Exhibit 10.1

 

REVOLVING CREDIT AGREEMENT

 

Dated as of August 27, 2013

 

among

 

WCI COMMUNITIES, INC.

 

as Borrower

 

THE BANKS PARTY HERETO

 

CITIBANK, N.A.

 

as Administrative Agent,

 

CITIGROUP GLOBAL MARKETS INC.

 

and

 

J.P. MORGAN SECURITIES LLC,

 

as Joint Lead Arrangers and Joint Book Managers

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

1

 

 

 

1.1

Defined Terms

1

1.2

Accounting Terms

28

1.3

Rounding

29

1.4

Other Interpretive Provisions

29

1.5

Exhibits and Schedules

30

1.6

References to “the Borrower and its Subsidiaries”

30

1.7

Time of Day

30

1.8

Letter of Credit Amounts

30

 

 

 

ARTICLE II. LOANS AND LETTERS OF CREDIT

30

 

 

 

2.1

Loans-General

30

2.2

Base Rate Loans

31

2.3

Eurodollar Rate Loans

31

2.4

Maturity Extension

32

2.5

Letters of Credit

32

2.6

Reduction of Commitment

39

2.7

Optional Increase to Commitment

39

2.8

Borrowing Base

41

 

 

 

ARTICLE III. PAYMENTS AND FEES

42

 

 

 

3.1

Principal and Interest

42

3.2

Commitment Fee

43

3.3

Other Fees

43

3.4

[Intentionally Omitted]

43

3.5

[Intentionally Omitted]

43

3.6

Eurodollar Fees and Costs

43

3.7

Late Payments/Default Interest

46

3.8

Computation of Interest and Fees

46

3.9

Holidays

46

3.10

Payment Free of Taxes

46

3.11

Funding Sources

49

3.12

Failure to Charge or Making of Payment Not Subsequent Waiver

49

3.13

Time and Place of Payments; Evidence of Payments; Application of Payments

49

3.14

Administrative Agent’s Right to Assume Payments Will be Made

49

3.15

Survivability

50

3.16

Bank Calculation Certificate

50

3.17

Designation of a Different Lending Office

50

 

 

 

ARTICLE IV. REPRESENTATIONS AND WARRANTIES

51

 

 

 

4.1

Existence and Qualification; Power; Compliance with Law

51

4.2

Authority; Compliance with Other Instruments and Government Regulations

51

4.3

No Governmental Approvals Required

52

 

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4.4

Subsidiaries

52

4.5

Financial Statements

53

4.6

No Material Adverse Change

53

4.7

Title to Assets

53

4.8

Intangible Assets

53

4.9

Anti-Terrorism Laws

53

4.10

Governmental Regulation

54

4.11

Litigation

54

4.12

Binding Obligations

54

4.13

No Default

54

4.14

[Intentionally Omitted]

55

4.15

Tax Liability

55

4.16

[Intentionally Omitted]

55

4.17

Environmental Matters

55

4.18

Disclosure

55

4.19

[Intentionally Omitted]

55

4.20

ERISA Compliance

55

4.21

Solvency

56

4.22

[Intentionally Omitted]

56

4.23

Tax Shelter Regulations

56

 

 

 

ARTICLE V. AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING
REQUIREMENTS)

56

 

 

 

5.1

Payment of Taxes and Other Potential Liens

56

5.2

Preservation of Existence

56

5.3

Maintenance of Properties

57

5.4

Maintenance of Insurance

57

5.5

Compliance with Laws

57

5.6

Inspection Rights

57

5.7

Keeping of Records and Books of Account

57

5.8

Use of Proceeds

58

5.9

Subsidiary Guaranty

58

 

 

 

ARTICLE VI. NEGATIVE COVENANTS

58

 

 

 

6.1

Payment or Prepayment of Subordinated Obligations and Certain Other Obligations

58

6.2

Indebtedness of Mortgage Subsidiaries

58

6.3

Merger and Sale of Assets

59

6.4

Investments and Acquisitions

59

6.5

Burdensome Agreements

60

6.6

Change in Business

61

6.7

Liens and Negative Pledges

61

6.8

Transactions with Affiliates

64

6.9

Consolidated Tangible Net Worth

64

6.10

Consolidated Leverage Ratio

64

6.11

Consolidated Interest Coverage Ratio or Minimum Liquidity

64

6.12

Distributions

65

6.13

Amendments

66

6.14

Investment in Subsidiaries and Joint Ventures

66

 

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6.15

Regulation U

66

6.16

Fiscal Year

66

6.17

Designation of Subsidiaries

66

 

 

 

ARTICLE VII. INFORMATION AND REPORTING REQUIREMENTS

67

 

 

 

7.1

Financial and Business Information of the Borrower and Its Subsidiaries

67

7.2

Compliance Certificate

70

 

 

 

ARTICLE VIII. CONDITIONS

70

 

 

 

8.1

Initial Advances, Etc.

70

8.2

Any Advance

72

8.3

Any Letter of Credit

72

 

 

 

ARTICLE IX. EVENTS OF DEFAULT AND REMEDIES UPON EVENTS OF DEFAULT

73

 

 

 

9.1

Events of Default

73

9.2

Remedies Upon Event of Default

74

 

 

 

ARTICLE X. THE ADMINISTRATIVE AGENT

76

 

 

 

10.1

Appointment and Authorization

76

10.2

Delegation of Duties

77

10.3

Liability of Administrative Agent

77

10.4

Reliance by Administrative Agent

77

10.5

Notice of Default

78

10.6

Credit Decision; Disclosure of Information by Administrative Agent

78

10.7

Indemnification of Administrative Agent

78

10.8

Administrative Agent in its Individual Capacity

79

10.9

Successor Administrative Agent

79

10.10

Administrative Agent May File Proofs of Claim

80

10.11

Guaranty Matters

80

10.12

Other Agents; Arrangers and Managers

81

10.13

Defaulting Banks

81

10.14

No Obligations of the Borrower

83

 

 

 

ARTICLE XI. MISCELLANEOUS

83

 

 

11.1

Cumulative Remedies; No Waiver

83

11.2

Amendments; Consents

83

11.3

Costs, Expenses and Taxes

85

11.4

Nature of Banks’ Obligations

85

11.5

Survival of Representations and Warranties

85

11.6

Notices and Other Communications; Facsimile Copies

86

11.7

Execution in Counterparts; Facsimile Delivery

88

11.8

Successors and Assigns

88

11.9

Sharing of Setoffs

91

11.10

Indemnification by the Borrower

91

11.11

Nonliability of Banks

92

11.12

Confidentiality

93

 

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11.13

No Third Parties Benefited

94

11.14

Other Dealings

94

11.15

Right of Setoff — Deposit Accounts

94

11.16

Further Assurances

94

11.17

Integration

94

11.18

Governing Law

95

11.19

Severability of Provisions

95

11.20

Headings

95

11.21

Conflict in Loan Documents

96

11.22

Waiver of Right to Trial by Jury

96

11.23

Purported Oral Amendments

96

11.24

Payments Set Aside

96

11.25

[Intentionally Omitted]

97

11.26

USA PATRIOT Act Notice

97

11.27

Replacement of Banks

97

11.28

No Fiduciary Relationship

98

 

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Exhibits

 

 

 

A

 

Assignment and Assumption

 

 

 

B

 

Borrowing Base Certificate

 

 

 

C

 

Compliance Certificate

 

 

 

D

 

Loan Notice

 

 

 

E

 

Note

 

 

 

F-1

 

Opinion of Counsel (Latham & Watkins LLP)

 

 

 

F-2

 

Opinion of General Counsel of the Borrower

 

 

 

G

 

Subsidiary Guaranty

 

 

 

H-1

 

U.S. Tax Compliance Certificate (For Foreign Banks That Are Not Partnerships)

 

 

 

H-2

 

U.S. Tax Compliance Certificate (For Foreign Participants That Are Not
Partnerships)

 

 

 

H-3

 

U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships)

 

 

 

H-4

 

U.S. Tax Compliance Certificate (For Foreign Banks That Are Partnerships)

 

 

 

I

 

Form of Solvency Certificate

 

 

 

Schedules

 

 

 

1.1

 

Pro Rata Shares

 

 

 

4.4

 

Subsidiaries

 

 

 

6.4

 

Investments

 

 

 

6.7

 

Existing Liens

 

 

 

11.6

 

Notices

 

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REVOLVING CREDIT AGREEMENT

 

Dated as of August 27, 2013

 

This Revolving Credit Agreement (as it may from time to time be supplemented,
modified, amended, renewed, extended or supplanted, this “Agreement”), dated as
of August 27, 2013, is entered into by and among WCI COMMUNITIES, INC., a
Delaware corporation (the “Borrower”), each financial institution set forth on
the signature pages of this Agreement or which from time to time becomes party
hereto (collectively, the “Banks” and individually, a “Bank”), Citibank, N.A.,
as Administrative Agent, and Citigroup Global Markets Inc. and J.P. Morgan
Securities LLC, as Joint Lead Arrangers and Joint Book Managers.

 

RECITALS

 

WHEREAS, the Borrower wishes to establish a revolving credit facility for
general corporate purposes of the Borrower and its Subsidiaries, subject to the
terms hereof.

 

WHEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

 

ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS

 

1.1                               Defined Terms.

 

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

 

“2017 Notes” means the $125,000,000 aggregate principal amount of senior secured
term notes due 2017 of the Borrower issued on June 8, 2012.

 

“Acquisition” means any transaction, or any series of related transactions,
consummated after the Closing Date, by which the Borrower or any of its
Subsidiaries directly or indirectly (a) acquires any ongoing business or all or
substantially all of the assets of any corporation, partnership or limited
liability company, or other business entity or division thereof, whether through
purchase of assets, merger or otherwise, (b) acquires control of securities of a
corporation representing 50% or more of the ordinary voting power for the
election of directors or (c) acquires control of a 50% or more ownership
interest in any corporation, partnership, limited liability company, or other
business entity.  For the avoidance of doubt, the acquisition by the Borrower
and its Subsidiaries of personal property, real property and interests in real
property in the ordinary course of their respective businesses shall not be
considered an Acquisition.

 

“Administrative Agent” means Citi in its capacity as administrative agent under
this Agreement and the other Loan Documents, or any successor administrative
agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account set forth on Schedule 11.6, or such other address or
account as the Administrative Agent may, from time to time, notify the Borrower
and the Banks.

 

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

 

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“Advance” means an advance of a Loan made or to be made to the Borrower by a
Bank pursuant to Article II.

 

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person.  As used in this definition, “control” (including its correlative
meanings, “controlled by” and “under common control with”) shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise); provided that, in any
event, any Person which owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of directors or other
governing body of a corporation or 10% or more of the partnership or other
ownership interests of any other Person will be deemed to control such
corporation or other Person.

 

“Agent Parties” has the meaning set forth in Section 11.6(c).

 

“Agent-Related Persons” means the Administrative Agent, together with its
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.

 

“Agreement” has the meaning set forth in the first paragraph hereof.

 

“Anti-Terrorism Laws” means Law related to terrorism financing or money
laundering including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. 107-56), The Currency and Foreign Transactions Reporting
Act (also known as the “Bank Secrecy Act”, 31 U.S.C. §§ 5311-5330 and 12 U.S.C.
§§ 1818(s), 1820(b) and 1951-1959), the Trading With the Enemy Act (50 U.S.C. §
1 et seq., as amended) and Executive Order 13224 (effective September 24, 2001).

 

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

 

“Arrangers” means CGMI and JPM, in their capacities as joint lead arrangers and
joint book managers.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another, or an Approved Fund thereof.

 

“Assignment and Assumption” means an assignment and assumption substantially in
the form of Exhibit A.

 

“Attorney Costs” means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel.

 

“Attributable Indebtedness” when used with respect to any sale and leaseback
transaction, means, as at the time of determination, the present value
(discounted at a rate equivalent to the Borrower’s then-current weighted average
cost of funds for borrowed money as at the time of determination, compounded on
a semi-annual basis) of the total obligations of the lessee for rental payments
during the remaining term of any Capital Leases included in any such sale and
leaseback transaction.

 

“Authorizations” has the meaning set forth for that term in Section 4.1.

 

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“Bank” means each financial institution whose name is set forth in the signature
pages of this Agreement and each lender which may hereafter become a party to
this Agreement pursuant to Section 11.8.

 

“Bank of America” means Bank of America, N.A. and its successors.

 

“Bank of America Letter of Credit Facility” means that certain Letter of Credit
Agreement dated as of January 19, 2009 by and between WCI Communities, LLC and
Bank of America, as amended by the First Amendment to Letter of Credit
Agreement, dated as of November 21, 2011, by and between WCI Communities, LLC
and Bank of America, as amended by the Second Amendment to Letter of Credit
Agreement, dated as of July 1, 2012, by and between WCI Communities, LLC and
Bank of America, as amended by the Third Amendment to Letter of Credit
Agreement, dated as of November 30, 2012, by and between WCI Communities, LLC
and Bank of America, and as may be further amended, amended and restated,
modified or supplemented from time to time.

 

“Bank Insolvency Event” means that (i) a Bank or its Parent Company is insolvent
or (ii) an event of the kind referred to in Section 9.1(j) occurs with respect
to a Bank or its Parent Company (as if the references in such provisions to the
Borrower or Subsidiaries referred to such Bank or Parent Company).

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the one month Eurodollar Rate
plus 1.00% and (c) the rate of interest in effect for such day as publicly
announced from time to time by Citi as its “prime rate.”  The “prime rate” is a
rate set by Citi based upon various factors including Citi’s costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  Any change in such rate announced by Citi shall take
effect at the opening of business on the day specified in the public
announcement of such change.

 

“Base Rate Advance” means an Advance made by a Bank to fund its Pro Rata Share
of a Base Rate Loan.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Base Rate Spread” means 1.75%.

 

“Borrower” means WCI Communities, Inc., a Delaware corporation, and its
successors and permitted assigns.

 

“Borrower Materials” has the meaning set forth in Section 7.1.

 

“Borrowing Base” has the meaning set forth in Section 2.8(b).

 

“Borrowing Base Availability” means the lesser of (a) the difference of (1) the
Commitment minus (2) the Total Outstandings and (b) the difference of (1) the
Borrowing Base minus (2) the Borrowing Base Indebtedness (including the Total
Outstandings).  Borrowing Base Availability will be calculated (i) in connection
with the delivery of any Compliance Certificate pursuant to Section 7.2, as of
the end of the Fiscal Quarter or Fiscal Year to which such Compliance
Certificate relates, and (ii) in connection with the incurrence of any Loan, the
issuance of any Letter of Credit (including a designation of a Letter of Credit
under Section 2.5(l)) or the incurrence of any other Borrowing Base
Indebtedness, in each case, as of the end of the most recent Fiscal Quarter for
which financial statements have been delivered (or were required to have been
delivered) pursuant to Section 7.1 (on a pro forma basis with

 

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such Loan, Letter of Credit or other Borrowing Base Indebtedness deemed to be
incurred as of the end of such Fiscal Quarter at the time of such computation).

 

“Borrowing Base Certificate” means a written calculation of the Borrowing Base,
substantially in the form of Exhibit B signed, on behalf of the Borrower by a
Senior Officer of the Borrower.

 

“Borrowing Base Indebtedness” means as of any date of determination, the
aggregate principal amount of indebtedness for borrowed money (including,
without limitation, the Senior Notes), and the aggregate face amount of
obligations under Financial Letters of Credit that are not Cash Collateralized
or Letter of Credit Collateralized, of the Borrower and Subsidiaries; provided
that Borrowing Base Indebtedness shall not include (i) Non-Recourse
Indebtedness, (ii) the outstanding principal amount of any Subordinated
Obligations or (iii) all Letters of Credit issued under the Stonegate Agreement.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state of New York, the state where the Administrative Agent’s
Office is located and, if such day relates to any Eurodollar Rate Loan, means
any such day on which dealings in Dollar deposits are conducted by and between
banks in the London interbank Eurodollar market.

 

“Capital Lease” means, with respect to any Person, a lease of any Property by
that Person as lessee that is, or should be recorded as a “capital lease” on a
balance sheet of that Person prepared in accordance with Generally Accepted
Accounting Principles in effect as of the date of this Agreement.

 

“Cash” means all monetary items (including currency, coin and bank demand
deposits) that are treated as cash under Generally Accepted Accounting
Principles consistently applied.

 

“Cash Collateralize” has the meaning set forth in Section 2.5(g).

 

“Cash Equivalents” means, with respect to any Person, that Person’s Investments
in:

 

(a)                                 marketable obligations with a maturity of
one year or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof;

 

(b)                                 demand and time deposits and certificates of
deposit or acceptances with a maturity of one year or less (i) of any of the
Banks or their respective Affiliates, (ii) of any other financial institution
that (A) is organized under the Laws of the United States, any state thereof,
the District of Columbia or any member nation of the Organization for Economic
Cooperation and Development or is the principal banking Subsidiary of a bank
holding company organized under the Laws of the United States, any state
thereof, the District of Columbia or any member nation of the Organization for
Economic Cooperation and Development and is a member of the Federal Reserve
System, (B) has combined capital and surplus of at least $100,000,000, and (C)
is assigned at least an A-1 rating by Thompson Financial BankWatch or (iii) that
are fully insured by the Federal Deposit Insurance Corporation, including, for
the avoidance of doubt, investments placed through the CDARS and ICS deposit
placement program;

 

(c)                                  commercial paper maturing no more than 365
days from the date of acquisition thereof issued by a corporation that is not
the Borrower or an Affiliate of the Borrower, and is organized under the laws of
any State of the United States of America or the District of Columbia and rated,
at the time of acquisition, at least A-1 by S&P or at least P-1 by Moody’s or at
least F1 by Fitch;

 

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(d)                                 repurchase obligations with a term of not
more than ten days for underlying securities of the types described in clause
(a) above entered into with any commercial bank meeting the specifications of
clause (b) above; and

 

(e)                                  investments in money market or other mutual
funds substantially all of whose assets comprise securities of the types
described in clauses (a) through (d) above.

 

“CDARS” means the Certificate of Deposit Account Registry Service.

 

“CDD” means a community development district and/or community development
authority or similar governmental or quasi-governmental entity created under
state or local statutes to encourage planned community development and to allow
for the construction and maintenance of long-term infrastructure through
alternative financing sources, including the tax-exempt and/or the taxable bond
markets.

 

“CDD Obligations” means Indebtedness and other obligations of the Borrower and
its Restricted Subsidiaries incurred with respect to CDDs and which are
reflected as a liability on the balance sheet of the Borrower as required by
GAAP.

 

“CFC Subsidiary” means any Subsidiary of the Borrower that is: (a) a “controlled
foreign corporation” within the meaning of Section 957 of the Code, (b) a
“domestic corporation” or “domestic partnership” within the meaning of Section
7701(a)(30) of the Code that has no material assets other than equity interests
in one or more Subsidiaries that are controlled foreign corporations within the
meaning of Section 957 of the Code and that conduct no business other than
holding such equity interests, and (c) disregarded as an entity separate from
its owner under Treasury Regulations Section 301.7701-3 that has no material
assets other than equity interests in one or more Subsidiaries described in
parts (a) and (b) of this definition.

 

“CGMI” means Citigroup Global Markets Inc. and its successors.

 

“Change in Control” means, and shall be deemed to have occurred at such time as
any of the following events shall occur:

 

(a)                                 any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than the Sponsors, is or
becomes the “beneficial owner” (as defined in Rules 13d-3 under the Exchange
Act), directly or indirectly, of more than 50% of the total voting power of the
Voting Stock of the Borrower (for the purposes of this clause (a), such other
person shall be deemed to beneficially own any Voting Stock of a Person held by
any other Person (the “parent entity”), if such other person is the beneficial
owner (as defined above in this clause (a)), directly or indirectly, of more
than 50% of the voting power of the Voting Stock of such parent entity); or

 

(b)                                 the stockholders of the Borrower adopt a
Plan of Liquidation or dissolution of the Borrower; provided that a liquidation
or dissolution of the Borrower which is part of a transaction that does not
constitute a Change in Control pursuant to the proviso contained in clause (c)
below shall not constitute a Change in Control;

 

(c)                                  the merger or consolidation of the Borrower
with or into another Person or the merger of another Person with or into the
Borrower, or the sale of all or substantially all the assets of the Borrower and
its Restricted Subsidiaries (determined on a consolidated basis) to another
Person, except in each case to a Sponsor or to a Restricted Subsidiary of the
Borrower; provided that a transaction following which (A) in the case of a
merger or consolidation transaction, one or more holders of securities

 

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that represented a majority of the Voting Stock of the Borrower immediately
prior to such transaction (or other securities into which such securities are
converted as part of such merger or consolidation transaction) own directly or
indirectly at least a majority of the voting power of the Voting Stock of the
surviving Person in such merger or consolidation transaction immediately after
such transaction or (B) in the case of a sale of assets transaction, each
transferee is or becomes an obligor in respect of the Obligations and a
Subsidiary of the transferor of such assets, in each case, shall not constitute
a Change in Control; or

 

(d)                                 a “Change in Control” (or analogous term) as
defined in the Senior Notes Indenture or in any other agreements governing any
Indebtedness under which at least $25,000,000 is outstanding.

 

“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;

 

(b)                                 any change in any Law or in the
administration, interpretation or application thereof by any Governmental
Agency; or

 

(c)                                  the making or issuance of any request,
guideline or directive (whether or not having the force of law) by any
Governmental Agency.

 

Notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and 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 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 in Status” means, with respect to any Guarantor Subsidiary, (a) such
Guarantor Subsidiary ceases to be a Subsidiary of the Borrower as a result of a
transaction permitted under this Agreement or (b) the designation by the
Borrower that such Guarantor Subsidiary is not required to be a Guarantor
Subsidiary under the definition thereof.

 

“Citi” means Citibank, N.A. and its successors.

 

“Closing Date” means the date of this Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended and as in effect from
time to time.

 

“Commission” means the Securities and Exchange Commission and any successor
commission.

 

“Commitment” means, subject to Sections 2.6 and 2.7, $75,000,000.  The Pro Rata
Shares of the Banks, on the Closing Date, with respect to the Commitment are set
forth in Schedule 1.1.

 

“Compensation Period” has the meaning set forth for that term in Section 3.14.

 

“Compliance Certificate” means a compliance certificate in the form of Exhibit C
signed, on behalf of the Borrower, by a Senior Officer of the Borrower.

 

6

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“Connection Income Taxes” means Connection Taxes that are imposed on or measured
by net income (however denominated) or that are franchise Taxes or branch
profits Taxes.

 

“Connection Taxes” means with respect to any Recipient, Taxes imposed as a
result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Consolidated EBITDA” means, for any period, Consolidated Net Income for such
period, (a) plus, without duplication, (i) any extraordinary loss reflected in
such Consolidated Net Income (including the amount of net loss resulting from
the payment of any premiums, fees or similar amounts that are required to be
paid under the terms of the instruments governing any Indebtedness upon the
repayment, prepayment or other extinguishment of such Indebtedness, in
accordance with the terms of such Indebtedness), and (ii) Consolidated Interest
Expense for such period, and (iii) the aggregate amount of federal, state and
foreign income taxes payable by the Borrower and its Restricted Subsidiaries for
such period, and (iv) depreciation, impairment charges for inventory, goodwill
and similar items, amortization of goodwill and other intangible assets,
non-cash compensation expense and all other non-cash expenses of the Borrower
and its Restricted Subsidiaries for such period, and (v) litigation costs and
expenses for non-ordinary course litigation (and in the case of the foregoing
items (ii), (iii), (iv), and (v) only to the extent deducted in the
determination of Consolidated Net Income for such period), (b) minus, without
duplication, (i) consolidated interest income of the Borrower and its Restricted
Subsidiaries for such period, and (ii) any extraordinary gain reflected in such
Consolidated Net Income, in each of the foregoing cases as determined in
accordance with Generally Accepted Accounting Principles consistently applied.

 

“Consolidated Interest Coverage Ratio” means, as of any date of determination,
the ratio of (a) Consolidated EBITDA for the 12 month period ending on such date
to (b) Consolidated Interest Incurred for the 12 month period ending on such
date.

 

“Consolidated Interest Expense” means, for any period, the consolidated interest
expense (including capitalized interest and other charges amortized to cost of
sales and including all other non-cash interest expense, but excluding interest
of a Loan Party to another Loan Party); provided, however, that any non-cash
interest expenses or income attributable to movement in the mark-to-market
valuation of Swap Contracts or other derivative instruments pursuant to GAAP
shall be excluded from the calculation of Consolidated Interest Expense) of Loan
Parties and their Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.

 

“Consolidated Interest Incurred” means, for any period, the aggregate amount
(without duplication and determined in each case in accordance with GAAP) of
interest (excluding interest of a Loan Party to another Loan Party) incurred,
whether such interest was expensed or capitalized, paid, accrued, or scheduled
to be paid or accrued during such period by any of the Loan Parties and their
Subsidiaries during such period, including (a) the interest portion of all
deferred payment obligations and (b) all commissions, discounts, and other fees
and charges (excluding premiums) owed with respect to bankers’ acceptances and
letter of credit financings (including, without limitation, letter of credit
fees) and Swap Contracts, in each case to the extent attributable to such
period; provided, however, that the Consolidated Interest Incurred of the
Restricted Subsidiaries shall only be included in the amount of the Loan
Parties’ pro-rata share of interest; and provided further, that any non-cash
interest expenses or income attributable to movement in the mark-to-market
valuation of Swap Contracts or other derivative instruments pursuant to GAAP
shall be excluded from the calculation of Consolidated Interest Incurred)

 

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of Loan Parties and their Restricted Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP.  For purposes of this definition,
interest on Capital Leases shall be deemed to accrue at an interest rate
reasonably determined by the Borrower to be the rate of interest implicit in
such Capital Leases in accordance with GAAP.

 

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Total Indebtedness net of Unrestricted Cash on that date in
excess of $10,000,000 plus, to the extent the Borrower cannot meet the
requirements of Section 6.11(b), the amount necessary to enable the Borrower to
meet the requirements of Section 6.11(a) to (b) the sum of (i) Consolidated
Total Indebtedness net of Unrestricted Cash on that date in excess of
$10,000,000 plus, to the extent the Borrower cannot meet the requirements of
Section 6.11(b), the amount necessary to enable the Borrower to meet the
requirements of Section 6.11(a) and (ii) Consolidated Tangible Net Worth on that
date determined in accordance with Generally Accepted Accounting Principles
consistently applied.

 

“Consolidated Net Income” means, for any period, the net income of the Borrower
and its Restricted Subsidiaries on a consolidated basis determined in accordance
with Generally Accepted Accounting Principles consistently applied.

 

“Consolidated Net Tangible Assets” means, as of any date, the total amount of
assets of the Borrower and its Restricted Subsidiaries on a consolidated basis
at the end of the Fiscal Quarter immediately preceding such date for which
financial statements under Section 7.1 have been delivered (or have been
required to have been delivered), as determined in accordance with GAAP, less
(1) Intangible Assets and (2) any assets securing Non-Recourse Indebtedness up
to the aggregate principal amount of such Non-Recourse Indebtedness.

 

“Consolidated Net Worth”  means, with respect to any Person as of any date, the
consolidated stockholders’ equity of such Person and its Restricted
Subsidiaries, determined on a consolidated basis at the end of the Fiscal
Quarter immediately preceding such date for which financial statements under
Section 7.1 have been delivered (or have been required to have been delivered),
as determined in accordance with GAAP, less (without duplication) (1) any
amounts thereof attributable to Disqualified Equity Interests of such Person or
its Restricted Subsidiaries or any amount attributable to Unrestricted
Subsidiaries and (2) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going concern
business made within twelve months after the acquisition of such business)
subsequent to the Closing Date in the book value of any asset owned by such
Person or a Restricted Subsidiary of such Person.

 

“Consolidated Tangible Net Worth” means, with respect to any Person as of any
date, the Consolidated Net Worth of such Person and its Restricted Subsidiaries
determined on a consolidated basis at the end of the Fiscal Quarter immediately
preceding such date for which financial statements under Section 7.1 have been
delivered (or have been required to have been delivered), less (without
duplication) all Intangible Assets of such Person and its Restricted
Subsidiaries determined on a consolidated basis at the end of the Fiscal Quarter
immediately preceding such date for which financial statements under Section 7.1
have been delivered (or have been required to have been delivered).

 

“Consolidated Total Indebtedness” means, as of any date of determination, all
Indebtedness and any drawn Performance Letters of Credit not reimbursed when due
and not Cash Collateralized or Letter of Credit Collateralized, of the Borrower
and its Restricted Subsidiaries on a consolidated basis on that date (without
duplication for any guaranty by the Borrower of a Restricted Subsidiary’s
Indebtedness or any guaranty by a Restricted Subsidiary of either the Borrower’s
or another Restricted Subsidiary’s Indebtedness or otherwise).

 

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“Contingent Guaranty Obligation” means, with respect to any Person, any
agreement, undertaking or arrangement by which such Person guarantees, endorses
(other than for collection or deposit in the ordinary course of business),
contingently agrees to purchase or provide funds for the payment of, or
otherwise is contingently liable upon, the Indebtedness of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person to enable such Person to pay Indebtedness, or otherwise
assures any creditor with respect to Indebtedness of such other Person against
loss with respect to payment of such Indebtedness, including, without
limitation, any such agreement, undertaking or arrangement in the form of a
comfort letter, operating agreement, take-or-pay contract or “put” agreement;
provided that a “bad boy”, “bad acts” or completion guarantee or similar
arrangement shall not constitute a Contingent Guaranty Obligation except to the
extent of the principal amount then due and payable thereunder.  The amount of
any Contingent Guaranty Obligation of a Person shall be deemed to be (1) in the
event the terms of such Contingent Guaranty Obligation provide that such Person
shall be liable for a fixed portion of the principal amount of the related
primary Indebtedness and such Indebtedness has a stated or determinable
principal amount, an amount equal to such fixed portion and (2) in the event the
principal amount of the related primary Indebtedness is not stated or
determinable or the terms of such Contingent Guaranty Obligation do not provide
that such Person shall be liable for a fixed portion of such principal, an
amount equal to the maximum reasonably anticipated liability which is likely to
be paid by such Person in respect of such principal as determined by such Person
in good faith; provided, however, that if any Person is liable severally but not
jointly and severally with one or more other obligors under any Contingent
Guaranty Obligation, the amount of such Contingent Guaranty Obligation shall be
the product of (x) the amount determined as set forth above and (y) the maximum
percentage of the aggregate liability in respect of principal under such
Contingent Guaranty Obligation with respect to which such Person is severally
liable.

 

“Contractual Obligation” means, as to any Person, any provision of any
outstanding Securities issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or any
of its Property is bound, other than, in the case of the Borrower and its
Restricted Subsidiaries, any of the Loan Documents.

 

“Core Businesses” means (i) any businesses engaged in by the Borrower and its
Subsidiaries on the Closing Date, (ii) any business or other activities that are
reasonably similar, ancillary, complementary or related to, or a reasonable
extension, development or expansion of, the businesses described in clause (i)
of this definition, (iii) any business in the homebuilding, real estate
development or community planning industries and (iv) commercial real estate
development, brokerage and the sale or rental of homes and other real estate
activities, including the provision of mortgage financing, title insurance or
homeowners’ insurance.

 

“Credit Suisse” means Credit Suisse AG, Cayman Islands Branch and its
successors.

 

“Debt Rating” means, as of any date of determination, the rating as determined
by a Rating Agency of the Borrower’s non-credit-enhanced, senior unsecured
long-term debt.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
as amended from time to time, and all other applicable liquidation,
conservatorship, insolvency, reorganization, or similar debtor relief Laws from
time to time in effect affecting the rights of creditors generally.

 

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

 

“Default Rate” has the meaning set forth for that term in Section 3.7.

 

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“Defaulting Bank” means, at any time, a Bank that (i) has failed for two
Business Days or more to comply with its obligations under this Agreement to
make a Loan or make a payment to an Issuing Bank in respect of an L/C Advance or
pay any other amount required to be paid by it under the Loan Documents (each a
“funding obligation”), (ii) has notified in writing the Borrower, the
Administrative Agent or any Issuing Bank, or has stated publicly, that it does
not intend or expect to comply with any such funding obligation, (iii) has
defaulted on its funding obligations under any other loan agreement or credit
agreement or other similar agreement, (iv) for three or more Business Days after
written request of the Administrative Agent or the Borrower, fails to provide a
written certification that it will comply with its prospective funding
obligations hereunder (provided that such Bank will cease to be a Defaulting
Bank pursuant to this clause (iv) upon the Administrative Agent’s and the
Borrower’s receipt of such written confirmation), or (v) as to which a Bank
Insolvency Event has occurred and is continuing with respect to such Bank;
provided that neither the reallocation of funding obligations provided for in
Section 10.13 as a result of a Bank being a Defaulting Bank nor the performance
by Non-Defaulting Banks of such reallocated funding obligations shall by
themselves cause the relevant Defaulting Bank to become a Non-Defaulting Bank;
provided further that in each case, a Bank shall not be a Defaulting Bank solely
by virtue of the ownership or acquisition of any Equity Interest in that Bank or
any direct or indirect parent company thereof by a Governmental Agency so long
as such ownership interest does not result or provide such Bank with immunity
from the jurisdiction of course within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Bank (or such
Governmental Agency) to reject, repudiate, disavow or disaffirm any contracts or
agreements made with such Bank.  Any determination by the Administrative Agent
that a Bank is a Defaulting Bank under any of clauses (i) through (v) above will
be conclusive and binding absent manifest error, and such Bank will be deemed to
be a Defaulting Bank upon notification of such determination by the
Administrative Agent to the Borrower, the Issuing Banks, and the Banks.

 

“Deferred Tax Valuation Allowance” means the valuation allowance applied to
deferred tax assets resulting from the application of Financial Accounting
Standards Board Statement No. 109, Accounting for Income Taxes, or otherwise
required in accordance with Generally Accepted Account Principles consistently
applied.

 

“Designated Deposit Account” means a demand deposit account from time to time
designated by the Borrower by written notification to the Administrative Agent.

 

“Designation” has the meaning set forth for that term in Section 6.17.

 

“Designation Amount” has the meaning set forth for that term in Section 6.17.

 

“Developed Lots” means subdivision lots located in the United States that are
wholly owned by the Borrower or its Restricted Subsidiaries (unencumbered by a
Lien or Liens, other than Liens permitted under Section 6.7; provided that the
principal amount of Indebtedness for borrowed money secured by such Liens is
included in Borrowing Base Indebtedness for the purpose of calculating the
Borrowing Base Availability), and that are subject to a recorded plat or
subdivision map or similar zoning and development restrictions, in substantial
compliance with all applicable Laws and available for the construction thereon
of foundations for Units.

 

“Disposition” means the sale, transfer, license, lease or other disposition
(including any sale and leaseback transaction and any sale or issuance of Equity
Interests (other than directors’ qualifying shares or other shares required by
applicable Law) in a Restricted Subsidiary) of any property by any Person,
including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

 

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“Disqualified Equity Interests” of any Person means any class of Equity
Interests of such Person that, by their terms, or by the terms of any related
agreement or of any security into which they are convertible, puttable or
exchangeable, are, or upon the happening of any event or the passage of time
would be, required to be redeemed by such Person, whether or not at the option
of the holder thereof, or mature or are mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, in whole or in part, on or prior to the
date which is 91 days after the final Maturity Date; provided, however, that any
class of Equity Interests of such Person that, by its terms, authorizes such
Person to satisfy in full its obligations with respect to the payment of
dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise)
or repurchase thereof or otherwise by the delivery of Equity Interests that are
not Disqualified Equity Interests, and that are not convertible, puttable or
exchangeable for Disqualified Equity Interests or Indebtedness, will not be
deemed to be Disqualified Equity Interests so long as such Person satisfies its
obligations with respect thereto solely by the delivery of Equity Interests that
are not Disqualified Equity Interests; provided further, however, that any
Equity Interests that would constitute Disqualified Equity Interests but for
provisions thereof giving holders thereof (or the holders of any security into
or for which such Equity Interests are convertible, exchangeable or exercisable)
the right to require the Borrower to redeem such Equity Interests upon the
occurrence of a change in control or asset sale occurring prior to the Maturity
Date shall not constitute Disqualified Equity Interests if the change in control
or asset sale provisions applicable to such Equity Interests specifically
provide that the Borrower will not redeem any such Equity Interests pursuant to
such provisions prior to the Maturity Date.

 

“Distribution” means, with respect to any shares of capital stock or any warrant
or right to acquire shares of capital stock or any other equity security issued
by a Person, (a) the retirement, redemption, purchase, or other acquisition for
value (other than for capital stock or other equity securities of the same type
of such Person) by such Person of any such security, (b) the declaration or
payment by such Person of any dividend in Cash or in Property (other than in
capital stock or other equity securities of the same type of such Person) on or
with respect to any such security, and (c) any Investment by such Person in any
holder of 5% or more of the capital stock (or other equity securities) of such
Person, if a purpose of such Investment is to avoid the characterization of the
transaction between such Person and such holder as a Distribution under clause
(a) or (b) above.  In addition, to the extent any loan or advance by the
Borrower to one of its Restricted Subsidiaries is deemed to be an “Investment”
for purposes of this Agreement, then any principal payment made by such
Restricted Subsidiary in respect of such loan or advance shall be considered a
Distribution for purposes of Section 6.12.

 

“Dollars” means the national currency of the United States of America.

 

“Domestic Lending Office” means, with respect to each Bank, its office, branch
or affiliate identified on the signature pages hereof as its Domestic Lending
Office or such other office, branch or affiliate as such Bank may hereafter
designate as its Domestic Lending Office by notice to the Borrower and the
Administrative Agent.

 

“Domestic Subsidiary” means any Restricted Subsidiary of the Borrower that was
formed under the laws of the United States or any state of the United States or
the District of Columbia or that guarantees or otherwise provides direct credit
support for any Indebtedness of the Borrower or any Guarantor Subsidiary.

 

“Eligible Assignee” means:  (a) a Bank; (b) an Affiliate of a Bank; (c) an
Approved Fund; and (d) a financial institution that has, or is a wholly-owned
subsidiary of a parent company that has, (i) an unsecured long-term debt rating
of not less than BBB+ from S&P or Baa1 from Moody’s (or BBB+ from S&P and Baa1
from Moody’s if both agencies issue ratings of its unsecured long-term debt) and
(ii) if its unsecured short-term debt is rated, an unsecured short-term debt
rating of not less than A2 from S&P or P2 from Moody’s (or A2 from S&P and P2
from Moody’s if both agencies issue ratings of its unsecured

 

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short-term debt); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include (x) the Borrower or any of the Borrower’s Affiliates
or Subsidiaries, or (y) any Defaulting Bank or Potential Defaulting Bank or any
of their respective subsidiaries, or any Person who, upon becoming a Bank
hereunder, would constitute any of the foregoing Persons described in this
clause (y).

 

“Embargoed Person” means any party that (i) is publicly identified on the most
current list of “Specially Designated Nationals and Blocked Persons” published
by OFAC or (ii) resides, is organized or chartered, or has a place of business
in a country or territory subject to OFAC sanctions programs.

 

“Engagement Letter” means the Engagement Letter, dated as of August 27, 2013, by
and among Citi, CGMI and JPM.

 

“Equity Interests” of any Person means (1) any and all shares or other equity
interests (including common stock, preferred stock, limited liability company
interests and partnership interests) in such Person and (2) all rights to
purchase, warrants or options (whether or not currently exercisable),
participations or other equivalents of or interests in (however designated) such
shares or other interests in such Person.

 

“ERISA” means, at any date, the Employee Retirement Income Security Act of 1974,
as amended, and the regulations thereunder, all as the same shall be in effect
at such date.

 

“ERISA Affiliate” means any Person (or any trade or business, whether or not
incorporated) that is under common control with the Borrower within the meaning
of Section 414 of the Code.

 

“ERISA Event” means:  (a) a Reportable Event with respect to a Pension Plan; (b)
a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a “substantial
employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal (within the meanings of Sections 4203 and
4205 of ERISA) by the Borrower or any ERISA Affiliate from a Multiemployer Plan
or notification that a Multiemployer Plan is in “reorganization” (within the
meaning of Section 4241 of ERISA), “insolvency” (within the meaning of Section
4245 of ERISA), or “endangered” or “critical status” (within the meaning of
Section 305 of ERISA); (d) the filing of a notice of intent to terminate, the
treatment of a Pension Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate; (g) a determination that any Pension Plan is, or is
expected to be in “at-risk” status (as defined in Section 303(i)(4)(A) of ERISA
or Section 430(i)(4)(A) of the Code); (h) the failure by the Borrower or any
ERISA Affiliate to meet the funding requirements of Sections 412 and 430 of the
Code or Sections 302 and 303 of ERISA with respect to any Pension Plan, whether
or not waived, or the failure to make by its due date a required installment
under Section 430(j) of the Code or Section 303(j) of ERISA with respect to any
Pension Plan or the failure to make any required contribution to a Multiemployer
Plan; (i) the filing pursuant to Section 412(c) of the Code or Section 302(c) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Pension Plan; or (j) the imposition of a Lien upon the assets of
the Borrower or any ERISA Affiliate pursuant to the Code or ERISA with respect
to any Pension Plan.

 

“Escrow Receivables” means, as of any date of determination, the amounts due to
the Borrower or any Restricted Subsidiary and held at an escrow or title company
(including an escrow or title company

 

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that is a Restricted Subsidiary of the Borrower) following the sale and
conveyance of title of a Model Home or Unit to a buyer to the extent that such
amounts are free and clear of all Liens other than Liens permitted under Section
6.7(u) and under clause (t)(i) of the definition of Permitted Encumbrances.

 

“Eurodollar Advance” means an Advance made by a Bank to fund its Pro Rata Share
of a Eurodollar Rate Loan.

 

“Eurodollar Base Rate” has the meaning set forth in the definition of Eurodollar
Rate.

 

“Eurodollar Rate” means for any Interest Period with respect to any Eurodollar
Rate Loan, a rate per annum determined by the Administrative Agent pursuant to
the following formula:

 

Eurodollar Rate =

 

Eurodollar Base Rate

 

1.00 — Eurodollar Reserve Percentage

 

 

Where, “Eurodollar Base Rate” means, for such Interest Period, the rate per
annum equal to the British Bankers Association (or successor thereto if the
British Bankers Association is no longer making such rates available) LIBOR Rate
(“BBA LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent from
time to time) at approximately 11:00 a.m., London time, 2 Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period.  If such rate is not available at such time for any reason, then the
“Eurodollar Base Rate” for such Interest Period shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Rate Loan being made, continued or
converted by Citi and with a term equivalent to such Interest Period would be
offered by Citi’s London Branch to major banks in the London interbank
Eurodollar market at their request at approximately 11:00 a.m., London time, 2
Business Days prior to the commencement of such Interest Period.

 

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

 

“Eurodollar Rate Spread” means 2.75%.

 

“Eurodollar Reserve Percentage” means, for any day during any Interest Period,
the reserve percentage (expressed as a decimal, carried out to 5 decimal places)
in effect on such day, whether or not applicable to any Bank, under regulations
issued from time to time by the Federal Reserve Board for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as “Eurocurrency liabilities”).  The Eurodollar Rate for each
outstanding Eurodollar Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.

 

“Event of Default” has the meaning provided in Section 9.1.

 

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

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a Recipient
made by or on account of any obligation of the Borrower hereunder,

 

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(a)                                 Taxes imposed on or measured by net income
(however denominated), franchise Taxes and branch profits taxes, in each case,
(i) imposed as a result of such Recipient being organized under the laws of, or
having its principal office or, in the case of any Bank, its applicable Lending
Office located in the jurisdiction imposing such Tax (or any political
subdivision thereof), or (ii) that are Connection Taxes;

 

(b)                                 in the case of a Bank (i) United States
federal withholding (including backup withholding) Taxes imposed on amounts
payable to or for the account of such Bank with respect to an applied interest
in a Loan or Commitment pursuant to a Law in effect at the time such Bank
acquires such interest in the Loan or Commitment (other than with respect to an
assignee pursuant to a request by the Borrower under Section 11.27), or
designates a new Lending Office, except in either case, to the extent that such
Bank (or its assignor, if any) was entitled, at the time of designation of a new
Lending Office (or assignment), to receive additional amounts from the Borrower
under Section 3.10 with respect to such Taxes, or (ii) is attributable to such
Bank’s failure or inability to comply with Section 3.10(e); and

 

(c)                                  any United States federal withholding Taxes
imposed under FATCA.

 

“Exposure” means for any Bank, as of any date of determination, the product
obtained by multiplying that Bank’s then effective Pro Rata Share by the then
effective Commitment.

 

“Extension Notice” has the meaning provided in Section 2.4.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b) of the Code and any applicable governmental
agreements with respect thereto and laws enacting such governmental agreements.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Citi on such day on
such transactions as determined by the Administrative Agent.

 

“Financial Letter of Credit” means any letter of credit issued by an issuer for
the account of the Borrower or a Restricted Subsidiary that represents an
irrevocable obligation on the part of the issuer to make payment on account of
any indebtedness with respect to which the Borrower or a Restricted Subsidiary
is liable in the event that the Borrower or Restricted Subsidiary fails to
fulfill its financial obligations to the beneficiary.

 

“Fiscal Quarter” means each of the fiscal quarters of the Borrower ending on
each March 31, June 30, September 30 and December 31.

 

“Fiscal Year” means each of the fiscal years of the Borrower ending on each
December 31.

 

“Fitch” means Fitch IBCA, Duff & Phelps, a division of Fitch, Inc. and any
successor thereto.

 

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“Foreign Bank” means any Bank that is organized under the laws of a jurisdiction
other than that in which the Borrower is resident for tax purposes.  For
purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

 

“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of that
Person which is not a Domestic Subsidiary and which is a controlled foreign
corporation as defined in Section 957 of the Code.

 

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

 

“GAAP Value” means, with respect to any property or asset, the book value for
such property or asset determined in accordance with Generally Accepted
Accounting Principles consistently applied.

 

“Generally Accepted Accounting Principles” (or “GAAP”) means generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States as in effect on the Closing Date.  The term “consistently applied,” as
used in connection therewith, means that the accounting principles applied to
financial statements of a Person as of any date or for any period are consistent
in all material respects (subject to Section 1.2) to those applied to financial
statements of that Person as of recent prior dates and for recent prior periods.

 

“Governmental Agency” or “Governmental Agencies” means (a) any federal, state,
county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality, or public body, (c) any court or administrative
tribunal, or (d) any arbitration tribunal or other non-governmental authority to
whose jurisdiction a Person has consented, in each case whether of the United
States of America or any other nation.

 

“Guarantor Subsidiary” means each wholly owned Restricted Subsidiary of the
Borrower, but excluding each Unrestricted Subsidiary, Immaterial Subsidiary,
Mortgage Subsidiary, Foreign Subsidiary and CFC Subsidiary; provided that the
assets of all Immaterial Subsidiaries that are not required to be Guarantor
Subsidiaries shall not in the aggregate exceed 7.5% of the Consolidated Net
Tangible Assets of the Borrower and its Restricted Subsidiaries, in each case
measured as of the end of the previous Fiscal Year.

 

“Hazardous Materials” means substances defined as “hazardous substances”
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. § 9601 et seq., or as “hazardous”, “toxic” or “pollutant”
substances or as “solid waste” pursuant to the Hazardous Materials
Transportation Act, 49 U.S.C. § 1801, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. § 6901, et seq., or as “friable asbestos-containing
material” pursuant to the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.
or any other applicable Hazardous Materials Law, in each case as such Laws are
amended from time to time.

 

“Hazardous Materials Laws” means all Laws governing the use, generation,
manufacture, production, storage, release, threatened release, discharge,
treatment, transportation or disposal or presence of Hazardous Materials
applicable to any real Property of the Borrower or its Subsidiaries.

 

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“ICS” means Insured Cash Sweep.

 

“IFRS” has the meaning set forth in Section 1.2.

 

“Immaterial Subsidiary” means, at any date of determination, each Restricted
Subsidiary of the Borrower, whose total assets as of the last day of the then
most recently ended Fiscal Quarter for which internal financial statements are
available were less than $20,000,000 determined in accordance with Generally
Accepted Accounting Principles.

 

“Increasing Bank” has the meaning set forth in Section 2.7(a).

 

“Indebtedness” means, with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) that portion of the
obligations of such Person under Capital Leases that should properly be recorded
as a liability on a balance sheet of that Person prepared in accordance with
Generally Accepted Accounting Principles as in effect on the date of this
Agreement, (c) any obligation of such Person that is evidenced by a promissory
note, bond, indenture or other instrument representing an extension of credit to
such Person, whether or not for borrowed money, (d) any obligation of such
Person for the deferred purchase price of Property or services (other than trade
or other accounts payable incurred in the ordinary course of business (but
specifically excluding from such exception the deferred purchase price of any
owned real property); provided, however, that Indebtedness shall not include
obligations with respect to options to purchase real property that have not been
exercised), (e) any obligation of the types referred to in clauses (a) through
(d) above, whether or not assumed, that is secured by a Lien on assets of such
Person, whether or not that Person has assumed such obligation or whether or not
such obligation is non-recourse to the credit of such Person, but only to the
extent of the fair market value of the assets so subject to the Lien if such
obligation is nonrecourse, (f) obligations of such Person arising under banker
or other acceptance facilities or under facilities for the discount of accounts
receivable of such Person, (g) any obligation of such Person under Financial
Letters of Credit issued for the account of such Person to the extent not Cash
Collateralized, (h) net obligations of such Person under any Swap Contract, (i)
Contingent Guaranty Obligations, (j) obligations of such Person to purchase
securities or other property arising out of or in connection with the sale of
the same or substantially similar securities or property, (k) liabilities and
obligations under any receivables sales transactions, (l) Attributable
Indebtedness and (m) the liquidation value of preferred stock of a Restricted
Subsidiary of such Person issued and outstanding and held by any Person other
than such Person (or one of its wholly-owned Restricted Subsidiaries); provided,
however, that in no event shall Indebtedness include CDD Obligations. 
Notwithstanding the foregoing, none of the items described in the foregoing
clauses (a) through (k) between or among the Borrower and/or any of its
Restricted Subsidiaries shall constitute Indebtedness for purposes of Sections
6.9, 6.10 and 6.11 or the definitions used therein.

 

“Indemnified Liabilities” has the meaning set forth in Section 11.10.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower under any Loan Document and (b) to the extent not otherwise described
in (a), Other Taxes.

 

“Indemnitees” has the meaning set forth in Section 11.10.

 

“Information” has the meaning set forth in Section 11.12.

 

“Intangible Assets” means, with respect to any Person, all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, licenses, organization or
developmental expenses, write-ups of assets over their carrying value

 

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(other than write-ups which occurred prior to the Closing Date and other than,
in connection with the acquisition of an asset, the write-up of the value of
such asset to its fair market value in accordance with GAAP on the date of
acquisition) and all other items which would be treated as intangibles on the
consolidated balance sheet of such Person prepared in accordance with GAAP.

 

“Interest Period” means, as to each Eurodollar Rate Loan, a period of 1, 2, 3 or
6 months, as designated by the Borrower; provided that (a) the first day of each
Interest Period must be a Business Day, (b) any Interest Period that would
otherwise end on a day that is not a Business Day shall be extended to the next
succeeding Business Day, unless such Business Day falls in the next calendar
month, in which case the Interest Period shall end on the next preceding
Business Day, and (c) no Interest Period may extend beyond the Maturity Date.

 

“Investment” means, with respect to any Person, any investment by that Person,
whether by means of purchase or other acquisition of capital stock or other
Securities of any other Person or by means of loan, advance, capital
contribution, or other debt or equity participation or interest in any other
Person, including any partnership or joint venture interest in any other Person;
provided that an Investment of a Person shall not include any trade or account
receivable arising in the ordinary course of the business of such Person,
whether or not evidenced by a note or other writing.  The amount of any
Investment shall be the amount actually invested, less any return of capital,
without adjustment for subsequent increases or decreases in the market value of
such Investment.  In addition, the Designation of any Subsidiary as an
Unrestricted Subsidiary shall be deemed to be an Investment in an amount equal
to the Designation Amount as determined in accordance with Section 6.17.   For
the avoidance of doubt, the acquisition by the Borrower and its Subsidiaries of
personal property, real property and interests in real property in the ordinary
course of their respective businesses shall not be considered an Investment.

 

“IRS” means the United States Internal Revenue Service.

 

“ISP98” has the meaning set forth in Section 2.5(h).

 

“Issuing Bank” means any Bank in its capacity as an issuer of Letters of Credit
hereunder up to its Issuing Bank’s L/C Limit.  As of the Closing Date, the
Issuing Banks are Citi, JPMorgan Chase Bank, N.A., Credit Suisse and Bank of
America.

 

“Issuing Bank’s L/C Limit” means, with respect to any Bank which is also an
Issuing Bank at any time, an amount equal to the product of such Bank’s Pro Rata
Share multiplied by the L/C Limit, or such higher or lower amount as shall be
agreed by such Bank at the request of the Borrower.  Such Bank or the Borrower
shall notify the Administrative Agent or any such change in the Issuing Bank’s
L/C Limit of such Bank.

 

“Joint Venture” means any Person, other than a Subsidiary, (a) in which the
Borrower or any Restricted Subsidiary of the Borrower holds an equity Investment
which entitles the Borrower or such Restricted Subsidiary to more than 10% of
(i) the ordinary voting power for the election of the board of directors or
other governing body of such Person or (ii) the partnership, membership or other
ownership interest in such Person, and (b) which has at least one holder of its
equity interests that is not any Subsidiary of the Borrower.

 

“JPM” means J.P. Morgan Securities LLC and its successors.

 

“L/C Advance” means, with respect to each Bank, such Bank’s funding of its
participation in any L/C Borrowing in accordance with its Pro Rata Share.

 

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“L/C Borrowing” means an extension of credit resulting from a drawing under a
Letter of Credit which has not been reimbursed on the date required or
refinanced as a Loan.

 

“L/C Limit” means $50,000,000.

 

“Land Held for Future Development” means, as of any date of determination, Land
Parcels (unencumbered by a Lien or Liens, other than Liens permitted under
Section 6.7; provided that the principal amount of Indebtedness for borrowed
money secured by such Liens is included in Borrowing Base Indebtedness for the
purpose of calculating the Borrowing Base Availability) where development
activity has been suspended or has not yet begun, but is expected by the
Borrower in good faith to occur in the future.

 

“Land Parcels” means parcels of land located in the United States wholly owned
by the Borrower or any Restricted Subsidiary that are unencumbered by any Lien
or Liens (other than Permitted Encumbrances).

 

“Laws” means, collectively, all foreign, federal, state and local statutes,
treaties, codes, ordinances, rules, regulations and controlling precedents of
any Governmental Agency.

 

“Lending Office” means, as to any Bank, the office or offices of such Bank
described as such in such Bank’s Administrative Questionnaire, or such other
office or offices as a Bank may from time to time notify the Borrower and the
Administrative Agent.

 

“Letter of Credit” means any of the standby letters of credit issued by an
Issuing Bank under the Commitment pursuant to Section 2.5, either as originally
issued or as the same may be supplemented, modified, amended, renewed, extended
or supplanted.  A Letter of Credit shall be a Financial Letter of Credit or a
Performance Letter of Credit.

 

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form, from time to time, that
is in use by an Issuing Bank.

 

“Letter of Credit Collateralize” has the meaning set forth in Section 2.5(g).

 

“Letter of Credit Fee” means 2.25%.

 

“Letter of Credit Usage” means, as of any date of determination, the aggregate
undrawn face amount of outstanding Letters of Credit plus the aggregate amount
of all Unreimbursed Amounts, including all L/C Borrowings.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for
security, security interest, encumbrance, lien or charge of any kind, whether
voluntarily incurred or arising by operation of Law or otherwise, affecting any
Property, including any agreement to grant any of the foregoing (other than an
agreement which gives to a Person the right to become equally and ratably
secured with any other Person to whom a Lien is granted on any item of Property)
any conditional sale or other title retention agreement, any lease in the nature
of a security interest, or the filing of or agreement to give any financing
statement (other than a precautionary financing statement with respect to a
lease that is not in the nature of a security interest) under the Uniform
Commercial Code or comparable Law of any jurisdiction with respect to any
Property.  Notwithstanding the foregoing, in no event shall an operating lease
or any filing with respect thereto be deemed to constitute a Lien.

 

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“Liquidity” means at any time, without duplication, the sum of (a) all
Unrestricted Cash held by the Borrower and its Restricted Subsidiaries plus (b)
the Borrowing Base Availability plus (c) the aggregate amounts available to be
utilized by the Borrower under the Stonegate Agreement.

 

“Loans” means the aggregate of the Advances made at any one time by the Banks
pursuant to Article II.

 

“Loan Documents” means, collectively, this Agreement, the Engagement Letter, the
Notes, the Letters of Credit, Letter of Credit Applications, the Subsidiary
Guaranty, any Loan Notice, any Request for Letter of Credit, any Compliance
Certificate, any Borrowing Base Certificate and any other instruments, documents
or agreements of any type or nature hereafter executed and delivered by the
Borrower or any of its Restricted Subsidiaries or Affiliates to the
Administrative Agent or any other Bank pursuant to this Agreement, in each case
either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.

 

“Loan Notice” means a notice of (a) a request for a Loan, (b) a conversion of
Loans from one Type to the other or (c) a continuation of Eurodollar Rate Loans
and, if in writing, shall be substantially in the form of Exhibit D.

 

“Loan Parties” means, collectively, the Borrower and each Guarantor Subsidiary.

 

“Lots Under Development” means, as of any date of determination, Land Parcels
(unencumbered by a Lien or Liens, other than Liens permitted under Section 6.7;
provided that the principal amount of Indebtedness for borrowed money secured by
such Liens is included in Borrowing Base Indebtedness for the purpose of
calculating the Borrowing Base Availability) that are being developed into
Developed Lots.  For the avoidance of doubt, in no event shall Lots Under
Development include any Land Held for Future Development.

 

“Margin Stock” shall have the meaning assigned to such term in Regulation U of
the Board of Governors of the United States Federal Reserve System, or any
successor thereto.

 

“Material Adverse Effect” means any one or more events, developments or
circumstances which, individually or when aggregated with any other
circumstances or events, has had or would reasonably be expected to have a
material adverse effect on (i) the business, performance property, condition
(financial or otherwise) or results of operations of the Borrower and its
Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform its
payment or other material obligations under the Loan Documents or (iii) the
validity or enforceability against the Borrower or any other Loan Party of any
material obligations of the Borrower or any other Loan Party under the Loan
Documents or the rights or remedies of the Administrative Agent and the Banks
thereunder.

 

“Material Amount of Assets” means, as of any date of determination, more than
5.0% of the consolidated total assets of the Borrower and its Restricted
Subsidiaries as of such date.

 

“Maturity Date” means August 27, 2017.

 

“Maturity Extension” has the meaning provided in Section 2.4.

 

“Model Homes” means housing Units (unencumbered by a Lien or Liens, other than
Liens permitted under Section 6.7; provided that the principal amount of
Indebtedness for borrowed money secured by such Liens is included in Borrowing
Base Indebtedness for the purpose of calculating the

 

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Borrowing Base Availability) which have been completed, furnished and landscaped
and are used in the marketing efforts with respect to a residential home
community.

 

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

 

“Mortgage Subsidiary” means any Subsidiary of the Borrower engaged primarily in
the mortgage origination and lending business.

 

“Multiemployer Plan” means any “employee benefit plan” (as defined in Section
3(3) of ERISA) of a type described in Section 4001(a)(3) of ERISA, to which the
Borrower or any ERISA Affiliate makes or is obligated to make contributions.

 

“New Bank” has the meaning set forth in Section 2.7(a).

 

“Non-Complying Bank” has the meaning set forth in Section 11.27.

 

“Non-Consenting Bank” has the meaning set forth in Section 11.27.

 

“Non-Defaulting Bank” means, at any time, a Bank that is not a Defaulting Bank
or a Potential Defaulting Bank.

 

“Non-Recourse Indebtedness” with respect to any Person means Indebtedness of
such Person for which (1) the sole legal recourse for collection of principal
and interest on such Indebtedness is against the specific property identified in
the instruments evidencing or securing such Indebtedness and such property was
acquired, in whole or in part, directly or indirectly (including through the
purchase of Equity Interests of the Person owning such property), with the
proceeds of such Indebtedness or such Indebtedness was incurred within 365 days
after the direct or indirect acquisition of such property, including through the
purchase of Equity Interests of the Person owning such property, and (2) no
other assets of such Person may be realized upon in collection of principal or
interest on such Indebtedness.  Indebtedness that is otherwise Non-Recourse
Indebtedness will not lose its character as Non-Recourse Indebtedness because
there is recourse to the Borrower, any Guarantor Subsidiary or any other Person
for (a) environmental warranties, covenants or indemnities, (b) indemnities for
and liabilities arising from fraud, misrepresentation, misapplication or
non-payment of rents, profits, deposits, insurance and condemnation proceeds and
other sums actually received by the obligor from secured assets to be paid to
the lender, waste and mechanics’ liens, breach of separateness covenants, and
other customary exceptions or (c) similar customary “bad-boy” guarantees.

 

“Note” means each promissory note made by the Borrower to a Bank evidencing the
Advances under that Bank’s Pro Rata Share of the Commitment, substantially in
the form of Exhibit E, either as originally executed or as the same may from
time to time be supplemented, modified, amended, renewed, extended or
supplanted.

 

“Obligations” means all present and future obligations of every kind or nature
of the Borrower or any Loan Party at any time and from time to time owed to the
Administrative Agent or the Banks or any one or more of them under any one or
more of the Loan Documents, whether due or to become due, matured or unmatured,
liquidated or unliquidated, or contingent or noncontingent, including
obligations of performance as well as obligations of payment, and including
interest that accrues to the extent permitted by applicable Law after the
commencement of any proceeding under any Debtor Relief Law by or against the
Borrower.

 

“OFAC” means the U.S. Treasury Department’s Office of Foreign Assets Control.

 

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“Officer’s Certificate” means, when used with reference to any Person, a
certificate signed by a Senior Officer of such Person.

 

“Opinions of Counsel” means the favorable written legal opinions of (a) Latham &
Watkins LLP, special counsel to the Borrower and (b) Vivien Hastings, General
Counsel to the Loan Parties (with respect to matters of Florida law),
substantially in the form of Exhibits F-1 and F-2, respectively.

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
hereunder or under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Loan
Document, except, in each case, any such Taxes that are Connection Taxes imposed
with respect to an assignment, other than an assignment made pursuant to Section
11.27, or sale of a participation.

 

“Outstanding Amount” means:

 

(a)                                 with respect to Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Loans, as the case may be, occurring
on such date; and

 

(b)                                 with respect to any Letter of Credit Usage
on any date, the amount of such Letter of Credit Usage on such date, after
giving effect to the issuance, extension, expiry, renewal or increase of any
Letter of Credits occurring on such date and any other changes in the aggregate
amount of the Letter of Credit Usage as of such date, including as a result of
any reimbursements of outstanding unpaid drawings under any Letters of Credit or
any reductions in the maximum amount available for drawing under Letters of
Credit taking effect on such date.

 

“PAPA” means an arrangement, other than with an Affiliate of the Borrower, which
may be unsecured or secured by a Lien granted in conjunction with purchase
contracts for the purchase of real estate and which provides for future payments
due to the sellers of such real estate at the time of the sale of such real
estate (or parts thereof) and which payments may be contingent on the sale price
of such real estate (or parts thereof), which arrangement may include (1)
adjustments to the land purchase price, (2) profit participations, (3) community
marketing fees and community enhancement fees and (4) reimbursable costs paid by
the land developer.

 

“PATRIOT Act” has the meaning set forth in Section 11.26.

 

“Parent Company” means, with respect to a Bank, the bank holding company (as
defined in Federal Reserve Board Regulation Y), if any, of such Bank, or any
Person owning, beneficially or of record, directly or indirectly, a majority of
the shares of such Bank.

 

“Participant” has the meaning set forth in Section 11.8(d).

 

“Participant Register” has the meaning set forth in Section 11.8(d).

 

“Party” means any Person other than the Banks or the Administrative Agent which
now or hereafter is a party to any of the Loan Documents.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto
established under ERISA.

 

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“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, which is
subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code,
and which is sponsored or maintained by the Borrower or any ERISA Affiliate or
to which the Borrower or any ERISA Affiliate contributes or has an obligation to
contribute.

 

“Performance Letter of Credit” means any letter of credit issued by an issuer
for the account of the Borrower or a Restricted Subsidiary that is not a
Financial Letter of Credit.

 

“Permitted Encumbrances” means:

 

(a)                                 inchoate Liens incident to construction or
maintenance of real property; or Liens incident to construction or maintenance
of real property now or hereafter filed of record for which adequate reserves
have been set aside if required by, and in accordance with, Generally Accepted
Accounting Principles and which are being contested in good faith by appropriate
proceedings and have not proceeded to judgment, provided that, by reason of
nonpayment of the obligations secured by such Liens, no material property is
subject to a material risk of loss or forfeiture;

 

(b)                                 Liens for Taxes and assessments on real
property which are not yet delinquent; or Liens for Taxes and assessments on
real property for which adequate reserves have been set aside if required by,
and in accordance with, Generally Accepted Accounting Principles and are being
contested in good faith by appropriate proceedings and have not proceeded to
judgment, provided that, by reason of nonpayment of the obligations secured by
such Liens, no material property is subject to a material risk of loss or
forfeiture;

 

(c)                                  minor defects and irregularities in title
to any real property which in the aggregate do not materially impair the fair
market value or use of the real property for the purposes for which it is or may
reasonably be expected to be held;

 

(d)                                 easements, plats, declarations of
condominium and restrictions of record customary in any of the Core Businesses
or the Tower Business;

 

(e)                                  easements, rights-of-way, exceptions,
restrictions, reservations, or other agreements for the purpose of pipelines,
conduits, cables, wire communication lines, power lines and substations,
streets, trails, walkways, drainage, irrigation, water, utilities, and sewerage
purposes, dikes, canals, ditches, the removal of oil, gas, coal, or other
minerals, and other like purposes affecting real property, facilities, or
equipment which in the aggregate do not materially impair the fair market value
or use of such property for the purposes for which it is or may reasonably be
expected to be held;

 

(f)                                   easements, rights-of-way, exceptions,
restrictions, reservations, or other agreements affecting real property which in
the aggregate do not materially impair the fair market value or use of such
property for the purposes for which it is or may reasonably be expected to be
held;

 

(g)                                  rights reserved to or vested in any
Governmental Agency to control or regulate the use of any real property (and
Liens created by the exercise of any such rights);

 

(h)                                 any obligations or duties affecting any real
property to any Governmental Agency with respect to any right, power, franchise,
grant, license, or permit;

 

(i)                                     present or future zoning laws and
ordinances or other laws and ordinances restricting the occupancy, use, or
enjoyment of real property;

 

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(j)                                    contractual or statutory Liens of
landlords and Liens of suppliers (including sellers of goods) and other Liens
imposed by law or pursuant to customary reservations or retentions of title
arising in the ordinary course of business;

 

(k)                                 statutory Liens, including Liens of
carriers, warehousemen, mechanics and materialmen, other than those described in
clauses (a) or (b) above and any Lien imposed pursuant to the Code or ERISA with
respect to any Pension Plan, arising in the ordinary course of business with
respect to obligations which are not delinquent or are being contested in good
faith, provided that, if delinquent, adequate reserves have been set aside with
respect thereto if required by, and in accordance with, GAAP;

 

(l)                                     covenants, conditions, and restrictions
affecting the use of real property which in the aggregate do not materially
impair the fair market value or use of the real property for the purposes for
which it is or may reasonably be expected to be held;

 

(m)                             rights of tenants under leases and rental
agreements covering real property entered into in the ordinary course of
business of the Person owning such real property;

 

(n)                                 Liens incurred or deposits made in the
ordinary course of business (as determined in good faith by the Borrower) in
connection with workers’ compensation, unemployment or other insurance and other
types of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds, development obligations, progress
payments, utility services, developer’s or other obligations to make on-site or
off-site improvements and other similar obligations (exclusive of obligations
for the payment of borrowed money);

 

(o)                                 Liens consisting of deposits of property to
secure statutory obligations of the Borrower or a Restricted Subsidiary of the
Borrower in the ordinary course of its business;

 

(p)                                 Liens consisting of additions, accessions,
improvements and replacements and customary deposits in connection with Model
Homes and proceeds and products therefrom;

 

(q)                                 Liens for homeowner, condominium, property
owner, amenity providers, clubs and similar associations and club fees and
assessments and other payments;

 

(r)                                    leases or subleases, licenses or
sublicenses, (or any Liens related thereto) granted to others that do not
materially interfere with the ordinary course of business (as determined in good
faith by the Borrower) of the Borrower or any Restricted Subsidiary;

 

(s)                                   any right, title and interest of the
landlord under any lease pursuant to which the Borrower or a Restricted
Subsidiary has a leasehold interest in any property or assets and any Liens that
by operation of law have been placed by such landlord on property over which the
Borrower or a Restricted Subsidiary has any real property interest;

 

(t)                                    pledges, deposits and other Liens
existing under, or required to be made in connection with, (i) earnest money
obligations, escrows or similar purpose undertakings or indemnifications in
connection with any purchase and sale agreement, (ii) development agreements or
other contracts entered into with governmental authorities (or an entity
sponsored by a governmental authority), in connection with the entitlement of
real property, (iii) CDD Obligations arising in ordinary course of business or
(iv) agreements for the funding of infrastructure, including in respect of the
issuance of community facility district bonds, metro district bonds, Mello-Roos
bonds and subdivision

 

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improvement bonds, and similar bonding requirements arising in the ordinary
course of business of a homebuilder (as determined in good faith by the
Borrower); and

 

(u)                                 Liens consisting of deposits of property to
secure (or in lieu of) surety, appeal or customs bonds in proceedings to which
the Borrower or a Restricted Subsidiary of the Borrower is a party in the
ordinary course of its business.

 

“Person” means an individual, trustee, corporation, general partnership, limited
partnership, limited liability company, joint stock company, trust, estate,
unincorporated organization, union, tribe, business association or Governmental
Agency, or other entity.

 

“Plan” means any “employee benefit plan” (as such term is defined in Section
3(3) of ERISA) (a) established, maintained or contributed to by the Borrower or
any of its Subsidiaries or, with respect to any such plan that is subject to
Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate, or (b) with
respect to which the Borrower or any of its Subsidiaries may have any liability
(whether actual or contingent).

 

“Plan of Liquidation” with respect to any Person, means a plan that provides
for, contemplates or the effectuation of which is preceded or accompanied by
(whether or not substantially contemporaneously, in phases or otherwise):  (1)
the sale, lease, conveyance or other disposition of all or substantially all of
the assets of such Person otherwise than as an entirety or substantially as an
entirety; and (2) the distribution of all or substantially all of the proceeds
of such sale, lease, conveyance or other disposition of all or substantially all
of the remaining assets of such Person to creditors and holders of equity
interests of such Person.

 

“Platform” has the meaning set forth in Section 7.1.

 

“Potential Defaulting Bank” means, at any time, any Bank (i) with respect to
which an event of the kind referred to in the definition of “Bank Insolvency
Event” has occurred and is continuing in respect of any financial institution
affiliate of such Bank, (ii) that has notified, or whose Parent Company or a
financial institution affiliate thereof has notified, the Administrative Agent,
the Borrower or any Issuing Bank in writing, or has stated publicly, that it
does not intend to comply with its funding obligations under any other loan
agreement or credit agreement or other similar agreement, or (iii) that has, or
whose Parent Company has, a non-investment grade rating from Moody’s or S&P or
another nationally recognized rating agency.  Any determination by the
Administrative Agent that a Bank is a Potential Defaulting Bank under any of
clauses (i) through (iii) above will be conclusive and binding absent manifest
error, and such Bank will be deemed a Potential Defaulting Bank upon
notification of such determination by the Administrative Agent to the Borrower,
the Issuing Banks and the Banks.

 

“Pro Rata Share” of a Bank, as it pertains to the Commitment, means the
applicable percentage set forth opposite the name of that Bank on Schedule 1.1
to this Agreement, as such Schedule 1.1 may change from time to time in
accordance with the terms of this Agreement or in accordance with any effective
Assignment and Assumption.

 

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.

 

“Public Lender” has the meaning set forth in Section 7.1.

 

“Qualified Equity Interests” means Equity Interests of the Borrower other than
Disqualified Equity Interests.

 

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“Qualified Issuer” means a commercial bank, savings bank, savings and loan
association or similar financial institution which, (a) has total assets of
$5,000,000,000 or more, (b) is “well capitalized” within the meaning of such
term under the Federal Depository Institutions Control Act, (c) is engaged in
the business of lending money and extending credit under credit facilities
substantially similar to those extended under this Agreement and (d) is
operationally and procedurally able to meet the obligations of a Bank hereunder
to the same degree as a commercial bank.

 

“Quarterly Payment Date” means September 30, 2013, and each December 31, March
31, June 30 and September 30 thereafter through and including the Maturity Date.

 

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

 

“Recipient” means (a) the Administrative Agent, (b) any Bank and (c) any Issuing
Bank, as applicable.

 

“Redesignation” has the meaning set forth for that term in Section 6.17.

 

“Register” has the meaning set forth in Section 11.8(c).

 

“Regulation D” means Regulation D, as at any time amended, of the Board of
Governors of the Federal Reserve System or any other regulation in substance
substituted therefor.

 

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

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period is waived pursuant
to applicable Laws as in effect on the date hereof.

 

“Request for Letter of Credit” means a written request for the issuance of a
Letter of Credit signed by a Responsible Official of the Borrower, in a form
reasonably designated from time to time by the Administrative Agent.

 

“Required Banks” means, as of any date of determination, Banks having an
aggregate Pro Rata Share of more than 50% of the Commitment or, if the
commitment of each Bank to make Advances and the obligation of the Issuing Banks
to issue Letters of Credit have been terminated or suspended, Banks holding in
the aggregate more than 50% of the Total Outstandings (with the aggregate amount
of each Bank’s risk participation and funded participation in Letter of Credit
Usage being deemed “held” by such Bank for purposes of this definition);
provided that, the Pro Rata Share of the Commitment of, and the portion of the
Total Outstandings held or deemed held by, any Defaulting Bank shall be excluded
for purposes of making a determination of Required Banks.

 

“Requirement of Law” means, as to any Person, any Law or any judgment, award,
decree, writ or determination of, or any consent or similar agreement with, a
Governmental Agency, in each case applicable to or binding upon such Person or
any of its Property or to which such Person or any of its Property is subject.

 

“Responsible Official” means (a) when used with reference to a Person other than
an individual, any corporate officer of such Person, general partner of such
Person, corporate officer of a corporate general partner of such Person, or
corporate officer of a corporate general partner of a partnership that is a
general partner of such Person, or any other responsible official thereof duly
acting on behalf thereof, and

 

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(b) when used with reference to a Person who is an individual, such Person.  Any
document or certificate hereunder that is signed or executed by a Responsible
Official of a Person shall be conclusively presumed to have been authorized by
all necessary corporate, partnership or other action on the part of that Person.

 

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

 

“S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.,
and any successor thereto.

 

“Securities” means any capital stock, share, voting trust certificate, bonds,
debentures, notes or other evidences of indebtedness, limited partnership
interests, or any warrant, option or other right to purchase or acquire any of
the foregoing.

 

“Senior Notes” means the notes issued under the Senior Notes Indenture.

 

“Senior Notes Indenture” means that certain Indenture, by and between the
Borrower, the guarantors party thereto and Wilmington Trust, National
Association, as trustee, dated as of August 7, 2013, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

 

“Senior Officer” means the (a) chief executive officer, (b) chief operating
officer, (c) chief financial officer, (d) chief accounting officer, (e) vice
president of finance or (f) treasurer, in each case whatever the title
nomenclature may be, of the Person designated.

 

“Significant Subsidiary” means (a) any Restricted Subsidiary that would be a
“significant subsidiary” as defined in Regulation S-X promulgated pursuant to
the Securities Act as such Regulation is in effect on the Closing Date and (b)
any Restricted Subsidiary that, when aggregated with all other Restricted
Subsidiaries that are not otherwise Significant Subsidiaries and as to which any
event described in Section 9.1(h)(x) or (j) has occurred and is continuing,
would constitute a Significant Subsidiary under clause (a) of this definition.

 

“Sold Homes Under Construction” means Developed Lots having fully or partially
constructed Units thereon (including, at a minimum, the commencement of a
foundation for any such Unit) that are subject to bona fide contracts for the
sale of such Units to a third party.

 

“Solvent” means, with respect to any Person on any date of determination, that
on such date (i) the sum of the debt (including contingent liabilities) of such
Person and its Restricted Subsidiaries, taken as a whole, does not exceed the
present fair saleable value (on a going concern basis) of the assets of the
Person and its Restricted Subsidiaries, taken as a whole; (ii) the capital of
such Person and its Restricted Subsidiaries, taken as a whole, is not
unreasonably small in relation to the business of such Person and its Restricted
Subsidiaries, taken as a whole, contemplated as of the date hereof; and (iii)
such Person and its Restricted Subsidiaries, taken as a whole, do not intend to
incur, or believe that they will incur, debts including current obligations
beyond their ability to pay such debt as they mature in the ordinary course of
business. For the purposes hereof, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability (irrespective of whether
such contingent liabilities meet the criteria for accrual under FASB Account
Standards Codification (ASC) Topic 450, “Contingencies”).

 

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“Sponsors” means Monarch Alternative Capital LP, Stonehill Institutional
Partners, L.P. and their respective managed funds and Affiliates (but excluding
any of their respective portfolio companies).

 

“Stonegate Agreement” means the $10,000,000 revolving credit facility by and
between the Borrower, WCI Communities, LLC, and Stonegate Bank dated as of
February 28, 2013.

 

“Subordinated Obligations” means, collectively, all obligations of the Borrower
or any of its Restricted Subsidiaries that (a) do not provide for any scheduled
redemption on or before 180 days after the Maturity Date and (b) are expressly
subordinated in right of payment to the Obligations.

 

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, or other business entity whether now existing or
hereafter organized or acquired:  (a) in the case of a corporation or limited
liability company, of which securities having a majority of the ordinary voting
power for the election of the board of directors (other than securities having
such power only by reason of the happening of a contingency) are at the time
owned by such Person or one or more Subsidiaries of such Person; or (b) in the
case of a partnership or other business entity, in which such Person or a
Subsidiary of such Person is a general partner.

 

“Subsidiary Guaranty” means the guaranty of the Indebtedness of the Borrower
under this Agreement executed by each Guarantor Subsidiary of the Borrower
substantially in the form of Exhibit G, either as originally executed or as the
same may from time to time be supplemented, modified, amended, renewed, extended
or supplanted.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

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

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
Letter of Credit Usage.

 

“Tower Business” means the business of constructing multi-family residential
condominium projects reasonably anticipated to have six floors or more above a
parking level. Each such project shall be referred to herein as a “Tower”.

 

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

 

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“Unit” means a residential housing unit available for sale, or subject to a
contract for the sale of such Unit, located in the United States.

 

“Unreimbursed Amount” has the meaning set forth in Section 2.5(c)(i).

 

“Unrestricted Cash” means, as of any date of determination, the Cash and Cash
Equivalents of the Borrower and its Restricted Subsidiaries to the extent that
such Cash and Cash Equivalents are free and clear of all Liens other than as
permitted by Sections 6.7(a), (d) and (u).

 

“Unrestricted Subsidiary” means (1) any Subsidiary that at the time of
determination shall be designated an Unrestricted Subsidiary by the board of
directors of the Borrower in accordance with Section 6.17 and (2) any Subsidiary
of an Unrestricted Subsidiary.

 

“Unsold Homes Under Construction” means Developed Lots where on-site
construction of Units has commenced as evidenced by the commencement of
foundations for such Units, other than Sold Homes Under Construction.

 

“Voting Stock” means, with respect to any Person, the capital stock of such
Person having general voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or trustees of such Person
(irrespective of whether or not at the time capital stock of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).

 

1.2                               Accounting Terms.

 

All accounting terms not specifically defined in this Agreement shall be
construed in conformity with, and all financial data required to be submitted by
this Agreement shall be prepared in conformity with, Generally Accepted
Accounting Principles consistently applied, except as otherwise specifically
prescribed herein.  In the event that Generally Accepted Accounting Principles
change during the term of this Agreement such that the financial covenants
contained in Sections 6.9, 6.10, 6.11 or 6.14 would then be calculated in a
different manner or with different components or would render the same not
meaningful criteria for evaluating the Borrower’s financial condition, (a) the
Borrower and the Banks agree to amend this Agreement in such respects as are
necessary to conform those covenants as criteria for evaluating the Borrower’s
financial condition to substantially the same criteria as were effective prior
to such change in Generally Accepted Accounting Principles and (b) until so
amended, (i) such financial covenants shall continue to be computed in
accordance with Generally Accepted Accounting Principles prior to such change
therein and (ii) the Borrower shall provide to the Administrative Agent and the
Banks financial statements and other documents required under this Agreement or
as reasonably requested hereunder setting forth a reconciliation between
calculations of such financial covenants made before and after giving effect to
such change in Generally Accepted Accounting Principles.  At any time after the
Closing Date, the Borrower may elect to apply International Financial Reporting
Standards (“IFRS”) accounting principles in lieu of GAAP and, upon any such
election, references herein to GAAP shall thereafter be construed to mean IFRS,
as in effect as of the date of such election; provided that any such election,
once made, shall be irrevocable; provided, further, any calculation or
determination in this Agreement that requires the application of GAAP for
periods that include Fiscal Quarters ended prior to the Borrower’s election to
apply IFRS shall remain as previously calculated or determined in accordance
with GAAP.  The Borrower shall give notice of any such election made in
accordance with this definition to the Administrative Agent and the Banks. 
Notwithstanding the foregoing, in no event shall the Borrower apply IFRS with
respect to the Borrowing Base calculations (including any component definitions
thereof) made pursuant to Section 2.8 without the written consent of the
Administrative Agent (which may be given or withheld in its sole discretion).

 

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1.3                               Rounding.

 

Any financial ratios required to be maintained by the Borrower pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed in this Agreement and rounding the result up or
down to the nearest number (with a round-up if there is no nearest number) to
the number of places by which such ratio is expressed in this Agreement.

 

1.4                               Other Interpretive Provisions.

 

With reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:

 

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

 

(b)                                 Any definition of or reference to any
agreement, instrument or other document shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document).

 

(c)                                  The words “herein,” “hereto,” “hereof” and
“hereunder” 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.

 

(d)                                 Article, Section, Exhibit and Schedule
references are to the Loan Document in which such reference appears.

 

(e)                                  Any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time.

 

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

 

(g)                                  The term “or” is not exclusive.

 

(h)                                 The term “documents” includes any and all
instruments, documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical or
electronic form.

 

(i)                                     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.”

 

(j)                                    Section headings herein and in the other
Loan Documents are included for convenience of reference only and shall not
affect the interpretation of this Agreement or any other Loan Document.

 

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1.5                               Exhibits and Schedules.

 

All Exhibits and Schedules to this Agreement, either as originally existing or
as the same may from time to time be supplemented, modified, or amended, are
incorporated herein by reference.  A matter disclosed on any Schedule shall be
deemed disclosed on all Schedules.

 

1.6                               References to “the Borrower and its
Subsidiaries”.

 

Any reference herein to “the Borrower and its Subsidiaries” or the like shall
refer solely to the Borrower during such times, if any, as the Borrower shall
have no Subsidiaries.

 

1.7                               Time of Day.

 

Unless otherwise specified, all references herein to times of day shall be
references to Eastern standard time.

 

1.8                               Letter of Credit Amounts.

 

Unless otherwise specified herein, the amount of a Letter of Credit at any time
shall be deemed to be the stated amount of such Letter of Credit in effect at
such time (after taking into account amounts drawn prior to such time that are
not subject to reinstatement); provided, however, that with respect to any
Letter of Credit that, by its terms or the terms of any document related
thereto, provides for one or more automatic increases in the stated amount
thereof, the amount of such Letter of Credit shall be deemed to be the maximum
stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

 

ARTICLE II.
LOANS AND LETTERS OF CREDIT

 

2.1                               Loans-General.

 

(a)                                 Subject to the terms and conditions set
forth in this Agreement (including Section 8.2), at any time and from time to
time from the Closing Date through the Business Day immediately preceding the
Maturity Date, each Bank shall, pro rata according to that Bank’s Pro Rata Share
of the Commitment then in effect, make Advances to the Borrower under the
Commitment in such amounts as the Borrower may request; provided that, after
giving effect to such Advance, the Total Outstandings shall not exceed the
aggregate Commitments and Borrowing Base Indebtedness shall not exceed the
Borrowing Base.  Subject to the limitations set forth herein, the Borrower may
borrow, repay and reborrow under this Section 2.1(a) without premium or penalty.

 

(b)                                 [Intentionally Omitted].

 

(c)                                  Subject to the next sentence and to Section
2.5(c), each Loan shall be made pursuant to the Borrower’s irrevocable Loan
Notice to the Administrative Agent, which shall specify the requested (i) date
of such Loan, (ii) Type of Loan, (iii) amount of such Loan and (iv) in the case
of a Eurodollar Rate Loan, Interest Period for such Loan.  Any Loan Notice
delivered under this Agreement may be delivered by mail, email, telecopier,
telephone, or as otherwise acceptable to the Administrative Agent; provided
that, each telephonic Loan Notice given by the Borrower pursuant to this Section
2.1(c) must be confirmed promptly by delivery to the Administrative Agent of a
written Loan Notice, appropriately completed and signed by a Responsible
Official of the Borrower.

 

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(d)                                 Promptly following receipt of a Loan Notice,
the Administrative Agent shall notify each Bank by telephone, telecopier or
telex of the date and Type of the Loan, the applicable Interest Period in the
case of a Eurodollar Rate Loan, and that Bank’s Pro Rata Share of the Loan.  Not
later than 1:00 p.m. New York time, on the date specified for any Loan, each
Bank shall make its Pro Rata Share of the Loan in immediately available funds
available to the Administrative Agent at the Administrative Agent’s Office. 
Upon fulfillment of the applicable conditions set forth in Article VIII, all
Advances shall be credited in immediately available funds to the Designated
Deposit Account.

 

(e)                                  The principal amount of each Loan shall be
an integral multiple of $1,000,000 and shall be in an amount not less than (i)
$1,000,000 if such Loan is a Base Rate Loan and (ii) $5,000,000 if such Loan is
a Eurodollar Rate Loan.

 

(f)                                   A Loan Notice shall be irrevocable upon
the Administrative Agent’s first notification thereof.  The obligation of each
Bank to make any Advance is several, and not joint or joint and several, and is
not conditioned upon the performance by any other Bank of its obligation to make
Advances.  The failure by any Bank to perform its obligation to make any Advance
will not increase the obligation of any other Bank to make Advances.

 

(g)                                  The Borrower may redesignate a Base Rate
Loan as a Eurodollar Rate Loan, or a Eurodollar Rate Loan as a Base Rate Loan or
a Eurodollar Rate Loan with a new Interest Period, by delivering a Loan Notice
to the Administrative Agent, within the time periods and pursuant to the
conditions set forth in Section 2.1(c), 2.2 or 2.3, as applicable, and elsewhere
in this Agreement.  If no Loan Notice has been made prior to the last day of the
Interest Period for an outstanding Eurodollar Rate Loan within the requisite
notice periods set forth in Section 2.3, then the Borrower shall be deemed to
have requested that such Eurodollar Rate Loan be redesignated as a Base Rate
Loan.

 

(h)                                 The Advances made by each Bank under this
Section 2.1 shall be evidenced by that Bank’s Note to the extent requested by
such Bank.

 

2.2                               Base Rate Loans.

 

Each request by the Borrower for a Base Rate Loan shall be made pursuant to a
Loan Notice received by the Administrative Agent, at the Administrative Agent’s
Office, not later than 12:00 p.m. New York time, on the Business Day on which
the requested Base Rate Loan is to be made.  The Administrative Agent shall
notify each Bank of a request for a Base Rate Loan as soon as practicable after
receipt of the same.  All Loans shall constitute Base Rate Loans unless properly
designated as Eurodollar Rate Loans pursuant to Section 2.3.

 

2.3                               Eurodollar Rate Loans.

 

(a)                                 Each request by the Borrower for a
Eurodollar Rate Loan shall be made pursuant to a Loan Notice received by the
Administrative Agent, at the Administrative Agent’s Office, not later than 12:00
p.m. New York time, at least 3 Business Days before the first day of the
applicable Interest Period, provided that, such advance notice period may be
reduced by the Administrative Agent in its discretion with respect to any
Eurodollar Rate Loan made on the Closing Date.  The Administrative Agent shall
notify each Bank of a request for a Eurodollar Rate Loan as soon as practicable
after receipt of the same.

 

(b)                                 At or about 1:00 p.m., New York time, 2
Business Days before the first day of the applicable Interest Period, the
Administrative Agent shall determine the applicable Eurodollar Rate

 

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(which determination shall be conclusive in the absence of manifest error) and
promptly shall give notice of the same to the Borrower and the Banks by
telephone, telecopier or, in the case of Banks, telex.

 

(c)                                  No more than 10 Eurodollar Rate Loans may
be outstanding at any particular time.

 

2.4                               Maturity Extension.

 

At any time after the Closing Date, the Borrower and any Bank may agree, by
notice to the Administrative Agent (each such notice, an “Extension Notice”), to
extend the maturity date (any such extension, a “Maturity Extension”) of such
Bank’s Commitments and/or Loans to the extended maturity date specified in such
Extension Notice; provided that, (a) only one additional tranche of Commitments
and/or Loans shall be permitted under this Section 2.4, (b) only the consent of
the Borrower and respective extending Banks will be required in order to effect
such Maturity Extension and (c) each Bank shall be offered the opportunity to
participate in such Maturity Extension on the same terms and conditions as each
other Bank.  This Section 2.4 shall supersede any provisions in Section 11.2 or
any provisions relating to the pro rata sharing of payments set forth in this
Agreement to the contrary.

 

2.5                               Letters of Credit.

 

(a)                                 Letter of Credit Commitment.

 

(i)                                     Subject to the terms and conditions of
this Agreement (including Section 8.3), each Issuing Bank agrees, in reliance
upon the agreements of the other Banks set forth in this Section 2.5, (1) from
time to time during the period from the Closing Date through the day 5 days
prior to the Maturity Date, to issue Letters of Credit for the account of the
Borrower in an aggregate amount not exceeding such Issuing Bank’s L/C Limit, and
such Issuing Bank shall issue for the account of the Borrower one or more
Letters of Credit and amend Letters of Credit previously issued by it in
accordance with Section 2.5(b), and (2) to honor drafts under the Letters of
Credit; provided that, no Issuing Bank shall be obligated to issue any Letter of
Credit if, after giving effect to such issuance, (x) the Total Outstandings
exceeds the Commitments, (y) Borrowing Base Indebtedness exceeds the Borrowing
Base or (z) the Letter of Credit Usage would exceed the L/C Limit or any limit
established by Law after the Closing Date on such Issuing Bank’s ability to
issue the requested Letter of Credit at any time. Notwithstanding the foregoing,
an Issuing Bank shall not issue any Letter of Credit if, (A) on or prior to the
Business Day immediately preceding the issuance thereof any Bank has notified
the Issuing Bank or the Administrative Agent in writing that the conditions set
forth in Section 8.3 have not been satisfied with respect to the issuance of
such Letter of Credit or (B) the expiry date of such requested Letter of Credit
would occur after the earlier of (x) 5 days prior to the Maturity Date, unless
such Letter of Credit is Cash Collateralized in a manner acceptable to the
applicable Issuing Bank in its sole discretion and such Issuing Bank agrees that
any participations in such Letter of Credit by the Banks pursuant to this
Section 2.5 shall terminate on the Maturity Date and (y) one year from the date
of such issuance, unless agreed by the applicable Issuing Bank; provided that,
nothing in this clause (y) shall prevent any Letter of Credit with a one-year
tenor from providing for the renewal thereof for additional one-year periods,
subject to the foregoing clause (B).  Subject to the terms and conditions
hereof, the Borrower’s ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired, terminated or
that have been drawn upon and reimbursed.  All Existing Letters of Credit shall
be deemed to be issued hereunder and shall constitute Letters of Credit subject
to the terms hereof.

 

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(ii)                                  No Issuing Bank shall be obligated to
issue any Letter of Credit if:

 

(A)                               any order, judgment or decree of any
Governmental Agency 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 Agency with jurisdiction over
such Issuing Bank shall prohibit, or request that such Issuing Bank refrain
from, the issuance of letters of credit generally or such Letter of Credit in
particular or 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 compensated hereunder) not in effect on the Closing Date,
or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which such Issuing Bank in good
faith deems material to it;

 

(B)                               the issuance of such Letter of Credit would
violate one or more policies of such Issuing Bank applicable to the customers of
such Issuing Bank generally; or

 

(C)                               a default of any Bank’s obligations to fund
under Section 2.5(c) exists or any Bank is at such time a Defaulting Bank
hereunder, unless such Issuing Bank has entered into satisfactory arrangements
with the Borrower or such Bank to eliminate the Issuing Bank’s risk with respect
to such Bank.

 

Each Bank from time to time party hereto agrees to act as an Issuing Bank
hereunder.

 

(b)                                 Procedures for Issuance and Amendment of
Letters of Credit.

 

(i)                                     Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the Borrower delivered to the
applicable Issuing Bank (with a copy to the Administrative Agent) in the form of
a Letter of Credit Application, appropriately completed and signed by a
Responsible Official of the Borrower.  Such Letter of Credit Application must be
received by the applicable Issuing Bank and the Administrative Agent not later
than 1:00 p.m., New York time, at least 3 Business Days (or such later date and
time as the applicable Issuing Bank may agree in a particular instance in its
sole discretion) prior to the proposed issuance date or date of amendment, as
the case may be.  In the case of a request for an initial issuance of a Letter
of Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to such Issuing Bank:  (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as such Issuing Bank may require.  In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the applicable Issuing Bank (w)
the Letter of Credit to be amended; (x) the proposed date of amendment thereof
(which shall be a Business Day); (y) the nature of the proposed amendment; and
(z) such other matters as such Issuing Bank may require.

 

(ii)                                  Promptly after receipt of any Letter of
Credit Application, the applicable Issuing Bank will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit Application from the Borrower

 

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and, if not, such Issuing Bank will provide the Administrative Agent with a copy
thereof.  Upon receipt by the applicable Issuing Bank of confirmation from the
Administrative Agent that the requested issuance or amendment is permitted in
accordance with the terms hereof, then, subject to the terms and conditions
hereof, such Issuing Bank shall, on the requested date, issue a Letter of Credit
for the account of the Borrower or enter into the applicable amendment, as the
case may be, in each case in accordance with such Issuing Bank’s usual and
customary business practices.  Immediately upon the issuance of each Letter of
Credit, each Bank shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the applicable Issuing Bank a risk participation in
such Letter of Credit in an amount equal to the product of such Bank’s Pro Rata
Share times the amount of such Letter of Credit.

 

(iii)                               Promptly after its delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the applicable Issuing Bank will also (x)
deliver to the Borrower and the Administrative Agent a true and complete copy of
such Letter of Credit or amendment and (y) notify the Borrower and the
Administrative Agent of any return, surrender or cancellation of any Letter of
Credit.

 

(c)                                  Drawings and Reimbursements; Funding of
Participations.

 

(i)                                     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 promptly notify the Borrower and the
Administrative Agent thereof and of the date such Issuing Bank proposes to pay
such drawing.  The Borrower shall reimburse such Issuing Bank through the
Administrative Agent in an amount equal to the amount of any payment by such
Issuing Bank under a Letter of Credit, which reimbursement shall be made, (x) if
such Issuing Bank notifies the Borrower and the Administrative Agent of such
payment before 2:00 p.m. New York time on the Business Day immediately preceding
the date of such payment (the date of such payment being, the “Honor Date”),
then on the Honor Date, or (y) if such Issuing Bank notifies the Borrower and
the Administrative Agent after 2:00 p.m. New York time on the Business Day
immediately preceding the Honor Date or any Business Day thereafter, then on the
Business Day immediately following such notice (with any notice received on or
after 2:00 p.m. New York time on any day deemed to be received before 2:00 p.m.
New York time on the next Business Day).  If the Borrower fails to so reimburse
such Issuing Bank by such date, the Administrative Agent shall promptly notify
each Bank of the Honor Date, the amount of the unreimbursed drawing (the
“Unreimbursed Amount”), and the amount of such Bank’s Pro Rata Share thereof. 
In such event, the Borrower shall be deemed to have requested a Base Rate Loan
in an amount equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.1(e) for the principal amount of Base Rate
Loans, but subject to the amount of the unutilized portion of the Borrowing Base
Availability and the conditions set forth in Section 8.2 (other than the
delivery of a Loan Notice).  Any notice given by an Issuing Bank or the
Administrative Agent pursuant to this Section 2.5(c)(i) may be given by
telephone if immediately confirmed in writing; provided that, the lack of such
an immediate confirmation shall not affect the conclusiveness or binding effect
of such notice.

 

(ii)                                  Each Bank (including the Bank acting as
Issuing Bank) shall upon any notice pursuant to Section 2.5(c)(i) make funds
available to the Administrative Agent for the account of the applicable Issuing
Bank at the Administrative Agent’s Office in an amount equal to its Pro Rata
Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day
specified in such notice by the Administrative Agent (provided that, the
Administrative Agent gives notice on or prior to 11:00 a.m. on such Business
Day), whereupon, subject to the provisions of Section 2.5(c)(iii), each Bank
that so makes funds available shall be deemed to have

 

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made an Advance to the Borrower in such amount.  The Administrative Agent shall
remit the funds so received to the applicable Issuing Bank.

 

(iii)                               With respect to any Unreimbursed Amount that
is not fully refinanced by a Base Rate Loan because the conditions set forth in
Section 8.2 cannot be satisfied or for any other reason, the Borrower shall be
deemed to have incurred from the applicable Issuing Bank an L/C Borrowing in the
amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at the Default Rate.  In such event, each Bank’s payment to the
Administrative Agent for the account of the applicable Issuing Bank pursuant to
Section 2.5(c)(ii) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Bank in
satisfaction of its participation obligation under this Section 2.5.

 

(iv)                              Until each Bank funds its Advance or L/C
Advance pursuant to this Section 2.5(c) to reimburse the applicable Issuing Bank
for any amount drawn under any Letter of Credit, interest in respect of such
Bank’s Pro Rata Share of such amount shall be solely for the account of the
applicable Issuing Bank.

 

(v)                                 Each Bank’s obligation to make Advances or
L/C Advances to reimburse the Issuing Bank for amounts drawn under Letters of
Credit, as contemplated by this Section 2.5(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right which such Bank may
have against the applicable Issuing Bank, the Borrower or any other Person for
any reason whatsoever; (B) the occurrence or continuance of a Default, or (C)
any other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Bank’s obligation to make Advances
pursuant to this Section 2.5(c) is subject to the conditions set forth in
Section 8.2 (other than delivery by the Borrower of a Loan Notice).  No such
making of an L/C Advance shall relieve or otherwise impair the obligation of the
Borrower to reimburse the applicable Issuing Bank for the amount of any payment
made by such Issuing Bank under any Letter of Credit, together with interest as
provided herein.

 

(vi)                              If any Bank fails to make available to the
Administrative Agent for the account of the applicable Issuing Bank any amount
required to be paid by such Bank pursuant to the foregoing provisions of this
Section 2.5(c) by the time specified in Section 2.5(c)(ii), such Issuing Bank
shall be entitled to recover from such Bank (acting through the Administrative
Agent), on demand, such amount with interest thereon for the period from the
date such payment is required to the date on which such payment is immediately
available to such Issuing Bank at a rate per annum equal to the Federal Funds
Rate from time to time in effect.  A certificate of the applicable Issuing Bank
submitted to any Bank (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest error.

 

(d)                                 Repayment of Participations.

 

(i)                                     At any time after an Issuing Bank has
made a payment under any Letter of Credit and has received from any Bank such
Bank’s L/C Advance in respect of such payment in accordance with Section 2.5(c),
if the Administrative Agent receives for the account of such Issuing Bank any
payment in respect of the related Unreimbursed Amount or interest thereon
(whether directly from the Borrower or otherwise, including proceeds of cash
collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Bank its Pro Rata Share thereof (appropriately
adjusted, in the case of interest payments, to reflect the

 

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period of time during which such Bank’s L/C Advance was outstanding) in the same
funds as those received by the Administrative Agent.

 

(ii)                                  If any payment received by the
Administrative Agent for the account of an Issuing Bank pursuant to Section
2.5(c)(i) is required to be returned under any of the circumstances described in
Section 11.24 (including pursuant to any settlement entered into by such Issuing
Bank in its discretion), each Bank shall pay to the Administrative Agent for the
account of such Issuing Bank its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Bank, at a rate per annum equal to the
Federal Funds Rate from time to time in effect.

 

(e)                                  Obligations Absolute.  The obligation of
the Borrower to reimburse the applicable Issuing Bank for each drawing under
each Letter of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:

 

(i)                                     any lack of validity or enforceability
of such Letter of Credit, this Agreement, or any other agreement or instrument
relating thereto;

 

(ii)                                  the existence of any claim, counterclaim,
set-off, defense or other right that the Borrower may have at any time against
any beneficiary or any transferee of such Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting), the applicable
Issuing Bank or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;

 

(iii)                               any draft, demand, certificate or other
document presented under such 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; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under such Letter of Credit;

 

(iv)                              any payment by the applicable Issuing Bank
under such Letter of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of Credit; or any payment
made by the applicable Issuing Bank under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under any Debtor Relief
Law; or

 

(v)                                 any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower;

 

provided that, the foregoing in clauses (i) through (v) shall not excuse any
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are waived by
the Borrower to the extent permitted by applicable Law) suffered by the Borrower
that are caused by such Issuing Bank’s (or its Related Parties’) gross
negligence, bad faith or willful misconduct as determined in a final and
non-appealable judgment by a court of competent jurisdiction when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The Borrower shall promptly examine a copy of each

 

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Letter of Credit and each amendment thereto that is delivered to it and, in the
event of any claim of noncompliance with the Borrower’s instructions or other
irregularity, the Borrower will promptly notify the applicable Issuing Bank.

 

(f)                                   Role of Issuing Bank.  Each Bank and the
Borrower agree that, in paying any drawing under a Letter of Credit, the
applicable Issuing Bank shall not have any responsibility to obtain any document
(other than any sight draft, certificates and documents expressly required by
the Letter of Credit) or to ascertain or inquire as to the validity or accuracy
of any such document or the authority of the Person executing or delivering any
such document.  None of the Issuing Banks, any Agent-Related Person nor any of
the respective correspondents, participants or assignees of any Issuing Bank
shall be liable to any Bank for (i) any action taken or omitted in connection
herewith at the request or with the approval of the Banks or the Required Banks,
as applicable; (ii) any action taken or omitted in the absence of gross
negligence, bad faith or willful misconduct as determined in a final,
non-appealable judgment of a court of competent jurisdiction; or (iii) the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application.  The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement.  None of any Issuing Bank, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of any Issuing Bank, shall be liable or responsible for any of the
matters described in clauses (i) through (v) of Section 2.5(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against an Issuing Bank (and any other applicable
“issuer” within the meaning of ISP98), and an Issuing Bank (or such issuer) may
be liable to the Borrower, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by the Borrower which
the Borrower proves were caused by such Issuing Bank’s (or such issuer’s)
willful misconduct or gross negligence, in each case as determined in a final,
non-appealable judgment of a court of competent jurisdiction.  In furtherance
and not in limitation of the foregoing, an Issuing Bank may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and such
Issuing Bank shall not be responsible for the validity or sufficiency of any
instrument 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.

 

(g)                                  Cash or Letter of Credit Collateral.  Upon
the request of the Administrative Agent, (i) if an Issuing Bank has honored any
full or partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Borrowing, (ii) if, as of the date 5 days prior to the
Maturity Date or acceleration pursuant to Section 9.2(a)(ii), any Letter of
Credit may for any reason remain outstanding and partially or wholly undrawn or
(iii) if any amount remains available to be drawn under any Letter of Credit by
reason of the operation of Section 3.14 of ISP 98, the Borrower shall
immediately Cash Collateralize or Letter of Credit Collateralize the then
outstanding amount of the Letter of Credit Usage, excluding any portion of such
amount that is already Cash Collateralized by operation of another provision of
this Agreement (in an amount equal to 101% of such outstanding amount determined
as of the date of such L/C Borrowing or the Maturity Date, as the case may be). 
For purposes hereof, “Cash Collateralize” means to pledge and deposit with or
deliver to the Administrative Agent, for the benefit of the Issuing Banks and
the Banks, as collateral for the then outstanding amount of the Letter of Credit
Usage, cash or deposit account balances pursuant to documentation in form and
substance satisfactory to the Administrative Agent and the applicable Issuing
Banks (which documents are hereby consented to by the Banks).  Derivatives of
such term have corresponding meanings.  The Borrower hereby grants to the
Administrative Agent, for the benefit of the Issuing Banks and the Banks, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing.  Cash collateral shall be

 

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maintained in a blocked, non-interest bearing deposit account at Citi.  For
purposes hereof, “Letter of Credit Collateralize” means to deliver to the
Administrative Agent, for the benefit of the Issuing Banks and the Banks, as
collateral for the then outstanding amount of the Letter of Credit Usage, one or
more irrevocable standby letters of credit (other than a Letter of Credit) in
the aggregate amount equal to 101% of the then outstanding amount of the Letter
of Credit Usage (less the amount, if any, of the then outstanding amount of the
Letter of Credit Usage being Cash Collateralized) issued by one or more
financial institutions that each is a Qualified Issuer in form and substance
satisfactory to the Administrative Agent and the applicable Issuing Banks (which
documents are hereby consented to by the Banks).  Derivatives of such term have
corresponding meanings.  The Borrower hereby agrees that the Administrative
Agent may immediately apply cash collateral or draw upon any irrevocable standby
letters of credit delivered pursuant to this Section 2.5(g) in order to
reimburse the Issuing Banks for any drawings under any Letters of Credit.

 

(h)                                 Applicability of ISP98.  The rules of the
“International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) (“ISP98”) shall apply to each Letter of Credit,
except as provided in Section 2.5(l) below.

 

(i)                                     Conflict with Letter of Credit
Application.  In the event of any conflict between the terms hereof and the
terms of any Letter of Credit Application, the terms hereof shall control.

 

(j)                                    Letter of Credit Fees.

 

(i)                                     The Borrower shall pay to the
Administrative Agent for the account of the Banks a letter of credit fee payable
to the Banks in accordance with their Pro Rata Shares with respect to each
Letter of Credit issued or renewed equal to the Letter of Credit Fee times the
daily maximum amount available to be drawn under such Letter of Credit (whether
or not such maximum amount is then in effect under such Letter of Credit);
provided that, (x) if any portion of a Defaulting Bank’s Pro Rata Share of any
Letter of Credit is Cash Collateralized by the Borrower or reallocated to the
other Banks pursuant to Section 10.13(b)(iii), then the Borrower shall not be
required to pay a Letter of Credit fee to such Defaulting Bank with respect to
such portion of such Defaulting Bank’s Pro Rata Share so long as it is Cash
Collateralized or Letter of Credit Collateralized by the Borrower or reallocated
to the other Banks, but such Letter of Credit fee shall instead be payable to
such other Banks in accordance with their Pro Rata Share of such reallocated
amount, and (y) if any portion of a Defaulting Bank’s Pro Rata Share is not Cash
Collateralized or Letter of Credit Collateralized or reallocated pursuant to
Section 10.13(b)(iii), then the Letter of Credit fee with respect to such
Defaulting Bank’s Pro Rata Share shall be payable to the applicable Issuing Bank
until such Pro Rata Share is Cash Collateralized or Letter of Credit
Collateralized or reallocated or such Bank ceases to be a Defaulting Bank.  Such
letter of credit fee shall accrue and be computed on a quarterly basis in
arrears, and shall be due and payable on each Quarterly Payment Date, commencing
with the first such date to occur after the issuance of such Letter of Credit
and on the Maturity Date.

 

(ii)                                  The Borrower shall pay directly to the
applicable Issuing Bank for its own account a fronting fee with respect to each
Letter of Credit issued or renewed by such Issuing Bank equal to 0.125% per
annum of the daily maximum amount which is available to be drawn under such
Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit).  Such fronting fee shall accrue and be computed on a
quarterly basis in arrears, and shall be due and payable on each Quarterly
Payment Date, commencing with the first such date to occur after the issuance of
such Letter of Credit and on the earlier of (x) the expiry date of such Letter
of Credit or (y) the Maturity Date.

 

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(iii)                               The Borrower shall pay directly to the
applicable Issuing Bank for its own account the customary issuance,
presentation, amendment, and other processing fees, and other standard costs and
charges, of such Issuing Bank relating to letters of credit as from time to time
in effect.  Such customary fees and standard costs and charges are due and
payable within ten (10) Business Days of demand and are nonrefundable.

 

(k)                                 Reporting.  Each Issuing Bank shall, no
later than the 3rd Business Day following the last day of each month, provide to
the Administrative Agent a report in form and substance reasonably satisfactory
to the Administrative Agent, showing the date of issuance or amendment of each
Letter of Credit, the account party, the original face amount (if any), the
expiration date, and the reference number of any Letter of Credit issued or
amended during such month.  Upon request of any Bank, the Administrative Agent
shall forward copies of such reports to such Bank.

 

(l)                                     Designation of Additional Letters of
Credit.

 

(i)                                     Subject to the limitations set forth in
this Section, the Borrower may, on one occasion on or after the Closing Date, by
written notice to the Administrative Agent designate letters of credit under the
Bank of America Letter of Credit Facility as Letters of Credit hereunder and
such designated letters of credit shall be deemed Letters of Credit and Bank of
America shall be an Issuing Bank for all purposes under this Agreement.

 

(ii)                                  Designation of Letters of Credit under
clause (i) above shall be subject to the following conditions at the time of any
such designation:

 

(A)                               Bank of America shall be a Bank hereunder;

 

(B)                               after giving effect to such designation the
Total Outstandings shall not exceed the Borrowing Base Availability; and

 

(C)                               each of the conditions set forth in Section
8.3 shall be satisfied.

 

2.6                               Reduction of Commitment.

 

The Borrower shall have the right, at any time and from time to time, without
penalty or charge, upon at least three (3) Business Days prior written notice
voluntarily to reduce or terminate permanently and irrevocably, in aggregate
principal amounts in an integral multiple of $1,000,000 but not less than
$5,000,000 (unless all of the unused Commitment is being terminated), all or a
portion of the unused Commitment.  The Borrower shall pay to the Administrative
Agent (for the account of each Bank, pro rata according to that Bank’s Pro Rata
Share) on the date of such termination all unpaid commitment fees which have
accrued to such date in respect of the terminated portion of the Commitment.

 

2.7                               Optional Increase to Commitment.

 

(a)                                 Subject to the limitations set forth in this
Section, the Administrative Agent may, at any time and from time to time at the
request of the Borrower, increase the Commitment by (i) admitting additional
Banks hereunder (each a “New Bank”), or (ii) increasing the Exposure of any Bank
(each an “Increasing Bank”), subject to the following conditions:

 

(i)                                     each New Bank is an Eligible Assignee;

 

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(ii)                                  the Borrower executes (A) a new Note
payable to the order of a New Bank, or (B) a replacement Note payable to the
order of an Increasing Bank if such Increasing Bank previously received a Note;

 

(iii)                               each New Bank executes and delivers to the
Administrative Agent an instrument of joinder to this Agreement which is in form
and substance acceptable to the Administrative Agent;

 

(iv)                              after giving effect to the admission of any
New Bank or the increase in the Exposure of any Increasing Bank, the Commitment
does not exceed $125,000,000 less the aggregate amount of reductions, if any, of
the Commitment made pursuant to Sections 2.6;

 

(v)                                 each increase in the Commitment shall be in
the amount of $5,000,000 or a greater integral multiple of $500,000;

 

(vi)                              no admission of any New Bank shall increase
the Exposure of any existing Bank without the written consent of such Bank;

 

(vii)                           no Bank shall be an Increasing Bank without the
written consent of such Bank;

 

(viii)                        the Borrower shall offer such increased
Commitments to each existing Bank (pursuant to their respective Pro Rata Share)
prior to offering any such increased Commitment to any New Bank; provided that,
any existing Bank that does not affirmatively accept such offer in writing
within 10 Business Days of the date of delivery of written notice thereof shall
be presumed to have declined such offer;

 

(ix)                              no Default or Event of Default exists or would
result from such increased Commitments (provided that, for the purposes of this
condition, compliance with Sections 6.10 and 6.11 shall be determined in
accordance with clause (x) below);

 

(x)                                 the Borrower satisfies Sections 6.10 and
6.11(b) on a pro forma basis after giving effect to such increased Commitments
(which shall be deemed fully drawn for purposes of complying with Section 6.10);

 

(xi)                              [Intentionally Omitted];

 

(xii)                           [Intentionally Omitted];

 

(xiii)                        the Administrative Agent shall have received from
the Borrower such documents as it may reasonably request in connection with such
increase, including:

 

(A)                               a certificate signed by a Senior Officer of
the Borrower (x) certifying and attaching the resolutions adopted by the
Borrower approving or consenting to such increase and (y) certifying that (1)
the representations and warranties contained in Article IV and the other Loan
Documents are true and correct on and as of the date of the increase, except to
the extent that such representations and warranties specifically refer to an
earlier date, and (2) no Default or Event of Default exists as of the date of
the increase or will result from the increase; and

 

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(B)                               a written consent to the increase and
reaffirmation of its obligations under the Loan Documents executed by each
Guarantor Subsidiary; and

 

(xiv)                       Any such increase shall be effective, if at all, as
of the date determined by the Borrower subject to the reasonable approval of the
Administrative Agent.  The Administrative Agent shall promptly notify the Banks
of the effective date of such increase.

 

(b)                                 Except as set forth in Section 2.7(a), no
consent of the Banks shall be required for an increase in the amount of the
Commitment pursuant to this Section 2.7.

 

(c)                                  After the admission of any New Bank or the
increase in the Exposure of any Increasing Bank, the Administrative Agent shall
promptly provide to each Bank and to the Borrower a new Schedule 1.1 to this
Agreement.

 

(d)                                 Concurrently with the effectiveness of any
increase to the Commitment under this Section, (i) the participation interest of
each Bank in each outstanding Letter of Credit shall be adjusted, and (ii) each
New Bank and each Increasing Bank shall make additional Advances available to
the Administrative Agent (the proceeds of which shall be paid to the other Banks
for assignment of Loans or used in part to refinance expiring Eurodollar Rate
Loans) in the amount required to result in the aggregate outstanding Advances of
each Bank being equal to its Pro Rata Share of the Commitment, as so increased.

 

(e)                                  The Borrower confirms its obligation
pursuant to Section 3.6(f) to repay any breakage fees resulting from the
prepayment of any Eurodollar Rate Loans resulting from the Borrower’s request to
increase the Commitment under this Section 2.7.

 

(f)                                   This Section shall supersede any
provisions in Section 11.2 or 11.8 to the contrary.

 

2.8                               Borrowing Base.

 

(a)                                 Reporting of Borrowing Base.  Concurrently
with (i) the delivery of the financial statements described in Section 7.1(a)
and (b) and (ii) the request for the incurrence of a Loan, issuance of any
Letter of Credit or the incurrence of any other Borrowing Base Indebtedness, the
Borrower shall provide the Administrative Agent with a Borrowing Base
Certificate in a form satisfactory to the Administrative Agent showing the
Borrower’s calculations of the components of the Borrowing Base as of the end of
the last Fiscal Quarter for which financial statements were required to be
delivered under Section 7.1(a) or 7.1(b) (or, to the extent more recent, the
last fiscal month for which internal financial statements are available), as
applicable, and such data supporting such calculations per Exhibit B or in
another form as the Administrative Agent may reasonably require.  Any change in
the Borrowing Base shall be effective upon receipt of a Borrowing Base
Certificate.

 

(b)                                 Amount of Borrowing Base.  As used in this
Agreement, the term “Borrowing Base” means a Dollar amount equal to the sum of
the following, as of any date of determination, and without duplication, and
with respect to the Borrower and the Restricted Subsidiaries:

 

(i)                                     Escrow Receivables.  100% of the
aggregate GAAP Value of Escrow Receivables; plus

 

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(ii)                                  Sold Homes Under Construction.  90% of the
aggregate GAAP Value of Sold Homes Under Construction; plus

 

(iii)                               Model Homes.  85% of the aggregate GAAP
Value of Model Homes; plus

 

(iv)                              Unsold Homes Under Construction. 80% of the
aggregate GAAP Value of Unsold Homes Under Construction; plus

 

(v)                                 Developed Lots and Lots Under Development. 
65% of the aggregate GAAP Value of Developed Lots and Lots Under Development.

 

(vi)                              Land Held For Future Development.  50% of the
aggregate GAAP Value of Land Held for Future Development; plus

 

(vii)                           Unrestricted Cash.  100% of Unrestricted Cash
minus Total Outstandings (excluding undrawn Letters of Credit);

 

provided, however, that the aggregate of the amounts set forth in clause (vi)
shall be less than 45% of the Borrowing Base; provided further, that (a) the
value of any unentitled land or land under option; (b) the value of the vertical
construction of any Tower; (c) the value of the land on which a Tower is
constructed, but only after the construction of such Tower has commenced; and
(d) the value of the assets securing the loans under the Stonegate Agreement, in
each case, shall not be included in the Borrowing Base.

 

ARTICLE III.
PAYMENTS AND FEES

 

3.1                               Principal and Interest.

 

(a)                                 Interest shall be payable on the outstanding
daily unpaid principal amount of each Advance from the date of such Advance
until payment in full and shall accrue and be payable at the rates set forth
herein, to the extent permitted by applicable Laws, before and after default,
before and after maturity, before and after any judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law, with interest on
overdue interest to bear interest at the Default Rate.

 

(b)                                 Interest accrued on each Base Rate Loan
shall be due and payable in arrears on each Quarterly Payment Date.  Except as
otherwise provided in Section 3.7, the unpaid principal amount of any Base Rate
Loan shall bear interest at a fluctuating rate per annum equal to the sum of the
Base Rate plus the Base Rate Spread.

 

(c)                                  Interest accrued on each Eurodollar Rate
Loan shall be due and payable in arrears on the last day of the Interest Period
applicable to such Eurodollar Rate Loan; provided, in the case of each Interest
Period of longer than three months, accrued interest shall also be due and
payable each date that is three months, or an integral multiple thereof, after
the commencement of such Interest Period.  Except as otherwise provided in
Section 3.7, the unpaid principal amount of any Eurodollar Rate Loan shall bear
interest at a rate per annum equal to the sum of the Eurodollar Rate for that
Eurodollar Rate Loan plus the Eurodollar Rate Spread.

 

(d)                                 If not sooner paid, the Loans shall be
payable as follows:

 

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(i)                                     the Loans shall be payable within one
Business Day in Cash to the extent that the Total Outstandings exceeds at any
time the Commitments as then in effect or Borrowing Base Indebtedness exceeds at
any time the Borrowing Base as then in effect, but only to the extent of such
excess, and excluding any portion of such excess represented by outstanding
Letters of Credit which are Cash Collateralized or Letter of Credit
Collateralized pursuant to Section 2.5(g); and

 

(ii)                                  the Loans shall in any event be
immediately payable in Cash on the Maturity Date.

 

(e)                                  Loans may, at any time and from time to
time, voluntarily be prepaid at the election of the Borrower in whole or in part
without premium or penalty; provided that:  (i) any partial prepayment shall be
in integral multiples of $1,000,000, (ii) any partial prepayment shall be in an
amount not less than $1,000,000 on a Base Rate Loan, and not less than
$5,000,000 on a Eurodollar Rate Loan, (iii) the Administrative Agent must have
received written notice of any prepayment at least 3 Business Days before the
date of prepayment in the case of a Eurodollar Rate Loan and by 1:00 p.m., New
York time, on the date of prepayment in the case of a Base Rate Loan, (iv) each
prepayment of principal, except for partial prepayments on Base Rate Loans,
shall be accompanied by prepayment of interest accrued to the date of payment on
the amount of principal paid and (v) in the case of any prepayment of any
Eurodollar Rate Loan, the Borrower shall promptly upon demand reimburse each
Bank for any loss or cost directly or indirectly resulting from the prepayment,
determined as set forth in Section 3.6.

 

3.2                               Commitment Fee.

 

From the Closing Date until the Maturity Date, the Borrower shall pay to the
Administrative Agent, for the account of each Bank, pro rata according to that
Bank’s Pro Rata Share of the Commitment, a commitment fee equal 0.50% times the
average daily amount by which the Commitment exceeds the aggregate outstanding
principal of the Loans plus the Letter of Credit Usage; provided that, no
commitment fee shall accrue with respect to any Defaulting Bank’s Pro Rata Share
of the Commitment to the extent not reallocated pursuant to Section 10.13.  This
commitment fee shall accrue daily and be payable in arrears with respect to each
calendar quarter on the Quarterly Payment Date falling at the end of such
calendar quarter.  The Administrative Agent shall calculate the commitment fee
and shall notify the Borrower in writing of such amounts prior to each Quarterly
Payment Date.

 

3.3                               Other Fees.

 

The Borrower shall pay to Citi and the Arrangers such other fees in such amounts
and at such times as heretofore set forth in the Engagement Letter and any other
applicable letter agreements to which the Borrower is a party.

 

3.4                               [Intentionally Omitted].

 

3.5                               [Intentionally Omitted].

 

3.6                               Eurodollar Fees and Costs.

 

(a)                                 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

 

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the account of, or credit extended or participated in by, any Bank (except any
reserve requirement reflected in the Eurodollar Rate) or an Issuing Bank;

 

(ii)                                  subject any Recipient to any Tax of any
kind whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Rate Loan made by it, or
change the basis of taxation of payments to such Recipient in respect thereof
(except for Indemnified Taxes, Taxes described in clauses (b) and (c) of the
definition of Excluded Taxes, and Connection Income Taxes); or

 

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

 

and the result of any of the foregoing would be to increase the cost to such
Bank of making or maintaining any Eurodollar Rate Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Bank or such
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 Bank
or such Issuing Bank hereunder (whether of principal, interest or any other
amount) then, upon request of such Bank or such Issuing Bank, the Borrower will
pay to such Bank or such Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Bank or such Issuing Bank, as the case
may be, for such additional costs incurred or reduction suffered.

 

(b)                                 Capital or Liquidity Requirements.  If any
Bank or an Issuing Bank determines that any Change in Law affecting such Bank or
such Issuing Bank or any Lending Office of such Bank or such Bank’s or such
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
Bank’s or such Issuing Bank’s capital or on the capital of such Bank’s or such
Issuing Bank’s holding company, if any, as a consequence of this Agreement, the
Commitments of such Bank or the Loans made by, or participations in Letters of
Credit held by, such Bank, or the Letters of Credit issued by such Issuing Bank,
to a level below that which such Bank or such Issuing Bank or such Bank’s or
such Issuing Bank’s holding company could have achieved but for such Change in
Law (taking into consideration such Bank’s or such Issuing Bank’s policies and
the policies of such Bank’s or such Issuing Bank’s holding company with respect
to capital adequacy), then from time to time the Borrower will pay to such Bank
or such Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Bank or such Issuing Bank or such Bank’s or such Issuing
Bank’s holding company for any such reduction suffered.

 

(c)                                  Certificates for Reimbursement.  A
certificate of a Bank or an Issuing Bank setting forth the amount or amounts
necessary to compensate such Bank or such Issuing Bank or its holding company,
as the case may be, as specified in Section 3.6(a) or Section 3.6(b) and
delivered to the Borrower shall be conclusive absent manifest error.  The
Borrower shall pay such Bank or such Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt
thereof.

 

(d)                                 Delay in Requests.  Failure or delay on the
part of any Bank or an Issuing Bank to demand compensation pursuant to the
foregoing provisions of this Section shall not constitute a waiver of such
Bank’s or such Issuing Bank’s right to demand such compensation, provided that,
the Borrower shall not be required to compensate a Bank or an Issuing Bank
pursuant to the foregoing provisions of this Section for any increased costs
incurred or reductions suffered more than 6 months prior to the date that such
Bank or such 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
Bank’s or such Issuing Bank’s intention to

 

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claim compensation therefor (except that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the 6-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

 

(e)                                  If, with respect to any proposed Eurodollar
Rate Loan:

 

(i)                                     the Administrative Agent reasonably
determines that, by reason of circumstances affecting the London interbank
Eurodollar market generally that are beyond the reasonable control of the Banks,
deposits in dollars (in the applicable amounts) are not being offered to each of
the Banks in the London interbank Eurodollar market for the applicable Interest
Period; or

 

(ii)                                  the Required Banks advise the
Administrative Agent that the Eurodollar Rate as determined by the
Administrative Agent will not adequately and fairly reflect the cost to such
Banks of making the applicable Eurodollar Advances; then the Administrative
Agent forthwith shall give notice thereof to the Borrower and the Banks,
whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, the obligation of
the Banks to make any future Eurodollar Advances shall be suspended.  If at the
time of such notice there is then pending a Loan Notice that specifies a
Eurodollar Rate Loan, such Loan Notice shall be deemed to specify a Base Rate
Loan.

 

(f)                                   Compensation for Losses.  Upon demand of
any Bank (with a copy to the Administrative Agent) from time to time, the
Borrower shall promptly compensate such Bank for and hold such Bank harmless
from any loss, cost or expense incurred by it as a result of:

 

(i)                                     any continuation, conversion, payment or
prepayment of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);

 

(ii)                                  any failure by the Borrower (for a reason
other than the failure of any Bank to make a Loan) to prepay, borrow, continue
or convert any Loan other than a Base Rate Loan on the date or in the amount
notified by the Borrower; or

 

(iii)                               any assignment of a Eurodollar Rate Loan on
a day other than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 11.27;

 

including any loss, cost or expense arising from the liquidation or reemployment
of funds obtained by it to maintain such Loan or from fees payable to terminate
the deposits from which such funds were obtained.  The Borrower shall also pay
any customary administrative fees charged by such Bank in connection with the
foregoing.  For purposes of calculating amounts payable by the Borrower to the
Banks under this Section 3.6, each Bank shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining
the Eurodollar Rate for such Loan by a matching deposit or other borrowing in
the London interbank Eurodollar market for a comparable amount and for a
comparable period, whether or not such Eurodollar Rate Loan was in fact so
funded.

 

(g)                                  If any Bank requests compensation under
this Section 3.6, then such Bank shall, if requested by the Borrower, use
commercially reasonable efforts to designate another Lending Office for any Loan
or Letter of Credit affected by such event.

 

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3.7                               Late Payments/Default Interest.

 

If any installment of principal, interest or fee or any other amount payable to
the Banks under any Loan Document is not paid when due, it shall thereafter bear
interest at a fluctuating interest rate per annum at all times (whether before
or after judgment ) equal to the sum of the Base Rate plus the Base Rate Spread
plus 2% (the “Default Rate”), provided however that, subject to the following
sentence, principal, interest or other amounts due with respect to Eurodollar
Rate Loans shall bear interest at a fluctuating rate per annum at all times
equal to the sum of the Eurodollar Rate plus the Eurodollar Rate Spread plus 2%;
in each case, to the extent permitted by applicable Law, until paid in full
(whether before or after judgment).  Upon and during the continuance of any
Event of Default under Section 9.1(j), the Obligations shall automatically bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate, to the extent permitted by applicable Law, until no Event of
Default exists (whether before or after judgment).

 

3.8                               Computation of Interest and Fees.

 

All computations of interest for Base Rate Loans when the Base Rate is
determined by Citi’s “prime rate” shall be calculated on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed.  All other
computations of interest and fees hereunder shall be calculated on the basis of
a year of 360 days and paid for the actual number of days elapsed (including the
first day and excluding the last day), which results in greater interest than if
a year of 365 days were used.  Any Loan that is repaid on the same day on which
it is made shall bear interest for one day.

 

3.9                               Holidays.

 

If any payment to be made by the Borrower shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case
may be.

 

3.10                        Payment Free of Taxes.

 

(a)                                 Payments Free of Taxes.  Any and all
payments by or on account of any obligation of the Borrower hereunder or under
any other Loan Document shall be made free and clear of and without reduction or
withholding for any Taxes, except as required by applicable Law.  If the
Borrower shall be required (as determined in the good faith discretion of the
applicable withholding agent) by applicable Law to deduct and withhold any Tax
from any such payment, then

 

(i)                                     if such Tax is an Indemnified Tax, then
the sum payable shall be increased as necessary so that after making all
required deductions of Indemnified Taxes (including deductions and withholdings
applicable to additional sums payable under this Section) the Recipient receives
an amount equal to the sum it would have received had no such deductions been
made,

 

(ii)                                  the Borrower or Administrative Agent, as
applicable, shall make such deductions, and

 

(iii)                               the Borrower or Administrative Agent, as
applicable, shall timely pay the full amount deducted to the relevant
Governmental Agency in accordance with applicable Law.

 

(b)                                 Payment of Other Taxes by the Borrower.  The
Borrower shall timely pay any Other Taxes to the relevant Governmental Agency in
accordance with applicable Law, or at the option of

 

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the Administrative Agent timely reimburse it for its payment in accordance with
applicable Law of any Other Taxes.

 

(c)                                  Indemnification by the Borrower.  Without
duplication of Section 3.10(a), the Borrower shall indemnify each Recipient
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to
amounts payable under this Section) payable or paid by such Recipient, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Agency.  A certificate as to the amount
of such payment or liability, together with reasonable supporting documentation,
if any, delivered to the Borrower by a Bank (with a copy to the Administrative
Agent), or by the Administrative Agent on its own behalf or on behalf of a Bank,
shall be conclusive absent manifest error.

 

(d)                                 Evidence of Payments.  As soon as
practicable after any payment of Taxes by the Borrower to a Governmental Agency,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Agency evidencing such
payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.

 

(e)                                  Status of Banks.  Any Bank that is entitled
to an exemption from or reduction of withholding Tax under the law of the
jurisdiction in which the Borrower is resident for tax purposes, or any treaty
to which such jurisdiction is a party, with respect to payments hereunder or
under any other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), prior to the date on which such Bank becomes a Bank under
this Agreement, and at the time or times prescribed by applicable Law or
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable Law as will permit
such payments to be made without withholding or at a reduced rate of
withholding.  In addition, any Bank, if reasonably requested by the Borrower or
the Administrative Agent, 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 to determine
whether or not such Bank is subject to backup withholding or information
reporting requirements.  Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section
3.10(e)(1)(i)-(iv), Section 3.10(e)(2) and Section 3.10(e)(3) below) shall not
be required if in the Bank’s reasonable judgment such completion, execution or
submission would subject such Bank to any material unreimbursed cost or expense
or would materially prejudice the legal or commercial position of such Bank. 
Without limiting the generality of the foregoing,

 

(1)                                 any Foreign Bank shall deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Bank
becomes a Bank 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)                                     duly executed originals of IRS Form
W-8BEN claiming eligibility for benefits of an income tax treaty to which the
United States is a party,

 

(ii)                                  duly executed originals of IRS Form
W-8ECI,

 

(iii)                               in the case of a Foreign Bank claiming the
benefits of the exemption for portfolio interest under section 881(c) of the
Code, (x) a certificate (a “U.S. Tax Compliance Certificate”) substantially in
the form of Exhibit H-1 to the effect that such Foreign Bank is not (A) a “bank”
within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent

 

47

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shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the
Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly executed originals of IRS Form W-8BEN,

 

(iv)                              duly executed originals of IRS Form W-8IMY,
accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance
Certificate substantially in the form of Exhibit H-2 or Exhibit H-3, IRS Form
W-9, and/or other certification documents from each beneficial owner, as
applicable; provided that, if the Foreign Bank is a partnership and one or more
direct or indirect partners of such Foreign Bank are claiming the portfolio
interest exemption, such Foreign Bank may provide a U.S. Tax Compliance
Certificate substantially in the form of Exhibit H-4 on behalf of each such
direct and indirect partner, and

 

(v)                                 any other form or certificate prescribed by
applicable Law as a basis for claiming exemption from or a reduction in United
States federal withholding Tax duly completed together with such supplementary
documentation as may be prescribed by applicable Law to permit the Borrower to
determine the withholding or deduction required to be made;

 

(2)                                 if a payment made to a Bank under any Loan
Document would be subject to United States federal withholding Tax imposed by
FATCA if such Bank 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 Bank 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 Bank has complied with its obligations under
FATCA or to determine the amount to deduct and withhold from such payment.

 

(3)                                 each Bank that is a “United States person”
within the meaning of Section 7701(a)(30) of the Code shall deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Bank becomes a
Bank under this Agreement (and from time to time thereafter upon the request of
the Borrower or the Administrative Agent) duly completed originals of IRS Form
W-9 (or any successor form) certifying that such Bank is exempt from U.S.
federal backup withholding tax.

 

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

 

(f)                                   Treatment of Certain Refunds.  If any
Recipient determines, in its sole discretion exercised in good faith, that it
has received a refund of any Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such
refund (but only to the extent of indemnity payments made by the Borrower under
this Section with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses of such Recipient, and without interest (other than any
interest paid by the relevant Governmental Agency with respect to such refund),
provided that, the Borrower, upon the request of the Recipient, agrees to repay
the amount paid over to the Borrower pursuant to this Section 3.10(f) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Agency) to the Recipient in the event the Recipient is required to repay such
refund to such Governmental Agency.  Notwithstanding anything to the contrary in
this Section 3.10(f), in no event will the Recipient be required to pay any
amount to the Borrower pursuant to this Section 3.10(f) the payment of which
would

 

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place the Recipient in a less favorable net after-Tax position than it 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 Section 3.10(f) shall not be construed to require the
Recipient to make available its Tax returns (or any other information relating
to its Taxes that it deems confidential) to the Borrower or any other Person.

 

3.11                        Funding Sources.

 

Except as otherwise provided in Section 3.6(g), nothing in this Agreement shall
be deemed to obligate any Bank to obtain the funds for its share of any Loan in
any particular place or manner or to constitute a representation by any Bank
that it has obtained or will obtain the funds for its share of any Loan in any
particular place or manner.

 

3.12                        Failure to Charge or Making of Payment Not
Subsequent Waiver.

 

Any decision by any Bank not to require payment of any fee or costs, or to
reduce the amount of the payment required for any fee or costs, or to calculate
any fee or any cost in any particular manner, shall not limit or be deemed a
waiver of any Bank’s right to require full payment of any fee or costs, or to
calculate any fee or any costs in any other manner.  Any decision by the
Borrower to pay any fee or costs shall not limit or be deemed a waiver of any
right of the Borrower to protest or dispute the payment amount of such fee or
costs.

 

3.13                        Time and Place of Payments; Evidence of Payments;
Application of Payments.

 

All payments to be made by the Borrower shall be made without conditions or
deduction for any counterclaim, defense, recoupment or setoff.  The amount of
each payment hereunder, under the Notes or under any Loan Document shall be made
to the Administrative Agent at the Administrative Agent’s Office, for the
account of each of the Banks or the Administrative Agent, as the case may be, in
lawful money of the United States of America without deduction, offset or
counterclaim and in immediately available funds on the day of payment (which
must be a Business Day).  All payments of principal received after 1:00 p.m.,
New York time, on any Business Day, shall be deemed received on the next
succeeding Business Day for purposes of calculating interest thereon.  The
amount of all payments received by the Administrative Agent for the account of a
Bank shall be promptly paid by the Administrative Agent to that Bank in
immediately available funds.  Each Bank shall keep a record of Advances made by
it and payments of principal with respect to each Note, and such record shall be
presumptive evidence of the principal amount owing under such Note; provided
that, failure to keep such record shall in no way affect the Obligations of the
Borrower.  Prior to the Maturity Date or an acceleration of the maturity of the
Loans, payments under the Loan Documents shall be applied first to amounts owing
under the Loan Documents other than the principal amount of and accrued interest
on the Loans and the Borrower’s obligations with respect to Letter of Credit
Usage, second to accrued interest on the Loans, third, to the principal amount
of the Loans and fourth to the Borrower’s Obligations with respect to Letter of
Credit Usage then due and owing.  Following the Maturity Date or an acceleration
of the maturity of the Loans, payments and recoveries under the Loan Documents
shall be applied in a manner designated in Section 9.2(e).  All payments with
respect to principal and interest shall be applied ratably in accordance with
the Pro Rata Shares.

 

3.14                        Administrative Agent’s Right to Assume Payments Will
be Made.

 

Unless the Borrower or any Bank has notified the Administrative Agent, prior to
the date any payment is required to be made by it to the Administrative Agent
hereunder, that the Borrower or such Bank, as the case may be, will not make
such payment, the Administrative Agent may assume that the

 

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Borrower or such Bank, as the case may be, has timely made such payment and may
(but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto.  If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:

 

(a)                                 if the Borrower failed to make such payment,
each Bank shall forthwith on demand repay to the Administrative Agent the
portion of such assumed payment that was made available to such Bank in
immediately available funds, together with interest thereon in respect of each
day from and including the date such amount was made available by the
Administrative Agent to such Bank to the date such amount is repaid to the
Administrative Agent in immediately available funds at the Federal Funds Rate
from time to time in effect; and

 

(b)                                 if any Bank failed to make such payment,
such Bank shall forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest thereon for the
period from the date such amount was made available by the Administrative Agent
to the Borrower to the date such amount is recovered by the Administrative Agent
(the “Compensation Period”) at a rate per annum equal to the Federal Funds Rate
from time to time in effect.  If such Bank pays such amount to the
Administrative Agent, then such amount shall constitute such Bank’s Advance
included in the applicable Loan.  If such Bank does not pay such amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the Borrower shall pay
such amount to the Administrative Agent, together with interest thereon for the
Compensation Period at a rate per annum equal to the rate of interest applicable
to the applicable Advance.  Nothing herein shall be deemed to relieve any Bank
from its obligation to fulfill its Pro Rata Share of the Commitment or to
prejudice any rights which the Administrative Agent or the Borrower may have
against any Bank as a result of any default by such Bank hereunder.

 

A notice of the Administrative Agent to any Bank or the Borrower with respect to
any amount owing under this Section 3.14 shall be conclusive, absent manifest
error.

 

3.15                        Survivability.

 

All of the Borrower’s obligations under Sections 3.6 and 3.10 hereof shall
survive termination of the Commitments and repayment of all other Obligations
hereunder.

 

3.16                        Bank Calculation Certificate.

 

Any request for compensation pursuant to Section 3.6 shall be accompanied by a
statement of an officer of the Bank requesting such compensation and describing
the methodology used by such Bank in calculating the amount of such
compensation, which methodology may consist of any reasonable averaging and
attribution.

 

3.17                        Designation of a Different Lending Office.

 

If any Bank requests compensation under Sections 3.6(a) through 3.6(e), or the
Borrower is required to pay any additional amount to any Bank or any
Governmental Agency for the account of any Bank pursuant to Section 3.10, then
such Bank shall use reasonable efforts to designate a different Lending Office
for funding or booking its Advances hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Bank, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Sections 3.6(a) through 3.6(e) or Section
3.10, as the case may be, in the future, and (ii) in each case, would not
subject such Bank to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such

 

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Bank.  The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Bank in connection with any such designation or assignment.

 

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Banks that:

 

4.1                               Existence and Qualification; Power; Compliance
with Law.

 

The Borrower is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware, and its certificate of
incorporation does not provide for the termination of its existence.  The
Borrower is duly qualified or registered to transact business as a foreign
corporation in the State of Florida, and in each other jurisdiction in which the
conduct of its business or the ownership of its properties makes such
qualification or registration necessary, except where the failure so to qualify
or register would not constitute a Material Adverse Effect.  The Borrower has
all requisite corporate power and authority to conduct its business, to own and
lease its Properties and to execute, deliver and perform all of its obligations
under the Loan Documents.  All outstanding shares of capital stock of the
Borrower are duly authorized, validly issued, fully paid, non-assessable, and
were issued in compliance with all applicable state and federal securities Laws,
except where the failure to so comply would not constitute a Material Adverse
Effect.  The Borrower is in compliance with all Laws and other legal
requirements applicable to its business the violation of which would have a
Material Adverse Effect, and has obtained all authorizations, consents,
approvals, orders, licenses and permits (collectively, “Authorizations”) from,
and has accomplished all filings, registrations and qualifications with, or
obtained exemptions from any of the foregoing from, any Governmental Agency that
are necessary for the transaction of its business, except where the failure so
to obtain Authorizations, or to comply with, file, register, qualify or obtain
exemptions would not constitute a Material Adverse Effect.

 

4.2                               Authority; Compliance with Other Instruments
and Government Regulations.

 

The execution, delivery, and performance by the Borrower, and by each Guarantor
Subsidiary of the Borrower, of the Loan Documents to which it is a Party, have
been duly authorized by all necessary corporate or partnership action, and do
not:

 

(a)                                 require any consent or approval not
heretofore obtained of any stockholder, partner, security holder, or creditor of
such Party;

 

(b)                                 violate or conflict with any provision of
such Party’s charter, certificate or articles of incorporation, bylaws,
certificate or articles of organization, operating agreement, partnership
agreement or other organizational or governing documents of such Party;

 

(c)                                  result in or require the creation or
imposition of any Lien (except to the extent that any Lien is created under this
Agreement or is permitted under this Agreement pursuant to Section 6.7);

 

(d)                                 constitute a “transfer of an interest” or an
“obligation incurred” that is avoidable by a trustee under Section 548 of the
Bankruptcy Code of 1978, as amended, or constitute a “fraudulent transfer” or
“fraudulent obligation” within the meaning of the Uniform Fraudulent Transfer
Act as enacted in any jurisdiction or any analogous Law;

 

(e)                                  violate any Requirement of Law applicable
to such Party; or

 

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(f)                                   result in a breach of or constitute a
default under, or cause or permit the acceleration of any obligation owed under,
any indenture or loan or credit agreement to which such Party or any of its
Property is bound or affected with respect to any obligation or obligations
aggregating $25,000,000 or more;

 

and neither the Borrower nor any Guarantor Subsidiary of the Borrower is in
violation of, or default under, any Requirement of Law, or any indenture, loan
or credit agreement described in Section 4.2(f) in any respect that would
constitute a Material Adverse Effect.

 

4.3                               No Governmental Approvals Required.

 

Except such as have heretofore been obtained, no Authorization from, or filing,
registration, or qualification with, or exemption from any of the foregoing
from, any Governmental Agency is or will be required to authorize or permit the
execution, delivery and performance by the Borrower or any Guarantor Subsidiary
of the Borrower of the Loan Documents to which it is a Party, except where the
failure to obtain such Authorization, registration or exemption would not
constitute a Material Adverse Effect.

 

4.4                               Subsidiaries.

 

(a)                                 Schedule 4.4 correctly sets forth the names,
the form of legal entity, the jurisdictions of organization of all Subsidiaries
of the Borrower as of the Closing Date and the identification by the Borrower of
each Restricted Subsidiary, Significant Subsidiary, Guarantor Subsidiary,
Foreign Subsidiary, Unrestricted Subsidiary, Immaterial Subsidiary and Mortgage
Subsidiary of the Borrower, in each case as of the Closing Date.  As of the
Closing Date, unless otherwise indicated in Schedule 4.4, all of the outstanding
shares of capital stock, or all of the units of equity interest, as the case may
be, of each Subsidiary indicated thereon are owned of record and beneficially by
the Borrower or one of such Subsidiaries, and all such shares or equity
interests so owned were issued in compliance with all state and federal
securities Laws and are duly authorized, validly issued, fully paid and
non-assessable (other than with respect to required capital contributions to any
joint venture in accordance with customary terms and provisions of the related
joint venture agreement), except where the failure to so comply would not
constitute a Material Adverse Effect, and are free and clear of all Liens,
except for Liens permitted under this Agreement.

 

(b)                                 Each Guarantor Subsidiary is duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
organization, is duly qualified to do business as a foreign organization and is
in good standing as such in each jurisdiction in which the conduct of its
business or the ownership or leasing of its Properties makes such qualification
necessary (except where the failure to be so duly qualified and in good standing
does not constitute a Material Adverse Effect) and has all requisite power and
authority to conduct its business, to own and lease its Properties and to
execute, deliver and perform the Loan Documents to which it is a Party.

 

(c)                                  Each Guarantor Subsidiary is in substantial
compliance with all Laws and other requirements applicable to its business and
has obtained all Authorizations from, and each such Significant Subsidiary has
accomplished all filings, registrations, and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the failure so to
obtain Authorizations, or to comply with, file, register, qualify or obtain
exemptions does not constitute a Material Adverse Effect.

 

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4.5                               Financial Statements.

 

The Borrower has furnished to each Bank the audited consolidated financial
statements of the Borrower and its Restricted Subsidiaries as of December 31,
2012 and for the Fiscal Year then ended.  Such audited financial statements are
in accordance with the books and records of the Borrower and its Restricted
Subsidiaries, were prepared in accordance with Generally Accepted Accounting
Principles consistently applied and fairly present in accordance with Generally
Accepted Accounting Principles consistently applied the consolidated financial
condition and results of operations of the Borrower and its Restricted
Subsidiaries as of the date and for the period covered thereby.

 

4.6                               No Material Adverse Change.

 

Since the date of the financial statement most recently delivered (or required
to be delivered) under Section 4.5 or Section 7.1, there has been no material
adverse change in the financial condition of the Borrower or its Subsidiaries,
taken as a whole.

 

4.7                               Title to Assets.

 

(a)                                 Except with respect to the assets described
in Section 4.7(b), the Borrower and its Restricted Subsidiaries have good and
valid title to all of the assets reflected in the financial statements described
in Section 4.5 as owned by them (other than assets disposed of in the ordinary
course of business), free and clear of all Liens other than Liens permitted
pursuant to Section 6.7.

 

(b)                                 The Borrower and its Restricted Subsidiaries
have good record and marketable title in fee simple to all Developed Lots, Lots
Under Development, Land Held for Development, and Model Homes and Units being
constructed on Developed Lots included in the Borrowing Base (as set forth in
the Borrowing Base Certificate delivered by the Borrower to the Administrative
Agent pursuant to Section 8.1(a)(viii) or Section 2.8(a)(ii), as the case may
be), free and clear of all Liens (other than Liens permitted pursuant to Section
6.7).

 

4.8                               Intangible Assets.

 

The Borrower and its Guarantor Subsidiaries own, or possess the right to use,
all trademarks, trade names, copyrights, patents, patent rights, licenses and
other intangible assets that are necessary in the conduct of their businesses as
operated, and no such intangible asset, to the actual knowledge of the Borrower,
conflicts with the valid trademark, trade name, copyright, patent, patent right
or intangible asset of any other Person to the extent that such conflict would
constitute a Material Adverse Effect.

 

4.9                               Anti-Terrorism Laws.

 

(a)                                 No Loan Party, none of their Subsidiaries
and, to the actual knowledge of the Senior Officers of each Loan Party, none of
the respective officers, directors, brokers or agents of such Loan Party or such
Subsidiary (i) has violated or is in violation of Anti-Terrorism Laws or (ii)
has engaged or engages in any transaction, investment, undertaking or activity
that conceals the identity, source or destination of the proceeds from any
category of offenses designated in the “Forty Recommendations” and “Nine Special
Recommendations” published by the Organisation for Economic Co-operation and
Development’s Financial Action Task Force on Money Laundering.

 

(b)                                 No Loan Party, none of their Subsidiaries
and, to the actual knowledge of the Senior Officers of each Loan Party, none of
the respective officers, directors, brokers or agents of such

 

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Loan Party or such Subsidiary that is acting or benefiting in any capacity in
connection with the Loans is an Embargoed Person.

 

(c)                                  Except as otherwise authorized by OFAC, no
Loan Party, none of their Subsidiaries and, to the actual knowledge of the
Senior Officers of each Loan Party, none of the respective officers, directors,
brokers or agents of such Loan Party or such Subsidiary acting or benefiting in
any capacity in connection with the Loans (i) conducts any business or engages
in making or receiving any contribution of funds, goods or services to or for
the benefit of any Embargoed Person, (ii) deals in, or otherwise engages in any
transaction related to, any property or interests in property blocked pursuant
to any Anti-Terrorism Law or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.

 

4.10                        Governmental Regulation.

 

(a)                                 Neither the Borrower nor any Guarantor is
engaged principally or as one of its important activities in the business of
purchasing or carrying Margin Stock, or extending credit for the purpose of
purchasing or carrying Margin Stock, and no proceeds of any Borrowings or
drawings under any Letter of Credit will be used for any purpose that violates
Regulation U of the Board of Governors of the United States Federal Reserve
System.

 

(b)                                 Neither the Borrower nor any of the
Guarantor Subsidiaries is required to be registered as an “investment company”
under the Investment Company Act of 1940.

 

4.11                        Litigation.

 

There are no actions, suits, or proceedings pending or, to the actual knowledge
of the Borrower, threatened against or affecting the Borrower or any of its
Restricted Subsidiaries or any Property of any of them before any Governmental
Agency which would constitute a Material Adverse Effect.  To the actual
knowledge of the Borrower, there are no investigations by any Governmental
Agency pending or threatened against or affecting the Borrower or any of its
Restricted Subsidiaries or any Property of any of them which would constitute a
Material Adverse Effect.

 

4.12                        Binding Obligations.

 

Each of the Loan Documents to which the Borrower or any Guarantor Subsidiary of
the Borrower is a Party has been duly authorized, executed and delivered and
constitutes the legal, valid and binding obligation of the Borrower or the
Guarantor Subsidiary, as the case may be, enforceable against the Borrower or
the Guarantor Subsidiary, as the case may be, in accordance with its terms,
except as enforcement may be limited by Debtor Relief Laws or by equitable
principles relating to the granting of specific performance or other equitable
remedies as a matter of judicial discretion.

 

4.13                        No Default.

 

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

 

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4.14                        [Intentionally Omitted].

 

4.15                        Tax Liability.

 

The Borrower and its Restricted Subsidiaries have timely filed all federal
income Tax returns and all other material Tax returns which are required to be
filed or have requested a valid extension thereof, and have paid, or made
provision for the payment of, all Taxes which have become due pursuant to said
returns or pursuant to any assessment received by the Borrower or any Restricted
Subsidiary, except such Taxes, if any, (a) as are being contested in good faith
by appropriate proceedings (and with respect to which the Borrower or its
Restricted Subsidiary has established adequate reserves for the payment of the
same to the extent required by, and in accordance with, Generally Accepted
Accounting Principles), or (b) the failure of which to pay will not constitute a
Material Adverse Effect.

 

4.16                        [Intentionally Omitted].

 

4.17                        Environmental Matters.

 

To the actual knowledge of the Borrower, the Borrower and its Restricted
Subsidiaries are in substantial compliance with all applicable Laws relating to
environmental protection where the failure to comply would constitute a Material
Adverse Effect.  To the actual knowledge of the Borrower, neither the Borrower
nor any of its Restricted Subsidiaries has received any notice from any
Governmental Agency respecting the alleged violation by the Borrower or any
Restricted Subsidiary of such Laws which would constitute a Material Adverse
Effect and which has not been or is not being corrected.

 

4.18                        Disclosure.

 

The information provided by the Borrower to the Banks in connection with this
Agreement or any Loan, taken as a whole, has not contained any untrue statement
of a material fact and has not omitted a material fact necessary to make the
statements contained therein, taken as a whole, not misleading under the
totality of the circumstances existing at the date such information was provided
and in the context in which it was provided.

 

4.19                        [Intentionally Omitted].

 

4.20                        ERISA Compliance.

 

(a)                                 Except as would not reasonably be expected
to have a Material Adverse Effect, each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other Federal or
state Laws.  Each Plan that is intended to qualify under Section 401(a) of the
Code has received a favorable determination or opinion letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the actual knowledge of the Borrower, except as would
not reasonably be expected to have a Material Adverse Effect, nothing has
occurred which would prevent, or cause the loss of, such qualification.  As of
the date of this Agreement, neither the Borrower nor any ERISA Affiliate
sponsors, or has sponsored within the past 6 years, a Pension Plan, or is a
participant, or has participated within the past 6 years, in a Multiemployer
Plan.

 

(b)                                 There are no pending or, to the actual
knowledge of the Borrower, threatened claims, actions or lawsuits, or action by
any Governmental Agency, with respect to any Plan that would reasonably be
expected to have a Material Adverse Effect.  There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or would reasonably be expected to result in a
Material Adverse Effect.  No ERISA Event that has resulted or

 

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would reasonably be expected to result in a Material Adverse Effect has occurred
or is reasonably expected to occur.

 

4.21                        Solvency.

 

On a consolidated basis, after giving effect to the making of any Loans and the
issuance of any Letter of Credit hereunder, the Borrower and its Subsidiaries
are Solvent.

 

4.22                        [Intentionally Omitted].

 

4.23                        Tax Shelter Regulations.

 

The Borrower does not intend to treat the Loans or Letters of Credit as being a
“reportable transaction” (within the meaning of Treasury Regulation Section
1.6011-4).  In the event the Borrower determines to take any action inconsistent
with such intention, it will promptly notify the Administrative Agent thereof. 
Accordingly, if the Borrower so notifies the Administrative Agent, the Borrower
acknowledges that one or more of the Banks may treat its Loans or Letters of
Credit as part of a transaction that is subject to Treasury Regulation Section
301.6112-1, and such Bank or Banks, as applicable, will maintain the lists and
other records required by such Treasury Regulation.

 

ARTICLE V.
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)

 

As long as any Loan remains unpaid, or any other Obligation remains unpaid, or
any portion of the Commitment or any Letter of Credit remains outstanding, the
Borrower shall, and shall cause each of its Restricted Subsidiaries to, unless
the Administrative Agent (with the approval of the Required Banks) otherwise
consents in writing:

 

5.1                               Payment of Taxes and Other Potential Liens.

 

Pay and discharge promptly, all Taxes, assessments, and governmental charges or
levies imposed upon the Borrower or any of its Restricted Subsidiaries, upon
their respective Property or any part thereof, upon their respective income or
profits or any part thereof, except any Tax, assessment, charge, or levy (i)
that is not yet past due, or is being contested in good faith by appropriate
proceedings, as long as the Borrower or its Restricted Subsidiary has
established and maintains adequate reserves for the payment of the same to the
extent required by, and in accordance with, Generally Accepted Accounting
Principles or (ii) the failure of which to pay would not constitute a Material
Adverse Effect.

 

5.2                               Preservation of Existence.

 

Preserve and maintain their respective existence, licenses, rights, franchises,
and privileges in the jurisdiction of their formation and all authorizations,
consents, approvals, orders, licenses, permits, or exemptions from, or
registrations with, any Governmental Agency that are necessary for the
transaction of their respective business, and qualify and remain qualified to
transact business in each jurisdiction in which such qualification is necessary
in view of their respective business or the ownership or leasing of their
respective Properties; provided that, (a) the failure to preserve and maintain
any particular right, franchise, privilege, authorization, consent, approval,
order, license, permit, exemption, or registration, or to qualify or remain
qualified in any jurisdiction, that does not constitute a Material Adverse
Effect will not constitute a violation of this covenant, and (b) nothing in this
Section 5.2 shall prevent any consolidation or merger or disposition of assets
permitted by Section 6.3 or shall prevent the termination

 

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of the business or existence (corporate or otherwise) of any Subsidiary of the
Borrower which in the reasonable judgment of the management of the Borrower is
no longer necessary or desirable including the liquidation of WCI Towers
Northeast USA, Inc., First Fidelity Title, Inc., and WCI Communities Rivington,
LLC.

 

5.3                               Maintenance of Properties.

 

Maintain, preserve and protect all of their respective real Properties in good
order and condition, subject to wear and tear in the ordinary course of business
and damage caused by the natural elements, and not permit any waste of their
respective real Properties, except that the failure to so maintain, preserve or
protect any particular real Property, or the permitting of waste on any
particular real Property, where such failure or waste with respect to all real
Properties of the Borrower and its Restricted Subsidiaries, in the aggregate,
would not constitute a Material Adverse Effect.

 

5.4                               Maintenance of Insurance.

 

Maintain insurance with responsible insurance companies in such amounts and
against such risks as in the Borrower’s reasonable business judgment is adequate
in light of the Borrower’s and its Restricted Subsidiaries’ size, business,
assets and location of operations.

 

5.5                               Compliance with Laws.

 

Comply with all Requirements of Laws (including ERISA, Hazardous Materials Laws,
Anti-Terrorism Laws and Regulation U and X issued by the Board of Governors of
the Federal Reserve System) noncompliance with which would constitute a Material
Adverse Effect, except that the Borrower and its Restricted Subsidiaries need
not comply with a Requirement of Law then being contested by any of them in good
faith by appropriate procedures, so long as such contest (or a bond or surety
posted in connection therewith) operates as a stay of enforcement of any
material penalty that would otherwise apply as a result of such failure to
comply.

 

5.6                               Inspection Rights.

 

Permit representatives and independent contractors of the Administrative Agent
and each Bank to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors
and officers, all at the reasonable expense of the Borrower and at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Borrower; provided that, none of
the foregoing unreasonably interferes with the normal business operations of the
Borrower or any of such Restricted Subsidiaries and that the Banks shall engage
in any such inspections on a cooperative basis.

 

5.7                               Keeping of Records and Books of Account.

 

Keep adequate records and books of account fairly reflecting all financial
transactions in conformity with Generally Accepted Accounting Principles applied
on a consistent basis (except for changes concurred with by the Borrower’s
independent certified public accountants) and all applicable requirements of any
Governmental Agency having jurisdiction over the Borrower or any of its
Restricted Subsidiaries.

 

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5.8                               Use of Proceeds.

 

Use the proceeds of all Loans solely for working capital, land acquisitions,
Acquisitions permitted hereunder, the acquisition of any assets used in the Core
Businesses (but excluding any assets used solely in connection with the Tower
Business) and other general corporate purposes of the Borrower and its
Restricted Subsidiaries.

 

5.9                               Subsidiary Guaranty.

 

Cause each of its Guarantor Subsidiaries hereafter formed, acquired or
qualifying as a Guarantor Subsidiary, to (a) execute and deliver to the
Administrative Agent promptly following such formation, acquisition or
qualification a joinder of the Subsidiary Guaranty in the form attached as an
exhibit thereto, and (b) deliver to the Administrative Agent documents of the
types referred to in clause (v) of Section 8.1(a) and, if requested by the
Administrative Agent, favorable opinions of counsel to such Guarantor Subsidiary
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to in clause (a)), all in form,
content and scope reasonably satisfactory to the Administrative Agent.  For the
avoidance of doubt, any Subsidiary of the Borrower that guarantees the
obligations under the Senior Notes and the Senior Note Indenture shall also be a
Guarantor Subsidiary hereunder and shall comply with the provisions of this
Section 5.9.

 

ARTICLE VI.
NEGATIVE COVENANTS

 

As long as any Loan remains unpaid, or any other Obligation remains unpaid, or
any portion of the Commitment or any Letter of Credit remains outstanding, the
Borrower shall not, and shall not permit any of its Restricted Subsidiaries to,
unless the Administrative Agent (with the approval of the Required Banks)
otherwise consents in writing:

 

6.1                               Payment or Prepayment of Subordinated
Obligations and Certain Other Obligations.

 

(a)                                 Make any payment with respect to any
Subordinated Obligation in violation of the provisions in the instruments
governing such Subordinated Obligation; or

 

(b)                                 (i) Make an optional or unscheduled payment
or prepayment of any principal (including an optional or unscheduled sinking
fund payment), interest or any other amount with respect to any Subordinated
Obligation, or (ii) make a purchase or redemption of any Subordinated
Obligation; provided, however, that the restrictions set forth in this clause
(b) shall not apply if all of the following conditions are met:

 

(i)                                     the Borrower is in compliance with the
covenants set forth in Sections 6.9, 6.10 and 6.11 hereof on a pro forma basis
after giving effect to such payment, prepayment, purchase or redemption of
Subordinated Obligations; and

 

(ii)                                  no Default or Event of Default then exists
or would result therefrom.

 

6.2                               Indebtedness of Mortgage Subsidiaries.

 

Notwithstanding anything herein to the contrary, Mortgage Subsidiaries shall not
incur any Indebtedness for borrowed money other than Non-Recourse Indebtedness.

 

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6.3                               Merger and Sale of Assets.

 

Merge or consolidate with or into any Person, sell a Material Amount of Assets
or liquidate or dissolve the Borrower or any Restricted Subsidiary, except,
subject to Section 6.6:

 

(a)                                 a merger of the Borrower into a wholly-owned
Restricted Subsidiary of the Borrower that has nominal assets and liabilities,
the primary purpose of which is to effect the reincorporation of the Borrower in
another state of the United States;

 

(b)                                 merger, consolidation or liquidation of a
Subsidiary of the Borrower into the Borrower (with the Borrower as the surviving
corporation) or into any other Restricted Subsidiary of the Borrower, provided
that, (i) the reduction in the proportionate share of the Borrower and its
Restricted Subsidiaries in the total assets of such resulting Subsidiary (after
intercompany eliminations) does not constitute a Material Amount of Assets and
(ii) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;

 

(c)                                  mergers, consolidations, liquidations, or
sales of all or substantially all of the assets of a Restricted Subsidiary;
provided that, (i) any such transaction does not involve a transfer by the
Borrower or its Restricted Subsidiaries of a Material Amount of Assets and (ii)
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;

 

(d)                                 a merger or consolidation of the Borrower
with another Person if (i) no Change in Control results therefrom, (ii) the
Borrower does not transfer a Material Amount of Assets measured before the
effectiveness of the merger or consolidation to one or more Persons in giving
effect to such merger or consolidation, (iii) the Borrower is the surviving
Person and (iv) immediately after giving effect to such merger, no Default or
Event of Default shall have occurred and be continuing;

 

(e)                                  the sale of inventory (which shall include
personal property, real property and interests in real property) in the ordinary
course of business;

 

(f)                                   any sale of assets among the Loan Parties
and their Restricted Subsidiaries which is in the ordinary course of business or
is otherwise in compliance with all other provisions of this Agreement; or

 

(g)                                  the liquidation of WCI Towers Northeast
USA, Inc., First Fidelity Title, Inc. and WCI Communities Rivington, LLC.

 

6.4                               Investments and Acquisitions.

 

Make any Acquisition, or enter into an agreement to make any Acquisition, or
make or suffer to exist any Investment, other than:

 

(a)                                 Investments in Cash or Cash Equivalents;

 

(b)                                 Loans and advances to directors, employees
and officers of the Borrower and its Restricted Subsidiaries for bona fide
business purposes not in excess of $2,000,000 (without giving effect to the
forgiveness of any such loan) at any one time outstanding;

 

(c)                                  Investments of the Borrower in any of its
wholly-owned Restricted Subsidiaries and Investments of any Subsidiary of the
Borrower in the Borrower or any of the Borrower’s wholly-owned Restricted
Subsidiaries;

 

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(d)                                 Acquisitions of or Investments in Persons
engaged primarily in the same businesses as the Borrower and its Restricted
Subsidiaries (including Core Businesses and the Tower Business), or in a
business reasonably related to such businesses, including electronic commerce
and similar activities related to real estate;

 

(e)                                  Acquisitions of or Investments in the
Borrower’s own capital stock permitted by Section 6.12;

 

(f)                                   Acquisitions of or Investments in Persons
engaged primarily in businesses other than those permitted by Section 6.4(d),
provided that, the aggregate cost of all such Acquisitions and Investments made
in any fiscal year does not exceed $10,000,000;

 

(g)                                  Investments in Restricted Subsidiaries in
existence on the Closing Date or other Investments in existence on the Closing
Date and disclosed on Schedule 6.4;

 

(h)                                 Investments received in connection with the
settlement of a bona fide dispute with another Person;

 

(i)                                     Investments in Unrestricted
Subsidiaries, subject to the limitations set forth in Section 6.17 and in an
amount not to exceed $15,000,000 in the aggregate; provided that such
limitations shall not apply to Investments in Unrestricted Subsidiaries as of
the Closing Date listed on Schedule 6.4; and

 

(j)                                    advances, Loans, rebates and extensions
of credit (including the creation of receivables) to suppliers, customers and
vendors, and performance and completion guarantees, in each case in the ordinary
course of business and any Investments received in satisfaction or partial
satisfaction thereof, provided that, the aggregate amount of any such
Investments at any one time does not exceed $25,000,000;

 

but in all events, subject to the restrictions of Section 6.14.

 

For purposes of compliance with this Section, in the event that any Acquisition
or Investment meets the criteria set forth in more than one of clauses (a)
through (j) of this Section, the Borrower, in its sole discretion, may classify
or reclassify such Acquisition or Investment in any manner that complies with
this Section and such Acquisition or Investment shall be treated as having been
permitted pursuant to only one of the clauses of this Section.

 

6.5                               Burdensome Agreements.

 

Enter into any Contractual Obligation that limits the ability (i) of any
Restricted Subsidiary to make Distributions to the Borrower or any Subsidiary
Guarantor or to otherwise transfer property to the Borrower or any Subsidiary
Guarantor or (ii) of any Restricted Subsidiary to guarantee the Indebtedness of
the Borrower; provided however that the foregoing restrictions shall not apply
to (x) restrictions imposed by Law or this Agreement, (y) customary restrictions
and conditions contained in agreements relating to a sale of a Subsidiary or all
or substantially all of its assets pending such sale, provided such restrictions
and conditions apply only to the Subsidiary that is sold and such sale is
permitted hereunder and (z) customary provisions in leases, partnership
agreements, limited liability company organizational governance documents, joint
venture agreements and other similar agreements entered into in the ordinary
course of business that restrict the transfer or encumbrance of leasehold
interests or ownership interests in such partnership, limited liability company,
joint venture or similar Person.

 

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6.6                               Change in Business.

 

Engage in any business other than the businesses as now conducted by the
Borrower or its Subsidiaries (including the Core Businesses), and any business
reasonably related to such businesses, other than businesses in which the
Borrower and its Subsidiaries have invested to the extent permitted pursuant to
Section 6.4(f); provided, however, that the Borrower and its Subsidiaries shall
be permitted to engage in the Tower Business.

 

6.7                               Liens and Negative Pledges.

 

Create, incur, assume, or suffer to exist, any Lien of any nature upon or with
respect to any of their respective Properties, whether now owned or hereafter
acquired, or enter or suffer to exist any Contractual Obligation wherein the
Borrower or any of its Restricted Subsidiaries agrees not to grant any Lien on
any of their Properties, except:

 

(a)                                 Liens and Contractual Obligations existing
on the date hereof and described in Schedule 6.7, provided that, the obligations
secured by such Liens and Contractual Obligations are not increased and that no
such Lien or Contractual Obligation extends to any Property of the Borrower or
any Restricted Subsidiary other than the Property subject to such Lien or
Contractual Obligation on the Closing Date;

 

(b)                                 Liens on Property of any Foreign Subsidiary
securing Indebtedness of that Foreign Subsidiary, or Contractual Obligations of
any Foreign Subsidiary restricting the grant of any Lien on the Property of such
Foreign Subsidiary;

 

(c)                                  Liens on Property securing Indebtedness of
the Borrower or any of its Restricted Subsidiaries, or Contractual Obligations
restricting the grant of any Lien on Property where such Property secures
Indebtedness incurred for the purposes of acquiring and/or developing such
Property, provided that, such Indebtedness is included in “Borrowing Base
Indebtedness” for the purpose of calculating the Borrowing Base Availability;

 

(d)                                 Liens or Contractual Obligations that may
exist from time to time under the Loan Documents;

 

(e)                                  Liens or Contractual Obligations consisting
of a Capital Lease covering personal Property entered into in the ordinary
course of business;

 

(f)                                   Liens and Contractual Obligations that are
Permitted Encumbrances;

 

(g)                                  attachment, judgment and other similar
Liens arising in connection with court proceedings; provided that, in the case
of such Liens securing claims that exceed $25,000,000 in the aggregate over the
amount of any insurance proceeds reasonably expected to be received, the
execution or enforcement of such Liens are effectively stayed and the claims
secured thereby are being contested in good faith by appropriate proceedings
timely commenced and diligently prosecuted;

 

(h)                                 Liens on any asset of any Person, or
Contractual Obligations of such Person restricting the grant of any Lien on such
asset of such Person, in each case existing at the time such Person becomes a
Subsidiary and not created in contemplation of such event;

 

(i)                                     Liens on any asset of any Person, or
Contractual Obligations of such Person restricting the grant of any Lien on such
asset of such Person, in each case existing at the time such

 

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Person is acquired by or merged or consolidated with or into the Borrower or any
of its Restricted Subsidiaries and not created in contemplation of such event;

 

(j)                                    Liens on any asset, or Contractual
Obligations restricting the grant of any Lien on such asset, in each case
existing prior to the acquisition thereof by the Borrower or any of its
Restricted Subsidiaries and not created in contemplation of such acquisition;

 

(k)                                 Liens arising out of the refinancing,
extension, renewal or refunding of any Indebtedness secured by any Lien
permitted by any of the foregoing clauses of this Section, provided that, such
Indebtedness is not increased and is not secured by additional assets;

 

(l)                                     Liens or Contractual Obligations arising
in the ordinary course of business which do not secure any obligation in an
amount exceeding $15,000,000 in the aggregate, and do not in the aggregate
materially detract from the value of the assets covered by such Liens or
materially impair the use thereof in the operation of the Borrower’s business;

 

(m)                             any Contractual Obligations restricting the
grant of any Lien; provided that, as of any date of determination, such
Contractual Obligations do not (x) prohibit first priority, perfected Liens on
Properties of the Borrower and the Guarantor Subsidiaries in favor of the
Administrative Agent and the Banks to secure the Obligations then outstanding
and determinable (other than unasserted or contingent indemnification or
reimbursement Obligations) as of such date, or (y) require that holders of any
indebtedness receive Liens ranking senior or pari passu to Liens granted on
collateral in favor of the Administrative Agent and the Banks to secure the
Obligations then outstanding and determinable (other than unasserted or
contingent indemnification or reimbursement Obligations) as of such date;

 

(n)                                 assessment district or similar Liens in
connection with municipal financings;

 

(o)                                 a Contractual Obligation wherein the
Borrower or any of its Restricted Subsidiaries agrees to grant any Lien on any
of their Properties, if such Contractual Obligation provides for the grant of a
Lien on a pari passu basis in favor of the Administrative Agent for the benefit
of the Banks with respect to the Obligations and in favor of the holders of such
other Indebtedness (other than Subordinated Obligations), if any, as the
Borrower designates (and the Borrower shall, as soon as reasonably possible,
provide to the Banks a copy of any such Contractual Obligation);

 

(p)                                 Liens on Property of a Joint Venture
permitted under Section 6.4 and 6.14;

 

(q)                                 Liens securing Non-Recourse Indebtedness of
the Borrower and any Restricted Subsidiary; provided that, such Liens apply only
to (a) the property whose acquisition (direct or indirect, including through the
purchase of Equity Interests of the Person owning such property) was financed,
in whole or in part, out of the net proceeds of such Non-Recourse Indebtedness
within 180 days after the incurrence of such Non-Recourse Indebtedness and (b)
assets directly related thereto or derived therefrom, such as proceeds
(including insurance proceeds), products, rents, and profits thereof, fixtures
thereon and improvements and accessions thereto;

 

(r)                                    Liens securing obligations of the
Borrower or any Restricted Subsidiary to any third party in connection with
PAPAs, any option, repurchase right or right of first refusal to purchase real
property granted to the master developer or the seller of real property that
arises as a result of the non-use or non-development of such real property by
the Borrower or any Restricted Subsidiary and joint development agreements with
third parties to perform and/or pay for or reimburse the costs of construction
and/or development related to or benefiting property (and additions, accessions,
improvements and replacements and customary deposits in connection therewith and
proceeds and

 

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products therefrom) of the Borrower or any Restricted Subsidiary and property
belonging to such third parties, in each case entered into in the ordinary
course of business; provided that, such Liens do not at any time encumber any
property, other than the property (and additions, accessions, improvements and
replacements and customary deposits in connection therewith and proceeds and
products therefrom) financed by such Indebtedness and the proceeds and products
thereof;

 

(s)                                   Liens upon specific items of inventory or
other goods and proceeds of any Person securing such Person’s obligations in
respect of bankers’ acceptances issued or created for the account of such Person
to facilitate the purchase, shipment or storage of such inventory or other
goods; provided however, that such bankers’ acceptances do not constitute
Indebtedness;

 

(t)                                    Liens securing reimbursement obligations
with respect to commercial letters of credit which encumber documents, goods
covered thereby and other assets relating to such letters of credit and products
and proceeds thereof;

 

(u)                                 (i) bankers’ Liens, rights of setoff and
other similar Liens existing solely with respect to cash and Cash Equivalents on
deposit in one or more accounts maintained by the Borrower or any Restricted
Subsidiary, in each case granted in the ordinary course of business (as
determined in good faith by the Borrower) in favor of the bank or banks with
which such accounts are maintained, securing amounts owing to such bank with
respect to cash management and operating account arrangements, including those
involving pooled accounts and netting arrangements; provided that, in no case
shall any such Liens secure (either directly or indirectly) the repayment of any
Indebtedness; (ii) Liens arising under Article 2 or Article 4 of the UCC and
banker’s Liens and rights of set-off, revocation, refund or chargeback or other
similar Liens in connection with account control agreements in favor of banks or
other financial institutions; and (iii) Liens arising under Article 2 or Article
4 of the UCC and banker’s Liens and rights of set-off, revocation, refund or
chargeback or other similar Liens in connection with account control agreements
in favor of banks or other financial institutions;

 

(v)                                 Liens arising from filing Uniform Commercial
Code financing statements regarding leases;

 

(w)                               Liens consisting of restrictions and easements
in connection with an acquisition permitted under Section 6.4(d) or (f);
provided that, such Liens were not incurred in contemplation or anticipation of
such acquisition;

 

(x)                                 Liens on cash pledged to secure deductibles,
retentions and other obligations to insurance providers in the ordinary course
of business (as determined in good faith by the Borrower);

 

(y)                                 Liens on cash collateral including deposits
supporting performance bonds and financial bonds;

 

(z)                                  Liens incurred in the ordinary course of
business (as determined in good faith by the Borrower) as security for the
obligations of the Borrower and its Restricted Subsidiaries with respect to
indemnification in respect of title insurance providers or surety bond
providers; and

 

(aa)                          Liens on the equity interests of an Unrestricted
Subsidiary to secure Indebtedness of such Unrestricted Subsidiary.

 

For purposes of compliance with this Section:  (x) in the event that any Lien or
Contractual Obligation meets the criteria set forth in more than one of clauses
(a) through (aa) of this Section, the Borrower, in its sole discretion, may
classify or reclassify such Lien or Contractual Obligation in any manner that

 

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complies with this Section and such Lien or Contractual Obligation shall be
treated as having been permitted pursuant to only one of the clauses of this
Section; and (y) any Indebtedness secured by a Lien may be divided and
classified among more than one of the clauses of this Section.

 

6.8                               Transactions with Affiliates.

 

Enter into any transaction of any kind with any Affiliate of the Borrower other
than (a) a transaction that results in Subordinated Obligations, (b) a
transaction between or among the Borrower and/or its Restricted Subsidiaries,
(c) a transaction that has been authorized by the board of directors or a
committee established by the board of directors of the Borrower with the
favorable vote of a majority of the directors who have no financial or other
interest in the transaction or by the vote of a majority of the outstanding
shares of capital stock of the Borrower, (d) a transaction entered into on an
arm’s length basis on terms and under conditions not less favorable to the
Borrower or any of its Restricted Subsidiaries than could be obtained from a
Person that is not an Affiliate of the Borrower, (e) salary, bonus, equity
compensation and other compensation arrangements and indemnification
arrangements with directors or officers consistent with past practice or current
market practice, or (f) transactions permitted by clauses (b), (c) and (g) of
Section 6.4.

 

6.9                               Consolidated Tangible Net Worth.

 

Permit Consolidated Tangible Net Worth to be, at the end of any Fiscal Quarter,
less than an amount equal to the sum of (a) $125,681,000 plus (b) an amount
equal to 50% of aggregate of the cumulative Consolidated Net Income for each
Fiscal Quarter ending after June 30, 2013 and ending as of the last day of such
Fiscal Quarter (provided that, there shall be no reduction hereunder in the
event of a consolidated net loss in any such Fiscal Quarter) plus (c) an amount
equal to 25% of any Consolidated Net Income realized as a result of a reversal
of the Deferred Tax Valuation Allowance after June 30, 2013 plus (d) an amount
equal to 50% of the cumulative net proceeds received by the Borrower from the
issuance of its capital stock after June 30, 2013.

 

6.10                        Consolidated Leverage Ratio.

 

Permit the Consolidated Leverage Ratio to be, at the end of any Fiscal Quarter,
greater than 0.60 to 1.00.

 

6.11                        Consolidated Interest Coverage Ratio or Minimum
Liquidity.

 

Permit both of the following to occur with respect to any Fiscal Quarter:

 

(a)                                 Liquidity to be less than the sum of
Consolidated Interest Incurred for the 12 month period ending on such date; and

 

(b)                                 the Consolidated Interest Coverage Ratio to
be, at the end of any Fiscal Quarter, less than:

 

For each Fiscal Quarter ending after the Closing Date through and including the
Fiscal Quarter ending September 30, 2014

 

1.00

 

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For the Fourth Fiscal Quarter of 2014 through and including the Fiscal Quarter
ending September 30, 2015

 

1.25

 

 

 

For the Fiscal Quarter ending December 31, 2015 and each Fiscal Quarter
thereafter

 

1.50

 

For the avoidance of doubt, the Borrower must be in breach of both of the
covenants in the foregoing clauses (a) and (b) in order to be in breach of this
Section 6.11.

 

6.12                        Distributions.

 

(a)                                 Make any Distribution unless (i) the
Borrower is in compliance with the covenants set forth in Sections 6.9, 6.10 and
6.11 hereof on a pro forma basis after giving effect thereto and (ii) no Default
or Event of Default then exists or would result therefrom.

 

(b)                                 Notwithstanding Section 6.12(a) above, this
Section 6.12 does not prohibit:

 

(i)                                     retirements, redemptions, purchases, or
other acquisitions for value of capital stock, warrants or rights to acquire
shares of capital stock or other equity securities (x) from or with employees,
officers or directors or former employees, officer or directors (or their
estates or beneficiaries under their estates) of the Borrower and its Restricted
Subsidiaries in connection with the Borrower’s equity incentive plans or other
benefit plans or upon death, disability, retirement, severance or termination or
pursuant to any agreement under which the capital stock or other securities were
issued or any employment agreement, (y) in connection with cashless exercises of
options, warrants or other rights to acquire capital stock or other equity
securities, or (z) in lieu of fractional shares; provided that, the total cash
consideration paid by or on behalf of the Borrower and its Restricted
Subsidiaries for all such repurchases and exchanges from or with employees
(excluding repurchases and exchanges solely to satisfy Tax withholding
obligations) does not exceed in the aggregate $5,000,000 in any Fiscal Year;

 

(ii)                                  the purchase of call options or call
spreads by the Borrower or its Restricted Subsidiaries in connection with any
convertible securities offering of Subordinated Obligations by the Borrower,
together with the repurchase of shares of capital stock or settlement for cash
(in whole or in part) as may be required by the terms of such options or
spreads;

 

(iii)                               a Distribution made (x) to the Borrower or
to a Guarantor Subsidiary by any of their respective Subsidiaries or (y) to a
wholly-owned Restricted Subsidiary of the Borrower by any Subsidiary that is not
a Loan Party;

 

(iv)                              the payment of any Distribution within 60 days
after the date of declaration thereof so long as such Distribution was permitted
by the provisions of this Agreement at the time of its declaration; or

 

(v)                                 the making of cash payments in connection
with any conversion of convertible securities of the Borrower.

 

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6.13                        Amendments.

 

Amend, waive or terminate any provision in any instrument or agreement governing
Subordinated Obligations unless such amendment, waiver or termination would not
be materially adverse to the interests of the Banks under this Agreement.

 

6.14                        Investment in Subsidiaries and Joint Ventures.

 

Permit, as of the last day of any Fiscal Quarter, the Borrower’s equity
interest, computed in accordance with Generally Accepted Accounting Principles
consistently applied, in (1) all Restricted Subsidiaries of the Borrower (other
than those that are consolidated on the Borrower’s financial statements), (2)
all Joint Ventures (other than those that are consolidated on the Borrower’s
financial statements) and (3) without duplication of amounts described in
clauses (1) and (2), other entities in which the Borrower owns an equity
interest that are not consolidated on the Borrower’s financial statements (other
than Unrestricted Subsidiaries and de minimis investments in readily marketable
securities of publicly traded companies), to exceed 20% of Consolidated Tangible
Net Worth in the aggregate as of the last day of such Fiscal Quarter.

 

6.15                        Regulation U.

 

Permit any Loan hereunder to be used to purchase or carry margin stock or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.

 

6.16                        Fiscal Year.

 

Change its fiscal year-end to a date other than December 31.

 

6.17                        Designation of Subsidiaries.

 

The board of directors of the Borrower may designate any Subsidiary of the
Borrower as an “Unrestricted Subsidiary” hereunder (a “Designation”) only if:
(1) no Default shall have occurred and be continuing at the time of or after
giving effect to such Designation; (2) the Borrower would be permitted to make,
at the time of such Designation, an Investment pursuant to Section 6.4 in an
amount (the “Designation Amount”) equal to the fair market value of the
Borrower’s proportionate ownership interest in such Subsidiary on such date; (3)
neither the Borrower nor any of its other Subsidiaries (other than Unrestricted
Subsidiaries) (x) provides any direct or indirect credit support for any
Indebtedness of such Subsidiary (including any undertaking, agreement or
instrument evidencing such Indebtedness) or (y) is directly or indirectly liable
for any Indebtedness of such Subsidiary other than, in each case, such
Investments as are permitted pursuant to Section 6.4; (4) such Subsidiary is a
Person with respect to which neither the Borrower nor any Restricted Subsidiary
has any direct or indirect obligation (x) to subscribe for additional Equity
Interests or (y) to maintain or preserve the Person’s financial condition or to
cause the Person to achieve any specified levels of operating results; and (5)
such Subsidiary has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Issuer or any Restricted Subsidiary,
except for any guarantee given solely to support the pledge by the Borrower or
any Restricted Subsidiary of the Equity Interest of such Unrestricted
Subsidiary, which guarantee is not recourse to the Borrower or any Restricted
Subsidiary, and except in the case of clauses (4) and (5) of this Section 6.17,
to the extent: (i) that the Borrower or such Restricted Subsidiary could
otherwise provide such a Subsidiary Guaranty or incur such Indebtedness under
this Agreement; and (ii) the satisfaction of such obligation, the provision of
such Subsidiary Guaranty and the incurrence of such Indebtedness otherwise would
be permitted under this Agreement.

 

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If, at any time after the Designation, any Unrestricted Subsidiary fails to meet
the requirements set forth in the preceding paragraph it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Agreement and any
Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall
be deemed to be incurred by a Restricted Subsidiary as of the date and, if the
Indebtedness is not permitted to be incurred under this Agreement or the Lien is
not permitted under Section 6.7, the Borrower shall be in Default hereunder.

 

Upon designation of a Restricted Subsidiary as an Unrestricted Subsidiary in
compliance with this Section 6.17, such Restricted Subsidiary shall, by
execution and delivery of an Officer’s Certificate in form satisfactory to the
Administrative Agent, be released from any Subsidiary Guaranty previously made
by such Restricted Subsidiary.

 

The Borrower may redesignate an Unrestricted Subsidiary as a Restricted
Subsidiary (a “Redesignation”) only if (1) no Default shall have occurred and be
continuing at the time of and after giving effect to such Redesignation and (2)
all Liens, Indebtedness and Investments of such Unrestricted Subsidiary
outstanding immediately following such Redesignation would, if incurred or made
at such time, have been permitted to be incurred or made for all purposes of
this Agreement.

 

All Designations and Redesignations must be evidenced by resolutions of the
board of directors of the Borrower and an Officer’s Certificate delivered to the
Administrative Agent certifying compliance with the foregoing provisions.  Such
resolutions and Officer’s Certificate shall be delivered to the Administrative
Agent within 45 days after the end of the Fiscal Quarter of the Borrower in
which such Designation or Redesignation is made (or, in the case of a
Designation or Redesignation made during the last Fiscal Quarter of the
Borrower’s Fiscal Year, within 90 days after the end of such Fiscal Year).

 

ARTICLE VII.
INFORMATION AND REPORTING REQUIREMENTS

 

7.1                               Financial and Business Information of the
Borrower and Its Subsidiaries.

 

As long as any Loan remains unpaid or any other Obligation remains unpaid, or
any portion of the Commitment or any Letter of Credit remains outstanding, the
Borrower shall, unless the Administrative Agent (with the approval of the
Required Banks) otherwise consents in writing, deliver to the Administrative
Agent and each of the Banks (except as otherwise provided below) at its own
expense:

 

(a)                                 As soon as reasonably possible, and in any
event within the earlier of (x) 50 days after the close of each Fiscal Quarter
of the Borrower (other than the fourth Fiscal Quarter) and (y) five days after
such related filing (if any) with the Securities Exchange Commission is due, (i)
the consolidated and consolidating balance sheet of the Borrower and its
Restricted Subsidiaries as of the end of such Fiscal Quarter, setting forth in
comparative form the corresponding figures for the corresponding Fiscal Quarter
of the preceding Fiscal Year, if available, and (ii) the consolidated and
consolidating statements of profit and loss and the consolidated statements of
cash flows of the Borrower and its Restricted Subsidiaries for such Fiscal
Quarter and for the portion of the Fiscal Year ended with such Fiscal Quarter,
setting forth in comparative form the corresponding periods of the preceding
Fiscal Year.  Such consolidated and consolidating balance sheets and statements
shall be prepared in reasonable detail in accordance with Generally Accepted
Accounting Principles consistently applied (other than those which require
footnote disclosure of certain matters), and shall be certified by the principal
financial officer of the Borrower, subject to normal year-end accruals and audit
adjustments;

 

(b)                                 As soon as reasonably possible, and in any
event within the earlier of (x) 120 days after the close of each Fiscal Year of
the Borrower and (y) five days after such related filing (if any)

 

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with the Securities Exchange Commission is due, (i) the consolidated and
consolidating (in accordance with past practices of the Borrower) balance sheets
of the Borrower and its Restricted Subsidiaries as of the end of such Fiscal
Year, setting forth in comparative form the corresponding figures at the end of
the preceding Fiscal Year and (ii) the consolidated and consolidating (in
accordance with past practices of the Borrower) statements of profit and loss
and the consolidated statements of cash flows of the Borrower and its Restricted
Subsidiaries for such Fiscal Year, setting forth in comparative form the
corresponding figures for the previous Fiscal Year.  Such consolidated and
consolidating balance sheet and statements shall be prepared in reasonable
detail in accordance with Generally Accepted Accounting Principles consistently
applied.  Such consolidated balance sheet and statements shall be accompanied by
a report and opinion of Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by the Borrower, which
report and opinion shall state that the examination of such consolidated
financial statements by such accountants was made in accordance with generally
accepted auditing standards and that such consolidated financial statements
fairly present the financial condition, results of operations and of cash flows
of the Borrower and its Restricted Subsidiaries subject to no exceptions as to
scope of audit and subject to no other exceptions or qualifications (other than
changes in accounting principles in which the auditors concur and other than as
a result of current debt maturity) unless such other exceptions or
qualifications are approved by the Required Banks in their reasonable
discretion.  Such consolidating balance sheet and statements shall be certified
by a Senior Officer of the Borrower;

 

(c)                                  Promptly after the receipt thereof by the
Borrower, copies of any audit or management reports submitted to it by
independent accountants in connection with any audit or interim audit submitted
to the board of directors of the Borrower or any of its Restricted Subsidiaries;

 

(d)                                 Promptly after the same are available,
copies of each annual report, proxy or financial statement or other report or
communication sent to its stockholders, and copies of all annual, regular and
periodic reports that the Borrower may file or be required to file with the
Commission; provided that, any of the foregoing reports, statements or
communications filed with or furnished to the Commission by the Borrower (and
which are available online) shall be deemed to have been delivered by the
Borrower under this Section 7.1;

 

(e)                                  Promptly upon a Senior Officer of the
Borrower becoming aware of the occurrence of any (i) ERISA Event that would
reasonably be expected to result in a Material Adverse Effect or (ii)
“prohibited transaction” (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) in connection with any Pension Plan or any trust
created thereunder that would reasonably be expected to result in a Material
Adverse Effect, in each case, a written notice specifying the nature thereof,
what action the Borrower and any of its Restricted Subsidiaries, or to the
extent known, any ERISA Affiliate is taking or proposes to take with respect
thereto, and, when known, any action taken or threatened to be taken by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto;

 

(f)                                   Promptly upon a Senior Officer of the
Borrower becoming aware of the existence of a Default or an Event of Default, a
written notice specifying the nature and period of existence thereof and what
action the Borrower is taking or proposes to take with respect thereto;

 

(g)                                  Promptly upon a Senior Officer of the
Borrower becoming aware that the holder of any evidence of Indebtedness (in a
principal amount in excess of $25,000,000) of the Borrower or any of its
Restricted Subsidiaries has given notice or taken any other action with respect
to a default or event of default, a written notice specifying the notice given
or action taken by such holder and the nature of such default or event of
default and what action the Borrower or such Restricted Subsidiary is taking or
proposes to take with respect thereto;

 

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(h)                                 Promptly upon a Senior Officer of the
Borrower becoming aware of the existence of any pending or threatened litigation
or any investigation by any Governmental Agency that could reasonably be
expected to constitute a Material Adverse Effect (provided that, no failure of a
Senior Officer to provide notice of any such event shall be the sole basis for
any Default or Event of Default hereunder);

 

(i)                                     Prior written notice to the
Administrative Agent of any transaction of which any Senior Officer of the
Borrower has actual knowledge pursuant to which any “person” (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than the Sponsors,
becomes the “beneficial owner” (as defined in Rules 13d-3 under the Exchange
Act), directly or indirectly, of 25% or more of the total voting power of the
Voting Stock of the Borrower;

 

(j)                                    As soon as reasonably possible, and in
any event prior to the date that is 45 days after the commencement of each
Fiscal Year, deliver to the Administrative Agent the business plan of the
Borrower and its Restricted Subsidiaries for that Fiscal Year, together with
projections covering the next succeeding Fiscal Year;

 

(k)                                 Promptly following obtaining knowledge
thereof by a Senior Officer of the Borrower, written notice to the
Administrative Agent of any announcement by the Rating Agencies of any change or
possible change in a Debt Rating;

 

(l)                                     Promptly upon a Senior Officer of the
Borrower becoming aware that the Borrower or an ERISA Affiliate has become a
sponsor of, or participant in, any Pension Plan or Multiemployer Plan, notice of
such sponsorship or participation; and

 

(m)                             Such other data and information as from time to
time may be reasonably requested by any of the Banks.

 

Documents required to be delivered pursuant to Sections 7.1 and 7.2 may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower (or any direct or indirect
parent of the Borrower) posts such documents, or provides a link thereto on the
website on the Internet at the website address listed on Schedule 11.6; or (ii)
on which such documents are posted on the Borrower’s behalf and at the
Borrower’s expense on IntraLinks or another relevant website, if any, to which
each Bank and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that, the Borrower shall notify (which may be by facsimile or electronic mail)
the Administrative Agent of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents.  Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the notices required
by Sections 7.1(e), (f), (g) and (h) and the Compliance Certificate required by
Section 7.2 to the Administrative Agent (which may be electronic copies
delivered via electronic mail).

 

The Borrower hereby acknowledges that (i) the Administrative Agent, the
Arrangers or both will make available to the Banks and the Issuing Bank(s)
materials or information provided by or on behalf of the Borrower hereunder
(collectively, the “Borrower Materials”) by posting the Borrower Materials on
IntraLinks or another similar electronic system (the “Platform”) and (ii)
certain of the Banks may be “public-side” Banks (i.e., Banks that do not wish to
receive material non-public information with respect to the Borrower or its
securities) (each, a “Public Lender”).  The Borrower hereby agrees that so long
as the Borrower is the issuer of any outstanding debt or equity securities that
are registered or issued pursuant to a private offering or is actively
contemplating issuing any such securities:

 

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(i)                                     all the Borrower Materials that are to
be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof;

 

(ii)                                  by marking the Borrower Materials
“PUBLIC,” the Borrower shall be deemed to have authorized the Administrative
Agent, the Arrangers, the Issuing Bank(s) and the Banks to treat such the
Borrower Materials as not containing any material non-public information with
respect to the Borrower or its securities for purposes of United States Federal
and state securities laws (provided, however, that to the extent such the
Borrower Materials constitute Information, they shall be treated as set forth in
Section 11.12);

 

(iii)                               all the Borrower Materials marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated
“Public Investor”; and

 

(iv)                              the Administrative Agent and the Arrangers
shall be entitled to treat any the Borrower Materials that are not marked
“PUBLIC” as being suitable only for posting on a portion of the Platform not
designated “Public Investor.”

 

Notwithstanding the foregoing, the Borrower shall be under no obligation to mark
any the Borrower Materials “PUBLIC.”

 

7.2                               Compliance Certificate.

 

Concurrently with the delivery of the financial statements described in Section
7.1(a) and (b), the Borrower shall deliver to the Administrative Agent and the
Banks, at the Borrower’s sole expense, a Compliance Certificate dated as of the
last day of the Fiscal Quarter or Fiscal Year, as the case may be.

 

ARTICLE VIII.
CONDITIONS

 

8.1                               Initial Advances, Etc.

 

The obligation of each Bank to make the initial Advance to be made by it and of
the Issuing Bank(s) to issue the initial Letter of Credit are subject to the
following conditions precedent, each of which shall be satisfied prior to the
making of the initial Advances (unless all of the Banks, in their sole and
absolute discretion, shall agree otherwise):

 

(a)                                 The Administrative Agent shall have received
all of the following, each dated as of the Closing Date (unless otherwise
specified or unless the Administrative Agent otherwise agrees) and all in form
and substance satisfactory to the Administrative Agent and each of the Banks:

 

(i)                                     executed counterparts of this Agreement,
sufficient in number for distribution to the Banks and the Borrower;

 

(ii)                                  a Note executed by the Borrower in favor
of each Bank requesting a Note, each in a principal amount equal to that Bank’s
Pro Rata Share of the Commitment, promptly following the Closing Date;

 

(iii)                               the Subsidiary Guaranty executed by each
Subsidiary which is a Guarantor Subsidiary as of the Closing Date;

 

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(iv)                              a customary solvency certificate in
substantially the form of Exhibit I;

 

(v)                                 with respect to the Borrower and each
Subsidiary which is a Guarantor Subsidiary as of the Closing Date, such
documentation as the Administrative Agent may reasonably require to establish
the due organization, valid existence and good standing of the Borrower and each
such Subsidiary, its qualification to engage in business in each jurisdiction in
which it is required to be so qualified, its authority to execute, deliver and
perform any Loan Documents to which it is a Party, and the identity, authority
and capacity of each Responsible Official thereof authorized to act on its
behalf, including certified copies of articles of incorporation and amendments
thereto, bylaws and amendments thereto, certificates of good standing or
qualification to engage in business, tax clearance certificates, certificates of
corporate resolutions, incumbency certificates, and the like;

 

(vi)                              the Opinions of Counsel;

 

(vii)                           an Officer’s Certificate of the Borrower
affirming, to the actual knowledge of the certifying Senior Officer, that the
conditions set forth in Sections 8.1(c) and 8.1(d) have been satisfied;

 

(viii)                        a Borrowing Base Certificate calculated as of the
last day of the Fiscal Quarter ending on June 30, 2013;

 

(ix)                              the financial statements described in Section
4.5;

 

(x)                                 a Compliance Certificate calculated as of
the last day of the Fiscal Quarter ending on June 30, 2013; and

 

(xi)                              such other assurances, certificates,
documents, consents or opinions relevant hereto as the Administrative Agent may
reasonably require.

 

(b)                                 All fees then payable under the letter
agreements referred to in Section 3.3 shall have been paid and all other amounts
and expenses owed hereunder shall have been paid.

 

(c)                                  The representations and warranties of the
Borrower contained in Article IV shall be true and correct in all material
respects on and as of the Closing Date.

 

(d)                                 The Borrower and its Restricted Subsidiaries
shall be in compliance with all the terms and provisions of the Loan Documents,
and no Default or Event of Default shall have occurred and be continuing.

 

(e)                                  The Administrative Agent shall have
received satisfactory evidence that the 2017 Notes have been, or concurrently
with the Closing Date will be, terminated and all Liens securing obligations
under the 2017 Notes have been, or concurrently with the Closing Date are being,
released;

 

(f)                                   The Administrative Agent shall have
received a copy of the Senior Notes Indenture.

 

(g)                                  The Administrative Agent shall have
received 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.

 

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8.2                               Any Advance.

 

The obligations of the Banks to make any Advance are subject to the following
conditions precedent:

 

(a)                                 the Administrative Agent shall have received
a Loan Notice;

 

(b)                                 the representations and warranties contained
in Article IV (other than the representations and warranties contained in
Sections 4.4(a) and 4.18) shall be true and correct in all material respects on
and as of the date of the Loan as though made on and as of that date (except
that the financial statements referred to in Section 4.5(a) shall be deemed to
refer to the most recent statements furnished pursuant to Section 7.1(b) and the
financial statements referred to in Section 4.5(b) shall be deemed to refer to
the most recent statements furnished pursuant to Section 7.1(a)); it being
understood and agreed that any representation or warranty that is qualified as
to materiality or “Material Adverse Effect” shall be true and correct in all
respects;

 

(c)                                  [Intentionally Omitted];

 

(d)                                 at and after giving effect to such Advance,
no Default or Event of Default shall have occurred and be continuing; and

 

(e)                                  after giving effect to such Loan or Letter
of Credit, the Total Outstandings shall be less than the Borrowing Base
Availability as set forth on the Borrowing Base Certificate provided pursuant to
Section 2.8.

 

Each Loan Notice submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in this Section have
been satisfied on and as of the date of the Loan requested thereby.

 

8.3                               Any Letter of Credit.

 

The obligations of an Issuing Bank to issue, renew or increase any Letter of
Credit (including any issuance, renewal or increase in any Letter of Credit on
the Closing Date) are subject to the following conditions precedent:

 

(a)                                 the Administrative Agent and the Issuing
Bank shall have received a Request for Letter of Credit;

 

(b)                                 the representations and warranties contained
in Article IV (other than the representations and warranties contained in
Sections 4.4(a) and 4.18) shall be true and correct in all material respects on
and as of the date of the issuance of the Letter of Credit as though made on and
as of that date (except that the financial statements referred to in Section
4.5(a) shall be deemed to refer to the most recent statements furnished pursuant
to Section 7.1(b) and the financial statements referred to in Section 4.5(b)
shall be deemed to refer to the most recent statements furnished pursuant to
Section 7.1(a)); it being understood and agreed that any representation or
warranty that is qualified as to materiality or “Material Adverse Effect” shall
be true and correct in all respects;

 

(c)                                  [Intentionally Omitted];

 

(d)                                 at and after giving effect to the issuance,
renewal or increase of such Letter of Credit, no Default or Event of Default
shall have occurred and be continuing; and

 

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(e)                                  after giving effect to such Loan or Letter
of Credit, the Total Outstandings shall be less than the Borrowing Base
Availability as set forth on the Borrowing Base Certificate provided pursuant to
Section 2.8.

 

Each Request for Letter of Credit submitted by the Borrower shall be deemed to
be a representation and warranty that the conditions specified in this Section
have been satisfied on and as of the date of the issuance of the Letter of
Credit requested thereby.

 

ARTICLE IX.
EVENTS OF DEFAULT AND REMEDIES UPON EVENTS OF DEFAULT

 

9.1                               Events of Default.

 

There will be a default hereunder if any one or more of the following events
(“Events of Default”) occurs and is continuing, whatever the reason therefor:

 

(a)                                 failure to pay any installment of principal
on any Loan on the date, or any payment in respect of a Letter of Credit
pursuant to Section 2.5, when due; or

 

(b)                                 failure to pay any installment of interest
on any of the Loans, or to pay any fee or other amounts due the Administrative
Agent or any Bank hereunder, within five (5) Business Days after the date when
due; or

 

(c)                                  any failure to comply with Sections 2.8(a),
5.2 (with respect to the Borrower), 5.8, 5.9, any Section of Article VI or
7.1(f); or

 

(d)                                 [Intentionally Omitted]; or

 

(e)                                  the Borrower or any other Party fails to
perform or observe any other term, covenant, or agreement contained in any Loan
Document on its part to be performed or observed within 30 calendar days after
notice by the Administrative Agent of such Default; or

 

(f)                                   any representation or warranty in any Loan
Document or in any certificate, agreement, instrument, or other document made or
deemed made or delivered, on or after the Closing Date, pursuant to or in
connection with any Loan Document proves to have been incorrect when made in any
respect material to the ability of the Borrower to duly and punctually perform
all of the Obligations; or

 

(g)                                  the Borrower, any of its Significant
Subsidiaries which is also a Restricted Subsidiary, or any Guarantor Subsidiary
(i) fails to pay the principal, or any principal installment, of any present or
future Indebtedness (other than Non-Recourse Indebtedness), or any guaranty of
present or future Indebtedness (other than Non-Recourse Indebtedness) on its
part to be paid, when due (or within any stated grace period), whether at the
stated maturity, upon acceleration, by reason of required prepayment or
otherwise in excess of $25,000,000 in the aggregate or (ii) fails to perform or
observe any other material term, covenant, or agreement on its part to be
performed or observed, or suffers to exist any condition, in connection with any
present or future Indebtedness (other than Non-Recourse Indebtedness), or any
guaranty of present or future Indebtedness (other than Non-Recourse
Indebtedness), in excess of $25,000,000 in the aggregate, if as a result of such
failure or such condition any holder or holders thereof (or an agent or trustee
on its or their behalf) has the right to declare it due before the date on which
it otherwise would become due or has the right to cause a demand such that such
Indebtedness be repurchased, prepaid, defeased or redeemed; or

 

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(h)                                 (x) any written guarantee of the
indebtedness and liabilities of the Borrower to the Administrative Agent and the
Banks or any one or more of them arising under the Loan Documents is asserted to
be invalid or unenforceable by any Loan Party (other than following the release
of any such guarantee contemplated by Section 10.11 or following the termination
of such guarantee in accordance with its terms), or (y) any Loan Document, at
any time after its execution and delivery and for any reason other than the
agreement of all the Banks, satisfaction in full of all the Obligations or in
accordance with its terms, ceases to be in full force and effect or is declared
by a court of competent jurisdiction to be null and void, invalid, or
unenforceable in any respect; or

 

(i)                                     a final judgment (or judgments) against
the Borrower or any of its Significant Subsidiaries is entered for the payment
of money in excess of $25,000,000 in the aggregate over the amount of any
insurance proceeds reasonably expected to be received and remains unsatisfied,
unpaid, undischarged or unbonded without procurement of a stay of execution
within 30 calendar days after the issuance of any writ of execution or similar
legal process or the date of entry of judgment, whichever is earlier, or in any
event at least 5 calendar days prior to the sale of any assets pursuant to such
legal process; or

 

(j)                                    the Borrower or any Significant
Subsidiary of the Borrower institutes or consents to any proceeding under a
Debtor Relief Law relating to it or to all or any part of its Property, or fails
generally, or admits in writing its inability, to pay its debts as they mature,
or makes a general assignment for the benefit of creditors; or applies for or
consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator, or similar officer for it or for all or any part of
its property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator, or similar officer is appointed without the application or
consent of that Person and the appointment continues undischarged or unstayed
for 60 calendar days; or any proceeding under any Debtor Relief Law relating to
any such Person or to all or any part of its Property is instituted without the
consent of that Person, and continues undismissed or unstayed for 60 calendar
days; or

 

(k)                                 the occurrence of one or more ERISA Events
if the aggregate liability of the Borrower and its ERISA Affiliates under ERISA
as a result thereof would reasonably be expected to result in a Material Adverse
Effect; or

 

(l)                                     any determination is made by a court of
competent jurisdiction that payment of principal or interest or both is due to
the holder of any Subordinated Obligations which would not be permitted by
Section 6.1 or that any Subordinated Obligation is not subordinated in
accordance with its terms to the Obligations; or

 

(m)                             a Change in Control shall have occurred.

 

9.2                               Remedies Upon Event of Default.

 

Without limiting any other rights or remedies of the Administrative Agent or the
Banks provided for elsewhere in this Agreement or the Loan Documents, or by
applicable Law or in equity, or otherwise:

 

(a)                                 Upon the occurrence of any Event of Default,
and so long as any such Event of Default shall be continuing (other than an
Event of Default described in Section 9.1(j) with respect to the Borrower or a
Guarantor Subsidiary):

 

(i)                                     the Required Banks may request the
Administrative Agent to, and the Administrative Agent thereupon shall, by notice
to the Borrower, declare that all commitments to make Advances or issue Letters
of Credit, and all other obligations of the Administrative Agent,

 

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any Issuing Bank or the Banks with respect to Advances and Letters of Credit
shall be suspended; and

 

(ii)                                  the Required Banks may request the
Administrative Agent to, and the Administrative Agent thereupon shall, by notice
to the Borrower:

 

(A)                               declare the unpaid principal of all
Obligations due to the Banks hereunder and under the Notes, an amount equal to
the Letter of Credit Usage, all interest accrued and unpaid thereon, and all
other amounts payable to the Banks under the Loan Documents to be forthwith due
and payable, whereupon the same shall become and be forthwith due and payable,
without protest, presentment, notice of dishonor, demand, or further notice of
any kind, all of which are expressly waived by the Borrower;

 

(B)                               require that the Borrower Cash Collateralize
or Letter of Credit Collateralize all outstanding Letters of Credit at 101% of
the face amount thereof (excluding any portion of such amount that is already
Cash Collateralized by operation of another provision of this Agreement); and

 

(C)                               apply cash collateral or make drawings under
irrevocable standby letters of credit delivered pursuant to Section 2.5(g).

 

(b)                                 Upon the occurrence of any Event of Default
described in Section 9.1(j) with respect to the Borrower or a Guarantor
Subsidiary:

 

(i)                                     all commitments to make Advances or
issue Letters of Credit, and all other obligations of the Administrative Agent,
any Issuing Bank or the Banks with respect to Advances and Letters of Credit
under the Loan Documents shall terminate without notice to or demand upon the
Borrower, which are expressly waived by the Borrower; and

 

(ii)                                  (A) the unpaid principal of all
Obligations due to the Banks hereunder and under the Notes, an amount equal to
the Letter of Credit Usage and all interest accrued and unpaid on such
Obligations, and all other amounts payable under the Loan Documents shall be
forthwith due and payable, without protest, presentment, notice of dishonor,
demand, or further notice of any kind, all of which are expressly waived by the
Borrower; and (B) the Administrative Agent may apply cash collateral or make
drawings under irrevocable standby letters of credit delivered pursuant to
Section 2.5(g).

 

(c)                                  So long as any Letter of Credit shall
remain outstanding, any amounts received by the Administrative Agent in respect
of the Letter of Credit Usage pursuant to Section 9.2(a)(ii) or 9.2(b)(ii) may
be held as cash collateral for the obligation of the Borrower to reimburse the
Issuing Banks in event of any drawing under any Letter of Credit (and the
Borrower hereby grants to the Administrative Agent for the benefit of the
Issuing Banks and the Banks a security interest in such cash collateral).  In
the event any Letter of Credit in respect of which the Borrower has deposited
cash collateral with the Administrative Agent is canceled or expires, the cash
collateral shall be applied first to the reimbursement of the Issuing Banks (or
all of the Banks, as the case may be) for any drawings thereunder, second to the
payment of any outstanding Obligations of the Borrower hereunder or under any
other Loan Document, and third to the Person entitled to such amount.

 

(d)                                 Upon the occurrence of an Event of Default,
the Banks and the Administrative Agent, or any of them, may proceed to protect,
exercise, and enforce their rights and remedies under the

 

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Loan Documents against the Borrower or any other Party and such other rights and
remedies as are provided by Law or equity, without notice to or demand upon the
Borrower (which are expressly waived by the Borrower) except to the extent
required by applicable Laws.  The order and manner in which the rights and
remedies of the Banks under the Loan Documents and otherwise are exercised shall
be determined by the Required Banks.

 

(e)                                  All payments received by the Administrative
Agent and the Banks, or any of them, after the acceleration of the maturity of
the Loans or after the Maturity Date shall be applied first to the costs and
expenses (including Attorney Costs) of the Administrative Agent, acting as
Administrative Agent, and of the Banks and thereafter paid pro rata to the Banks
in the same proportion that the aggregate of the unpaid principal amount owing
on the Obligations of the Borrower to each Bank, plus accrued and unpaid
interest thereon, bears to the aggregate of the unpaid principal amount owing on
all the Obligations, plus accrued and unpaid interest thereon.  Regardless of
how each Bank may treat the payments for the purpose of its own accounting, for
the purpose of computing the Borrower’s Obligations, the payments shall be
applied first, to the costs and expenses of the Administrative Agent, acting as
Administrative Agent, payable to the Administrative Agent in its capacity as
such hereunder, second, to the payment of accrued and unpaid fees hereunder and
interest on all Obligations to the Banks, to and including the date of such
application (ratably according to the accrued and unpaid interest on the Loans),
third, to the ratable payment of the unpaid principal of all Obligations to the
Banks, fourth, to the payment of all other amounts then owing to the
Administrative Agent or the Banks under the Loan Documents, and fifth, the
balance, if any, to the Borrower or as otherwise required by law.  Subject to
Section 9.2(a)(i), no application of the payments will cure any Event of Default
or prevent acceleration, or continued acceleration, of amounts payable under the
Loan Documents or prevent the exercise, or continued exercise, of rights or
remedies of the Banks hereunder or under applicable Law unless all amounts then
due (whether by acceleration or otherwise) have been paid in full.

 

ARTICLE X.
THE ADMINISTRATIVE AGENT

 

10.1                        Appointment and Authorization.

 

(a)                                 Each Bank hereby irrevocably appoints,
designates and authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto.  Notwithstanding any provision to
the contrary contained elsewhere herein or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Bank or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent.  Without limiting the generality of the
foregoing sentence, the use of the term “agent” herein and in the other Loan
Documents 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 merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.

 

(b)                                 An Issuing Bank shall act on behalf of the
Banks with respect to any Letters of Credit issued by it and the documents
associated therewith, and such Issuing Bank shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Article X with
respect to any acts taken or omissions suffered by such Issuing Bank in
connection with Letters of Credit issued by it or

 

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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 X and in the definition of
“Agent-Related Person” included such Issuing Bank with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to such Issuing
Bank.

 

10.2                        Delegation of Duties.

 

The Administrative Agent may execute any of its duties under this Agreement or
any other Loan Document by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties.  The Administrative Agent
shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.

 

10.3                        Liability of Administrative Agent.

 

No Agent-Related Person shall (a) be liable for any action taken or omitted to
be taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct in connection with its duties expressly set
forth herein, as determined in a final, non-appealable judgment of a court of
competent jurisdiction, and with respect to the Borrower, except as set forth in
Sections 2.5(e) and 2.5(f) and for any failure to comply with Section 11.12), or
(b) be responsible in any manner to any Bank or participant for any recital,
statement, representation or warranty made by any Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Party or any other party to any Loan Document to perform its obligations
hereunder or thereunder.  No Agent-Related Person shall be under any obligation
to any Bank or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Party or any Affiliate thereof.  No Agent-Related Person shall be
under any obligation to take any action that, in its opinion or the opinion of
its counsel, may expose any Agent-Related Person to liability or that is
contrary to any Loan Document or applicable Law, 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 Bank in violation of any Debtor Relief Law.

 

10.4                        Reliance by Administrative Agent.

 

(a)                                 The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing,
communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
electronic mail message, statement or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to any Party), independent accountants and other experts selected by the
Administrative Agent.  The Administrative Agent shall be fully justified in
failing or refusing to take any action under any Loan Document unless it shall
first receive such advice or concurrence of the Required Banks as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.  The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Banks (or such greater
number of Banks as may be expressly

 

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required hereby in any instance) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Banks.

 

(b)                                 For purposes of determining compliance with
the conditions specified in Section 8.1, each Bank that has signed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Bank unless the
Administrative Agent shall have received notice from such Bank prior to the
proposed Closing Date specifying its objection thereto.

 

10.5                        Notice of Default.

 

The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, except with respect to defaults
in the payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Banks, unless the Administrative
Agent shall have received written notice from a Bank or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default.”  The Administrative Agent will promptly
notify the Banks of its receipt of any such notice.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as may
be directed by the Required Banks in accordance with Article IX; provided,
however, that unless and until the Administrative Agent has received any such
direction, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interest of the
Banks.

 

10.6                        Credit Decision; Disclosure of Information by
Administrative Agent.

 

Each Bank acknowledges that no Agent-Related Person has made any representation
or warranty to it, and that no act by the Administrative Agent hereafter taken,
including any consent to and acceptance of any assignment or review of the
affairs of any Party or any Affiliate thereof, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Bank as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession.  Each Bank represents to the Administrative
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Parties and their respective Subsidiaries, and all applicable bank or other
regulatory Laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrower
hereunder.  Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
the other Parties.  Except for notices, reports and other documents expressly
required to be furnished to the Banks by the Administrative Agent herein, the
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
of the Parties or any of their respective Affiliates which may come into the
possession of any Agent-Related Person.

 

10.7                        Indemnification of Administrative Agent.

 

Whether or not the transactions contemplated hereby are consummated, the Banks
shall, ratably in accordance with their respective Pro Rata Shares, indemnify
upon demand each Agent-Related Person

 

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(to the extent not reimbursed by or on behalf of any Party and without limiting
the obligation of any Party to do so), and hold harmless each Agent-Related
Person from and against any and all Indemnified Liabilities incurred by it;
provided, however, that no Bank shall be liable for the payment to any
Agent-Related Person of any portion of such Indemnified Liabilities to the
extent determined in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from such Agent-Related Person’s own gross
negligence or willful misconduct; provided, however, that no action taken in
accordance with the directions of the Required Banks (or greater number, if so
required) shall be deemed to constitute gross negligence or willful misconduct
for purposes of this Section.  Without limitation of the foregoing, each Bank
shall reimburse the Administrative Agent upon demand for its ratable share of
any costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrower.  The undertaking in this Section shall survive termination of the
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.

 

10.8                        Administrative Agent in its Individual Capacity.

 

The Administrative Agent and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Loan Parties and their respective Affiliates
as though the Administrative Agent were not the Administrative Agent or an
Issuing Bank hereunder and without notice to or consent of the Banks.  The Banks
acknowledge that, pursuant to such activities, the Administrative Agent or its
Affiliates may receive information regarding any Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Party or such Affiliate) and acknowledge that the Administrative
Agent shall be under no obligation to provide such information to them.  With
respect to its Loans, the Administrative Agent shall have the same rights and
powers under this Agreement as any other Bank and may exercise such rights and
powers as though it were not the Administrative Agent or an Issuing Bank, and
the terms “Bank” and “Banks” include the Administrative Agent in its individual
capacity.

 

10.9                        Successor Administrative Agent.

 

The Administrative Agent may resign as Administrative Agent upon 30 days’ notice
to the Banks.  If the Administrative Agent resigns under this Agreement, the
Required Banks shall appoint from among the Banks a successor administrative
agent for the Banks, which successor administrative agent shall be consented to
by the Borrower at all times other than during the existence of an Event of
Default under Section 9.1(a) or 9.1(j) (which consent of the Borrower shall not
be unreasonably withheld or delayed).  If no successor administrative agent is
appointed 15 days prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Banks and the Borrower, a successor administrative agent from among the
Banks.  Upon the acceptance of its appointment as successor administrative agent
hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term “Administrative Agent” shall mean such successor
administrative agent and the retiring Administrative Agent’s appointment, powers
and duties as Administrative Agent shall be terminated.  After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Article X and Sections 11.3 and 11.10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.  If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring

 

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Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective and the Banks
shall perform all of the duties of the Administrative Agent hereunder until such
time, if any, as the Required Banks appoint a successor agent as provided for
above.

 

10.10                 Administrative Agent May File Proofs of Claim.

 

In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Party, the Administrative Agent
(irrespective of whether the principal of any Loan or other 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, 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
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
Banks and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Banks and the
Administrative Agent and their respective agents and counsel and all other
amounts due the Banks and the Administrative Agent under Sections 2.5, 3.2 and
11.3) 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;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each 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 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 3.2, 3.3 and 11.3.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Bank any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Bank or to authorize the Administrative Agent to vote in
respect of the claim of any Bank in any such proceeding.

 

10.11                 Guaranty Matters.

 

Each Bank acknowledges and irrevocably consents to the release and discharge of
any Guarantor Subsidiary from its obligations under the Subsidiary Guaranty by
the Administrative Agent, without any further consent or authorization by the
Banks, as a result of a Change in Status of a Guarantor Subsidiary.  The
Borrower may notify the Administrative Agent of any Change in Status of a
Guarantor Subsidiary by delivering an Officer’s Certificate, which shall include
a reasonably detailed description of such Change in Status and a certification
that no Default or Event of Default exists or would result from the release of
such Guarantor Subsidiary from its obligations under the Subsidiary Guaranty. 
Such Officer’s Certificate shall be delivered no later than simultaneously with
the delivery of a Compliance Certificate pursuant to Section 7.2 with respect to
the fiscal quarter during which such Change in Status occurs.  Upon delivery of
such Officer’s Certificate to the Administrative Agent, such Guarantor
Subsidiary will be released and discharged from its obligations under the
Subsidiary Guaranty, automatically, without any further action by the
Administrative Agent or any Bank, and the Subsidiary that is subject to such
Change in Status shall

 

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no longer be a Guarantor Subsidiary.  Upon request by the Administrative Agent
at any time, the Required Banks will confirm in writing the Administrative
Agent’s authority to take any steps to effect the release of any Guarantor
Subsidiary from its obligations under the Subsidiary Guaranty pursuant to this
Section 10.11.

 

10.12                 Other Agents; Arrangers and Managers.

 

None of the Banks or other Persons identified on the facing page or signature
pages of this Agreement as a “syndication agent,” “documentation agent,” “senior
managing agent,” “managing agent,” “co-agent,” “joint book manager”, “sole book
manager,” “lead manager,” “joint lead arranger”, “sole lead arranger,”
“arranger” or “co-arranger” shall have any right, power, obligation, liability,
responsibility or duty under this Agreement or any of the other Loan Documents
other than, in the case of such Banks, those applicable to all Banks as such. 
Without limiting the foregoing, none of the Banks or other Persons so identified
shall have or be deemed to have any fiduciary relationship with any Bank.  Each
Bank acknowledges that it has not relied, and will not rely, on any of the Banks
or other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

 

10.13                 Defaulting Banks.

 

(a)                                 If for any reason any Bank becomes a
Defaulting Bank, then in addition to the rights and remedies that may be
available to the Administrative Agent and the Banks at law or in equity, the
Defaulting Bank’s right to participate in the Loan and the Agreement will be
suspended during the pendency of the Defaulting Bank’s uncured default, and
(without limiting the foregoing) the Administrative Agent may (or at the
direction of the Required Banks, shall) withhold from the Defaulting Bank any
interest payments, fees, principal payments or other sums otherwise payable to
such Defaulting Bank under the Loan Documents until such default of such
Defaulting Bank has been cured.  Each Non-Defaulting Bank will have the right,
but not the obligation, in its sole discretion, to acquire at par a
proportionate share (based on the ratio of its Pro Rata Share of the Commitment
to the aggregate amount of the Pro Rata Shares of the Commitments of all of the
Non-Defaulting Banks that elect to acquire a share of the Defaulting Bank’s Pro
Rata Share of the Commitment) of the Defaulting Bank’s Pro Rata Share of the
Commitment, including its proportionate share in the outstanding principal
balance of the Loans.  The Defaulting Bank will pay and protect, defend and
indemnify the Administrative Agent and each of the other Banks and Issuing Banks
against, and hold the Administrative Agent, and each of the other Banks and
Issuing Banks harmless from, all claims, actions, proceedings, liabilities,
damages, losses, and expenses (including Attorney Costs, and interest at the
Base Rate plus 2.0% per annum for the funds advanced by the Administrative Agent
or any Banks on account of the Defaulting Bank) they may sustain or incur by
reason of or in consequence of the Defaulting Bank’s failure or refusal to
perform its obligations under the Loan Documents.  The Administrative Agent may
set off against payments due to the Defaulting Bank for the claims of the
Administrative Agent and the other Banks against the Defaulting Bank.  The
exercise of these remedies will not reduce, diminish or liquidate the Defaulting
Bank’s Pro Rata Share of the Commitment (except to the extent that part or all
of such Pro Rata Share of the Commitment is acquired by the other Banks as
specified above) or its obligations to share losses and reimbursement for costs,
liabilities and expenses under this Agreement.  This indemnification will
survive the payment and satisfaction of all of the Borrower’s obligations and
liabilities to the Banks and the Issuing Banks.  The foregoing provisions of
this Section 10.13 are solely for the benefit of the Administrative Agent and
the Banks, and may not be enforced or relied upon by the Borrower.

 

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

 

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(i)                                     fees shall cease to accrue on the
Commitment of such Defaulting Bank pursuant to Sections 3.2 and 3.3;

 

(ii)                                  the Defaulting Bank’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 11.2;

 

(iii)                               any L/C Advance of such Defaulting Bank not
funded by such Defaulting Bank will, upon notice by the Administrative Agent,
and subject in any event to the limitation in the first proviso below,
automatically be reallocated (effective on the day such Bank becomes a
Defaulting Bank) among the Non-Defaulting Banks pro rata in accordance with
their respective Commitments; provided that, (a) the sum of the Exposure of each
Non-Defaulting Bank may not in any event exceed the Non-Defaulting Bank’s Pro
Rata Share of the Commitment as in effect at the time of such reallocation, (b)
such reallocation will not constitute a waiver or release of any claim the
Borrower, the Administrative Agent, any Issuing Bank or any other Bank may have
against such Defaulting Bank including any claim of a Non-Defaulting Bank as a
result of such Non-Defaulting Bank’s increased exposure following such
reallocation, and (c) neither such reallocation nor any payment by a
Non-Defaulting Bank as a result thereof will cause such Defaulting Bank to be a
Non-Defaulting Bank;

 

(iv)                              to the extent that any portion (the
“unreallocated portion”) of the Defaulting Bank’s L/C Advance cannot be so
reallocated, whether by reason of clause (a) of the proviso in clause (iii)
above or otherwise, the Borrower will, without prejudice to any right or remedy
available to it hereunder or under Law and not later than 1 Business Day after
demand by the Administrative Agent, (a) Cash Collateralize the obligations of
the Borrower to each applicable Issuing Bank in respect of the unallocated
portion of such L/C Advance, as the case may be, in an amount at least equal to
101% of the aggregate amount of the unreallocated portion of such L/C Advance
(excluding any portion of such amount that is already Cash Collateralized by
operation of another provision of this Agreement), or (b) make other
arrangements satisfactory to the Administrative Agent and the Issuing Bank in
their sole discretion to protect them against the risk of non-payment by such
Defaulting Bank; and

 

(v)                                 any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of that
Defaulting Bank under this Agreement (whether voluntary or mandatory, at
maturity, pursuant to Article IX or otherwise) 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 that Defaulting Bank to the Administrative Agent
hereunder; second, to the payment on a pro rata basis of any amounts owing by
that Defaulting Bank to the Issuing Bank hereunder; third, if so determined by
the Administrative Agent or requested by the Issuing Bank, to be held as Cash
Collateral for future funding obligations of that Defaulting Bank of any
participation in any Letter of Credit; fourth, as the Borrower may request (so
long as no Default or Event of Default has occurred and is continuing), to the
funding of any Loan in respect of which that Defaulting Bank has failed to fund
its portion thereof as required by this Agreement, as reasonably determined by
the Administrative Agent; fifth, if so determined by the Administrative Agent
and the Borrower, to be held in a non-interest bearing deposit account and
released in order to satisfy obligations of that Defaulting Bank to fund Loans
under this Agreement; sixth, to the payment of any amounts owing to the Banks or
the Issuing Bank as a result of any judgment of a court of competent
jurisdiction obtained by any Bank or the Issuing Bank against that Defaulting
Bank as a result of that Defaulting Bank’s breach of its obligations under this
Agreement; seventh, so long as no Default or Event of Default has occurred and
is continuing, 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 that Defaulting Bank as a

 

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result of that Defaulting Bank’s breach of its obligations under this Agreement;
and eighth, to that Defaulting Bank or as otherwise directed by a court of
competent jurisdiction; provided that, if (x) such payment is a payment of the
principal amount of any Loans or L/C Borrowings in respect of which that
Defaulting Bank has not fully funded its appropriate share and (y) such Loans or
L/C Borrowings were made at a time when the conditions set forth in Section 8.2
were satisfied or waived, such payment shall be applied solely to pay the Loans
of, and L/C Borrowings owed to, all Non-Defaulting Banks on a pro rata basis
prior to being applied to the payment of any Loans of, or L/C Borrowings owed
to, that Defaulting Bank.  Any payments, prepayments or other amounts paid or
payable to a Defaulting Bank that are applied (or held) to pay amounts owed by a
Defaulting Bank or to post Cash Collateral pursuant to this Section 10.13(b)(v)
shall be deemed paid to and redirected by that Defaulting Bank, and each Bank
irrevocably consents hereto.

 

10.14                 No Obligations of the Borrower.

 

Nothing contained in this Article X shall be deemed to impose upon the Borrower
any obligation in respect of the due and punctual performance by the
Administrative Agent of its obligations to the Banks under any provision of this
Agreement, and the Borrower shall have no liability to the Administrative Agent
or any of the Banks in respect of any failure by the Administrative Agent or any
Bank to perform any of its obligations to the Administrative Agent or the Banks
under this Agreement.  Without limiting the generality of the foregoing, where
any provision of this Agreement relating to the payment of any amounts due and
owing under the Loan Documents provides that such payments shall be made by the
Borrower to the Administrative Agent for the account of the Banks, the
Borrower’s obligations to the Banks in respect of such payments shall be deemed
to be satisfied upon the making of such payments to the Administrative Agent in
the manner provided by this Agreement.

 

ARTICLE XI.
MISCELLANEOUS

 

11.1                        Cumulative Remedies; No Waiver.

 

The rights, powers, and remedies of the Administrative Agent or any Bank
provided herein or in any Note or other Loan Document are cumulative and not
exclusive of any right, power, or remedy provided by law or equity.  No failure
or delay on the part of the Administrative Agent or any Bank in exercising any
right, power, or remedy may be, or may be deemed to be, a waiver thereof; nor
may any single or partial exercise of any right, power, or remedy preclude any
other or further exercise of any other right, power, or remedy.  The terms and
conditions of Sections 8.1, 8.2, and 8.3 hereof are inserted for the sole
benefit of the Banks and the Administrative Agent may (with the approval of the
Required Banks) waive them in whole or in part with or without terms or
conditions in respect of any Loan, without prejudicing the Banks’ rights to
assert them in whole or in part in respect of any other Loans.

 

11.2                        Amendments; Consents.

 

No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrower or any other Party
therefrom, may in any event be effective unless in writing signed by the
Required Banks and the Borrower, and then only in the specific instance and for
the specific purpose given; and without the approval in writing of all of the
affected Banks, no amendment, waiver or consent may be effective:

 

(a)                                 to amend or modify the principal of, or the
amount of principal or principal prepayments payable on any Obligation, to
increase the Exposure of any Bank without the consent of that

 

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Bank, to decrease the rate of any interest or fee payable to any Bank without
the consent of that Bank, or to reduce or waive any interest or other amount
payable to any Bank without the consent of that Bank;

 

(b)                                 to postpone any date fixed for any payment
of principal of, prepayment of principal of, or any installment of interest on,
any Obligation owing to a Bank or any installment of any fee owing to a Bank, or
to extend the term of the Commitment without the consent of that Bank;

 

(c)                                  to amend or modify the provisions of the
definition in Section 1.1 of “Required Banks” or this Section 11.2, or any
provision providing for the ratable or pro rata treatment of the Banks without
the consent of each Bank;

 

(d)                                 release any Guarantor Subsidiary from
liability under the Subsidiary Guaranty (except as provided below); or

 

(e)                                  to amend or modify any provision of this
Agreement or the Loan Documents that expressly requires the consent or approval
of all the Banks without the consent of each Bank.

 

Any amendment, waiver or consent pursuant to this Section 11.2 shall apply
equally to, and shall be binding upon, all the Banks and the Administrative
Agent.  Any amendment, waiver or consent pursuant to this Section 11.2 that
permits the sale or other transfer of the capital stock of (or all or
substantially all of the assets of) a Guarantor Subsidiary shall automatically
release the Guarantor Subsidiary effective concurrently with such sale or other
transfer.

 

In addition, no amendment, modification, termination or waiver of any provision
(i) of Section 2.5 shall be effective without the written concurrence of
Administrative Agent and, with respect to the purchase of participations in
Letters of Credit, without the written concurrence of applicable Issuing Banks
that have issued an outstanding Letter of Credit or has not been reimbursed for
a payment under a Letter of Credit, (ii) of Article X or of any other provision
of this Agreement which, by its terms, expressly requires the approval or
concurrence of Administrative Agent shall be effective without the written
concurrence of Administrative Agent.

 

Notwithstanding anything to the contrary contained in this Section 11.2, if the
Administrative Agent and the Borrower shall have jointly identified an obvious
error, defect, ambiguity or inconsistency or any error or omission of a
technical, administrative or immaterial nature in any provision of any Loan
Document, then the Administrative Agent and the Borrower shall be permitted to
amend such provision in order to correct the same, and such amendment shall
become effective without any further action or consent of any other party to any
Loan Document if the same is not objected to in writing by the Required Banks
within five Business Days following their receipt of notice thereof.

 

Anything herein to the contrary notwithstanding, during such period as a Bank is
a Defaulting Bank, to the fullest extent permitted by applicable Law, such Bank
will not be entitled to vote in respect of amendments and waivers hereunder and
the Commitment and the outstanding Loans or other extensions of credit of such
Bank hereunder will not be taken into account in determining whether the
Required Banks or all of the Banks, as required, have approved any such
amendment or waiver (and the definition of “Required Banks” will automatically
be deemed modified accordingly for the duration of such period); provided that,
any such amendment or waiver that would increase the Exposure or extend the term
of the Commitment of such Defaulting Bank, postpone the date fixed for the
payment of principal or interest owing to such Defaulting Bank hereunder, reduce
the principal amount of any Obligation owing to such Defaulting Bank, reduce the
amount of or the rate or amount of interest on any amount owing to such
Defaulting Bank or of any fee payable to such Defaulting Bank hereunder, or
alter the terms of this proviso, will require the consent of such Defaulting
Bank.

 

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11.3                        Costs, Expenses and Taxes.

 

The Borrower shall pay within 30 days after demand (which demand shall be
accompanied by an invoice in reasonable detail) the reasonable actual
out-of-pocket costs and expenses of the Administrative Agent in connection with
the negotiation, preparation, execution, delivery, arrangement, syndication and
closing of (a) the Loan Documents and (b) any amendment, waiver or modification
of the Loan Documents.  The Borrower shall pay within 30 days after demand the
reasonable actual out-of-pocket costs and expenses of the Administrative Agent
and each of the Banks and Issuing Banks in connection with the enforcement of
any Loan Documents following the occurrence of a Default or an Event of Default,
including in connection with any refinancing, restructuring, reorganization
(including a bankruptcy reorganization, if such payment is approved by the
bankruptcy court or any similar proceeding).  The costs and expenses referred to
in the first sentence above (for which the Borrower shall be liable solely with
respect to costs and expenses of the Administrative Agent and Arrangers) and the
second sentence above (which shall apply to costs and expenses of the
Administrative Agent, the Banks and the Issuing Banks) shall include filing
fees, recording fees, title insurance fees, appraisal fees, search fees, and
other out-of-pocket expenses and Attorney Costs of the Administrative Agent,
Arrangers or any of the Banks or Issuing Banks, as the case may be, or
independent public accountants and other outside experts retained by the
Administrative Agent (provided that, the Borrower shall not be liable under this
Section 11.3 for (i) fees and expenses of more than one firm of independent
public accountants, or more than one expert with respect to a specific subject
matter, at any one time, or (ii) the fees and expenses of more than one firm of
outside legal counsel (and one local counsel in each relevant jurisdiction and
specialty counsel, if applicable) retained to represent the Administrative
Agent, the Banks and the Issuing Banks, but if any of such parties does not
consent to such joint representation, the Borrower shall be liable for the fees
and expenses of not more than one firm of outside legal counsel (and one local
counsel in each relevant jurisdiction and specialty counsel, if applicable)
retained to represent the Administrative Agent and also for not more than one
additional firm of outside legal counsel retained to otherwise represent one or
more of the Banks and Issuing Banks).  Nothing herein shall obligate the
Borrower to pay any costs and expenses in connection with an assignment of or
participation in a Bank’s Pro Rata Share of a Commitment.  Any amount payable to
the Administrative Agent, any Arranger, any Bank, any Issuing Bank or any
Participant under this Section 11.3 shall bear interest from the date which is
30 days after the Borrower’s receipt of demand (together with reasonable
supporting documentation) for payment at the rate then in effect for Base Rate
Loans.

 

11.4                        Nature of Banks’ Obligations.

 

Nothing contained in this Agreement or any other Loan Document and no action
taken by the Administrative Agent or the Banks or any of them pursuant hereto or
thereto may, or may be deemed to, make the Banks a partnership, an association,
a joint venture, or other entity, either among themselves or with the Borrower. 
The obligations of the Banks hereunder to make Advances and to fund
participations in Letters of Credit are several and not joint or joint and
several.  The failure of any Bank to make any Advance or to fund any such
participation on any date required hereunder shall not relieve any other Bank of
its corresponding obligation to do so on such date, and no Bank shall be
responsible for the failure of any other Bank to so make its Advance or purchase
its participation.

 

11.5                        Survival of Representations and Warranties.

 

All representations and warranties made hereunder and in any other Loan Document
or other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Bank, regardless of any investigation made by the
Administrative Agent or any Bank or on their behalf and notwithstanding that the
Administrative Agent

 

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or any Bank may have had notice or knowledge of any Default at the time of the
making of any Advance or the issuance of any Letter of Credit, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.

 

11.6                        Notices and Other Communications; Facsimile Copies.

 

(a)                                 Notices Generally.  Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in Section 11.6(b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:

 

(i)                                     if to the Borrower, the Administrative
Agent, to the address, telecopier number, electronic mail address or telephone
number specified for such Person on Schedule 11.6; and

 

(ii)                                  if to any other Bank, to the address,
telecopier number, electronic mail address or telephone number specified in its
Administrative Questionnaire.

 

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (x) actual receipt by the relevant party hereto and
(y) (A) if sent by hand or overnight courier service, when signed for by or on
behalf of the relevant party hereto, (B) if mailed by certified or registered
mail, 4 Business Days after deposit in the mails, postage prepaid or (C) if sent
by telecopier, when sent (except that, if not given during normal business hours
for the recipient, shall be deemed to have been given at the opening of business
on the next Business Day for the recipient).  Notices delivered through
electronic communications to the extent provided in Section 11.6(b) below, shall
be effective as provided in Section 11.6(b).

 

(b)                                 Electronic Communications.  Notices and
other communications to the Banks and the Issuing Bank(s) hereunder may be
delivered or furnished by electronic communication (including e mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that, the foregoing shall not apply to notices to
any Bank or the Issuing Bank(s) pursuant to Article II if such Bank or such
Issuing Bank, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic communication. 
The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that, approval of such
procedures may be limited to particular notices or communications.  Unless the
Administrative Agent otherwise prescribes,

 

(i)                                     notices and other communications sent to
an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and

 

(ii)                                  notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as

 

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described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.

 

(c)                                  The Platform.  THE PLATFORM IS PROVIDED “AS
IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE
ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE
PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING 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 BORROWER MATERIALS OR
THE PLATFORM.  In no event shall the Administrative Agent or any of its Related
Parties (collectively, the “Agent Parties”) have any liability to the Borrower,
any Bank, any Issuing Bank or any other Person for losses, claims, damages,
liabilities or expenses of any kind (whether in tort, contract or otherwise)
arising out of the Borrower’s or the Administrative Agent’s transmission of the
Borrower Materials through the Internet, except to the extent that such losses,
claims, damages, liabilities or expenses are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Agent Party; provided, however,
that in no event shall any Agent Party have any liability to the Borrower, any
Bank, any Issuing Bank or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual damages).

 

(d)                                 Change of Address, Etc.  Each of the
Borrower, the Administrative Agent and the Issuing Bank(s) may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the other parties hereto.  Each other Bank may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the Borrower, the Administrative Agent and the Issuing
Bank(s).  In addition, each Bank agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record:

 

(i)                                     an effective address, contact name,
telephone number, telecopier number and electronic mail address to which notices
and other communications may be sent and

 

(ii)                                  accurate wire instructions for such Bank.

 

(e)                                  Reliance by Administrative Agent, Issuing
Bank(s) and Banks.  The Administrative Agent, the Issuing Bank(s) and the Banks
shall be entitled to rely and act upon any notices (including telephonic Loan
Notices) purportedly given by or on behalf of the Borrower even if

 

(i)                                     such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or

 

(ii)                                  the terms thereof, as understood by the
recipient, varied from any confirmation thereof.

 

The Borrower shall indemnify each Agent-Related Person, each Issuing Bank and
each Bank from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Borrower.  All telephonic notices to and other telephonic communications with
the Administrative Agent may be recorded by the Administrative Agent, and each
of the parties hereto hereby consents to such recording.

 

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11.7                        Execution in Counterparts; Facsimile Delivery.

 

This Agreement and any other Loan Document to which the Borrower is a Party may
be executed in any number of counterparts and any party hereto or thereto may
execute any counterpart, each of which when executed and delivered will be
deemed to be an original and all of which counterparts of this Agreement or any
other Loan Document, as the case may be, taken together will be deemed to be but
one and the same instrument.  Such counterparts may be sent by telecopy, with
the original counterparts to follow by mail or courier.  The execution of this
Agreement or any other Loan Document by any party hereto or thereto will not
become effective until executed counterparts hereof or thereof (or other
evidence of execution satisfactory to the Administrative Agent and the Borrower)
have been delivered to the Administrative Agent and the Borrower.  The parties
hereto agree and acknowledge that delivery of any signature by facsimile shall
constitute execution by such signatory.

 

11.8                        Successors and Assigns.

 

(a)                                 The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Bank and no Bank may assign or otherwise transfer
any of its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of Section 11.8(b), (ii) by way of participation
in accordance with the provisions of Section 11.8(d), (iii) by way of pledge or
assignment of a security interest subject to the restrictions of Section 11.8(f)
or (iv) in accordance with Section 11.27 (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 11.8(d) and, to
the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Any Bank may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this Section 11.8(b), participations in Letters of
Credit) at the time owing to it); provided that, (i) except in the case of an
assignment of the entire remaining amount of the assigning Bank’s Commitment and
the Loans at the time owing to it or in the case of an assignment to a Bank or
an Affiliate or Approved Fund of a Bank, the aggregate amount of the Commitment
(which for this purpose includes Loans outstanding thereunder) or, if the
Commitment is not then in effect, the principal outstanding balance of the Loans
of the assigning Bank subject to each such assignment, determined as of the date
the Assignment and Assumption with respect to such assignment is delivered to
the Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 and shall be
an integral multiple of $1,000,000 unless each of the Administrative Agent and,
so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether such minimum amount has been met; (ii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Bank’s rights
and obligations under this Agreement with respect to the Loans or the Commitment
assigned; (iii) any assignment to an Eligible Assignee other than a Bank or an
Affiliate or Approved Fund of a Bank shall be subject to the prior written
consent of the Administrative Agent, not to be unreasonably withheld or delayed;
(iv) 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 (treating multiple, simultaneous assignments by or
to two or

 

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more Approved Funds as a single assignment) (except that no such processing and
recordation fee shall be payable (w) in connection with any assignment to or
from Citi or any of its Affiliates or Approved Funds, or (x) in the case of an
assignee which is already a Bank or is an Affiliate or Approved Fund of a Bank,
or (y) for any assignment which the Administrative Agent, in its sole discretion
elects to waive such processing and recordation fee), and the Eligible Assignee,
if it shall not be a Bank, shall deliver to the Administrative Agent an
Administrative Questionnaire; and (z) any assignment to an Eligible Assignee
other than a Bank or an Affiliate or Approved Fund of a Bank shall be subject to
the prior written consent of the Borrower (such consent not to be unreasonably
withheld or delayed), but such consent of the Borrower shall not be required if
a Default or an Event of Default has then occurred and is continuing; provided
that, the Borrower shall be deemed to have consented to any such Eligible
Assignee unless it shall have objected thereto within five (5) Business Days
following written request for such consent.  Subject to acceptance and recording
thereof by the Administrative Agent pursuant to Section 11.8(c), from and after
the effective date specified in each Assignment and Assumption, the Eligible
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 Bank under this Agreement, and the assigning Bank 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 Bank’s rights and
obligations under this Agreement, such Bank shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 3.6, 3.10, 11.3,
11.6(e) and 11.10 with respect to facts and circumstances occurring prior to the
effective date of such assignment).  Upon request, the Borrower shall execute
and deliver a Note to the assignee Bank.  Any assignment or transfer by a Bank
of rights or obligations under this Agreement that does not comply with this
Section 11.8(b) shall be treated for purposes of this Agreement as a sale by
such Bank of a participation in such rights and obligations in accordance with
Section 11.8(d).  Any costs and expenses incurred in connection with an
assignment hereunder (including the processing and recordation fee pursuant to
Section 11.8(b)(iv)) shall be paid by the Eligible Assignee (except as otherwise
provided in Section 11.27).

 

(c)                                  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Banks, and the
Commitments of, and principal amounts of the Loans and other Obligations owing
to, each Bank 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 Banks shall treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the Borrower and
any Bank, at any reasonable time and from time to time upon reasonable prior
notice.

 

(d)                                 Any Bank 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 Bank’s rights or obligations under this Agreement (including
all or a portion of its Commitment or the Loans (including such Bank’s
participations in Letters of Credit) owing to it); provided that, (i) such
Bank’s obligations under this Agreement otherwise shall remain unchanged, (ii)
such Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the other Banks shall continue to deal solely and directly with such Bank in
connection with such Bank’s rights and obligations under this Agreement.  Any
agreement or instrument pursuant to which a Bank sells such a participation
shall provide that such Bank shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided further, that such agreement or instrument may
provide that such Bank will not,

 

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without the consent of the Participant, agree to any amendment, waiver or other
modification described in Sections 11.2(a), 11.2(b) or 11.2(d) that directly
affects such Participant; provided further, that any Bank selling a
participation shall endeavor promptly to give the Borrower notice following any
such sale, but the failure to give such notice will not give rise to any
liability on the part of such Bank or otherwise affect the validity of any such
sale.  Subject to clause (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of, and subject to the limitations
of, Sections 3.6 and 3.10 to the same extent as if it were a Bank and had
acquired its interest by assignment pursuant to Section 11.8(b).  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 11.15 as though it were a Bank, provided that, such Participant agrees
to be subject to Section 11.9 as though it were a Bank.  Each Bank 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 Bank shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
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
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 Bank 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.

 

(e)                                  A Participant shall not be entitled to
receive any greater payment under Sections 3.6 and 3.10 than the applicable Bank
would have been entitled to receive with respect to the participation sold to
such Participant.

 

(f)                                   Any Bank may at any time pledge or assign
a security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Bank, including
any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that, no such pledge or assignment shall release such Bank from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Bank as a party hereto.

 

(g)                                  In connection with any assignment of rights
and obligations of any Defaulting Bank hereunder, no such assignment will be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment 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 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 Bank, 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 Bank to the Administrative Agent, any Issuing Bank
and each other Bank 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 in accordance with such Defaulting Bank’s
Pro Rata Share.  Notwithstanding the foregoing, in the event that any assignment
of rights and obligations of any Defaulting Bank hereunder becomes effective
under applicable Law without compliance with the provisions of this paragraph,
then the assignee of such interest will be deemed to be a Defaulting Bank for
all purposes of this Agreement until such compliance occurs.

 

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(h)                                 If any Issuing Bank resigns as an Issuing
Bank it shall retain all the rights and obligation of an Issuing Bank hereunder
with respect to all Letters of Credit outstanding as of the effective date of
its resignation as an Issuing Bank and all Obligations with respect thereto
(including the right to require the Banks to make Base Rate Loans or fund risk
participation in Unreimbursed Amounts pursuant to Section 2.5).

 

11.9                        Sharing of Setoffs.

 

Each Bank severally agrees that if it, through the exercise of the right of
setoff, banker’s lien, or counterclaim against the Borrower or otherwise,
receives payment of the Obligations due it hereunder and under the Notes that is
ratably more than that to which it is entitled hereunder pursuant to Section
3.13 or 9.2(e), then:  (a) the Bank exercising the right of setoff, banker’s
lien, or counterclaim or otherwise receiving such payment shall purchase, and
shall be deemed to have simultaneously purchased, from the other Bank a
participation in the Obligations held by the other Bank and shall pay to the
other Bank a purchase price in an amount so that the share of the Obligations
held by each Bank after the exercise of the right of setoff, banker’s lien, or
counterclaim or receipt of payment shall be in the same proportion that existed
prior to the exercise of the right of setoff, banker’s lien, or counterclaim or
receipt of payment, and (b) such other adjustments and purchases of
participations shall be made from time to time as shall be equitable to ensure
that all of the Banks share any payment obtained in respect of the Obligations
ratably in accordance with the provisions of Section 3.13 and 9.2(e), provided
that, if all or any portion of a disproportionate payment obtained as a result
of the exercise of the right of setoff, banker’s lien, counterclaim or otherwise
is thereafter recovered from the purchasing Bank by the Borrower or any Person
claiming through or succeeding to the rights of the Borrower, the purchase of a
participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery, but without interest.  Each Bank that
purchases a participation in the Obligations pursuant to this Section shall from
and after the purchase have the right to give all notices, requests, demands,
directions and other communications under this Agreement with respect to the
portion of the Obligations purchased to the same extent as though the purchasing
Bank were the original owner of the Obligations purchased.  The Borrower
expressly consents to the foregoing arrangements and agrees that, to the extent
permitted by Law, any Bank holding a participation in an Obligation so purchased
may exercise any and all rights of setoff, banker’s lien or counterclaim with
respect to the participation as fully as if the Bank were the original owner of
the Obligation purchased.  Notwithstanding anything in this Section 11.9 to the
contrary, in the event that any Defaulting Bank exercises any right of setoff,
(i) all amounts so set off will be paid over immediately to the Administrative
Agent for further application in accordance with the provisions of Section
10.13(b)(iii) and, pending such payment, will be segregated by such Defaulting
Bank from its other funds and deemed held in trust for the benefit of the
Administrative Agent, the Issuing Banks, the Banks and any other Person entitled
to such amounts pursuant to Section 10.13(b)(iii) and (y) the Defaulting Bank
will provide promptly to the Administrative Agent a statement describing in
reasonable detail the Obligations owing to such Defaulting Bank as to which it
exercised such right of setoff.

 

11.10                 Indemnification by the Borrower.

 

The Borrower shall indemnify and hold harmless each Agent-Related Person, the
Arrangers, each Bank, each Issuing Bank and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the “Indemnitees”) from and against any and all liabilities,
obligations, losses, damages (including punitive and exemplary damages),
penalties, claims, demands, actions, judgments, suits, costs, expenses and
disbursements (including Attorney Costs; provided that, such Attorney Costs
shall not include the fees and expenses of more than one firm of outside legal
counsel (and one local counsel in each relevant jurisdiction and specialty
counsel, if applicable, and solely in the case of a conflict of interest, one
additional counsel in each applicable material jurisdiction to the affected

 

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Indemnitees) retained to represent the Administrative Agent, the Banks and the
Issuing Banks, but if any of such parties does not consent to such joint
representation, the Borrower shall be liable for the fees and expenses of not
more than one firm of outside legal counsel (and one local counsel in each
relevant jurisdiction and specialty counsel, if applicable, and solely in the
case of a conflict of interest, one additional counsel in each applicable
material jurisdiction to the affected Indemnitees) retained to represent the
Administrative Agent and also for not more than one additional firm of outside
legal counsel retained to otherwise represent one or more of the Banks and
Issuing Banks)) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Indemnitee in any way
relating to or arising out of or in connection with (a) the execution, delivery,
enforcement, performance or administration of any Loan Document or any other
agreement, letter or instrument delivered in connection with the transactions
contemplated thereby or the consummation of the transactions contemplated
thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use
of the proceeds therefrom (including any refusal by an 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), (c) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory (including any investigation of, preparation for, or defense of
any pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto or (d) the use,
generation, manufacture, production, storage, release, threatened release,
discharge, treatment, transportation, disposal or presence of any Hazardous
Materials if such Hazardous Materials are on, under, about or relate to the
Borrower’s Property or operations, so long as such liability, obligation, loss,
damage (including punitive and exemplary damages), penalty, claim, demand,
action, judgment, suit, cost, expense or disbursement arises out of or relates
to a Commitment, the use of proceeds of any Loans, any transaction contemplated
pursuant to this Agreement, or any relationship or alleged relationship of any
Indemnitee to Borrower related to this Agreement (all the foregoing,
collectively, the “Indemnified Liabilities”); provided that, such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence, willful misconduct or material breach of the Loan
Documents by such Indemnitee.  No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee have any liability for
any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date).  All amounts due under
this Section 11.10 shall be payable within 10 Business Days after demand
therefor.  The agreements in this Section 11.10 shall survive the resignation of
the Administrative Agent, the replacement of any Bank, the termination of the
Commitments and the repayment, satisfaction or discharge of all the other
Obligations.  Notwithstanding the foregoing, indemnification for Indemnified
Taxes and Other Taxes shall be governed by, and be subject to the qualifications
and requirements set forth in, Section 3.10.  Furthermore, this Section 11.10
shall not apply with respect to Taxes other than any Taxes that represent
losses, claims, damages, etc. arising from any non-Tax claim.

 

11.11                 Nonliability of Banks.

 

The relationship between the Borrower and the Banks is, and shall at all times
remain, solely that of borrower and lenders, and the Banks and the
Administrative Agent neither undertake nor assume any responsibility or duty to
the Borrower to review, inspect, supervise, pass judgment upon, or inform the
Borrower of any matter in connection with any phase of the Borrower’s business,
operations, or condition, financial or otherwise.  The Borrower shall rely
entirely upon its own judgment with respect to such matters, and any review,
inspection, supervision, exercise of judgment, or information supplied to the
Borrower by any Bank, the Administrative Agent or any Arranger in connection
with any such matter

 

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is for the protection of the Banks, the Administrative Agent and the Arrangers,
and neither the Borrower nor any third party is entitled to rely thereon.

 

11.12                 Confidentiality.

 

Each of the Administrative Agent, each Bank and each Issuing Bank agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed

 

(a)                                 to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and representatives only for the purposes of administration or
enforcement of this Agreement (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 (including any self-regulatory
authority, such as the National Association of Insurance Commissioners),

 

(c)                                  to the extent required by applicable Laws
or regulations or by any subpoena or similar legal process,

 

(d)                                 to any other party hereto,

 

(e)                                  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,

 

(f)                                   subject to an agreement containing a
standard of confidentiality substantially the same as that in this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii)
any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations,

 

(g)                                  with the consent of the Borrower or

 

(h)                                 to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent, any Bank, any Issuing Bank or any
of their respective Affiliates on a nonconfidential basis from a source other
than the Borrower.

 

For purposes of this Section 11.12, “Information” means all information received
from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary
or any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Arranger, any Bank or an Issuing Bank
on a nonconfidential basis prior to disclosure by the Borrower or any
Subsidiary, provided that, in the case of information received from the Borrower
or any Subsidiary after the date hereof, such information is clearly identified
at the time of delivery as confidential.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.  Each of the
Administrative Agent, each Bank and each Issuing Bank acknowledges that (x) the
Information may include material non-public information concerning the Borrower
or a Subsidiary, as the case may be, (y)

 

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it has developed compliance procedures regarding the use of material non-public
information and (z) it will handle such material non-public information in
accordance with applicable Law, including Federal and state securities Laws. 
Notwithstanding the foregoing, the provisions set forth in this Section 11.12
shall expire and shall be of no further effect after the first anniversary of
the earlier of (a) the Maturity Date and (b) the date on which no Loan remains
unpaid, or any other Obligation remains unpaid, or any portion of the Commitment
or any Letter of Credit remains outstanding.

 

11.13                 No Third Parties Benefited.

 

This Agreement is made for the purpose of defining and setting forth certain
obligations, rights and duties of the Borrower, the Administrative Agent and the
Banks in connection with the Commitment, and is made for the sole benefit of the
Borrower, the Administrative Agent and the Banks, and the Administrative Agent’s
and the Banks’ successors and assigns.  Except as provided in Sections 11.8 and
11.10, no other Person shall have any rights of any nature hereunder or by
reason hereof.

 

11.14                 Other Dealings.

 

Any Bank may, without liability to account to the other Banks, accept deposits
from, lend money or provide credit facilities to and generally engage in any
kind of banking or other business with the Borrower and its Subsidiaries.

 

11.15                 Right of Setoff — Deposit Accounts.

 

Upon the occurrence of an Event of Default and the acceleration of maturity of
the principal indebtedness pursuant to Section 9.2, the Borrower hereby
specifically authorizes each Bank in which the Borrower maintains a deposit
account (whether a general or special deposit account, other than trust
accounts) or a certificate of deposit to setoff any Obligations owed to the
Banks against such deposit account or certificate of deposit without prior
notice to the Borrower (which notice is hereby waived) whether or not such
deposit account or certificate of deposit has then matured.  Nothing in this
Section shall limit or restrict the exercise by a Bank of any right to setoff or
banker’s lien under applicable Law, subject to the approval of the Required
Banks.

 

11.16                 Further Assurances.

 

The Borrower shall, at its expense and without expense to the Banks or the
Administrative Agent, do, execute, and deliver such further acts and documents
as any Bank or the Administrative Agent from time to time reasonably requires
for the assuring and confirming unto the Banks or the Administrative Agent the
rights hereby created or intended now or hereafter so to be, or for carrying out
the intention or facilitating the performance of the terms of any Loan Document;
provided that, this Section 11.16 is not intended to create any affirmative
obligation on the part of the Borrower to provide additional collateral
security, additional guarantors or other credit enhancement with respect to the
Obligations.

 

11.17                 Integration.

 

This Agreement, together with the other Loan Documents, comprises the complete
and integrated agreement of the parties on the subject matter hereof and
supersedes all prior agreements, written or oral (including the mandate letter
and the summary of terms relating to this Agreement), on the subject matter
hereof except as provided in Section 3.3 hereof or otherwise expressly provided
herein to the contrary.  The Loan Documents were drafted with the joint
participation of the Borrower and the Banks and shall be construed neither
against nor in favor of either, but rather in accordance with the fair meaning
thereof.

 

94

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11.18                 Governing Law.

 

(a)                                 GOVERNING LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD RESULT IN THE
APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.

 

(b)                                 SUBMISSION TO JURISDICTION.  THE BORROWER
AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF
THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
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 OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

(c)                                  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 PARAGRAPH
(b) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)                                 SERVICE OF PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 11.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY
HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

11.19                 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.

 

11.20                 Headings.

 

Article and section headings in this Agreement and the other Loan Documents are
included for convenience of reference only and are not part of this Agreement or
the other Loan Documents for any other purpose.

 

95

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11.21                 Conflict in Loan Documents.

 

To the extent there is any actual irreconcilable conflict between the provisions
of this Agreement and any other Loan Document, the provisions of this Agreement
shall prevail.

 

11.22                 Waiver of Right to Trial by Jury.

 

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.

 

11.23                 Purported Oral Amendments.

 

THE BORROWER EXPRESSLY ACKNOWLEDGES THAT THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF
WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION
11.2.  THE BORROWER AGREES THAT IT WILL NOT RELY ON ANY COURSE OF DEALING,
COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF
ANY AGENT OR ANY BANK THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN
AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THE AGREEMENT OR THE OTHER LOAN
DOCUMENTS.

 

11.24                 Payments Set Aside.

 

To the extent that any payment by or on behalf of the Borrower is made to the
Administrative Agent or any Bank, or the Administrative Agent or any Bank
exercises its right of set-off, and such payment or the proceeds of such set-off
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent or such Bank in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Bank
severally agrees to pay to the Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by the Administrative Agent,
plus interest thereon from the date of such demand to the date such payment is
made at a rate per annum equal to the Federal Funds Rate from time to time in
effect.

 

96

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11.25                 [Intentionally Omitted].

 

11.26                 USA PATRIOT Act Notice.

 

Each Bank that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Bank) hereby notifies
the Borrower that pursuant to the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Bank or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the PATRIOT Act.  The
Borrower hereby agrees to provide any such information that is reasonably
requested by any Bank or the Administrative Agent.

 

11.27                 Replacement of Banks.

 

If (a) any Bank requests compensation under Sections 3.6(a) through 3.6(e), (b)
the Borrower is required to pay any additional amount pursuant to Section 3.10,
(c) any Bank is a Defaulting Bank, (d) any Bank is a Non-Consenting Bank or (e)
any other circumstance exists hereunder that gives the Borrower the right to
replace a Bank as a party hereto, then the Borrower may, at its sole expense and
effort, upon notice to such Bank and the Administrative Agent, require such Bank
to assign and delegate, without recourse (subject to the last sentence of this
Section 11.27, in accordance with and subject to the restrictions contained in,
and consents required by, Section 11.8), and such Bank shall assign within three
(3) Business Days after the date of such notice, all of its interests, rights
and obligations under this Agreement and the related Loan Documents to an
Eligible Assignee reasonably acceptable to the Administrative Agent that shall
assume such obligations, provided that:

 

(a)                                 the Borrower shall have paid to the
Administrative Agent the assignment fee specified in Section 11.8(b);

 

(b)                                 such Bank shall have received payment of an
amount equal to the outstanding principal of its Loans and L/C Advances, 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(f) 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) and including all
amounts due to such Bank under Sections 3.10, 11.3, 11.6(e) and 11.10, but
subject to the provisions of clause (c) below);

 

(c)                                  in the case of any such assignment
resulting from a claim for compensation under Sections 3.6(a) through 3.6(e) or
payments required to be made pursuant to Section 3.10, such assignment will
result in a reduction in such compensation or payments thereafter;

 

(d)                                 prior to such assignment, such Bank shall
have taken no action under Section 3.17 so as to eliminate the continued need
for payment of the amounts owing pursuant to Sections 3.6 and 3.10;

 

(e)                                  such assignment does not conflict with
applicable Laws; and

 

(f)                                   no Event of Default shall have occurred
and be continuing at the time of such assignment.

 

In the event that a Bank (a “Non-Complying Bank”) does not comply with the
requirements of the immediately preceding sentence within three (3) Business
Days after receipt of notice to such effect

 

97

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from the Borrower, each Bank hereby authorizes and directs the Administrative
Agent to execute and deliver such documentation as may be required to give
effect to an assignment in accordance with Section 11.8 on behalf of such
Non-Complying Bank and any such documentation so executed by the Administrative
Agent shall be effective for purposes of documenting an assignment pursuant to
Section 11.8.

 

In the event that (i) the Borrower or the Administrative Agent has requested
that the Banks consent to a departure or waiver of any provisions of the Loan
Documents or agree to any amendment thereto, (ii) the consent, waiver or
amendment in question requires the agreement of each affected Bank in accordance
with the terms of Section 11.2 and (iii) the Required Banks have agreed to such
consent, waiver or amendment, then any Bank who does not agree to such consent,
waiver or amendment shall be deemed a “Non-Consenting Bank.”

 

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

 

11.28                 No Fiduciary Relationship.

 

The Borrower hereby acknowledges that none of the Administrative Agent, the
Banks or their Affiliates has any fiduciary relationship with or duty to the
Borrower or any of its Affiliates arising out of or in connection with the Loan
Documents, and the relationship between the Administrative Agent, the Banks or
any of their Affiliates, on the one hand, and the Borrower or its Affiliates, on
the other hand, in connection with the Loan Documents is solely that of debtor
and creditor.

 

[Remainder of Page Intentionally Left Blank]

 

98

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

 

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

 

 

 

WCI COMMUNITIES, INC.,

 

 

a Delaware Corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Russell Devendorf

 

 

Name:

Russell Devendorf

 

 

Title:

Senior Vice President and Chief Financial Officer

 

[Signature Page — Revolving Loan Agreement]

 

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

 

 

 

CITIBANK, N.A.,

as Administrative Agent, a Bank and an Issuing Bank

 

 

 

 

 

 

 

 

 

 

By:

/s/ Marni McManus

 

 

Name:

Marni McManus

 

 

Title:

Managing Director and Vice President

 

[Signature Page — Revolving Loan Agreement]

 

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

 

 

 

JPMORGAN CHASE BANK, N.A.,

as a Bank and an Issuing Bank

 

 

 

 

 

 

 

 

By:

/s/ Mohammad Hasan

 

 

Name:

Mohammad Hasan

 

 

Title:

Vice President

 

[Signature Page — Revolving Loan Agreement]

 

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

 

 

BANK OF AMERICA, N.A.,

 

as a Bank and an Issuing Bank

 

 

 

 

 

By:

/s/ Ann E. Kenzie

 

Name: Ann E. Kenzie

 

Title: Vice President

 

[Signature Page – Revolving Loan Agreement]

 

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

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

 

as a Bank and an Issuing Bank

 

 

 

 

 

By:

/s/ William O’Daly

 

Name: William O’Daly

 

Title: Authorized Signatory

 

 

 

 

 

By:

/s/ Philipp Horat

 

Name: Philipp Horat

 

Title: Authorized Signatory

 

[Signature Page – Revolving Loan Agreement]

 

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

 

SCHEDULE 1.1

 

PRO RATA SHARES

 

Bank

 

Pro Rata Share

 

Pro Rata Share
of Commitment

 

Citibank, N.A.

 

40.000000000

%

$

30,000,000.00

 

JPMorgan Chase Bank, N.A.

 

30.000000000

%

$

22,500,000.00

 

Bank of America, N.A.

 

15.000000000

%

$

11,250,000.00

 

Credit Suisse AG, Cayman Islands Branch

 

15.000000000

%

$

11,250,000.00

 

TOTAL

 

100.000000000

%

$

75,000,000.00

 

 

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

 

SCHEDULE 4.4

 

SUBSIDIARIES

 

Restricted Subsidiaries:

WCI Communities, LLC

Delaware

 

WCI Communities Management, LLC

Delaware

 

WCI Towers Northeast USA, Inc.

Delaware

 

Watermark Realty Referral, Inc.

Florida

 

Watermark Realty, Inc.

Delaware

 

WCI Realty, Inc.

Florida

 

Pelican Landing Golf Resort Ventures, Inc.

Delaware

 

Spectrum Eastport, LLC

Delaware

 

WCI Communities, Rivington, LLC

Delaware

 

Pelican Landing Golf Resort Ventures

 

 

Limited Partnership

Delaware

 

Pelican Landing Timeshare Ventures

 

 

Limited Partnership

Delaware

 

Eastport Home & Land Company, LLC

Delaware

 

First Fidelity Title, Inc.

Delaware

 

 

 

Significant Subsidiaries:

WCI Communities, LLC

 

 

WCI Communities Management, LLC

 

 

 

 

Guarantor Subsidiaries:

WCI Communities, LLC

 

 

WCI Communities Management, LLC

 

 

WCI Towers Northeast USA, Inc.

 

 

Watermark Realty Referral, Inc.

 

 

Watermark Realty, Inc.

 

 

WCI Realty, Inc.

 

 

Pelican Landing Golf Resort Ventures, Inc.

 

 

Spectrum Eastport, LLC

 

 

WCI Communities, Rivington, LLC

 

 

 

 

Foreign Subsidiaries:

None

 

 

 

 

Unrestricted Subsidiaries:

None

 

 

 

 

Immaterial Subsidiaries:

WCI Towers Northeast USA, Inc.

 

 

First Fidelity Title, Inc.

 

 

Watermark Realty Referral, Inc.

 

 

Watermark Realty, Inc.

 

 

WCI Realty, Inc.

 

 

Pelican Landing Golf Resort Ventures, Inc.

 

 

Spectrum Eastport, LLC

 

 

WCI Communities, Rivington, LLC

 

 

Pelican Landing Golf Resort Ventures Limited Partnership

 

 

Pelican Landing Timeshare Ventures Limited Partnership

 

 

Eastport Home & Land Company, LLC

 

 

 

 

Mortgage Subsidiary:

None

 

 

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

 

SCHEDULE 6.4

 

INVESTMENTS

 

Section 6.4(g) - Investments in Restricted Subsidiaries

 

WCI Communities, LLC

 

WCI Communities Management, LLC

 

WCI Towers Northeast USA, Inc.

 

Watermark Realty Referral, Inc.

 

Watermark Realty, Inc.

 

WCI Realty, Inc.

 

Pelican Landing Golf Resort Ventures, Inc.

 

Spectrum Eastport, LLC

 

WCI Communities, Rivington, LLC

 

Pelican Landing Golf Resort Ventures Limited Partnership

 

Pelican Landing Timeshare Ventures Limited Partnership

 

Eastport Home & Land Company, LLC

 

First Fidelity Title, Inc.

 

Section 6.4(g) - Other Investments

 

Sarasota National Community Development District Bonds

 

$

24,000,000.00

 

 

Section 6.4(i) - Investments in Unrestricted Subsidiaries

 

None.

 

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

 

SCHEDULE 6.7

 

EXISTING LIENS

 

1.              Contingent liens arising under CDD bonds

 

The obligation to pay principal and interest on the bonds issued by the CDD is
allocated to each benefited parcel within the CDD. The CDD imposes liens against
the property to secure the unpaid obligation. CDD liens have the priority
accorded them by Florida law and such liens may be foreclosed by the CDD in the
manner provided by law.  The bonds, including interest and redemption premiums,
if any, are typically payable and secured solely from the assessments levied on
the property benefited.

 

CDD Outstanding Bond Balance by Issuance as of July 31, 2013

 

 

 

A BOND

 

B BOND

 

LIABILITY & OTHER

 

 

 

 

 

A Bond
Par

 

A Bond
Assumed

 

A Bond
Principal
Paid

 

A Bond
Liability

 

B Bond
Par

 

B Bond
Redeemed

 

B Bond
Outstanding

 

B Bond
Cash

 

Ppd / Accr
Interest *

 

Total
Liability

 

Total
Less Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bayside

 

(7,660,000

)

6,022,693

 

1,299,656

 

(337,651

)

(7,745,000

)

7,745,000

 

—

 

—

 

6,189

 

(331,462

)

(337,651

)

Heron Bay

 

(3,175,000

)

2,896,643

 

—

 

(278,357

)

—

 

—

 

—

 

—

 

6,173

 

(272,184

)

(278,357

)

Heron Bay North

 

(6,930,000

)

3,556,889

 

772,495

 

(2,600,616

)

(2,165,000

)

790,000

 

(1,375,000

)

268,326

 

19,529

 

(3,687,761

)

(3,707,290

)

Pelican Preserve

 

(3,200,000

)

2,784,602

 

73,924

 

(341,473

)

(34,950,000

)

34,950,000

 

—

 

—

 

552

 

(340,921

)

(341,473

)

Sarasota National

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

Tiburon

 

(7,610,000

)

5,302,580

 

—

 

(2,307,420

)

(17,150,000

)

17,150,000

 

—

 

—

 

28,294

 

(2,279,126

)

(2,307,420

)

Venetian

 

(12,910,000

)

9,124,209

 

—

 

(3,785,791

)

(14,785,000

)

14,785,000

 

—

 

—

 

57,380

 

(3,728,411

)

(3,785,791

)

Total

 

(41,485,000

)

29,687,616

 

2,146,075

 

(9,651,309

)

(76,795,000

)

75,420,000

 

(1,375,000

)

268,326

 

118,117

 

(10,639,866

)

(10,757,983

)

 

 

 

 

 

 

 

 

A

 

 

 

 

 

B

 

C

 

D

 

A+B+C+D

 

A+B+C

 

 

In April 2013, we acquired property (Sarasota National), which was secured by an
existing CDD obligation and the related $24.0 million of CDD bonds issued and
outstanding. Therefore, we are both an owner of property subject to a CDD
obligation as well as the holder of the related CDD bonds.  In accordance with
ASC Subtopic 405-20, Extinguishments of Liabilities, (“ASC 405-20”), we
accounted for the existing CDD obligation as a debt extinguishment to the extent
of our obligation to repay the related CDD bond obligations.  As a result, $23.6
million of $24.0 million existing CDD obligation, which relates to the property
owned by us, is not recorded as a CDD obligation on our balance sheet.

 

2.              Any liens securing obligations under the following credit
facilities:

 

1)             Stonegate Agreement

2)             Bank of America Letter of Credit Facility

 

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

 

3.              Existing UCC Financing Statements

 

WCI Communities, Inc., WCI Communities, LLC., & Pelican Landing Golf Resort
Ventures Limited Partnership

 

 

 

Name

 

Jurisdiction

 

Current Secured
Party of Record

 

File #s

 

File Date

 

File Type

 

Collateral
Secured

 

Expiration
Date

1.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

Textron Financial Corporation

 

30674724

 

02-27-03

 

Original

 

Equipment Lease

 

02-27-08

 

 

 

 

 

 

 

 

80644490

 

02-22-08

 

Continuation

 

Equipment Lease

 

02-22-13

 

 

 

 

 

 

 

 

30634460

 

02-18-13

 

Continuation

 

Equipment Lease

 

02-18-18

2.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

FNF Capital, Inc.

 

40349300

 

02-09-04

 

Original

 

Equipment Lease

 

02-09-09

 

 

 

 

 

 

 

 

84061030

 

12-08-08

 

Continuation

 

Equipment Lease

 

12-08-13

3.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

FNF Capital, Inc.

 

41588849

 

05-20-04

 

Original

 

Equipment Lease

 

05-20-09

 

 

 

 

 

 

 

 

84052112

 

12-08-08

 

Continuation

 

Equipment Lease

 

05-20-14

4.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

Wells Fargo Equipment Finance, Inc.

 

41976739

 

07-14-04

 

Original

 

Equipment Lease

 

07-14-09

 

 

 

 

 

 

 

 

90284916

 

01-28-09

 

Continuation

 

Equipment Lease

 

07-14-14

5.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

Textron Financial Corporation

 

53073138

 

09-29-05

 

Original

 

Equipment Lease

 

09-29-10

 

 

 

 

 

 

 

 

0225843

 

6-29-10

 

Continuation

 

Equipment Lease

 

06-29-15

6.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

FNF Capital, LLC

 

53317899

 

10-19-05

 

Original

 

Equipment Lease

 

10-19-10

 

 

 

 

 

 

 

 

03197567

 

09-07-10

 

Continuation

 

Equipment Lease

 

09-07-15

7.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

Textron Financial Corporation

 

53464527

 

11-08-05

 

Original

 

Equipment Lease

 

11-08-10

 

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

 

 

 

Name

 

Jurisdiction

 

Current Secured
Party of Record

 

File #s

 

File Date

 

File Type

 

Collateral
Secured

 

Expiration
Date

 

 

 

 

 

 

 

 

02466740

 

07-15-10

 

Continuation

 

Equipment Lease

 

07-15-15

8.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

FNF Capital, LLC

 

61082502

 

03-23-06

 

Original

 

Equipment Lease

 

03-23-11

 

 

 

 

 

 

 

 

10977440

 

03-16-11

 

Continuation

 

Equipment Lease

 

03-16-16

9.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

FNF Capital, LLC

 

70755560

 

02-28-07

 

Original

 

Equipment Lease

 

02-28-12

 

 

 

 

 

 

 

 

20464794

 

02-06-12

 

Continuation

 

Equipment Lease

 

02-06-17

10.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

Modular Space Corporation

 

20083405337

 

10-08-08

 

Original

 

Equipment Lease

 

10-08-13

11.

 

WCI Communities, Inc.

 

DE — Secretary of State

 

Wells Fargo Financial Leasing Inc.

 

20101846009

 

05-26-10

 

Original

 

Equipment Lease

 

05-26-15

 

 

 

 

 

 

 

 

20132533793

 

07-01-13

 

Amendment

 

Restatement of Collateral

 

05-26-15

*12.

 

WCI Communities, Inc.

 

FL-Secretary of State

 

Robb & Stucky, Ltd., LLLP

 

200808914314

 

08-08-08

 

Original

 

Equipment

 

08-08-13 (may have been continued)

*13.

 

WCI Communities, Inc.

 

FL-Secretary of State

 

Robb & Stucky, Ltd., LLLP

 

200808914292

 

08-08-08

 

Original

 

Equipment

 

08-08-13 (may have been continued)

*14.

 

WCI Communities, Inc.

 

FL-Secretary of State

 

Siemens Financial Services, Inc.

 

200809312040

 

10-07-08

 

Original

 

Equipment

 

10-07-13

15.

 

WCI Communities, LLC

 

DE- Secretary of State

 

Macrolease Corporation

 

20113345686

 

08-29-11

 

Original

 

Equipment Lease

 

08-29-16

 

 

 

 

 

 

 

 

20113890475

 

10-10-11

 

Amendment

 

Equipment Lease

 

08-29-16

16.

 

WCI Communities, LLC

 

DE — Secretary of State

 

Macrolease Corporation

 

20120516973

 

02-09-12

 

Original

 

Equipment Lease

 

02-09-17

 

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

 

 

 

Name

 

Jurisdiction

 

Current Secured
Party of Record

 

File #s

 

File Date

 

File Type

 

Collateral
Secured

 

Expiration
Date

 

 

 

 

 

 

 

 

20121675380

 

05-01-12

 

Amendment

 

Equipment Lease

 

02-09-17

17.

 

WCI Communities, LLC

 

DE- Secretary of State

 

TCF Equipment Finance, Inc.

 

20121738154

 

05-04-12

 

Original

 

Equipment Lease

 

05-04-17

18.

 

WCI Communities, LLC

 

DE-Secretary of State

 

TCF Equipment Finance, Inc.

 

20121905902

 

05-17-12

 

Original

 

Equipment Lease

 

05-17-17

 

 

 

 

 

 

 

 

20122462333

 

06-26-12

 

Amendment

 

Equipment Lease

 

06-26-17

19.

 

WCI Communities, LLC

 

DE-Secretary of State

 

TCF Equipment Finance, Inc.

 

20122018846

 

05-24-12

 

Original

 

Equipment Lease

 

05-24-17

20.

 

WCI Communities, LLC

 

DE-Secretary of State

 

TCF Equipment Finance, Inc.

 

20122672089

 

07-11-12

 

Original

 

Equipment Lease

 

07-11-17

21.

 

WCI Communities, LLC

 

DE-Secretary of State

 

TCF Equipment Finance, Inc.

 

20122672774

 

07-11-12

 

Original

 

Equipment Lease

 

07-11-17

22.

 

WCI Communities, LLC

 

DE-Secretary of State

 

TCF Equipment Finance, Inc.

 

20123747062

 

09-28-12

 

Original

 

Equipment Lease

 

09-28-17

23.

 

WCI Communities, LLC

 

DE-Secretary of State

 

TCF Equipment Finance, Inc.

 

20130518267

 

02-17-13

 

Original

 

Equipment Lease

 

02-07-18

24.

 

WCI Communities, LLC

 

DE- Secretary of State

 

Deere Credit, Inc.

 

20131717371

 

05-06-13

 

Original

 

Equipment and Inventory, attachments, accounts and proceeds

 

05-06-18

25.

 

Watermark Realty, Inc.

 

DE — Secretary of State

 

Hewlett-Packard Financial Services Company

 

20120744898

 

2/27/12

 

Original

 

Equipment Lease

 

02-27-17

26.

 

Pelican Landing Golf Resort Ventures LP

 

DE — Secretary of State

 

Textron Financial Corporation

 

20103445248

 

10/4/10

 

Original

 

Financed equipment

 

10-04-15

27.

 

Pelican Landing Golf Resort Ventures LP and

 

DE — Secretary of State

 

PNCEF, LLC

 

20104421214

 

12/14/10

 

Original

 

Leased equipment

 

12-14-15

 

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

 

 

 

Name

 

Jurisdiction

 

Current Secured
Party of Record

 

File #s

 

File Date

 

File Type

 

Collateral
Secured

 

Expiration
Date

 

 

Raptor Bay Golf

 

 

 

 

 

 

 

 

 

 

 

 

 

 

28.

 

Pelican Landing Golf Resort Ventures LP

 

DE — Secretary of State

 

TCF Equipment Finance, Inc.

 

20120780199

 

2/29/12

 

Original

 

Leased and financed equipment

 

02-28-17

29.

 

Pelican Landing Golf Resort Ventures LP

 

DE — Secretary of State

 

General Electric Capital Corporation

 

20121006891

 

3/15/12

 

Original

 

Leased equipment

 

03-15-17

30.

 

Pelican Landing Golf Resort Ventures LP

 

DE- Secretary of State

 

TCF Equipment Finance, Inc.

 

20123838242

 

10-04-12

 

Original

 

Equipment Lease

 

10-04-17

31.

 

Pelican Landing Golf Resort Ventures LP and Pelican Landing Golf Resort
Ventures, Inc.

 

DE- Secretary of State

 

Wells Fargo Financial Leasing, Inc.

 

20132283167

 

06-14-13

 

Original

 

Equipment Lease

 

06-14-18

 

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

 

SCHEDULE 11.6

 

ADDRESSES FOR NOTICES TO BORROWER PARTIES

 

WCI Communities, Inc.

 

Address:

24301 Walden Center Drive

 

Bonita Springs, FL 34134

 

 

Attention:

Russell Devendorf, Senior Vice President and Chief Financial Officer

 

Telephone:

(239) 498-8220

 

Fax:

(239) 498-8338

 

Email:

russelldevendorf@wcicommunities.com

 

 

 

Sheila Leith, Vice President and Treasurer

 

Telephone:

(239) 498-8529

 

Fax:

(239) 498-8504

 

Email:

sheilaleith@wcicommunities.com

 

 

 

Vivien Hastings, Senior Vice President and General Counsel

 

Telephone:

(239) 498-8213

 

Fax:

(239) 498-8277

 

Email:

vivienhastings@wcicommunities.com

 

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

 

ADDRESSES FOR NOTICES TO CITIBANK, N.A.

 

Citibank, N.A., as Administrative Agent

 

For payments and requests for Credit Extensions:

 

Investor Relations

1615 Brett Road, Building III

New Castle, DE 19720

Attention:

Investor Relations

Telephone:

302-894-6010

Facsimile:

212-994-0961

Email:

global.loans.support@citi.com

 

Payment Instructions

 

Citibank, N.A.

 

ABA #

021000089

Account No.:

36852248

Account Name:

Medium Term Finance

Attn.:

Global Loans

Ref:

WCI Communities, Inc.

 

Other Notices as Administrative Agent:

 

Investor Relations

1615 Brett Road, Building III

New Castle, DE 19720

Attention:

Investor Relations

Telephone:

302-894-6010

Facsimile:

212-994-0961

Email:

global.loans.support@citi.com

 

With a copy to:

 

Proskauer Rose LLP

Eleven Time Square

New York, NY 10036-8299

Attention:  Andrew Bettwy, Esq.

Fax: 212-969-2900

 

Citibank, N.A., as Lender

 

Investor Relations

1615 Brett Road, Building III

New Castle, DE 19720

Attention:

Investor Relations

 

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

 

Telephone:

302-894-6010

Facsimile:

212-994-0961

Email:

global.loans.support@citi.com

 

With a copy to:

 

Proskauer Rose LLP

Eleven Time Square

New York, NY 10036-8299

Attention:  Andrew Bettwy, Esq.

Fax: 212-969-2900

 

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

 

EXHIBIT A

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between the
Assignor identified in item 1 below (the “Assignor”) and the Assignee identified
in item 2 below (the “Assignee”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Agreement identified below (the
“Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee.  The Standard Terms and Conditions set forth in Annex I 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 Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations as a Bank under the 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 under the respective facilities identified below (including,
without limitation, Letters of Credit 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 Bank)
against any Person, whether known or unknown, arising under or in connection
with the 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 Assignor
to the Assignee pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned Interest”).  Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

(d)                                 Assignor:

 

(e)                                 
Assignee:                                                                              [and
is an Affiliate or Approved Fund of [identify Bank](1)]

 

(f)                                   Borrower:  WCI Communities, Inc., a
Delaware corporation

 

(g)                                  Administrative Agent:  Citibank, N.A., as
the administrative agent under the Agreement

 

(h)                                 Agreement:  Revolving Credit Agreement,
dated as of August 27, 2013, among WCI Communities, Inc., as Borrower, the Banks
from time to time party thereto, and Citibank, N.A., as Administrative Agent, as
amended, restated, extended, supplemented or otherwise modified from time to
time.

 

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

(1)                                 Select as applicable.

 

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

 

(i)                                     Assigned Interest:

 

Aggregate Amount of
Commitment
for all Banks*

 

Amount of Commitment
Assigned*

 

Pro Rata Share Assigned
of Aggregate
Commitment(2)

 

CUSIP
Numbers

 

$

 

 

$

 

 

 

%

 

 

$

 

 

$

 

 

 

%

 

 

$

 

 

$

 

 

 

%

 

 

 

[7.                                  Trade Date:                               ,
        ](3)

 

Effective Date:                                  ,

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

 

ASSIGNOR

 

 

 

[NAME OF ASSIGNOR]

 

 

 

By:

 

 

 

Title:

 

 

 

 

 

ASSIGNEE

 

 

 

[NAME OF ASSIGNEE]

 

 

 

By:

 

 

 

Title:

 

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

*                                         Amount to be adjusted by the
counterparties to take into account any payments or prepayments made between the
Trade Date and the Effective Date.

(2)                                 Set forth, to at least 9 decimals, as a
percentage of the Commitment of all Banks thereunder.

(3)                                 To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of the
Trade Date.

 

5

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

 

[Consented to and](4) Accepted:

 

 

 

 

 

CITIBANK, N.A.,

 

 

as Administrative Agent

 

 

 

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

[Consented to:](5)

 

 

 

 

 

WCI COMMUNITIES, INC.,

 

 

as Borrower

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

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

(4)                                 To be added only if the consent of the
Administrative Agent is required by the terms of the Agreement.

(5)                                 To be added only if the consent of the
Borrower is required by the terms of the Agreement.

 

6

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

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

 

(i)                                     Representations and Warranties.

 

(A)          Assignor.  The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(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 (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the 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.

 

(B)          Assignee.  The 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 Bank under the Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Agreement (subject to receipt of
such consents as may be required under the Agreement), (iii) from and after the
Effective Date, it shall be bound by the provisions of the Agreement as a Bank
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Bank 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 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 deems appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest, (vi) it has, independently and without reliance
upon the Administrative Agent or any other Bank and based on such other
documents and information as it has deemed appropriate, made it own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest, and (vii) attached hereto is any documentation
required to be delivered by it pursuant to the terms of the Agreement, including
Section 3.10(e) thereof, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Bank, 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 Bank.

 

(ii)           Payments.  From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date to the
Assignee.

 

(iii)          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

 

7

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

 

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.

 

8

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

 

EXHIBIT B

 

Borrowing Base Certificate Date:               

 

BORROWING BASE CERTIFICATE

 

The undersigned Senior Officer, being the duly elected
                                       of WCI Communities, Inc., a Delaware
corporation (the “Borrower”), hereby certifies that the following is a true and
correct calculation of the Borrowing Base as of                   ,         
(the “Statement Date”).  Capitalized terms used but not defined herein shall
have the meanings set forth in the Revolving Credit Agreement dated as of
August 27, 2013, as amended, restated, extended, supplemented or otherwise
modified from time to time (the “Agreement”), by and among the Borrower, the
Banks from time to time party thereto (the “Banks”), and Citibank, N.A., as
Administrative Agent.

 

11.29                 Borrowing Base Calculation.

 

(a)           Borrowing Base.  The following Escrow Receivables, Sold Homes
Under Construction, Model Homes, Unsold Homes Under Construction, Lots under
Development, Developed Lots, Land Held for Future Development and Unrestricted
Cash of the Borrower or any Subsidiary qualify for inclusion in the Borrowing
Base (all figures are as of Statement Date or the date of incurrence of any
Loan, Letter of Credit or any other Borrowing Base Indebtedness, as applicable):

 

(i)

100% of the aggregate GAAP Value of Escrow Receivables

 

$

 

 

(ii)

90% of the aggregate GAAP Value of Sold Homes Under Construction

 

$

 

 

(iii)

85% of the aggregate GAAP Value of Model Homes

 

$

 

 

(iv)

80% of the aggregate GAAP Value of Unsold Homes Under Construction

 

$

 

 

(v)

65% of the aggregate GAAP Value of Developed Lots and Lots Under Development

 

$

 

 

(vi)

50% of the aggregate GAAP Value of Land Held for Future Development(1)

 

$

 

 

(vii)

100% of Unrestricted Cash minus Total Outstandings

 

$

 

 

(viii)

Total Borrowing Base (Lines I.A.1+2+3+4+5+6+7)

 

$

 

 

 

(b)                                 Borrowing Base Indebtedness.  The following
figures are as of the Statement Date:

 

(i)

The aggregate principal amount of indebtedness for borrowed money (including,
without limitation, the Senior Notes)

 

$

 

 

(ii)

Letter of Credit Usage with respect to Financial Letters of Credit that are not
Cash Collateralized or Letter of Credit Collateralized (computed as if all
Financial Letters of Credit

 

$

 

 

 

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

(1)                                 Line I.A.6 shall not exceed 45% of the
amount in Line I.A.8.  The value of (i) any unentitled land or land under
option, (ii) the vertical construction of any Tower, (iii) the land on which a
Tower is constructed, but only after the construction of such Tower has
commenced and (iv) the assets securing the loans under the Stonegate Agreement,
in each case, shall not be included in the Borrowing Base.

 

1

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

 

 

were Letters of Credit issued under the Agreement)

 

 

 

 

(iii)

other Borrowing Base Indebtedness(2)

 

$

 

 

(iv)

Total Borrowing Base Indebtedness (Lines I.B.1+2+3)

 

$

 

 

 

(c)           Borrowing Base Surplus/(Deficit) at the Statement Date.

 

(Line I.A.8 minus Line I.B.4)

 

$

 

 

 

(d)           Commitment less Total Outstandings.

 

1.

Commitment

 

$

 

 

2.

Total Outstandings

 

$

 

 

3.

(Line I.D.1 minus Line I.D.2)

 

$

 

 

 

(e)           Borrowing Base Availability. The Borrowing Base Availability shall
be the lesser of Line I.C.1 and Line I.D.3.

 

1.

Borrowing Base Availability at the Statement Date

 

$

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Borrowing Base Certificate
as of                       , 20[    ].

 

 

WCI COMMUNITIES, INC.,

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

 

 

[Printed Name and Title]

 

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

(2)                                 Line I.B.3 shall not include (i) any
Non-Recourse Indebtedness, (ii) the outstanding principal amount of any
Subordinated Obligations or (iii) all Letters of Credit issued under the
Stonegate Agreement.

 

2

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

 

EXHIBIT C

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:                    ,           

 

To:          Citibank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Revolving Credit Agreement, dated as of
August 27, 2013 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement”), among WCI
COMMUNITIES, INC., a Delaware corporation (the “Borrower”), the Banks from time
to time party thereto, and Citibank, N.A., as Administrative Agent.  Capitalized
terms used but not defined herein have the meanings given to them in the
Agreement.

 

The undersigned Senior Officer hereby certifies as of the date hereof that
he/she is the                                                                   
of the Borrower, and that, as such, he/she is authorized to execute and deliver
this Compliance Certificate to the Administrative Agent on the behalf of the
Borrower, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

(a)           Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 7.1(b) of the Agreement for the Fiscal Year of
the Borrower ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section.

 

[Use following paragraph 1 for fiscal quarter-end financial statements]

 

(b)           Attached hereto as Schedule 1 are the unaudited financial
statements required by Section 7.1(a) of the Agreement for the Fiscal Quarter of
the Borrower ended as of the above date.  Such financial statements fairly
present the financial condition, results of operations and cash flows of the
Borrower and its Restricted Subsidiaries in accordance with Generally Accepted
Accounting Principles as at such date and for such period, subject only to
normal year-end audit adjustments and the absence of footnotes.

 

(c)           Attached hereto as Schedule 2 is a backlog report which is true
and correct in all material respects and which summarizes the Borrower’s backlog
as of the Fiscal Quarter of the Borrower ended as of the above date.

 

[select one.]

 

(d)           [To the best knowledge of the undersigned as of the date hereof,
there is no Default or Event of Default.]

 

[or]

 

[The following is a list of each Default or Event of Default as of the date
hereof and the nature and status of each such Default or Event of Default:]

 

(e)                                  To the actual knowledge of the undersigned,

 

[select one:]

 

1

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

 

[no event or circumstance constituting a Material Adverse Effect (other than a
Material Adverse Effect which is not particular to the Borrower and which is
generally known) has occurred since the date of the most recent Compliance
Certificate delivered under Section 7.2 of the Agreement.]

 

[or]

 

[the following is a list of each Material Adverse Effect (describing in
reasonable detail the nature and status thereof) which has occurred since the
date of the most recent Compliance Certificate delivered under Section 7.2 of
the Agreement.]

 

(f)            The financial covenant analyses and information set forth on
Schedule 3 attached hereto are true and accurate on and as of the date of this
Compliance Certificate.

 

(g)           The computation of the Borrowing Base Availability set forth on
Schedule 4 attached hereto is true and accurate on and as of the date of this
Compliance Certificate.

 

[Use the following paragraph 7 if there has been any change to the listing of
Subsidiaries]

 

(h)           [Attached hereto as Schedule 5 is a report of each change, as of
the last day of such Fiscal Quarter, in the listing of Subsidiaries set forth in
Schedule 4.4 (as the same may have been revised by previous Compliance
Certificates), including changes in Guarantor Subsidiaries].

 

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of                         ,           .

 

 

 

WCI COMMUNITIES, INC., a Delaware corporation

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

2

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

 

For the Quarter/Year ended                                (“Statement Date”)

 

SCHEDULE 1
to the Compliance Certificate

 

Financial Statements

 

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

 

For the Quarter/Year ended                                (“Statement Date”)

 

SCHEDULE 2
to the Compliance Certificate

 

Backlog Report

 

WCI COMMUNITIES, INC. TO INSERT REPORT

 

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

 

For the Quarter/Year ended                                (“Statement Date”)

 

SCHEDULE 3
to the Compliance Certificate

 

Financial Covenant Analyses and Information

 

WCI COMMUNITIES, INC. TO PREPARE SPREADSHEET WITH LINE ITEM CALCULATIONS OF THE
FOLLOWING

 

11.30                 Section 6.9 — Consolidated Tangible Net Worth.

 

11.31                 Section 6.10 — Consolidated Leverage Ratio.

 

11.32                 Section 6.11 — Consolidated Interest Coverage Ratio or
Minimum Liquidity.

 

11.33                 Section 6.14— Investment in Subsidiaries and Joint
Ventures.

 

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

 

For the Quarter/Year ended                                (“Statement Date”)

 

SCHEDULE 4
to the Compliance Certificate

 

Borrowing Base Availability

 

WCI COMMUNITIES, INC. TO PREPARE SPREADSHEET WITH LINE ITEM CALCULATIONS OF THE
FOLLOWING

 

11.1                        Borrowing Base Availability

 

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

 

For the Quarter/Year ended                                (“Statement Date”)

 

SCHEDULE 5
to the Compliance Certificate

 

List of Subsidiaries

 

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

 

EXHIBIT D

 

FORM OF LOAN NOTICE

 

Date:                    ,        

 

To:          Citibank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Revolving Credit Agreement, dated as of
August 27, 2013 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement”), among WCI
COMMUNITIES, INC., a Delaware corporation (the “Borrower”), the Banks from time
to time party thereto, and Citibank, N.A., as Administrative Agent.  Capitalized
terms used but not defined herein have the meanings given to them in the
Agreement.

 

The undersigned hereby requests (select one):

 

o

An Advance

o

A conversion or continuation of Loans

 

On                                                          (a Business Day).

 

In the amount of $                                      .

 

Comprised of

[Type of Loan requested]

 

For Eurodollar Rate Loans:  with an Interest Period of           .

 

The Advances requested herein comply with the proviso to the first sentence of
Section 2.1(a) of the Agreement.

 

In connection with the requested Advance, the undersigned certifies that the
conditions precedent to the making of such Advance, as set forth in Section 8.2
of the Agreement, have been satisfied.

 

 

 

WCI COMMUNITIES, INC., a Delaware corporation

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

1

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EXHIBIT E

 

NOTE

 

$

,       

 

New York, New York

 

FOR VALUE RECEIVED, the undersigned promises to pay to the order of
                                               (the “Bank”) the principal amount
of                                                DOLLARS ($                  ),
or such lesser aggregate amount of Advances as may be made pursuant to the
Bank’s Pro Rata Share of the Commitment under the Loan Agreement hereinafter
described, payable as hereinafter set forth.  The undersigned promises to pay
interest on the principal amount of each Advance made hereunder and remaining
unpaid from time to time from the date of each Advance until the date of payment
in full, payable as hereinafter set forth.

 

Reference is made to the Revolving Credit Agreement dated as of August 27, 2013,
among the undersigned, as Borrower, the Banks from time to time party thereto,
and Citibank, N.A., as Administrative Agent (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Loan
Agreement”).  Terms defined in the Loan Agreement and not otherwise defined
herein are used herein with the meanings defined for those terms in the Loan
Agreement.  This is one of the Notes referred to in the Loan Agreement, and any
holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Loan Agreement as originally executed or as it
may from time to time be supplemented, modified, amended, renewed, extended or
supplanted.  The Loan Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
upon the terms and conditions therein specified.

 

The principal indebtedness evidenced by this Note shall be payable as provided
in the Loan Agreement and in any event on the Maturity Date.

 

Interest shall be payable on the outstanding daily unpaid principal amount of
each Advance hereunder from the date thereof until payment in full and shall
accrue and be payable at the rates and on the dates set forth in the Loan
Agreement to the fullest extent permitted by applicable Law, before and after
default, before and after maturity, before and after any judgment, and before
and after the commencement of any proceeding under any Debtor Relief Law, with
interest on overdue interest to bear interest at the rate set forth in
Section 3.7 of the Loan Agreement.

 

The amount of each payment hereunder shall be made to the Administrative Agent
at the Administrative Agent’s Office, for the account of the Bank, in lawful
money of the United States of America, without deduction, offset or counterclaim
and in immediately available funds on the day of payment (which must be a
Business Day).  All payments of principal received after 1:00 p.m., New York
time, on any Business Day, shall be deemed received on the next succeeding
Business Day for purposes of calculating interest thereon.  The Bank shall use
its best efforts to keep a record of the Advances made by it (which record may
be in electronic or other intangible form) and payments of principal with
respect to this Note, and such record shall be presumptive evidence of the
principal amount owing under this Note; provided that failure to keep such
record shall in no way affect the Obligations of the Borrower.

 

The undersigned hereby waives protest, presentment, notice of dishonor, demand
and any other notice of any kind, to the fullest extent permitted by applicable
Laws.

 

1

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

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD
RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW
YORK.  THE UNDERSIGNED 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 NOTE
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY).  This Note shall be subject to the provisions of Sections 11.18
and 11.22 of the Loan Agreement as if such sections were set forth herein,
mutatis mutandis, and the provisions of such sections are incorporated by
reference herein.

 

 

 

WCI COMMUNITIES, INC.,

 

a Delaware corporation

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

2

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

 

ADVANCES AND PAYMENTS OF PRINCIPAL
(Base Rate Loans)

 

Date

 

Amount of Loan or of
Redesignation From
Another Type of Loan

 

Amount of Principal Paid or
Redesignated Into Another
Type of Loan

 

Unpaid Principal
Balance

 

Notation
Made by

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

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

 

ADVANCES AND PAYMENTS OF PRINCIPAL
(Eurodollar Rate Loans)

 

Date

 

Amount of Loan or of
Redesignation From
Another Type of Loan

 

Amount of Principal Paid or
Redesignated Into Another
Type of Loan

 

Unpaid Principal
Balance

 

Notation
Made by

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

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

 

EXHIBIT F-1

 

OPINION OF COUNSEL

 

LATHAM & WATKINS LLP

 

[Attached.]

 

1

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

 

EXHIBIT F-2

 

OPINION OF COUNSEL

 

GENERAL COUNSEL TO THE LOAN PARTIES

 

[Attached.]

 

1

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

 

EXHIBIT G

 

SUBSIDIARY GUARANTY

 

THIS SUBSIDIARY GUARANTY (“Guaranty”) dated as of August 27, 2013, is made by
each of the undersigned guarantors and, effective as of the date set forth in
the applicable Instrument of Joinder, each other Person who has become a
guarantor pursuant to Section 19 hereof (each a “Guarantor” and, collectively,
the “Guarantors”) in favor of Citibank, N.A., as the Administrative Agent
(“Administrative Agent”), under the Loan Agreement referred to below, and the
Banks that are party to the Loan Agreement from time to time (each a “Bank” and
collectively the “Banks”) (the Administrative Agent and the Banks are referred
to herein collectively as the “Lender Parties” and each individually as a
“Lender Party”), with reference to the following facts:

 

RECITALS

 

A.            Pursuant to that certain Revolving Credit Agreement dated as of
August 27, 2013, among WCI Communities, Inc., a Delaware corporation (the
“Borrower”), the Banks and the Administrative Agent (as amended, extended,
renewed, supplemented, or otherwise modified from time to time, the “Loan
Agreement”), the Banks are making certain credit facilities available to
Borrower.  Terms defined in the Loan Agreement and not otherwise defined in this
Guaranty shall have the meanings given to those terms in the Loan Agreement and
such definitions are incorporated by reference herein in full.

 

B.            As a condition to the availability of such credit facilities,
certain Guarantors are required to enter into this Guaranty and to guarantee the
Guaranteed Obligations (as hereinafter defined), subject to the limitations set
forth herein.

 

C.            Each Guarantor expects to realize direct and indirect benefits
from the availability of the aforementioned credit facilities to Borrower, as
the result of financial or business support which may be provided to such
Guarantor by Borrower.

 

AGREEMENT

 

NOW, THEREFORE, in order to induce the Banks to extend the aforementioned credit
facilities, and for other good and valuable consideration, the receipt and
adequacy of which hereby are acknowledged, each Guarantor hereby represents,
warrants, covenants, agrees and guarantees, on a joint and several basis, as
follows:

 

1.             Guaranty.  Each Guarantor hereby absolutely and unconditionally
guarantees, as a guarantee of payment and not merely as a guarantee of
collection, prompt payment when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, of any and all existing
and future indebtedness and liabilities of every kind, nature and character,
direct or indirect, absolute or contingent, liquidated or unliquidated,
voluntary or involuntary, of the Borrower to Lender Parties arising at any time
under the Loan Agreement and the Loan Documents (collectively, the “Guaranteed
Obligations”).  The Lender Parties’ books and records showing the amount of the
Guaranteed Obligations shall be admissible in evidence in any action or
proceeding, and shall be binding upon the Guarantors and conclusive for the
purpose of establishing the amount of the Guaranteed Obligations, absent
manifest error.  This Guaranty shall not be affected by the validity, regularity
or enforceability of the Guaranteed Obligations or any instrument or agreement
evidencing any Guaranteed Obligations, or any question as to the authenticity of
such instrument or agreement, or by the existence, validity, enforceability,
perfection, or extent of any collateral therefor, or by any fact or circumstance
relating to the Guaranteed Obligations which might otherwise constitute a
defense to the obligations of any Guarantor under this Guaranty, other

 

1

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

 

than payment in full by the Borrower or any other Person.  The obligations of
each Guarantor hereunder shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance under Section 548 of the Bankruptcy Code (Title 11, United States
Code) or any comparable provisions of any applicable state law.

 

2.             No Setoff or Deductions; Taxes.  Each Guarantor represents and
warrants that it (or, if it is a disregarded entity for U.S. federal income tax
purposes, its regarded owner) is a “United States person” within the meaning of
Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.  All
payments by each Guarantor hereunder shall be paid in full, without setoff or
counterclaim or any deduction or withholding whatsoever, including, without
limitation, for any and all present and future taxes, except as required by
applicable law.  If any Guarantor must make a payment under this Guaranty, such
Guarantor represents and warrants that it will make the payment from one of its
U.S. resident offices to the Lender Parties so that no withholding tax is
imposed on the payment to the extent permitted by applicable law.  If
notwithstanding the foregoing, a Guarantor makes a payment under this Guaranty
to which withholding tax or other tax applies, the Guarantor’s payment shall be
increased, or the Lender Parties shall be indemnified, as applicable, as and to
the extent provided in Section 3.10 of the Loan Agreement.

 

3.             No Termination.  This Guaranty is a continuing and irrevocable
guaranty of all Guaranteed Obligations now or hereafter existing and shall
remain in full force and effect until (a) all of the Guaranteed Obligations are
paid in full and any commitments of the Banks or facilities provided by the
Banks with respect to the Guaranteed Obligations are terminated, at which time
this Guaranty and the obligations of the Guarantors hereunder shall terminate
(except as expressly provided in Sections 8 and 12 hereof), or (b) with respect
to any Guarantor, such Guarantor is released pursuant to Section 10.11 of the
Loan Agreement.  At the Administrative Agent’s option, all payments under this
Guaranty shall be made to an office of the Administrative Agent located in the
United States and in U.S. Dollars.

 

4.             Waiver of Notices.  Each Guarantor waives notice of the
acceptance of this Guaranty and of the extension or continuation of the
Guaranteed Obligations or any part thereof.  Each Guarantor further waives
presentment, protest, notice, dishonor or default, demand for payment and any
other notices to which such Guarantor might otherwise be entitled.

 

5.             Subrogation.  The Guarantors shall exercise no right of
subrogation, contribution or similar rights against the Borrower or any other
Guarantor with respect to any payments on the Guaranteed Obligations made to the
Lender Parties under this Guaranty until all of the Guaranteed Obligations are
paid in full and any commitments of the Banks or facilities provided by the
Banks with respect to the Guaranteed Obligations are terminated.  If any amounts
are paid to a Guarantor in violation of the foregoing limitation, then such
amounts shall be held in trust for the benefit of the Lender Parties and shall
forthwith be paid to the Lender Parties to reduce the amount of the Guaranteed
Obligations, whether matured or unmatured.

 

6.             Waiver of Suretyship Defenses.  Each Guarantor agrees that the
Lender Parties may, at any time and from time to time, and without notice to
such Guarantor, make any agreement with the Borrower or with any other Person
liable on any of the Guaranteed Obligations or providing collateral as security
for the Guaranteed Obligations, for the extension, renewal, payment, compromise,
discharge or release of the Guaranteed Obligations or any collateral (in whole
or in part), or for any modification or amendment of the terms thereof or of any
instrument or agreement evidencing the Guaranteed Obligations or the provision
of collateral, all without in any way impairing, releasing, discharging or
otherwise affecting the obligations of such Guarantor under this Guaranty.  Each
Guarantor waives any defense arising by reason of any disability or other
defense of the Borrower or any other Guarantor, or the cessation from any cause
whatsoever of the liability of the Borrower (other than payment in full of the

 

2

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

 

Guaranteed Obligations), or any claim that such Guarantor’s obligations exceed
or are more burdensome than those of the Borrower and waives the benefit of any
statute of limitations affecting the liability of such Guarantor hereunder. 
Each Guarantor waives any right to enforce any remedy which any Lender Party now
has or may hereafter have against the Borrower and waives any benefit of and any
right to participate in any security now or hereafter held by any Lender Party
until all of the Guaranteed Obligations are paid in full and any commitments of
the Banks and facilities provided by the Banks with respect to the Guaranteed
Obligations are terminated.  Further, each Guarantor consents to the Lender
Parties’ taking of, or failure to take, any action which might in any manner or
to any extent vary the risks of the Guarantors under this Guaranty or which, but
for this provision, might operate as a discharge of any Guarantor.

 

7.             Exhaustion of Other Remedies Not Required.  The obligations of
each Guarantor hereunder are those of primary obligor, and not merely as surety,
and are independent of the Guaranteed Obligations.  Each Guarantor waives
diligence by the Lender Parties and action on delinquency in respect of the
Guaranteed Obligations or any part thereof, including, without limitation any
provisions of law requiring the Lender Parties to exhaust any right or remedy or
to take any action against the Borrower, any other guarantor or any other
person, entity or property before enforcing this Guaranty against such
Guarantor.

 

8.             Reinstatement.  Notwithstanding anything in this Guaranty to the
contrary, this Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any portion of the Guaranteed
Obligations is revoked, terminated, rescinded or reduced or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of the
Borrower or any other Person or otherwise, as if such payment had not been made
and whether or not the Lender Parties are in possession of or have released this
Guaranty and regardless of any prior revocation, rescission, termination or
reduction.

 

9.             Subordination.  While an Event of Default has occurred and is
continuing, each Guarantor hereby subordinates the payment of all obligations
and indebtedness of the Borrower owing to such Guarantor, whether now existing
or hereafter arising, including but not limited to any obligation of the
Borrower to the Guarantor as subrogee of the Lender Parties or resulting from
such Guarantor’s performance under this Guaranty, until such time as all
Guaranteed Obligations have been paid in full.  If the Lender Parties so
request, any such obligation or indebtedness of the Borrower to the Guarantor
shall be enforced and performance received by the Guarantors as trustee for the
Lender Parties and the proceeds thereof shall be paid over to the Lender Parties
on account of the Guaranteed Obligations, but otherwise without reducing or
affecting in any manner the liability of the Guarantors under this Guaranty.

 

10.          Information.  While an Event of Default has occurred and is
continuing, each Guarantor shall furnish promptly to the Lender Parties any and
all financial or other information regarding such Guarantor or its property as
the Lender Parties may reasonably request in writing.

 

11.          Stay of Acceleration.  In the event that acceleration of the time
for payment of any of the Guaranteed Obligations is stayed, upon the insolvency,
bankruptcy or reorganization of the Borrower or any other Person, or otherwise,
all such amounts shall nonetheless be payable by the Guarantors immediately upon
demand by the Lender Parties.

 

12.          Expenses.  The Guarantors shall pay, within 30 days after demand,
all the reasonable actual out-of-pocket costs and expenses (including reasonable
attorneys’ fees and expenses and costs disbursements of any law firm or other
external counsel) of the Lender Parties in connection with the enforcement of
this Guaranty following the occurrence of a Default or an Event of Default,
including in connection with any refinancing, restructuring, reorganization
(including a bankruptcy reorganization, if

 

3

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

 

such payment is approved by the bankruptcy court or any similar proceeding),
subject to the limitations set forth in Section 11.3 of the Loan Agreement
(which limitations shall be applied as if such expenses were payable by the
Borrower thereunder).  The obligations of the Guarantors (excluding Guarantors
that have been released pursuant to Section 10.11 of the Loan Agreement) under
the preceding sentence shall survive termination of this Guaranty.

 

13.          Amendments.  No provision of this Guaranty may be waived, amended,
supplemented or modified, except by a written instrument executed by the
Administrative Agent, the Required Banks under Section 11.2 of the Loan
Agreement and the Guarantors.

 

14.          No Waiver; Enforceability.  No failure by the Lender Parties to
exercise, and no delay in exercising, any right, remedy or power hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy or power hereunder preclude any other or further exercise thereof
or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or in equity.  The
unenforceability or invalidity of any provision of this Guaranty shall not
affect the enforceability or validity of any other provision herein.  Subject to
the terms hereof and of the Loan Agreement, any right, remedy, power or
privilege of the Lender Parties hereunder may be exercised by the Administrative
Agent or the Required Banks.

 

15.          Assignment; Governing Laws; Jurisdiction.  This Guaranty shall (a)
bind each Guarantor and its successors and assigns, provided that no Guarantor
may assign its rights or obligations under this Guaranty without the prior
written consent of the Lender Parties (and any attempted assignment without such
consent shall be void), (b) inure to the benefit of the Lender Parties and their
respective successors and assigns and the Lender Parties may, subject to the
terms of the Loan Agreement but without notice to the Guarantors and without
affecting the Guarantors’ obligations hereunder, assign or sell participations
in the Guaranteed Obligations and this Guaranty, in whole or in part, and (c) be
governed by the internal laws of the State of New York.  Each Guarantor hereby
irrevocably (i) submits to the exclusive jurisdiction of any State court sitting
in New York County and the United States District Court of the Southern District
of New York in any action or proceeding arising out of or relating to this
Guaranty, and (ii) waives to the fullest extent permitted by law any defense
asserting an inconvenient forum in connection therewith.  Service of process by
the Lender Parties in connection with such action or proceeding shall be binding
on a Guarantor if sent to such Guarantor by registered or certified mail at the
address for notices to be delivered to the Borrower pursuant to Section 11.6 of
the Loan Agreement.  Each Guarantor agrees that the Lender Parties may, subject
to Section 11.12 of the Loan Agreement, disclose to any prospective purchaser
and any purchaser of all or part of the Guaranteed Obligations any and all
information in the Lender Parties’ possession concerning the Guarantors.

 

16.          Condition of the Borrower.  Each Guarantor acknowledges and agrees
that it has the sole responsibility for, and has adequate means of, obtaining
from the Borrower such information concerning the financial condition, business
and operations of the Borrower as such Guarantor requires, and that the Lender
Parties have no duty, and such Guarantor is not relying on the Lender Parties at
any time, to disclose to such Guarantor any information relating to the
business, operations or financial condition of the Borrower.

 

17.          Setoff.  After demand upon the Guarantors for payment under this
Guaranty, each Guarantor hereby specifically authorizes each Bank (subject to
the approval of the Required Banks) in which such Guarantor maintains a deposit
account (whether a general or special deposit account, other than trust
accounts) or a certificate of deposit to setoff any Guaranteed Obligations owed
to the Banks against such deposit account or certificate of deposit without
prior notice to any Guarantor (which notice is hereby waived) whether or not
such deposit account or certificate of deposit has then matured.  Nothing

 

4

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

 

in this shall limit or restrict the exercise by a Bank of any right to setoff or
banker’s lien under applicable Law, subject to the approval of the Required
Banks.

 

18.          Other Guarantees.  Unless otherwise agreed by the Lender Parties
and the Guarantors in writing, this Guaranty is not intended to supersede or
otherwise affect any other guaranty now or hereafter given by the Guarantors for
the benefit of the Lender Parties or any term or provision thereof.

 

19.          Additional Guarantors.  Any other Person may become a Guarantor
hereunder and become bound by the terms and conditions of this Guaranty, in each
case effective as of the date set forth in the applicable Instrument of Joinder,
by executing and delivering to the Administrative Agent an Instrument of Joinder
substantially in the form attached hereto as Exhibit “A” (an “Instrument of
Joinder”).

 

20.          Representations and Warranties.  Each Guarantor represents and
warrants that (i) it is duly organized and in good standing under the laws of
the jurisdiction of its organization and has the requisite corporate, limited
liability company or limited partnership, as applicable, power to make and
perform this Guaranty, and all necessary corporate, limited liability company or
limited partnership, as applicable, authority to execute, deliver and perform
all of its obligations under this Guaranty; (ii) this Guaranty constitutes its
legal, valid and binding obligation enforceable in accordance with its terms,
except as enforcement may be limited by Debtor Relief Laws or by equitable
principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion; (iii) the making and performance of
this Guaranty does not and will not violate the provisions of any applicable
material law, regulation or order, does not and will not require any consent
under, any material agreement, instrument, or document to which it is a party or
by which it or any of its property may be bound or affected and does not and
will not (when aggregated with any defaults and breaches of the Borrower and
other Guarantors) result in the breach of or constitute a default under, or
cause or permit the acceleration of any obligation owed under, any indenture or
loan or credit agreement to which such Party or any of its Property is bound or
affected with respect to any obligation or obligations aggregating $25,000,000
or more; (iv) all material consents, approvals, licenses and authorizations of,
and filings and registrations with, any governmental authority required under
applicable law and regulations for the making and performance of this Guaranty
have been obtained or made and are in full force and effect; and (v) by virtue
of its relationship with the Borrower, the execution, delivery and performance
of this Guaranty is for the direct benefit of such Guarantor and it has received
adequate consideration for this Guaranty.

 

21.          WAIVER OF JURY TRIAL; FINAL AGREEMENT.  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 GUARANTY.  THIS GUARANTY REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Signature Pages Follow]

 

5

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Executed as of the date first written above.

 

 

 

GUARANTORS:

 

 

 

 

 

[ADD GUARANTORS],

 

a [                  ] corporation

 

 

 

 

 

 

By:

 

 

Name: 

 

Title:

 

 

 

 

 

ADMINISTRATIVE AGENT:

 

 

 

 

 

CITIBANK, N.A.,

 

as Administrative Agent

 

 

 

 

 

 

By:

 

 

Name: 

 

Title:

 

[Signature Page — Subsidiary Guaranty]

 

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

 

EXHIBIT A

 

INSTRUMENT OF JOINDER

 

THIS INSTRUMENT OF JOINDER (“Joinder”) is executed as of                     ,
by
                                                                                                                                              ,
a                        (“Joining Party”), and delivered to the Administrative
Agent pursuant to the terms of that certain Subsidiary Guaranty dated as of
August 27, 2013 (the “Guaranty”). Terms used but not defined in this Joinder
shall have the meanings defined for or ascribed to those terms in the Guaranty.

 

RECITALS

 

A.            The Guaranty was made by the Guarantors in favor of the Banks that
are parties to that certain Revolving Credit Agreement, dated as of August 27,
2013 (as amended, extended, renewed, supplemented, or otherwise modified from
time to time, the “Loan Agreement”), by and among WCI Communities, Inc., a
Delaware corporation, as Borrower, the Banks party thereto from time to time,
and Citibank, N.A., as Administrative Agent.

 

B.            Joining Party is becoming a Guarantor pursuant to Section 5.9 of
the Loan Agreement.

 

C.            Joining Party expects to realize direct and indirect benefits from
the availability to Borrower of credit facilities pursuant to the Loan
Agreement, as the result of financial or business support which may be provided
to such Joining Party by Borrower.

 

NOW THEREFORE, Joining Party agrees as follows:

 

AGREEMENT

 

1.             By this Joinder, Joining Party becomes a “Guarantor” under and
pursuant to Section 19 of the Guaranty. Joining Party agrees that, upon its
execution hereof, it will become a Guarantor under the Guaranty with respect to
all Indebtedness of Borrower heretofore or hereafter incurred under the Loan
Agreement, and will be bound by all terms, conditions, and duties applicable to
a Guarantor under the Guaranty.

 

2.             The effective date of this Joinder is                       .

 

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“Joining Party”

 

 

 

a

 

 

 

 

 

 

By:

 

 

 

 

 

 

Printed Name and Title

 

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EXHIBIT H-1

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Banks That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is made to that certain Revolving Credit Agreement dated as of August
27, 2013 by and among WCI COMMUNITIES, INC., a Delaware corporation (the
“Borrower”), the Banks from time to time party thereto, and CITIBANK, N.A., as
the Administrative Agent (as therein defined) (as the same may be modified,
amended or restated from time to time, the “Credit Agreement”).

 

Pursuant to the provisions of Section 4.06(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) evidencing such Loan(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 Internal Revenue Code, (iii) it is not a ten
percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B)
of the Internal Revenue Code and (iv) it is not a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Internal
Revenue Code.

 

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, the undersigned shall promptly so inform the Borrower and
the Administrative Agent, 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 in either of the two calendar years
preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF LENDER]

 

 

 

 

By:

 

 

 

Name: 

 

 

Title: 

 

Date:                      , 2013

 

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EXHIBIT H-2

 

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 Revolving Credit Agreement dated as of August
27, 2013 by and among WCI COMMUNITIES, INC., a Delaware corporation (the
“Borrower”), the Banks from time to time party thereto, and CITIBANK, N.A., as
the Administrative Agent (as therein defined) (as the same may be modified,
amended or restated from time to time, the “Credit Agreement”).

 

Pursuant to the provisions of Section 4.06(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 Internal
Revenue Code, (iii) it is not a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Internal Revenue Code, and (iv) it is
not a controlled foreign corporation related to the Borrower as described in
Section 881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished its participating Lender 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, the undersigned shall promptly so inform such Lender in writing, 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 in either of the
two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF PARTICIPANT]

 

 

 

 

By:

 

 

 

Name: 

 

 

Title: 

 

 

Date:                      , 2013

 

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EXHIBIT H-3

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is made to that certain Revolving Credit Agreement dated as of August
27, 2013 by and among WCI COMMUNITIES, INC., a Delaware corporation (the
“Borrower”), the Banks from time to time party thereto, and CITIBANK, N.A., as
the Administrative Agent (as therein defined) (as the same may be modified,
amended or restated from time to time, the “Credit Agreement”).

 

Pursuant to the provisions of Section 4.06(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
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect 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 Internal Revenue
Code, (iv) none of its direct or indirect partners/members is a ten percent
shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the
Internal Revenue Code and (v) none of its direct or indirect partners/members is
a controlled foreign corporation related to the Borrower as described in Section
881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption.  By executing this certificate, the undersigned agrees that (1) if
the information provided on this certificate changes, the undersigned shall
promptly so inform such Lender 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 in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF PARTICIPANT]

 

 

 

 

By:

 

 

 

Name: 

 

 

Title: 

 

 

Date:                      , 2013

 

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EXHIBIT H-4

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Banks That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to that certain Revolving Credit Agreement dated as of August
27, 2013 by and among WCI COMMUNITIES, INC., a Delaware corporation (the
“Borrower”), the Banks from time to time party thereto, and CITIBANK, N.A., as
the Administrative Agent (as therein defined) (as the same may be modified,
amended or restated from time to time, the “Credit Agreement”).

 

Pursuant to the provisions of Section 4.06(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) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect 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 Internal Revenue Code, (iv)
none of its direct or indirect partners/members is a ten percent shareholder of
the Borrower within the meaning of Section 871(h)(3)(B) of the Internal Revenue
Code and (v) none of its direct or indirect partners/members is a controlled
foreign corporation related to the Borrower as described in Section 881(c)(3)(C)
of the Internal Revenue Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption.  By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, 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 in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF LENDER]

 

 

 

 

By:

 

 

 

Name: 

 

 

Title: 

 

Date:                      , 2013

 

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EXHIBIT I

 

FORM OF SOLVENCY CERTIFICATE

 

August 27, 2013

 

This Solvency Certificate is being executed and delivered pursuant to Section
8.1(a)(iv) of the Revolving Credit Agreement, dated as of the date hereof (the
“Credit Agreement”; terms defined therein being used herein as defined therein)
among WCI Communities, Inc., a Delaware corporation, as Borrower (the
“Borrower”), the other Guarantors party thereto from time to time, Citibank,
N.A., as Administrative Agent, and each Bank from time to time party thereto.

 

I, Russell Devendorf, the Chief Financial Officer of the Borrower, solely in
such capacity and not in an individual capacity, hereby certify that I am the
Chief Financial Officer of the Borrower and that I am familiar with the
businesses and assets of the Borrower and its Subsidiaries (taken as a whole), I
have made such other investigations and inquiries as I have deemed appropriate
and I am duly authorized to execute this certificate (this “Solvency
Certificate”) on behalf of the Borrower pursuant to the Credit Agreement.

 

I further certify, solely in my capacity as Chief Financial Officer of the
Borrower, and not in my individual capacity, as of the date hereof and after
giving effect to the incurrence of the indebtedness and obligations being
incurred in connection with the Credit Agreement on the date hereof, if any,
that, (i) the sum of the debt (including contingent liabilities) of the Borrower
and its Restricted Subsidiaries, taken as a whole, does not exceed the present
fair saleable value (on a going concern basis) of the assets of the Borrower and
its Restricted Subsidiaries, taken as a whole; (ii) the capital of the Borrower
and its Restricted Subsidiaries, taken as a whole, is not unreasonably small in
relation to the business of the Borrower and its Restricted Subsidiaries, taken
as a whole, contemplated as of the date hereof; and (iii) the Borrower and its
Restricted Subsidiaries, taken as a whole, do not intend to incur, or believe
that they will incur, debts including current obligations beyond their ability
to pay such debt as they mature in the ordinary course of business. For the
purposes hereof, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability (irrespective of whether such contingent
liabilities meet the criteria for accrual under FASB Accounting Standards
Codification (ASC) Topic 450, “Contingencies”).

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, I have executed this Solvency Certificate on the date first
written above.

 

 

WCI COMMUNITIES, INC.

 

 

 

 

By:

 

 

 

 

 

 

Name: Russell Devendorf

 

 

Title: Chief Financial Officer

 

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