative Agent

By:

 

 

  Title:

[Consented to:]16

[NAME OF RELEVANT PARTY]

By:

 

 

  Title:

 

15  To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.

16  To be added only if the consent of the Borrower and/or Swing Line Lender is
required by the terms of the Credit Agreement.

 

D-4

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

ANNEX 1 TO EXHIBIT D

D.R. HORTON, INC.

CREDIT AGREEMENT

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim, (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and (iv) it is [not] a
Defaulting Lender; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document, or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an assignee under Section 13.2 of the Credit
Agreement (subject to such consents, if any, as may be required under
Section 13.2(b)(iii) of the Credit Agreement), (iii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement as a
Lender thereunder and, to the extent of [the][the relevant] Assigned Interest,
shall have the obligations of a Lender thereunder, (iv) it is sophisticated with
respect to decisions to acquire assets of the type represented by the Assigned
Interest and either it, or the Person exercising discretion in making its
decision to acquire the Assigned Interest, is experienced in acquiring assets of
such type, (v) it has received a copy of the Credit Agreement, and has received
or has been accorded the opportunity to receive copies of the most recent
financial statements delivered pursuant to Section 7.1 thereof, as applicable,
and such other documents and information as it deems appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest, (vi) it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest, (vii) it shall pay to the Administrative
Agent a processing and recordation fee in the amount of $3,500 pursuant to
Section 13.2(b)(iv) of the Credit Agreement and (viii) attached to the
Assignment and Assumption is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
[the][such] Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, [the][any] Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest,

 

D-I-1

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

fees and other amounts) to [the][the relevant] Assignor for amounts which have
accrued to but excluding the Effective Date and to [the][the relevant] Assignee
for amounts which have accrued from and after the Effective Date.
Notwithstanding the foregoing, the Administrative Agent shall make all payments
of interest, fees or other amounts paid or payable in kind from and after the
Effective Date to [the][the relevant] Assignee.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

 

D-I-2

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

EXHIBIT E

EXHIBIT E-1

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to that certain Credit Agreement, dated as of September 7,
2012 (as it may be amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among D.R. Horton,
Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto from
time to time and The Royal Bank of Scotland plc, as Administrative Agent (the
“Administrative Agent”). Capitalized terms used herein that are not defined
herein shall have the meanings ascribed to them in the Credit Agreement.

Pursuant to the provisions of Section 3.7(g) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s)) in respect of which it is providing this
certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of
the Code, (iii) it is not a ten percent shareholder of the Borrower within the
meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code, and (v) the interest payments on the Loan(s) are not effectively connected
with the undersigned’s conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, or if a lapse in time or change in circumstances renders
the information on this certificate obsolete, expired or inaccurate in any
material respect, the undersigned shall promptly so inform the Borrower and the
Administrative Agent in writing and deliver promptly to the Borrower and the
Administrative Agent an updated certificate or other appropriate documentation
(including any new documentation reasonably requested by the Borrower or the
Administrative Agent) or promptly notify the Borrower and the Administrative
Agent in writing of its inability to do so, and (2) the undersigned shall have
at all times furnished the Borrower and the Administrative Agent with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned or at such times are as
reasonably requested by the Borrower or the Administrative Agent.

 

[NAME OF LENDER] By:  

 

  Name:   Title:

Date:                     , 20[    ]

 

E-1

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

EXHIBIT E-2

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is made to that certain Credit Agreement, dated as of September 7,
2012 (as it may be amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among D.R. Horton,
Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto from
time to time and The Royal Bank of Scotland plc, as Administrative Agent (the
“Administrative Agent”). Capitalized terms used herein that are not defined
herein shall have the meanings ascribed to them in the Credit Agreement.

Pursuant to the provisions of Section 3.7(g) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s)) in respect of which it is providing this certificate,
(ii) its partners/members are the sole beneficial owners of such Loan(s) (as
well as any Note(s), (iii) with respect to the extension of credit pursuant to
the Credit Agreement or any other Loan Document, neither the undersigned nor any
of its partners/members is a bank extending credit pursuant to a loan agreement
entered into in the ordinary course of its trade or business within the meaning
of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten
percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B)
of the Code, (v) none of its partners/members is a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code, and (vi) the interest payments on the Loan(s) are not effectively
connected with the undersigned’s or its partners/members’ conduct of a U.S.
trade or business.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by an IRS Form W-8BEN from each of its partners/members
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, or if a lapse in time or change in circumstances renders the
information on this certificate obsolete, expired or inaccurate in any material
respect, the undersigned shall promptly so inform the Borrower and the
Administrative Agent in writing and deliver promptly to the Borrower and the
Administrative Agent an updated certificate or other appropriate documentation
(including any new documentation reasonably requested by the Borrower or the
Administrative Agent) or promptly notify the Borrower and the Administrative
Agent in writing of its inability to do so, and (2) the undersigned shall have
at all times furnished the Borrower and the Administrative Agent with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned or at such times are as
reasonably requested by the Borrower or the Administrative Agent.

 

[NAME OF LENDER] By:  

 

  Name:   Title:

Date:                     , 20[    ]

 

E-2

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

EXHIBIT E-3

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to that certain Credit Agreement, dated as of September 7,
2012 (as it may be amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among D.R. Horton,
Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto from
time to time and The Royal Bank of Scotland plc, as Administrative Agent (the
“Administrative Agent”). Capitalized terms used herein that are not defined
herein shall have the meanings ascribed to them in the Credit Agreement.

Pursuant to the provisions of Section 3.7(g) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code, and (v) the interest payments with respect to such participation are not
effectively connected with the undersigned’s conduct of a U.S. trade or
business.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. person status on an IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, or if a lapse in time or change in circumstances renders the
information on this certificate obsolete, expired or inaccurate in any material
respect, the undersigned shall promptly so inform such Lender in writing and
deliver promptly to such Lender an updated certificate or other appropriate
documentation (including any new documentation reasonably requested by such
Lender) or promptly notify such Lender in writing of its inability to do so, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned or at such times are
as reasonably requested by such Lender.

 

[NAME OF PARTICIPANT] By:  

 

  Name:   Title:

Date:                     , 20[    ]

 

E-3

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

EXHIBIT E-4

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to that certain Credit Agreement, dated as of September 7,
2012 (as it may be amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among D.R. Horton,
Inc., a Delaware corporation (the “Borrower”), the Lenders party thereto from
time to time and The Royal Bank of Scotland plc, as Administrative Agent (the
“Administrative Agent”). Capitalized terms used herein that are not defined
herein shall have the meanings ascribed to them in the Credit Agreement.

Pursuant to the provisions of Section 3.7(g) of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
partners/members are the sole beneficial owners of such participation,
(iii) with respect such participation, neither the undersigned nor any of its
partners/members is a bank extending credit pursuant to a loan agreement entered
into in the ordinary course of its trade or business within the meaning of
Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten
percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B)
of the Code, (v) none of its partners/members is a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code, and (vi) the interest payments with respect to such participation are not
effectively connected with the undersigned’s or its partners/members’ conduct of
a U.S. trade or business.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by an IRS Form W-8BEN from each of its partners/members claiming the
portfolio interest exemption. By executing this certificate, the undersigned
agrees that (1) if the information provided on this certificate changes, or if a
lapse in time or change in circumstances renders the information on this
certificate obsolete, expired or inaccurate in any material respect, the
undersigned shall promptly so inform such Lender in writing and deliver promptly
to such Lender an updated certificate or other appropriate documentation
(including any new documentation reasonably requested by such Lender) or
promptly notify such Lender in writing of its inability to do so, and (2) the
undersigned shall have at all times furnished such Lender with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned or at such times are as
reasonably requested by such Lender.

 

[NAME OF PARTICIPANT] By:  

 

  Name:   Title:

Date:                     , 20[    ]

 

E-4

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

EXHIBIT F

[RESERVED]

 

F-1

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

EXHIBIT G

[RESERVED]

 

G-1

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

EXHIBIT H

FORM OF GUARANTY

This GUARANTY (“Guaranty”) is made as of September 7, 2012 by the undersigned
(the “Guarantors”), in favor of the “Lenders” under that certain Credit
Agreement dated as of September 7, 2012, among D.R. Horton, Inc., a Delaware
corporation (the “Borrower”), the Lenders from time to time parties thereto and
The Royal Bank of Scotland plc, in its capacity as Administrative Agent. Such
Credit Agreement, as it may be amended, restated, amended and restated,
supplemented or otherwise modified from time to time, is hereinafter referred to
as the “Credit Agreement.” Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to them in the Credit Agreement.

1. Guaranty. (i) For value received and in consideration of any loan, advance or
financial accommodation of any kind whatsoever heretofore, now or hereafter
made, given or granted to the Borrower by the Lenders, the Guarantors
unconditionally, jointly and severally guarantee for the benefit of each of the
Lenders the full and prompt payment when due, whether at maturity or earlier, by
reason of acceleration or otherwise, and at all times thereafter, of all of the
Obligations (including, without limitation, interest accruing following the
filing of a bankruptcy petition by or against any Loan Party, at the applicable
rate specified in the Credit Agreement, whether or not such interest is allowed
as a claim in bankruptcy).

(ii) At any time after the occurrence and during the continuance of a Default,
the Guarantors shall pay to the Administrative Agent, for the benefit of the
Lenders, on written demand and in immediately available funds, the full amount
of the Obligations then due. The Guarantors hereby agree that this Guaranty is
an absolute guaranty of payment and is not a guaranty of collection.

2. Obligations Unconditional. Subject to Sections 11 and 12 hereof the
Guarantors hereby agree that their obligations under this Guaranty shall be
unconditional, irrespective of: (i) the validity, enforceability, avoidance,
novation or subordination of any of the Obligations or any of the Loan
Documents; (ii) the absence of any attempt by, or on behalf of, any Lender or
the Administrative Agent to collect, or to take any other action to enforce, all
or any part of the Obligations whether from or against the Borrower, any other
guarantor of the Obligations or any other person; (iii) the election of any
remedy by, or on behalf of, any Lender or the Administrative Agent with respect
to all or any part of the Obligations; (iv) the waiver, consent, extension,
forbearance or granting of any indulgence by, or on behalf of, any Lender or the
Administrative Agent with respect to any provision of any of the Loan Documents;
(v) the election by, or on behalf of, any one or more of the Lenders, in any
proceeding instituted under Chapter 11 of Title 11 of the United States Code (11
U.S.C. 101 et seq.) (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 the Borrower, as debtor-in-possession, under Section 364 of
the Bankruptcy Code; (vii) the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of the claims of any of the Lenders or the
Administrative Agent for repayment of all or any part of the Obligations or any
Expenses; or (viii) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of the Borrower or any one or more of
the Guarantors.

3. Enforcement; Application of Payments. Upon the occurrence and during the
continuance of a Default, the Administrative Agent may proceed directly and at
once, without notice, against any one or more of the Guarantors to obtain
performance of and to collect and recover the full amount, or any portion, of
the Obligations then due, without first proceeding against the Borrower, any
other Guarantor or any other Person, or against any security or collateral for
the Obligations. Subject only to the terms and provisions of the Credit
Agreement, the Administrative Agent shall have the exclusive

 

H-1

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

right to determine the application of payments and credits, if any, from the
Guarantors, the Borrower or from any other Person on account of the Obligations
or any other liability of the Guarantors to any Lender.

4. Waivers.

(a) The Guarantors hereby waive diligence, presentment, demand of payment,
filing of claims with a court in the event of receivership or bankruptcy of the
Borrower, protest or notice with respect to the Obligations, all setoffs and
counterclaims and all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor and notices of
acceptance of this Guaranty, and all other demands whatsoever (and shall not
require that the same be made on the Borrower as a condition precedent to the
Guarantors’ obligations hereunder), and covenants that this Guaranty will not be
discharged, except by complete payment (in cash) and performance of the
Obligations and any other obligations contained herein. The Guarantors further
waive all notices of the existence, creation or incurring of new or additional
indebtedness, arising either from additional loans extended to the Borrower or
otherwise, and also waive all notices that the principal amount, or any portion
thereof, and/or any interest on any instrument or document evidencing all or any
part of the Obligations is due, notices of any and all proceedings to collect
from the maker, any endorser or any other guarantor of all or any part of the
Obligations, or from any other Person, and, to the extent permitted by law,
notices of exchange, sale, surrender or other handling of any security or
collateral given to the Agent to secure payment of all or any part of the
Obligations.

(b) The Guarantors understand that they shall be liable for the full amount of
their liability under this Guaranty, notwithstanding the occurrence of any event
impairing the rights of the Guarantors, the Administrative Agent or any of the
Lenders to proceed against the Borrower, any other guarantor (including without
limitation any Guarantor hereunder) or the Borrower’s or such guarantor’s
property. The Guarantors agree that all of their obligations under this Guaranty
(including their obligation to pay in full all indebtedness evidenced by or
arising under the Credit Agreement) shall remain in full force and effect
without defense, offset or counterclaim of any kind, notwithstanding that the
Guarantors’ rights against the Borrower may be impaired, destroyed or otherwise
affected by reason of any action or inaction on the part of the Administrative
Agent or any Lender.

(c) The Lenders, either themselves or acting through the Administrative Agent,
are hereby authorized, without notice or demand and without affecting the
liability of the Guarantors hereunder, from time to time, (i) to renew, extend,
accelerate or otherwise change the time for payment of, or other terms relating
to, all or any part of the Obligations, or to otherwise modify, amend or change
the terms of any of the Loan Documents; (ii) to accept partial payments on all
or any part of the Obligations; (iii) to take and hold security or collateral
for the payment of all or any part of the Obligations, this Guaranty, or any
other guaranties of all or any part of the Obligations or other liabilities of
the Borrower, (iv) to exchange, enforce, waive and release any such security or
collateral; (v) to apply such security or collateral and direct the order or
manner of sale thereof as in their discretion they may determine; and (vi) to
settle, release, exchange, enforce, waive, compromise or collect or otherwise
liquidate all or any part of the Obligations, this Guaranty, any other guaranty
of all or any part of the Obligations, and any security or collateral for the
Obligations or for any such guaranty. Any of the foregoing may be done in any
manner, without affecting or impairing the obligations of the Guarantors
hereunder.

5. Setoff. At any time when all or any part of the Obligations have become due
and payable (by acceleration or otherwise) following the occurrence of a
Default, each Lender and the Administrative Agent may, without notice to the
Guarantors and regardless of the acceptance of any security or collateral for
the payment hereof, appropriate and apply toward the payment of all or any part
of the

 

H-2

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

Obligations (i) any indebtedness due or to become due from such Lender or the
Administrative Agent to any one or more of the Guarantors, and (ii) any moneys,
credits or other property belonging to any one or more of the Guarantors, at any
time held by or coming into the possession of such Lender or the Administrative
Agent or any of their respective Affiliates.

6. Financial Information. The Guarantors hereby assume responsibility for
keeping themselves informed of the financial condition of the Borrower and any
and all endorsers and/or other guarantors of all or any part of the Obligations,
and of all other circumstances bearing upon the risk of nonpayment of the
Obligations, or any part thereof, that diligent inquiry would reveal, and the
Guarantors hereby agree that none of the Lenders nor the Administrative Agent
shall have any duty to advise the Guarantors of information known to any of them
regarding such condition or any such circumstances. In the event any Lender, in
its sole discretion, undertakes at any time or from time to time to provide any
such information to any one or more of the Guarantors, such Lender shall be
under no obligation (i) to undertake any investigation not a part of its regular
business routine, (ii) to disclose any information which such Lender, pursuant
to accepted or reasonable commercial finance or banking practices, wishes to
maintain confidential or (iii) to make any other or future disclosures of such
information or any other information to any one or more of the Guarantors.

7. No Marshalling; Reinstatement. The Guarantors consent and agree that none of
the Lenders nor the Administrative Agent nor any Person acting for or on behalf
of the Lenders or the Administrative Agent shall be under any obligation to
marshal any assets in favor of the Guarantors or against or in payment of any or
all of the Obligations. The Guarantors further agree that, to the extent that
the Borrower, any one or more of the Guarantors or any other guarantor of all or
any part of the Obligations makes a payment or payments to any Lender or the
Administrative Agent, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to the Borrower, any one or more of the Guarantors,
such other guarantor or any other Person, or their respective estates, trustees,
receivers or any other party, including, without limitation, the Guarantors,
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, the part of the Obligations
which has been paid, reduced or satisfied by such amount shall be reinstated and
continued in full force and effect as of the time immediately preceding such
initial payment, reduction or satisfaction.

8. Subrogation. Until the Obligations have been paid in full and the Aggregate
Revolving Credit Commitment has been terminated, the Guarantors (i) shall have
no right of subrogation with respect to such Obligations, (ii) waive any right
to enforce any remedy which the Lenders or the Administrative Agent (or any of
them) now have or may hereafter have against the Borrower, any endorser or any
guarantor of all or any part of the Obligations or any other Person, and
(iii) waive any benefit of, and any right to participate in, any security or
collateral given to the Lenders and the Administrative Agent (or any of them) to
secure the payment or performance of all or any part of the Obligations or any
other liability of the Borrower to the Lenders.

9. Subordination.

(a) Subordinated Debt. The payment and performance of all indebtedness or
liabilities of the Borrower to the Guarantors whether now existing or hereafter
incurred or created, in each case, whether such amounts are due or not due,
direct or indirect, absolute or contingent (the “Subordinated Debt”) are hereby
subordinated to the Obligations and, except as set forth in subparagraphs
(b) and (c) of this Section 9 the Guarantors will not accelerate, ask, demand,
sue for, take or receive from the Borrower, by setoff or in any other manner,
the whole or any part of the Subordinated Debt, including, without limitation,
the taking of any negotiable instruments evidencing such amounts, nor any
security for any of the

 

H-3

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

Subordinated Debt, unless and until all of the Obligations shall have been fully
paid and satisfied in cash and all financing arrangements among the Borrower,
the Administrative Agent and the Lenders shall have been terminated.

(b) Permitted Payments. Notwithstanding the provisions of subparagraph (a) of
this Section 9, (i) the Borrower may pay to the Guarantors, and the Guarantors
may accept from the Borrower, any and all payments of the Subordinated Debt made
in the ordinary course of business (“Ordinary Course Payments”) and (ii) in the
absence of a “Default” and provided that the payment described below, if made,
would not otherwise give rise to the occurrence of a Default, the Borrower may
pay to the Guarantors, and the Guarantors may accept from the Borrower, any and
all payments of the Subordinated Debt other than the payments described in
clause (i) above (“Other Payments” and together with “Ordinary Couse Payments”,
“Permitted Payments”).

(c) Enforcement Rights. The Guarantors, prior to the payment in full of the
Obligations and the termination of all financing arrangements among the Borrower
and the Lenders, shall have no right to enforce any claim with respect to the
Subordinated Debt, including, without limitation, any Permitted Payment, or
otherwise to take any action against the borrower or the Borrower’s Property
without the Administrative Agent’s prior written approval.

10. Enforcement; Amendments; Waivers. No delay on the part of any of the Lenders
or the Administrative Agent in the exercise of any right or remedy arising under
this Guaranty, the Credit Agreement, any of the other Loan Documents or
otherwise with respect to all or any part of the Obligations or any other
guaranty of or security for all or any part of the Obligations shall operate as
a waiver thereof, and no single or partial exercise by any such Person of any
such right or remedy shall preclude any further exercise thereof. No
modification or waiver of any of the provisions of this Guaranty shall be
binding upon the Lenders or the Administrative Agent, except as expressly set
forth in a writing duly signed and delivered by the party making such
modification or waiver. Failure by any of the Lenders or the Administrative
Agent at any time or times hereafter to require strict performance by the
Borrower, the Guarantors, any other guarantor of all or any part of the
Obligations or any other Person of any of the provisions, warranties, terms and
conditions contained in any of the Loan Documents now or at any time or times
hereafter executed by such Persons and delivered to the Administrative Agent or
any Lender shall not waive, affect or diminish any right of the Administrative
Agent or such Lender at any time or times hereafter to demand strict performance
thereof and such right shall not be deemed to have been waived by any act or
knowledge of the Administrative Agent or any Lender, or their respective agents,
officers or employees, unless such waiver is contained in an instrument in
writing, directed and delivered to the Borrower or the Guarantors, as
applicable, specifying such waiver, and is signed by the party or parties
necessary to give such waiver under the Credit Agreement. No waiver of any
Default by the Administrative Agent or any Lender shall operate as a waiver of
any other Default or the same Default on a future occasion, and no action by the
Administrative Agent or any Lender permitted hereunder shall in any way affect
or impair the Administrative Agent’s or any Lender’s rights and remedies or the
obligations of the Guarantors under this Guaranty. Any determination by a court
of competent jurisdiction of the amount of any principal and/or interest owing
by the Borrower to any of the Lenders shall be conclusive and binding on the
Guarantors irrespective of whether any of the Guarantors was party to the suit
or action in which such determination was made.

11. Limitation on Obligations. The following provisions of this Guaranty apply
with respect to all Guarantors:

(a) The provisions of this Guaranty are severable, and in any action or
proceeding involving any state corporate law, or any state, federal or foreign
bankruptcy, insolvency, reorganization

 

H-4

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

or other law affecting the rights of creditors generally, if the obligations of
any Guarantor under this Guaranty would otherwise be held or determined to be
avoidable, invalid or unenforceable on account of the amount of such Guarantor’s
liability under this Guaranty, then, notwithstanding any other provision of this
Guaranty to the contrary, the amount of such liability shall, without any
further action by the Guarantors, the Administrative Agent or any Lender, be
automatically limited and reduced to the highest amount that is valid and
enforceable as determined in such action or proceeding (such highest amount
determined hereunder being the relevant Guarantor’s “Maximum Liability”). This
Section 11(a) with respect to the Maximum Liability of the Guarantors, is
intended solely to preserve the rights of the Administrative Agent hereunder to
the maximum extent not subject to avoidance under applicable law, and neither
the Guarantors nor any other person or entity shall have any right or claim
under this Section 11(a) with respect to the Maximum Liability, except to the
extent necessary so that the obligations of the Guarantors hereunder shall not
be rendered voidable under applicable law.

(b) Each of the Guarantors agrees that the Obligations may at any time and from
time to time exceed the Maximum Liability of each Guarantor, and may exceed the
aggregate Maximum Liability of all other Guarantors, without impairing this
Guaranty or affecting the rights and remedies of the Administrative Agent
hereunder. Nothing in this Section 9(b) shall be construed to increase any
Guarantor’s obligations hereunder beyond its Maximum Liability.

(c) In the event any Guarantor (a “Paying Guarantor”) shall make any payment or
payments under this Guaranty or shall suffer any loss as a result of any
realization upon any collateral granted by it to secure its obligations under
this Guaranty, each other Guarantor (each a “Non-Paying Guarantor”) shall
contribute to such Paying Guarantor an amount equal to such Non-Paying
Guarantor’s “Pro Rata Share” of such payment or payments made, or losses
suffered, by such Paying Guarantor. For the purposes hereof, each Non-Paying
Guarantor’s “Pro Rata Share” with respect to any such payment or loss by a
Paying Guarantor shall be determined as of the date on which such payment or
loss was made by reference to the ratio of (i) such Non-Paying Guarantor’s
Maximum Liability as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder) or, if such
Non-Paying Guarantor’s Maximum Liability has not been determined, the aggregate
amount of all monies received by such Non-Paying Guarantor from the Borrower
after the date hereof (whether by loan, capital infusion or by other means) to
(ii) the aggregate Maximum Liability of all Guarantors hereunder (including such
Paying Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder), or to the extent
that a Maximum Liability has not been determined for any Guarantors, the
aggregate amount of all monies received by such Guarantors from the Borrower
after the date hereof (whether by loan, capital infusion or by other means).
Nothing in this Section 11(c) shall affect any Guarantor’s several liability for
the entire amount of the Obligations (up to such Guarantor’s Maximum Liability).
Each of the Guarantors covenants and agrees that its right to receive any
contribution under this Guaranty from a Non-Paying Guarantor shall be
subordinate and junior in right of payment to all the Obligations. The
provisions of this Section 11(c) are for the benefit of both the Administrative
Agent and the Guarantors and may be enforced by any one, or more, or all of them
in accordance with the terms hereof.

12. Effectiveness; Termination. This Guaranty shall become effective upon its
execution by the Guarantors and shall continue in full force and effect and may
not be terminated or otherwise revoked until the Obligations shall have been
fully paid (in cash) and discharged and the Credit Agreement and all financing
arrangements between the Borrower and the Lenders under the Loan Documents shall
have been terminated. If, notwithstanding the foregoing, the Guarantors shall
have any right under applicable law to terminate or revoke this Guaranty, the
Guarantors agree that such termination or

 

H-5

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

revocation shall not be effective until a written notice of such revocation or
termination, specifically referring hereto, signed by the Guarantors, is
actually received by the Administrative Agent. Such notice shall not affect the
right and power of any of the Lenders or the Administrative Agent to enforce
rights arising prior to receipt thereof by the Administrative Agent. If any
Lender grants loans or takes other action after any of the Guarantors terminates
or revokes its obligations under this Guaranty but before the Administrative
Agent receives such written notice, the rights of such Lender with respect
thereto shall be the same as if such termination or revocation had not occurred.

13. Fees and Expenses; Indemnification. The provisions of Section 10.6 of the
Credit Agreement shall apply to each Guarantor, mutatis mutandis.

14. Successors and Assigns. This Guaranty shall be binding upon the Guarantors
and upon their successors and assigns and shall inure to the benefit of the
Lenders and the Administrative Agent and their respective successors and
assigns; all references herein to the Borrower and to the Guarantors shall be
deemed to include their respective successors and assigns. The successors and
assigns of the Guarantors and the Borrower shall include, without limitation,
their respective receivers, trustees or debtors-in-possession. All references to
the singular shall be deemed to include the plural where the context so
requires.

15. CHOICE OF LAW. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

16. CONSENT TO JURISDICTION. THE ADMINISTRATIVE AGENT AND THE GUARANTORS HEREBY
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE SOUTHERN DISTRICT OF NEW
YORK (OR THE STATE COURTS SITTING IN THE BOROUGH OF MANHATTAN IN THE EVENT THE
FEDERAL COURTS LACK SUBJECT JURISDICTION) IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE ADMINISTRATIVE AGENT AND THE
GUARANTORS HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVE
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM.

17. WAIVER OF JURY TRIAL. EACH OF THE GUARANTORS AND THE ADMINISTRATIVE AGENT
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, BETWEEN THE GUARANTORS AND THE LENDERS OR THE ADMINISTRATIVE
AGENT ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS
GUARANTY OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH. EITHER THE GUARANTORS OR THE ADMINISTRATIVE AGENT MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS GUARANTY WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.

18. SERVICE OF PROCESS. EACH OF THE GUARANTORS AND THE ADMINISTRATIVE AGENT
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN THE MANNER PROVIDED FOR IN
SECTION 14.1 OF THE CREDIT AGREEMENT. NOTHING IN THIS GUARANTY WILL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

 

H-6

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

19. Advice of Counsel. The Guarantors represent and warrant that they have
consulted with their legal counsel regarding all waivers under this Guaranty,
including without limitation those under Section 4 and Sections 14 through 16
hereof, that they believe that they fully understand all rights that they are
waiving and the effect of such waivers, that they assume the risk of any
misunderstanding that they may have regarding any of the foregoing, and that
they intend that such waivers shall be a material inducement to the
Administrative Agent and the Lenders to extend the indebtedness guaranteed
hereby.

20. Notices. All notices and other communications provided to any party hereto
shall be in writing or by facsimile and addressed to such party at its address
set forth below or at such other address as may be designated by such party in a
notice to the other party. Any notice, if mailed and properly addressed with
postage prepaid, shall be deemed given when received; any notice, if transmitted
by facsimile, shall be deemed given when transmitted. The addresses for notices
are as follows:

if to the Guarantors, at:

D.R. Horton, Inc.

301 Commerce Street

Suite 500

Fort Worth, Texas 76102

Attention: Bill W. Wheat

       Stacey H. Dwyer

       Ted I. Harbour

Telecopy: 817-390-8200

and

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, N.Y. 10166

Attention: Joerg Esdorn

Telecopy: 1 212-351-4035

if to the Administrative Agent, at its address provided for in the Credit
Agreement.

21. Severability. Wherever possible, each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.

22. Merger. This Guaranty represents the final agreement of the Guarantors with
respect to the matters contained herein and may not be contradicted by evidence
of prior or contemporaneous agreements, or subsequent oral agreements, between
the Guarantors and the Administrative Agent or any Lender.

23. Supplemental Guaranties. Pursuant to Section 7.16 of the Credit Agreement,
additional Subsidiaries of the Borrower may become obligated as Guarantors
hereunder (each as fully as

 

H-7

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

though an original signatory hereto) by executing and delivering to the
Administrative Agent a Supplemental Guaranty in the form of Exhibit A hereto
(with blanks appropriately filled in), together with such additional supporting
documentation required pursuant to Section 7.16 of the Credit Agreement.

24. Release of Guarantors. Any Guarantor may be released from its obligations
under this Guaranty Agreement pursuant to the terms of Section 7.17 of the
Credit Agreement without any action required on the part of the Administrative
Agent, the Lenders, the Borrower or any other Guarantor. Each Guarantor
expressly agrees that its obligations arising hereunder shall not be affected or
diminished by the release of any other Guarantor hereunder.

[Remainder of Page Intentionally Left Blank]

 

H-8

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

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

 

[GUARANTORS] By:  

 

  Name:   Title:

 

H-9

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

EXHIBIT A TO GUARANTY

SUPPLEMENTAL GUARANTY

[Date]

The Royal Bank of Scotland plc,

as Administrative Agent for the Lenders

Ladies and Gentlemen:

Reference is hereby made to (i) that certain Credit Agreement, dated as of
September 7, 2012, among D.R. Horton, Inc., the lenders from time to time party
thereto (the “Lenders”), and The Royal Bank of Scotland plc, as a Lender and as
Administrative Agent (the “Administrative Agent”) on behalf of itself and the
other Lenders (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) and (it) that
certain Guaranty, dated as of September 7, 2012, executed and delivered by the
Guarantors party thereto in favor of the Administrative Agent, for the benefit
of the Lenders (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Guaranty”). Terms not defined herein
which are defined in the Credit Agreement shall have for the purposes hereof the
respective meanings provided therein.

In accordance with Section 7.16 of the Credit Agreement and Section 23 of the
Guaranty, the undersigned, [GUARANTOR]                     , a
                    corporation [limited partnership/limited liability company]
organized under the laws of                     , hereby elects to be a
“Guarantor” for all purposes of the Credit Agreement and the Guaranty,
respectively, effective from the date hereof.

Without limiting the generality of the foregoing, the undersigned hereby agrees
to perform all the obligations of a Guarantor under, and to be bound in all
respects by the terms of, the Guaranty, to the same extent and with the same
force and effect as if the undersigned were a direct signatory thereto.

This Supplemental Guaranty shall be construed in accordance with and governed by
the internal laws (and not the law of conflicts) of the State of New York but
giving effect to federal laws applicable to national banks.

 

Exhibit A-1

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

IN WITNESS WHEREOF, this Supplemental Guaranty has been duly executed by the
undersigned as of the      day of                     , 201    .

 

[GUARANTOR] By:  

 

  Name:   Title:

 

Exhibit A-2

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

EXHIBIT I

FORM OF COMPLIANCE CERTIFICATE

 

To: The Lenders party to the

   Credit Agreement Described Below

This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of September 7, 2012 (as amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among D.R. Horton, Inc., a Delaware corporation (the “Borrower”),
the Lenders party thereto and The Royal Bank of Scotland plc, as Administrative
Agent for the Lenders. Unless otherwise defined herein, capitalized terms used
in this Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

I am the duly elected                      of the Borrower.

I have reviewed the terms of the Credit Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements.

The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of, any condition or event which constitutes a
Default or Unmatured Default at the end of the accounting period covered by the
attached financial statements, except as set forth below.

Schedule I attached hereto sets forth financial data and computations evidencing
the Borrower’s compliance with the covenants contained in Sections 7.27.1 and
7.27.3 of the Credit Agreement, all of which data and computations are, to the
best of my knowledge, true, complete and correct.

Schedule II hereto sets forth the determination of the applicable Pricing Level
in the Pricing Schedule on the basis of which certain rates and percentage fees
under the Credit Agreement shall be determined commencing on the fifth day
following the delivery hereof.

Described below are the exceptions, if any, to paragraph 3, listing, in detail,
the nature of the condition or event, the period during which it has existed and
the action which the Borrower has taken, is taking, or proposes to take with
respect to each such condition or event:

The foregoing certifications, together with the computations set forth in
Schedule I and Schedule II hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this      day of
                    ,             .

 

D.R. HORTON, INC. By:  

 

  Name:   Title:

 

I-1

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

SCHEDULE I TO COMPLIANCE CERTIFICATE

COMPLIANCE AS OF             ,          WITH

PROVISIONS OF SECTIONS 7.27.1 AND 7.27.3 OF THE CREDIT AGREEMENT

 

Schedule I-1

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

SCHEDULE II TO COMPLIANCE CERTIFICATE

BORROWER’S CALCULATION OF APPLICABLE PRICING LEVEL IN PRICING SCHEDULE

 

Schedule II-1

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

EXHIBIT J

FORM OF INVENTORY SUMMARY REPORT

AS OF                     ,

REPORT DATE:                         ,

ADMINISTRATIVE AGENT: The Royal Bank of Scotland plc

BORROWER:                              D. R. Horton, Inc., a Delaware
corporation

This certificate is delivered under the Credit Agreement dated as of
September 7, 2012 (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Borrower,
Administrative Agent, the Swing Line Lender defined therein and the Lenders
defined therein. Capitalized terms used herein shall, unless otherwise
indicated, have the respective meanings set forth in the Credit Agreement.

I certify to Lenders that:

(a) I am an authorized signatory of Borrower in the position(s) set forth under
my signature below;

(b) the financial details set forth on the attached Annex I were prepared in
accordance with GAAP, and present accurately in all material respects the Loan
Inventory for Borrower as of                     ,                     ; and

(c) As of the date hereof, the representation and warranty contained in
Section 6.16 is true and correct in all material respects.

 

D. R. HORTON, INC., a Delaware corporation

By:  

 

  Name:   Title:

 

J-1

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

Annex I

to Inventory Summary Report

As Of                     ,         

(Amounts in Millions)

Calculation of Borrowing Base

 

Loan Inventory At Book Value

   Total    Less
Encumbered
Portion17, as
applicable    Unencumbered
Portion, as
applicable    Advance
Rate     Amount

(A) Unrestricted Homebuilding cash in excess of $25,000,000

              100 %      

 

  

 

  

 

    

 

(B) Book Value of all funds in escrow, related to a Dwelling Unit

              90 %      

 

  

 

  

 

    

 

(C) Book Value of Dwelling Lots

              85 %      

 

  

 

  

 

    

 

(D) Book Value of Developed Lots

              65 %      

 

  

 

  

 

    

 

(E) Book Value of Lots Under Development

              65 %      

 

  

 

  

 

    

 

(F) Book Value of Unimproved Land

              40 %      

 

  

 

  

 

    

 

(G) TOTAL (Sum of A+B+C+D+E+F)

                           

 

(H) Borrowing Limitation (amount, if any, by which D+E+F exceeds 50% of G)

                           

 

(I) TOTAL of Borrowing Base18 (line G — line H)

                           

 

 

17  Other than the portion that is encumbered by Liens described in clause (i),
(ii), (iii), (iv), (v), (vii), (viii), (x), (xx), (xxii) or (xxvi) of the
definition of “Permitted Liens” in the Credit Agreement.

18  (a) no asset that is not wholly owned by a Loan Party shall be included in
the Borrowing Base and (b) no asset that is subject to any Lien (other than
Liens described in clause (i), (ii), (iii), (iv), (v), (vii), (viii), (x), (xx),
(xxii) or (xxvi) of the definition of “Permitted Liens” in the Credit Agreement)
shall be included in the Borrowing Base.

 

Annex I to Exhibit J

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

Reconciliation of Borrowing Base and Senior Indebtedness

 

(A)   Borrowing Base

   

 

(B)   Less: Senior Indebtedness

(other than Permitted Nonrecourse Indebtedness and Permitted Purchase Money
Indebtedness)

   

 

(C)   Subtotal [ = (A) — (B)]19

   

 

 

19  If the Leverage Ratio as of the end of a fiscal quarter equals or exceeds
1.10 to 1.00, the Borrower shall be required to cause the aggregate principal
amount of Senior Indebtedness to be less than the Borrowing Base.

 

Annex I to Exhibit J

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

EXHIBIT K

FORM OF COMPETITIVE BID NOTE

                    , 20     

D.R. Horton, Inc., a Delaware corporation (the “Borrower”), promises to pay, on
or before the Revolving Credit Facility Termination Date,                     
(the “Lender”), or its registered assigns, the aggregate unpaid principal amount
of all Competitive Bid Loans made by the Lender to the Borrower pursuant to
Article II of the Credit Agreement (as defined below) in lawful money of the
United States in immediately available funds at the main office of The Royal
Bank of Scotland plc, as Administrative Agent, in New York, New York, together
with interest, in like money and funds, on the unpaid principal amount hereof at
the rates and on the dates determined in accordance with the Credit Agreement.

This Note (Competitive Bid Loans) is one of the Notes issued pursuant to, and is
entitled to the benefits of the Credit Agreement dated as of September 7, 2012,
among the Borrower, The Royal Bank of Scotland plc, as Administrative Agent, and
the lenders named therein (the “Credit Agreement”), including the Lender, to
which Credit Agreement, as it may be amended, restated, amended and restated,
supplemented or otherwise modified from time to time, reference is hereby made
for a statement of the terms and conditions under which this Note may be prepaid
or its maturity date accelerated. Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to them in the
Credit Agreement.

 

D.R. HORTON, INC. By:  

 

 

K-1

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

EXHIBIT L

FORM OF COMPETITIVE BID QUOTE

(Section 2.3.4)

                    , 201    

 

To: The Royal Bank of Scotland plc, as Administrative Agent20

Attn:                     

 

  Re: Competitive Bid Quote to D.R. Horton, Inc. (the “Borrower”)

In response to your Invitation for Competitive Bid Quotes dated
                    , 201    , the undersigned hereby makes the following
Competitive Bid Quote pursuant to Section 2.3.4 of the Credit Agreement dated as
of September 7, 2012 (the “Credit Agreement”) among the Borrower, the Lenders
(including the undersigned) party thereto and The Royal Bank of Scotland plc, as
Administrative Agent, on the following terms:

 

1. Quoting Lender:

 

2. Person to contact at Quoting Lender:

 

3. Borrowing Date:                     , 20     21

 

4. The undersigned hereby offers to make Competitive Bid Loan(s) in the
following principal amounts, for the following Interest Periods and at the
following rates:

 

Principal Amount22

   Interest Period23    [Competitive
Bid Margin24]     [Absolute Rate25]     Minimum Amount26  

$                    

                             %                           %    $
                       

 

 

20  Change to D.R. Horton, Inc. if it is the Competitive Bid Agent.

21  As specified in the related Invitation.

22  Principal amount bid for each Interest Period may not exceed principal
amount requested. Bids must be made in an integral multiple of $1,000,000.

23  As specified in the related Invitation.

24  Competitive Bid Margin over or under the Adjusted LIBO Rate determined for
the applicable Interest Period. Specify percentage (rounded to the nearest 1/100
of 1%) and specify whether “PLUS” or “MINUS.”

25  Specify rate of interest per annum (rounded to the nearest 1/100 of 1%).

26  Specify minimum amount which the Borrower may accept (See section
2.3.4(b)(iv)), which amount shall not be less than $1,000,000.

 

L-1

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

5. The maximum aggregate amount of the Competitive Bid Loans offered above which
may be accepted by the Borrower is $                        .27

The undersigned understands and agrees that, subject to the satisfaction of the
applicable conditions set forth in the Credit Agreement, the undersigned is
irrevocably obligated to make to the Borrower any Competitive Bid Loans(s) for
which any of the foregoing offers is accepted, in whole or (subject to the
limitations, if any, set forth above and the terms of the Credit Agreement) in
part. Capitalized terms used herein have the meaning assigned to them in the
Credit Agreement.

 

Very truly yours, [NAME OF REVOLVING CREDIT LENDER] By:  

 

  Authorized Officer

 

27  When more than one Competitive Bid Loan is offered, specify the maximum
aggregate amount which may be accepted (see Section 2.3.4(b)(vi)).

 

L-2

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

EXHIBIT M

FORM OF COMPETITIVE BID QUOTE REQUEST

(Section 2.3.2)

                    , 201    

 

To: The Royal Bank of Scotland plc,

   as Administrative Agent (the “Administrative Agent”)

 

From: D.R. Horton, Inc. (the “Borrower”)

 

  Re: Credit Agreement (the “Credit Agreement”) dated as of September 7, 2012,
among the Borrower, The Royal Bank of Scotland plc, as Administrative Agent, and
the Lenders party thereto.

The undersigned hereby gives notice pursuant to Section 2.3.2 of the Credit
Agreement that the Borrower requests Competitive Bid Quotes for the following
proposed Competitive Bid Advance(s):

Borrowing Date:                     , 200    

 

Principal Amount28

  

Interest Period29

$

  

Such Competitive Bid Quotes should offer a [Competitive Bid Margin][Absolute
Rate]

The Competitive Bid Agent with respect to this request shall be the
[Administrative Agent/Borrower]

Upon acceptance by the undersigned of any or all of the Competitive Bid Advances
offered by Revolving Credit Lenders in response to this request, the Borrower
shall be deemed to affirm as of such date the representations and warranties
made in the Credit Agreement to the extent specified in Article V thereof.
Capitalized terms used herein have the meanings assigned to them in the Credit
Agreement.

 

D.R. HORTON, INC.

By:

 

 

 

 

28  Amount must be at least $10,000,000 and an integral multiple of $1,000,000.

29  One, two, three, six, nine or twelve months (Eurodollar Auction) or at least
30 and up to 360 days (Absolute Rate Auction), subject to the provisions of the
definitions of Eurodollar Interest Period and Competitive Bid Interest Period.

 

M-1

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

EXHIBIT N

FORM OF INVITATION FOR COMPETITIVE BID QUOTES

(Section 2.3.3)

                    , 201    

 

To: [Name of Revolving Credit Lender]

 

  Re: Invitation for Competitive Bid Quotes to D.R. Horton, Inc.

     (the “Borrower”)

Pursuant to Section 2.3.3 of the Credit Agreement dated as of September 7, 2012
(the “Credit Agreement”) among the Borrower, the Lenders party thereto and The
Royal Bank of Scotland plc, as Administrative Agent, the undersigned is pleased
[on behalf of the Borrower] to invite you to submit Competitive Bid Quotes to
the Borrower for the following proposed Competitive Bid Advance(s):

Borrowing Date:                     ,             

 

Principal Amount(l)

  

Interest Period(2)

$

  

Such Competitive Bid Quotes should offer a [Competitive Bid Margin][Absolute
Rate]. Your Competitive Bid Quote must comply with Section 2.3.4 of the Credit
Agreement and the foregoing terms on which the Competitive Bid Quote Request was
made. Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.

Please respond to this invitation by no later than 10:00 a.m. New York time on
                    , 201    .

 

THE ROYAL BANK OF SCOTLAND PLC,

as Administrative Agent30

By:

 

 

  Authorized Officer

 

30  Change to D.R. Horton, Inc. if it is the Competitive Bid Agent.

 

N-1

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

SCHEDULE 1

LENDERS AND COMMITMENTS

 

Lender

   Revolving Credit Commitments  

The Royal Bank of Scotland plc

   $ 125,000,000.00   

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

SCHEDULE 2

PERMITTED LIENS

None.

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

SCHEDULE 3

LITIGATION

None.

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

SCHEDULE 4

GUARANTORS

 

Name

 

Form of Entity

 

Jurisdiction of Formation

C. Richard Dobson Builders, Inc.

  Corporation   Virginia

CH Investments of Texas, Inc.

  Corporation   Delaware

CHI Construction Company

  Corporation   Arizona

CHTEX of Texas, Inc.

  Corporation   Delaware

Continental Homes, Inc.

  Corporation   Delaware

Continental Homes of Texas, L.P.

  Limited Partnership   Texas

Continental Residential, Inc.

  Corporation   California

D.R. Horton - Emerald, Ltd.

  Limited Partnership   Texas

D.R. Horton - Schuler Homes, LLC

  Limited Liability Company   Delaware

D.R. Horton - Texas, Ltd.

  Limited Partnership   Texas

D.R. Horton, Inc. - Birmingham

  Corporation   Alabama

D.R. Horton, Inc. - Chicago

  Corporation   Delaware

D.R. Horton, Inc. - Dietz-Crane

  Corporation   Delaware

D.R. Horton, Inc. - Fresno

  Corporation   Delaware

D.R. Horton, Inc. - Greensboro

  Corporation   Delaware

D.R. Horton, Inc. – Gulf Coast

(f/k/a DRH Regrem V, Inc.)

  Corporation   Delaware

D.R. Horton, Inc. – Huntsville

(f/k/a DRH Regrem XIII, Inc.)

  Corporation   Delaware

D.R. Horton, Inc. - Jacksonville

  Corporation   Delaware

D.R. Horton, Inc. - Louisville

  Corporation   Delaware

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

Name

 

Form of Entity

 

Jurisdiction of Formation

D.R. Horton, Inc. - Minnesota   Corporation   Delaware D.R. Horton, Inc. - New
Jersey   Corporation   Delaware D.R. Horton, Inc. - Portland   Corporation  
Delaware D.R. Horton, Inc. - Sacramento   Corporation   California D.R. Horton,
Inc. - Torrey   Corporation   Delaware

D.R. Horton LA North, Inc.

(f/k/a DRH Regrem X, Inc.)

  Corporation   Delaware

D.R. Horton BAY, Inc.

(f/k/a D.R. Horton OCI Inc., D.R. Horton Orange County Inc. and DRH Regrem IX,
Inc.)

  Corporation   Delaware

D.R. Horton Cruces Construction, Inc.

(f/k/a DRH Regrem XI, Inc.)

  Corporation   Delaware D.R. Horton Los Angeles Holding Company, Inc.  
Corporation   California D.R. Horton Management Company, Ltd.   Limited
Partnership   Texas D.R. Horton Materials, Inc.   Corporation   Delaware

D.R. Horton VEN Inc.

(f/k/a D.R. LAV Inc. and D.R. Horton San Diego Holding Company, Inc.)

  Corporation   California DRH Cambridge Homes, Inc.   Corporation   California
DRH Cambridge Homes, LLC   Limited Liability Company   Delaware DRH
Construction, Inc.   Corporation   Delaware DRH Regrem VII, LP   Limited
Partnership   Texas

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

Name

 

Form of Entity

 

Jurisdiction of Formation

D.R. Horton Serenity Construction, LLC

(f/k/a DRH Regrem VIII, LLC)

  Limited Liability Company   Delaware DRH Regrem XII, LP   Limited Partnership
  Texas DRH Regrem XIV, Inc.   Corporation   Delaware DRH Regrem XV, Inc.  
Corporation   Delaware DRH Regrem XVI, Inc.   Corporation   Delaware DRH Regrem
XVII, Inc.   Corporation   Delaware DRH Regrem XVIII, Inc.   Corporation  
Delaware DRH Regrem XIX, Inc.   Corporation   Delaware DRH Regrem XX, Inc.  
Corporation   Delaware DRH Regrem XXI, Inc.   Corporation   Delaware DRH Regrem
XXII, Inc.   Corporation   Delaware DRH Regrem XXIII, Inc.   Corporation  
Delaware DRH Regrem XXIV, Inc.   Corporation   Delaware

DRH Regrem XXV, Inc.

(f/k/a D.R. Horton VEN, Inc. and D.R. Horton Inc. – Los Angeles)

  Corporation   Delaware DRH Southwest Construction, Inc.   Corporation  
California DRH Tucson Construction, Inc.   Corporation   Delaware HPH
Homebuilders 2000 L.P.   Limited Partnership   California KDB Homes, Inc.  
Corporation   Delaware Meadows I, Ltd.   Corporation   Delaware Meadows II, Ltd.
  Corporation   Delaware Meadows VIII, Ltd.   Corporation   Delaware Meadows IX,
Inc.   Corporation   New Jersey Meadows X, Inc.   Corporation   New Jersey
Melmort Co.   Corporation   Colorado Melody Homes, Inc.   Corporation   Delaware

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

Name

 

Form of Entity

 

Jurisdiction of Formation

Schuler Homes of Arizona LLC   Limited Liability Company   Delaware Schuler
Homes of California, Inc.   Corporation   California Schuler Homes of Oregon,
Inc.   Corporation   Oregon Schuler Homes of Washington, Inc.   Corporation  
Washington Schuler Mortgage, Inc.   Corporation   Delaware Schuler Realty
Hawaii, Inc.   Corporation   Hawaii SGS Communities at Grande Quay, L.L.C.  
Limited Liability Company   New Jersey SHA Construction LLC   Limited Liability
Company   Delaware SHLR of California, Inc.   Corporation   California SHLR of
Colorado, Inc.   Corporation   Colorado SHLR of Nevada, Inc.   Corporation  
Nevada SHLR of Utah, Inc.   Corporation   Utah SHLR of Washington, Inc.  
Corporation   Washington SRHI LLC   Limited Liability Company   Delaware SSHI
LLC   Limited Liability Company   Delaware Vertical Construction Corporation  
Corporation   Delaware Western Pacific Funding, Inc.   Corporation   California
Western Pacific Housing-Antigua, LLC   Limited Liability Company   Delaware
Western Pacific Housing-Aviara, L.P.   Limited Partnership   California Western
Pacific Housing-Boardwalk, LLC   Limited Liability Company   Delaware Western
Pacific Housing-Broadway, LLC   Limited Liability Company   Delaware Western
Pacific Housing-Canyon Park, LLC   Limited Liability Company   Delaware Western
Pacific Housing-Carmel, LLC   Limited Liability Company   Delaware

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

Name

 

Form of Entity

 

Jurisdiction of Formation

Western Pacific Housing-Carrillo, LLC   Limited Liability Company   Delaware
Western Pacific Housing-Communications Hill, LLC   Limited Liability Company  
Delaware Western Pacific Housing-Copper Canyon, LLC   Limited Liability Company
  Delaware Western Pacific Housing-Creekside, LLC   Limited Liability Company  
Delaware Western Pacific Housing-Culver City, L.P.   Limited Partnership  
California Western Pacific Housing-Del Valle, LLC   Limited Liability Company  
Delaware Western Pacific Housing-Lomas Verdes, LLC   Limited Liability Company  
Delaware Western Pacific Housing-Lost Hills Park, LLC   Limited Liability
Company   Delaware Western Pacific Housing-McGonigle Canyon, LLC   Limited
Liability Company   Delaware Western Pacific Housing-Mountaingate, L.P.  
Limited Partnership   California Western Pacific Housing-Norco Estates, LLC  
Limited Liability Company   Delaware Western Pacific Housing-Oso, L.P.   Limited
Partnership   California Western Pacific Housing-Pacific Park II, LLC   Limited
Liability Company   Delaware Western Pacific Housing-Park Avenue East, LLC  
Limited Liability Company   Delaware Western Pacific Housing-Park Avenue West,
LLC   Limited Liability Company   Delaware Western Pacific Housing-Playa Vista,
LLC   Limited Liability Company   Delaware Western Pacific Housing-Poinsettia,
L.P.   Limited Partnership   California Western Pacific Housing-River Ridge, LLC
  Limited Liability Company   Delaware Western Pacific Housing-Robinhood Ridge,
LLC   Limited Liability Company   Delaware Western Pacific Housing-Santa Fe, LLC
  Limited Liability Company   Delaware

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

Name

 

Form of Entity

 

Jurisdiction of Formation

Western Pacific Housing - Scripps, L.P.   Limited Partnership   California
Western Pacific Housing-Scripps II, LLC   Limited Liability Company   Delaware
Western Pacific Housing-Seacove, L.P.   Limited Partnership   California Western
Pacific Housing-Studio 528, LLC   Limited Liability Company   Delaware Western
Pacific Housing-Terra Bay Duets, LLC   Limited Liability Company   Delaware
Western Pacific Housing-Torrance, LLC   Limited Liability Company   Delaware
Western Pacific Housing-Torrey Commercial, LLC   Limited Liability Company  
Delaware Western Pacific Housing-Torrey Meadows, LLC   Limited Liability Company
  Delaware Western Pacific Housing-Torrey Multi-Family, LLC   Limited Liability
Company   Delaware Western Pacific Housing-Torrey Village Center, LLC   Limited
Liability Company   Delaware Western Pacific Housing-Vineyard Terrace, LLC  
Limited Liability Company   Delaware Western Pacific Housing-Windemere, LLC  
Limited Liability Company   Delaware Western Pacific Housing-Windflower, L.P.  
Limited Partnership   California Western Pacific Housing, Inc.   Corporation  
Delaware

Western Pacific Housing, L.P.

(f/k/a Western Pacific Housing Co., a California Limited Partnership)

  Limited Partnership   California Western Pacific Housing Management, Inc.  
Corporation   California WPH-Camino Ruiz, LLC   Limited Liability Company  
Delaware

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

SCHEDULE 5

ENVIRONMENTAL MATTERS

None.