Exhibit 10.1
 
DEBTOR-IN-POSSESSION LOAN AGREEMENT
 
among
 
GREENWOOD FINANCIAL INC. AND CERTAIN AFFILIATES,
as Borrowers

 
ORLEANS HOMEBUILDERS, INC.,
as Parent

 
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
 
WELLS FARGO SECURITIES, LLC,
as Lead Arranger and Bookrunner
 
and
 
THE LENDERS PARTY HERETO

 
$120,000,000
 
Dated as of April 21, 2010

 

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TABLE OF CONTENTS
 

       
Page
         
SECTION 1.
 
DEFINITIONS
 
2
1.1
 
Definitions
 
2
1.2
 
Construction of Terms
 
23
1.3
 
Accounting Reports and Principles
 
23
1.4
 
Business Day; Time
 
23
SECTION 2.
 
AMOUNT AND TERMS OF THE COMMITMENTS, LOANS, LETTERS OF CREDIT AND TRI-PARTY
AGREEMENTS
 
24
2.1
 
The Commitments
 
24
2.2
 
Letters of Credit
 
26
2.3
 
Use of Proceeds
 
27
2.4
 
Loans and Advances
 
27
2.5
 
Interest Rate
 
34
2.6
 
Default Rate
 
34
2.7
 
Fees Payable by Borrowers
 
34
2.8
 
Repayment
 
35
2.9
 
Commitment Reductions
 
36
2.10
 
Prepayments
 
36
2.11
 
General Payment Provisions
 
39
2.12
 
Payment Administration and Cash Management
 
40
2.13
 
LIBOR Provisions
 
41
2.14
 
Notes
 
42
2.15
 
Taxes
 
42
2.16
 
Increased Costs; Capital Adequacy
 
43
2.17
 
Survival of Indemnity
 
44
2.18
 
Replacement of Lenders
 
44
2.19
 
Lending Office
 
45
SECTION 3.
 
MATTERS RELATING TO REAL ESTATE
 
45
3.1
 
Budget
 
45
3.2
 
Appraisals
 
47
3.3
 
Sale of Assets
 
47
3.4
 
Marketing and Sale of Assets
 
48
3.5
 
Advisors
 
49

 
i

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SECTION 4.
 
CONDITIONS OF LENDING
 
49
4.1
 
Agreement to Make Available the Commitments, Loans, Letters of Credit and
Tri-Party Agreements
 
49
4.2
 
Availability of Letters of Credit and Tri-Party Agreements
 
55
4.3
 
Conditions Precedent to Revolving Loans
 
55
SECTION 5.
 
REPRESENTATIONS AND WARRANTIES
 
56
5.1
 
Use of Proceeds
 
56
5.2
 
Incorporation, Good Standing, and Due Qualification
 
56
5.3
 
Power and Authority; No Conflict
 
57
5.4
 
Legally Enforceable Agreement
 
57
5.5
 
Financial Statements; Accuracy of Information.
 
57
5.6
 
Conflicts
 
58
5.7
 
Consents
 
58
5.8
 
Litigation
 
58
5.9
 
Other Agreements
 
58
5.10
 
No Defaults and Outstanding Judgments or Orders
 
59
5.11
 
Taxes
 
59
5.12
 
Debt
 
59
5.13
 
ERISA
 
59
5.14
 
Ownership and Liens
 
59
5.15
 
Representations and Warranties as to Real Estate
 
60
5.16
 
Representation and Warranties as to other Collateral
 
61
5.17
 
No Violation of Law
 
61
5.18
 
Compliance with Covenants
 
61
5.19
 
Securities Activities
 
62
5.20
 
DIP Representations
 
62
5.21
 
CRO
 
62
SECTION 6.
 
AFFIRMATIVE COVENANTS
 
62
6.1
 
Reporting Requirements
 
62
6.2
 
Payment of Taxes
 
64
6.3
 
Access to Properties, Books and Records; Inspections
 
65
6.4
 
Maintenance of Records
 
65
6.5
 
Maintenance of Existence
 
65
6.6
 
Insurance
 
65
6.7
 
ERISA
 
68
6.8
 
Accounts
 
68

 
ii

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6.9
 
Compliance with Laws
 
68
6.10
 
Payment of Debt
 
68
6.11
 
Maintenance of Properties
 
68
6.12
 
Deposit Accounts, Securities Accounts and Cash Management Systems
 
68
6.13
 
Tax Refunds
 
69
6.14
 
Monitoring of Expenses
 
69
6.15
 
Budget Compliance
 
69
6.16
 
Other Actions
 
70
6.17
 
Reduction of Letters of Credit
 
70
6.18
 
Further Assurances
 
70
6.19
 
Landlord Waivers
 
70
SECTION 7.
 
NEGATIVE COVENANTS
 
71
7.1
 
Creation of Debt
 
71
7.2
 
Grant of Liens; Equitable Lien; Negative Pledge; Restrictions
 
71
7.3
 
Mergers
 
71
7.4
 
Asset Sales
 
71
7.5
 
Transactions With Affiliates
 
72
7.6
 
Use of Proceeds
 
72
7.7
 
Restricted Payments
 
72
7.8
 
Amendments of Documents Relating to Subordinated Debt
 
72
7.9
 
Nature of Business
 
72
7.10
 
Subrogation
 
73
7.11
 
Investments; Acquisitions
 
73
7.12
 
ERISA and Other Compensation Arrangements
 
73
7.13
 
Compensation
 
73
7.14
 
DIP Financing
 
74
7.15
 
Alteration of Rights of Lenders
 
74
7.16
 
Chapter 11 Claims
 
74
7.17
 
Reclamation Claims; Bankruptcy Code § 546(c) Agreements.
 
74
7.18
 
506(c) Claims
 
74
7.19
 
Other Payments
 
74
7.20
 
Construction
 
75
SECTION 8.
 
FINANCIAL COVENANTS
 
75
8.1
 
Real Estate Acquisitions
 
75
8.2
 
Minimum Collateral Value Ratio
 
75
8.3
 
Limitation on Holdings of Cash and Cash Equivalents
 
75

 
iii

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SECTION 9.
 
EVENTS OF DEFAULT
 
75
SECTION 10.
 
REMEDIES
 
79
10.1
 
Remedies of Lenders
 
79
10.2
 
Effect of Delay
 
80
10.3
 
Acceptance of Partial Payment
 
80
10.4
 
Application of Proceeds
 
80
10.5
 
Other Available Remedies
 
80
10.6
 
Waiver of Marshalling of Assets
 
80
10.7
 
Waiver of Counterclaim
 
81
10.8
 
Relief from Stay
 
81
10.9
 
Further Remedies
 
81
10.10
 
Credit Bidding
 
81
SECTION 11.
 
THE AGENT
 
82
11.1
 
Appointment
 
82
11.2
 
Delegation of Duties
 
82
11.3
 
Exculpatory Provisions
 
82
11.4
 
Reliance by Agent
 
83
11.5
 
Non-Reliance on Agent and Other Lenders
 
83
11.6
 
Indemnification
 
84
11.7
 
Consequential Damages
 
84
11.8
 
Agent in Its Individual Capacity
 
84
11.9
 
Resignation or Removal of Agent as Agent
 
84
11.10
 
Authority
 
85
11.11
 
Borrower Default
 
85
11.12
 
Lender Default
 
86
11.13
 
Ratable Sharing
 
87
11.14
 
Documentation
 
87
SECTION 12.
 
MISCELLANEOUS
 
88
12.1
 
Modifications; Amendments, Waivers and Consents
 
88
12.2
 
Binding Nature
 
88
12.3
 
Governing Law
 
89
12.4
 
Time of Performance
 
89
12.5
 
Severability
 
89
12.6
 
Captions
 
89
12.7
 
Computations
 
89
12.8
 
Continuing Obligation
 
89

 
iv

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12.9
 
Assignment and Participation
 
89
12.10
 
Notices
 
92
12.11
 
Cumulative Remedies
 
96
12.12
 
Third Party Beneficiaries
 
96
12.13
 
Entire Agreement
 
96
12.14
 
Counterparts
 
96
12.15
 
Expenses and Indemnification.
 
97
12.16
 
Relationship of Parties
 
99
12.17
 
Damage Waiver
 
99
12.18
 
Publicity
 
99
12.19
 
No Implied Waiver
 
99
12.20
 
USA Patriot Act
 
99
12.21
 
Conflict; Construction of Documents; Reliance
 
100
12.22
 
Jurisdiction
 
100
12.23
 
Waiver of Jury Trial
 
100
12.24
 
Interim Loan Documents; No Novation or Impairment of Security Interests
 
101
12.25
 
General Acknowledgments
 
101
12.26
  
Releases
  
101

 
Exhibits
         
A
 
-
 
Form of Term Note
B
 
-
 
Form of Revolving Note
C
 
-
 
Form of Request for Revolving Loan
D
 
-
 
Form of Application and Agreement for Irrevocable Standby Letter of Credit
E
 
-
 
Form of Budget
F
 
-
 
Form of Compliance Certificate
G
 
-
 
Form of Assignment and Assumption
H
 
-
 
Form of Common Interest and Confidentiality Agreement
I
 
-
 
Final Order
         
Schedules
         
1(a)
 
-
 
Schedule of Borrowers
1(b)
 
-
 
Schedule of Allocated Values
2.1
 
-
 
Schedule of Commitments
2.2(a)
 
-
 
Schedule of Letters of Credit and Tri-Party Agreements
3.4
 
-
 
Schedule of Guideline Prices
5.2
 
-
 
Schedule of Ownership and Jurisdiction of Organization
5.14
 
-
 
Schedule of Real Estate
5.15
  
-
  
Schedule of New Jersey Real Estate Subject to Obligation to Remediate Discharge
of Hazardous Substance

 
v

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5.16
 
-
 
Schedule of Intellectual Property
7.8
 
-
 
Schedule of Existing Cost-Sharing Partnerships
7.20
  
-
  
Schedule of Units Upon Which Construction May Occur

 
vi

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DEBTOR-IN-POSSESSION LOAN AGREEMENT
 
This Debtor-in-Possession Loan Agreement (this “Agreement”), made as of the 21st
day of April, 2010, by and among GREENWOOD FINANCIAL, INC., a Delaware
corporation (“Master Borrower”), ORLEANS HOMEBUILDERS, INC. (“Parent”), each of
the other Subsidiaries of Parent identified on Schedule 1(a) that is attached
hereto as borrowers (together with Master Borrower and Parent, each a “Borrower”
and, collectively, the “Borrowers”), the Lenders who are or may become a party
hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent for the Lenders
(“Agent”).
 
BACKGROUND
 
A.          Pursuant to that certain Amended and Restated Revolving Credit Loan
Agreement dated as of December 22, 2004 (the “Original Credit Agreement”),
executed by Master Borrower, certain of the other Borrowers, Agent and certain
of the Lenders, such Lenders agreed to provide a credit facility to Borrowers on
the terms and conditions contained in the Original Credit Agreement to finance
Borrowers’ acquisition of residential real estate and construction activities.
 
B.           Pursuant to that certain Amended and Restated Revolving Credit Loan
Agreement dated as of January 24, 2006 (as amended prior to the date hereof, the
“Amended Credit Agreement”), executed by Master Borrower, certain of the other
Borrowers, Agent and certain of the Lenders, such Lenders agreed to amend and
restate the Original Credit Agreement on the terms and conditions contained in
the Amended Credit Agreement.
 
C.           Pursuant to that certain Second Amended and Restated Revolving
Credit Loan Agreement dated as of September 30, 2008 (as amended prior to the
date hereof, the “Pre-Petition Credit Agreement”), executed by Master Borrower,
certain of the other Borrowers, Agent and certain of the Lenders (the
“Pre-Petition Lenders”), such Pre-Petition Lenders agreed to amend and restate
the Amended Credit Agreement on the terms and conditions contained in the
Pre-Petition Credit Agreement.
 
D.          The Pre-Petition Credit Agreement matured on December 20, 2009 and
the Borrowers thereunder were unable to repay the Pre-Petition Balance at such
time.
 
E.           Certain Borrowers and Parent requested, and Agent and Pre-Petition
Lenders agreed, to enter into a limited waiver on December 18, 2009 to provide
the parties until February 12, 2010 to establish the terms and conditions under
which the Agent and Pre-Petition Lenders might extend the maturity of the
Pre-Petition Credit Agreement and no such agreement was reached.
 
F.           On March 1, 2010 (the “Petition Date”), the Borrowers each filed
voluntary petitions for relief under chapter 11 of the Bankruptcy Code which are
being jointly administered under Case No. 10-10684 (collectively, the
“Bankruptcy Cases”) and are pending in the United States Bankruptcy Court for
the District of Delaware (the “Bankruptcy Court”).

 
1

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G.           On March 3, 2010 (the “Interim Order Date”), the Bankruptcy Court
entered that certain Interim Order Pursuant to Bankruptcy Code Section 105, 361,
362, 363, 364 and 507 and Bankruptcy Rules 2002, 4001 and 9014 (I) Authorizing
the Borrowers (A) to obtain Post-Petition Financing and (B) to use Cash
Collateral and (II) Granting (A) Adequate Protection to Pre-Petition Secured
Parties and (B) Related Relief (together with all exhibits and schedules
thereto, collectively, the “Interim Order”), which among other things approved
certain interim financing pursuant to the terms and conditions of the term sheet
(the “Term Sheet”) and letter agreement (the “Letter Agreement”, together with
the Interim Order and the Term Sheet, the “Interim Loan Documents”).
 
H.           The Borrowers, the Lenders, and the Agent desire to set forth the
terms and conditions under which the Lenders will make available to the
Borrowers certain credit facilities to be used for the purposes specified in
this Agreement and amend and restate the Interim Loan Documents;
 
I.            Borrowers desire to secure all of the Indebtedness hereunder and
under the other Loan Documents with a first priority Lien on all of its real,
personal and mixed property.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged and intending to be legally bound, the parties
hereto agree to amend and restate the Interim Loan Documents as follows:
 
SECTION 1.
DEFINITIONS

 
1.1         Definitions.  In addition to other words and terms defined elsewhere
in this Agreement, as used in this Agreement, the following words and terms
shall have the following meanings, respectively, unless the context hereof
otherwise clearly requires:
 
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by Agent.
 
“Advisory Agent” means Capstone Advisory Group LLC or any successor satisfactory
to Agent.
 
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
 
“Agent” means Wells Fargo Bank, National Association, in its capacity as agent
for Lenders, and any successor thereto appointed pursuant to Section 11.9.
 
“Agreement” means this Debtor-in-Possession Loan Agreement, and any schedules,
exhibits, riders, extensions, supplements, amendments, or modifications to this
Debtor-in-Possession Loan Agreement.
 
“Allocated Value” means the value attributed to Projects in the Borrowing Base
Certificate delivered pursuant to Section 4.1(c)(viii) and set forth on Schedule
1(b).
 
“Alternate Interest Rate” means, at any time, the per annum rate of interest
that is equal to the sum of (A) the higher of (i) the Prime Rate, (ii) the rate
that is 1.50% in excess of the 1-month LIBOR Rate, (iii) the rate that is 1.50%
in excess of the Federal Funds Rate, or (iv) two percent (2%) plus (B) the
Applicable Spread in effect on such day.  Any change in the Base Rate due to a
change in the Prime Rate, the LIBOR Rate or the Federal Funds Rate shall be
effective on the effective date of such change.

 
- 2 -

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“Amended Credit Agreement” has the meaning assigned to such term in the Recitals
to this Agreement.
 
“Applicable Spread” means the following amounts per annum:
 
Term Loan
Margin
 
Revolving Loan
Margin
 
3.50%
  8.50%  

 
“Appraisal” means an appraisal or re-appraisal of the Appraised Value of Real
Estate  that (i) is directed to Agent, and (ii) contains terms and conditions
satisfactory to Agent and (iii) conforms in all respects to Title X of the
Federal Financial and Institutional Reform, Recovery and Enforcement Act of 1989
(FIRREA).
 
“Appraised Value” means, with respect to the Real Estate in any Project, the
value thereof as determined on an “as completed, fair market value” basis
pursuant to Section 3.2; provided that until Agent has determined the Appraised
Value pursuant to Appraisals ordered pursuant to Section 3.2(b), the Appraised
Value of a Project shall be deemed to be its Allocated Value.
 
“Approved Bank” any commercial bank incorporated under the laws of the United
States or any state thereof, having capital and unimpaired surplus in excess of
$1,000,000,000.
 
“Approved Fund” means, with respect to any Lender, any Fund that is administered
or managed by (i) such Lender, (ii) an Affiliate of such Lender or (iii) an
entity or an Affiliate of an entity that administers or manages a Lender.
 
“Asset Sale” means the sale by any Borrower (other than to another Borrower) to
any Person of (i) any of the stock of any Borrower or its Subsidiaries,
(ii) substantially all of the assets of any division or line of business of any
Borrower, or (iii) any other assets (whether tangible or intangible) of any
Borrower.
 
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 12.9(b), and accepted by Agent), in substantially the form
of Exhibit G attached hereto.
 
“Authorized Signer” means any of the Persons listed on the certificate to be
delivered to Agent at Closing in accordance with Section 4.1(a)(iv) or on any
replacement certificate with respect thereto subsequently delivered to Agent at
any time.

 
- 3 -

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“Avoidance Actions” means all causes of action for preferences, fraudulent
conveyances, and other avoidance power claims, including, without limitation,
any recoveries under Sections 506(c), 542, 545, 547, 548, 549, 550, 552(b) and
553 of the Bankruptcy Code and other avoidance or similar actions under the
Bankruptcy Code , whether received by judgment, settlement or otherwise.
 
“Bankruptcy Cases” has the meaning assigned to such term in the Recitals to this
Agreement.
 
“Bankruptcy Code” means 11 U.S.C. § 101 et. seq., as amended from time to time.
 
“Bankruptcy Court” has the meaning assigned to such term in the Recitals to this
Agreement.
 
“Borrower” has the meaning assigned to such term in the Introductory Paragraph
of this Agreement.
 
“Budget” has the meaning assigned to such term in Section 3.1(a).
 
“Budget Availability” means, at any time, the amount determined pursuant to
Section 3.1 scheduled to be made available for operations until the next
Revolving Loan, based on the most recently delivered Budget, plus, to the extent
available, the Excess Variance Amount.
 
“Business” means the improvement of land in the States of Pennsylvania, New
Jersey, New York, Illinois, Virginia, North Carolina, South Carolina and Florida
with residential dwellings, and the sale of such dwellings.
 
“Business Day” means any day other than a Saturday, a Sunday, a public holiday
under the laws of the Commonwealth of Pennsylvania or of the State of North
Carolina or another day on which banking institutions in such jurisdictions are
authorized or obligated to close.
 
“Capital Lease” means all leases that have been or should be capitalized on the
books of the lessee in accordance with GAAP.
 
“Capital Stock” means the capital stock of or other equity interests in a
Person, including the common or preferred equity interest in a corporation, the
membership interests in a limited liability company and the partnership
interests (general or limited) in a partnership and any equivalent ownership
interest in any other Person, as well as all warrants, rights or options to
purchase or acquire any of the foregoing.
 
“Carve-Out” has the meaning assigned to such term in the Final Order.
 
“Carve-Out Collateral Account” has the meaning assigned to such term in
Section 2.12(e).
 
“Cash” means money, currency or a credit balance in an unrestricted Deposit
Account or a Securities Account controlled by a Borrower.
 
“Cash Collateral Account” means, collectively, any and all Deposit Accounts of
the Borrowers other than the Revolving Loan Collateral Account, the Letter of
Credit Collateral Account, and the Carve-Out Collateral Account.

 
- 4 -

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“Cash Equivalents” means, as at any date of determination, (i) marketable
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having maturities
of not more than one (1) year from the date of acquisition, (ii) time deposits,
certificates of deposit or bankers’ acceptances of any Approved Bank, with such
deposits, acceptances or certificates having maturities of not more than one (1)
year from the date of acquisition, (iii) repurchase obligations with a term of
not more than seven (7) days for underlying securities of the types described in
clauses (i) or (ii) and entered into with any Approved Bank, (iv) commercial
paper or finance company paper issued by any Person incorporated under the laws
of the United States or any state thereof and rated at least A-1 or the
equivalent thereof by Standard & Poor’s (“S&P”) or at least P-1 or the
equivalent thereof by Moody’s Investors Service, Inc. (“Moody’s”), and in each
case maturing not more than one year after the date of acquisition, and (iv)
investments in money market funds or mutual funds, at least ninety five percent
(95%) of whose assets consist of securities and other obligations of the type
described in clause (i) through (iv) above, that has net assets of not less than
$1,000,000,000, and has the highest rating obtainable from either S&P or
Moody’s.  All such Cash Equivalents must be denominated solely for payment in
Dollars.  Overnight deposits and demand deposits maintained in the ordinary
course of business shall be considered cash.
 
“Change of Control” means the occurrence of one or more of the following events:
 
1.           the occurrence of a change in the composition of the Board of
Directors of Parent such that a majority of the members of Board of Directors
are not a member who (i) was a member of such Board of Directors on the Closing
Date or (ii) was nominated for election or elected to such Board of Directors
with the affirmative vote of a majority of the members who were either members
of such Board of Directors on the Closing Date or whose nomination or election
was previously so approved; or
 
2.           Mitchell Arden ceases to be the CRO of Parent and he is not
replaced within five (5) Business Days by a Person satisfactory to Agent and
Majority Revolving Lenders.
 
“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (i) the adoption or taking effect of any law, rule, regulation
or treaty, (ii) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof or (iii) the making or issuance of any request, guideline
or directive (whether or not having the force of law) by any Governmental
Authority.
 
“Closing” and “Closing Date” means the date on which each of the Loan Documents
has been executed and delivered by all of the parties thereto and all of the
conditions contained in Section 4.1 have been satisfied.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
 
“Collateral” means, at any time, all of the real, personal and mixed property in
which a Lien is purported to be granted pursuant to the Orders or any Collateral
Documents as security for the Indebtedness, including without limitation,
inventory, accounts receivable, chattel paper, contract rights, documents,
equipment, fixtures, deposit accounts, general intangibles (including, without
limitation, all tax refunds, copyrights, licensing agreements, patents,
trademarks, and trade names), instruments, real property, securities and other
investment property, all cash collateral, Avoidance Actions and proceeds of all
of the foregoing, wherever located.

 
- 5 -

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“Collateral Documents” means the Security Agreements, the Mortgages, the Control
Agreements and all other instruments or documents delivered by any Borrower
pursuant to this Agreement or any of the other Loan Documents in order to grant
to Agent, on behalf of Lenders, a Lien on any real, personal or mixed property
of that Borrower as security for the Indebtedness.
 
“Collateral Value Ratio” means, as of any date of determination, the ratio of
(a) aggregate Appraised Value (based on the most recent Appraisal) of all Real
Estate minus Cost-to-Complete (excluding on a Project level basis where
Allocated Value is used) and minus the Appraised Value of Units or Lots sold, to
(b) the sum of (x) outstanding Revolving Loans plus outstanding Term Loans plus
(y) the face amount of any issued Letters of Credit minus (z) Cash Collateral
held in the Revolving Loan Collateral Account, the Letter of Credit Collateral
Account, the Cash Collateral Account, and the Carve-Out Collateral Account;
provided that the following limitations shall apply:
 
(i)           Generally.  The amount of Appraised Value attributable to Projects
in any jurisdiction in which the liens of Mortgages are limited to a stated
amount that is less than the Commitments shall at no time exceed such stated
amount (which shall not be an aggregate amount) contained in each of the
then-outstanding Mortgages in such jurisdiction (that is, for example, if there
are five (5) Mortgages encumbering Projects in Florida, each with a stated
principal amount of $75,000,000, the maximum Appraised Value, at any time, on
account of Florida Projects would be $75,000,000).
 
(ii)         New York.  The amount of Appraised Value attributable to any
Project in the State of New York shall at no time exceed the stated amount of
the Mortgage that encumbers such Project.
 
(iii)        Purchase Money Mortgages.  The aggregate amount of Appraised Value
shall at all times be reduced by the then-outstanding aggregate principal
balance of all purchase money mortgages encumbering Projects that are Permitted
Liens and that do not secure the Indebtedness.
 
(v)         Documentation.  No Appraised Value shall be attributed to a Project
that has not satisfied the requirements of Section 4.1(d).
 
“Commitments” means the aggregate Term Loan Commitments and the Revolving Loan
Commitments.
 
“Committee” means the official committee of unsecured creditors duly appointed
in the Bankruptcy Cases.
 
“Compliance Certificate” means a certificate in the form attached hereto as
Exhibit F.

 
- 6 -

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“Common Interest and Confidentiality Agreement” means that certain Common
Interest and Confidentiality Agreement entered into by the Lenders effective as
of the Closing Date substantially in the form of Exhibit H attached hereto, as
amended from time to time.
 
“Company Certified” means reviewed by the CRO and certified by the CFO or other
authorized officer acceptable to the Agent that such information is true and
correct to the best of such certifying officer’s knowledge.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or
otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.
 
“Control Agreement” means an agreement, satisfactory in form and substance to
Agent and executed by the financial institution or securities intermediary at
which a Deposit Account or a Securities Account, as the case may be, is
maintained, pursuant to which such financial institution or securities
intermediary confirms and acknowledges Agent’s security interest in such
account, and agrees that the financial institution or securities intermediary,
as the case may be, will comply with instructions originated by Agent as to
disposition of funds in such account, without further consent by any Borrower.
 
“Cost Incurred” means:
 
(a)         With regard to the Appraised Value of finished Units, the total
amount incurred to date to construct the Unit; and
 
(b)         With regard to the Appraised Value of Lots of Improved Land, the
then-current book value thereof, determined in accordance with GAAP.
 
“Cost-to-Complete” means:
 
(a)         With regard to the Appraised Value of finished Units, the total
budgeted cost of constructing the vertical structure of the Unit equal to (i)
the base budget for the Unit type plus (ii) the higher of customized changes
from the base budget actually proposed by the buyer and customized changes
estimated by management based on historical experience, less Cost Incurred; and
 
(b)         With regard to the Appraised Value of Lots of Improved Land, the
total budgeted cost of land improvement (it being understood that total budgeted
costs exclude contingencies), less Cost Incurred.
 
“CRO” means Mitchell Arden, in his capacity as Chief Restructuring Officer of
Parent or any replacement officer satisfactory to Agent and Majority Revolving
Lenders.

 
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“Debt” means, for any Person as of any date, without duplication, all
(i) indebtedness or liability for borrowed money; (ii) obligations, whether or
not for money borrowed (a) represented by notes payable, or drafts accepted, in
each case representing extensions of credit, (b) evidenced by bonds, debentures,
notes or similar instruments, or (c) constituting purchase money indebtedness,
title retention debt instruments or other similar instruments, upon which
interest charges are customarily paid or that are issued or assumed as full or
partial payment for property or services rendered; (iii) lease obligations and
obligations that are treated as capitalized leases under GAAP;
(iv) reimbursement obligations under surety bonds, letters of credit and/or
tri-party agreements issued with respect to Improvements (whether or not the
same have been presented for payment); (v) reimbursement obligations under
Financial Letters of Credit and surety bonds (regardless of whether the same
have been presented for payment); (vi) obligations, contingent or otherwise,
under any synthetic lease, tax retention operating lease, off balance sheet loan
or similar off balance sheet financing arrangement if the transaction giving
rise to such obligation (a) is considered indebtedness for borrowed money for
tax purposes but is classified as an operating lease under GAAP and (b) does not
(and is not required pursuant to GAAP to) appear as a liability on the balance
sheet of a Person; (vii) liabilities arising under any “swap agreement” (as that
term is defined in 11 U.S.C. § 101, as heretofore or hereafter amended; and
(viii) without duplication, all liabilities of third parties of the type
described in (i)–(vii), inclusive, that are guaranteed by or otherwise recourse
to a Person, whether or not the obligations have been assumed.
 
“Defaulting Lender” has the meaning assigned to such term in Section 11.12.
 
“Default Rate” means a rate of interest that is equal to the applicable Interest
Rate otherwise payable with respect to Loans plus two and one-quarter percent
(2.25%) per annum.
 
“Deficiency Claim” means the unsecured portion of any claim the Agent or Lenders
have against the Borrowers relating to the Pre-Petition Debt or the
Indebtedness.
 
“Deposit Account” means a demand, time, savings, passbook or like account with a
federally insured bank or savings and loan association, other than an account
evidenced by a negotiable certificate of deposit.
 
“Dollars” and the sign “$” mean lawful money of the United States of America.
 
“Eligible Assignee” means (i) a Lender, an Affiliate of a Lender, an Approved
Fund, and (ii) (a) a commercial bank organized under the laws of the United
States or any state thereof; (b) a savings and loan association or savings bank
organized under the laws of the United States or any state thereof; (c) a
commercial bank organized under the laws of any other country or a political
subdivision thereof; provided that (1) such bank is acting through a branch or
agency located in the United States or (2) such bank is organized under the laws
of a country that is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country; and (d) any other entity
that is an “accredited investor” (as defined in Regulation D under the
Securities Act) that extends credit or buys loans as one of its businesses
including insurance companies, mutual funds and lease financing companies;
provided that, notwithstanding the foregoing, “Eligible Assignee” shall not
include (v) any Person with net assets of less than $500,000,000, (w) Parent or
any of Parent’s Affiliates, (x) any Person taking directions from or working in
concert with Parent or any of Parent’s Affiliates, (y) any competitor of Parent
or its Affiliates in the homebuilding industry or any Affiliate of such
competitor, or (z) any natural Person.

 
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“Environmental Claims” means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, accusations,
allegations, notices of noncompliance or violation, investigations (other than
internal reports prepared by any Person in the ordinary course of business and
not in response to any third party action or request of any kind) or proceedings
relating in any way to any actual or alleged violation of or liability under any
Environmental Law or relating to any permit issued, or any approval given, under
any such Environmental Law, including, without limitation, any and all claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages, contribution, indemnification cost recovery,
compensation or injunctive relief resulting from Hazardous Substances or arising
from alleged injury or threat of injury to human health or the environment.
 
“Environmental Condition” means (i) the presence or likely presence of any
Hazardous Substance under conditions indicating an existing, past, or a material
threat of Release at, to, or from structures on property or the environment,
regardless of whether the presence or likely presence of such Hazardous
Substance is in compliance with Environmental Law; (ii) any condition in air,
soil, surface water or ground water which adversely affects a work place where a
business operation occurs or an actual or intended residence, (iii) any damage
to a natural resource; and (iv) any contamination which must be assessed,
investigated, or remediated under any of the Environmental Laws.
 
“Environmental Law” means any presently existing or hereafter enacted or decided
federal, state or local statutory or common law relating to pollution or the
protection of human health or the environment, including without limitation, any
common law of nuisance or trespass, any judicial or administrative order, decree
or consent order pertaining to any Environmental Condition, and any law or
regulation relating to emissions, discharges, releases or threatened release of
any Hazardous Substance into the environment (including without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of any Hazardous Substance.
 
“Environmental Report” means any Phase I or Phase II environmental site
assessment, preliminary assessment report, site investigation, remedial
investigation workplan, or remedial action work plan or remediation report that
is (i) prepared with respect to any lots within any of the Projects, or for any
of the Projects, in accordance with any Environmental Law applicable at the time
of preparation and the Agent’s then-current protocol for environmental studies
of land for residential development by a qualified environmental engineer,
geologist or hydrogeologist acceptable to Agent in its reasonable business
judgment, (ii) in the case of any Phase I environmental site assessment, dated
not earlier than twelve (12) months prior to the acquisition by any of the
Borrowers or any affiliate of the Borrowers of the property assessed by such
Phase I environmental site assessment, (iii) in the case of any Phase I
environmental site assessment prepared after November 1, 2005, prepared in
accordance with the standards and practices for all appropriate inquiries
codified at 40 C.F.R. Part 312, and (iv) if not addressed to Agent, as agent for
the Lenders, accompanied by a reliance letter (in form acceptable to Agent in
good faith) addressed to Agent as agent for the Lenders.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations and published interpretations thereof.

 
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“ERISA Affiliate” means any trade or business (whether or not incorporated),
which together with any Borrower (or some or all of them) would be treated as a
single employer under Section 414 of the Code or Section 4001 of ERISA.
 
“Eurocurrency Reserve Requirements” means, for any day as applied to a Loan, the
aggregate (without duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve System or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board of Governors of the
Federal Reserve System) maintained by a member bank of the Federal Reserve
System.
 
“Event of Default” means any of the events specified in Section 9.
 
“Excess Variance Amount” has the meaning assigned to such term in Section
6.15(a).
 
“Excluded Taxes” means, with respect to Agent, any Lender or any other recipient
of any payment to be made by or on account of any obligation of any Borrower
hereunder (i) income and franchise taxes imposed on (or measured by) its net
income or net profits (or franchise taxes imposed in lieu of net income taxes)
imposed on Agent, such Lender or other recipient as a result of a present or
former connection between Agent, such Lender or such other recipient and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from Agent or such Lender having executed, delivered
or performed its obligations or received a payment hereunder, or enforced, this
Agreement, (ii) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction (iii) any withholding tax
that is imposed on amounts payable to Agent, such Lender or any other recipient
of any payment to be made by or on account of any obligation of any Borrower
hereunder, at the time such Lender becomes a party to this Agreement (or
designates a new Lending Office), except to the extent such Lender (or its
assignor, if any) was entitled, immediately prior to the time of designation of
a new Lending Office or assignment), to receive additional amounts from the
Borrowers with respect to such withholding tax pursuant to Section 2.15(a), and
(iv) Taxes attributable to such Lender’s failure to comply with Section 2.15(e).
 
“Federal Funds Rate” means for any day the rate per annum, based on a year of
360 days and actual days elapsed, and rounded upward to the nearest 1/100th of
one percent (0.01%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by Federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the “Federal Funds
Effective Rate” as of the Closing Date; provided that, if such Federal Reserve
Bank (or its successor) does not announce such rate on any day, the “Federal
Funds Effective Rate” for such day shall be the Federal Funds Rate for the last
day on which such rate was announced.
 
“Final” shall mean, as to any order, that such order is no longer subject to
review, reversal, modification or amendment by appeal or writ of certiorari.

 
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“Final Order” shall mean an order of the Bankruptcy Court substantially in the
form of Exhibit I attached hereto.
 
“Financial Statements” mean the reports of financial condition required to be
delivered pursuant to Sections 6.1(a), 6.1(b) and 6.1(c).
 
“Fiscal Quarter” means each of the three (3) month periods that ends on the last
day of the third (3rd), sixth (6th), ninth (9th) and twelfth (12th) months of a
Fiscal Year.
 
“Fiscal Year” means the period of twelve (12) consecutive calendar months on the
basis of which Parent reports its income for GAAP purposes, which twelve (12)
month period currently ends on each June 30.
 
“Foreign Lender” means any Lender that is organized, or lending through a branch
that is organized, under the laws of a jurisdiction other than that in which any
Borrower is resident for tax purposes.  For purposes of this definition, the
United States of America, each State thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.
 
“Fund” means any Person (other than a natural person) that (i) 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 business, or
(ii) temporarily warehouses loans for any Lender or any Person described in
clause (i) above.
 
“Funding Date” means the Business Day on which an Revolving Loan is made.
 
“GAAP” means generally accepted accounting principles as 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 as in effect on the date hereof or in
such other statements by such other Person as may be approved by a significant
segment of the accounting profession, which are applicable to the circumstances
as of the date of determination and which are applied on a consistent basis.
 
“Governmental Approvals” means all authorizations, consents, approvals, permits,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
 
“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).
 
“Hazardous Substance” means any substance, the possession, release, manufacture,
storage, use, generation, treatment, disposal, transportation or other
management of which is regulated by or pursuant to any Environmental Law and
shall include, without limitation, (i) any substance defined as hazardous by or
pursuant to the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.; (ii) any oil as
defined by the Oil Pollution Act of 1990, as amended, 33 U.S.C. § 2701 et seq.;
(iii) any hazardous, toxic, residual, industrial, municipal, or universal waste
or substance; (iv) any pollutant; (v) any contaminant; (vi) any chemical; and
(vii) any radioactive materials.

 
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“Home Sale Order” means that certain Final Order authorizing the Borrowers (a)
to contract and close on sales of homes; (b) to honor deposits and other
contractual obligations; (c) to sell homes free and clear of all liens, claims,
encumbrances, and other interests; (d) to establish procedures for the
resolution of lien and other claims; and (e) to use proceeds of home sales in
accordance with lien procedures.
 
“Improved Land” means land that (i) has received all Governmental Approvals
necessary for immediate development as for-sale residential housing, other than
building permits, provided that land that has received all such Governmental
Approvals except for state- and federally-issued permits (but not local
subdivision and land development approvals, which may, however, be conditioned
upon the receipt of state- and federally-issued permits) and that Borrower in
good faith believes will be issued within 120 days may be treated as Improved
Land until such permits are issued but only if such permits are issued within
such period of 120 days, and (ii) is fully developed with Improvements that have
been completed (other than the finish paving of streets).
 
“Improvements” means the site improvements required for the development,
improvement and sale of a Project, including, but not limited to, roads, curbs,
sidewalks, storm water drainage lines and facilities and water and sewer lines
and facilities.
 
“Indebtedness” means all obligations owing to the Agent or Lenders, or any of
them, under this Agreement, the Term Notes, the Revolving Notes (including, but
not limited to, the repayment of the Loans and all interest and other charges
due thereon and hereunder), and all other Loan Documents, whether for past,
present or future advances, renewals, extensions, modifications, interest, late
charges, costs and fees of any type or otherwise.
 
“Indemnified Taxes” means all Taxes other than Excluded Taxes and Other Taxes.
 
“Intellectual Property” means all patents, trademarks, trademarks, copyrights,
technology, software, know-how and processes used in or necessary for the
conduct of the business of the Borrowers.
 
“Interest Rate” means, on any day, the sum (expressed as a per annum rate of
interest) of (i) the LIBOR Market Index Rate as of such day plus (ii) the
Applicable Spread in effect on such day.
 
“Interim Loan Documents” has the meaning set forth in the Recitals hereto.
 
“Interim Order” has the meaning assigned to such term in the Recitals hereto.
 
“Interim Order Date” means March 3, 2010.
 
“IP Collateral” means, collectively, the Intellectual Property that constitutes
Collateral under the Security Agreement.

 
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“IP Filing Office” means the United States Patent and Trademark Office, the
United States Copyright Office or any successor or substitute office in which
filings are necessary or, in the opinion of Agent, desirable in order to create
or perfect Liens on, or evidence the interest of Agent and Lenders in, any IP
Collateral.
 
“Investment” means (i) any direct or indirect purchase or other acquisition by
any Borrower of, or of a beneficial interest in, any Securities (other than Cash
or Cash Equivalents) of any other Person, (other than a Borrower) (ii) any
direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Borrower from any Person (other than a borrower), of any equity
Securities of such Person or (iii) any direct or indirect loan, advance or
capital contribution by any Borrower to any other Person (other than a
Borrower), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business.  The amount of any Investment shall
be the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment (other than
adjustments for the repayment of, or the refund of capital with respect to, the
original principal amount of any such Investment).
 
“Issuance Fee” means the fee payable by Borrowers pursuant to Section 2.7(c).
 
“Issuer” means (i) Agent and (ii) each Approved Bank that has heretofore issued
a Letter of Credit or executed a Tri-Party Agreement hereunder.
 
“Joint Venture” means an entity that is engaged principally in the business of
for-sale residential real estate and in which Parent, directly or indirectly,
owns at least a 30% interest.
 
“Last Reported Fiscal Quarter” means, on any date, the later of (i) the Fiscal
Quarter most recently concluded that ended at least 50 days before such date or
(ii) the most recent Fiscal Quarter with respect to which Borrowers have
delivered to Agent a report as required by Section 6.1(b).
 
“Lender” means each Person executing this Agreement as a Lender, as set forth on
the signature pages hereto, and each Person that hereafter becomes a party to
this Agreement as a Lender pursuant to Section 12.9; provided that the term
“Lenders”, when used in the context of a particular Commitment, shall mean
Lenders having that Commitment.
 
“Lending Office” means with respect to a Lender, the office, branch, subsidiary
or affiliate of such Lender identified in the questionnaire delivered by such
Lender to Agent or otherwise selected by such Lender pursuant to Section 2.19
hereof.
 
“Letter of Credit” means letters of credit issued or to be issued by Issuer for
the account of a Borrower pursuant to Section 2.2(a).
 
“Letter of Credit Collateral Account” has the meaning assigned to such term in
Section 2.12(c).
 
“Letter of Credit Fee” means the fee payable by Borrowers pursuant to Section
2.7(c).

 
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“Letter of Credit Sublimit” means $15,000,000.
 
“LIBOR Market Index Rate” means, for any day, the greater of (x) two percent
(2%) and (y) a rate per annum determined in accordance with the following
formula (rounded upward to the nearest 1/100th of 1%):
 

 
1-month LIBOR Rate
 
1.0  –  Eurocurrency Reserve Requirements

 
“Lien” means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing).
 
“Limited Unsecured Claim Payment” means the payment or distribution made in the
Bankruptcy Cases, whether such payment is made pursuant to a Reorganization Plan
or otherwise, of the first $4,000,000 derived solely from the proceeds of any
Avoidance Actions to or for the benefit of unsecured creditors.
 
“Loan” or “Loan(s)” means, individually or collectively, the Term Loans and the
Revolving Loans.
 
“Loan Document(s)” means this Agreement, the Notes, the Collateral Documents,
the Letters of Credit and Tri-Party Agreements and all documents executed in
connection with the Loans evidenced by this Agreement and the Notes, and may
include, without limitation, all certificates issued with respect to any of the
foregoing and any renewals or modifications thereof.
 
“Loan Fees” means the various fees payable by Borrowers from time to time
pursuant to Section 2.7.
 
“London Business Day” means any Business Day on which commercial banks are open
for international business (including dealings in Dollar deposits) in London and
in Charlotte, North Carolina.
 
“Lot” or “Lots” shall mean the portions of Real Estate that have been approved
for construction thereon of a single family Unit.
 
“Majority Lenders” means, at any date, any combination of Lenders whose Pro Rata
Shares aggregate more than fifty percent (50%) of the aggregate Term Loan
Exposure for all Lenders plus the aggregate Revolving Loan Exposure of all
Lenders.
 
“Majority Revolving Lenders” means, at any date, any combination of Revolving
Lenders whose Pro Rata Shares aggregate more than fifty percent (50%) of the
aggregate Revolving Loan Exposure of all Revolving Lenders.

 
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“Margin Stock” has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System as in effect from time to time.
 
“Master Borrower” has the meaning assigned to such term in the Introductory
Paragraph to this Agreement.
 
“Material Adverse Effect” means, with respect to the Borrowers, or any of them,
from and after the Petition Date, a material and adverse effect upon the
business, properties, assets, operations, condition (financial or otherwise) or
prospects of the Borrowers and their respective subsidiaries taken as a whole,
or upon their ability to perform their respective obligations under the Loan
Documents in accordance with their respective terms.
 
“Maturity Date” means the earliest to occur of (i) March 1, 2011, (ii) the
effective date of an approved Reorganization Plan, (iii) conversion of the
Bankruptcy Cases to a Chapter 7 proceeding or (iv) any other termination of this
Agreement in accordance with the Final Order or this Agreement.
 
“Mortgage” or “Mortgages” means the mortgages or deeds of trust (as appropriate
for the jurisdiction in which the Project subject thereto is located) granted to
Agent (for the ratable benefit of the Lenders) or to a wholly-owned subsidiary
of Agent as trustee for Agent (for the ratable benefit of the Lenders), which
shall be security for the repayment of the Indebtedness, and shall constitute
first priority lien(s) upon the Project(s), subject to Permitted Priority
Liens.  The Mortgages shall be in a form prepared by and acceptable to Agent.
 
“Multiemployer Plan” means a Plan described in Section 4001(a)(3) of ERISA and
defined in Section 3(37) of ERISA that covers employees of either of a Borrower
or any ERISA Affiliate.
 
“Net Asset Sale Proceeds” means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received) received from such sale, net of any bona fide direct costs incurred in
connection with such sale, including (i) transfer taxes or similar taxes
customarily paid by seller, and (ii) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Debt (other than the
Indebtedness) that is (a) secured by a Permitted Priority Lien on the asset
being sold (b) actually paid at the time of receipt of such cash payment to a
Person that is not an Affiliate of any Borrower and (c) approved by the Agent,
(iii)  from any Asset Sale outside the ordinary course of business, payment of
the outstanding principal amount of, premium or penalty, if any, and interest on
any Debt (other than the Indebtedness) that is (a) secured by a Permitted
Priority Lien on an asset that was previously sold for which a claim had not
been filed at the time of the relevant Asset Sale, and (b) actually paid at the
time of receipt of such cash payment to a Person that is not an Affiliate of any
Borrower, and (iv) such other customary expenses set forth on HUD closing
statement paid or credited by a Borrower as seller (including, but not limited
to, sales commissions, settlement charges, real estate taxes, sales incentives
and credits, recording fees, escrows for uncompleted items, and title company
charges); provided that in the case of any sale of any Real Estate, Lot or Unit,
the amounts in clause (iv) shall not exceed ten percent (10%) of the gross Cash
payment for such asset without the consent of Agent (such consent not to be
unreasonably withheld).

 
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“Net Insurance/Condemnation Proceeds” means any Cash payments or proceeds
received by any Borrower or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of any Borrower or
any of its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by any Borrower or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
such Borrower or such Subsidiary in respect thereof.
 
“New York Mortgage” means each Mortgage that encumbers a Project located in the
State of New York.
 
“Notes” means the Term Notes and the Revolving Notes; “Note” means any of such
Notes.
 
“1-month LIBOR Rate” means, with respect to each day, the rate for Dollar
deposits of one-month maturity as reported on Reuters Screen LIBOR01 Page as of
11:00 a.m., London time, on such day or if such day is not a London Business
Day, then the immediately preceding London Business Day (or if not so reported,
then as determined by the Agent from another recognized source or interbank
quotation).
 
“Orders” means, collectively, the Interim Order and Final Order.
 
“Organizational Documents” means, with respect to any entity, the documents
pursuant to which a Person is organized, including without limitation, its
articles of incorporation, by-laws, partnership agreement, certificate of
limited partnership, limited liability company organization or formation
agreement, limited liability company certificate or articles of formation and
trust indenture, as appropriate to the entity.
 
“Original Credit Agreement” has the meaning defined in the Recitals to this
Agreement.
 
“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, assessments, charges or similar levies
imposed by any Governmental Authority arising 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.
 
“Parent” means Orleans Homebuilders, Inc., a Delaware corporation.
 
“Participant” has the meaning set forth in Section 12.9(d) hereof.
 
“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
 
“Permitted Critical Vendor Payment” means an account payable permitted to be
paid under Section 7.19(c).

 
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“Permitted Debt” means:
 
(i)             the Indebtedness;
 
(ii)            normal operating liabilities such as trade accounts payable,
taxes payable, and lease obligations as of the Closing Date, and customer
deposits under agreements of sale for the purchase of Real Estate, Units or Lots
in the ordinary course of business;
 
(iii)           reimbursement obligations under surety bonds, Letters of Credit
or Tri-Party Agreements (whether or not the same have been presented for
payment);
 
(iv)           purchase money mortgages and other Debt in existence on the
Closing Date and set forth on Schedule 7.1, each as in effect, and in the
principal amount outstanding, on the Closing Date;
 
(v)           obligations constituting deposits under agreements of sale for
Units; and
 
(v)           other Debt secured by Permitted Priority Liens not otherwise
described above.
 
“Permitted Liens” means:
 
(i)             Liens for taxes, assessments, or similar charges, incurred in
the ordinary course of business, the payment of which is not, at the time,
required by Section 6.2;
 
(ii)            Encumbrances consisting of zoning restrictions, easements or
other restrictions on the use of real property, none of which materially impairs
the use of such property by Borrower in for construction thereon and of Units,
and none of which is violated in any material respect by existing or proposed
structures or land use;
 
(iii)           Liens, security interests or mortgages in favor of Agent for the
benefit of the Lenders to secure the Indebtedness;
 
(iv)           Liens securing Permitted Debt set forth on Schedule 7.1 and
subordinated to the extent required/permitted pursuant to the Final Order;
 
(v)           attachments, judgments and other similar Liens arising in
connection with court proceedings, to the extent such Lien does not constitute
an Event of Default;
 
(vi)           Statutory rights of set-off, revocation, refund, chargeback or
similar rights or remedies of banks and other similar financial institutions
arising under deposit agreements or under the Uniform Commercial Code as to
Deposit Accounts or Securities Accounts (including funds or other assets
credited thereto or funds maintained therewith);
 
(vii)          Licenses (with respect to Intellectual Property and other
property), leases or subleases granted to third parties in accordance with any
applicable terms of the Collateral Documents and not interfering in any material
respect with the ordinary conduct of the business of any Borrower or resulting
in a material diminution in the value of any Collateral as security for the
Indebtedness;

 
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(viii)        any interest or title of a lessor or sublessor under any lease not
prohibited by this Agreement;
 
(ix)           Liens in favor of collecting banks arising under Section 4-210 of
the Uniform Commercial Code and other banker’s Liens arising by operation of
law;
 
(x)            statutory Liens arising in the ordinary course of business in
favor of landlords (a) for amounts not yet overdue or (b) for amounts that are
overdue and that (in the case of any such amounts overdue for a period in excess
of 5 days) are being contested in good faith by appropriate proceedings, so long
as (1) such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested amounts, and (2) in
the case of a Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
 
(xi)           Liens consisting of deposits securing the payment and performance
of real estate and other personal property leases not prohibited by the terms
hereof or by any other Loan Document incurred in the ordinary course of
business, so long as no foreclosure, sale or similar proceedings have been
commended with respect to any portion of the Collateral on account thereof; and
 
(xii)          other Permitted Priority Liens not otherwise described above.
 
“Permitted Priority Liens” means any unpaid and allowed liens that (a) attached
or were eligible to attach on the Petition Date and that under applicable law
are senior to, and (i) have not been subordinated to or (ii) are avoidable
pursuant to an Avoidance Action, the liens and security interests of the
Pre-Petition Lenders and are perfected prior to the Petition Date or that are
perfected subsequent to such commencement as permitted by Section 546(b) of the
Bankruptcy Code and (b) has been determined to be valid and enforceable pursuant
to the terms of the Home Sale Order.
 
“Person” means an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, governmental
authority, or other entity of whatever nature.
 
“Plan” means any plan to provide benefits other than salary for services
rendered, or any other benefit arrangement, obligation, or practice established,
maintained, or to which contributions have been made by either of the Borrower
or any ERISA Affiliate.
 
“Potential Event of Default” means a condition or event that, after notice or
lapse of time or both, would constitute an Event of Default.
 
“Prescribed Laws” means, collectively, (a) the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (Public Law 107-56) (The USA PATRIOT ACT), (b) Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001, and relating to Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism, (c) the International Emergency Economic Power
Act, 50 U.S.C. §1701 et. seq. and (d) all other statutes and laws relating to
money laundering or terrorism.

 
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“Petition Date” has the meaning assigned to such term in the Recitals of this
Agreement.
 
“Pre-Petition Balance” or “Pre-Petition Debt” means all unpaid, interest, fees
and costs owing by certain Borrowers to the Agent and the Lenders under the
Pre-Petition Loan Documents in the aggregate amount of approximately
$337,956,029.99.
 
“Pre-Petition Credit Agreement” shall have the meaning assigned to such term in
the Recitals of this Agreement.
 
“Pre-Petition Lenders” shall have the meaning assigned to such term in the
Recitals of this Agreement.
 
“Pre-Petition Loan Documents” shall mean the Pre-Petition Credit Agreement and
each of the other documents executed in connection therewith.
 
“Prohibited Transaction” means any transaction set forth in Section 406 of ERISA
or Section 4975 of the Code.
 
“Project” means, at any time, a tract of Real Estate comprising an identifiable
community of Lots that is marketed as a community and that is then owned by a
Borrower.
 
“Pro Rata Share” means (i) with respect to all payments, computations and other
matters relating to the Term Loan Commitments or the Term Loan of any Term
Lender, the percentage obtained by dividing (x) the Term Loan Exposure of that
Term Lender by (y) the aggregate Term Loan Exposure of all Lenders, (ii) with
respect to all payments, computations and other matters relating to the
Revolving Loan Commitment or the Revolving Loans of any Revolving Lender or any
Letters of Credit issued or participations therein deemed purchased by any
Revolving Lender, the percentage obtained by dividing (x) the Revolving Loan
Exposure of that Revolving Lender by (y) the aggregate Revolving Loan Exposure
of all Revolving Lenders, and (iii) for all other purposes with respect to each
Lender, the percentage obtained by dividing (x) the sum of the Term Loan
Exposure of that Lender plus the Revolving Loan Exposure of that Lender by
(y) the sum of the aggregate Term Loan Exposure of all Lenders plus the
aggregate Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
Section 12.9.  The initial Pro Rata Share of each Lender for purposes of each of
clauses (i), (ii) and (iii) of the preceding sentence is set forth opposite the
name of that Lender in Schedule 2.1 annexed hereto.
 
“Real Estate” means all land, fee simple title to which is now or hereafter
owned by a Borrower, together with all Improvements and Units now or hereafter
constructed thereon.
 
“Refund Collateral” has the meaning assigned to such term in the Security
Agreement.
 
“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Substances into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Substances), including the movement
of any Hazardous Substances through the air, soil, surface water or groundwater.

 
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“Relevant Accounting Period” means, at any time, the period of four (4)
consecutive Fiscal Quarters, the last of which is the Last Reported Fiscal
Quarter.
 
“Reorganization Plan” shall mean a plan of reorganization for the Borrowers
proposed pursuant to the Bankruptcy Code.
 
“Reportable Event” means any of the events set forth in Section 4043 of ERISA,
other than a reportable event as to which provision for 30-day notice to the
PBGC has been waived under applicable regulations.
 
“Requisite Revolving Lenders” means, at any date, any combination of Revolving
Lenders whose Pro Rata Shares aggregate more than sixty six and two thirds
percent (66 2/3%) of the aggregate Revolving Loan Exposure of all Revolving
Lenders.
 
“Request for Revolving Loan” means a written notice from a Borrower to Agent, in
the appropriate form that is attached hereto as Exhibit C, requesting that an
Revolving Loan in a specified amount be advanced to such Borrower on a specified
Funding Date.
 
“Revolving Loan Collateral Account” has the meaning assigned to such term in
Section 2.12(b).
 
“Revolving Loan Commitment” means, as to any Lender, the obligation of such
Lender to make Revolving Loans to Borrowers under Section 2.1(b) and to honor
drawings and demands under Letters of Credit and Tri-Party Agreements issued or
executed under Section 2.2, in an aggregate principal or face amount at any time
outstanding not to exceed the amount set forth opposite such Lender’s name on
Schedule 2.1 hereto, as the same may be reduced or modified at any time or from
time to time pursuant to the terms hereof.
 
“Revolving Loan Exposure”, with respect to any Revolving Lender, means, as of
any date of determination (i) prior to the termination of the Revolving Loan
Commitments, the amount of that Lender’s Revolving Loan Commitment, and
(ii) after the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that Lender
plus (b) the aggregate amount of such Lenders’ Pro Rata Share in any outstanding
Letters of Credit or Tri-Party Agreements or any unreimbursed drawings under any
Letters of Credit or Tri-Party Agreements.
 
“Revolving Lender” means a Lender that has a Revolving Loan Commitment and/or
that has an outstanding Revolving Loan.
 
“Revolving Loans” means the Loans made by Revolving Lenders to Borrowers
pursuant to Section 2.1(b).
 
“Revolving Loan Sublimit” means $20,000,000, unless increased to $25,000,000
pursuant to Section 2.1(b)(iii).
 
“Revolving Loan Termination Date” has the meaning assigned to such term in
Section 2.1(b)(i).

 
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“Revolving Notes” means each of the promissory notes made by Borrowers, payable
to the order of each Lender and substantially in the form of Exhibit B hereto,
evidencing the Revolving Loans, and any amendments and modifications thereto,
any substitutes therefor, and any replacements, restatements, renewals or
extension thereof, in whole or in part.
 
“RICO” means the Racketeer Influenced and Corrupt Organization Act, as amended
by the Comprehensive Crime Control Act of 1984, 18 USC §§1961-68, as amended
from time to time.
 
“Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated,
certificated or uncertificated, or otherwise, or in general any instruments
commonly known as “securities” or any certificates of interest, shares or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
 
“Securities Account” means an account to which a financial asset is or may be
credited in accordance with an agreement under which the Person maintaining the
account undertakes to treat the Person for whom the account is maintained as
entitled to exercise the rights that comprise the financial asset.
 
“Security Agreement” means the Security Agreement among the Borrowers and Agent
pursuant to Section 4.1(a)(ii).
 
“Special Purpose Collateral Account” means each of the Revolving Loan Collateral
Account, the Letter of Credit Collateral Account, the Cash Collateral Account,
and the Carve-Out Collateral Account.
 
“Subordinated Debt” means (i) Debt for borrowed money, the repayment of which by
its terms is subordinated to the Indebtedness on terms and conditions
satisfactory to Agent, (ii) the Debt incurred pursuant to that certain Junior
Subordinated Indenture dated as of September 20, 2005, among OHI Financing,
Inc., Parent and Wilmington Trust Company, including the guaranty of such Debt
by Parent, and (iii) the Debt incurred pursuant to that certain Junior
Subordinated Indenture dated as of August 3, 2009, between OHI Financing, Inc.,
as Issuer, and The Bank of New York Mellon, as Trustee, including the guaranty
of such Debt by Parent.
 
“Subsidiary” means, with respect to any Person, means any corporation,
partnership, trust, limited liability company, association, joint venture or
other business entity of which more than 50% of the total voting power of shares
of stock or other ownership interests entitled (without regard to the occurrence
of any contingency) to vote in the election of the members of the governing body
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof.
 
“Superpriority Claims” shall mean Indebtedness or other claims arising out of
credit obtained or debt incurred by the Borrowers having priority in accordance
with the provisions of Section 364(c)(1) of the Bankruptcy Code or any or all
administrative expenses of the kind specified in Section 503(b) or 507(b) of the
Bankruptcy Code.

 
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“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
 
“Term Lender” means a Tranche 1 Term Lender and a Tranche 2 Term Lender.
 
“Term Loan Commitment” means a Tranche 1 Term Loan Commitment and a Tranche 2
Term Loan Commitment.
 
“Term Loan Exposure”, with respect to any Lender, means, as of any date of
determination (i) prior to the funding of the Term Loans, the amount of that
Lender’s Term Loan Commitment, and (ii), after the funding of the Term Loans,
the outstanding principal amount of the Term Loan of that Lender.
 
“Term Loans” means the Tranche 1 Term Loans and the Tranche 2 Term Loans.
 
“Term Note” means each of the promissory notes made by Borrowers, payable to the
order of each Term Lender and substantially in the form of Exhibit A hereto,
evidencing the Term Loans, and any amendments and modifications thereto, any
substitutes therefor, and any replacements, restatements, renewals or extension
thereof, in whole or in part.
 
“Tranche 1 Term Lender” means a Lender that has a Tranche 1 Term Loan Commitment
and/or that has an outstanding Tranche 1 Term Loan.
 
“Tranche 1 Term Loan Commitment” means, as to any Lender, the obligation of such
Lender to make Tranche 1 Term Loans to Borrowers under Section 2.1(a), in an
aggregate principal or face amount at any time outstanding not to exceed the
amount set forth opposite such Lender’s name on Schedule 2.1 hereto, as the same
may be reduced or modified at any time or from time to time pursuant to the
terms hereof.
 
“Tranche 1 Term Loans” means the Loans made by Tranche 1 Term Lenders to
Borrowers pursuant to Section 2.1(a).
 
“Tranche 2 Term Lender” means a Lender that has a Tranche 2 Term Loan Commitment
and/or that has an outstanding Tranche 2 Term Loan.
 
“Tranche 2 Term Loan Commitment” means, as to any Lender, the obligation of such
Lender to make Tranche 2 Term Loans to Borrowers under Section 2.1(a), in an
aggregate principal or face amount at any time outstanding not to exceed the
amount set forth opposite such Lender’s name on Schedule 2.1 hereto, as the same
may be reduced or modified at any time or from time to time pursuant to the
terms hereof.
 
“Tranche 2 Term Loans” means the Loans made by Tranche 2 Term Lenders to
Borrowers pursuant to Section 2.1(a).
 
“Tri-Party Agreement” means a tri-party agreement issued or to be issued by
Issuer for the account of a Borrower pursuant to Section 2.2(a).

 
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“Unit” or “Units” means an attached or detached for-sale single-family
residential housing facility or an individual condominium dwelling.
 
“Unused Fee” means the fee payable by Borrowers pursuant to Section 2.7(b).
 
“Up-Front Fee” has the meaning assigned to such term in Section 2.7(a).
 
1.2           Construction of Terms.  Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole and “or” has the inclusive meaning
represented by the phrase “and/or.”  References in this Agreement to
“determination” by Agent or Lenders include good faith estimates by Agent or
Lenders (in the case of quantitative determinations) and good faith beliefs by
the Agent or Lenders (in the case of qualitative determinations). The words
“hereof,” “herein,” “hereunder” and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this
Agreement.  The Section and other headings contained in this Agreement preceding
this Agreement are for reference purposes only and shall not control or affect
the construction of this Agreement or the interpretation thereof in any
respect.  Reference to any Article, Section, Schedule and Exhibit are to this
Agreement, unless otherwise specified.  All definitions of, and references to,
any Loan Document mean the Loan Document that is identified herein, as the same
may from time to time be amended in accordance with the provisions of this
Agreement and the subject Loan Document.  The use in any of the Loan Documents
of the word “include” or “including”, when following any general statement, term
or matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to
similar items or matters, whether or not nonlimiting language (such as “without
limitation” or “but not limited to” or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter.
 
1.3           Accounting Reports and Principles.  The character or amount of any
asset, liability, account or reserve and of any item of income or expense to be
determined, and any consolidation or other accounting computation to be made,
and the construction of any definition containing a financial term, pursuant to
this Agreement or any other Loan Document, shall be construed, determined or
made, as the case may be, in accordance with GAAP, consistently applied, unless
such principles are inconsistent with any express provision of this Agreement.
 
1.4           Business Day; Time.  Whenever any payment or other obligation
hereunder, whether under a Note or under another Loan Document, is due on a day
other than a Business Day, such shall be paid or performed on the Business Day
next following the prescribed due date, except as otherwise specifically
provided for herein to the contrary, and such extension of time shall be
included in the computation of interest and charges.  Any reference made herein
or in any other Loan Document to an hour of day shall refer to the then
prevailing Eastern time, unless specifically provided herein to the contrary.
 
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SECTION 2.
AMOUNT AND TERMS OF THE COMMITMENTS, LOANS, LETTERS OF CREDIT AND TRI-PARTY
AGREEMENTS.

 
 
2.1
The Commitments.

 
(a)                 Term Loans.
 
(i)             Tranche 1 Term Loans.  Subject to the terms and conditions set
forth herein, each Tranche 1 Term Lender severally, in accordance with its
respective Pro Rata Share, shall extend to Borrowers an amount not exceeding
such Lender’s Pro Rata Share of the aggregate amount of the Tranche 1 Term Loan
Commitments to be used for the purposes identified in Section 2.3(a).  All
Tranche 1 Term Loans shall be deemed to have been made on the Interim Order
Date.  The amount of each Tranche 1 Term Lender’s Tranche 1 Term Loan Commitment
as of the Closing Date is set forth opposite such Tranche 1 Term Lender’s name
on Schedule 2.1 annexed hereto and the aggregate amount of the Tranche 1 Term
Loan Commitments is $40,000,000; provided that the amount of the Tranche 1 Term
Loan Commitment of each Lender shall be adjusted from time to time as required
to give effect to any assignment of such Tranche 1 Term Lender’s Term Loan
Commitment pursuant to Section 12.9.  Master Borrower (for the benefit of the
Borrowers) may make only one borrowing under the Tranche 1 Term Loan
Commitments.  Amounts borrowed under this Section 2.1(a) and subsequently repaid
or prepaid may not be reborrowed.
 
(ii)            Tranche 2 Term Loans.  Subject to the terms and conditions set
forth herein, each Tranche 2 Term Lender severally, in accordance with its
respective Pro Rata Share, shall extend to Borrowers an amount not exceeding
such Lender’s Pro Rata Share of the aggregate amount of the Tranche 2 Term Loan
Commitments to be used for the purposes identified in Section 2.3(a).  All
Tranche 2 Term Loans shall be deemed to have been made on the Interim Order
Date.  The amount of each Tranche 2 Term Lender’s Tranche 2 Term Loan Commitment
as of the Closing Date is set forth opposite such Tranche 2 Term Lender’s name
on Schedule 2.1 annexed hereto and the aggregate amount of the Tranche 2 Term
Loan Commitments is $40,000,000; provided that the amount of the Tranche 2 Term
Loan Commitment of each Lender shall be adjusted from time to time as required
to give effect to any assignment of such Tranche 2 Term Lender’s Term Loan
Commitment pursuant to Section 12.9.  Master Borrower (for the benefit of the
Borrowers) may make only one borrowing under the Tranche 2 Term Loan
Commitments.  Amounts borrowed under this Section 2.1(a) and subsequently repaid
or prepaid may not be reborrowed.
 
(iii)           Notwithstanding anything contained in the Pre-Petition Loan
Documents, each Borrower and each Lender acknowledges and agrees that the right
of the Lenders to participate in the Term Loans and any compensation or payment
that may be received by such Lenders incremental to that which would have been
received had such Term Loans remained Pre-Petition Debt are hereby authorized as
compensation for, in consideration for, and solely on account of the agreement
of such Lender to make and/or consent to the Loans and the Loan Documents and
not as adequate protection for, repayment of, or otherwise on account of, any
Pre-Petition Debt.
 
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(b)                 Revolving Loans.
 
(i)             Subject to the terms and conditions set forth herein, commencing
on the Closing Date and expiring on the earliest of: (x) the occurrence of an
Event of Default or (y) the Business Day immediately preceding the Maturity Date
(the “Revolving Loan Termination Date”), each Revolving Lender shall extend to
the Borrowers from time to time in accordance with the terms hereof an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the Revolving
Loan Commitments to be used for the purposes described in Section 2.3(b);
provided that outstanding principal amount of Revolving Loans (not resulting
from the draw of a Letter of Credit or Tri-Party Agreement) shall not exceed,
and the Revolving Lenders shall not be required to make Revolving Loans (not
resulting from the draw of a Letter of Credit or Tri-Party Agreement) in excess
of, the Revolving Loan Sublimit.  The amount of each Revolving Lender’s
Revolving Loan Commitment as of the Closing Date is set forth opposite such
Revolving Lender’s name on Schedule 2.1 annexed hereto.  As of the Closing Date,
the aggregate Revolving Loan Commitment is $40,000,000, which is comprised of
the Revolving Loan Sublimit plus the Letter of Credit Sublimit; provided that
the amount of the Revolving Loan Commitment of each Revolving Lender shall be
adjusted from time to time as required to give effect to any assignment of such
Revolving Lender’s Revolving Loan Commitment pursuant to Section 12.9 and shall
be reduced from time to time by the amount of any reductions thereto made
pursuant to Section 2.9.  Each Revolving Lender’s Revolving Loan Commitment
shall expire on the Revolving Loan Termination Date and all Revolving Loans and
all other amounts outstanding hereunder with respect to the Revolving Loans and
the Revolving Loan Commitments shall be paid in full no later than the Maturity
Date (other than amounts that may be drawn under Letters of Credit, if any,
whose expiration date is beyond the Maturity Date in accordance with Section
2.2(b)(iii) hereof).  The parties acknowledge and agree that any Revolving Loans
advanced to the Borrowers as “Revolving Loans” under the Interim Loan Documents
shall be deemed a part of the outstanding principal balance of the Revolving
Loans under this Agreement as of the Closing Date.  Borrowers may borrow, repay
and re-borrow Revolving Loans at any time and from time to time prior to the
Maturity Date.
 
(ii)           Notwithstanding anything herein to the contrary, at no time shall
Revolving Lenders be obligated to make any Revolving Loan if, as a result
thereof, (i) the amount of the requested Revolving Loan would exceed the
then-current Budget Availability, (ii) the aggregate outstanding principal
balance of all Revolving Loans (including the amount of any requested Revolving
Loan hereunder but excluding any Revolving Loans made as a result of a drawing
under a Letter of Credit or Tri-Party Agreement) would exceed the Revolving Loan
Sublimit, or (iii) the sum of (x) the aggregate outstanding principal balance of
all Revolving Loans (including the amount of any requested Revolving Loan
hereunder) plus (y) the aggregate maximum exposure of Revolving Lenders pursuant
to then-outstanding Letters of Credit and Tri-Party Agreements plus (z) any
Revolving Loans made as a result of a drawing under a Letter of Credit or
Tri-Party Agreement, would exceed the Revolving Loan Commitments then in effect;
provided that Borrowers may request an amount in excess of the amount required
to be borrowed as projected by the Budget to cover such Defaulting Lender’s
share of the requested Loan in order that the requested amount of an Revolving
Loan hereunder less the amount of such Defaulting Lender(s)’s Pro Rata Share
thereof is an amount that would satisfy the aforesaid conditions; provided,
however, that for the avoidance of doubt, no Lender shall be required to fund
any amount in excess of its Pro Rata Share of the Revolving Loan Commitment.

 
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(iii)           Notwithstanding the foregoing, the Revolving Loan Sublimit may
be increased up to $25,000,000 if the following conditions are met: (x) the
Agent receives a written notice from the CRO requesting such increase of the
Revolving Loan Sublimit, (y) the Agent shall have received a written
certification by the CRO that no Event of Default or Potential Event of Default
has occurred and is continuing, and (z) Majority Revolving Lenders consent in
writing to such increase.
 
2.2         Letters of Credit.
 
(a)           Amount and Availability of Letters of Credit and Tri-Party
Agreements.  Subject to the terms and conditions set forth herein, Borrowers may
request, and Agent, pursuant to this Section 2.2(a) shall issue or execute on
behalf of the Revolving Lenders Letters of Credit or Tri-Party Agreements issued
as a replacement or extension of any Letter of Credit or Tri-Party Agreement
identified on Schedule 2.2(a), in each case so long as such Letter of Credit is
related to a Project that secures the Indebtedness and satisfies the
requirements of Section 4.1(d).  The Letters of Credit and Tri-Party Agreements
listed on Schedule 2.2(a) issued under the Pre-Petition Credit Agreement in the
aggregate face amount of $369,610.22 are hereby deemed Letters of Credit and
Tri-Party Agreements under this Agreement.  No Letter of Credit or Tri-Party
Agreement shall be issued or executed by Agent if, as a result thereof the
aggregate liability of Agent and all other Issuers under all Letters of Credit
and Tri-Party Agreements then outstanding or in effect (together with the amount
of any requested Letter of Credit or Tri-Party Agreement and the amount of any
drawings honored under any Letter of Credit or Tri-Party Agreement issued
hereunder) would exceed the Letter of Credit Sublimit or (y) the sum of (1) the
aggregate outstanding principal balance of all Revolving Loans plus (2) the
aggregate maximum exposure of Revolving Lenders pursuant to then-outstanding
Letters of Credit and Tri-Party Agreements (including the amount of any
requested Letter of Credit or Tri-Party Agreement) would exceed the Revolving
Loan Commitments then in effect.
 
(b)           Letters of Credit and Tri-Party Agreements Generally.
 
(i)            The terms of all Letters of Credit and Tri-Party Agreements, and
all documents ancillary thereto, shall be subject to Agent’s and Issuer’s prior
approval.
 
(ii)           At least five (5) Business Days prior to the date that any
Borrower desires Agent to issue a Letter of Credit, such Borrower shall deliver
to Agent and Issuer a completed and executed Application and Agreement for
Irrevocable Standby Letter of Credit (each a “Letter of Credit Application”) in
the form attached hereto as Exhibit D or such other form satisfactory to Issuer.
 
(iii)           No Letter of Credit shall be issued or renewed or Tri-Party
Agreement executed or maintained for a term that extends beyond March 1, 2011
unless (a) all Revolving Lenders so agree in writing and in their sole
discretion and (b) at the time of such issuance or renewal, Borrowers deliver to
the Agent immediately available same day funds equal to 105% of Issuer’s maximum
exposure under all outstanding Letters of Credit and Tri-Party Agreements that
expire after March 1, 2011, which funds shall be held by Agent as cash
collateral in the Letter of Credit Collateral Account for Borrowers’
reimbursement obligations and other Indebtedness, or (c) at the time of such
issuance or renewal, with respect to any such Letter of Credit or Tri-Party
Agreement that expires after the Maturity Date, Borrowers deliver a back-to-back
letter of credit issued by an Approved Bank with a face amount of 105% of the
Issuer’s maximum exposure under all outstanding Letters of Credit and Tri-Party
Agreements that expire after March 1, 2011.

 
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(iv)         No Letter of Credit shall be issued or renewed or Tri-Party
Agreement executed or maintained while any Revolving Lender is a Defaulting
Lender unless the Borrowers have delivered to Agent immediately available same
day funds equal to each such Defaulting Lender’s Pro Rata Share of such Letter
of Credit or Tri-Party Agreement, to be held as cash collateral in the Letter of
Credit Collateral Account for Borrowers’ reimbursement obligations and other
Indebtedness; provided that Borrowers shall not be required to comply with this
Section 2.2(b)(iv) if there is an amount in the Letter of Credit Collateral
Account sufficient to cover all exposure of Issuer to such Defaulting Lender
under or pursuant to this Agreement.
 
(v)          Each Revolving Lender hereby unconditionally agrees to make a
Revolving Loan to reimburse Issuer for any drawings honored under any Letter of
Credit or Tri-Party Agreement issued hereunder in an amount equal to such
Revolving Lender’s Pro Rata Share of such drawing.
 
(vi)         Any Cash or Cash Equivalent received by a Borrower from a
beneficiary of a Letter of Credit or Tri-Party Agreement in exchange for the
issuance of such Letter of Credit or Tri-Party Agreement which is issued as a
replacement or extension of any Letter of Credit or Tri-Party Agreement
identified on Schedule 2.2(a), shall be paid to the Agent who will distribute
and apportion among those Pre-Petition Lenders that were Non-Defaulting Lenders
based on their Pro Rata Share of the amount of the related Loan or Letter of
Credit Advance (as defined under the Pre-Petition Credit Agreement) such
Pre-Petition Lenders funded.
 
2.3         Use of Proceeds.
 
(a)           Term Loans.  The proceeds of the Term Loans shall be used to repay
a corresponding amount (on a dollar-for-dollar basis) of the outstanding
Pre-Petition Balance owing to each Term Loan Lender.
 
(b)           Revolving Loans.  The proceeds of the Revolving Loans shall be
used by Borrowers in accordance with the initial Budget with modifications as
approved by Agent pursuant to Section 3.1 and for the specific uses set forth in
each Request for Revolving Loan.
 
2.4         Loans and Advances
 
(a)           Loans Generally.  Loans shall be made by Term Lenders and
Revolving Lenders simultaneously and proportionately to their Pro Rata Shares,
it being understood that the obligations of Term Lenders and Revolving Lenders
to advance funds to Borrowers hereunder are several and independent and that no
Lender shall be responsible for the Pro Rata Share of Loans of any Defaulting
Lender, nor shall the Commitment of any Lender be increased or decreased as a
result of the failure of any Defaulting Lender to make advances or otherwise
perform hereunder.

 
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(b)           Revolving Loans.  Borrowers may request Revolving Loans not more
frequently than once a day (unless otherwise approved by Agent), commencing on
the first Business Day after the Closing Date.
 
(c)           Request for Revolving Loan.
 
(i)           Subject to the provisions of this Section 2, whenever a Borrower
desires to request a Revolving Loan under this Agreement, such Borrower shall
deliver to Agent a properly completed Request for Revolving Loan, executed by an
Authorized Signer, no later than 11:00 A.M. at least two (2) Business Days in
advance of the proposed Funding Date.  The Request for Revolving Loan shall
specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the
amount of the proposed Revolving Loan, (iii) those specific items in the Budget
for which the Revolving Loan will be used and sufficient evidence of such items
including, without limitation, receipts and invoices and other documentation
consistent with past practice and additional supporting documentation requested
by Agent, (iv) with respect to construction expenses, a description of
construction progress made since the prior Request for Revolving Loan for such
construction and the status of completion of such Project, and (v) a
reconciliation describing the manner in which Revolving Loans made pursuant to
the previous Request for Revolving Loan were spent compared to the proposed use
as set forth in such previous Request for Revolving Loan.  Revolving Loans shall
be in integral multiples of $200,000 but may not be in an amount less than
$50,000.  Each request for an Revolving Loan shall include a representation that
all Revolving Loans made as a result of the previous Request for Revolving Loan
were, or prior to the applicable Funding Date will be, disbursed in a manner
materially consistent with such Request for Revolving Loan and that any payments
made to any trade creditor with respect to pre-petition payables were Permitted
Critical Vendor Payments and that all payments were made in accordance with the
Budget in compliance with Section 6.15.  Each Request for Revolving Loan shall
be delivered to Agent at 201 S. College Street, 8th Floor, Charlotte,
NC  28288-5708, Attention: Syndication Agency Services, facsimile 704-383-7989,
with a copy to Agent at 301 South College Street, Charlotte, NC  28202,
Attention:  Nathan Rantala, Director, e-mail Nathan.Rantala@Wachovia.com (or to
such other addresses or facsimile numbers or electronic mail addresses as Agent
may from time-to-time advise Borrowers by written notice).  Agent shall endeavor
to review and approve each Request for Revolving Loan not later than (1)
Business Day prior to the Funding Date (such approval not to be unreasonably
withheld or delayed), and Agent shall endeavor to advise Borrowers of its
approval or rejection of such Request for Revolving Loan (and the reason
therefor) as soon as reasonably possible; provided that failure to advise
Borrowers of such rejection shall not be deemed an approval of such Request for
Revolving Loan.
 
(ii)          Prior to the funding of any Revolving Loan, Borrowers shall notify
Agent regarding any matters known to Borrowers which are included in those
matters that Borrowers are required to certify as true and correct in the
applicable Request for Revolving Loan in the event that such certifications will
no longer be true and correct as of the applicable Funding Date.  The acceptance
by Borrowers of the proceeds of any Revolving Loan shall constitute a
re-certification by Borrowers, as of the applicable Funding Date, as to the
matters to which Borrowers are required to certify in the applicable Request for
Revolving Loan.

 
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(d)          Request for Letters of Credit and Tri-Party Agreements.  Borrowers
shall give Agent written notice (effective upon receipt) of a Borrower’s request
for issuance of a Letter of Credit or execution of a Tri-Party Agreement
hereunder, specifying the purpose of the Letter of Credit or Tri-Party
Agreement, the amount thereof and the date such Borrower desires it be issued or
executed.  Each such request shall be delivered to Agent only at Agent’s office
identified in Section 12.10 (or to such other address as Agent may from
time-to-time advise Master Borrower by written notice), accompanied by a draft
of the proposed Letter of Credit or Tri-Party Agreement (which must be
reasonably acceptable to Agent) together with the other documents required
pursuant to Section 2.2(b) hereof, all of which shall be delivered to Agent at
least five (5) Business Days in advance of the date Borrower desires the Letter
of Credit or Tri-Party Agreement to be issued or executed.  Each Letter of
Credit or Tri-Party Agreement shall be subject to the limitations and
requirements provided in this Agreement.
 
(e)          Funding of Revolving Loans.
 
(i)           By 3:00 P.M. on the day Agent approves a Request for Revolving
Loan for a Revolving Loan pursuant to Section 2.4(c)(i), Agent shall notify each
Revolving Lender by facsimile or electronic (e-mail) transmission of the
proposed borrowing.  Except as provided in Section 2.4(c)(ii), not later than
noon on the Funding Date specified in the Request for Revolving Loan, each
Revolving Lender shall wire transfer to such account of Agent as Agent shall
designate an amount in immediately available funds equal to the amount of each
Revolving Lender’s Pro Rata Share of the Revolving Loan to be made to or for the
account of Borrowers on such Funding Date.  Agent shall cause such Revolving
Loans to be made available to the requesting Borrower on the Funding Date
pertaining thereto by depositing the amount thereof in the a Cash Collateral
Account designated by the requesting Borrower.
 
(ii)          Each Revolving Lender shall make the amount of its Pro Rata Share
of the Revolving Loan available to Agent, in same day funds, not later than noon
on the Funding Date, by wire transfer to Syndication Agency Services, 201 S.
College Street, Charlotte, North Carolina, ABA #053 000 219, Account
#5000000061196, Ref. Orleans Homebuilders, Inc. (or to such other account as
Agent may from time to time advise the Revolving Lenders by written
notice).  Unless Agent shall have been notified by any Revolving Lender prior to
any Funding Date in respect of any requested Revolving Loan that such Lender
does not intend to make available to Agent such Revolving Lender’s Pro Rata
Share of the requested Revolving Loan on such Funding Date, Agent may assume
that such Revolving Lender intends to honor Agent’s demand and Agent in its sole
discretion may, but shall not be obligated to, make available to the requesting
Borrower a corresponding amount on such Funding Date by depositing the proceeds
thereof in the designated Cash Collateral Account of the requesting Borrower
with Agent.  In such event, if a Revolving Lender fails to make its Pro Rata
Share of the requested Revolving Loan available to Agent on the Funding Date,
then such Revolving Lender agrees to pay to Agent forthwith on demand, such
Revolving Lender’s Pro Rata Share of the Revolving Loan so advanced, with
interest thereon, for each day from and including the date such amount is made
available to Borrowers to but excluding the date of payment to Agent, at in the
case of a payment to be made by such Revolving Lender, the Federal Funds
Rate.  If such Revolving Lender pays its Pro Rata Share of such Revolving Loan
to Agent, then the amount so paid shall constitute such Revolving Lender’s
Revolving Loan.  Notwithstanding the foregoing, Agent shall have no obligation
to make Revolving Loans to Borrowers in excess of amounts received from
Revolving Lenders pursuant to this Section 2.4(e) and nothing in the foregoing
shall relieve any Lender of any liability for its failure to fund a Revolving
Loan as required by this Agreement.

 
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(f)           Drawings and Reimbursement of Letters of Credit.
 
(i)           In determining whether to honor any drawing under any Letter of
Credit or Tri- Party Agreement by the beneficiary thereof, the Issuer shall be
responsible only to examine the documents delivered under such Letter of Credit
with reasonable care so as to ascertain whether they appear on their face to be
in accordance with the terms and conditions of such Letter of Credit.  As
between Borrowers and any Issuer, Borrowers assume all risks of the acts and
omissions of, or misuse of the Letters of Credit or Tri-Party Agreements issued
by such Issuer by, the respective beneficiaries of such Letters of Credit or
Tri-Party Agreements.  In furtherance and not in limitation of the foregoing,
such Issuer shall not be responsible for:  (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any such Letter of Credit or
Tri-Party Agreement, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or Tri-Party
Agreement or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason; (iii)
failure of the beneficiary of any such Letter of Credit or Tri-Party Agreement
to comply fully with any conditions required in order to draw upon such Letter
of Credit or Tri-Party Agreement; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or Tri-Party Agreement or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit or Tri-Party
Agreement of the proceeds of any drawing under such Letter of Credit or
Tri-Party Agreement; or (viii) any consequences arising from causes beyond the
control of such Issuer, including any act or omission by a government authority,
and none of the above shall affect or impair, or prevent the vesting of, any of
such Issuing Lender’s rights or powers hereunder.
 
(ii)           In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this Section 2.4(f), any
action taken or omitted by any Issuing Lender under or in connection with the
Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing Lender
under any resulting liability to Borrowers.

 
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(iii)         Notwithstanding anything to the contrary contained in this Section
2.4(f)(iii), Borrowers shall retain any and all rights each may have against any
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of such Issuing Lender, as determined by a final judgment of
a court of competent jurisdiction.
 
(iv)         In the event an Issuer has determined to honor a drawing under a
Letter of Credit or Tri- Party Agreement issued by it, such Issuer shall (A)
first, obtain reimbursement from the Letter of Credit Collateral Account, and
(B) second, to the extent there are not sufficient funds in the Letter of Credit
Collateral Account, immediately notify Borrowers and Agent, and Borrowers shall
reimburse such Issuer (x) if such notice is received on or before 10:30 A.M. on
the date of such drawing, on such date and (y) if such notice is received after
10:30 A.M. on the date of such drawing, on the next Business Day, in each case
in dollars and in same day funds equal to the amount of such payment; provided
that, anything contained in this Agreement to the contrary notwithstanding, (i)
unless Borrowers shall have notified Administrative Agent and such Issuing
Lender prior to 11:00 A.M. on the date such drawing is honored that Borrowers
intend to reimburse such Issuer for the amount of such payment with funds other
than the proceeds of Revolving Loans, Borrowers shall be deemed to have given a
timely Request for Revolving Loan to Agent requesting Revolving Lenders to make
Revolving Loans on the Funding Date in an amount equal to the amount of such
payment and (ii) subject to satisfaction or waiver of the conditions specified
in Section 4.3, Revolving Lenders shall, on the Funding Date, make Revolving
Loans in the amount of such payment, the proceeds of which shall be applied
directly by Agent to reimburse such Issuer for the amount of such payment; and
provided further that if for any reason proceeds of Revolving Loans are not
received by such Issuer on the Funding Date in an amount equal to the amount of
such payment, Borrowers shall reimburse such Issuing Lender, on demand, in an
amount in same day funds equal to the excess of the amount of such payment over
the aggregate amount of such Revolving Loans, if any, which are so
received.  Nothing in this Section 2.4(f)(iv) shall be deemed to relieve any
Revolving Lender from its obligation to make Revolving Loans on the terms and
conditions set forth in this Agreement, and Borrowers shall retain any and all
rights it may have against any Revolving Lender resulting from the failure of
such Revolving Lender to make such Revolving Loans under this Section
2.4(f)(iv).
 
(v)         Notwithstanding the foregoing, the amount of Revolving Loans funded
with respect to a particular drawing shall be reduced by the amount available in
the Letter of Credit Collateral Account, which shall be used by to reimburse the
Issuer pursuant to Section 2.4(e) and reduce the Borrowers’ funding obligations
under immediately preceding clause (iv) in an amount equal to such reimbursement
from the Letter of Credit Collateral Account.
 
(vi)         Further, notwithstanding the foregoing, if any Letter of Credit or
Tri-Party Agreement was issued, renewed, executed or maintained while any Lender
was a Defaulting Lender, then (x) the Agent shall apply cash collateral from the
Letter of Credit Collateral Account as reimbursement of such Defaulting Lender’s
Pro Rata Share of such Letter of Credit or Tri-Party Agreement and (y) the
Revolving Loan deemed made pursuant to Section 2.2(f)(iv) shall be apportioned
among those Revolving Lenders that were Non-Defaulting Lenders at the time the
subject Letter of Credit or Tri-Party Agreement was issued, renewed, executed or
maintained based on their Pro Rata Share of the amount of the Letter of Credit
or Tri-Party Agreement issued, such that the Issuer is completely reimbursed for
the payment made under such Letter of Credit or Tri-Party Agreement.

 
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(vii)        By 3:00 P.M. on the day Agent has actual knowledge that a drawing
or a demand for payment has been or will be made under a Letter of Credit or
Tri-Party Agreement, Agent shall notify each Revolving Lender by facsimile or
electronic (e-mail) transmission of the proposed drawing or demand.  Not later
than noon on the anticipated date of the honoring of any drawing or demand, as
specified in Agent’s notice to the Lenders, each Revolving Lender shall wire
transfer to such account of Agent as Agent shall designate an amount in
immediately available funds equal to the amount of each Revolving Lender’s Pro
Rata Share of the drawing for the account of Issuer on such Funding Date.  Agent
shall cause such Revolving Loans to be made available to the requesting Issuer
on the Funding Date pertaining thereto by depositing the amount thereof in the
designated account of Issuer.
 
(viii)       Each Revolving Lender shall make the amount of its Pro Rata Share
of the drawing available to Agent, in same day funds, not later than noon on the
Funding Date, by wire transfer to Syndication Agency Services, 201 S. College
Street, Charlotte, North Carolina, ABA #053 000 219, Account #5000000061196,
Ref. Orleans Homebuilders, Inc. (or to such other account as Agent may from time
to time advise the Revolving Lenders by written notice).  Agent shall have no
obligation to reimburse Issuer in excess of amounts received from Revolving
Lenders pursuant to this Section 2.4(f)(viii) and nothing in the foregoing shall
relieve any Lender of any liability for its failure to fund a Revolving Loan as
required by this Agreement.
 
(ix)          The obligation of Borrowers to reimburse each Issuer for payments
under the Letters of Credit and Tri-Party Agreements issued by it and to repay
any Revolving Loans made by Revolving Lenders pursuant to Section 2.4(f) and the
obligations of Revolving Lenders under Section 2.4(f) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:
 
(1)           any lack of validity or enforceability of any Letter of Credit or
Tri-Party Agreement;
 
(2)           the existence of any claim, set-off, defense or other right which
Borrowers or any Lender may have at any time against a beneficiary or any
transferee of any Letter of Credit or Tri-Party Agreement (or any Persons for
whom any such transferee may be acting), any Issuer or other Revolving Lender or
any other Person or, in the case of a Revolving Lender, against Borrowers,
whether in connection with this Agreement, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction between
Borrowers or one of its Subsidiaries and the beneficiary for which any Letter of
Credit or Tri-Party Agreement was procured);

 
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(3)           any draft or other document presented under any Letter of Credit
or Tri-Party Agreement proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
 
(4)           payment by the applicable Issuer under any Letter of Credit or
Tri-Party Agreement against presentation of a draft or other document which does
not substantially comply with the terms of such Letter of Credit or Tri-Party
Agreement;
 
(5)           any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Borrowers or any of
their Subsidiaries;
 
(6)           any breach of this Agreement or any other Loan Document by any
party thereto;
 
(7)           any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
 
(8)           the fact that an Event of Default or a Potential Event of Default
shall have occurred and be continuing;
 
provided, in each case, that payment by the applicable Issuer under the
applicable Letter of Credit or Tri-Party Agreement shall not have constituted
gross negligence or willful misconduct of such Issuer under the circumstances in
question (as determined by a final judgment of a court of competent
jurisdiction).
 
(g)           Loans Attributable to New York Projects.  Following the recording
of a Mortgage that encumbers a Project in the State of New York (each a “New
York Mortgage”) the amount of each Loan thereafter made (until the aggregate
amount of such Loans equals the “Secured Amount” (as defined in such Mortgage))
shall be deemed to have been advanced under, and secured by, such New York
Mortgage.  The portion of the Indebtedness secured by such New York Mortgage
shall be reduced only by the last and final sums that Borrowers repay with
respect to the Indebtedness (as provided in this Section 2.4(g)) and, from and
after the date on which the aggregate amount of the Indebtedness first equals or
exceeds the Secured Amount, the portion of the Indebtedness secured by such New
York Mortgage shall not be reduced by any intervening repayments of the
Indebtedness by Borrowers until such time as the aggregate outstanding
Indebtedness has been reduced to an amount less than the Secured Amount.  So
long as the outstanding balance of the Indebtedness exceeds the Secured Amount
of a New York Mortgage, any payments and repayments of the Indebtedness shall
not be deemed applied against, or to reduce, the portion of the Indebtedness
secured by such New York Mortgage and such payments shall be deemed to reduce
only such portions of the Indebtedness as are secured by Mortgages encumbering
real property located outside of the State of New York, except as provided in
the next sentence of this Section 2.4(g).  If at any time when more than one New
York Mortgage is in effect a payment of the Indebtedness is made such that the
outstanding principal amount of the Indebtedness would be less than the Secured
Amount of any New York Mortgage, the amount of such payment shall be deemed
applied in reduction of the Secured Amount of such New York Mortgage as shall be
specified by Agent by written notice to Master Borrower.

 
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2.5          Interest Rate.
 
(a)           Subject to the provisions of Sections 2.13 and 2.16, each Loan
shall bear interest at the applicable Interest Rate then in effect.  The
Interest Rate shall change (i) automatically from time to time effective as of
the effective date of each change in the LIBOR Market Index Rate, and (ii) to
the extent allowed by law, on the effective date of any change in the highest
lawful rate.
 
(b)           Interest payable on the Loans shall be calculated on the basis of
a 360-day year but charged for each year or portion thereof that any Loan
remains outstanding.
 
2.6          Default Rate.  Any principal amount not paid when due (at the
Maturity Date, by acceleration or otherwise) shall bear interest thereafter
until paid in full (before or after judgment), payable on demand, at the Default
Rate.
 
2.7          Fees Payable by Borrowers.  Borrowers agree to pay to the Agent,
for the account of Lenders, as consideration for the agreement of the Lenders to
make available the Commitments, the following Loan Fees:
 
(a)           Up-Front Fee.  On the Interim Order Date, Borrowers shall have
paid to Agent for the account of those Revolving Lenders executing this
Agreement an amendment fee (the “Up-Front Fee”) equal to 1.50% (that is, 150
“basis points”) of the aggregate amount of such Revolving Lender’s Pro Rata
Share of the Revolving Loan Commitments as of the Interim Order Date.
 
(b)           Unused Fee.
 
(i)           Commencing on April 15, 2010 (or within three (3) days upon
receipt of invoice, whichever is later), and continuing on the 15th day of each
succeeding month thereafter through and including the month(or within three (3)
days upon receipt of invoice, whichever is later) in which the Maturity Date
occurs and on the Maturity Date, Borrowers shall pay, to Agent for the account
of the Revolving Lenders an unused fee (the “Unused Fee”) in arrears through
(and including) the last day of the immediately preceding calendar month, at the
rate of 1.00% per annum (that is, 100 “basis points”) on the average daily
unused portion of the Revolving Loan Commitment (excluding the amount of
outstanding Letters of Credit and Tri-Party Agreements).
 
(ii)           The Unused Fee shall be calculated on the basis of a 360-day
year.  Unused Fees shall be allocated to the Revolving Lenders in accordance
with their respective Pro Rata Shares at the time payment of each Unused Fee is
due.

 
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(c)           Letters of Credit and Tri-Party Agreement Fee.  Borrowers shall
pay quarterly, in arrears on the fifteenth (15th) day of each Fiscal Quarter
during such time that any Letter of Credit or Tri-Party Agreement remains
outstanding, a fee (the “Letter of Credit Fee”) based on the amount available to
be drawn under such Letter of Credit or Tri-Party Agreement during the preceding
Fiscal Quarter.  Such fee shall be calculated on the basis of a 360-day year at
the per annum rate equal to the Applicable Spread applicable to Revolving
Loans.  From the Letter of Credit Fee (and for the avoidance of doubt does not
constitute an additional amount to be paid by Borrowers), each Issuer shall also
receive a Letter of Credit and Tri-Party Agreement issuance fee (the “Issuance
Fee”) calculated at the rate of 0.125% per annum (that is, 12.5 “basis points”)
of the amount of such Issuer’s exposure under the Letters of Credit and
Tri-Party Agreements executed by such Issuer for so long as any portion of such
Letters of Credit and Tri-Party Agreements remain undrawn, and the balance of
all such fees paid by Borrowers shall be allocated to the Revolving Lenders in
accordance with their respective Pro Rata Shares at the time payment such fees
is due.  The provisions of this Section 2.7(c) shall supersede all agreements
heretofore made with regard to fees pertaining to Letters of Credit and
Tri-Party Agreements identified on Schedule 2.2(a) between any Borrower and the
Issuers thereof.  In addition to the Issuance Fee, and not to be paid from the
Letter of Credit Fee, Borrowers shall also pay to each Issuer, for its own
account, such Issuer’s letter of credit issuance, renewal, amendment, delivery
and billing fees that are such Issuer’s standard fees pertaining thereto at the
time a Letter of Credit is issued, renewed or amended.
 
(d)           Unpaid Loan Fees.  In the event that Borrowers fail to pay the
same when due, Revolving Lenders may disburse any Loan Fees then due, in whole
or in part, either on the dates as provided above or at any time or times
thereafter, without the consent of Borrowers and without receiving a Request for
Revolving Loan and such disbursements shall be deemed to be Revolving Loans.  If
any such Loan Fee is advanced in the manner described in the preceding sentence,
interest at the Interest Rate as provided herein shall accrue upon the Revolving
Loan made in connection with unpaid Loan Fees.
 
2.8           Repayment.
 
(a)           Interest.
 
(i)           Term Loans.  Commencing on April 15, 2010 (or within three (3)
days upon receipt of invoice, whichever is later), and continuing on the
fifteenth (15th) day of each succeeding month (or within three (3) days upon
receipt of invoice, whichever is later) thereafter through and including the
month in which the Maturity Date occurs and on the Maturity Date, the Borrowers
shall pay to the Agent interest at the applicable Interest Rate, in arrears
through (and including) the last day of the immediately preceding calendar
month, on the aggregate outstanding principal balance of the Term Loans.
 
(ii)          Revolving Loans.  Commencing on April 15, 2010 (or within three
(3) days upon receipt of invoice, whichever is later), and continuing on the
15th day of each succeeding month (or within three (3) days upon receipt of
invoice, whichever is later) thereafter through and including the month in which
the Maturity Date occurs and on the Maturity Date, the Borrowers shall pay to
the Agent interest at the applicable Interest Rate, in arrears through (and
including) the last day of the immediately preceding calendar month, on the
aggregate outstanding principal balance of the Revolving Loans.
 
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(b)           Term Loan Principal.
 
(i)           Borrowers shall prepay the principal amount of the Term Loans, as
required from time to time pursuant to Section 2.10.
 
(ii)          The entire outstanding principal balance of all Term Loans,
together with all accrued interest thereon and other amounts payable by
Borrowers pursuant to this Agreement, shall be due and payable without notice or
demand on the Maturity Date.
 
(c)           Revolving Loan Principal.
 
(i)           Borrowers shall prepay the principal amount of the Revolving Loans
as required from time to time pursuant to Section 2.10.
 
(ii)          The entire outstanding principal balance of all Revolving Loans,
together with all accrued interest thereon and other amounts payable by
Borrowers pursuant to this Agreement, shall be due and payable without notice or
demand on the Maturity Date.
 
2.9          Commitment Reductions.
 
(a)           Voluntary Reduction of Revolving Loan Commitments.  Master
Borrower shall have the right, at any time after the Closing Date, to terminate,
upon not less than ten (10) days’ prior written notice to Agent, or to reduce,
upon not less than three (3) Business Days’ prior written notice to Agent, the
Revolving Loan Commitments, provided that the Revolving Loan Commitments may not
be so reduced by Master Borrower to an amount that is less than the sum of the
aggregate principal balance of all Revolving Loans then outstanding plus 105% of
the aggregate amount of liabilities under all outstanding Letters of Credit and
Tri-Party Agreements.  Any voluntary termination or reduction in the Revolving
Loan Commitments shall permanently reduce the Revolving Loan Commitments.  If
Borrowers desire to reduce the Revolving Loan Commitments as aforesaid,
Borrowers shall execute and deliver to Agent such documents and instruments as
Agent shall reasonably require in connection with such reduction.  Each such
reduction of the Revolving Loan Commitments shall not result in a reduction of
the Letter of Credit Sublimit.  For the avoidance of doubt, subject to the terms
of this Section 2.9(a), the Master Borrower shall have the right to specifically
reduce the Letter of Credit Sublimit to an amount not less than 105% of the
aggregate amount of liabilities under all outstanding Letters of Credit and
Tri-Party Agreements.
 
(b)           Pro Rata Reductions of Revolving Loan Commitments.  Any reduction
of the Revolving Loan Commitments pursuant to this Section 2.9 shall be in
proportion to each Revolving Lender’s Pro Rata Share.
 
                2.10          Prepayments.
 
(a)           Voluntary Prepayments.  Borrowers may make prepayments (full or
partial) with respect to the Indebtedness from time to time without penalty or
premium to be applied to the Indebtedness in accordance with Section
2.10(b)(vi).  The acceptance by Lenders of any prepayment at a time when an
Event of Default has occurred and is continuing shall not constitute a waiver,
release or accord and satisfaction thereof or of any rights in respect thereto
by the Agent or Lenders.

 
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(b)           Mandatory Prepayments.
 
(i)           Drawing under Letter of Credit or Tri-Party Agreement.  If a
Revolving Loan is made or a drawing is made under any Letter of Credit or
Tri-Party Agreement and any Revolving Lender fails to deliver to Agent, as
required by the terms of this Agreement, such Revolving Lender’s Pro Rata Share
of the Revolving Loan, if any, that results from such a drawing and no other
Revolving Lender or Lenders elect to fund the Defaulting Lender’s share of such
Revolving Loan, Borrowers shall, within one (1) Business Day after notice from
Agent, pay to Agent for the account of Issuer the amount of such Defaulting
Lender’s Pro-Rata Share of the Revolving Loan or drawing, net of any amount in
the Letter of Credit Collateral Account relating to such Defaulting Lender and
the subject Letter of Credit or Tri-Party Agreement.  No payment by Borrowers of
a Defaulting Lender’s Pro Rata Share of a Revolving Loan shall be deemed to
constitute a cure of the default by the Defaulting Lender of its obligations
under this Agreement to fund its Pro Rata Share of each Revolving Loan.  Any
amount payable by any Borrower pursuant to a drawn Letter of Credit or Tri-Party
Agreement shall be automatically added to the Budget to the extent the
performance subject to such Letter of Credit or Tri-Party Agreement is not
already in the Budget and shall be deemed to be a modification approved by Agent
and the applicable Lenders.
 
(ii)          Revolving Loans, Letters of Credit and Tri-Party Agreements in
Excess of Revolving Loan Sublimit or Revolving Loan Commitments.
 
(1)           At any time the unpaid principal balance of outstanding Revolving
Loans (excluding Loans resulting from a drawing under a Letter of Credit or
Tri-Party Agreement) exceeds the Revolving Loan Sublimit, Borrowers (without any
requirement of notice from Agent or any Lender) shall promptly (but not later
than one (1) Business Day thereafter) make a principal payment on account of the
Revolving Loans in an amount that reduces the outstanding principal balance of
all Revolving Loans to an amount that is equal to or less than the Revolving
Loan Sublimit.
 
(2)           At any time that the unpaid principal balance of outstanding
Revolving Loans plus all liability under Letters of Credit and Tri-Party
Agreements exceeds the Revolving Loan Commitments, Borrowers (without any
requirement of notice from Agent or any Lender) shall promptly (but not later
than one (1) Business Day thereafter) make a principal payment on account of the
Revolving Loans in an amount that reduces the outstanding principal balance of
all Revolving Loans plus all exposure under Letters of Credit and Tri-Party
Agreements to an amount that is equal to or less than the Revolving Loan
Commitments.
 
(iii)         Refund Collateral.  Within one (1) Business Day after the date of
receipt of any Refund Collateral by Agent or any Borrower, the Borrowers shall
prepay the Loans in an aggregate amount equal to the Refund Collateral.  Agent
shall provide notice of receipt of such Refund Collateral to Master Borrower.

 
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(iv)         Prepayments from Net Insurance/Condemnation Proceeds.  Within one
(1) Business Day after the date of receipt by Agent or any Borrower of any Net
Insurance/Condemnation Proceeds that are required to be applied to prepay the
Loans pursuant to the provisions of Section 6.6(m), Borrowers shall prepay the
Loans in such amount.
 
(v)         Net Asset Sale Proceeds.  On the date of receipt by Agent or any
Borrower of any Net Asset Sale Proceeds, Borrowers shall prepay the Loans in the
amount of such Net Asset Sale Proceeds.
 
(vi)        Application of Proceeds.  Subject to the terms of the Orders, the
payments required to be made pursuant to this Section 2.10 and elsewhere
hereunder shall be applied in the following order:
 
(1)           with respect to any Asset Sale outside of the ordinary course, to
the outstanding principal amount of, premium or penalty, if any, and interest on
any Debt that is secured by a Permitted Priority Lien;
 
(2)           to the payment of all costs and expenses of such sale, collection
or other realization, all other expenses, liabilities and advances made or
incurred by Agent in connection therewith, and all amounts for which Agent is
entitled to compensation (including the fees described in Section 2.7 and costs
of Appraisals), reimbursement and indemnification under any Loan Document and
all advances made by Agent thereunder for the account of the applicable
Borrower, and to the payment of all costs and expenses paid or incurred by Agent
in connection with the Loan Documents, all in accordance with Sections 11.6 and
12.15 and the other terms of this Agreement and the Loan Documents;
 
(3)           to repay accrued and currently due and payable interest on the
Revolving Loans;
 
(4)           to repay accrued and currently due and payable interest on the
Term Loans (pari passu as between the Tranche 1 Term Loans and Tranche 2 Term
Loans);
 
(5)           with respect to the proceeds of any Asset Sale in the ordinary
course, to be held by Agent until no later than 4:00 P.M. of each Friday to fund
any Request for Revolving Loan;
 
(6)           to repay principal amounts outstanding under the Revolving Loans;
 
(7)           to fund the Carve-Out Collateral Account to provide Cash
Collateral for the Carve-Out until the amount in such account is equal to the
Carve-Out;

 
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(8)           to fund the Letter of Credit Collateral Account to provide Cash
Collateral for issued but undrawn, or the future issuance of, Letters of Credit
and Tri-Party Agreements until the amount in such account is equal to the
aggregate amount of the Letter of Credit Sublimit;
 
(9)           to fund the Revolving Loan Collateral Account to provide Cash
Collateral for the Revolving Loan Commitments (excluding the amount in the
Letter of Credit Collateral Account) until the amount in such account is equal
to the Revolving Loan Commitments (excluding the amount in the Letter of Credit
Collateral Account);
 
(10)         to repay principal amounts pari passu as between Tranche 1 and
Tranche 2 outstanding under the Term Loans;
 
(11)         to repay Pre-Petition Debt; and
 
(12)         to the payment to or upon the order of such Borrower or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
 
2.11         General Payment Provisions.
 
(a)           Manner, Time and Application of Payment.  All payments of
principal, interest and fees hereunder and under the Notes shall be made when
due by Borrowers without notice, set-off or counterclaim and in immediately
available same day funds and delivered to Agent not later than 1:00 P.M. eastern
time on the date due for the account of Lenders.  Funds received by Agent after
that time shall be deemed to have been paid by Borrowers on the next succeeding
Business Day.  All such payments shall be made by wire transfer to the account
identified in Section 2.4(e)(ii), or to such other account as Agent may from
time to time specify by written notice to Borrowers.  Unless Agent shall have
received notice from Master Borrower prior to the date on which any payment is
due hereunder or under the Notes to the effect that Borrowers will not make such
payment, Agent may assume that Borrowers have made such payment on the date such
payment is due and may, in reliance upon such assumption, distribute to the
Lenders their Pro Rata Share of any such payment.  If Agent makes such
distribution to Lenders and Borrowers have not in fact made such payment, then
each of the Lenders severally agrees to repay to Agent forthwith on demand the
amount so distributed to such Lender, with interest thereon, at the Federal
Funds Rate, for each day from and including the date such amount is made to it
to but excluding the date of payment to Agent.
 
(b)           Apportionment of Payments.  Aggregate principal and interest
payments made by Borrowers in respect of Loans shall be apportioned
proportionately to each Lender in accordance with each Lender’s respective Pro
Rata Share of the applicable type of Loan.  Agent shall, within one (1) Business
Day, distribute to each Lender its Pro Rata Share of all payments received by
Agent for the benefit of Lenders, and if any such payment is not so distributed,
Agent shall pay to the intended recipient thereof interest on the unpaid amount
thereof at the Federal Funds rate until such payment is paid.

 
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(c)           Conditional Payment.  Borrowers agree that checks and other
instruments received by Agent on behalf of Lenders or by any Lender in payment
of or on account of the Indebtedness constitute only conditional payment until
such items are actually paid to Agent or such Lender.
 
(d)           Charging Accounts.  Whenever Borrowers are obligated, pursuant to
Section 2 hereof, or pursuant to the Notes or any other Loan Document, to make
payments of any nature to Agent or Lenders, Agent shall be entitled, and each
Borrower, by its execution of the Notes, authorizes Agent, to withdraw against
any Depository Account, the amount of such fees, expenses, interest or other
amounts due.  Agent shall deliver to the subject Borrower a notice setting
forth, in reasonable detail, the amount of the fees, expenses and/or payments
paid by such withdrawal, and the name or number of the account or accounts from
which the withdrawal was made. Any such charge shall be subject to the
provisions of Section 11.14 hereof relating to the sharing of recoveries among
Lenders.
 
2.12          Payment Administration and Cash Management.
 
(a)           Cash Management.  The Borrowers shall implement a cash management
system acceptable to the Agent.  The Borrowers shall, among other things:
(i) deposit all Cash and other Cash Equivalents owned by the Borrowers in one or
more depository accounts with the Agent (the “Depository Accounts”); (ii)
indicate to all appropriate parties that funds from any Asset Sale shall be
delivered directly to Agent; (iii) direct all of Borrowers’ account debtors to
deposit any and all proceeds of Collateral into the Depository Accounts; (iv)
irrevocably authorize and direct any banks which currently maintain the
Borrowers’ initial receipt of cash, checks and other items to promptly wire
transfer all available funds to a Depository Accounts and to close all such
accounts other than the Depository Accounts; and (v) promptly cause to be
deposited all proceeds of Collateral received by any of the Borrowers, and remit
all cash and other monies, as and when received, into the Depository Accounts.
 
(b)           Revolving Loan Collateral Account.  Agent is hereby authorized to
establish and maintain a Special Purpose Collateral Account number 2000033159395
designated as “Greenwood Financial Revolving Loan Collateral Account” (the
“Revolving Loan Collateral Account”).
 
(c)           Letter of Credit Collateral Account.  Agent is hereby authorized
to establish and maintain a Special Purpose Collateral Account number
2000033159434 designated as “Greenwood Financial Letter of Credit Collateral
Account” (the “Letter of Credit Collateral Account”).
 
(d)           Cash Collateral Account.  Agent is hereby authorized to establish
and maintain a Special Purpose Collateral Account number 2000033159418
designated as “Greenwood Financial Cash Collateral Account” (the “Cash
Collateral Account”).
 
(e)           Carve-Out Collateral Account.  Agent is hereby authorized to
establish and maintain a Special Purpose Collateral Account number 2000033159405
designated as “Greenwood Financial Carve-Out Collateral Account” (the “Carve-Out
Collateral Account”).

 
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(f)           Reserved.
 
(g)           Special Purpose Collateral Accounts.  Each Special Purpose
Collateral Account shall be a blocked established and maintained by Agent at its
office at 201 S. College Street, 8th Floor, Charlotte, NC 28288-5708, Attention:
Syndicated Agency Services, facsimile 704-383-7989 as under the sole dominion
and control of Agent.  All amounts at any time held in a Special Purpose
Collateral Account shall be beneficially owned by the Borrower named as the
owner thereof but shall be held in the name of Agent hereunder, as a funding
source as set forth herein and as collateral security for the Indebtedness upon
the terms and conditions set forth herein.  The Borrowers shall have no right to
withdraw, transfer or, except as expressly set forth herein, otherwise receive
any funds deposited into any Special Purpose Collateral Account.  Anything
contained herein to the contrary notwithstanding, each Special Purpose
Collateral Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or government authority, as may now or hereafter be in
effect.  All deposits of funds in any Special Purpose Collateral Account shall
be made by wire transfer (or, if applicable, by intra-bank transfer from another
account of Borrowers) of immediately available funds, in each case addressed in
accordance with instructions of Agent.  Borrowers shall, promptly after
initiating a transfer of funds to any Special Purpose Collateral Account, give
notice to Agent by telefacsimile of the date, amount and method of delivery of
such deposit.  Cash held by Agent in any Special Purpose Collateral Account
shall not be invested by Agent but instead shall be maintained as a cash deposit
in such Special Purpose Collateral Account pending application thereof as
elsewhere provided in this Agreement.  To the extent permitted under Regulation
Q of the Board of Governors of the Federal Reserve System, any Cash held in any
Special Purpose Collateral Account shall bear interest at the standard rate paid
by Agent to its customers for deposits of like amounts and terms.  Subject to
Agent’s rights hereunder, any interest earned on deposits of Cash in any Special
Purpose Collateral Account shall be deposited directly in, and held in, such
Special Purpose Collateral Account.
 
2.13          LIBOR Provisions.
 
(a)           Inability to Determine Interest Rate.  If at any time Agent shall
have reasonably determined (which determination shall be conclusive and binding
upon Borrowers) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the 1-month LIBOR
Rate, Agent shall give facsimile, telephonic or written notice thereof to Master
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given, and until such notice has been withdrawn by Agent, all Loans shall bear
interest at the Alternate Interest Rate rather than by reference to the LIBOR
Market Index Rate.
 
(b)           Illegality or Impracticality.  If any Lender reasonably determines
that maintenance of its Loans on which interest is charged at a rate based on
the LIBOR Market Index Rate at a Lending Office would (i) violate any applicable
law, rule, regulation, or directive, whether or not having the force of law, or
(ii) has become impracticable, or would cause such Lender material hardship, as
a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the London interbank market or the position of
such Lender in that market, then Agent shall give facsimile, telephonic or
written notice thereof to Master Borrower and the Lenders as soon as practicable
thereafter. If such notice is given, and until such notice has been withdrawn by
Agent, all Loans shall bear interest at the Alternate Interest Rate rather than
by reference to the LIBOR Market Index Rate.

 
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2.14          Notes.  The obligation of Borrowers to repay all Tranche 1 Term
Loans, and all interest and other charges thereon, may be evidenced by the
Tranche 1 Term Notes.  The obligation of Borrowers to repay all Tranche 2 Term
Loans, and all interest and other charges thereon, may be evidenced by the
Tranche 2 Term Notes.  The obligation of Borrowers to repay all Revolving Loans,
and all interest and other charges thereon, may be evidenced by the Revolving
Notes.  If so requested by any Lender by written notice to Master Borrower (with
a copy to Agent) at least two (2) Business Days prior to the Closing Date or at
any time thereafter, Borrowers shall execute and deliver to each Lender one
Tranche 1 Term Note in the principal amount of such Lender’s Tranche 1 Term Loan
Commitment, one Tranche 2 Term Note in the principal amount of such Lender’s
Tranche 2 Term Loan Commitment, and one Revolving Note in the principal amount
of such Lender’s Revolving Loan Commitment.
 
 
2.15
Taxes.

 
(a)           Any and all payments by or on account of any obligation of
Borrowers hereunder or under any other Loan Document shall be made free and
clear of and without reduction or withholding for any Indemnified Taxes or Other
Taxes, provided that if Borrowers shall be required by applicable law to deduct
any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.15), Agent or the applicable Lender, as the case may be, receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) Borrowers shall make such deductions and (iii) Borrowers shall timely
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
 
(b)           In addition, Borrowers shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
 
(c)           Borrowers shall indemnify Agent and each Lender, within ten (10)
days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes paid by Agent or such Lender, as the case may be, on or with respect
to any payment by or on account of any obligation of any Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.15) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to
the amount of such payment or liability delivered to Master Borrower by a Lender
(with a copy to Agent), or by Agent on its own behalf or on behalf of a Lender,
shall be conclusive absent manifest error.
 
(d)           As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by Borrowers to a Governmental Authority, Borrowers shall deliver to
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to Agent.

 
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(e)           Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments under this Agreement shall deliver to
Master Borrower (with a copy to Agent), at the time such Lender becomes a party
to this Agreement and at any other time or times reasonably requested by Master
Borrower, such properly completed and executed documentation prescribed by
applicable law or reasonably requested by Master Borrower as will permit such
payments to be made without withholding or at a reduced rate.  Agent and each
Lender that is a “United States person,” as defined in Section 7701(a)(30) of
the Code (other than Persons that are corporations or otherwise exempt from
United States backup withholding Tax), shall deliver at the time(s) and in the
manner(s) prescribed by applicable law, to Master Borrower and Agent (as
applicable), a properly completed and duly executed United States Internal
Revenue Service Form W-9, or any successor form, certifying that such Person is
exempt from United States backup withholding Tax on payments made hereunder.
 
(f)           If Agent or a Lender determines, in its sole discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by Borrowers or with respect to which Borrowers have paid additional
amounts pursuant to this Section 2.15, it shall pay to Master Borrower an amount
equal to such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by Borrowers under this Section 2.15 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of Agent or such Lender, as the case may be, and without interest
(other  than any interest paid by the relevant Governmental Authority with
respect to such refund), provided that Borrowers, upon the request of Agent or
such Lender, agree to repay the amount so paid over to Master Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to Agent or such Lender in the event Agent or such Lender is required
to repay such refund to such Governmental Authority.  This Section 2.15 shall
not be construed to require Agent or any Lender to make available its Tax
returns (or any other information relating to its Taxes that it deems
confidential) to Master Borrower, any Borrower or any other Person.
 
 
2.16
Increased Costs; Capital Adequacy.

 
(a)           If any Change in Law shall: (i) impose, modify or deem applicable
any reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except the Eurocurrency Reserve
Requirements); (ii) subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any participation in any Loan made by it, or change
the basis of taxation of payments to such Lender in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 2.15 and the imposition of,
or any change in the rate of, any Excluded Taxes payable by such Lender); or
(iii) impose on any Lender or the London interbank market any other condition,
cost or expense affecting this Agreement or Loans made by such Lender or
participation therein; and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Loan (or of
maintaining its obligation to make any such Loan), or to reduce the amount of
any sum received or receivable by such Lender hereunder (whether of principal,
interest or any other amount) then, upon request of such Lender, Borrowers will
pay to such Lender such additional amount or amounts as will compensate such
Lender for such additional costs incurred or reduction suffered.

 
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(b)           If any Lender determines that any Change in Law affecting such
Lender or any Lending Office of such Lender or such Lender’s holding company, if
any, regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender’s capital or on the capital of such Lender’s
holding company, if any, as a consequence of this Agreement, the Commitment of
such Lender or the Loans made by such Lender to a level below that which such
Lender or such Lender’s holding company could have achieved but for such Change
in Law (taking into consideration such Lender’s policies and the policies of
such Lender’s holding company with respect to capital adequacy), then from time
to time Borrowers will pay to such Lender such additional amount or amounts as
will compensate such Lender or such Lender’s holding company for any such
reduction suffered.
 
(c)           A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in Section 2.16(a) or 2.16(b) and delivered to Master Borrower
shall be conclusive absent demonstrable error.  Borrowers shall pay such Lender
the amount shown as due on any such certificate within thirty (30) days after
receipt thereof.
 
(d)           Failure or delay on the part of any Lender to demand compensation
pursuant to this Section 2.16 shall not constitute a waiver of such Lender’s
right to demand such compensation; provided that Borrowers shall not be required
to compensate a Lender pursuant to this Section for any increased costs incurred
or reductions suffered more than nine (9) months prior to the date that such
Lender notifies Master Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine (9) month period
referred to above shall be extended to include the period of retroactive effect
thereof).
 
2.17        Survival of Indemnity.  The obligations of Borrower under
Sections 2.15 and 2.16 shall survive payment of the Indebtedness and termination
of the Agreement.
 
2.18        Replacement of Lenders.  If any Lender requests compensation under
Section 2.16, or if Borrowers are required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.15, then Borrowers may, at their sole expense and effort, upon notice
by Master Borrower to such Lender and Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 12.9 hereof), all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an Eligible Assignee that shall assume such obligations (which
Eligible Assignee may be another Lender, if a Lender accepts such assignment);
provided that: (i) Agent shall have received from the assigning Lender or
assignee the assignment fee specified in Section 12.9 of the Agreement; (ii)
such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Loan Documents from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or Borrowers (in the case of all other amounts); (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.15 or
payments required to be made pursuant to Section 2.16, such assignment will
result in a reduction in such compensation or payments thereafter; and (iv) such
assignment does not conflict with applicable law.  A Lender shall not be
required to make any such assignment or delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling
Borrowers to require such assignment and delegation cease to apply.
 
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2.19
Lending Office.

 
(a)           Each Lender may book its Pro Rata Share of Loans at any Lending
Office selected by such Lender and may change its Lending Office from time to
time. All terms of this Agreement shall apply to any such Lending Office and the
Loans and Notes issued hereunder shall be deemed held by each Lender for the
benefit of any such Lending Office.  Each Lender may, by written notice to Agent
and Master Borrower, designate replacement or additional Lending Offices through
which Loans will be made by it and for whose account Loan payments are to be
made.
 
(b)           If any Lender requests compensation under Section 2.16, or
requires Borrowers to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender, unless directed by Master Borrower not to do so, shall use
reasonable efforts to designate a different Lending Office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.15 or Section 2.16, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender.  Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
 
SECTION 3.
MATTERS RELATING TO REAL ESTATE

 
 
3.1
Budget.

 
(a)                 Initial Budget.  The Borrowers’ initial budget regarding its
use of Revolving Loans (as updated pursuant to Section 3.1(c), the “Budget”)
shall be the Budget delivered on the Closing Date and is attached hereto as
Exhibit E.  Each Budget shall be for the thirteen (13) weeks following the date
of delivery of such Budget.  All updated versions of the Budget shall be
approved by the CRO, satisfactory to Agent and modeled on the form attached
hereto as Exhibit E.
 
(b)                 Content of Budget.  The Budget shall set forth for each week
of the 13-week period detail relating to the Business, including the costs and
timing of payment of such costs pertaining to the construction and sale of Real
Estate, Lots and Units.  The associated underlying assumptions for the
Borrowers’ anticipated uses of the Revolving Loans shall be subject to approval
by the Agent.  For the avoidance of doubt, initially and all updates of the
Budget must be satisfactory to Agent in all respects, including the amount and
the proposed recipient of any proposed payment or use of cash collateral or
proceeds of Revolving Loans.  Among other things, the Budget shall include:
 
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(i)           anticipated receipts from the retail sale of Units, from bulk
sales of Lots and Units, and from other Asset Sales;
 
(ii)          payments of accounts payable that are Permitted Critical Vendor
Payments;
 
(iii)         overhead and administrative expenses to include insurance,
utilities, rents, leases, sales, marketing and other general and administrative
costs;
 
(iv)         periodic advances for payroll, commissions and other
compensation-related costs;
 
(v)          real estate taxes, insurances, homeowners association costs and
other recurring community-related costs and other costs that are the obligation
of the Borrowers;
 
(vi)         Cost-to-Complete of Units for which construction is permitted under
Section 7.20;
 
(vii)        costs required for the preservation of entitlements and platments;
 
(viii)       limited amounts for costs associated with sales and marketing of
Lots or Units;
 
(ix)         amounts necessary to fund the Carve-Out Collateral Account equal to
the amount of the Carve-Out;
 
(x)          restructuring costs to include Borrowers professionals,
professionals of the Committee and other bankruptcy and financing costs;
 
(xi)         a best estimate of the forecasted week ending book balance of cash;
and
 
(xii)        sufficient information to identify and quantify the cash flow
impact of planned cost savings, a critical vendor program, headcount reductions
and other milestones, to the extent submitted by the CRO pursuant to Section
3.3(b)(iv).
 
(c)           Modifications to the Budget.  The Budget shall be updated from
time to time by delivering an updated Budget pursuant to Section
6.1(f).  Revisions to the Budget may include provisions for customer changes and
upgrades, updated Cost-to-Complete, bulk sales of Lots or Units or
condemnations.  Revisions to the Budget must be approved by the Agent in every
respect.
 
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3.2
Appraisals.

 
(a)           New Appraisals.  Agent shall order (with the Borrowers’
cooperation) updated appraisals for all Projects and the Borrowers shall (i)
respond and cooperate with any information or document requests made by any
appraiser completing an Appraisal on behalf of the Agent within five (5)
Business Days of such request and (ii) to pay any and all appraisal costs of
Agent.  Each new Appraisal shall be ordered and reviewed by the Agent.  The
final Appraisal amount shall be determined by the Agent in accordance with
Section 3.2(c).  The time period for compliance with this Section 3.2(a) as
provided in the first sentence hereof is in lieu of any notice or grace periods
contained in this Agreement or in any other Loan Documents.
 
(b)           Re-Appraisals.  Notwithstanding the foregoing, Agent, at its
discretion, shall have the right to obtain new Appraisals of all or any portion
of the Projects (a) whenever an Event of Default has occurred and is continuing,
(b) as required by the then current regulatory requirements generally applicable
to real estate loans of the categories made under this Agreement, as reasonably
interpreted by the Agent, (c) at any time following a condemnation of more than
an immaterial portion of a Project, as determined in good faith by the Agent and
(d) upon any material adverse change with respect to a Project, as determined in
good faith by the Agent.
 
(c)           Generally.  Borrowers acknowledge that the Agent may make changes
or adjustments to the values set forth in any Appraisal as may be required by
the Agent’s appraisal department in the exercise of its good faith business
judgment, and that the Agent is not bound by the value set forth in any
Appraisal performed pursuant to this Agreement and does not concur with or make
any representations or warranties with respect to any Appraisal.  Borrowers
further agree that Lenders shall have no liability as a result of or in
connection with any such Appraisal for statements contained in such Appraisal,
including without limitation, the accuracy and completeness of information,
estimates, conclusions and opinions contained in such Appraisal, or variance of
such Appraisal from the fair value.  All Appraisal costs shall be paid for by
Borrowers as incurred.
 
 
3.3
Sale of Assets.

 
(a)           Generally.  All sales of Real Estate, Lots or Units shall be made
through a title company or closing agent or attorney and the Net Asset Sale
Proceeds shall be paid directly to Agent for application pursuant to Section
2.10(b).
 
(b)           Requirements. Borrowers shall comply with the following
requirements relating to the general sale process for assets:
 
(i)           Engage in weekly meetings and/or teleconferences (each a “Weekly
Status Meeting”) on Tuesday of each week with Agent, Advisory Agent, the
Revolving Lenders who wish to participate, and their respective representatives,
commencing on April 20, 2010 in which Agent and Advisory Agent are provided with
a status report on the assets, the Sale process, the Budget and other matters
reasonably requested by the Agent and other Lenders.
 
(ii)          Deliver to Agent, weekly in advance of each Weekly Status Meeting,
all expressions of interest (whether verbal or in writing), commitments or
contractual documents from any party interested in purchasing any of the
Borrowers assets outside of the ordinary course of business.
 
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(iii)         Make available to Agent and its Advisory Agent, on the Interlinks
datasite related to the Sale process, due diligence materials made available to
potential buyers for assets, in each case received through such date and
excluding individual retail sales of Units.
 
(iv)         Not later than April 30, 2010 the CRO shall furnished to Agent each
in form and substance satisfactory to Agent: (A) its recommendation with respect
to operating systems, internal controls, staff reductions and senior management
of the Borrowers and their subsidiaries which shall be satisfactory to the Agent
in the good faith exercise of its judgment; and the Borrowers shall, to the
extent acceptable to the Borrowers, diligently effect such recommendations; and
(B) a long-term “wind down” budget for all operations.
 
(v)         At least one (1) Business Day (or such shorter time period approved
by Agent) prior to any sale commitment deadline for any particular sale of
assets in the ordinary course of business, Parent shall cause the CRO to deliver
to the Agent and its Advisory Agent a draft HUD closing statement with
Borrowers’ best estimate of closing costs and net sale proceeds evidencing that
the Borrowers are in compliance with Section 3.4(b).
 
(vi)         Not later than three (3) Business Days after a sale Borrowers
shall, or shall cause, a final executed HUD to be delivered to Agent evidencing
that the Borrowers are in compliance with Section 3.4(b) together with
confirmation of the wire payment of any sale proceeds.
 
 
3.4
Marketing and Sale of Assets

 
(a)           Marketing of Assets.
 
(i)           Parent shall cause the CRO to manage the sale of all assets of the
Borrowers and shall, in his or her discretion as set forth in the wind-down plan
(if she or he believes it is economically beneficial), engage unrelated,
third-party real estate brokers acceptable to the Agent to sell the
Projects.  The Agent shall have reasonable access to Borrowers’ management who
will be responsible for the sales process as well as any real estate brokers
that are engaged.  The CRO shall make its commercially reasonable best efforts
to sell all the assets as soon as practical on commercially reasonable terms and
prices.
 
(b)           Sale of Assets. Borrowers may sell Lots or Units in Projects in
the ordinary course of business pursuant to agreements of sale.  Sales of Lots
and Units shall meet the following criteria:
 
(i)           Any single Lot or Unit shall not be sold without the Agent’s prior
written consent if (x) Borrowers have not delivered information required
pursuant to Section 3.3(b)(v) and (y) the gross sale price on the HUD Statement
would be less than seventy percent (70%) of the greater of (A) the list price
based on Borrower’s guidelines price set forth on Schedule 3.4 as of the Closing
Date or (B) contracted sale price in the current agreement of sale for such Lot
or Unit as of the Closing Date.
 
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(ii)          Closing and settlement costs, including but not limited to
ordinary course brokerage costs (if any), legal, property transfer taxes and
other professional fees, shall not exceed ten percent (10%) of the gross sale
price without the consent of Agent (not to be unreasonably withheld).
 
(iii)         Net Asset Sale Proceeds shall be applied to the Revolving Loans
pursuant to Section 2.10(b).
 
3.5           Advisors.  The Borrowers will continue to engage a mergers and
acquisitions advisor and a restructuring advisor acceptable to the Agent unless
Majority Revolving Lenders provide written notice to Borrowers that such
engagement is no longer needed, with the estimated costs funded under the
Budget.
 
SECTION 4.
CONDITIONS OF LENDING

 
4.1           Agreement to Make Available the Commitments, Loans, Letters of
Credit and Tri-Party Agreements.  The effectiveness of this Agreement is subject
to the conditions precedent that Agent and Lenders shall have received on or
before the date hereof  all of the following collateral documents, each in form
and substance satisfactory to the Agent:
 
(a)           Delivery of the following documents, dated as of the Closing Date
unless otherwise noted:
 
(i)           If requested pursuant to Section 2.14, the Notes, duly executed by
the Master Borrower and by each other Borrower;
 
(ii)          The Security Agreement, duly executed by each Borrower in favor of
Agent for the ratable benefit of the Lenders;
 
(iii)         Certified copies of all corporate, limited partnership and limited
liability company action (as appropriate) taken by the Borrowers, including
resolutions of their respective Boards of Directors, authorizing the execution,
delivery and performance of the Loan Documents to which each is a party;
 
(iv)         An incumbency and signature certificate (dated as the date of this
Agreement) of the Secretaries, general partners, managers or members (as
appropriate) of each Borrowers, certifying the names and true signatures of the
officers or other authorized Persons of such Borrowers authorized to sign the
Loan Documents to which it is a party;
 
(v)          A copy of the Organizational Documents of each Borrowers, certified
as true and correct by its respective Secretary, general partner, manager or
members; and
 
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(vi)        A Subsistence Certificate for each Borrowers, issued as of a recent
date, from the state of such entity’s formation and all jurisdictions in which
such Borrowers is required to register as a foreign corporation, limited
partnership or limited liability company;
 
(b)           To the extent not addressed in the Final Order, an Opinion
directed to Agent and the Lenders and issued by the counsel to the Borrowers
(who must be an independent attorney-at-law licensed to practice in
Pennsylvania) that (i) the Borrowers are duly organized, validly existing, and
in good standing in the state of such entity’s formation, (ii) each Borrowers
has the power to enter into the transactions contemplated by this Agreement and
by the Loan Documents; (iii) the transactions contemplated by this Agreement and
the Loan Documents specified in the opinion do not violate any provision of any
Organizational Document; (iv) the Loan Documents have been executed and
delivered by, and constitute the valid and binding obligations of, each
Borrowers (to the extent executed thereby), enforceable in accordance with their
terms, except as limited by applicable bankruptcy or other laws affecting
creditor’s rights generally; and (v) such other matters relating to the
transactions contemplated herein as Agent or Agent’s counsel may reasonably
request;
 
(c)           On or before the Closing Date, Agent and Lenders shall have
received:
 
(i)           Draft annual financial statements for the Fiscal Year ended June
30, 2009, Company Certified that they fairly present, in all material respects,
the financial condition of the Borrowers as at the dates indicated and the
results of their operations and their cash flows for the periods indicated
(other than impairments for each of the periods), subject to changes resulting
from audit and normal year-end adjustments, together with schedules detailing
impairments by community (i.e., Project) on a book value and borrowing base
value for such periods; provided, however, that such schedules will not be
Company Certified;
 
(ii)          Draft unaudited quarterly financial statements for the Fiscal
Quarter ended September 30, 2009 and December 31, 2009 (other than impairments
for each of the periods), Company Certified that, in all material respects
present the financial condition of the Borrowers as at the dates indicated and
the results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments,
together with schedules detailing impairments by community (i.e., Project) on a
book value and borrowing base value for such periods; provided, however, that
such schedules will not be Company Certified;
 
(iii)         Monthly financial statements for the month ended December 31,
2009, January 31, 2010 and February 28, 2010, Company Certified that, in all
material respects present the financial condition of the Borrowers as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments;
 
(iv)         A Company Certified detailed report, as of the last day of the
previous month, listing all (A) unsold Lots, (B) Units for under construction
(spec, model, & sold units) as permitted under the terms of this Agreement, (C)
a count and listing of new agreements of sale and cancellations of agreements of
sale during such month, (D) a count and listing of closings of any sale of Lots
or Units (including spec, models and sold Lots, Units and values), (E) Backlog,
spec and model inventory by division (North, South, Midwest, Florida), and (F)
Costs-to-Complete detail by Project;
 
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(v)          Payables detail and aging (including any disputed payables) as of
December 31, 2009, the Petition Date and March 31, 2010, Company Certified;
 
(vi)         Weekly report of Cash and Cash Equivalents as of the Closing Date,
including all days since the most recently delivered report, Company Certified;
 
(vii)        Budget approved by the CRO and in form and substance satisfactory
to Agent and Revolving Lenders, certified by the CRO that it is based upon good
faith estimates and assumptions believed by Parent to be reasonable at the time
made, it being recognized by Revolving Lenders that such projections as to
future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the projected
results; and
 
(viii)       The Borrowing Base Certificate delivered pursuant to the terms the
Pre-Petition Credit Agreement on March 15, 2010, Company Certified.
 
(d)           On or before the Closing Date, with respect to each Project (other
than Real Estate subject to a purchase money mortgage constituting a Permitted
Priority Lien), Borrowers shall have delivered or cause to be delivered to Agent
(or, if required by any applicable rule or regulation by which Lenders are
governed, Agent shall have obtained) each of the following:
 
(i)           If requested by Agent, a Mortgage, or an amendment thereto, for
the ratable benefit of the Lenders, for such Project, executed and acknowledged
by the Borrower that is the owner thereof, which shall be a first lien (subject
only to Permitted Liens) on the Project in an amount not less than the aggregate
Commitments, plus any interest and other charges due thereon; provided that if
the Project is located in Florida, New York, Virginia or another jurisdiction
that imposes taxes upon the recording of, or requires documentary stamps to be
affixed to, Mortgages, the amount of the Mortgages in such jurisdictions may be
limited in amount as from time to time designated by Master Borrower and
approved by Agent, and such Mortgages may be effected by the subject Borrower
and Agent executing a mortgage modification, spreader and reaffirmation
agreement, in form acceptable to Agent, whereby the lien of an existing Mortgage
is spread to encumber such Project;
 
(ii)          If requested by Agent, a collateral assignment to Agent, for the
ratable benefit of the Lenders, of all Governmental Approvals (to the extent
assignable), contracts and agreements to which such Project is subject, in form
acceptable to Agent in good faith, executed by the Borrower that is the owner of
such Project;
 
(iii)         If requested by Agent, evidence as required by applicable banking
regulations that no part of the Project on which any Unit is to be constructed
is located in a flood plain or, if such evidence is not provided, a policy and
certificate of flood insurance covering the Project, naming the Agent as
insured;
 
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(iv)         The standard form of mortgagee title insurance policy issued by
First American Title Insurance Company or another title insurance company
satisfactory to the Agent or appropriate endorsements to any existing title
policy, issued in favor of the Agent, for the ratable benefit of the Lenders,
but at the Borrower’s expense insuring the Mortgage on such Project, in an
amount determined by Borrowers and Agent in good faith, as a first lien on the
Real Estate included in such Project, free and clear of all prior Liens and
encumbrances (other than Liens and encumbrances in favor of the Agent), subject
only to such title conditions and Permitted Liens as may have been approved by
the Agent.  The policy of title insurance shall include such endorsements or
additional coverage as determined by Agent to be necessary (which may include
(if available) Pennsylvania Endorsements 100, 300, 710, 1010 and 1110 or their
equivalents from other jurisdictions);
 
(v)          If requested by Agent, copies of any subdivision or land
development plans applicable to such Project and evidence of the final approval
and recordation of such plans;
 
(vi)         Evidence that the Borrower has procured insurance policies as
required by the terms of Section 6.6 and copies of all such insurance policies;
 
(vii)        If requested by Agent, a survey or other plan reasonably acceptable
to Agent of the Real Estate included in such Project, showing any encroachments
by or on the Real Estate and the location of all easements and rights-of-way
affecting such Real Estate, all present and proposed utility lines,
encroachments and building set-back lines;
 
(viii)       An environmental indemnity agreement with respect to such Project,
executed by the Borrower and Parent, in form reasonably acceptable to Agent;
 
(ix)         A Phase I environmental site assessment for such Project which (i)
is dated not earlier than twelve (12) months before the date that the Project
was acquired by the Borrower; (ii) meets the ASTM International Standard for a
Phase I environmental site assessment in effect as of the date of the
environmental site assessment and, in the case of any Phase I environmental site
assessment prepared after November 1, 2005, meets the standards and practices
for all appropriate inquires set forth at 40 C.F.R. Part 312; (iii) indicates
that the Real Estate is not subject to any Environmental Conditions; (iv) does
not reveal any violation of any applicable Environmental Law; and (v) does not
show the presence of any used, in use or closed underground storage tanks in the
Real Estate;
 
(x)           If requested by Agent, (i) copies of all Governmental Approvals
theretofore issued with respect to such Project, including permits, use
registrations and approvals required under any law (including, without
limitation thereto, planning, zoning, subdivision and building laws) for
construction of the Units and Improvements and use thereof by the Borrower or by
the purchasers thereof, and such other evidence as the Agent may require that
the Units and use thereof contemplated by the Borrower, are permitted by and
comply with all applicable laws including, without limitation thereto, zoning
ordinances, and (ii) a certification by the appropriate Borrower that all
Governmental Approvals required for the lawful commencement of construction of
Units thereon (other than building permits for such Units) have been issued and
continue to be in full force and effect and available to the appropriate
Borrower; and
 
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(xi)          Such other information and documents that the Agent may reasonably
request.  The failure of the Agent to demand a certain type of information or
document in regard to a Project will not constitute a waiver by the Agent of its
right to demand that type of information or document in the future.
 
(e)           On or before the Closing Date, one or more promissory notes, in
form and substance satisfactory to Agent, evidencing each item of Debt arising
out of any loan owed by any Borrower to another Borrower and all such security
agreements, documents and instruments that may be necessary or, as reasonably
determined by the Agent, desirable in order to create in favor of Agent, for the
benefit of Lenders, a valid and (upon the delivery to Agent of each such
promissory note) perfected first priority security interest in such promissory
note, subject only to Permitted Priority Liens;
 
(f)            On or before the Closing Date, Borrowers shall have delivered to
the Agent:
 
(i)           Certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Agent) representing all Capital Stock
pledged pursuant to the Security Agreement;
 
(ii)          Duly completed UCC financing statements and fixture filings, or
amendments thereto, with respect to all personal and mixed property Collateral
of the Borrowers, for filing in all jurisdictions as may be necessary or, in the
opinion of Agent, desirable to perfect the security interests created in such
Collateral pursuant to the Collateral Documents;
 
(iii)         Duly completed UCC termination statements, and authorization of
the filing thereof from the applicable secured party, as may be necessary to
terminate any effective UCC financing statements or fixture filings disclosed in
such search (other than any such financing statements or fixture filings in
respect of Liens permitted to remain outstanding pursuant to the terms of this
Agreement;
 
(iv)         If requested by Agent, Control Agreements with financial
institutions and other Persons in order to perfect Liens in respect of Deposit
Accounts, Securities Accounts and other Collateral pursuant to the Collateral
Documents;
 
(v)         Original Pineland Development certificates, duly signed by the
Applicable Borrower in blank;
 
(vi)         Assignment of life insurance proceeds;
 
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(vii)        All such security agreements, documents and instruments, and duly
completed UCC financing statements and such federal and state forms that may be
necessary or, as reasonably determined by the Agent, desirable in order to
create in favor of Agent, for the benefit of Lenders, a valid and (upon such
filing and recording or filing) perfected first priority security interest in
all income tax refunds and proceeds thereof received by, or payable to, any
Borrower after the Closing Date, subject only to Permitted Priority Liens;
 
(viii)       This Agreement, duly executed by each Borrower, Agent, and each
Revolving Lender; provided, however, that Term Lenders shall be bound by and
deemed a party to this Agreement upon the receipt by the Agent of such Term
Lender’s signature page to this Agreement so long as such signature page is
received on or before 5:00 P.M. Friday, April 23, 2010; provided, further, that
delivery of, or failure to deliver, signature pages by any Term Lender shall not
otherwise affect the effectiveness of this Agreement with respect to any other
party who has delivered a signature page; and
 
(ix)          Such other and further documents as may be required reasonably by
the Agent or Lenders in order to consummate the transactions contemplated
hereunder.
 
(g)           Implementation of the cash management system pursuant to Section
2.12 to the satisfaction of Agent;
 
(h)           On or before the Closing Date, Borrowers shall have paid to Agent,
for distribution (as appropriate) to Agent and Lenders, the fees payable on or
before the Closing Date referred to in Section 2.7;
 
(i)            On the Closing Date, Borrowers shall have paid (i) to Agent, all
of Agent’s outstanding expenses under the Loan Documents, including inspection
and appraisal costs, (ii) to Reed Smith LLP and Schnader Harrison Segal and
Lewis LLP, counsel to Agent, all fees and expenses invoiced through the Closing
Date; and (iii) to Capstone Advisory Group LLC, financial advisor to the Agent,
all fees and expenses invoiced through the Closing Date;
 
(j)            Other than the filing of the Bankruptcy Cases, no material
adverse change in Borrowers’ assets, liabilities, business, financial condition,
business prospects, or results of operations (when taken as a whole) since the
Petition Date;
 
(k)           Other than the filing of the Bankruptcy Cases, as to Borrowers,
there shall exist no action, suit, investigation, litigation, or proceeding
pending or threatened in any court or before any arbitrator or governmental
instrumentality that is not subject to the automatic stay and in Agent’s
judgment (a) would be expected to have a Material Adverse Effect on Borrower and
its Subsidiaries (when taken as a whole), or (b) would be expected to materially
and adversely affect the Loan Documents or the transactions contemplated
thereby;
 
(l)            The Board of Directors of Parent shall have appointed a CRO
acceptable to the Agent and Majority Revolving Lenders who shall be given
executive decision making authority with no requirement that such officer report
to any person other than the Board of Directors; and
 
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(m)           The Bankruptcy Court shall have entered the Final Order
authorizing the financing of Borrowers as set forth in Loan Documents, which
shall be Final and in full force and effect.
 
4.2          Availability of Letters of Credit and Tri-Party Agreements.  The
agreement of the Lenders to cause Agent to issue any Letter of Credit or
Tri-Party Agreement is subject to the following conditions precedent, any of
which may be waived by the Agent, at its sole discretion:
 
(a)           The requesting Borrower shall have delivered to Agent executed
(and, if necessary, notarized) copies of the following (all of which shall be in
a form and contain such terms as shall be acceptable to the Agent, in its sole
discretion):
 
(i)           A Letter of Credit Application, if required;
 
(ii)           Copies of all financial security agreements, development
agreements or similar documents, under which the obligations of the requesting
Borrower are to be secured by the requested Letter of Credit or Tri-Party
Agreement.  Such documents must be in a form satisfactory to the Agent; and
 
(iii)          Such other information and documents that Agent may reasonably
request.  It is understood that the failure of Agent to demand a certain type of
information or document in regard to the issuance of a Letter of Credit or
Tri-Party Agreement will not constitute a waiver by Agent of its right to demand
that type of information or document in the future.
 
(b)           The Project for which the Letter of Credit or Tri-Party Agreement
has been requested is in an Approved Jurisdiction.
 
(c)           On the date of issuance of such Letter of Credit or Tri-Party
Agreement, all conditions precedent described in Section 4.3 shall be satisfied
to the same extent as if the issuance of such Letter of Credit or Tri-Party
Agreement were the making of a Loan and the date of issuance of such Letter of
Credit or Tri-Party Agreement were a Funding Date.
 
4.3           Conditions Precedent to Revolving Loans.  The obligation any
Revolving Lender to make any Revolving Loan shall be subject to the further
conditions precedent that, on the applicable Funding Date:
 
(a)           All of the conditions, agreements and covenants set forth in this
Agreement to be satisfied on or before the Funding Date by any Borrower have
been satisfied;
 
(b)           No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Request for
Revolving Loan that would constitute an Event of Default or a Potential Event of
Default;
 
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(c)           The representations and warranties of the Borrowers herein or in
any of the Loan Documents shall be true, correct and complete in all material
respects on and as of the Funding Date with the same force and effect as if made
on and as of such date, except for those that relate to a specific date which
shall be true, correct and complete as of such date; provided that, if a
representation and warranty is qualified as to materiality, the materiality
qualifier set forth above shall be disregarded with respect to such
representation and warranty for purposes of this condition;
 
(d)           Other than the filing of the Bankruptcy Cases, as to Borrowers,
there shall exist no action, suit, investigation, litigation, or proceeding
pending or threatened in any court or before any arbitrator or governmental
instrumentality that is not subject to the automatic stay and in Agent’s
judgment (a) would be expected to have a material adverse effect on Borrowers
assets, liabilities, business, financial condition, business prospects, or
results of operations or which could impair Borrowers ability to perform
satisfactorily under the Loan Documents, or (b) would be expected to materially
and adversely affect the Loan Documents or the transactions contemplated
thereby;
 
(e)           Immediately prior to such Revolving Loan the Borrowers shall not
have Investments in Cash and Cash Equivalents in excess of $5,000,000 in the
aggregate on a consolidated basis, and after giving effect to such Revolving
Loan (including the amount of such Revolving Loan), in each case exclusive of
Cash or Cash Equivalents in any Special Purpose Collateral Accounts (other than
the Cash Collateral Account in which such $5,000,000 is maintained);
 
(f)           The requesting Borrower shall have delivered a Request for
Revolving Loan pursuant to Section 2.4(c) including a certification, in form and
substance acceptable to the Agent, executed by the CRO confirming the statements
made in paragraphs (a) through (e) above to be true, complete and accurate and
that the conditions set forth therein have been satisfied; and
 
(g)           Agent shall have received such other approvals, opinions, or
documents as the Agent may in good faith request.
 
SECTION 5.
REPRESENTATIONS AND WARRANTIES

 
In addition to the representations and warranties contained in any other Loan
Documents, Borrowers hereby make the following representations and warranties to
Agent and the Lenders:
 
5.1          Use of Proceeds.  The proceeds of Revolving Loans have been used
for the purposes in Sections 2.3(a).
 
5.2          Incorporation, Good Standing, and Due Qualification.  Each Borrower
is either a corporation, limited partnership or limited liability company, duly
incorporated or organized, validly existing, and in good standing under the laws
of the state of its formation, has the power and authority to own its assets and
to transact the business in which it is now engaged or proposed to be engaged
in, and is duly qualified as a foreign corporation, limited partnership or
limited liability company and in good standing under the laws of each other
jurisdiction in which such qualification is required.  Schedule 5.2 correctly
sets forth the ownership interest of each Borrower and each of its Joint
Ventures and Subsidiaries and the jurisdiction of organization of each Borrower
and each of its Joint Ventures and Subsidiaries.
 
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5.3          Power and Authority; No Conflict.  The execution, delivery, and
performance by the Borrowers of the Loan Documents to which they are parties
have been duly authorized by all necessary corporate, partnership or limited
liability company action, as appropriate, and do not and will not (i) require
any consent or approval of the shareholders, partners or members of any such
entity; (ii) contravene such entity’s Organizational Documents; (iii) violate
any provision of or cause or result in a breach of or constitute a default under
any law, rule, regulation (including, without limitation, Regulation U of the
Board of Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination, or award presently in effect having
applicability to such entity; (iv) cause or result in a breach of or constitute
a default under any indenture or loan or credit agreement or any other
agreement, lease, or instrument to which such entity is a party or by which it
or its properties may be bound or affected or; (v) cause or result in or require
the creation or imposition of any Lien upon or with respect to any of the
properties now owned or hereafter acquired by such Borrower except as
contemplated by this Agreement.
 
5.4          Legally Enforceable Agreement.  This Agreement is, and each of the
other Loan Documents executed by the Borrowers when delivered under this
Agreement will be, legal, valid, and binding obligations of the Borrowers,
enforceable against it or them in accordance with the respective terms thereof,
except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, and other similar laws affecting creditors’ rights
generally.
 
5.5          Financial Statements; Accuracy of Information.
 
(a)           The Financial Statements of the Borrowers for the period ending
June 30, 2009, September 30, 2009 and December 31, 2009 delivered to Agent and
Lenders are true and correct and represent fairly their financial positions as
of the date thereof  (other than impairments for each of the periods as well as
future impairments) and the results of their operations or affairs for the
period indicated, and show (including the footnotes) all known liabilities,
direct or contingent, of the Borrowers as of the date thereof, all in accordance
with GAAP consistently applied. Since the date of such Financial Statements, no
event or change (other than in connection with the maturing of the Pre-Petition
Credit Facility and the commencement of the Bankruptcy Cases) has occurred that
has resulted in or evidences a Material Adverse Effect and, since such date, no
Borrower has incurred, other than in the ordinary course of business, any
indebtedness, liabilities, obligations or commitments, contingent or otherwise.
No information, exhibit, or report furnished by any Borrower to Agent or the
Lenders in connection with the negotiation of this Agreement contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statement contained therein not materially misleading. All
projections delivered by Borrowers to Agent were made on a reasonable basis and
in good faith.  Except as disclosed to Agent in writing, no Borrower has any
material contingent liabilities (including liabilities for taxes), unusual
forward or long-term commitments or unrealized or anticipated losses from
unfavorable commitments.
 
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(b)          No representation or warranty made by any Borrower under this
Agreement or any other Loan Document is false or misleading in any material
respect (including by omission of material information necessary to make such
representation, warranty of statement not misleading).  The Borrowers have
disclosed to Agent in writing every fact which could reasonably be expected to
have a Material Adverse Effect on the Borrowers taken as a whole, or which so
far as any Borrower can now foresee is reasonably possible in the future and
would have a Material Adverse Effect, on the business, operations or financial
condition of the Borrowers taken as a whole or the ability of the Borrowers
taken as a whole to perform their respective obligations under this Agreement or
any other Loan Document.
 
(c)           All information, financial statements, exhibits, and reports
furnished by any Borrower to Agent or the Lenders in connection with this
Agreement and the borrowings contemplated hereby are, and all such information,
financial statements, exhibits and reports hereafter furnished by any Borrower
to Agent or the Lenders will be, true and correct in every material respect on
the date so furnished for the periods covered thereby, and no such information,
financial statements, exhibit or report contains or will contain, with respect
to Borrowers taken as a whole, any material misstatement of fact or omits or
will omit to state a material fact or any fact necessary to make the statement
contained therein not materially misleading.
 
5.6          Conflicts.  The execution, delivery and performance of this
Agreement and the Loan Documents will not violate any provision of any
indenture, agreement, or other instrument to which any Borrower, or any of their
respective properties or assets are bound, and will not be in conflict with,
result in a breach of, or constitute (with due notice and/or lapse of time) a
default under any such indenture, agreement, or other instrument, or result in
the creation or imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of said properties or assets.
 
5.7          Consents.  No authorization, consent, approval, license or
exemption of, and no registration, qualification, designation, declaration or a
filing with any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign is necessary to the valid
execution and delivery by any Borrower of this Agreement and the other Loan
Documents to which each is a party including without limitation, approval of the
Bankruptcy Court pursuant to the Orders which are in full force and effect as of
the Closing Date (copies of which have been delivered to the Lenders on or
before the Closing Date).
 
5.8          Litigation.  Other than the filing of the Bankruptcy Cases, as to
Borrowers, there shall exist no action, suit, investigation, litigation, or
proceeding pending or threatened in any court or before any arbitrator or
governmental instrumentality that is not subject to the automatic stay and in
Agent’s judgment (a) would be expected to have a Material Adverse Effect on any
Borrower, or (b) would be expected to materially and adversely affect the Loan
Documents or the transactions contemplated thereby.
 
5.9           Other Agreements.  No Borrower is a party to any indenture, loan,
or credit agreement, or to any lease or other agreement or instrument, or
subject to any charter or corporate restriction which could reasonably be
expected to have a Material Adverse Effect.  No Borrower is in default in any
respect in the performance, observance, or fulfillment of any of the
obligations, covenants, or conditions contained in any agreement or instrument
material to its business to which it is a party and which default could
reasonably be expected to have a Material Adverse Effect.
 
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5.10        No Defaults and Outstanding Judgments or Orders.  Each Borrower has
satisfied, and none is in default with respect to, any final, unappealed and
unstayed judgment, writ, injunction or decree of any court or arbitrator, and
none of them is in default of any rule or regulation (if such default could
reasonably be expected to have a Material Adverse Effect) of any federal, state,
municipal, or other governmental authority, commission, board, bureau, agency or
instrumentality, domestic or foreign by which it is bound.
 
5.11         Taxes.  Each Borrower has filed or caused to be filed all federal,
state, and local Tax returns and reports required to have been filed and has
paid or has caused to be paid all Taxes (including interest and penalties
imposed thereon) required to have been paid by it, except (i) Taxes that are
being contested in good faith by appropriate proceedings and for which such
Borrower has set aside on its books adequate reserves in conformity with GAAP or
(ii) to the extent that the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
 
5.12        Debt.  No Borrower has any Debt, except Permitted Debt that is (i)
disclosed in the Financial Statements or (ii) which arose or accrued after the
date of the most recent Financial Statements and has been disclosed in writing
to Agent.
 
5.13        ERISA.  Each Borrower is in compliance in all material respects with
all applicable provisions of ERISA, the Code, all other applicable requirements
of law.  Neither a Reportable Event nor a Prohibited Transaction has occurred
and is continuing with respect to any Plan; no notice of intent to terminate a
Plan has been filed nor has any Plan been terminated; to the best of any
Borrower’s knowledge after due inquiry, no circumstances exist which constitute
grounds under Section 4042 of ERISA entitling the PBGC to institute proceedings
to terminate, or appoint a trustee to administer, a Plan, nor has the PBGC
instituted any such proceedings; no Borrower or any ERISA Affiliate has
completely or partially withdrawn under Sections 4201 or 4204 of ERISA from a
Multiemployer Plan; each Borrower and each ERISA Affiliate have met their
minimum funding requirements under ERISA with respect to all of their Plans and
the present fair market value of all Plan assets exceeds the present value of
all vested benefits under each Plan, as determined on the most recent valuation
date of the Plan and in accordance with the provisions of ERISA and the
regulations thereunder for calculating the potential liability of any Borrower
or any ERISA Affiliate to the PBGC or the Plan under Title IV of ERISA; and no
Borrower or ERISA Affiliate has incurred any liability to the PBGC under ERISA.
 
5.14        Ownership and Liens.  The Borrowers have (i) good, sufficient and
legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), or (iii) good title to (in the case of all other personal property),
all of their respective properties and assets reflected in the financial
statements referred to in Section 5.5 or in the most recent financial statements
delivered pursuant to Section 6.1, in each case except for assets disposed of
since the date of such financial statements as permitted under
Section 7.4.  Each such property is free and clear of all liens other than
Permitted Liens and liens the enforcement of which are stayed in connection with
the Bankruptcy Cases.  A list of all Real Estate owned by any Borrower is set
forth on Schedule 5.14 hereto, as updated pursuant to Section 6.1(d) and any
purchases and sales since the most recent update pursuant to Section 6.1(d).
 
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5.15        Representations and Warranties as to Real Estate.  As to Real
Estate:
 
(a)           No Violations Relating to the Real Estate.  No Borrower has
knowledge of any violation, nor is there any notice or other record of violation
of any zoning, subdivision, environmental, building or other statute, ordinance,
regulation, restrictive covenant or other restriction applicable to the Real
Estate, except for violations, if any, which Borrowers have disclosed in writing
to Agent and are proceeding in good faith to remove or correct or which is
subject to contest by applicable proceedings timely commenced and diligently
pursued to conclusion and which non-compliance could not reasonably be expected
to have a Material Adverse Effect on the Borrowers.
 
(b)           Liens.  There exist no liens, encumbrances or other charges
against the Real Estate, or any portion thereof, or any property relating
thereto, including statutory and other liens of mechanics, workmen, contractors,
subcontractors, suppliers, taxing authorities and others, except for Permitted
Liens and liens the enforcement of which are stayed in connection with the
Bankruptcy Cases.
 
(c)           Compliance with Laws.  The Real Estate is being and (to the
knowledge of any Borrower with respect to dates prior to ownership by a
Borrower) has been operated in all material respects, in compliance with
applicable federal and state laws and regulations (including but not limited to
environmental laws and regulations) and with local ordinances, and all permits
required thereunder have been obtained and complied with in all material
respects.
 
(d)           Environment.  The Borrowers have duly complied with, and their
businesses, operations, assets, equipment, property, leaseholds, or other
facilities (including, but not limited to, the Real Estate) are in material
compliance with, the provisions of all federal, state, and local Environmental
Laws, and all health, and safety laws, codes and ordinances, and all rules and
regulations applicable to Projects promulgated thereunder.  Except as set forth
in the Environmental Reports heretofore delivered to Agent, no Borrower has
received notice of, or knows of, or suspects the existence of any Environmental
Condition which is or may be a violation of, any Environmental Law or any other
federal, state, or local health or safety laws, codes or ordinances, and any
rules or regulations promulgated thereunder with respect to its businesses,
operations, assets, equipment, property, leaseholds, or other facilities
(including, but not limited to, the Real Estate) with which it has not complied
(subject to the prosecution of a good faith contest of any such notice that has
not heretofore been determined adversely to such Borrower).  Except as set forth
in Schedule 5.15 annexed hereto, none of the Borrowers own, lease, occupy or
have any legally cognizable interest in any Real Estate which is located in New
Jersey and which is, pursuant to N.J.S.A. 58:10B-1.3(a), subject to any
obligation to remediate the discharge of a Hazardous Substance.
 
(e)           Security Requirements.  Borrowers have delivered all documents and
met all conditions required under Section 4.1(d).
 
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5.16
Representation and Warranties as to other Collateral.

 
(a)           Intellectual Property.  As of the Closing Date, the Borrowers own
or have the right to use, all Intellectual Property used in the conduct of their
business, except where the failure to own or have such right to use in the
aggregate could not reasonably be expected to have a Material Adverse
Effect.  No claim has been asserted against any Borrower and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor do
Borrowers know of any valid basis for any such claim, except for such claims
that in the aggregate could not reasonably be expected to have a Material
Adverse Effect.  The use of such Intellectual Property by the Borrowers does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.  All federal, state and foreign registrations of and
applications for Intellectual Property, and all unregistered Intellectual
Property, that are owned or licensed by any Borrower on the Closing Date are
described on Schedule 5.16 annexed hereto.
 
(b)           Governmental Authorizations.  No authorization, approval or other
action by, and no notice to or filing with, any Government Authority is required
for either (i) the pledge or grant by any Borrower of the Liens purported to be
created in favor of Agent pursuant to any of the Collateral Documents or
(ii) the exercise by Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by applicable law), except for
filings or recordings contemplated by the Collateral Documents, approvals,
permits and other authorizations that may be required to develop, construct,
market and sell Units, and except as may be required, in connection with the
disposition of any Capital Stock pledged as Collateral, by laws generally
affecting the offering and sale of securities or in connection with a judicial
foreclosure.
 
(c)           Absence of Third-Party Filings.  Except such as may have been
filed in favor of Agent as contemplated by the Collateral Documents and to
evidence Permitted Liens, (i) no effective UCC financing statement, fixture
filing or other instrument similar in effect covering all or any part of the
Collateral is on file in any filing or recording office and (ii) no effective
filing covering all or any part of the IP Collateral is on file in any IP Filing
Office.
 
(d)           Margin Regulations.  The pledge of the Collateral pursuant to the
Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
 
(e)           Information Regarding Collateral.  All information supplied to
Agent by or on behalf of any Borrower with respect to any of the Collateral (in
each case taken as a whole with respect to any particular Collateral) is
accurate and complete in all material respects.
 
5.17        No Violation of Law.  No Borrower has engaged in any conduct or
taken or omitted any act in violation of RICO or of any Prescribed Law.
 
5.18        Compliance with Covenants.  As of the date this representation is
made or deemed made, each Borrower is in compliance with applicable covenants
contained in Section 8 hereof.
 
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5.19
Securities Activities.

 
(a)           No Borrower is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock.
 
(b)           Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of any Borrower alone or of the Borrowers
on a consolidated basis) subject to the provisions of Sections 7.2 or 7.11 or
subject to any restriction contained in any agreement or instrument, between any
Borrower and any Lender or any Affiliate of any Lender, relating to
Indebtedness, will be Margin Stock.
 
5.20        DIP Representations.
 
(a)           The Final Order continues to remain effective.
 
(b)           The CRO has disclosed any material assumptions with respect to the
Budget.
 
The delivery to Agent of each Request for Revolving Loan and request for the
issuance of a Letter of Credit or Tri-Party Agreement shall constitute the
representation and warranty of Borrowers that the conditions contained in
Sections 4.1, 4.2 and 4.3 are satisfied as of such date, except for those that
relate to a specific date which shall be true and correct as of such earlier
date.
 
5.21        CRO.  The Board of Directors of Parent has duly appointed the CRO
and the CRO has been given executive decision making authority with no
requirement that the CRO report to any Person other than the Board of Directors.
 
SECTION 6.
AFFIRMATIVE COVENANTS

 
In addition to the covenants contained in the Loan Documents, Borrowers hereby
covenant and agree that, so long as Lenders have any obligation to make
Revolving Loans or issue Letters of Credit or Tri-Party Agreements hereunder, or
any Loan is outstanding, Borrowers shall perform all covenants in this Section
6:
 
6.1          Reporting Requirements.  Each Borrower shall furnish, or cause to
be furnished, to Agent and Agent shall furnish to Lenders:
 
(a)           For each Fiscal Year, as soon as available, and in any event
within ninety (90) days after the end of each Fiscal Year, unaudited Financial
Statements of Parent (which shall include a consolidated balance sheet and a
consolidated statement of operations) through the end of such Fiscal Year, and a
consolidated statement of cash flow for such Fiscal Year, all in reasonable
detail and stating in comparative form the respective figures for the
corresponding date and period in the prior Fiscal year and all prepared in
accordance with GAAP consistently applied and Company Certified that they fairly
present, in all material respects, the financial condition of the Borrowers as
at the dates indicated and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting from audit and normal
year-end adjustments.
 
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(b)          For each Fiscal Quarter commencing with the Fiscal Quarter ending
March 31, 2010, as soon as available, and in any event within sixty (60) days
after the close of each of the first three Fiscal Quarters and ninety (90) days
after the close of each fourth Fiscal Quarter (or within five (5) Business Days
after Parent files its Annual Report on Form 10-K for such Fiscal Year,
commencing for the Fiscal Year ending June 30, 2010, if earlier), unaudited
management-prepared quarterly Financial Statements of Parent (which shall
include a Consolidated Balance Sheet and a Consolidated Statement of Operations)
as of the end of each Fiscal Quarter, all in reasonable detail and prepared in
conformity with GAAP, applied on a basis consistent with that of the preceding
Fiscal Year. Such statements shall be Company Certified that they fairly
present, in all material respects, the financial condition of the Borrowers as
at the dates indicated and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting from audit and normal
year-end adjustments as well as any change in held for use/sale methodology.
 
(c)           As soon as available, and in any event within twenty (20) days
after the close of each month, unaudited management-prepared monthly and
year-to-date consolidated financial statements of Parent (which shall include a
consolidated balance sheet and a consolidated statement of operations) as of the
end of each month, all in reasonable detail and prepared in conformity with the
Parent’s prior internal monthly reporting practices, Company Certified that they
fairly present, in all material respects, the financial condition of the
Borrowers as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments.
 
(d)          Within twenty (20) days of the end of each month, an updated
Schedule 5.14 and a current, detailed report listing all (A) unsold Lots, (B)
Units for under construction (spec, model, & sold units) as permitted under the
terms of this Agreement, (C) new agreements of sale and cancellations of
agreements of sale during such month, (D) closings of any sale of Lots or Units
(including spec, models and sold Lots, Units and values), (E) Backlog, spec and
model inventory by division (North, South, Midwest, Florida), and (F)
Costs-to-Complete detail by Project, Company Certified.
 
(e)           Within twenty (20) days after the end of each month, a
consolidated list of all accounts payable of any Borrower, and an aging report
of such accounts payable, Company Certified as to its correctness.
 
(f)           Not later than six weeks from the Closing Date and at the end of
each six-week period thereafter on the Tuesday of each such week (or more
frequently as reasonably requested by Agent), an updated Budget, certified by
the CRO that is based upon good faith estimates and assumptions believed by
Parent to be reasonable at the time made and reconciliation of weekly variances
from the previous Budget, certified as to its correctness by the CRO.
 
(g)           Weekly, on each Tuesday after the Closing Date, a report
reflecting the balances of Cash and Cash Equivalents in all accounts of the
Borrowers for each day of the previous week, certified as to its correctness by
the CRO.
 
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(h)          As soon as practicable in advance of filing with the Bankruptcy
Court all material motions, proposed orders and other pleadings related to the
Bankruptcy Cases generally, the Loans or which could impact the Budget or a sale
of the Borrowers’ assets outside of the ordinary course of business (which must
in all respects be in form and substance reasonably satisfactory to the Agent,
including any proposed “stalking horse” which must also be reasonably
satisfactory to the Majority Revolving Lenders), any Reorganization Plan, and/or
any disclosure statement related to such plan.
 
(i)           Promptly upon the occurrence thereof, notification of (i) the
institution of any material litigation or the commencement of any material
administrative proceedings against a Borrower, (ii) the entry of any judgment
against any Borrower in an amount in excess of $250,000, (iii) any notices and
copies thereof of any and all motions, claims, hearings or other proceedings
filed with or scheduled to be heard by the Bankruptcy Court, or (iv) the
happening of any other event which could reasonably be expected to have a
Material Adverse Effect upon the Borrowers.
 
(j)           Upon the occurrence of an Event of Default, a written notice
setting forth the details of such Event of Default and the action which is
proposed to be taken by the Borrowers with respect thereto.
 
(k)           As soon as possible and in any event within five (5) days after
any Borrower knows that any Reportable Event or Prohibited Transaction has
occurred with respect to any Plan or that the PBGC, any Borrower has instituted
or will institute proceedings under Title IV of ERISA to terminate any Plan,
Borrowers will deliver to Agent a certificate of the CRO setting forth details
as to such Reportable Event or Prohibited Transaction or Plan termination and
the action such Borrower proposes to take with respect thereto.
 
(l)           Together with each delivery of Financial Statements pursuant to
Section 6.1(c), Borrowers shall submit to Agent a Compliance Certificate, in the
form attached hereto as Exhibit F and executed by the CRO, confirming whether
the Borrowers are in compliance with the financial covenants of Section 8 as of
the dates provided herein for compliance.
 
(m)          Such other information respecting the condition or operations,
financial or otherwise, of Borrowers as the Agent (or any Lender acting through
Agent) may from time to time reasonably request.
 
6.2          Payment of Taxes.  Subject to Bankruptcy Code limitations, each
Borrower shall (i) duly pay and discharge or cause to be paid and discharged,
before the same shall become delinquent, all Taxes, assessments, levies and
other governmental charges, imposed upon such Borrower or its properties, sale
and activities, or any part thereof, or upon the income or profits therefrom,
and (ii) within thirty (30) days after any request therefor by Agent, deliver to
Agent a receipt from the applicable Governmental Authority evidencing said
payment, provided, however, that any such Tax, assessment, levy and other
governmental charge need not be paid if the validity or amount thereof is being
properly contested in good faith by appropriate proceedings and if such Borrower
has set aside on its books adequate reserves in conformity with GAAP, and
provided, further, that such Borrower will pay all such Taxes, assessments,
levies or other governmental charges forthwith upon the commencement of
proceedings to foreclose any Lien which may have attached as security therefor.
 
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6.3          Access to Properties, Books and Records; Inspections.
 
(a)           Borrowers shall (i) permit any of the officers, employees or
representatives of Agent or  of any Lender (if accompanied by an officer,
employee or representative of Agent) to visit and inspect any of the properties
of Borrowers and (ii) permit any officers, employees or representatives of Agent
to examine Borrowers’ books and records and make extracts therefrom and discuss
the affairs, finances, and accounts of Borrowers with representatives thereof,
during normal business hours, and as often as Agent may reasonably request upon
prior telephone notice or at any time from time to time after an Event of
Default.
 
(b)          The CRO shall provide Agent and Lenders access to information
(including historical information) and personnel, including, without limitation,
regularly scheduled meetings (at times as mutually agreed) with senior
management and other company advisors and the Agent and consultants to the Agent
(including Advisory Agent and counsel to Agent), and such consultants shall be
provided with access to all information and to other internal meetings regarding
strategic planning, cash and liquidity management, operational and restructuring
activities, in each case, as it may reasonably request.
 
(c)           Inspection of Projects.  Borrowers shall cooperate with or allow
for Agent, by its employees and independent contractors, to conduct monthly (or
more frequently if requested by the Agent) appraisals and collateral
examinations (and the Borrowers agree to cooperate fully with any such
collateral examinations).  The reasonable costs and expenses of such appraisals
and collateral examinations shall be Borrowers’ expense.
 
6.4          Maintenance of Records.  Borrowers shall keep adequate records and
books of account, in which complete entries were made in accordance with
generally accepted accounting principals consistently applied, reflecting all
financial transactions of Borrowers.
 
6.5          Maintenance of Existence.  Each Borrower shall preserve and
maintain its existence and good standing in the jurisdiction of its formation,
and qualify and remain qualified as a foreign entity in each jurisdiction in
which such qualification is required.
 
6.6          Insurance.  Each Borrower shall take out, maintain and keep in
force,  policies of insurance on the following terms:
 
(a)           Insurance against loss to each Project on a “Special Perils”
policy form, covering insurance risks no less broad than those covered under a
Standard Multi Peril (SMP) policy form, which contains the most recent
Commercial ISO “Causes of Loss-Special Form,” in commercially reasonable amounts
and with endorsements as heretofore customarily maintained by subsidiaries of
Parent, issued by insurers licensed in the jurisdiction in which each Project is
located and that satisfy Agent’s then-current standards for property insurers
and complying with the requirements of the Mortgages.
 
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(b)          Commercial general liability insurance against death, bodily injury
and property damage arising on, about or in connection with each Project, with
limits not less than those heretofore maintained by subsidiaries of Parent and
written on the most recent Standard “ISO” occurrence basis form or equivalent
form, excess umbrella liability coverage with limits not less than those
heretofore maintained by subsidiaries of Parent and completed operations
coverage for a period of one year after construction of Units, issued by
insurers licensed in the jurisdiction in which each Project is located and that
satisfy Agent’s then-current standards for liability insurers.
 
(c)           Worker’s compensation insurance in an amount not less than those
that are statutorily required in each jurisdiction in which the Borrowers
operate.
 
(d)           During the making of any alterations or improvements to any
Project, insurance covering claims based on the owner’s or employer’s contingent
liability not covered by the insurance provided in Section 6.6(b) above.
 
(e)           Insurance against loss or damage by flood or mud slide in
compliance with the Flood Disaster Protection Act of 1973, as amended from time
to time, covering each Project that is now, or at any time while the
Indebtedness remains outstanding shall be, situated in any area which an
appropriate governmental authority designates as a special flood hazard area, in
amounts equal to the full replacement value of all above grade structures
located or to be constructed in such special flood hazard area.
 
(f)           Warranty insurance for all homes to be sold after the Petition
Date.
 
(g)           Such other insurance relating to the Projects and the uses and
operation thereof as Agent may, from time to time, reasonably require,
including, but not limited to products liability and workers’ compensation
insurance.
 
(h)           Directors’ and officers’ liability insurance in the forms, and in
amounts not less than that which is now carried by the Borrowers.
 
(i)           All insurance shall:  (i) be carried in companies with a Rating of
A- or better and a Financial Size Category of Class IX or higher, as set forth
in the most recently published Best’s Key Rating Guide, or otherwise acceptable
to Agent; (ii) in form and content acceptable to Agent; and (iii) provide thirty
(30) days’ (ten (10) days’ for non-payment of any premium) advance written
notice to Agent before any cancellation, material modification or notice of
non-renewal.  All physical damage policies and renewals shall contain a mortgage
clause acceptable to Agent, naming Agent as mortgagee, which clause shall
expressly state that any breach of any condition or warranty by any Borrower
shall not prejudice the rights of Agent under such insurance, and a loss payable
clause in favor of Agent for personal property, contents, inventory, equipment,
loss of rents and business interruption.  All liability policies and renewals
shall name Agent and each Lender as an additional insured.  No additional
parties shall appear in the mortgage or loss payable clause without Agent’s
prior written consent.  All deductibles shall be in amounts acceptable to
Agent.  In the event of the foreclosure of any Mortgage or any other transfer of
title to any Borrower in full or partial satisfaction of the Indebtedness, all
right, title and interest of each Borrower in and to all insurance policies and
renewals thereof then in force shall pass to such purchaser or grantee.  If the
insurance, or any part thereof, shall expire, or be withdrawn, or become void or
unsafe by reason of any Borrower’s breach of any condition thereof, or become
void or unsafe by reason of the value or impairment of the capital of any
company in which the insurance may then be carried, or if for any reason
whatever the insurance shall be unsatisfactory to Agent, Borrowers shall place
new insurance that satisfies the requirements of this Section 6.6.
 
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(j)           Any notice pertaining to insurance and required pursuant to this
Section 6.6 shall be given in the manner provided in this Agreement at the
address from time to time directed by Agent by notice to Master Borrower.  The
insurance shall be evidenced by, at the option of Agent, the original policy or
a true and certified copy of the original policy, or in the case of liability
insurance, a Certificate of Liability Insurance.  Borrowers shall use their best
efforts to deliver originals of all policies and renewals (or certificates
evidencing the same), marked “paid,” to Agent at least thirty (30) days before
the expiration of existing policies and, in any event, Borrowers shall deliver
originals of such policies or certificates to Agent at least fifteen (15) days
before the expiration of existing policies.  If Agent has not received
satisfactory evidence of such renewal or substitute insurance in the time frame
specified herein, Agent shall have the right, but not the obligation, to
purchase such insurance for Lender’s interest only.  Any amounts so disbursed
pursuant to this Section 6.6(j) shall be paid by Borrowers.  Nothing contained
in this Section 6.6 shall require Agent or any Lender to incur any expense or
take any action hereunder, and inaction by Agent and Lenders shall never be
considered a waiver of any right accruing to Mortgagee on account of this
Section 6.6.
 
(k)           No Borrower shall carry any separate insurance on any Project
concurrent in kind or form with any insurance required hereunder or contributing
in the event of loss without Agent’s prior written consent and any such policy
shall have attached a standard non-contributing mortgagee clause, with loss
payable to Agent, and shall meet all other requirements set forth herein.
 
(l)           The evidence of insurance shall contain the agreement of the
insurer to give not less than thirty (30) days’ notice to the Agent prior to
cancellation of such policies or material change in the coverage thereof or ten
(10) days’ notice for non-payment of premium and shall be on a form ACORD 27
(with respect to property insurance), ACORD 25 (with respect to liability
insurance), or such similar form as is acceptable to Agent.
 
(m)           Upon receipt by any Borrower of any Net Insurance/Condemnation
Proceeds, Borrowers shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans as provided in Section
2.10(b)(iv).
 
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6.7          ERISA.  Each Borrower shall comply in all material respects with
the requirements of ERISA applicable to any employee benefit plan (within the
meaning of Section 3(2) of ERISA), sponsored by any Borrower.  Each Borrower
shall to furnish to the Agent (a) as soon as possible, and in any event within
thirty (30) days after any executive officer of a Borrower has knowledge that
(i) any Reportable Event with respect to any Plan has occurred, a statement of
an executive officer of the Borrower, setting forth on behalf of such Borrower
details as to such Reportable Event and the action which it proposes to take
with respect thereto, together with a copy of the notice, if any, required to be
filed of such Reportable Event given to the PBGC, or (ii) an accumulated funding
deficiency has been incurred or an application has been made to the Secretary of
the Treasury for a waiver or modification of the minimum funding standard or an
extension of any amortization period under Section 412 of the Code with respect
to a Plan, a Plan or Multiemployer Plan has been or is proposed to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA, proceedings have been instituted to terminate a Plan, a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Multiemployer Plan, or any such Borrower or ERISA Affiliate
will incur any material liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan or
Multiemployer Plan under Sections 4062, 4063, 4201 or 4204 of ERISA, a statement
of an executive officer of the Borrower, setting forth details as to such event
and the action the applicable Borrower proposes to take with respect thereto,
(b) promptly upon reasonable request of the Agent, copies of each annual and
other report with respect to each Plan subject to Title IV of ERISA and (c)
promptly after receipt thereof, a copy of any notice any Borrower or ERISA
Affiliate may receive from the PBGC relating to the PBGC’s intention to
terminate any Plan or to appoint a trustee to administer any Plan.
 
6.8          Accounts.  The Borrowers shall maintain one or more demand Deposit
Accounts with Agent into which the proceeds of each Revolving Loan shall be
deposited.
 
6.9          Compliance with Laws.  Each Borrower shall comply with all
applicable laws (including but not limited to any applicable Tax law, product
safety law, occupational safety or health law, Environmental Law, and Prescribed
Laws) in all respects.
 
6.10        Payment of Debt.  Subject to Bankruptcy Code limitations and the
Budget, each Borrower shall promptly pay and discharge (i) all of its Debt
incurred after the Petition Date in accordance with the terms thereof and in
accordance with the Budget; and (ii) all lawful claims for labor, materials and
supplies or otherwise incurred after the Petition Date, which, if unpaid, might
become a lien or charge upon any Real Estate (except for Permitted Liens) or, if
the same could reasonably be expected to have a Material Adverse Effect, against
any other property or any part thereof; provided that so long as Borrowers
notify Agent in writing of their intention to do so, no Borrower shall be
required to pay and discharge any such Debt or claim so long as the failure to
so pay or discharge does not constitute or result in an Event of Default and so
long as the validity thereof shall be contested in good faith by appropriate
proceedings diligently pursued and it shall have set aside on its books adequate
reserves with respect thereto.
 
6.11        Maintenance of Properties.  Each Borrower shall maintain or cause to
be maintained in good repair, working order and condition, ordinary wear and
tear excepted, all their material properties used or useful in the business of
the Borrowers (including all Intellectual Property) and from time to time will
make or cause to be made all appropriate repairs, renewals and replacements
thereof.
 
6.12         Deposit Accounts, Securities Accounts and Cash Management
Systems.  Each Borrower shall use and maintain its Deposit Accounts, Securities
Accounts, and cash management systems in a manner reasonably satisfactory to
Agent.  Borrowers shall not permit any of such Deposit Accounts and Securities
Accounts at any time to be located other than with Agent.
 
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6.13          Tax Refunds.  Within five (5) Business Days of the Closing Date,
the Borrowers shall file an amendment to their federal Tax return claiming an
additional Tax refund with respect to the current net operating loss carryback
law.  If any Borrower files any state or federal tax return or an amendment
thereto claiming a tax refund (including without limitation with respect to the
current net operating loss carryback law) such Borrower shall (x) concurrently
file any and all forms required by Agent, so that the proceeds of any such
refund to which such Borrower may be entitled is delivered directly to Agent on
behalf of the Lenders (in connection with its security interest in such Tax
refund) and made payable to Agent for the ratable benefit of Lenders, and (y)
obtain prior written approval of Agent of such filing and forms.
 
6.14          Monitoring of Expenses.  Notwithstanding any Bankruptcy Court
authorization to pay “critical vendors”, prior to making such payments, the
Borrowers shall implement procedures, which shall be acceptable to the Revolving
Lenders in their sole discretion, for monitoring and controlling the Borrowers’
compliance with the Budget, which shall include, without limitation,
implementation of protocols by the Borrowers’ financial advisors, which
protocols shall include training and implementation of standards for paying
expenses in accordance with the Budget.
 
6.15          Budget Compliance.
 
(a)           Expenses.
 
(i)           At the end of each calendar week, the aggregate actual
disbursements made by the Borrowers on items in the Budget other than Permitted
Critical Vendor Payments, shall not exceed 115% of the aggregate amount of
projected disbursements for that week other than Permitted Critical Vendor
Payments plus the Excess Variance Amount from the prior week, as set forth in
the Budget (“Excess Variance Amount” being 115% of the cumulative budgeted
disbursements through such period less aggregate cumulative actual disbursements
other than Permitted Critical Vendor Payments); provided that the Excess
Variance Amount shall (i) at no time exceed $2,000,000, and (ii) be reduced to
$0 upon the earlier to occur of (A) delivery, approval and implementation of
each updated Budget, or (B) six weeks after the delivery of the previously
delivered Budget.
 
(ii)           Further, notwithstanding the foregoing, at no time may the
outstanding principal amount of outstanding Revolving Loans (excluding Revolving
Loans resulting from any draw of a Letter of Credit or Tri-Party Agreement)
exceed Revolving Loans projected under the Budget by more than $2,000,000 for
more than five (5) Business Days.
 
(b)           Measurement. The Budget compliance covenants set forth in this
Section shall be measured by the Agent upon the Agent’s receipt of the weekly
budget to actual report required to be delivered by the Borrower pursuant to
Section 6.1(g) of this Agreement.

 
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6.16          Other Actions.  Borrowers shall take the following actions as soon
as reasonably possible, but not later than the following dates, either:  (i) (a)
file their joint disclosure statement and joint plan of reorganization with the
Bankruptcy Court not later than May 15, 2010, (b) obtain court approval of their
joint disclosure statement not later than June 30, 2010, and (c) obtain
confirmation of their plan of reorganization no later than July 30, 2010; or
(ii) (a) file its motion under Bankruptcy Code Section 363(b) to sell
substantially all assets and bidding procedures no later than April 30, 2010,
(b) obtain court approval of bidding procedures for such sale not later than May
20, 2010, (c) conduct an auction of all or substantially all of the Borrowers’
assets not later than June 23, 2010; (d) obtain court approval of such sale to
the successful bidder not later than June 24, 2010; and (e) close sales
transaction and receipt of Lenders of sale proceeds not later than July 5,
2010.  Notwithstanding the foregoing, the aforementioned dates may be extended
by thirty (30) days at the discretion of the Agent.
 
6.17          Reduction of Letters of Credit.  Borrowers shall use commercially
reasonable best efforts to work with municipalities to reduce any supporting
letters of credit required by such municipalities.
 
6.18          Further Assurances.  Each Borrower shall do such further acts and
things and to execute and deliver to Agent such additional assignments,
agreements, powers and instruments, as Agent may reasonably require or
reasonably deem advisable to carry into effect the purposes of this Agreement or
to better assure and confirm unto Agent and the Lenders their respective rights,
powers and remedies hereunder.
 
6.19          Landlord Waivers.  Borrowers agree to use commercially reasonable
efforts to deliver to Agent Landlord Waivers for leased premises located at 3333
Street Road, Bensalem, Pennsylvania and all other locations where the value of
Collateral is greater than $100,000 or where books and records for a division
are maintained.
 
6.21           Super-Priority Lien and Administrative Claim.  Except for the
Carve-Out and Permitted Priority Liens, the Borrowers hereby covenant, agree,
represent and warrant that (a) all Indebtedness constitutes allowed
administrative expenses in the Bankruptcy Cases with priority under Section
364(c)(1) of the Bankruptcy Code over any and all other administrative expenses
of the kind specified or ordered pursuant to any provision of the Bankruptcy
Code, including, but not limited to, Sections 105, 326, 328, 503(b), 506(c),
507(a), 507(b) and 726 of the Bankruptcy Code and shall be payable from the
Collateral, and (b) pursuant to Section 364(d) of the Bankruptcy Code, the
Indebtedness is secured by a priming, first priority, security interest in and
Lien on all now owned or hereafter acquired assets and property of the estate
(as defined in the Bankruptcy Code), real and personal, of the Borrowers,
including without limitation the Collateral and proceeds of all of the
foregoing, wherever located.
 
6.22           Final Order.  The Borrowers shall comply with all terms and
conditions of the Orders in all respects and shall not take any action seeking
to vacate, stay, reverse, modify or amend the Final Order without the prior
consent of Agent and Majority Revolving Lenders.
 
6.23           Sale of Assets.  The Borrowers shall consult with the Agent in
all respects relating to any sale outside of the ordinary course of business,
including, without limitation, the approval of any winning bid and the rejection
of any potential bid for such assets.

 
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SECTION 7.            NEGATIVE COVENANTS
 
In addition to the covenants contained in the Loan Documents, Borrowers hereby
covenant and agree that, so long as the Lenders have any obligation to make
Loans or issue Letters of Credit hereunder, or any Loan is outstanding,
Borrowers shall not:
 
7.1           Creation of Debt.  Create, incur, assume or suffer to exist any
Debt except Permitted Debt.
 
7.2           Grant of Liens; Equitable Lien; Negative Pledge; Restrictions.
 
(a)           Grant, or permit to exist, any lien on any Project or on any other
asset (whether real or personal) of any Borrower, other than Permitted Liens and
liens the enforcement of which are stayed in connection with the Bankruptcy
Cases.
 
(b)           create or assume any Lien upon any of its properties or assets,
whether now owned or hereafter acquired, other than Liens excepted by the
provisions of Section 7.2(a), unless it shall make or cause to be made an
effective provision whereby the Indebtedness will be secured by such Lien
equally and ratably with any and all other Indebtedness secured thereby as long
as any such Indebtedness shall be so secured; provided that, notwithstanding the
foregoing, this covenant shall not be construed as a consent by any Lenders to
the creation or assumption of any such Lien not permitted by the provisions of
Section 7.2(a).
 
(c)           enter into any agreement prohibiting the creation or assumption of
any Lien (excluding any Critical Vendor settlement) upon any of its properties
or assets, whether now owned or hereafter acquired other than any agreement
evidencing an asset sale, as to the assets being sold or stock sale as to the
assets or stock being sold, or customary provisions in leases and other
contracts restricting the assignment thereof.
 
(d)           create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any such
Subsidiary to (i) pay dividends or make any other distributions on any of such
Subsidiary’s Capital Stock owned by any Borrower, (ii) repay or prepay any
Indebtedness owed by such Subsidiary to any Borrower, (iii) make loans or
advances to any Borrower, or (iv) transfer any of its property or assets to any
Borrower, except (a) as provided in this Agreement and (b), as to transfers of
assets, as may be provided in an agreement with respect to a sale of such
assets.
 
7.3           Mergers.  Other than as required or permitted hereby, alter the
corporate, capital or legal structure of any Borrower, or enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), except in connection with a
Reorganization Plan approved by the Bankruptcy Court.
 
7.4           Asset Sales.  Convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions (including, without limitation, any sale and leaseback transaction
and any disposition under Bankruptcy Code section 363), all or any part of its
business, property or assets (including its notes or receivables and Capital
Stock of a Borrower, whether newly issued or outstanding), whether now owned or
hereafter acquired, except for sales approved by the Bankruptcy Court and
consented to by the Agent and the Lenders or the retail sale of Units in the
ordinary course.
 
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7.5           Transactions With Affiliates.  Enter into any transaction, or
cause any Borrower to enter into any transaction, including, without limitation,
the purchase, sale, or exchange of property or the rendering of any service,
with any Affiliate that is not a Borrower, including, without limitation, the
purchase, sale, or exchange of property or the rendering of any service, except
if (a) such transaction is in the ordinary course of or pursuant to the
reasonable requirements of Borrowers’ Business on terms that are no less
favorable to such Borrower, as the case may be, than those that might be
obtained at the time from persons who are not such an Affiliate, and (b) after
giving effect to such transaction, Borrowers remain in compliance with all
covenants in this Agreement.
 
7.6           Use of Proceeds.  Directly or indirectly, use any part of such
proceeds for the purpose of purchasing or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
or to extend credit to any person for the purpose of purchasing or carrying any
such margin stock, or for any purpose which violates, or is inconsistent with,
Regulation X of the Board of Governors of the Federal Reserve System.
 
7.7           Restricted Payments.  Permit any Borrower, or any Affiliate of a
Borrower with respect to clause (iv), to, directly or indirectly, declare,
order, pay, make or set apart any sum for (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Borrower now or hereafter outstanding, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of any
Borrower now or hereafter outstanding, (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of any Borrower now or hereafter
outstanding, and (iv) providing the funds for or the making of any payment or
prepayment of principal of, premium, if any, interest on, fees related to, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any purchase money
mortgages or Subordinated Debt, other than, in each case, payments,
distributions, purchases, acquisitions, providing of funds, pre-payments,
redemptions, retirements of sinking funds or similar payments or any other
actions to the extent taking place among Borrowers.
 
7.8           Amendments of Documents Relating to Subordinated Debt.  Amend or
otherwise change, or permit or consent to any amendment or change to, the terms
of any Subordinated Debt, or any extension, refinancing, renewal, repayment,
replacement, defeasance or refund of any Subordinated Debt, or make any payment
consistent with such an amendment thereof or change thereto, or any extension,
refinancing, renewal, repayment, replacement, defeasance or refund thereof.
 
7.9           Nature of Business.  (i) Modify or alter in any material manner
the nature and type of its business, the manner in which such business is
conducted or (ii) Modify or alter its organizational documents or (iii) issue
any Capital Stock or accept any contributions from holders of its Capital Stock,
except as required by the Bankruptcy Code.

 
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7.10           Subrogation.  Assert any right of subrogation or contribution
against any other Debtor until all Indebtedness is indefeasibly paid in full.
 
7.11           Investments; Acquisitions.   Directly or indirectly, make or own
any Investment in any Person, including any Joint Venture, or acquire, by
purchase or otherwise, all or substantially all the business, property or fixed
assets of, or Capital Stock of any Person, or any division or line of business
of any Person except in accordance with the Budget.
 
7.12           ERISA and Other Compensation Arrangements.
 
(a)           Prohibited Transactions.  Engage in a “prohibited transaction”, as
defined in Section 406 of ERISA or Section 4975 of the Code, with respect to any
Plan or Multiemployer Plan or knowingly consent to any other “party in interest”
or any “disqualified person”, as such terms are defined in Section 3(14) of
ERISA and Section 4975(e)(2) of the Code, respectively, engaging in any
“prohibited transaction”, with respect to any Plan or Multiemployer Plan; or
permit any Plan to incur any “accumulated funding deficiency”, as defined in
Section 302 of ERISA or Section 412 of the Code, unless such incurrence shall
have been waived in advance by the Internal Revenue Service; or terminate any
Plan in a manner which could result in the imposition of a Lien on any property
of any Borrower pursuant to Section 4068 of ERISA; or breach or knowingly permit
any employee or officer or any trustee or administrator of any Plan to breach
any fiduciary responsibility imposed under Title I of ERISA with respect to any
Plan; engage in any transaction which would result in the incurrence of a
liability under Section 4069 of ERISA; or fail to make contributions to a Plan
or Multiemployer Plan which could result in the imposition of a Lien on any
property of any Borrower pursuant to Section 303(k) of ERISA or Section 430(k)
of the Code, if the occurrence of any of the foregoing events (alone or in the
aggregate) would result in a liability which could reasonably be expected to
have a Material Adverse Effect.
 
(b)           Plans. Modify or amend any Plan in effect as of the Closing Date
such that such modification or amendment has the effect of (i) increasing
payments to Plan participants or beneficiaries, (ii) increasing the obligations
of any Borrower under the Plan or (iii) accelerating a Plan participant’s the
right to payment except, in each case, as approved by the Agent, or as required
under the Code, ERISA, or other applicable law.  Further no Borrower shall
establish or create a Plan, except as approved by the Agent, or as  required
under the Code, ERISA, or other applicable law.
 
7.13           Compensation.  Permit any Borrower to, directly or indirectly,
declare, order, pay, make or set apart any sum for commission, payroll,
Business-related expenses and similar advances to officers and employees, except
for commission, payroll, Business-related expenses and similar advances to
officers and employees in accordance with the Budget; provided that Parent or
its Affiliates may make bonus payments, incentive payments or any other similar
payment by to any Person (regardless of whether such recipient is an employee of
a Borrower or not) if (i) such bonus payments (not to include normal course
commission payments relating to the sale of real estate assets and construction
bonuses) are expressly provided for in a employee bonus program approved by the
Agent and Majority Revolving Lenders, which will be subject to notice and
hearing and approval by the Bankruptcy Court, or (ii) such bonus payments that
are normal course commission payments relating to the sale of real estate assets
and construction bonuses (regardless of whether such recipient is an employee of
a Borrower or not) are not in a percentage greater than the average percentage
on a per home basis of commissions paid prior to the Petition Date.
 
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7.14           DIP Financing.  Incur or apply to the Bankruptcy Court for
authority to incur, or suffer to exist, any indebtedness having the priority
afforded by Section 364(c) or (d) of the Bankruptcy Code (including any
Superpriority Claims) other than the financing provided for under this Agreement
unless such financing would pay in full the Indebtedness and the Pre-Petition
Indebtedness.
 
7.15           Alteration of Rights of Lenders.  Limit, affect or modify, or
apply to the Bankruptcy Court to limit, affect or modify any of the Lenders’
rights with respect to the Indebtedness, including rights with respect to
Pre-Petition Collateral and Post-Petition Collateral (each as defined in the
Orders) and the priority thereof and payment of various amounts, pursuant to any
Reorganization Plan or otherwise.
 
7.16           Chapter 11 Claims.  Except for the Carve-Out and the Permitted
Priority Liens, apply to the Bankruptcy Court for the authority or allow to be
incurred, created, assumed, suffered or permitted any Lien against any Borrower,
or any of their assets in the Bankruptcy Cases to be pari passu with, or senior
to, the liens, Encumbrances and claims of the Lenders granted and arising
hereunder and under the Orders.
 
7.17           Reclamation Claims; Bankruptcy Code § 546(c) Agreements.
 
(a)           Make any payments or transfer any property on account of claims
asserted by the Borrowers’ vendors for reclamation in accordance with UCC
Section 2 702 and Bankruptcy Code Section 546(c) in excess of an amount to be
agreed upon, in each case, by the Borrowers and the Majority Revolving Lenders.
 
(b)           Enter into any agreements or file any motion seeking a Bankruptcy
Court order for the return of inventory or supplies to any vendor pursuant to
Bankruptcy Code Section 546(c) without the written consent of the Lenders.
 
7.18           506(c) Claims.  Make or impose any claim of any kind upon or
against any Lender, the Agent or the Collateral pursuant to Section 506(c) of
the Bankruptcy Code or otherwise.  Each Borrower hereby irrevocably waives all
such claims and agrees that it shall not assert such claims at any time.  In
addition the Borrowers shall cause the priority of all liens of the Lenders and
the Agent on the Collateral to be maintained in full force and effect and in
accordance with this Agreement, the other Loan Documents and the Order.  The
Borrowers will ensure that except as otherwise provided in this Agreement, no
person or entity shall be permitted to exercise any rights or remedies with
respect to the Collateral unless and until all amounts due under this Agreement
and the other Loan Documents have been paid in full.
 
7.19           Other Payments.
 
(a)           Prepay pre-petition Debt, except as expressly provided for in the
Loan Documents or pursuant to “first day” or other orders entered upon pleadings
in form and substance satisfactory to the Agent and Majority Revolving Lenders.

 
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(b)           Make payments from Cash or otherwise with respect to post-petition
liabilities other than (i) for items provided for in the Budget, in the amount
for such item provided for in the Budget plus the Excess Variance Amount, or
(ii) as otherwise approved by agent and Majority Revolving Lenders.
 
(c)           Make payments with respect to pre-petition accounts payable except
for such payments that: (i) comply with the Order approving Debtors’ Motion for
Entry of Orders Authorizing Debtors to Pay Pre-Petition Obligations to Certain
Critical Vendors, (ii) are provided for in the Budget, (iii) are not in excess
of $100,000 except as approved by Agent, and (iv) do not exceed an aggregate
amount of $7,500,000 except if Agent and Majority Revolving Lenders agree to
increase such amount to $10,000,000 (each payment made in compliance with this
Section 7.19(c), an “Permitted Critical Vendor Payment”).
 
7.20           Construction.  The Borrowers shall not initiate, begin or
continue construction of any Lots or Units (including attached Units) that, as
of the Petition Date, the Borrowers have not made significant progress in the
construction of such Lot or Unit beyond the completion of stage 2 (foundation
and footing complete).  The Lots and Units upon which construction may occur are
set forth on Schedule 7.20.  The Borrowers shall take whatever action is
required to return such Units or Lots to “finished Lot status”.
 
SECTION 8.           FINANCIAL COVENANTS
 
So long as the Indebtedness shall remain unpaid or Lenders have any obligation
to make Loans or issue Letters of Credit hereunder, Borrowers shall comply with
all covenants in this Section 8.  Compliance with the covenants contained in
this Section 8 shall, as appropriate, be determined on the consolidated
Financial Statements of Parent (which shall include all Borrowers and all
consolidated subsidiaries of any Borrower).
 
8.1           Real Estate Acquisitions.  No Borrower shall purchase any Real
Estate, Lots or Units after the Closing Date.
 
8.2           Minimum Collateral Value Ratio.  The Borrowers shall not permit
the Collateral Value Ratio as of the last day of the most recently ended
calendar month, commencing with the month ending April 30, 2010, to be less than
2.00:1.00.
 
8.3           Limitation on Holdings of Cash and Cash Equivalents.  Borrowers
may not have Investments, Cash and Cash Equivalents in an aggregate amount not
to exceed $5,000,000 (including the amount of any proceeds of any Revolving Loan
or other amounts in the Cash Collateral Account, but excluding all other Special
Purpose Accounts) for a period of more than two (2) Business Days.
 
SECTION 9.            EVENTS OF DEFAULT
 
The occurrence of any of the following shall constitute an “Event of Default”
hereunder:
 
9.1           The failure of Agent to receive from Borrowers payment of any sum
as required pursuant to this Agreement or any other Loan Document when due; or

 
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9.2           The failure of any Borrower to observe or perform any promise,
covenant, warranty, obligation, representation or agreement in this Agreement or
in any other Loan Document, or in any other document evidencing or securing any
of the Indebtedness or the repayment thereof (and not specifically addressed in
the other Sections of this Section 9), within five (5) days after the earlier of
(i) a senior officer of any Borrower becoming aware of such default or (ii)
receipt by Master Borrower or such Borrower of written notice from Agent or any
Lender of such default; provided that the notice and cure period contained in
this Section 9.2 shall not apply to the breach of any covenant or obligation
contained in Section 6.1, 6.15, 6.16, Section 7, Section 8 or to any other
failure that, by its nature, is not susceptible to being cured by any Borrower;
or
 
9.3           Any assignment for the benefit of the creditors of any Borrower,
the filing of any other proceedings by any Borrower or by any other person or
entity rendering any Borrower or any of the Collateral subject to a proceeding
in insolvency or in bankruptcy, either for liquidation or for reorganization
(and in the case of an involuntary proceeding under the Bankruptcy Code, the
failure to have same dismissed prior to the entry of an Order for Relief), or if
the Borrowers taken as a whole shall become insolvent or unable to pay debts as
they mature; or
 
9.4           The dissolution or reorganization of any Borrower or a Change of
Control shall occur; or
 
9.5           The (i) entry of a judgment or judgments against any Borrower at
any time (a) in an aggregate amount that is at least $500,000 in excess of
insurance proceeds available to such Borrower with respect to such judgment or
judgments, if such judgment or judgments are not dismissed or bonded within
thirty (30) days or (b) that prevents Borrower from conveying Lots and Units in
the ordinary course of business if such judgment or judgments are not dismissed
or bonded within thirty (30) days, (ii) issuance of any writs of attachment,
execution or garnishment against any Borrower, or (iii) one or more non-monetary
judgments or decrees with respect to a post-petition event against the against
the Borrowers or any other material subsidiaries which would reasonably be
expected to cause a material adverse change or a material adverse effect on the
ability of the Borrowers or any other material subsidiaries taken as a whole to
perform their obligations under the Loan Documents or the value of the
Collateral or the interests of any Lender in the Collateral; or
 
9.6           The furnishing to Agent or any Lender, heretofore or hereafter, by
or on behalf of any Borrower of materially false information, or the refusal by
any Borrower to hereafter provide material information to Agent upon request; or
 
9.7           If any signature, certificate, opinion, financial statement or
other information heretofore or hereafter furnished or made by any Borrower to
Agent or the Lenders shall prove to be false, incorrect, incomplete or
misleading in any material respect on or as of the date furnished, made or
deemed made; or
 
9.8           The occurrence of any Material Adverse Effect; or
 
9.9           Any warranty or representation by any Borrower contained in this
Agreement or in any other Loan Document is now or hereafter materially false or
incorrect when made or deemed made; or

 
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9.10           Subject to any applicable grace or cure period therein contained,
the occurrence of any “Event of Default” as defined in or occurring under any
Loan Document; or
 
9.11           The occurrence of any default under the terms of any note or
other instrument that evidences Debt of any Borrower, which default continues
beyond any applicable cure period contained therein; or
 
9.12           At any time after the execution and delivery thereof, (i) any
Loan Document or any provision thereof, for any reason other than the
satisfaction in full of all Indebtedness, shall cease to be in full force and
effect (other than in accordance with its terms) or shall be declared to be null
and void, (ii) Agent or any Lender shall not have or shall cease to have a valid
and perfected first priority Lien in any Collateral, subject only to Permitted
Priority Liens, to the extent such Lien is required under this Agreement, in
each case for any reason other than the failure of Agent or any Lender to take
any action within its control, or (iii) any Borrower shall contest the validity
or enforceability of any Loan Document or any provision thereof in writing or
deny in writing that it has any further liability, including with respect to
future advances by Lenders, under any Loan Document or any provision thereof to
which it is a party; or
 
9.13           Subject to the entry of the Final Order, the occurrence of any
insolvency or bankruptcy proceeding with respect to any significant subsidiary
of Parent that is not a Debtor in the Bankruptcy Cases; or
 
9.14           The Bankruptcy Court shall enter an order with respect to any
Borrower dismissing its Bankruptcy Case or converting it to a case under chapter
7 of the Bankruptcy Code, or appointing a trustee, receiver, interim receiver or
receiver and manager in its Bankruptcy Case (other than at the request of the
Lenders) or appointing a responsible officer or an examiner with enlarged powers
shall be appointed in any of the Bankruptcy Cases (having powers beyond those
set forth in Bankruptcy Code sections 1106(a)(3) and (4)) (other than at the
request of the Lenders); or
 
9.15           any other superpriority administrative expense claim or lien
(other than Permitted Priority Liens and the Carve-Out) which is pari passu with
or senior to the claims or Liens of the Lenders under the Loan Documents or the
Pre-Petition Lenders in connection with their Adequate Protection claim shall be
granted in any of the Bankruptcy Cases without the consent of the Lenders; or
 
9.16           The Bankruptcy Court shall enter an order granting relief from
the automatic stay applicable under Section 362 of the Bankruptcy Code to any
creditor or party in interest (other than the Lenders or the Pre-Petition
Lenders) (i) subject to the entry of the Final Order, to permit foreclosure (or
the granting of a deed in lieu of foreclosure or the like) on any assets of the
Borrowers which have an aggregate value in excess of an amount to be agreed or
(ii) to permit other actions that would have a material adverse effect on the
Borrowers or their estates or the value of the Collateral or the interests of
the Lenders in the Collateral; or
 
9.17           An order of the Bankruptcy Court shall be entered in the
Bankruptcy Cases reversing, amending, supplementing, staying for a period of
five (5) days or more, vacating or otherwise modifying any of the Orders, or the
any Borrower shall apply for authority to do so without the prior written
consent of the Agent and Majority Revolving Lenders; provided that no Event of
Default shall occur under this clause to the extent that any such amendment,
supplement or other modification is made in compliance with this Agreement and
is not adverse, in the sole and absolute judgment of the Majority Revolving
Lenders, to the rights and interests of the Lenders under this Agreement and the
Loan Documents; or

 
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9.18           Any Borrower shall support (in any such case by way of any motion
or other pleading filed with the Bankruptcy Court or any other writing to
another party-in-interest executed by or on behalf of a Borrower or by way of
other written or unwritten statements to the Bankruptcy Court) any other
Person’s opposition of any motion made in the Bankruptcy Court by the Lenders
seeking confirmation of the amount of the Lenders’ claim or the validity and
enforceability of the Liens in favor of the Lenders and/or the Agent for the
benefit of the Lenders; or
 
9.19           From and after the date of entry thereof, the Final Order shall
cease to be in full force and effect (or shall have been vacated, stayed,
reversed, modified or amended), in each case without the consent of the Majority
Revolving Lenders; or
 
9.20           Other than as required by the Bankruptcy Code, or as may be
permitted in the Loan Documents or herein as permitted by the Bankruptcy Court,
the Borrowers shall make any payment (whether by way of adequate protection or
otherwise) of principal or interest or otherwise on account of any pre-petition
Debt or payables; or
 
9.21           Any of the Borrowers or their Affiliates shall fail to comply
with the terms of the Orders in any material respect; or
 
9.22           A plan shall be confirmed in any of the Bankruptcy Cases that
does not either provide for termination of the Revolving Loan Commitments and
payment in full in cash of the Indebtedness and the Pre-Petition Balance on or
shortly after the effective date of such plan of reorganization or liquidation
or is not otherwise acceptable to the Agent and the Majority Revolving Lenders
or any order shall be entered which dismisses any of the Bankruptcy Cases and
which order does not provide for termination of the Revolving Loan Commitments
and payment in full in cash of the Indebtedness and the Pre-Petition Balance or
which is not otherwise acceptable to the Agent and the Majority Revolving
Lenders, or any of the Borrowers shall seek, support, or fail to contest in good
faith the filing or confirmation of such a plan or the entry of such an order;
or
 
9.23           Any material provision of the Loan Documents shall cease to be
effective or shall be contested by any Borrower or any of their Affiliates; or
 
9.24           The filing of a motion, pleading or proceeding by any Borrowers
or their Affiliates which could reasonably be expected to result in a material
impairment of the rights or interests of the Lenders or Pre-Petition Lenders or
a final non-appealable determination by a court with respect to any motion,
pleading or proceeding brought by another party which results in a material
impairment; or
 
9.25           Any of the Collateral is attached, seized, or repossessed or
transferred, actually or constructively, to the possession of a trustee,
receiver, custodian or similar party; or

 
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9.26           Any order shall be entered by the Bankruptcy approving a motion
or permitting a claim against the Collateral under Section 506(c) or 552 of the
Bankruptcy Code; or
 
9.27           Any objections and other challenges shall be approved or granted
by the Bankruptcy Court with respect to the validity, priority, secured status
or amount of any of Lenders’ or Agent’s liens or claims (whether pre or post
petition) as provided for herein; other than with respect to a claim or cause of
action the Committee may bring relating to the Debt owed under the Pre-Petition
Loan Documents as permitted under the Final Order; or
 
9.28           Any Borrower shall file a motion seeking the relief described in
Sections 9.26 or 9.27.
 
SECTION 10.            REMEDIES
 
10.1           Remedies of Lenders.  Upon the occurrence of an Event of Default
hereunder and the completion of any applicable grace or cure period, and during
continuance of such Event of Default, (i) Agent may and (ii) upon the request of
Majority Revolving Lenders Agent shall, and without further order of the
Bankruptcy Court by notice to Master Borrower on behalf of the Lenders, and with
respect to Section 10.1(c) each individual Lender may, exercise all or any of
the following remedies, all of which rights and remedies shall be cumulative:
 
(a)           Demand immediate payment in full of all Indebtedness, whereupon
the same shall be immediately due and payable.
 
(b)           Immediately terminate Revolving Lenders’ obligations to make any
Loans or to issue any Letters of Credit or Tri-Party Agreements hereunder.
 
(c)           Set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held by any Lender to or for the
credit or the account of any Borrower, irrespective of whether Agent or Lenders
shall have made any demand under this Agreement, the Term Notes, the Revolving
Notes or any other Loan Document and although such obligations may be unmatured
(which rights of the Lenders are in addition to other rights and remedies,
including, without limitation, other rights of setoff, which the Lenders may
have).  All net funds recovered under the rights provided in this Section
10.1(c) shall be recovered by Lenders as agent for the other Lenders and shall
be distributed among Lenders according to their Pro Rata Share.  Each Lender
shall be an agent of all other Lenders for purposes of rights of set-off.
 
(d)           Credit bid some or all of the Indebtedness and the Debt under the
Pre-Petition Loan Documents at a sale of some or all of the Collateral outside
of a sale in the ordinary course of business.
 
(e)           Exercise its rights or remedies granted herein, or under
applicable law, or which it may otherwise have under any other Loan Document,
against any Borrower.
 
(f)           Notwithstanding anything to the contrary contained in this Section
10.1, upon the occurrence with respect to Parent of any event described in
Sections 9.13, 9.14, 9.15, 9.17, or 9.19, the entire Indebtedness shall be
immediately due and payable and Lenders’ obligations to make Loans or to issue
Letters of Credit or Tri-Party Agreements, shall automatically and immediately
terminate, without notice from Agent or any Lender.

 
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(g)           Apply the available funds contained in the Cash Collateral Account
to reduce the Indebtedness in the manner deemed appropriate by the Agent in the
Agent’s sole and absolute discretion.
 
10.2           Effect of Delay.  Neither failure nor delay on the part of Agent
or the Lenders to exercise any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
 
10.3           Acceptance of Partial Payment.  The acceptance by the Lenders of
any partial payments of Loans made by any Borrower after the occurrence of an
Event of Default hereunder, or the advance of any additional funds or the
issuance of a Letter of Credit or execution of a Tri-Party Agreement at any such
time, shall not be deemed a waiver by the Lenders of such Event of Default
unless expressly agreed in writing by the Agent.
 
10.4           Application of Proceeds.  Upon the occurrence and during the
continuation of an Event of Default, if requested by Majority Revolving Lenders,
or upon acceleration of the Indebtedness pursuant to Section 9, (a) all payments
received by Agent, whether from Borrowers or otherwise, and (b) all proceeds
received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral under any Collateral Document
may, in the discretion of Agent, be held by Agent as Collateral for, and/or
(then or at any time thereafter) applied in full or in part by Agent, in each
case in accordance with Section 2.10(b)(vi).
 
10.5           Other Available Remedies.  The enumeration of the rights and
remedies of the Agent and the Lenders set forth in this Agreement is not
intended to be exhaustive and the exercise by the Agent and the Lenders of any
right or remedy shall not preclude the exercise of any other rights or remedies,
all of which shall be cumulative, and shall be in addition to any other right or
remedy given hereunder or under any other Loan Documents or that may now or
hereafter exist in law or in equity or by suit or otherwise.
 
10.6           Waiver of Marshalling of Assets.  To the fullest extent permitted
by law, each Borrower, for itself and its successors and assigns, waives all
rights to a marshalling of the assets of Borrowers and others with interests in
any Borrower, and of the Projects, or to a sale in inverse order of alienation
in the event of foreclosure of all or any of the Mortgages, and agrees not to
assert any right under any laws pertaining to the marshalling of assets, the
sale in inverse order of alienation, homestead exemption, the administration of
estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Agent or Lenders under the Loan Documents to a sale of the
Projects for the collection of the Indebtedness without any prior or different
resort for collection or of the right of Lenders to the payment of the
Indebtedness out of the net proceeds of the Projects in preference to every
other claimant whatsoever.  In addition (but subject to any applicable statute
or law governing deficiencies remaining after the sale of any collateral), each
Borrower, for itself and its successors and assigns, waives in the event of
foreclosure of any or all of the Mortgages, any equitable right otherwise
available to any Borrower which would require the separate sale of the Projects
or require Agent to exhaust its remedies against any individual or any
combination of the Projects before proceeding against any other Project or
combination of Projects; and further in the event of such foreclosure each
Borrower hereby expressly consents to and authorizes, at the option of Agent,
the foreclosure and sale either separately or together of any combination of the
Projects, to the extent permitted by any applicable statute or law.
 
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10.7           Waiver of Counterclaim.  Each Borrower hereby waives the right to
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
action or proceeding brought against it by Agent or Lenders.
 
10.8           Relief from Stay.           Five (5) days after written notice to
the Borrowers by the Agent of the occurrence of any one or more Events of
Default and without further permission of the Bankruptcy Court, the Agent, on
behalf of the Lenders, shall be deemed to have been granted relief from the
automatic stay imposed by Section 362 of the Bankruptcy Code in order to enforce
the rights and remedies available to them under this Agreement and the other
Loan Documents.
 
10.9           Further Remedies. Five (5) days after written notice to the
Borrowers by the Agent of the occurrence of any one or more Events of Default
and without further permission of the Bankruptcy Court, the Lenders may proceed
to protect and enforce its rights under this Agreement and the other Loan
Documents by exercising such remedies as are available to the Lenders in respect
thereof under applicable law, either by suit in equity or by action at law, or
both, whether for specific performance of any provision contained in this
Agreement or any of the other Loan Documents or in aid of the exercise of any
power granted in this Agreement or any of the other Loan Documents.
 
10.10         Credit Bidding.  In the event that there shall occur a sale of the
Collateral outside of a sale in the ordinary course of business (regardless of
whether an Event of Default has occurred), whether the sale shall occur within
the Bankruptcy Cases pursuant to the Bankruptcy Code or under Article 9 of the
Uniform Commercial Code or otherwise, each Borrower and Lender hereby agrees
that the Agent, on behalf of all Lenders and Pre-Petition Lenders, shall be the
only party that is entitled to credit bid the Indebtedness and the Pre-Petition
Balance, on behalf of all Lenders and Pre-Petition Lenders, or any portion
thereof and to determine, in its sole discretion, the amount of any such initial
credit bid or bid increments; provided, however, that Requisite Revolving
Lenders shall approve in advance the maximum dollar amount of any such credit
bid.  Notwithstanding anything contained in the Pre-Petition Loan Documents, the
Lenders who constitute Pre-Petition Lenders hereby consent and agree that to the
extent the Agent needs the consent of Lenders under the Pre-Petition Loan
Documents in order to be able to credit bid some or all of the Pre-Petition
Balance, such approval shall only require approval by any combination of
Pre-Petition Lenders whose Pro Rata Shares aggregate more than sixty six and two
thirds percent (66 2/3%) of the aggregate Pre-Petition Balance of all
Pre-Petition Lenders; provided, further, that for the avoidance of doubt,
nothing contained in this Section 10.10 is intended to nor shall it take away
any individual Lender’s or Pre-Petition Lender’s right to credit bid its Pro
Rata Share of the Indebtedness or the Pre-Petition Balance pursuant to Section
363(k) of the Bankruptcy Code.

 
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SECTION 11.          THE AGENT
 
11.1         Appointment.  Each of the Lenders hereby irrevocably designates and
appoints Agent as agent of such Lender under this Agreement and the other Loan
Documents for the term hereof and each such Lender irrevocably authorizes Agent,
as agent for such Lender, to take such action on its behalf under the provisions
of this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto.  Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Agent.  Any reference to the Agent in this Section 11 shall be
deemed to refer to the Agent solely in its capacity as Agent and not in its
capacity as a Lender.
 
11.2         Delegation of Duties.  Agent may execute any of its respective
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to rely on advice of counsel concerning
all matters pertaining to such duties.  Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by Agent
with reasonable care.
 
11.3         Exculpatory Provisions.  Neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact, subsidiaries or affiliates
shall be (i) liable for any action taken or omitted to be taken by it or such
Person under or in connection with this Agreement or the other Loan Documents
(except for actions occasioned solely by its or such Person’s own gross
negligence or willful misconduct), or (ii) responsible in any manner to any of
the Lenders for (a) any recitals, statements, representations or warranties made
by any Borrower or any officer thereof contained in this Agreement or the other
Loan Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by Agent under or in connection
with, this Agreement or the other Loan Documents or, (b) the satisfaction of any
condition specified herein, other than receipt of items required to be delivered
to Agent, or (c) for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the other Loan Documents, or
(d) for any failure of any Borrower to perform their obligations hereunder or
thereunder.  Agent shall not be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement, or to inspect the properties,
books or records of any Borrower.  Agent shall have no duty to disclose to
Lenders information that is not required to be furnished by any Borrower to
Agent at such time, but is voluntarily furnished by any Borrower to Agent in its
individual capacity.

 
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11.4         Reliance by Agent.  Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrowers), independent accountants and other experts
selected by Agent.  Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless such Note shall have been transferred in
accordance with Section 13.9 hereof.  Agent shall be fully justified in failing
or refusing to take any action under this Agreement and the other Loan Documents
unless it shall first receive such advice or concurrence of the Majority
Revolving Lenders (or, when expressly required hereby or by the relevant other
Loan Document, all the Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action except for its own gross negligence or willful
misconduct.  Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the Notes in accordance with a
request of the Majority Revolving Lenders (or, when expressly required hereby,
all the Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Notes.
 
11.5         Non-Reliance on Agent and Other Lenders.  Each Lender expressly
acknowledges that neither Agent nor any of its respective officers, directors,
employees, agents, attorneys-in-fact, subsidiaries or affiliates has made any
representations or warranties to it and that no act by Agent hereinafter taken,
including any review of the affairs of the Borrowers or any of their respective
Affiliates, shall be deemed to constitute any representation or warranty by
Agent to any Lender.  Each Lender represents to Agent that it has, independently
and without reliance upon Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of any Borrower and their respective Affiliates
and made its own decision to make Loans and to enter into this Agreement.  Each
Lender also represents that it will, independently and without reliance upon
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of any Borrower and their respective
Affiliates.  Except for notices, reports and other documents expressly required
to be furnished to the Lenders by Agent hereunder or by the other Loan
Documents, Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of any Borrower or
any of their respective Affiliates which may come into the possession of Agent
or any of its respective officers, directors, employees, agents,
attorneys-in-fact, subsidiaries or affiliates.

 
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11.6         Indemnification.  Lenders agree to reimburse and indemnify Agent
(in its capacity as Agent but not as a Lender) ratably in proportion to their
respective Commitments (i) for any amounts (but excluding syndication expenses)
not reimbursed by any Borrower for which Agent is entitled to reimbursement by
such Borrower under the Loan Documents (and without limiting the obligation of
such Borrower to pay such reimbursement), including costs and expenses required
to be reimbursed by any Borrower under Section 12.15(a), (ii) for any other
reasonable out-of-pocket expenses incurred by Agent, on behalf of Lenders, in
connection with the administration and enforcement of the Loan Documents and
(iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against Agent in any way relating to or arising out of this Agreement or the
other Loan Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by Agent under or in connection with any of the foregoing, including
without limitation any indemnified amount not paid by the Borrowers that is
required to be paid under Section 12.15(b); provided that no Lender shall be
liable for any of the foregoing to the extent they arise from (a) the gross
negligence or willful misconduct of Agent as determined by a court of competent
jurisdiction by final and nonappealable judgment or (b) a dispute which is
solely between Agent and one or more Lenders in which the other Lender prevails
as determined by a court of competent jurisdiction by final and nonappealable
judgment.  The obligations of Lenders under this Section 11.6 shall survive
payment of the Indebtedness and termination of this Agreement.  Each Lender
shall, within ten (10) Business Days after a written demand therefor accompanied
with a description of the amounts payable, contribute its respective Pro-Rata
Share of the out-of-pocket costs and expenses incurred by Agent in accordance
with the terms of this Agreement, including, but not limited to, fees of
receivers or trustees, court costs, title company charges, filing and recording
fees, appraisers’ fees and reasonable fees and expenses of attorneys.
 
11.7         Consequential Damages.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN OR IN ANY OF THE LOAN DOCUMENTS, NEITHER AGENT NOR ANY LENDER SHALL BE
RESPONSIBLE OR LIABLE TO ANY LENDER OR TO AGENT FOR ANY PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
 
11.8         Agent in Its Individual Capacity.  Agent and its respective
subsidiaries and affiliates may make loans to, accept deposits from and
generally engage in any kind of business with Borrowers as though Agent were not
an Agent hereunder.  With respect to any Loans made or renewed by it and any
Term Note or Revolving Note issued to it, the Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms “Lender” and
“Lenders” shall include Agent in its individual capacity.
 
11.9         Resignation or Removal of Agent as Agent.  Subject to the
appointment and acceptance of a successor administrative agent as provided
below, (i) Agent may resign at any time by giving sixty (60) days’ written
notice thereof to Lenders and Master Borrower, and (ii) Agent may be removed at
any time by Majority Revolving Lenders with cause, if it is reasonably
determined by Majority Revolving Lenders that Agent has failed, and continues to
fail, in the administration of this Agreement and the other Loan Documents in
accordance with customary practices for similar credit facilities.  Upon any
such resignation or removal, Majority Revolving Lenders shall have the right to
appoint a successor Agent, subject to the approval of Borrowers, which approval
shall not be unreasonably withheld or delayed; provided, that no such approval
of Borrowers shall be required if an Event of Default is in existence.  If no
successor administrative agent shall have been so appointed by Majority
Revolving Lenders and shall have accepted such appointment within sixty (60)
days after the retiring Agent’s notice of resignation or the Majority Revolving
Lenders’ removal of the retiring Agent, then the retiring Agent may, on behalf
of Lenders, appoint a successor administrative agent, subject to the approval of
Borrowers, which approval shall not be unreasonably withheld or delayed;
provided, that no such approval of Borrowers shall be required if an Event of
Default is in existence.  Any successor administrative agent shall be a Lender
which has a combined capital and surplus of at least $1,000,000,000.00.  Upon
the acceptance of any appointment as Agent hereunder by a successor
administrative agent, such successor administrative agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder.  After any retiring Agent’s resignation or
removal hereunder as Agent, the provisions of this Section 11 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Agent hereunder.
 
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11.10   Authority.
 
(a)           Agent, as described herein, shall have all rights with respect to
collection and administration of the Indebtedness, the security therefor and the
exercise of remedies with respect thereto, except, to the extent otherwise
expressly set forth herein.  Lenders agree that Agent shall make all
determinations as to whether to grant or withhold approvals or consents under
the Loan Documents and as to compliance with the terms and conditions of the
Loan Documents, except to the extent otherwise expressly set forth therein or
herein.  Agent will simultaneously deliver to Lenders copies of any default
notice sent to Borrowers under the terms of the Loan Documents and will promptly
provide to Lenders copies of any other material notices.
 
(b)           As to any matters which are subject to the consent of any or all
of Lenders, as set forth in this Agreement, Agent shall not be permitted or
required to exercise any discretion or to take any action except upon the
receipt of the written consent to such action by Lenders holding the required
Pro Rata Shares, which written instructions shall be binding upon
Lenders.  Notwithstanding anything contained herein to the contrary, it is
understood and agreed that Lenders’ right to consent to or disapprove any
particular matter shall be limited to the extent that Lenders’ or Agent’s rights
to consent to or disapprove of such matter are limited in the Loan
Documents.  Subject to the foregoing limitations, each Lender hereby appoints
and constitutes Agent as its agent with full power and authority to exercise on
behalf of such Lender any and all rights and remedies which such Lender may have
with respect to, and to the extent necessary under applicable law for, the
enforcement of the Loan Documents, including the right to exercise, or to
refrain from exercising, any and all remedies afforded to such Lender by the
Loan Documents or which such Lender may have as a matter of law.
 
11.11   Borrower Default.  Agent shall not be deemed to have knowledge of the
occurrence of a default or an Event of Default (other than the nonpayment of
principal of or interest on the Loans) unless Agent has received notice from a
Lender or a Borrower specifying such default or Event of Default and stating
that such notice is a “Notice of Default”.  In the event that Agent receives
such a notice of the occurrence of a default or an Event of Default, Agent shall
give prompt notice thereof to Lenders.  Agent shall give each Lender prompt
notice of each nonpayment of principal of or interest on the Loans, whether or
not Agent has received any notice of the occurrence of such nonpayment.  Agent
shall (subject to Section 11.10) take such action hereunder with respect to such
default or Event of Default as shall be directed by Majority Revolving Lenders,
provided that, unless and until Agent shall have received such directions, Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such default or Event of Default as it shall deem
advisable in the best interests of Lenders, including, without limitation,
continuing to make Loans.
 
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11.12     Lender Default.
 
(a)           Definition.  If any Lender (a “Defaulting Lender”) (i) fails to
fund its Pro Rata Share of any Loan on or before the time required pursuant to
this Agreement, (ii) fails to pay Agent, within ten (10) days of demand (which
demand shall be accompanied by invoices or other reasonable back up information
demonstrating the amount owed) for such Lender’s Pro Rata Share of any
out-of-pocket costs, expenses or disbursements incurred or made by Agent
pursuant to the terms of this Agreement (the aggregate amount described in the
foregoing clauses (i) and (ii) which the Defaulting Lender fails to pay or fund
is referred to as the “Defaulted Amount”), (iii) has given notice to Agent or
any Borrower that it will not make, or that it has disaffirmed or repudiated any
obligation to make, any Loan hereunder (unless such notice is given by all
Lenders), (iv) has been deemed insolvent or become the subject of a bankruptcy
or insolvency proceeding, or (v) has been placed under a receivership or
conservatorship by the Federal Deposit Insurance Corporation (“FDIC”) and the
FDIC or an Eligible Assignee has not assumed the obligations of such Lender
under the Loan Documents and affirmed to Agent its intent to fully comply with
its obligations under the Loan Documents, in each case in writing in form and
substance satisfactory to Agent, then, in addition to the rights and remedies
that may be available to the other Lenders and the Borrowers (the
“Non-Defaulting Lenders”) at law and in equity, the provisions of this Section
11.12 shall apply.
 
(b)           Voting.  The Defaulting Lender’s right to participate in the
administration of the Loans and the Loan Documents, including without
limitation, any rights to vote upon, consent to or direct any action of Agent or
Lenders shall be suspended and such rights shall not be reinstated unless and
until such default is cured and all decisions (except the decision to remove
Agent), which are subject to receiving a vote of a required percentage of
Lenders shall be approved if voted in favor of by the required percentage of the
Non-Defaulting Lenders; provided that if Agent is a Defaulting Lender, Agent
shall continue to have all rights provided for in this Agreement with respect to
the administration of the Loan, unless Majority Revolving Lenders vote to remove
and replace such Agent as provided in Section 11.9. Notwithstanding the
foregoing, if a Lender (i) was a Defaulting Lender pursuant to clause (v) of
this Section 11.12, and (ii) such Lender is no longer a Defaulting Lender but is
still under an FDIC receivership or conservatorship (a “Special Lender”), then
such Special Lender shall be deemed to have acted with respect to a specific
matter in the same manner as Majority Revolving Lenders (other than the
Defaulting Lenders) that have expressly voted, consented or withheld consent, or
directed any action of Agent or Lenders if such Special Lender does not
expressly respond to any request for such vote consent or direction by the date
and time by which a response was requested.
 
(c)           Reserved.

 
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(d)           Purchase of Defaulting Lender’s Commitment.  Agent or any Lender
shall have the right, with Agent’s consent and in Agent’s sole discretion (but
shall have no obligation) to purchase from any Defaulting Lender, and such
Defaulting Lender agrees that it shall, upon Agent’s request, sell and assign to
Agent or such Lender or Lenders, all of the Commitment of such Defaulting Lender
for an amount equal to the principal balance of the Note held by the Defaulting
Lender and all accrued interest and fees, less any amounts due from the
Defaulting Lender with respect thereto through the date of sale, such purchase
and sale to be consummated pursuant to  an executed Assignment and Assumption
Agreement.
 
(e)           Distribution of Interest and Principal
Payments.    Notwithstanding anything in Section 2.12 to the contrary, so long
as any Lender is a Defaulting Lender, such Defaulting Lender’s Pro Rata Share of
any interest payments, principal payments and Loan Fees received by Agent for
the account of Lenders shall be deposited by Agent in a Special Purpose
Collateral Account.  Agent may use the funds in the Special Purpose Collateral
Accounts as it deems appropriate to fund Loans of such Defaulting Lender.
 
(f)           Other.  Nothing contained in this Section 11.12 shall be deemed or
construed to waive, diminish or limit, or prevent or stop any Lender from
exercising or enforcing, any rights or remedies which may be available at law or
in equity as a result of or in connection with any default under this Agreement
by a Lender.  In addition, no Lender shall be deemed to be a Defaulting Lender
if such Lender refuses to fund its Pro Rata Share of any Loan being made after
any bankruptcy related Event of Default hereof due to the lack of bankruptcy
court approval for such Revolving Loan.
 
11.13   Ratable Sharing.  The Lenders, by acceptance of a Note, agree among
themselves that with respect to all amounts received by them which are
applicable to the payment of or reduction of a proportion of the aggregate
amount of principal and interest due with respect to the Notes held by any
Lender (whether as a result of the enforcement of any Loan Document or on
foreclosure of any banker’s or other lien or any setoff or other claim on or
against any deposit or other balance of any Borrower held by any Lender) which
is greater than the proportion received by any other holder of a Note in respect
to the aggregate amount of principal and interest due with respect to the Notes
held by it, or any other amount payable hereunder, such Lender or such holder of
a Note receiving such proportionately greater payments shall notify each other
Lender and Agent of such receipt and remit to them such amounts as are necessary
so that all such recoveries of principal and interest with respect to the Notes
shall be proportionate to the Lenders’ respective Pro Rata Shares.  If any
Lender or holder of a Note receiving such proportionately greater payments is
required to return such proportionately greater payment to any trustee, receiver
or other representative of or for any Borrower upon or by reason of the
bankruptcy, insolvency, reorganization or dissolution of such Borrower, then
such other Lender(s) which received its or their Pro Rata Share of such
proportionately greater payment must also return such amounts to the appropriate
Borrower as if such payment or payments from the Lender receiving such
proportionately greater payments had not been made.
 
11.14   Documentation.  Agent shall deliver to any Lender, in addition to the
information required to be delivered by Agent to Lenders pursuant to this
Agreement, copies of such Loan Documents now or hereafter executed by Borrowers
and other documents delivered by Borrowers to Agent, promptly after receipt of a
written request therefor.
 
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SECTION 12.          MISCELLANEOUS
 
12.1     Modifications; Amendments, Waivers and Consents.
 
(a)           Modifications, waivers or amendments of or to the provisions of
this Agreement or any other Loan Document shall be effective only if set forth
in a written instrument signed by each of the parties required by this Section
12.
 
(b)           Except as set forth below, any term, covenant, agreement or
condition of this Agreement or any of the other Loan Documents may be amended or
waived by the Lenders, and any consent given by the Lenders, if, but only if,
such amendment, waiver or consent is in writing signed by the Majority Revolving
Lenders (or by Agent with the consent of the Majority Revolving Lenders) and
delivered to Agent and, in the case of an amendment, signed by the Borrowers;
provided that (x) without consent of each Term Lender, no amendment, waiver or
consent shall increase the Term Loan Commitments, (y) without the prior written
consent of each Borrower or Revolving Lender no amendment, waiver or consent
shall: (i) Increase the Revolving Loan Commitment or the Letter of Credit
Sublimit, (ii) postpone the date or reduce the amount of any scheduled reduction
of the Revolving Loan Commitment Amount, (iii) postpone the due date of any
amount payable in respect of any Letter of Credit or Tri-Party Agreement, (iv)
extend the expiration date of any Letter of Credit or Tri-Party Agreement beyond
the Maturity Date, (v) change in any manner the obligations of Revolving Lenders
relating to the purchase of participations in Letters of Credit or Tri-Party
Agreements, (vi) amend the definition of Majority Revolving Lenders and (z)
without the prior written consent of each Lender (i) postpone the Maturity Date
or postpone the date or reduce the amount of any scheduled payment (but not
prepayment) of principal of any Loan, (ii) postpone the date on which any
payment of interest or any fee is due; (iii) reduce the principal amount of any
Loan, (iv) reduce the Interest Rate payable on any Loan (other than any waiver
of any increase in the interest rate applicable to any of the Loans pursuant to
Section 2.5) or the amount of any Loan Fee; (viii) permit any assignment (other
than as specifically permitted or contemplated in this Agreement) of any of the
Borrowers’ rights and obligations hereunder; (ix) release any guarantor; (x)
release any Collateral or consent to the transfer, pledge, mortgage or
assignment of any Collateral, other than as specifically provided in this
Agreement; or (xi) amend the provisions of this Section 12.1, (xii) amend the
definition of Pro Rata Share or Majority Lenders (except for any changes
resulting solely from an increase in the aggregate amount of the Revolving Loan
Commitments approved by Majority Revolving Lenders), (xiii) amend any other
provision of this Agreement specifying the number or percentage of Lenders
required to (a) amend, waive or otherwise modify any rights of Lenders
hereunder, (b) make any determination that is to be made by Lenders or (c) grant
any consent that is required to be obtained from Lenders.  In addition, no
amendment or waiver of the provisions of this Section 11 shall be made without
the written consent of Agent and no Lender’s Commitment may be increased without
such Lender’s consent with respect to any amendment or consent hereunder, each
Loan held by the same Legal entity shall provide its consent in the same manner.
 
12.2     Binding Nature.  The rights and privileges of Agent and Lenders
contained in this Agreement shall inure to the benefit of their respective
successors and permitted assigns, and the duties of the Borrowers shall bind all
successors and permitted assigns.  All agreements, representations, warranties
and covenants made by the Borrowers herein or in any of the other Loan Documents
shall survive the execution and delivery of this Agreement and all other
documents referred to herein and shall be continuing as long as any portion of
any Indebtedness owed to Lenders hereunder shall remain outstanding and unpaid.

 
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12.3     Governing Law.  This Agreement shall in all respects be governed by the
laws of the Commonwealth of Pennsylvania.  This Agreement and all of the other
Loan Documents shall be construed as if drafted equally by all parties hereto.
 
12.4     Time of Performance.  Time of performance hereunder is of the essence
of this Agreement.
 
12.5     Severability.  If any provision hereof shall for any reason be held
invalid or unenforceable, no other provision shall be affected thereby, and this
Agreement shall be construed as if the invalid or unenforceable provision had
never been a part of it.
 
12.6     Captions.  The descriptive headings hereof are for convenience only and
shall not in any way affect the meaning or construction of any provision hereof.
 
12.7     Computations.  Except as otherwise expressly stated herein, all
computations required herein shall be made by the application of generally
accepted accounting principles and practices applied on a consistent basis.
 
12.8     Continuing Obligation.  If any claim is ever made upon any Lender for
the repayment or return of any money or property received by such Lender from
any Borrower in payment of the Loan or any other Obligation and such Lender
repays or returns all or part of said money or property by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over such Lender or any of its property or (ii) any settlement or
compromise of any such claim accomplished by such Lender with such claimant,
then in such event Borrowers agree that any such judgment, decree, settlement or
compromise shall be binding upon Borrowers, notwithstanding any termination
hereof or the cancellation of any note or other instrument evidencing any
liability to such Lender, and the Borrowers shall be and shall remain liable to
such Lender hereunder for the amount so repaid or the value of the property
returned to the same extent as if such had never originally been received by
such Lender.  Borrowers agree that no Lender shall have any duty or affirmative
obligation to defend against such claim and may object to or pay such claim in
its sole discretion without impairing or relinquishing the obligations of
Borrowers hereunder.  This Section 13.8 shall survive the termination of this
Agreement.
 
12.9     Assignment and Participation.
 
(a)           Successors and Assigns Generally.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Agent and each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of Section
12.9(b), (ii) by way of participation in accordance with the provisions of
Section 12.9(d) or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 12.9(e) (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 12.9(d) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Agent and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

 
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(b)           Assignments by Lenders.  Any Lender may at any time assign to one
or more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that any such assignment shall be subject to the
following conditions:
 
(i)      Minimum Amounts.
 
(1)      in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund,
no minimum amount need be assigned; and
 
(2)      in any case not described in Section 12.9(b)(i)(1), the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding
thereunder) or, if the applicable Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date) shall not be
less than $2,500,000, unless the Agent consents (such consent not to be
unreasonably withheld or delayed).
 
(ii)      Common Interest and Confidentiality Agreement.  Upon the effective
date of any assignment, such assignee shall be deemed to be a party to the
Common Interest and Confidentiality Agreement and agrees to be bound thereto as
if it was a signing party on the Closing Date.
 
(iii)      Required Consents.  No consent shall be required for any assignment
except to the extent required by Section 12.9(b)(ii) or this Section 12.9(b)(iv)
and, in addition:
 
(1)      the consent of the Agent (such consent not to be unreasonably withheld
or delayed) shall be required for assignments in respect of a Loan or Commitment
if such assignment is to a Person that is not a Lender with a Commitment, an
Affiliate of such Lender or an Approved Fund with respect to such Lender; and
 
(2)      the consent of the Issuer (such consent not to be unreasonably withheld
or delayed) shall be required for any assignment that increases the obligation
of the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding).
 
(iv)      Assignment and Assumption.  The parties to each assignment shall
execute and deliver to the Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500, and the assignee, if it is not a
Lender, shall deliver to the Agent an Administrative Questionnaire.

 
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(v)      Electronic Execution of Assignments.  The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
 
Subject to acceptance and recording thereof by Agent pursuant to Section
12.9(c), from and after the effective date specified in each Assignment and
Assumption, the assignee thereunder shall be a party to this Agreement and, to
the extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto) but shall continue to be entitled to the benefits of Sections
2.16, 2.17 and 12.15 hereof with respect to facts and circumstances occurring
prior to the effective date of such assignment.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 12.9(d).
 
(c)      Register.  Agent, acting solely for this purpose as an agent of
Borrowers, shall maintain at its office in Charlotte, North Carolina, a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and Borrowers, Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the Borrower and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
 
(d)      Participations.
 
(i)      Any Lender may at any time, without the consent of, or notice to,
Borrowers or Agent, sell participations to any Eligible Assignee (each, a
“Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the
Loans owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) Borrowers, Agent and the Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.

 
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(ii)      Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any  provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of Participant, agree to
any amendment, modification or waiver described in Section 12.1 that requires
the consent of all Lenders, that affects such Participant.  Subject to Section
12.9(d)(ii), Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.16, 2.17 and 12.15 hereof  to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to
Section 12.9(a).  To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.14 as though it were a Lender, provided
such Participant agrees to be subject to Section 11.14 as though it were a
Lender.
 
(iii)      A Participant shall not be entitled to receive any greater payment
under Sections 2.16 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with Master Borrower’s
prior written consent.  A Participant that would be a Foreign Lender if it were
a Lender shall not be entitled to the benefits of Section 2.16 unless Master
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of Borrowers, to comply with Section 2.16 as
though it were a Lender.
 
(e)      Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such assignee for
such Lender as a party hereto.
 
12.10     Notices.
 
(a)      Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in Section 12.10(d)),
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 to the addresses set forth below:
 
If to Master Borrower, any other
 
Borrower or Parent:
c/o Orleans Homebuilders, Inc.
 
3333 Street Road
 
Bensalem, Pennsylvania 19020
 
Attention:  Garry P. Herdler
 
Fax: (215) 633-2352
 
E-mail: gherdler@orleanshomes.com
   
with copies to:
Lawrence J. Dugan, Esquire
 
c/o Orleans Homebuilders, Inc.
 
3333 Street Road
 
Bensalem, Pennsylvania 19020

 
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Fax: 215-633-3019
 
E-mail: ldugan@orleanshomes.com
     
and
     
Mitchell B. Arden, CTP
 
Managing Director and Shareholder
 
Phoenix Management Services, Inc.
 
110 Chadds Ford Commons
 
Chadds Ford, PA 19317
 
Fax: 610-358-9377
 
E-mail: marden@phoenixmanagement.com
     
and
     
William M. Hartnett, Esquire
 
Cahill Gordon & Reindel LLP
 
Eighty Pine Street
 
New York, NY 10005-1702
 
Fax: 212-378-2198
 
E-mail: whartnett@cahill.com
     
Joel H. Levitin, Esquire
 
Cahill Gordon & Reindel LLP
 
Eighty Pine Street
 
New York, NY 10005-1702
 
Fax: 212-378-2198
 
E-mail: Jlevitin@cahill.com
     
and
     
Michael E. Plunkett, Esquire
 
Blank Rome LLP
 
One Logan Square 130 North 18th Street
 
Philadelphia, PA  19103
 
Fax:  215-832-5471
 
E-Mail:  plunkett@blankrome.com
If to Agent (other than
 
regarding fundings):
Wells Fargo Bank, National Association
 
301 South College Street, 4th Floor
 
Mail Code D1053-04R
 
Charlotte, NC  28202
 
Attention:  Nathan Rantala, Director
 
Fax:  (704) 383-2647
 
Email:  Nathan.rantala@wachovia.com

 
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with copies to:
Wells Fargo Bank, National Association
 
Mail Code VA 7391
 
P.O. Box 13327
 
Roanoke, VA  24040
     
or
     
10 South Jefferson Street
 
Roanoke, VA  24011
     
and
     
Claudia Z. Springer, Esquire
 
Reed Smith LLP
 
2500 One Liberty Place
 
Philadelphia, PA  19103
 
Fax:  215-851-8100
 
E-mail:  cspringer@reedsmith.com
     
and
     
Scott M. Esterbrook, Esquire
 
Reed Smith LLP
 
2500 One Liberty Place
 
Philadelphia, PA  19103
 
Fax:  215-851-8100
 
E-mail:  sesterbrook@reedsmith.com
   
If to Agent regarding fundings:
To Agent as provided in Section 2.12.2
   
If to Lenders:
At the address provided on the
 
Signature Page of such Lender
   
If to the Committee:
Richard W. Riley, Esq.
 
Duane Morris LLP
 
1100 North Market Street
 
Suite 1200
 
Wilmington, Delaware 19801
 
Fax:  302-397-0801
 
E-mail:  RWRiley@duanemorris.com
     
and
     
Gerard S. Catalanello, Esq. and
 
James J. Vincequerra, Esq.
 
Duane Morris LLP
 
1540 Broadway
 
New York, New York 10036-4086

 
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Fax:  212-692-1037 and 212-672-1178
 
E-mail:  gcatalanello@duanemorris.com and
jvincequerra@duanemorris.com
     
and
     
Lawrence J. Kotler, Esq.
 
Duane Morris LLP
 
30 South 17th Street
 
Philadelphia, Pennsylvania 19103-4196
 
Fax:  215-979-1514
 
E-mail:  LJKotler@duanemorris.com

 
(b)           Notices given to Master Borrower shall be deemed to have been
given to all of the Borrowers, notwithstanding that any such notice is addressed
only to Master Borrower.
 
(c)           Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient).  Notices delivered through electronic communications to the
extent provided in Section 12.10(d), shall be effective as provided in Section
12.10(d).
 
(d)           Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communication (including e mail and
Internet or intranet websites) pursuant to procedures approved by Agent,
provided that the foregoing shall not apply to notices to any Lender pursuant to
Section 2 if such Lender has notified Agent that it is incapable of receiving
notices under such Article by electronic communication.  Agent or Borrowers may,
in its or their 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 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 described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
 
(e)           Any party hereto may change its address or facsimile number for
notices and other communications hereunder by notice to the other parties
hereto.

 
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(f)           Notice given to any party by the attorney for another party shall
constitute notice from such party (and the attorneys for each party are hereby
permitted to give such notice to each other party on behalf of their
client).  Failure to provide copies of any notice to counsel as provided above
shall not invalidate or limit the effect of such notice.
 
12.11     Cumulative Remedies.  The rights and remedies provided hereunder are
cumulative and not exclusive of any rights or remedies (including without
limitation, the right of specific performance) which Agent or Lenders would
otherwise have.  Any waiver, consent or approval of any kind or character on the
part of Agent or Lenders of any Event of Default or breach of this Agreement or
any Loan Document or any such waiver of any provision or condition hereof or
thereof must be in writing, signed by Agent, and shall be effective only to the
extent in such writing specifically set forth.  Borrowers acknowledge that, with
respect to this Agreement and its terms, Borrowers are neither authorized nor
entitled to rely on any representations, course of dealing, modifications or
assurances in any form as to any subject from any officer of Agent unless and
until such representations, modifications, course of dealing, or assurances are
set forth in writing and signed by such officer of Agent.
 
12.12     Third Party Beneficiaries.  The parties do not intend the benefits of
this Agreement to inure to any third party.  Notwithstanding anything contained
herein or in the Notes or any other Loan Document executed in connection with
this transaction, or any conduct or course of conduct by either or both of the
parties hereto, or their respective Affiliates, agents, or employees, before or
after the signing of this Agreement or any of the other aforesaid Loan
Documents, this Agreement shall not be construed as creating any rights, claims,
or causes of action against Agent or any Lender, or any of their respective
officers, directors, agents, or employees, in favor of any person or entity
other than the Borrowers.  Under no circumstances shall any party referred to in
Section 2.11(c) be deemed a third-party beneficiary of this Agreement.
 
12.13     Entire Agreement.  This Agreement, the other Loan Documents contain
the entire agreement and understanding among Borrowers, Lenders and Agent
regarding the transactions contemplated by the Loan Documents.  All prior
negotiations and discussions between or among any of the parties hereto
regarding the transactions contemplated by the Loan Documents and the terms and
conditions thereof are superseded by this Agreement and the other Loan
Documents.
 
12.14     Counterparts.  This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.

 
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12.15     Expenses and Indemnification.
 
(a)           Costs and Expenses.
 
(i)           The Borrowers shall pay (i) all reasonable out of pocket expenses
incurred by the Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Agent), and shall pay all fees and time
charges and disbursements for attorneys who may be employees of the Agent, in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable out of
pocket expenses incurred by the Issuer in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or Tri-Party Agreement
or any demand for payment thereunder and (iii) all out of pocket expenses
incurred by the Agent, any Lender or the Issuer (including the fees, charges and
disbursements of any counsel for the Agent, any Lender or the Issuer), and shall
pay all fees and time charges for attorneys who may be employees of the Agent,
any Lender or the Issuer, in connection with the enforcement or protection of
its rights (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (B) in connection with the Loans
made or Letters of Credit or Tri-Party Agreements issued hereunder, including
all such out of pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
 
(ii)          Borrowers shall be solely responsible for the cost of preparing
any Environmental Report or of obtaining a reliance letter in form acceptable to
Agent in good faith and addressed to Agent as agent for the Lenders for any
Phase I or Phase II environmental site assessment which Borrowers did not cause
to be prepared.
 
(b)           Indemnification by Borrowers.
 
(i)           The Borrowers shall indemnify the Agent (and any sub-agent
thereof), each Lender and the Issuer, and each of their Affiliates and the
partners, directors, officers, employees, agents and advisors of Agent (and any
sub-agent thereof), each Lender and the Issuer and of their Affiliates (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, and shall pay or reimburse any such Indemnitee for, any and all
losses, claims (including, without limitation, any Environmental Claims or civil
penalties or fines assessed by U.S. Department of the Treasury’s Office of
Foreign Assets Control), damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), and
shall indemnify and hold harmless, each Indemnitee from, and shall pay or
reimburse any such Indemnitee for, all fees and time charges and disbursements
for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee
or asserted against any Indemnitee by any third party or by the Borrower or any
other Borrower arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any
Revolving Loan, Loan, Letter of Credit or Tri-Party Agreement or the use or
proposed use of the proceeds therefrom (including any refusal by the Issuer to
honor a demand for payment under a Letter of Credit or Tri-Party Agreement if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or Release of Hazardous Substances on or from any property owned or operated by
any Borrower or any Subsidiary thereof, or any Environmental Claim related in
any way to any Borrower or any Subsidiary thereof, (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by any Borrower or any Subsidiary thereof, and
regardless of whether any Indemnitee is a party thereto, or (v) any claim
(including, without limitation, any Environmental Claims or civil penalties or
fines assessed by the U.S. Department of the Treasury’s Office of Foreign Assets
Control), investigation, litigation or other proceeding (whether or not the
Agent or any Lender is a party thereto) and the prosecution and defense thereof,
arising out of or in any way connected with the Loans, this Agreement, any other
Loan Document, or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby, including without
limitation, reasonable attorneys and consultant’s fees, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by any Borrower or any Subsidiary thereof
against an Indemnitee for breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Loan Document, if such Credit Party or such
Subsidiary has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.
 
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(ii)          Agent shall promptly give Borrowers written notice of all suits or
actions instituted against Lenders with respect to which Borrowers have
indemnified Lenders, and Borrowers shall timely proceed to defend any such suit
or action through counsel reasonably acceptable to Lenders.  In the event that
Lenders determine in good faith that the subject action, if decided adversely to
Lenders’ interest, would have a material adverse effect upon any Lender, Lenders
shall also have the right, at the expense of Borrowers, to participate in or, at
Lenders’ election, assume the defense or prosecution of such suit, action, or
proceeding, and in the latter event Borrowers may employ counsel and participate
therein.  Agent shall have the right to adjust, settle, or compromise any claim,
suit, or judgment after notice to Borrowers, unless Borrowers desire to litigate
such claim, defend such suit, or appeal such judgment and simultaneously
therewith deposit with Agent collateral security sufficient to pay any judgment
rendered, with interest, costs, legal fees and expenses; and the right of
Lenders to indemnification under this Agreement shall extend to any money paid
by Lenders in settlement or compromise of any such claims, suits, and judgments
in good faith, after notice to Borrowers.
 
(iii)         If any suit, action, or other proceeding is brought by Lenders
against Borrowers for breach of Borrowers’ covenant of indemnity herein
contained, separate suits may be brought as causes of action accrue, without
prejudice or bar to the bringing of subsequent suits on any other cause or
causes of action, whether theretofore or thereafter accruing.
 
(iv)         The obligations of Borrowers and Parent under this Section 12.15
shall survive the repayment of the Debt and termination of this Agreement, and
shall continue in full force and effect so long as the possibility of such
claim, action or suit exists.  If, and to the extent that the obligations of
Borrowers or Parent under this Section 13.15 are unenforceable for any reason,
Borrowers and Parent hereby agree to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law.
 
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12.16     Relationship of Parties.  It is hereby acknowledged by Lenders and
Borrowers that the relationship between them created hereby and by the other
Loan Documents is that of creditor and debtor and is not intended to be and
shall not in any way be construed to be that of a partnership, a joint venture,
or principal and agent.  It is hereby further acknowledged that Agent’s
disbursement of any Loan proceeds to anyone other than a Borrower shall not be
deemed to make Agent or Lenders a partner, joint venturer, or principal or agent
of Borrowers, but rather shall be deemed to be solely for the purpose of
protecting Lenders’ security for the Indebtedness.  The relationship between
Agent and the Lenders is not intended by the parties to create, and shall not
create, any trust, joint venture or partnership relation between or among them.
 
12.17     Damage Waiver.  To the extent permitted by law, no Borrower shall
assert, and each Borrower hereby waives, any claim against any Indemnified
Party, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with or as a result of this Agreement, any other Loan Document, any
transaction contemplated by the Loan Documents, any Loan or the use of proceeds
thereof.  No Indemnified Party shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed
by it through telecommunications, electronic or other information transmission
systems in connection with the Loan Documents or the transactions contemplated
thereby.
 
12.18     Publicity.  Agent may, at its option and in such manner as it may
determine and which Master Borrower shall approve (such approval not to be
unreasonably withheld, delayed or conditioned), announce and publicize the
involvement of Agent and Lenders in the entering into of this Agreement.
 
12.19     No Implied Waiver.  No delay or failure of Agent or the Lenders in
exercising any right, power, or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise thereof or any abandonment or
discontinuance of steps to enforce such a right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.
 
12.20     USA Patriot Act.  Each Lender that is subject to the requirements of
the USA Patriot Act (Title III of Pub.L. 107-56) (signed into law October 26,
2001) (the “Act”) hereby notifies each Borrower that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies Borrowers, which information includes the name and address of
each Borrower and other information that will allow such Lender to identify
Borrowers in accordance with the Act; Agent shall obtain such information on
behalf of the Lenders.
 
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12.21     Conflict; Construction of Documents; Reliance.  In the event of any
conflict between the provisions of this Agreement and any of the other Loan
Documents, the provisions of this Agreement shall control; provided that any
provision of the Loan Documents which imposes additional burdens on Borrowers or
further restricts the rights of Borrowers or gives the Agent or Lenders
additional rights shall not be deemed to be in conflict or inconsistent with
this Agreement and shall be given full force and effect.  The parties hereto
acknowledge that they were represented by competent counsel in connection with
the negotiation, drafting and execution of the Loan Documents and that the Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted them.  Each Borrower acknowledges that it has
read the entirety of this Agreement and of every other Loan Document and that
Borrowers shall rely solely on their own judgment and on their legal counsel and
advisors in entering into this Agreement and executing the Loan Documents,
without relying in any manner on any statements, representations or
recommendations of Agent or any Lender or any parent, subsidiary or Affiliate of
Agent or of any Lender, or of any employee, officer, agent or advisor of any of
the foregoing entities.
 
12.22     Jurisdiction.  IN ANY LEGAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY LOAN
DOCUMENT OR THE RELATIONSHIP EVIDENCED HEREBY, BORROWERS HEREBY IRREVOCABLY
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT OR THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE AND ANY APPROPRIATE COURT ON
APPEAL THERE FROM.  BORROWERS EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWERS
HEREBY WAIVE ANY OBJECTION WHICH BORROWERS MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE, OR FORUM NON CONVENIENS.  BORROWERS HEREBY WAIVE
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND ANY OTHER PROCESS ISSUED IN ANY
SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT, AND ANY
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWERS
AT THE ADDRESS SET FORTH ABOVE AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE PROVIDING OF NOTICE IN ACCORDANCE WITH THE TERMS
HEREOF.  NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE
RIGHTS OF AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR
TO PRECLUDE THE ENFORCEMENT BY AGENT OR LENDERS OF ANY CLAIM, JUDGMENT OR ORDER
OBTAINED IN SUCH FORUM, OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT OR
OTHERWISE TO ENFORCE SAME, IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
 
12.23     Waiver of Jury Trial.  BORROWERS, AGENT AND LENDER, AFTER CONSULTATION
WITH THEIR RESPECTIVE COUNSEL, EACH HEREBY WAIVE ANY RIGHT WHICH THEY MAY HAVE
TO A JURY TRIAL IN CONNECTION WITH ANY LEGAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE)
COMMENCED BY OR AGAINST THEM OR ANY OF THEM IN ANY WAY ARISING OUT OF OR RELATED
TO THIS AGREEMENT, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR THE LOAN DOCUMENTS, OR IN ANY WAY PERTAINING TO THE RELATIONSHIPS
EVIDENCED BY THIS AGREEMENT.
 
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12.24     Interim Loan Documents; No Novation or Impairment of Security
Interests.  This Agreement supersedes, amends and restates in full, the Interim
Loan Documents and all prior amendments thereof.  The Indebtedness referred to
herein includes all of the Indebtedness outstanding pursuant to the Interim Loan
Documents immediately prior to the execution of this Agreement.  This Agreement
shall not cause a novation, payment and reborrowing, or termination of any of
the indebtedness or obligations of Borrowers under the Interim Loan Documents or
other loan documents executed in connection therewith, nor shall it extinguish,
discharge, terminate or impair Borrowers’ indebtedness or obligations or Agent’s
or any Lender’s rights or remedies under the Interim Loan Documents; provided
that all such indebtedness, obligations, rights and remedies shall be on the
terms and conditions of, and as set forth in, this Agreement, the Notes and the
other Loan Documents.  In addition, this Agreement shall not release, limit or
impair in any way the priority of any security interests and liens held by Agent
for the benefit of the Lenders against any assets of Borrowers arising under the
Interim Loan Documents.
 
12.25     General Acknowledgments.  Each Borrower and Parent acknowledges and
agrees that:
 
(a)           Neither this Agreement nor any other agreement entered in
connection herewith or pursuant to the terms hereof shall be deemed or construed
to be a compromise, satisfaction, reinstatement, accord and satisfaction,
novation or release of any of the Pre-Petition Loan Documents, or any rights or
obligations thereunder, or a waiver by Agent or any Lender of any of their
rights under the Pre-Petition Loan Documents or at law or in equity.
 
(b)           All liens, security interests, rights and remedies granted to
Agent and the Lenders in the Pre-Petition Loan Documents are hereby renewed,
confirmed and continued, and shall also secure the performance by Borrowers of
the Indebtedness hereunder.
 
(c)           The Borrower has no defense, set-off, counterclaim or challenge
against the payment of any sums owing under the Pre-Petition Loan Documents, or
the enforcement of any of the terms or conditions thereof.
 
(d)           The Borrower hereby confirms and acknowledges that the
Pre-Petition Balance is validly and duly owing under the Pre-Petition Loan
Documents to the Lenders, including all sums included therein for accrued and
unpaid interest, legal fees and expenses and earned and unpaid fees due to the
Agent or the Lenders under the Pre-Petition Loan Documents.
 
12.26     Releases. 
 
(a)           Release.
 
(i)           Each Borrower hereby acknowledges and agrees that, as of the
Closing Date, no right of offset, defense, counterclaim, claim, causes of action
or objection in favor of any Borrower and Parent against the Lenders (including
all lenders prior to the Closing Date) or the Agent, any other agent or any
Issuer exists arising out of or with respect to (i) the Indebtedness, this
Agreement or any of the other Loan Documents; (ii) any other documents
evidencing, securing or in any way relating to the foregoing, or (iii) the
administration or funding of the Loans, the Commitment or the issuance of
Letters of Credit or Tri-Party Agreements.
 
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(ii)          Each Borrower hereby expressly waives, releases and relinquishes
any and all defenses, setoffs, claims, counterclaims, causes of action or
objections, if any, against such Lenders, the Agent, the other agents or any
Issuer, whether known or unknown, both at law and in equity, only to the extent
arising out of any matter, cause or event occurring on or prior to the Closing
Date.
 
(iii)         Each Borrower for itself, each other Borrower and their respective
successors and assigns in interest and any person that may derivatively or
otherwise assert a claim through or by any of the foregoing to the fullest
extent permitted by applicable law (collectively, the “Releasors”) waives and
releases against Agent and each Lender and each of their respective employees,
agents, representatives, consultants, attorneys, fiduciaries, servants,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, related corporate divisions, participants and
assigns (collectively, the “Releasees”), and covenants not to commence or pursue
any litigation or action, claims, demands, causes of action, suits, debts, sums
of money, accounts, bonds, bills, covenants, contracts, controversies,
agreements, promises, setoffs, recoupments, counterclaims, defenses, expenses,
damages and/or judgments, whatsoever in law or in equity (whether matured,
unmatured, contingent or non-contingent) that relate in any way, either directly
or indirectly, to this Agreement, any Loan Documents, the transactions
contemplated thereby or any action by Agents, Lenders or any other Releasee in
any way related thereto, whether known or unknown, which each of the Releasors
had, now has or may have, in each case only to the extent arising out of any
matter, cause or event occurring prior to the Closing Date.  Each of the
Releasors hereby agrees that federal or state laws, rights, rules or legal
principles of any other jurisdiction which may be applicable thereto, to the
extent that they apply to the matters released hereby, are knowingly and
voluntarily waived and relinquished by such Releasors, to the full extent that
such rights and benefits pertaining to the matters released herein may be
waived, and each of the Releasors hereby agrees and acknowledges that this
waiver is an essential term of this Agreement, without Agents and Lenders would
not have entered into this Agreement.  Each of the Releasors represents and
warrants that it has not purported to transfer, assign, pledge or otherwise
convey any of its right, title or interest in any matter released hereby to any
other person.  In connection with the release in this Agreement, each of the
Releasors acknowledges that it is aware it may hereafter discover claims
presently unknown or unsuspected, or facts in addition to or different from
those which such Borrowers now knows or believes to be true, with respect to the
matters released herein.  Nevertheless, it is each of the Releasors’ intent in
executing this Agreement to fully, finally and forever release and settle such
matters to the extent they arise out of any matter, cause or event occurring
prior to the Closing Date.  In making this release, each of the Releasors has
consulted with counsel concerning the effect thereof.
 
(iv)         Nothing contained in this Section 12.26, is intended to nor shall
it limit the Committee’s rights to bring claims or causes of action against the
Lenders as permitted under the Final Order.
 
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12.27     Limited Subordination of Deficiency Claim.  By executing this
Agreement, the Agent and each Lender covenants and agrees that the payment of
any Deficiency Claim in the Bankruptcy Cases is hereby expressly made
subordinate to the Limited Unsecured Claim Payment, notwithstanding any
contractual (or other) right of subordination the Agent and the Lenders may be
entitled to assert against any holder of any claim against any Borrower.  Upon
full payment or distribution of the entire Limited Unsecured Claim Payment to
unsecured creditors, each Lender shall then have the right to payment of its
respective Deficiency Claim, if any, and, assuming the Lender has a Deficiency
Claim, to share, pro rata, in any additional proceeds of any Avoidance Actions
and/or any other distributions made to or for the benefit of unsecured claims in
the Bankruptcy Cases.  The provisions of this Section 12.27 are and are intended
solely for the purpose of defining the relative rights of the Lenders on the one
hand and the holders of unsecured claims against the Borrowers in the Bankruptcy
Cases on the other hand.  Nothing contained in this Section 12.27 is intended to
nor shall it (a) impair, as between the Borrowers and the Lenders, the
obligations of the Borrowers, which are absolute and unconditional, to comply
with the terms of this Agreement and pay to the Lenders any amounts required to
be paid hereunder as and when the same shall become due and payable in
accordance with their terms, (b) other than with respect to payment in full of
the Limited Unsecured Claim Payment pursuant to this Section 12.27, impair,
amend or modify the rights (whether in contract or otherwise) the Agent or any
Lender may have (whether pursuant to contract or otherwise) against (i) any
Borrower or (ii) any holder of any claim against any Borrower, including,
without limitation, any contractual right of subordination the Agent and the
Lenders may be entitled to, which are hereby reserved and preserved in every
respect or (c) other than with respect to the payment in full of the Limited
Unsecured Claim Payment pursuant to this Section 12.27, prevent the Agent or the
Lenders from enforcing any rights and remedies the Agent or any Lender may have
(whether pursuant to contract or otherwise) against (i) any Borrower and (ii)
any holder of any claim against any Borrower, including, without limitation, any
contractual right of subordination the Agent and the Lenders may be entitled to,
which are hereby reserved and preserved in every respect.  Each Lender
authorizes and directs Agent on its behalf to take any action as may be
necessary or appropriate to acknowledge and effectuate the subordination set
forth in this Section 12.27 and appoints the Agent as its attorney-in-fact for
any and all such purposes.  This Section 12.27 shall survive payment of the
Indebtedness and termination of this Agreement.
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
the day and year set forth above.
 
Master Borrower:
Greenwood Financial Inc., a Delaware corporation
         
By:
/s/ Lawrence J. Dugan
   
Name:  Lawrence J. Dugan
 
Title:  Vice President
       
 Corporate Borrowers:
Community Management Service Group, Inc.
 
OHB Homes, Inc.
 
OHI Financing, Inc.
 
Orleans Arizona, Inc.
 
Orleans Corporation
 
Orleans Corporation of New Jersey
 
Orleans Construction Corp.
 
Parker & Lancaster Corporation
 
Parker & Orleans Homebuilders, Inc.
 
Sharp Road Farms, Inc.
         
By:
/s/ Lawrence J. Dugan
   
Name:  Lawrence J. Dugan
 
Title:  Vice President
   
Limited Liability Company
 
Borrowers:
Masterpiece Homes, LLC
 
OHI PA GP, LLC
 
OPCNC, LLC
 
Orleans at Bordentown, LLC
 
Orleans at Cooks Bridge, LLC
   
Orleans at Covington Manor, LLC
 
Orleans at Crofton Chase, LLC 
 
Orleans at East Greenwich, LLC 
 
Orleans at Elk Township, LLC
 
Orleans at Evesham, LLC
 
Orleans at Hamilton, LLC
 
Orleans at Harrison, LLC
 
Orleans at Hidden Creek, LLC
 
Orleans at Jennings Mill, LLC
 
Orleans at Lambertville, LLC
 
Orleans at Lyons Gate, LLC
 
Orleans at Mansfield, LLC
 
Orleans at Maple Glen, LLC
 
Orleans at Meadow Glen, LLC
 
Orleans at Millstone, LLC
 
Orleans at Millstone River Preserve, LLC

[Borrowers’ signatures continued on the following page]
 
(Signature Pages to DIP Loan Agreement)

 

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Orleans at Moorestown, LLC
 
Orleans at Tabernacle, LLC
 
Orleans at Upper Freehold, LLC
 
Orleans at Wallkill, LLC
 
Orleans at Westampton Woods, LLC
 
Orleans at Woolwich, LLC
 
Orleans Arizona Realty, LLC
 
Orleans DK, LLC
 
Parker Lancaster, Tidewater, L.L.C.
 
RHGP, LLC
 
Wheatley Meadows Associates, LLC
         
By:
/s/ Lawrence J. Dugan
   
Name:  Lawrence J. Dugan
 
Title:  Vice President
Limited Partnership
 
Borrowers:
Brookshire Estates, L.P. (f/k/a Orleans at Brookshire Estates, L.P.)
 
Orleans at Falls, LP
 
Orleans at Limerick, LP
 
Orleans at Lower Salford, LP
 
Orleans at Thornbury, L.P.
 
Orleans at Upper Saucon, L.P.
 
Orleans at Upper Uwchlan, LP
 
Orleans at West Bradford, LP
 
Orleans at West Vincent, LP
 
Orleans at Windsor Square, LP
 
Orleans at Wrightstown, LP
 
Stock Grange, LP
 
By:
OHI PA GP, LLC, sole General Partner

 
By:
/s/ Lawrence J. Dugan
 
Name:  Lawrence J. Dugan
 
Title:  Vice President

 
Orleans RHIL, LP
 
Realen Homes, L.P.
 
By:
RHGP, LLC, sole General Partner
   
By:
Orleans Homebuilders, Inc.,
     
Authorized Member

 
By:
/s/ Lawrence J. Dugan
 
Name:  Lawrence J. Dugan
 
Title:  Vice President

(Signature Pages to DIP Loan Agreement)
 

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Parent:
Orleans Homebuilders, Inc., a Delaware corporation
         
By:
/s/ Lawrence J. Dugan
   
Name:  Lawrence J. Dugan
 
Title:  Vice President

[Lenders’ signatures continued on the following pages]

(Signature Pages to DIP Loan Agreement)

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreemetn under seal
the day and year set forth above.

 
Very truly yours,
     
WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Administrative Agent
       
By:
/s/ Nathan R. Rantala
   
Name: Nathan R. Rantala
   
Title: Director

(Signature Pages to DIP Loan Agreement)

 

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WELLS FARGO BANK,
 
NATIONAL ASSOCIATION, as
 
x Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
¨ Tranche 1 Term Lender
       
By: 
/s/ Nathan R. Rantala
   
Name: Nathan R. Rantala, Director

(Signature Pages to DIP Loan Agreement)

 

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BANK OF AMERICA, N.A., as
 
x Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
¨ Tranche 1 Term Lender
       
By: 
/s/ John L. McDonald
   
Name: John L. McDonald
   
Title: SVP

(Signature Pages to DIP Loan Agreement)

 

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MANUFACTURERS AND TRADERS TRUST
COMPANY, as
 
x Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
¨ Tranche 1 Term Lender
     
By: 
/s/ Anne D. Brehony
   
Name: Anne D. Brehony
   
Title: Vice President

(Signature Pages to DIP Loan Agreement)

 

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PNC BANK, N.A., successor to National City
Bank, as
 
x Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
¨ Tranche 1 Term Lender
       
By: 
/s/ Chris Guyer
   
Name: Chris Guyer
   
Title: VP

(Signature Pages to DIP Loan Agreement)

 

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FIRSTRUST BANK, as
 
x Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
x Tranche 1 Term Lender
       
By: 
/s/ Seth Mackler
   
Name: Seth Mackler
   
Title: Senior Vice President

(Signature Pages to DIP Loan Agreement)

 

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COMPASS BANK, an Alabama Banking
Corporation, as
 
x Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
¨ Tranche 1 Term Lender
       
By: 
/s/ Linda Garcia
   
Name: Linda Garcia
   
Title: SVP

(Signature Pages to DIP Loan Agreement)

 

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TD BANK, NA, successor by merger to Commerce
Bank, N.A., as
 
x Revolving Lender, Tranche 1 Term Lender and Tranche 2 Term Lender
 
¨ Tranche 1 Term Lender
       
By: 
/s/ Kenneth V. Jones
   
Name: Kenneth V. Jones
   
Title: Vice President

(Signature Pages to DIP Loan Agreement)

 

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SUNTRUST BANK, as
 
x Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
x Tranche 1 Term Lender
       
By: 
/s/ Janet R. Naifeh
   
Name: Janet R. Naifeh
   
Title: Senior Vice-President

(Signature Pages to DIP Loan Agreement)

 

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REGIONS BANK, successor by merger to
Amsouth Bank, as
 
x Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
¨ Tranche 1 Term Lender
       
By: 
/s/ William Carroll
   
Name: William Carroll
   
Title: Senior Vice President

(Signature Pages to DIP Loan Agreement)

 

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JPMORGAN CHASE BANK, N.A., as
 
x Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
x Tranche 1 Term Lender
       
By: 
/s/ Michael J. Burke
   
Name: Michael J. Burke
   
Title: SVP

(Signature Pages to DIP Loan Agreement)

 

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DEUTSCHE BANK TRUST COMPANY
AMERICAS, as
 
¨ Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
x Tranche 1 Term Lender
       
By: 
/s/ Michael M. Meagher
   
Name: Michael M. Meagher
   
Title: Vice President
         
/s/ David J. Crescenzi
   
Name: David J. Crescenzi
   
Title: Managing Director

(Signature Pages to DIP Loan Agreement)

 

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GOLDMAN SACHS CREDIT PARTNERS L.P.
 
x Revolving Lender, Tranche 1 Term Lender and
Tranche 2 Term Lender
 
¨ Tranche 1 Term Lender
       
By: 
/s/
   
Name:
   
Title: Counsel – Assistant Secretary

(Signature Pages to DIP Loan Agreement)

 

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