exv10w1






EXHIBIT 10.1




EXECUTION VERSION




ASSET PURCHASE AGREEMENT




AMONG




ORLEANS HOMEBUILDERS, INC.




AND




THE SELLER AFFILIATES NAMED HEREIN,




AS SELLERS,




AND




NVR, INC.,




AS PURCHASER




DATED AS OF APRIL 13, 2010









 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	
ARTICLE I
	DEFINITIONS

	 
	 	 	 	 	 	 
	SECTION 1.1
	 	CERTAIN DEFINITIONS	 	 	1	 
	SECTION 1.2
	 	TERMS DEFINED ELSEWHERE IN THIS AGREEMENT	 	 	10	 
	SECTION 1.3
	 	OTHER DEFINITIONAL AND INTERPRETIVE MATTERS	 	 	11	 
	 
	 	 	 	 	 	 
	
ARTICLE II
	PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

	 
	 	 	 	 	 	 
	SECTION 2.1
	 	PURCHASE AND SALE OF ASSETS	 	 	12	 
	SECTION 2.2
	 	EXCLUDED ASSETS	 	 	13	 
	SECTION 2.3
	 	ASSUMPTION OF LIABILITIES	 	 	14	 
	SECTION 2.4
	 	EXCLUDED LIABILITIES	 	 	15	 
	SECTION 2.5
	 	ASSIGNMENT AND ASSUMPTION; ASSUMED CURE AMOUNTS	 	 	16	 
	SECTION 2.6
	 	FURTHER CONVEYANCES AND ASSUMPTION	 	 	16	 
	SECTION 2.7
	 	CASUALTY EVENTS, CONDEMNATION	 	 	16	 
	SECTION 2.8
	 	BULK SALES LAWS	 	 	17	 
	SECTION 2.9
	 	ENVIRONMENTAL MATTERS	 	 	17	 
	SECTION 2.10
	 	TITLE AND SURVEY	 	 	18	 
	SECTION 2.11
	 	ASSIGNMENT OF HOA DOCUMENTS	 	 	19	 
	SECTION 2.12
	 	ALLOCATION OF PURCHASE PRICE	 	 	20	 
	 
	 	 	 	 	 	 
	
ARTICLE III
	CONSIDERATION

	SECTION 3.1
	 	CONSIDERATION	 	 	20	 
	SECTION 3.2
	 	CLOSING ADJUSTMENT	 	 	22	 
	SECTION 3.3
	 	SOLE ADJUSTMENTS	 	 	23	 
	 
	 	 	 	 	 	 
	
ARTICLE IV
	CLOSING AND TERMINATION

	 
	 	 	 	 	 	 
	SECTION 4.1
	 	CLOSING DATE	 	 	24	 
	SECTION 4.2
	 	DELIVERIES BY SELLERS	 	 	24	 
	SECTION 4.3
	 	DELIVERIES BY PURCHASER	 	 	25	 
	SECTION 4.4
	 	TERMINATION OF AGREEMENT	 	 	26	 
	SECTION 4.5
	 	PROCEDURE UPON TERMINATION	 	 	27	 
	SECTION 4.6
	 	EFFECT OF TERMINATION	 	 	27	 






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	 	 	 	 	Page
	
ARTICLE V
	REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLERS

	 
	 	 	 	 	 	 
	SECTION 5.1
	 	ORGANIZATION AND GOOD STANDING; STATUS OF SELLERS	 	 	28	 
	SECTION 5.2
	 	AUTHORIZATION OF AGREEMENT	 	 	29	 
	SECTION 5.3
	 	CONFLICTS; CONSENTS OF THIRD PARTIES	 	 	29	 
	SECTION 5.4
	 	FINANCIAL ADVISORS	 	 	29	 
	SECTION 5.5
	 	TITLE TO ASSETS	 	 	30	 
	SECTION 5.6
	 	CONTRACTS	 	 	30	 
	SECTION 5.7
	 	LEGAL COMPLIANCE; PERMITS	 	 	30	 
	SECTION 5.8
	 	ENVIRONMENTAL	 	 	31	 
	SECTION 5.9
	 	INTELLECTUAL PROPERTY	 	 	31	 
	SECTION 5.10
	 	TAX MATTERS	 	 	31	 
	SECTION 5.11
	 	JV INVESTORS	 	 	32	 
	 
	 	 	 	 	 	 
	
ARTICLE VI
	REPRESENTATIONS AND WARRANTIES OF PURCHASER

	 
	 	 	 	 	 	 
	SECTION 6.1
	 	ORGANIZATION AND GOOD STANDING	 	 	32	 
	SECTION 6.2
	 	AUTHORIZATION OF AGREEMENT	 	 	32	 
	SECTION 6.3
	 	CONFLICTS; CONSENTS OF THIRD PARTIES	 	 	33	 
	SECTION 6.4
	 	FINANCIAL ADVISORS	 	 	33	 
	SECTION 6.5
	 	INDEPENDENT INVESTIGATION; NO OTHER SELLER WARRANTIES	 	 	33	 
	SECTION 6.6
	 	NO KNOWLEDGE OF MISREPRESENTATION	 	 	34	 
	 
	 	 	 	 	 	 
	
ARTICLE VII
	BANKRUPTCY COURT MATTERS

	 
	 	 	 	 	 	 
	SECTION 7.1
	 	COMPETING TRANSACTION	 	 	34	 
	SECTION 7.2
	 	BANKRUPTCY COURT FILINGS	 	 	34	 
	 
	 	 	 	 	 	 
	
ARTICLE VIII
	COVENANTS

	 
	 	 	 	 	 	 
	SECTION 8.1
	 	ACCESS TO INFORMATION	 	 	35	 
	SECTION 8.2
	 	CONDUCT OF THE BUSINESS PENDING THE CLOSING	 	 	35	 
	SECTION 8.3
	 	CONSENTS	 	 	36	 
	SECTION 8.4
	 	REGULATORY APPROVALS	 	 	36	 
	SECTION 8.5
	 	FURTHER ASSURANCES	 	 	38	 
	SECTION 8.6
	 	CONFIDENTIALITY	 	 	38	 
	SECTION 8.7
	 	PUBLICITY	 	 	38	 
	SECTION 8.8
	 	SUPPLEMENTATION AND AMENDMENT OF THE DISCLOSURE SCHEDULE	 	 	39	 
	SECTION 8.9
	 	COURT ORDER	 	 	39	 






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	 	 	 	 	Page
	SECTION 8.10
	 	ADEQUATE ASSURANCE OF FUTURE PERFORMANCE	 	 	39	 
	SECTION 8.11
	 	PURCHASER COVENANTS AFTER CLOSING; ACCESS	 	 	40	 
	SECTION 8.12
	 	REPLACEMENT OF COMMITMENTS	 	 	40	 
	SECTION 8.13
	 	NAME CHANGES	 	 	40	 
	SECTION 8.14
	 	FINANCIAL STATEMENTS	 	 	41	 
	SECTION 8.15
	 	TRANSITION ARRANGEMENTS	 	 	41	 
	 
	 	 	 	 	 	 
	
ARTICLE IX
	CONDITIONS TO CLOSING 

	 
	 	 	 	 	 	 
	SECTION 9.1
	 	CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER	 	 	42	 
	SECTION 9.2
	 	CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS	 	 	42	 
	SECTION 9.3
	 	CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER AND SELLERS	 	 	43	 
	SECTION 9.4
	 	FRUSTRATION OF CLOSING CONDITIONS	 	 	43	 
	 
	 	 	 	 	 	 
	
ARTICLE X
	NO SURVIVAL

	 
	 	 	 	 	 	 
	SECTION 10.1
	 	SURVIVAL OF REPRESENTATIONS AND WARRANTIES	 	 	43	 
	SECTION 10.2
	 	NO CONSEQUENTIAL DAMAGES	 	 	44	 
	 
	 	 	 	 	 	 
	
ARTICLE XI
	TAXES

	 
	 	 	 	 	 	 
	SECTION 11.1
	 	TAX MATTERS	 	 	44	 
	 
	 	 	 	 	 	 
	
ARTICLE XII
	MISCELLANEOUS

	 
	 	 	 	 	 	 
	SECTION 12.1
	 	EXPENSES	 	 	45	 
	SECTION 12.2
	 	INJUNCTIVE RELIEF	 	 	45	 
	SECTION 12.3
	 	SUBMISSION TO JURISDICTION; CONSENT TO SERVICE OF PROCESS	 	 	45	 
	SECTION 12.4
	 	WAIVER OF RIGHT TO TRIAL BY JURY	 	 	45	 
	SECTION 12.5
	 	ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS	 	 	46	 
	SECTION 12.6
	 	GOVERNING LAW	 	 	46	 
	SECTION 12.7
	 	NOTICES	 	 	46	 
	SECTION 12.8
	 	SEVERABILITY	 	 	47	 
	SECTION 12.9
	 	BINDING EFFECT; ASSIGNMENT	 	 	47	 
	SECTION 12.10
	 	NON-RECOURSE	 	 	48	 
	SECTION 12.11
	 	COUNTERPARTS	 	 	48	 
	SECTION 12.12
	 	PURCHASE PRICE ALLOCATION	 	 	48	 






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SCHEDULES




	 	 	 	 	 	 	 
	Schedule	 	Subject	 	Page
	1.1(a)

	 	Controlled Jobs
	1.1(b)

	 	Nonassignable Documents and Intellectual Property
	1.1(c)

	 	Individual Properties
	1.1(d)

	 	Seller Knowledge Persons
	1.1(e)

	 	Purchased Contracts
	1.1(f)

	 	Purchased Leases
	1.1(g)

	 	Certain Allowable Interest Expense
	1.1(h)

	 	Construction Budgets
	1.1(i)

	 	Illustration of “Qualified Offset” Clause (i) Computation
	1.1(j)

	 	February 28, 2010 Backlog Report
	1.1(k)

	 	February 28, 2010 Model Home Prices
	2.1(a)

	 	Scheduled Real Property
	2.1(p)

	 	Other Purchased Assets
	2.2(j)

	 	Other Excluded Assets
	2.3(b)

	 	Specified Assumed Liabilities
	2.4(k)

	 	Certain Excluded Land Development Liabilities
	3.2(b)

	 	Closing Adjustment Methodology
	5.5(b)

	 	JV Real Property
	5.10(b)

	 	Open Tax Audits
	8.2(I)

	 	Exceptions to Ordinary Conduct of Business
	8.2(II)

	 	Units to be Weatherized
	8.12

	 	Commitments






EXHIBITS




	 	 	 
	Exhibit	 	Subject
	A

	 	Selling Affiliates
	B

	 	Bidding Procedures Order
	C-1

	 	Escrow Closing Agreement
	C-2

	 	Escrow Deposit Agreement
	D

	 	JV Assignment
	E

	 	Bill of Sale
	F

	 	Assignment and Assumption Agreement







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ASSET PURCHASE AGREEMENT




          ASSET PURCHASE AGREEMENT, dated as of April 13, 2010 (this “Agreement”), among Orleans
Homebuilders, Inc., a Delaware corporation (“Parent”), the individual selling Affiliates of
Parent set forth on Exhibit A hereto (collectively, the “Selling Affiliates” and,
together with Parent, the “Sellers,” and each, a “Seller”), and NVR, Inc., a
Virginia corporation (“Purchaser”).




W I T N E S S E T H:




          WHEREAS, Parent and certain of the Selling Affiliates are debtors-in-possession under title 11
of the United States Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), and filed
voluntary petitions for relief under chapter 11 of the Bankruptcy Code on the Petition Date, in the
United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) now in
the jointly administered cases No. 10-10684 (PJW) (collectively, the “Bankruptcy Case”);




          WHEREAS, the Sellers presently conduct the Business;




          WHEREAS, Sellers desire to sell, transfer and assign to Purchaser, and Purchaser desires to
purchase, acquire and assume from each Seller, pursuant to Sections 105, 363 and 365 of the
Bankruptcy Code, all of the Purchased Assets and Assumed Liabilities, all as more specifically
provided herein;




          WHEREAS, certain terms used in this Agreement are defined in Section 1.1;




          NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereby agree as follows:




ARTICLE I

DEFINITIONS




          SECTION 1.1 Certain Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified in this Section 1.1:




          “Accountants” means Ernst & Young LLP or another independent accounting firm mutually
agreed to by Seller and Purchaser.




          “Affiliate” means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, such Person, and the term “control” (including the terms “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through ownership of voting
securities, by contract or otherwise.




          “Assumed Cure Amount” means, with respect to each Purchased Lease or Purchased
Contract, any amounts required to be paid pursuant to Section 365(b) of the






 









 







Bankruptcy Code or otherwise in order to cure any defaults existing as of the date of
assumption in respect of such Purchased Lease or Purchased Contract, as approved by the Bankruptcy
Court (including, for the avoidance of doubt, the Sellers’ Assumed Cure Amounts).




          “Bidding Procedures Order” means an order of the Bankruptcy Court in the form attached
hereto as Exhibit B, as may be amended in form and substance reasonably satisfactory to
Purchaser.




          “Business” means the business of the Sellers of acquiring, marketing, developing, building and
selling high-quality single-family homes, townhomes and condominiums.




          “Business Day” means any day of the year on which national banking institutions in New
York are open to the public for conducting business and are not required or authorized to close.




          “Claim” means a claim against one or more of the Sellers and/or any of their
properties as such term is defined in Section 101(5) of the Bankruptcy Code and includes any claim
against Purchaser or any of Purchaser’s properties based on a theory of successor liability or any
similar theory.




          “Closing Adjustment” means an amount equal to the amount of all Qualified Development
Costs minus the amount of all Qualified Offsets. The Closing Adjustment shall be calculated
consistent with the methodology set forth on Schedule 3.2(b).




          “Contract” means any contract, commitment, indenture, note, bond, lease, license or
other agreement, written or oral, relating to the assets of any Seller or the operation of the
Business to which any Seller is a party or by which any of such Seller’s assets are bound.




          “Controlled Jobs” means those assets of the Sellers set forth on Schedule
1.1(a), which constitute all of the assets identified on Parent’s balance sheet as “Inventory
not owned — other financial interests,” “obligations related to inventory not owned — other
financial interests” and “Land deposits and costs of future land.”




          “Credit Agreement” means the Second Amended and Restated Revolving Credit Loan
Agreement, dated as of September 30, 2008, as amended, among Greenwood Financial, Inc. and certain
Affiliates, as borrowers, the Seller as Guarantor, Wachovia Bank, National Association, as
administrative agent, and the other agents and lenders party thereto.




          “Deposit” means an amount in cash equal to ten percent (10%) of the Base Purchase
Price that Purchaser shall deposit with the Escrow Agent pursuant to Section 3.1 hereof.




          “Documents” means all files, documents, instruments, papers, books, reports, records,
tapes, microfilms, photographs, letters, budgets, forecasts, ledgers, journals, title policies,
customer lists, regulatory filings, operating data and plans, technical documentation (design
specifications, functional requirements, operating instructions, logic manuals, flow charts, etc.),
site plans, subdivision plans, development plans, architectural drawings, engineering,
environmental and marketing materials, soil and other studies, surveys, plats, maps,






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as-built drawings, cost estimates and budgets, construction and land development schedules,
and budgets, property inspection reports, homeowner and condominium declarations, title policies,
agreements with governmental agencies, governmental permits, sales and marketing information
(including contracts and historical sales figures), reports and appraisals, warranties relating to
improvements to the Real Property or other Purchased Assets, user documentation (installation
guides, user manuals, training materials, release notes, working papers, etc.), marketing
documentation (sales brochures, flyers, pamphlets, web pages, etc.), and other similar materials
related to the Purchased Assets, in each case whether or not in electronic form; provided
that the documents set forth on Schedule 1.1(b) shall only be included in the “Documents”
if Sellers’ rights in such documents are assignable as of the Closing or become assignable
thereafter (it being agreed that, to the extent Sellers’ rights in such documents are not
assignable by Sellers as of the Closing, Sellers shall use their reasonable best efforts to cause
the owner thereof to assign rights to such documents to, and/or permit use of the same by,
Purchaser subject to the payment by Purchaser of a re-use or similar fee, as set forth on
Schedule 1.1(b), with respect to the construction of any home started after the Closing).
Schedule 1.1(b) sets forth any fees payable with respect to the re-use of any Documents set
forth on such Schedule or other restrictions on use or transfer thereof.




          “Escrow Agent” means the Title Company.




          “Escrow Closing Agreement” means an agreement executed by Purchaser, Sellers and the
Escrow Agent in the form attached hereto as Exhibit C-1.




          “Escrow Deposit Agreement” means an agreement executed by Purchaser, Sellers and the
Escrow Agent, in the form attached hereto as Exhibit C-2.




          “Excluded Developments” means the communities referred to as Wildflower at Walkill, in
Middletown, NY, and Woodside Crossing, in Rock Tavern, NY.




          “Expense Reimbursement” means (a) One Hundred Fifty Thousand Dollars ($150,000)
(covering the Purchaser’s internal management and personnel expenses incurred in pursuing the
transactions contemplated hereby), plus (b) all actual documented out-of-pocket costs, fees
and expenses incurred by Purchaser following the Petition Date in connection with (i) this
Agreement, including the negotiation and documentation of this Agreement and the evaluation of the
transactions contemplated hereby and/or (ii) any auction or hearings (including the filing of any
pleadings or other documents in connection with such hearings) relating to this Agreement, the
Bidding Procedures Order, the Sale Order or otherwise relating to the sale of any of the Purchased
Assets or the Bankruptcy Case; provided, that the aggregate amount of the Expense
Reimbursement shall in no event exceed One Million Dollars ($1,000,000).




          “Governmental Body” means any government or governmental or regulatory body thereof,
or political subdivision thereof, whether foreign, federal, state, or local, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or private).




          “HOA Documents” shall mean, with respect to any HOA, all articles of incorporation,
articles of association or other formation documents, bylaws and declarations of






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restrictive covenants, covenants, conditions and restrictions, including any amendments
thereto, applicable to such HOA.




          “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.




          “Individual Property” means each residential community set forth on Schedule
1.1(c), together with all of the Purchased Assets relating to such residential community.




          “Intellectual Property” means trademarks, service marks, trade names, and all the
goodwill associated therewith; published and unpublished works of authorship, whether copyrightable
or not, including architectural, consulting or engineering blueprints, plans, reports, designs,
schematics, ideas and concepts, domain names, customer lists, and all other intellectual property
rights used or useful in connection with the Purchased Assets; and all applications and
registrations therefor, databases and any other compilations of information used or useful in
connection with the Purchased Assets and applications and registrations thereof, and all derivative
works, renewals, extensions, restorations and reversions thereof; provided that the
documents set forth on Schedule 1.1(b) shall only be included in the “Intellectual
Property” if Sellers’ rights in such documents are assignable as of the Closing or become
assignable thereafter (it being agreed that, to the extent Sellers’ rights in such documents are
not assignable by Sellers as of the Closing, Sellers shall use their reasonable best efforts to
cause the owner thereof to assign rights to such documents to, and/or permit use of the same by,
Purchaser, subject to the payment by Purchaser of a re-use or similar fee, as set forth on
Schedule 1.1(b), with respect to the construction of any home started after the Closing).
Schedule 1.1(b) sets forth any fees payable with respect to the re-use of any Documents set
forth on such Schedule or other restrictions on use or transfer thereof.




          “JV Entity” means one or more joint ventures, strategic alliance or other form of
entity which owns JV Real Property.




          “JV Interests” means JV Investors’ respective interests in the JV Entities.




          “JV Investor” means any Affiliate of Sellers owning a partnership or membership
interest, as applicable, in any JV Entity.




          “JV Real Property” means (i) the development commonly known as “Dolington,” located in
Upper Makefield and Newton townships, Bucks County, PA, (ii) lots 258 and 263 in the development
commonly known as “Byers Station” (which lots are commonly known as “Byers Commercial”),
located in Upper Uwchlan township, Chester County, PA and (iii) Byers Station components #4 and #5
(being 52 townhouse and 60 single family properties), located in West Vincent township, Chester
County, PA, which will be conveyed to the applicable JV Investor pursuant to the Straw Party
Agreement dated September 22, 2004, the legal description of which real property as of February 28,
2010 (excluding the legal description of the real property contemplated by the foregoing clause
(iii)) is set forth on Schedule 5.5(b).




          “Knowledge of Seller” means the actual knowledge, after good faith inquiry, of each of
the individuals identified on Schedule 1.1(d) that is an employee of Parent or any of its
subsidiaries as of the date that the applicable representation or certification is made hereunder.







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          “Law” means any federal, state, local or foreign law, statute, code, ordinance, rule
or regulation.




          “Legal Proceeding” means any judicial, administrative or arbitral actions, suits,
proceedings (public or private) or claims or any proceedings by or before a Governmental Body.




          “Liability” means any debt, liability or obligation (whether direct or indirect, known
or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to
become due), and including all costs and expenses relating thereto.




          “Lien” means any mortgage, lien (as such term is defined in Section 101(37) of the
Bankruptcy Code including any mechanic’s, materialmen’s, statutory and any other consensual or
non-consensual lien), security interest, charge, hypothecation, deed of trust, pledge, right of
use, first offer or refusal, easement, servitude, restrictive covenant, lease, sublease, covenant,
right of way, option, Claim, restriction on transfer or otherwise, interest, encroachment or
encumbrance of any kind.




          “Material Adverse Effect” means (i) a material adverse effect on the Purchased Assets
(taken as a whole), or (ii) a material adverse effect on the ability of the Sellers (taken as a
whole) to consummate the transactions contemplated by this Agreement or perform their obligations
under this Agreement other than an effect resulting solely from an Excluded Matter. “Excluded
Matter” means any one or more of the following: (i) the announcement of the signing of this
Agreement or the filing of the Petition, compliance with the express provisions of this Agreement
or the consummation of the transactions contemplated hereby, (ii) reasonably anticipated events,
conditions, circumstances, developments, changes or effects arising out of the filing of the
Petition, (iii) actions or omissions taken or not taken by or on behalf of the Sellers or any of
their respective Affiliates at the express request, or with the consent, of the Purchaser or its
Affiliates, (iv) actions taken by the Purchaser or its Affiliates, other than as contemplated by
this Agreement, (v) failure of any Seller to meet any internal or published projections, forecasts,
estimates or predictions it being the understanding of the parties hereto that the underlying cause
of such failure may otherwise constitute a Material Adverse Effect if such event is not otherwise
excluded from the definition of Material Adverse Effect, (vi) events covered by Section 2.7
hereof, (vii) the failure of one or more JV Entity to have good and marketable title to, or a valid
leasehold interest in, the JV Real Property free and clear of all Liens other than Permitted Liens,
(viii) changes or proposed changes in Law or interpretations thereof by any Governmental Body (ix)
changes or proposed changes in generally accepted accounting principles in the United States or
elsewhere, (x) changes which generally affect the national or regional markets for residential
housing, (xi) changes in general economic conditions, currency exchange rates or United States or
international debt or equity markets and (xii) national or international political or social
conditions or any national or international hostilities, acts of terror or acts of war; provided
that, in the case of clauses (viii) through (xii), inclusive, such events, changes, conditions,
circumstances, developments or effects shall be taken into effect in determining whether any such
material adverse effect has occurred to the extent that any such events, changes, conditions,
circumstances, developments or effects have a material and disproportionate adverse effect on the
Business, the Purchased Assets, the Assumed Liabilities or the Sellers as compared to other
similarly affected persons.







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          “Order” means any order, injunction, judgment, decree, ruling, writ, assessment or
arbitration award of a Governmental Body.




          “Outside Date” means the later of (x) (i) with respect to any termination of this
Agreement by Purchaser, the earlier of (x) July 15, 2010 or, if the Sale Order is entered after
July 8, 2010, the date which is five (5) Business Days after the Sale Order is entered, and (y)
August 15, 2010; and (ii) with respect to any termination of this Agreement by Sellers, August 31,
2010 and (y) in the event that any filings with respect to the transactions hereunder are made
under the HSR Act or other Antitrust Laws, five (5) Business Days after expiration or early
termination of any applicable notice period under the HSR Act or such other Antitrust Laws.




          “Permits” means any approvals, authorizations, consents, licenses, permits or
certificates of a Governmental Body.




          “Permitted Liens” means: (a) easements, covenants or similar encumbrances and which
do not interfere with the development or intended use of any Individual Property for residential
single family houses, townhomes or condominium units, (b) with respect to any Individual Property
that is subject to a Purchased Lease, statutory Liens creating a security interest in favor of
landlords with respect to property of the Sellers which do not interfere with the current use of
such leased real property by the Sellers in any material respect, (c) Liens for any Tax not yet due
and payable , (d) Liens for any Tax due but not delinquent or being contested in good faith, (e)
Liens from which the Purchased Assets are sold free and clear pursuant to the Sale Order and (f)
easements, covenants or similar encumbrances as listed on the title policy issued when Seller
acquired the Individual Property.




          “Person” means any individual, corporation, limited liability company, partnership,
firm, joint venture, association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.




          “Petition Date” means March 1, 2010.




          “Purchased Contracts” means those Contracts set forth on Schedule 1.1(e), as
the same may be updated from time to time in accordance with this Agreement, all of which shall be
assumed by Sellers and assigned to Purchaser at Closing, and any licenses of architectural drawings
or similar materials included in the Purchased Assets under which a Seller is licensee, all of
which shall be assumed by Sellers and assigned to Purchaser at Closing. Notwithstanding anything
to the contrary contained in this Agreement, Schedule 1.1(e) may be amended or supplemented
at any time prior to Closing (i) by Purchaser, in its sole discretion without the consent of
Sellers, to delete any Contracts from Schedule 1.1(e), (ii) by Sellers, but only with the
prior consent of Purchaser, to add or delete any Contracts to or from Schedule 1.1(e), and
(iii) by Purchaser, but only with the prior consent of Parent, to add any Contracts to Schedule
1.1(e) except those related solely to the Excluded Developments.




          “Purchased Leases” means those leases set forth on Schedule 1.1(f), all of
which shall be assumed by Sellers and assigned to Purchaser at Closing. Notwithstanding anything
to the contrary contained in this Agreement, Schedule 1.1(f) may be amended or supplemented
at








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any time prior to Closing (i) by Purchaser, in its sole discretion without the consent of
Sellers, to delete any leases from Schedule 1.1(f), (ii) by Sellers, but only with the prior
consent of Purchaser, to add or delete any leases to or from Schedule 1.1(f), and (iii) by
Purchaser, but only with the prior consent of Parent, to add any leases to Schedule 1.1(f)
except those related solely to the Excluded Developments.




          “Qualified Bid” means a Qualified Bid as defined in the Sale Motion. This Agreement
shall be deemed to be a Qualified Bid.




          “Qualified Development Costs” means all costs, fees and expenses (x) in the case of
the Estimated Closing Adjustment, paid by or on behalf of any Seller after February 28, 2010 and
prior to the Closing, and (y) in the case of the Closing Date Schedule, paid, incurred or accrued
by or on behalf of any Seller after February 28, 2010 and prior to the Closing, which (with respect
to such incurred or accrued items) are paid prior to the delivery of the Closing Date Schedule, in
each case, relating to the construction or improvement of Scheduled Real Property that are properly
capitalized in accordance with generally accepted accounting principles, but excluding any interest
expense or overhead expenses (except in the case of the Real Property listed on Schedule
1.1(g), with respect to which payments of interest expense paid by the Sellers in connection
with the acquisition of such property shall be included), provided that such costs, fees,
and expenses with respect to any phase of construction, on an aggregate basis, shall not exceed
103% of the applicable amount for such phase of construction set forth on the construction budget
attached hereto as Schedule 1.1(h) (and subject to any subsequent changes thereto on
account of customer change orders and other adjustments to homes under construction, in each case
to the extent there is a corresponding increase in the sale price of the applicable home, or the
conversion of model homes).




          “Qualified Offsets” means the sum of—





     (i) the amount of the cash purchase price, net of closing costs as set forth on the
applicable HUD-1 (such closing costs not to exceed 5% of the gross sales price in the
aggregate for all units closed), received by the Sellers in respect of sales of Scheduled
Real Property which close after February 28, 2010 and prior to the Closing (an illustration
of the application of this clause (i) is set forth in Schedule 1.1(i) attached
hereto; the principles reflected in such illustration shall be used in applying this clause
(i) for purposes of the Closing Adjustment); and




     (ii) the amount of any net purchase price reductions or other concessions agreed to by
a Seller after February 28, 2010 and prior to the Closing with respect to a contract for the
sale of Scheduled Real Property dated prior to February 28, 2010; and




     (iii) (a) with respect to any unit (other than a model home) for which a sales
contract is entered into after February 28, 2010, but prior to the Closing, the amount by
which the net sales price for such unit is less than the average net selling price of the
backlog for a comparable unit in the applicable community as set forth in the column
entitled “Net Selling Price” in the February 28, 2010 Backlog report provided to Purchaser
(a copy of which is attached hereto as Schedule 1.1(j)), or, if there is no backlog
for purposes of this comparison, the average net sales price of homes conveyed



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to buyers over the preceding 12 months for a comparable unit in the applicable community;
and




     (b) as to model homes for which a sales contract is entered into after February 28,
2010, but prior to the Closing, the amount by which the net sales price for such unit is
less than 75% of the stated “Net Selling Price” for such unit as set forth on Schedule
1.1(k), unless such model home sale contract is otherwise consented to in advance by
Purchaser; and




     (iv) an amount equal to 10% of the net sales price for any contract for the sale of
Scheduled Real Property (but excluding homes in backlog whose construction status is Stage 0
or Stage 1) dated prior to February 28, 2010 that is cancelled after February 28, 2010 and
for which a new sales contract has not been executed as of the Closing Date;
provided that the amount calculated under this clause (iv) shall not be applied as a
Qualified Offset unless the calculated amount is greater than $2.0 million, and then the
amount of the Qualified Offset under this clause (iv) shall be equal to the excess of the
calculated amount over $2.0 million; and provided further that the amount of
the Qualified Offset under this clause (iv) as so calculated shall in no event exceed $2.0
million.



          “Remediation” means any abatement, investigation, clean-up, removal action, remedial
action, restoration, repair, response action, corrective action, monitoring, sampling and analysis,
installation, reclamation, closure, post-closure, settlement, or any other action taken in
connection with the suspected, threatened or actual release of hazardous substances or the
violation of any environmental law.




          “Sale Motion” means the Sellers’ Motion pursuant to Section 105(a), 363 and 365 of the
Bankruptcy Code and Bankruptcy Rules 6004 and 6006 for (i) approval of procedures in connection
with the sale of all or substantially all of the Sellers’ assets, (ii) authorization to enter into
this Agreement and approval of the Sale Order (subject to higher and better offers) in connection
therewith, and (iii) approval of the Bidding Procedures Order (including the setting of related
auction and hearing dates), as the same may be amended in form and substance reasonably
satisfactory to Purchaser.




          “Sale Order” shall be an order or orders of the Bankruptcy Court in form and substance
reasonably acceptable to Purchaser and Parent approving this Agreement and all of the terms and
conditions hereof, and approving and authorizing the Sellers to consummate the transactions
contemplated hereby. Without limiting the foregoing, the Sale Order shall, among other things, (i)
approve the sale of the Purchased Assets to the Purchaser (including the assumption by Sellers and
assignment to Purchaser of the Purchased Contracts and Purchased Leases) on the terms and
conditions set forth in this Agreement and authorize and direct the Sellers to proceed with the
transactions contemplated under this Agreement, (ii) include a finding that Purchaser is a good
faith purchaser of the Purchased Assets under Section 363(m) of the Bankruptcy Code, (iii) state
that the Purchased Assets shall be sold and transferred to Purchaser free and clear of all Liens
and Liabilities except for Permitted Liens and Assumed Liabilities (iv) state that the interest in,
and claims and rights under, the Purchased Contracts and Purchased Leases shall be assumed by
Sellers and assigned to Purchaser notwithstanding any provision in






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any such contract or lease or applicable Law that prohibits, restricts or conditions the
assignment or transfer of such contract or lease; (v) provide that, as of the Closing, any and all
defaults existing under Purchased Contracts or Purchased Leases as of the Closing shall be deemed
cured and no counter-party to any Purchased Contract or Purchased Lease shall have any rights
against Sellers, Purchaser or under such Purchased Contract or Purchased Lease on account of such
defaults, except the right to payment from Purchaser of any Assumed Cure Amount required to be paid
with respect to such Purchased Contract or Purchased Lease, (vi) provide for a waiver of the stays
contemplated by Rules 6004(h) and 6006(d) of the Bankruptcy Rules; and (vii) include a finding that
Purchaser has not engaged in any of the acts prohibited by Section 363(n) of the Bankruptcy Code.




          “Scheduled Real Property” means all real property listed on Schedule 2.1(a).




          “Sellers’ Assumed Cure Amounts” means any Assumed Cure Amounts payable with respect to
Sellers’ Assumed Cure Amounts Contracts.




          “Sellers’ Assumed Cure Amounts Contract” means any contract for the sale of homes by
Sellers to homebuyers and/or other Purchased Contracts or Purchased Leases, the assignment of which
is required in order for the Sellers to perform their respective obligations to transfer to
Purchaser at Closing title to the Real Property and interests in the JV Investors.




          “Survey” means a survey of each Individual Property obtained by Purchaser pursuant to
Section 2.10.




          “Tax” means (i) all federal, state, local or foreign taxes (including any income tax,
franchise tax, capital gains tax, capital tax, gross receipts tax, value-added tax, surtax, excise
tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax,
profits tax, capital stock tax, withholding tax, payroll tax, employment tax, social security tax,
unemployment tax, severance tax or occupation tax), (ii) all levies, assessments, tariffs, duties
(including any customs duties), deficiencies or similar charges (including any fine, addition,
penalty or interest), imposed, assessed or collected by or under the authority of any Governmental
Body and (iii) any item of another Person described in clause (i) or (ii) for which a taxpayer is
liable as a transferee or successor, by reason of Treasury Regulation Section 1.1502-6 (or similar
provision of state, local or foreign law), or by contract, indemnity or otherwise.




          “Tax Return” means any return, report, information return or other document (including
any related or supporting information) supplied or required to be supplied to any Governmental Body
with respect to Taxes.




          “Termination Fee” means an amount equal to two percent (2.0%) of the Base Purchase
Price.




          “Title Commitment” means an ALTA Owner’s Title Insurance Commitment issued or to be
issued to Purchaser with respect to each Individual Property.




          “Title Company” means First American Title Insurance Company.







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          SECTION 1.2 Terms Defined Elsewhere in this Agreement. For purposes of this
Agreement, the following terms have meanings set forth in the sections indicated.




	 	 	 
	Term	 	Section
	Agreement

	 	Introduction
	Allocation Schedule

	 	Section 2.12
	Antitrust Division

	 	Section 8.4(a)
	Antitrust Laws

	 	Section 8.4(b)
	Assignment and Assumption Agreement

	 	Section 4.2(c)
	Assumed Liabilities

	 	Section 2.3
	Bankruptcy Case

	 	Recitals
	Bankruptcy Code

	 	Recitals
	Bankruptcy Court

	 	Recitals
	Base Purchase Price

	 	Section 3.1
	Bill of Sale

	 	Section 4.2(b)
	Closing

	 	Section 4.1
	Closing Date

	 	Section 4.1
	Closing Date Schedule

	 	Section 3.2(b)
	Commitments

	 	Section 8.12
	Competing Bid

	 	Section 7.1(a)
	Competing Transaction

	 	Section 4.6(d)
	Condemnation

	 	Section 2.7(b)
	Confidentiality Agreement

	 	Section 8.6
	Damage or Destruction Loss

	 	Section 2.7
	Disclosure Schedule

	 	Article V
	Dispute Notice

	 	Section 3.2(c)
	Environmental Holdback Amount

	 	Section 2.9(b)
	Estimated Closing Adjustment

	 	Section 3.2(a)
	Excluded Assets

	 	Section 2.2
	Excluded Liabilities

	 	Section 2.4
	Excluded Matter

	 	Definition of Material
Adverse Effect
	FTC

	 	Section 8.4(a)
	HOA

	 	Section 2.1(n)
	Holdback Amount

	 	Section 3.1(b)
	IP Assignments

	 	Section 4.2(e)
	JV Assignment

	 	Section 4.2(b)
	Parent

	 	Introduction
	Purchase Price

	 	Section 3.1
	Purchased Assets

	 	Section 2.1
	Purchaser

	 	Introduction
	Purchaser Documents

	 	Section 6.2
	Purchaser’s Environmental Diligence

	 	Section 2.9(a)
	Real Property

	 	Section 2.1(a)
	Remediation Cost

	 	Section 2.9(c)
	Review Period

	 	Section 3.2(c)
	Sale Order Approval Date

	 	Section 7.1(a)






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	Term	 	Section
	Section

	 	Section 1.3(a)
	Seller

	 	Recitals
	Seller Documents

	 	Section 5.2
	Sellers

	 	Recitals
	Sellers’ Assumed Cure Amounts Purchase
Price Reduction

	 	Section 3.1(c)
	Selling Affiliates

	 	Introduction
	Substitute Commitments

	 	Section 8.12
	Title Objection

	 	Section 2.10(a)
	Title Objection Notice

	 	Section 2.10(a)
	Transfer Taxes

	 	Section 12(a)






          SECTION 1.3 Other Definitional and Interpretive Matters.




          (a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules
of interpretation shall apply:





     Calculation of Time Period. When calculating the period of time before which,
within which or following which any act is to be done or step taken pursuant to this
Agreement, the date that is the reference date in calculating such period shall be excluded.
If the last day of such period is a non-Business Day, the period in question shall end on
the next succeeding Business Day.




     Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.




     Gender and Number. Any reference in this Agreement to gender shall include all
genders, and words imparting the singular number shall include the plural and vice versa.




     Headings. The provision of a Table of Contents, the division of this Agreement
into Articles, Sections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in construing or
interpreting this Agreement. All references in this Agreement to any “Section” are
to the corresponding Section of this Agreement unless otherwise specified.




     Herein. The words such as “herein,” “hereinafter,” “hereof,” and “hereunder”
refer to this Agreement as a whole and not merely to a subdivision in which such words
appear unless the context otherwise requires.




     Including. The word “including” or any variation thereof means “including,
without limitation” and shall not be construed to limit any general statement
that it follows to the specific or similar items or matters immediately following it.




     Section References. All section references contained herein, unless otherwise
specified, shall refer to sections of this Agreement.



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          (b) The parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.




ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES




          SECTION 2.1 Purchase and Sale of Assets. On the terms and subject to the conditions
set forth in this Agreement, at the Closing, Purchaser shall purchase, acquire and accept from the
Sellers, and Sellers shall sell, transfer, assign, convey and deliver to Purchaser all of the
Sellers’ right, title and interest in, to and under the Purchased Assets free and clear of all
Liens and all Liabilities, other than Permitted Liens, and Assumed Liabilities. “Purchased
Assets” shall mean the following assets of the Sellers (but excluding Excluded Assets) as of
the Closing:





     (a) all real property (collectively, the “Real Property”) owned by Sellers or
any of them at any Individual Property, including the number of subdivided lots for each
Individual Property set forth on Schedule 2.1(a), together with all buildings, structures
(surface and sub surface), improvements and fixtures located thereon, whether completed or
partially constructed, and all rights, privileges and appurtenances pertaining thereto,
including all of the Sellers’ right, title and interest in and to all rights-of-way, open or
proposed streets, alleys, easements and strips or gores of land adjacent thereto, but
excluding any building lots and buildings constructed thereon that are sold and conveyed by
Sellers to residential homebuyers in the ordinary course of business prior to the Closing
(it being acknowledged that title to the JV Real Property is not held by Sellers but,
instead, by entities in which the Sellers have an ownership interest);




     (b) all accounts receivable of the Sellers relating to or arising out of the Real
Property or the other Purchased Assets (and excluding, for the avoidance of doubt, accounts
receivable in respect of sales proceeds for real estate closings for building lots and
buildings constructed thereon that are sold and conveyed by Sellers to buyers in the
ordinary course of business prior to Closing but for which the sale proceeds have not been
received by Sellers prior to Closing);




     (c) the Purchased Contracts and all rights of Sellers thereunder;




     (d) the Controlled Jobs;




     (e) the Purchased Leases and all rights of Sellers thereunder, together with all
improvements on, and fixtures and other appurtenances to, the leased property and rights in
respect thereof;




     (f) all inventory, supplies, materials and other personal property related to or used
in connection with the Real Property or the other Purchased Assets, including any furniture,
furnishings, fixtures, rugs, mats, carpeting, appliances, computers, televisions,



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other electronic equipment, plumbing fixtures and other equipment located in any model
homes included in the Real Estate;




     (g) all of Sellers’ right, title and interest in and to all customer and other deposits
(including earnest money deposits and security deposits and interests to escrows) held in
segregated accounts and prepaid charges and expenses of the Sellers related to or used in
connection with the Real Property or the other Purchased Assets;




     (h) all rights of the Sellers under any warranties relating to improvements to the Real
Property or other Purchased Assets;




     (i) the right of Sellers to any insurance proceeds and condemnation proceeds in respect
of the Real Property, the other Purchased Assets or the Assumed Liabilities;




     (j) all Intellectual Property owned and/or used by Seller in connection with the
Purchased Assets;




     (k) all Documents that are used, or held for use, in connection with the Real Property
or the other Purchased Assets, but excluding any Documents primarily related to or are
required to realize the benefits of any Excluded Asset; provided, however,
that the Sellers shall have continued access to such Documents (or copies thereof) as are
necessary or appropriate to administer the Bankruptcy Case;




     (l) all Permits and pending applications for Permits used in, held for use in or
intended to be used in connection with the Purchased Assets;




     (m) all rights of each Seller under non-disclosure or confidentiality, non-compete, or
non-solicitation agreements with employees and agents of such Seller or with third parties
to the extent relating to the Real Property or the other Purchased Assets set forth in this
Section 2.1, to the extent assignable;




     (n) all right, title and interest of Sellers in and to any homeowner associations or
similar organizations (“HOAs”), including as “declarant” under the applicable HOA
Documents;




     (o) Sellers’ interests in the JV Investors; and




     (p) all other assets that are used or held for use in connection with or related to the
Purchased Assets listed on Schedule 2.1(p).



          SECTION 2.2 Excluded Assets. Nothing herein contained shall be deemed to sell,
transfer, assign or convey the Excluded Assets to Purchaser, and the Sellers shall retain all
right, title and interest to, in and under the Excluded Assets. “Excluded Assets” shall
mean any assets of the Seller other than the Purchased Assets, including all interests and rights
of the Sellers in and to solely the following assets:







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     (a) all cash, cash equivalents, bank deposits or similar cash items of Seller and its
subsidiaries other than cash items included in the Purchased Assets pursuant to Section
2.1(g);




     (b) all right, title and interest in respect of the Excluded Developments;




     (c) all of the Sellers’ deposits or prepaid charges and expenses paid in connection
with or relating to any other Excluded Assets set forth in this Section 2.2;




     (d) all Contracts other than the Purchased Contracts and the Purchased Leases;




     (e) any Tax receivable, Tax refund, Tax deposit or other Tax asset;




     (f) any rights, Claims or causes of action (including causes of action under chapter 5
of the Bankruptcy Code, rights of indemnity, warranty, contribution or reimbursement) of any
Seller not related to or arising out of the Purchased Assets;




     (g) any Documents not transferred under Section 2.1;




     (h) all rights of the Sellers under this Agreement and the other documents contemplated
hereby, and all consideration receivable pursuant thereto;




     (i) all ownership interests in the Selling Affiliates; and




     (j) Seller’s right, title and interest in the other assets, if any, set forth on
Schedule 2.2(j).



          SECTION 2.3 Assumption of Liabilities. On the terms and subject to the conditions set
forth in this Agreement, at the Closing, Purchaser shall assume, effective as of the Closing Date,
and shall timely perform and discharge in accordance with their respective terms, the following
Liabilities (collectively, the “Assumed Liabilities”); provided, however,
that in no event shall the Assumed Liabilities include any of the Excluded Liabilities:





     (a) all Liabilities of the Sellers under the Purchased Contracts and the Purchased
Leases, but solely to the extent such Liabilities arise under the Purchased Contracts and
the Purchased Leases in accordance with their terms following the Closing, except as set
forth in Section 2.3(e);




     (b) all Liabilities arising out of or in connection with the ownership or operation of
the Purchased Assets following the Closing, including those Liabilities set forth on
Schedule2.3(b);




     (c) all Liabilities arising following the Closing under the HOA Documents;




     (d) the Transfer Taxes payable by Purchaser pursuant to Article XI;




     (e) the Assumed Cure Amounts; and



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     (f) all Liabilities for customer deposits related to the Real Property to the extent
delivered to Purchaser or for which Purchaser receives a credit at Closing.



          SECTION 2.4 Excluded Liabilities. Other than the Assumed Liabilities, Purchaser will
not assume, be liable for, have any responsibility for or otherwise become obligated in respect of
any actual, unliquidated or contingent liabilities or any other obligations of any Seller or
arising out of, relating to or otherwise in respect of the Business (the “Excluded
Liabilities”), including the following Liabilities:





     (a) all Liabilities arising out of or related to the Excluded Assets;




     (b) all Liabilities under or with respect to (i) any Employee Benefit Plan, (ii)
Sections 412, 4971 and 4980B of the Internal Revenue Code, 26 U.S.C. § 1 et
seq. (the “Code”), or Title IV or Section 302 of ERISA with respect to any
employee benefit plan that is or has been maintained or contributed to by any of the Sellers
or any entity with which any of the Sellers is considered a single employer under Section
414 of the Code, or (iii) any current or former Business employees and their compensation
and benefits, including any severance, retention or similar payments due or that become
payable in connection with actions taken under this Agreement;




     (c) any post-petition debt or administrative expense debt other than the Assumed Cure
Amounts;




     (d) any indebtedness for borrowed money or other interest bearing obligations;




     (e) any amounts payable to any Affiliates of the Sellers;




     (f) any damages or Liabilities arising out of or in connection with any litigation
pending, or claims arising, against Seller or any Selling Affiliate that is not otherwise an
Assumed Liability;




     (g) any Liability arising out of or in connection with a violation of any Law by the
Sellers, whether before or after the Closing, including any violations of Law relating to
occupational safety and health or discrimination on the basis of age, race, creed, color or
disability, or any conduct prohibited by the Foreign Corrupt Practices Act of 1977;




     (h) any Liabilities arising under environmental laws from facts, circumstances or
conditions existing, initiated or occurring on or prior to the Closing Date (including but
not limited to administrative or civil fines or penalties for violations of environmental
laws, or Remediation or response costs for contamination);




     (i) any employment agreements, retirement or pension plans of Sellers and
post-retirement benefits of any type or nature, whether funded or unfunded;




     (j) any Liability under the Worker Adjustment and Retraining Notification Act (or any
similar state or local law);



-15-









 






     (k) land development and related Liabilities for the Individual Properties set forth on
Schedule 2.4(k);




     (l) any Liability associated with the environmental escrow arrangement and sale
relating to an individual lot in Westhampton Woods with an underground storage tank;




     (m) all Liabilities relating to amounts required to be paid by each Seller hereunder;
and




     (n) all Liabilities not expressly listed in this Section 2.4, other than
Assumed Liabilities.



          SECTION 2.5 Assignment and Assumption; Assumed Cure Amounts.




          (a) Assignment and Assumption. At the Closing, Sellers shall assume and assign to
Purchaser the Purchased Contracts and the Purchased Leases pursuant to Sections 363 and 365 of the
Bankruptcy Code.




          (b) With respect to each Purchased Contract or Purchased Lease for which an Assumed Cure
Amount is payable, Purchaser shall pay such Assumed Cure Amount directly to the counter-party to
such Purchased Contract or Purchased Lease, as and when finally determined by the Bankruptcy Court
pursuant to the procedures set forth in the Bidding Procedures Order, the Sale Order or any other
applicable order of the Bankruptcy Court, provided, however, that in no event shall
Purchaser be required to pay any such Assumed Cure Amount prior to the Closing.




          (c) Parent or Sellers shall not reject, amend or modify any Purchased Lease or Purchased
Contract without the prior written consent of Purchaser.




          SECTION 2.6 Further Conveyances and Assumptions. From time to time following the
Closing, Parent and Purchaser shall, and shall cause their respective Affiliates to, execute,
acknowledge and deliver all such further conveyances, notices, assumptions, releases, boundary line
adjustment agreements, acquaintances and such other instruments, and shall take such further
actions, as may be reasonably necessary or appropriate to assure fully to Purchaser and its
respective successors or assigns, all of the properties, rights, titles, interests, estates,
remedies, powers and privileges intended to be conveyed to Purchaser under this Agreement and the
Seller Documents, including in each case with respect to any Individual Properties as to which the
purchase thereof is deferred in accordance with this Agreement, and to assure fully to Seller and
its Affiliates and their successors and assigns, the assumption of the liabilities and obligations
intended to be assumed by Purchaser under this Agreement and the Seller Documents, and to otherwise
make effective the transactions contemplated hereby and thereby.




          SECTION 2.7 Casualty Events, Condemnation.




          (a) In the event of any damage to or destruction of any Purchased Asset (other than normal
wear and tear) after the date of this Agreement and prior to the Closing (in any such case, a
“Damage or Destruction Loss”), Seller shall give notice thereof to the Purchaser. If any






-16-









 







such Damage or Destruction Loss is covered by policies of insurance, all right and claim of
the Sellers to any proceeds of insurance for such Damage or Destruction Loss shall be assigned and
(if previously received by the Sellers and not used prior to the Closing Date to repair any damage
or destruction) paid to the Purchaser at Closing. To the extent such Damage or Destruction Loss is
not covered by policies of insurance, the Purchaser shall have the right to reduce the Purchase
Price by an amount equal to (i) the estimated cost to repair or restore the Purchased Assets
affected by such Damage or Destruction Loss (the “Affected Assets”) to their condition
immediately prior to the occurrence of such Damage or Destruction Loss or (ii) if such Affected
Assets are destroyed or damaged beyond repair, the replacement cost of the Affected Assets and all
compensation payable on account of such Damage or Destruction Loss shall be retained by the
Sellers. If the Purchaser elects to reduce the Purchase Price pursuant to this Section
2.7, Parent and the Purchaser shall negotiate in good faith to agree upon the amount of such
reduction. If the parties are unable to reach agreement within five (5) Business Days after notice
of the Damage or Destruction Loss is given by the Sellers, then the amount of the reduction shall
be determined by an independent, qualified insurance adjuster selected by the Parties (or, if they
are unable to agree on such selection, one appointed by the Bankruptcy Court upon application of
either Party) whose determination of such reduction shall be final and binding upon the parties.
In addition, with respect to any Damage or Destruction Loss covered by policies of insurance, at
Closing, Purchaser shall receive a credit for any deductible amounts under any such insurance
policies.




          (b) In the event of a taking of any portion of the Purchased Asset after the date of this
Agreement and prior to the Closing (in any such case, a “Condemnation”), the Seller shall
give notice thereof to the Purchaser. At Closing, Sellers shall assign to Purchaser their right to
the proceeds of a Condemnation or, if received by any Sellers prior to Closing, Purchaser shall
receive a credit against the Purchase Price for any Condemnation Proceeds received by Sellers.




          SECTION 2.8 Bulk Sales Laws. Purchaser hereby waives compliance by any Seller with
the requirements and provisions of any “bulk-transfer” Laws of any jurisdiction that may otherwise
be applicable with respect to the sale and transfer of any or all of the Purchased Assets to
Purchaser.




          SECTION 2.9 Environmental Matters.




          (a) Until June 1, 2010, Purchaser will have the right, at its sole cost and expense, to
perform environmental investigations of the Real Property, including but not limited to, Phase I
and Phase II environmental site assessments (“Purchaser’s Environmental Diligence”) and
Sellers shall reasonably cooperate with Purchaser in the performance of Purchaser’s Environmental
Diligence. In connection therewith, Purchaser, its agents or employees, will not enter upon any of
the Real Property without twenty-four (24) hours prior notice to Parent, and all tests or
inspections will be scheduled and conducted in a manner which does not violate applicable law or
interfere with any Selling Affiliate’s development work on any portion of the Real Property.
Purchaser, at Purchaser’s sole cost and expense, shall promptly repair any damage to the Real
Property caused in connection with any investigations conducted by Purchaser on the Real Property
pursuant to this Section 2.9. Moreover, prior to any entry upon any portion of the Real
Property, Purchaser will deliver to Parent a certified copy of a commercial general liability
insurance policy with limits of not less than One Million Dollars






-17-









 







($1,000,000.00), combined single limit, insuring against claims for personal injury or death
or property damage occasioned by accidents occurring on the Real Property and relating to or
arising out of Purchaser’s activities pursuant to this Section 2.9. Purchaser shall
promptly provide to Parent copies of any reports or other results of Purchaser’s Environmental
Diligence.




          (b) If, on or before June 1, 2010, Purchaser notifies Parent in writing that Purchaser’s
Environmental Diligence has identified an issue which requires Remediation of any Individual
Property in order for such Individual Property to comply with environmental standards applicable to
residential real estate (as recommended by the applicable consultant conducting such Purchaser’s
Environmental Diligence), the parties will proceed to Closing with respect to such Individual
Property and a portion of the Holdback Amount, equal to the reasonable, good faith estimate as
agreed by Parent and Purchaser, of the total future costs to complete Remediation at the specified
Individual Properties (but in no event more than $1 million in aggregate with regard to all issues
and Individual Properties requiring Remediation) (such amounts, collectively, the
“Environmental Holdback Amount”), shall be designated to secure the performance of such
Remediation (with any amounts of such designated portion in excess of the actual cost of such
Remediation released to Parent in accordance with the terms of the Escrow Closing Agreement). If
Purchaser does not notify Parent of any issues on or before June 1, 2010, it shall be deemed to
have waived any objections or claims with respect thereto. For the avoidance of doubt, no portion
of the Holdback Amount shall be designated to secure Remediation of the matters disclosed to
Purchaser prior to the date hereof, the cost of which Remediation shall be for Purchaser’s account.




          (c) Purchaser shall be entitled to obtain reimbursement for the actual third party costs and
expenses in performing Remediation at the sites identified in paragraph (b) above (“Remediation
Costs”) solely from and to the extent of the Environmental Holdback Amount held by the Escrow
Agent. To obtain such reimbursement, Purchaser shall first present such request for reimbursement
to Parent with a copy to the Escrow Agent, along with invoices reflecting the Remediation Costs for
which Purchaser is then seeking reimbursement. Unless Parent objects to such request in a written
notice delivered to Purchaser, with a copy to the Escrow Agent, within ten (10) Business Days after
the receipt of such request, Escrow Agent shall disburse funds to the Purchaser from the
Environmental Holdback Amount on the fifteenth (15th) Business Day after the date of the
reimbursement request. If Parent objects to the reimbursement request, the Escrow Agent shall
disburse the funds subject to such objection to Purchaser only after receipt of a notice signed by
Parent and Purchaser stating that the dispute has been resolved and setting forth the amount to be
disbursed to Purchaser. At such time as Purchaser has completed any Remediation identified in
accordance with paragraph (b) above and has been reimbursed for such Remediation Costs, Purchaser
shall provide a notice to the Escrow Agent directing the Escrow Agent to disburse to Parent the
remaining balance, if any, of the Environmental Holdback Amount and the Escrow Agent shall disburse
such funds within five (5) Business Days after the date of such notice.




          SECTION 2.10 Title and Survey.




          (a) Until June 1, 2010, Purchaser may, at its sole cost and expense, obtain a Title Commitment
covering all or some of the Individual Properties from the Title Company and may, at Purchaser’s
option and at its sole cost and expense, obtain a current Survey of all or any






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portion of all or some of the Individual Properties. Until June 1, 2010, Purchaser may
deliver, from time to time, written notice (a “Title Objection Notice”) to Parent
identifying any exceptions to title or any survey matters affecting any Individual Property which
are not Permitted Liens (within clauses (a), (b), (c), (e), and (f) of the definition thereof)
(“Title Objections”) which are disclosed in the Title Commitment or Survey. Any title or
survey matters affecting any Individual Property which are not identified by Purchaser as Title
Objections pursuant to a Title Objection Notice delivered to Parent within the time period set
forth above which exist on the Closing Date shall be conclusively deemed to be acceptable to
Purchaser and shall thereafter be conclusively deemed to be part of the Permitted Liens for all
purposes under this Agreement.




          (b) If Purchaser delivers written notice of Title Objections pursuant to a Title Objection
Notice to Parent on or before June 1, 2010:





     (i) to the extent the Sellers are able to deliver good and marketable fee simple title
to the applicable Individual Property, and provided that such Title Objections do not
materially interfere with Purchaser’s ability to develop the applicable Individual Property
as residential building lots, the parties shall proceed to Closing with respect to such
Individual Property and the Purchase Price payable at the Closing shall be reduced by an
agreed upon amount to reflect diminution of value of such Individual Property due to such
Title Objections; provided, that Parent may exclude such Individual Property from
the Closing and the Purchase Price payable at the Closing shall be reduced by the Purchase
Price allocable to such Individual Property and at such time as Parent has cured such Title
Objections Purchaser shall then purchase such Individual Property in accordance with the
terms of this Agreement; and




     (ii) to the extent Sellers are unable to deliver good and marketable fee simple title
to the Individual Property, or to the extent that the Title Objections would materially
interfere with Purchaser’s ability to develop the applicable Individual Property as
residential building lots, the parties shall proceed to Closing without Purchaser acquiring
such Individual Property, and the Purchase Price payable at the Closing shall be reduced by
the amount of the Purchase Price allocable to such Individual Property.


In the event that Purchaser and Sellers are unable to agree upon the manner in which a Title
Objection is to be resolved in accordance with this paragraph, then the applicable Individual
Property shall be excluded from the Closing, the Purchase Price payable at the Closing shall be
reduced by the Purchase Price allocable to such Individual Property, and, at such time as such
dispute has been resolved, Purchaser shall purchase such Individual Property in accordance with the
terms of this Agreement, subject to the terms upon which the disputed Title Objection shall have
been resolved.




          SECTION 2.11 Assignment of HOA Documents. To the extent that a Seller is the
declarant, or an assignee of a declarant, under the applicable HOA Documents for an Individual
Property, such Seller shall obtain all necessary consents (other than consents of any Governmental
Body) to assignment of its rights as declarant, or assignee of a declarant, and shall duly and
validly assign all such rights to Purchaser at Closing; provided, in the event that any
such assignment is not effected as to any Individual Property at Closing, Purchaser may exclude





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such Individual Property from the Closing and the Purchase Price payable at the Closing shall
be reduced by the Purchase Price allocable to such Individual Property; provided,
further, that at such time as such Seller is capable of effecting such assignment,
Purchaser shall acquire such Individual Property upon payment of the Purchase Price allocable to
such Individual Property. Seller shall use commercially reasonable efforts to obtain such consents
(and cooperate with Purchaser obtaining such consents of Governmental Bodies and until receipt
thereof, at Purchaser’s sole cost, expense, and liability, Seller shall take such other actions as
declarant thereunder that Purchaser may reasonably request) and effect such assignments for each
Individual Property, including with respect to any Individual Properties excluded from Closing
pursuant to this Section 2.11. Once such consents are obtained and such assignments are
effected, Purchaser shall purchase such Individual Properties in accordance with the terms of this
Agreement.




          SECTION 2.12 Allocation of Purchase Price. Prior to the Closing Date, Purchaser shall
deliver to Parent a schedule (the “Allocation Schedule”) setting forth its proposed
allocation of the Purchase Price (including the Assumed Liabilities) among the Purchased Assets.
The Allocation Schedule shall be reasonable and shall be prepared in accordance with Section 1060
of the Code and the Treasury Regulations thereunder. Parent agrees that promptly after receiving
said Allocation Schedule, it shall return an executed copy thereof to Purchaser with any proposed
adjustments thereto. Purchaser and Parent shall promptly thereafter agree on allocations of the
Purchase Price that satisfy applicable law and regulations. Purchaser and Parent each agree to use
such allocations for purposes of paying any transfer or similar Taxes and to file Internal Revenue
Service Form 8594, and all federal, state, local and foreign Tax Returns in accordance with the
Allocation Schedule. Purchaser and Parent each agree to provide the other promptly with any other
information required to complete Form 8594.




ARTICLE III

CONSIDERATION




          SECTION 3.1 Consideration. At the Closing, as consideration for the Purchased Assets,
Purchaser shall (a) pay to Seller an amount in cash equal (i) to $170,000,000 (the “Base
Purchase Price”), minus (ii) any Purchase Price reduction pursuant to Sections
2.7, 2.9(b), 2.10(b), 2.11, 8.2, 9.1(a), or
9.1(c), plus (iii) any Purchase Price increase pursuant to Section 8.12,
plus (iv) the Estimated Closing Adjustment (which amount may be positive or negative),
minus (v) the Sellers’ Assumed Cure Amounts Purchase Price Reduction (as determined in
Section 3.1(c)) (as so adjusted, the “Purchase Price”), and (b) assume the Assumed
Liabilities. The Purchase Price shall be payable as follows:





     (a) On or prior to the first Business Day following the date of this Agreement,
Purchaser shall pay to the Escrow Agent one half of the Deposit to be held in escrow
pursuant to the terms and conditions of this Agreement and the Escrow Deposit Agreement. On
or prior to the deadline for submitting Qualified Bids, Purchaser shall pay to the Escrow
Agent the balance of the Deposit to be held in escrow pursuant to the terms and conditions
of this Agreement and the Escrow Deposit Agreement.




     (b) On the Closing Date, Purchaser shall:



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          (i) pay an amount to Parent, by wire transfer of immediately available funds
into an account designated by Parent, equal to ninety percent (90%) of the Purchase
Price less the Deposit (which Deposit shall be released by the Escrow Agent to
Parent); and




          (ii) deposit into an account with the Escrow Agent, subject to the terms of the
Escrow Closing Agreement, an amount equal to ten percent (10%) of the Purchase Price
(such amount, the “Holdback Amount”). The parties hereby agree that the
Holdback Amount shall only be released to the Purchaser in connection with an
adjustment pursuant to Section 3.2 or a reimbursement pursuant to
Section 2.9 and if not otherwise so released shall be released to Parent on
the later of (x) 60 days after the Closing and (y) the resolution of any dispute
with respect to an adjustment pursuant to Section 3.2 (or, in the case of
any Holdback Amount designated to secure performance of Remediation under
Section 2.9, upon completion of such Remediation in a manner reasonably
mutually satisfactory to the parties); provided, that Sellers’ obligation to
pay Purchaser pursuant to Section 3.2 shall not be limited to the Holdback
Amount; provided further, that if Parent (i) disputes the
calculation of the Closing Adjustment and delivers a Dispute Notice under
Section 3.2(c), or (ii) objects to a request for reimbursement in connection
with the performance of Remediation pursuant to Section 2.9, upon resolution
of such dispute or objection in accordance with Sections 3.2(c) or
2.9, respectively, the parties shall deliver to the Escrow Agent a joint
written notice signed by Parent and Purchaser stating that the dispute or objection,
as the case may be, has been resolved and setting forth the amounts to be disbursed
to Purchaser or released to Parent, as applicable.




     (c) For purposes of Section 3.1, the “Sellers’ Assumed Cure Amounts Purchase
Price Reduction” shall be an amount equal to: (i) the aggregate amount of all Sellers’
Assumed Cure Amounts that have been approved by the Bankruptcy Court on or prior to the
Closing Date, plus (ii) the aggregate amount of all Estimated Seller Assumed Cure
Amounts. An “Estimated Seller Assumed Cure Amount” shall mean the cure amount alleged to be
payable as of the Closing Date, by a party to a Sellers’ Assumed Cure Amounts Contract other
than the Sellers, for a Sellers’ Assumed Cure Amounts Contract for which the Sellers’
Assumed Cure Amounts has not been approved by the Bankruptcy Court on or prior to the
Closing Date. Notwithstanding anything to the contrary contained herein, for each Sellers’
Assumed Cure Amounts Contract for which the Sellers’ Assumed Cure Amounts has not been
approved by the Bankruptcy Court on or prior to the Closing Date, upon approval by the
Bankruptcy Court following the Closing of the actual amount of the Sellers’ Assumed Cure
Amounts which is payable for such Sellers’ Assumed Cure Amounts Contract, Purchaser shall
pay Sellers an amount equal to the excess, if any, of the Estimated Seller Assumed Cure
Amount for such Sellers’ Assumed Cure Amounts Contract over such actual amount of the
Sellers’ Assumed Cure Amounts payable for such Sellers’ Assumed Cure Amounts Contract, with
such excess payment to be made within seven (7) Business Days after Sellers give Purchaser
notice that the Bankruptcy Court has approved the actual amount of the Sellers’ Assumed Cure
Amounts payable for such Sellers’ Assumed Cure Amounts



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Contract (which notice shall indicate the amount of the Sellers’ Assumed Cure Amounts
approved by the Bankruptcy Court).




          SECTION 3.2 Closing Adjustment.




          (a) Not later than three (3) Business Days before the Closing, the Parent shall deliver to the
Purchaser a certificate of the Parent that sets forth in reasonable detail the Parent’s estimate of
the Closing Adjustment (the “Estimated Closing Adjustment”), along with reasonable
supporting detail therefor, and confirming that the Estimated Closing Adjustment was prepared in
good faith. The Estimated Closing Adjustment shall take into account only those Qualified
Development Costs that have been paid by or on behalf of Seller prior to the Closing.




          (b) Calculation. As promptly as practicable, but in no event later than forty-five
(45) days following the Closing Date, the Purchaser shall, (i) cause to be prepared, a statement
(the “Closing Date Schedule”) setting forth in reasonable detail the Purchaser’s
calculation of the Closing Adjustment and (ii) deliver to the Parent the Closing Date Schedule,
together with a certificate of the Purchaser confirming that the Closing Date Schedule was prepared
in good faith. The Closing Date Schedule shall take into account all Qualified Development Costs
that have been paid after February 28, 2010 and prior to the delivery of the Closing Date Schedule,
provided that the costs, fees, and expenses related thereto were incurred after February 28, 2010
and prior to the Closing.




          (c) Review; Disputes.




          (i) The Purchaser and the Parent shall, and shall cause their respective representatives to,
cooperate and assist in the preparation of the Closing Date Schedule and the calculation of Closing
Adjustment and in the conduct of the review referred to in this Section 3.2, including the
making available to the extent necessary of books, records, work papers and personnel. Upon
request, Parent shall make available to Purchaser evidence of payment of all Qualified Development
Costs reflected on the Closing Schedule.




          (ii) If the Parent disputes the calculation of the Closing Adjustment, then the Parent shall
deliver a written notice disagreeing with the calculation and setting forth the Parent’s
calculation of such amount (a “Dispute Notice”) to the Purchaser at any time during the
fifteen (15) day period commencing upon receipt by the Parent of the Closing Date Schedule and the
related certificate from the Purchaser, all as prepared by the Purchaser in accordance with the
requirements of Section 3.2(b) (the “Review Period”). The Dispute Notice shall set
forth the basis for the dispute of any such calculation in reasonable detail.




          (iii) If the Parent does not deliver a Dispute Notice to the Purchaser prior to the expiration
of the Review Period, the Purchaser’s calculation of the Closing Adjustment set forth in the
Closing Date Schedule shall be deemed final and binding on the Sellers and Purchaser for all
purposes.




          (iv) If the Parent delivers a Dispute Notice to the Purchaser prior to the expiration of the
Review Period, then the Parent and the Purchaser shall use commercially reasonable efforts to reach
agreement on the Closing Adjustment. If the Parent and the Purchaser are unable to reach agreement
on the Closing Adjustment within fifteen (15) days after






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the end of the delivery of the Dispute Notice, either party shall have the right to refer such
dispute to the Accountants for resolution and (i) each of the Purchaser and the Parent shall have a
reasonable opportunity to submit to the Accountants a written statement of their positions as to
any disputed issues with respect to the calculation of any of the Closing Adjustment; (ii) the
Accountants shall determine the Closing Adjustment in accordance with the terms of this Agreement
within fifteen (15) days of such referral and upon reaching such determination shall deliver a copy
of its calculations (the “Final Calculations”) to the Purchaser and the Parent; and (iii)
the determination made by the Accountants of the Closing Adjustments shall be final and binding on
the Sellers and the Purchaser for all purposes of this Agreement. In calculating the Closing
Adjustments, the Accountants (i) shall be limited to addressing any particular disputes referred to
in the Dispute Notice and (ii) such calculation shall, with respect to any disputed item, be no
greater than the higher amount calculated by the Parent or the Purchaser, and no less than the
lower amount calculated by the Parent or the Purchaser, as the case may be. The Final Calculations
shall reflect in detail the differences, if any, between the Closing Adjustment reflected therein
and the Closing Adjustment set forth in the Closing Date Schedule.




          (d) Payment Upon Final Determination of the Closing Adjustment.




          (i) If (A) the Estimated Closing Adjustment is greater than (B) the Closing Adjustment, as
finally determined in accordance with Section 3.2(c), then the Escrow Agent shall pay to
the Purchaser an amount equal to the difference between the Estimated Closing Adjustment and the
Closing Adjustment (from dollar one).




          (ii) If (A) the Closing Adjustment, as finally determined in accordance with Section
3.2(c), is greater than (B) the Estimated Closing Adjustment, then the Purchaser shall pay to
the Sellers an amount equal to the difference between the Closing Adjustment and the Estimated
Closing Adjustment (from dollar one).




          (iii) Any amounts payable pursuant to this Section 3.2(d) shall be paid in cash within
three (3) Business Days following the final determination of the Closing Adjustment by wire
transfer of immediately available funds to an account designated by Seller or Purchaser, as
applicable.




          SECTION 3.3 Sole Adjustments. In determining the Base Purchase Price, the Purchaser
has conducted its own investigation, analysis and evaluation of the assets, liabilities and
financial condition of the Sellers and the Purchased Assets, including without limitation the
vertical construction costs of homes under construction or to be constructed, site improvement
budgets (including related to land expenditures, dedication costs, lot finishing, land
entitlements, developer agreements, bonding requirements and contingencies), overhead, orders,
cancellations, unit counts, homes under backlog (whether or not construction has commenced),
impairment of the value of the Real Property, the documents relating to the JV Real Property and
the Liabilities of the JV Investors in connection therewith. Except to the extent expressly set
forth in Sections 2.7, 2.9(b), 2.10(b), 2.11, 3.2,
8.2, 8.12, 9.1(a), or 9.1(c), the Purchase Price shall not be
subject to adjustment, irrespective of any diligence performed by Purchaser or other events or
developments subsequent to the date hereof. In that regard, Purchaser acknowledges that Parent
will record material additional impairment charges and accruals and other costs relating to the






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Purchased Assets and the restructuring and Bankruptcy Case in the financial statements to be
delivered to Purchaser pursuant to Section 8.14.




ARTICLE IV

CLOSING AND TERMINATION




          SECTION 4.1 Closing Date. Subject to the satisfaction of the conditions set forth in
Section 9.1, Section 9.2 and Section 9.3 hereof (or the waiver thereof by
the party entitled to waive that condition), the closing of the purchase and sale of the Purchased
Assets and the assumption of the Assumed Liabilities provided for in Article II hereof (the
“Closing”) shall take place at the offices of Cahill Gordon & Reindel llp located
at 80 Pine Street, New York, New York (or at such other place as the parties may designate in
writing) at 12 p.m. (eastern time) on the date that is two (2) Business Days following the
satisfaction or waiver of the conditions set forth in Article IX (other than conditions
that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver
of such conditions), unless another time or date, or both, are agreed to in writing by the parties
hereto. The date on which the Closing shall be held is referred to in this Agreement as the
“Closing Date.” Unless otherwise agreed by the parties in writing, the Closing shall be
deemed effective and all right, title and interest of Sellers to be acquired by Purchaser hereunder
shall be considered to have passed to Purchaser as of 12:01 a.m. (eastern time) on the Closing
Date.




          SECTION 4.2 Deliveries by Sellers. At the Closing, Sellers shall deliver, or cause to
be delivered, to Purchaser:





     (a) subject to the provisions of Section 2.10 and Section 2.11, with
respect to the Real Property (other than the JV Real Property), one or more special warranty
deeds or local equivalents conveying the Real Property subject only to Permitted Liens;




     (b) an assignment and assumption agreement substantially in the form attached hereto as
Exhibit D (the “JV Assignment”), and such other documents reasonably
required by Purchaser, evidencing the transfer to Purchaser of the Sellers’ interests in the
JV Investors;




     (c) a duly executed bill of sale substantially in the form attached hereto as
Exhibit E (the “Bill of Sale”);




     (d) a duly executed assignment and assumption agreement substantially in the form
attached hereto as Exhibit F, with respect to the Purchased Leases and the Purchased
Contracts (the “Assignment and Assumption Agreement”);




     (e) executed intellectual property assignments and licenses with respect to Documents
and Intellectual Property included in the Purchased Assets, including any such Documents
which respect to which the Sellers are licensees, all in form and substance reasonably
acceptable to the parties and as may be necessary to assign or license, as the case may be,
the Documents and Intellectual Property included in the Purchased Assets (such assignments
and licenses, the “IP Assignments”);



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     (f) the officer’s certificate required to be delivered pursuant to Section
9.1(a) and Section 9.1(b);




     (g) an affidavit of non-foreign status complying with the requirements of Treasury
Regulation section 1.1445-2 from each Person treated as a Seller for United States federal
income Tax purposes;




     (h) subject to the provisions of Section 2.11, with respect to any HOA, an
assignment of all rights of Sellers as declarant under the applicable HOA Documents, in form
and substance reasonably acceptable to the parties and in a form for recordation in the
applicable land records together with a resignation executed by each individual designated
or appointed to the board of directors or other governing body of any HOA by any Seller
resigning from such board of directors or other governing body;




     (i) organizational documents, resolutions, incumbency certificates and other documents
as to the authority of Sellers as may be required by the Title Company;




     (j) a so-called owner’s affidavit and such other documentation as may be required by
the Title Company in order to issue one or more title insurance policies to Purchaser;




     (k) evidence, satisfactory to Purchaser in its sole discretion, that there will be no
default under the organizational documents of the JV Entities after giving effect to the
Closing;




     (l) all other instruments of conveyance and transfer (including applicable Transfer Tax
forms and filings), in form and substance reasonably acceptable to Purchaser or as may be
required by the Title Company, as may be necessary to convey the Purchased Assets to
Purchaser or to issue policies of title insurance to Purchaser with respect to the Purchased
Assets; and




     (m) possession of the Purchased Assets.



          SECTION 4.3 Deliveries by Purchaser. At the Closing, Purchaser shall deliver to
Seller or the Escrow Agent:





     (a) the Purchase Price less the Deposit, in immediately available funds, as set forth
in Section 3.1 hereof;




     (b) executed counterparts to the JV Assignments;




     (c) executed counterparts to the Bill of Sale;




     (d) executed counterparts to the Assignment and Assumption Agreement;




     (e) executed counterparts to the IP Assignments;



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     (f) the officer’s certificate required to be delivered pursuant to Section
9.2(a) and Section 9.2(b); and




     (g) such other documents, instruments and certificates to evidence the assignment of
the Purchased Assets and the assumption of the Assumed Liabilities as Seller may reasonably
request.



          SECTION 4.4 Termination of Agreement. This Agreement may be terminated prior to the
Closing as follows:





     (a) by Purchaser, if the Bankruptcy Court shall not have entered (i) the Bidding
Procedures Order on or before the date that is ten (10) Business Days following the hearing
at which the Bidding Procedures Order is considered, or (ii) the Sale Order on or before the
date that is ten (10) Business Days following the hearing at which the Sale Order is
considered, unless extended to a later date by mutual consent of Sellers and Purchaser;




     (b) by Purchaser or Sellers, if the Closing shall not have occurred by the close of
business on the Outside Date; provided, however, that if the Closing shall
not have occurred on or before the Outside Date due to a material breach of any
representations, warranties, covenants or agreements contained in this Agreement by
Purchaser, on the one hand, or any of the Sellers, on the other hand, then the breaching
party (or parties) may not terminate this Agreement pursuant to this Section 4.4(b);




     (c) by mutual written consent of Parent and Purchaser;




     (d) by Purchaser, if on or prior to the Outside Date, any of the conditions to the
obligations of Purchaser set forth in Section 9.1 or Section 9.3 shall have
become incapable of fulfillment other than as a result of a breach by Purchaser of any
covenant or agreement contained in this Agreement, and such condition is not waived by
Purchaser;




     (e) by the Sellers, if on or prior to the Outside Date, any condition to the
obligations of the Sellers set forth in Section 9.2 or Section 9.3 shall
have become incapable of fulfillment other than as a result of a breach by the Sellers of
any covenant or agreement contained in this Agreement, and such condition is not waived by
the Sellers;




     (f) by Purchaser, if there shall be a breach by Sellers of any representation or
warranty, or any covenant or agreement contained in this Agreement which would result in a
failure of a condition set forth in Section 9.1 or Section 9.3 and which
breach cannot be cured or has not been cured by the earlier of (i) thirty (30) days after
the giving of written notice by Purchaser to Parent of such breach and (ii) the Outside
Date;




     (g) by Sellers, if there shall be a breach by Purchaser of any representation or
warranty, or any covenant or agreement contained in this Agreement which would result in a
failure of a condition set forth in Section 9.2 or Section 9.3 and which
breach cannot be cured or has not been cured by the earlier of (i) thirty (30) days after
the giving of written notice by Parent to Purchaser of such breach and (ii) the Outside
Date;



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     (h) by Sellers or Purchaser if there shall be in effect a final nonappealable Order of
a Governmental Body of competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby;




     (i) by Purchaser or Sellers, if the Bankruptcy Court shall enter an order approving a
Competing Transaction; or




     (j) by Purchaser, if Parent or Sellers withdraw or seek authority to withdraw their
motion seeking approval of the transactions contemplated by this Agreement, or announces any
stand alone plan of reorganization or liquidation (or supports any such plan filed by any
other party).



          SECTION 4.5 Procedure Upon Termination.




          (a) In the event of termination by Purchaser or Sellers, or both, pursuant to Section
4.4 hereof, written notice thereof shall forthwith be given to the other party or parties, and
this Agreement shall terminate, and the purchase of the Purchased Assets hereunder shall be
abandoned, without further action by Purchaser or Parent.




          (b) If this Agreement is terminated as provided herein each party shall redeliver all
documents, work papers and other material of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof, to the party
furnishing the same.




          SECTION 4.6 Effect of Termination.




          (a) Except as otherwise set forth in this Agreement, in the event that this Agreement is
validly terminated as provided herein, then each of the parties shall be relieved of its duties and
obligations arising under this Agreement after the date of such termination and such termination
shall be without liability to Purchaser or Sellers; provided, however, that the
obligations of the parties set forth in this Section 4.6 and Section 8.6 and
Section 8.7 hereof shall survive any such termination and shall be enforceable hereunder.




          (b) Except as otherwise expressly provided herein, nothing in this Section 4.6 shall
relieve Purchaser or Sellers of any liability for a breach of this Agreement prior to the date of
termination. The damages recoverable by the non-breaching party shall include all attorneys’ fees
reasonably incurred by such party in connection with the transactions contemplated hereby.




          (c) Notwithstanding Section 4.6(a), if this Agreement is terminated pursuant to
Section 4.4(a)(ii), (b), (d) (but only if Purchaser terminates this
Agreement pursuant to such Section 4.4(d) by reason of the failure of the condition set
forth in Section 9.1 or Section 9.3(b) to be satisfied), (e) (but only if Sellers
terminate this Agreement pursuant to such Section 4.4(e) by reason of the failure of the
condition set forth in Section 9.3(b) to be satisfied), (f), (i), or
(j), then Sellers shall pay to Purchaser, by wire transfer of immediately available funds,
within five (5) Business Days of such termination, the Expense Reimbursement.




          (d) Notwithstanding Section 4.6(a), if this Agreement is terminated other than
pursuant to Section 4.4(c), (d) (unless Purchaser terminates this Agreement
pursuant to such






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Section 4.4(d) by reason of the failure of the condition set forth in Section
9.1 or Section 9.3(b) to be satisfied), (e) (unless Sellers terminate this
Agreement pursuant to such Section 4.4(e) by reason of the failure of the condition set
forth in Section 9.3(b) to be satisfied), (g) or (h), and, within twelve
(12) months after such termination, Parent and/or one or more of the Sellers sell, transfer or
otherwise dispose, directly or indirectly, including through an asset sale, stock sale, merger or
other similar transaction, all or a material portion of the Purchased Assets or the homebuilding
lots and real estate of the Parent and its subsidiaries located in any state other than New York
acquired subsequently to the date hereof, in a transaction or series of transactions with one or
more parties other than the Purchaser (such transaction or series of transactions, a “Competing
Transaction”), then, at the closing of any such Competing Transaction, Sellers shall pay to
Purchaser, by wire transfer of immediately available funds, the Termination Fee plus the Expense
Reimbursement (reduced by the amount of any Expense Reimbursement previously paid hereunder) as
liquidated damages, and not as a penalty, and Sellers shall have no other liability to Purchaser
under this Agreement or in connection with the transactions contemplated hereby.




          (e) In the event of a termination of this Agreement other than pursuant to Section 4.4
(g), Sellers shall cause the Escrow Agent to return to Purchaser the Deposit, by wire transfer
of immediately available funds within five (5) Business Days of such termination. In the case of a
termination pursuant to Section 4.4(g), Sellers shall be entitled to retain the Deposit
without limitation of any other remedies available to it hereunder.




ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLERS




          Subject to such exceptions as are disclosed in the Disclosure Schedule delivered by the
parties concurrently with the execution of this Agreement (the “Disclosure Schedule”),
Parent and Sellers hereby represent and warrant to Purchaser as follows:




          SECTION 5.1 Organization and Good Standing; Status of Sellers.




          (a) Parent is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its Business as now conducted. Parent is duly qualified or
authorized to do business as a foreign corporation and is in good standing under the laws of each
jurisdiction in which it owns or leases real property and each other jurisdiction in which the
conduct of its business or the ownership of its properties requires such qualification or
authorization, except where the failure to be so qualified, authorized or in good standing would
not have a Material Adverse Effect. Each Selling Affiliate and JV Investor is an entity duly
organized, validly existing and in good standing under the laws of the state of its formation or
organization and has all requisite power and authority to own, lease and operate its properties and
to carry on its Business as now conducted. Each Selling Affiliate and JV Investor is duly
qualified or authorized to do business as a foreign entity and is in good standing under the laws
of each jurisdiction in which it owns or leases real property and each other jurisdiction in which
the conduct of its business or the ownership of its properties requires such qualification or
authorization, except where the failure to be so qualified, authorized or in good standing would
not have a Material Adverse Effect.







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          (b) Each of the Sellers, other than OHI PA, LLC and OHI NJ, LLC, is a debtor in the Bankruptcy
Case.




          SECTION 5.2 Authorization of Agreement. Except for such authorization as is required
by the Bankruptcy Court (as hereinafter provided for), each Seller has all requisite power,
authority and legal capacity to execute and deliver this Agreement and each other agreement,
document, or instrument or certificate contemplated by this Agreement and to which it is a party or
to be executed by such Seller in connection with the consummation of the transactions contemplated
by this Agreement (such other agreements, documents, instruments or certificates, the “Seller
Documents”), to perform its respective obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and
the Seller Documents and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all requisite corporate action on the part of each Seller. This Agreement
has been, and each of the Seller Documents will be at or prior to the Closing, duly and validly
executed and delivered by each Seller which is a party thereto and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and
each of the Seller Documents when so executed and delivered will constitute, legal, valid and
binding obligations of such Seller in accordance with their respective terms, subject only to entry
of the Sale Order.




          SECTION 5.3 Conflicts; Consents of Third Parties.




          (a) None of the execution and delivery by Parent of this Agreement or by each Seller of the
Seller Documents, the consummation of the transactions contemplated hereby or thereby, or
compliance by each Seller with any of the provisions hereof or thereof will conflict with, or
result in any material violation of or material default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination or cancellation under any provision of (i)
the certificate of incorporation and by-laws or comparable organizational documents of such Seller;
(ii) subject to entry of the Sale Order, any Contract or Permit to which such Seller or any
agreement or Permit to which any JV Investor is a party or by which any of the properties or assets
of such Seller or any JV Investor are bound; (iii) subject to entry of the Sale Order, any Order of
any Governmental Body applicable to such Seller or any of the properties or assets of such Seller
as of the date hereof; or (iv) subject to entry of the Sale Order, any applicable Law.




          (b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on the part of any Seller in
connection with the execution and delivery of this Agreement or the Seller Documents, the
compliance by such Seller with any of the provisions hereof or thereof, the consummation of the
transactions contemplated hereby or thereby or the taking by such Seller of any other action
contemplated hereby or thereby, except for (i) compliance with the applicable requirements of the
HSR Act, and (ii) the entry of the Sale Order.




          SECTION 5.4 Financial Advisors. No Person is entitled to any brokerage, financial
advisory, finder’s or similar fee or commission payable by the Sellers in connection with the
transactions contemplated by this Agreement for which the Purchaser or any of its Affiliates could
be liable.







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          SECTION 5.5 Title to Assets.




          (a) Upon receipt of the approval of the Bankruptcy Court pursuant to the Sale Order, and
consummation of the deliveries at the Closing, Parent and each of the Sellers shall have delivered
to Purchaser, and Purchaser shall have, good and, as applicable, marketable title to, or a valid
leasehold interest in, all of the Purchased Assets free and clear of all Liens other than Permitted
Liens. To the Knowledge of Seller, no portion of the Real Property or any improvement thereon is
the subject of, or affected by, any condemnation or eminent domain proceedings or other proceeding
challenging good and marketable title to the Purchased Assets, currently instituted or pending, and
to the Knowledge of Seller, no such proceedings are threatened.




          (b) Each JV Entity has good and, as applicable, marketable title to, or a valid leasehold
interest in, the applicable JV Real Property set forth opposite its name on Schedule
5.5(b), in each case free and clear of all Liens other than Permitted Liens. To the Knowledge
of Seller, no portion of JV Real Property or any improvement thereon owned by any of the JV
Entities is the subject of, or affected by, any condemnation or eminent domain proceedings or other
proceeding challenging good and marketable title to the JV Real Property, currently instituted or
pending, and to the Knowledge of Seller, no such proceedings are threatened.




          (c) The JV Interests and the interests in the JV Investors have been duly authorized and
validly issued and are owned beneficially and of record by the applicable JV Investor and Seller,
respectively, free and clear of all Liens other than Permitted Liens, and were not (i) issued in
violation of, and are not subject to, the preemptive rights of any Person, (ii) issued in violation
of, and are not subject to, any agreement or Contract (including any right of first offer or right
of first refusal) (other than the applicable joint venture agreements and other organizational
documents of the relevant Persons) or (iii) issued in violation of any Laws, statutes, orders,
decrees, rules, regulations or judgments of any Governmental Body. Other than this Agreement and
the applicable joint venture agreement with respect to the JV Real Property, there is no agreement
between the applicable Sellers and any other Person with respect to the disposition of or otherwise
relating to the interests in the JV Investors.




          SECTION 5.6 Contracts. Sellers have made available to Purchaser true and correct
copies of all of the Purchased Contracts and the Purchased Leases.




          SECTION 5.7 Legal Compliance; Permits.




          (a) To the Knowledge of Seller, Sellers have, in connection with the Real Property, complied
and are currently in compliance in all material respects with all applicable Laws, and (i) to the
Knowledge of Seller, no condition exists which, with or without notice or passage of time or both,
shall cause Sellers not to remain in compliance, and (ii) no material action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced
against any Seller alleging any failure so to comply. Sellers have received no notification, and
have no Knowledge that any notification could reasonably be expected to be forthcoming, from any
Governmental Body relating to the Purchased Assets:




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(i) asserting that Sellers are not in
compliance with any applicable Laws or (ii) notifying Sellers of any investigation by any such
Governmental Body.




          (b) To the Knowledge of Seller, no condition exists and no event has occurred which could
reasonably be expected to cause the revocation of any Permit relating to the Purchased Assets, and
no Seller has received any notice of any proceeding relating to the revocation or modification of
any such Permit.




          SECTION 5.8 Environmental.




          (a) To the Knowledge of Sellers, there are no conditions, facilities, procedures or any other
facts or circumstances which could reasonably be expected to give rise to material claims,
expenses, losses, liabilities or governmental action or require remediation (i) in connection with
any hazardous substances released at, on or under, present at, or disposed from, the Real Property,
(ii) arising under any environmental laws with respect to any Real Property, or (iii) otherwise
arising from any of Seller’s activities at the Real Property involving hazardous substances.




          (b) Sellers have furnished to Purchaser copies of all environmental assessments or audits in
their possession or under their control that relate to Sellers’ compliance with applicable
environmental laws or the environmental condition of the Real Property.




          SECTION 5.9 Intellectual Property.




          (a) To the Knowledge of Sellers, the Sellers own or possess valid rights to use and exploit
all architectural plans, specifications, and other Intellectual Property included in the Purchased
Assets. Sellers have the right to transfer to Purchaser all of their rights with respect to any
such Intellectual Property.




          (b) To the Knowledge of Sellers, none of the Sellers has infringed, misappropriated or
otherwise violated, or is infringing, misappropriating or otherwise violating any Intellectual
Property right of any other Person in connection with the activities of Sellers relating to the
Real Property and other Purchased Assets. During the past two (2) years, none of the Sellers has
received any written claim or written notice from any Person alleging infringement,
misappropriation or any other violation of Intellectual Property rights or challenging the
validity, enforceability, use or ownership of the Sellers’ interest in the Intellectual Property
that is included in the Purchased Assets. To the Knowledge of Sellers, no Person has infringed,
misappropriated or otherwise violated, or is infringing, misappropriating or otherwise violating
any Intellectual Property that is included in the Purchased Assets.




          SECTION 5.10 Tax Matters.




          (a) All material Tax Returns required to be filed by or with respect to any Sellers have been
timely filed (taking into account any extension of time within which to file) and all Taxes of the
Sellers that are due and payable have been paid in full.




          (b) No deficiency for any amount of Taxes has been proposed, asserted or assessed in writing
by any Governmental Body against any Seller that remains unpaid. There are




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no audits, examinations or other administrative or judicial Legal Proceedings currently ongoing or pending with respect to
any Taxes of any Seller. There are no waivers or extensions of any
statute of limitations currently in effect with respect to Taxes of any Seller, other than
with respect to currently open audits that are disclosed on Schedule 5.10(b).




          (c) All material amounts of Taxes required to be withheld or collected by any Seller have been
withheld and collected and, to the extent required by Law, timely paid to the appropriate
Governmental Body.




          (d) There are no Liens for Taxes upon any Purchased Assets, except for Permitted Liens.




          (e) None of the Sellers is a “foreign person” within the meaning of Section 1445 of the Code.




          SECTION 5.11 JV Investors.




          (a) The equity interests in each of the JV Investors is owned in the percentages and by the
Persons set forth on Schedule 5.5(b).




          (b) No JV Investor owns any assets other than a JV Interest. No JV Investor has any
Liabilities other than Liabilities under the applicable partnership, limited liability company, or
similar organizational document of the applicable JV Entity or Liabilities incurred in connection
with the development of the applicable JV Real Property, which Liabilities are set forth on
Schedule 2.3(b).




ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF PURCHASER




          Subject to such exceptions as are disclosed in the Disclosure Schedule delivered by the
parties concurrently with the execution and delivery of this Agreement, Purchaser hereby represents
and warrants to Parent as follows:




          SECTION 6.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the Commonwealth of Virginia and
has all requisite power and authority to own, lease and operate its properties and to carry on its
business as now conducted.




          SECTION 6.2 Authorization of Agreement. Purchaser has full power and authority to
execute and deliver this Agreement and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by Purchaser or its designees in connection with
the consummation of the transactions contemplated hereby and thereby (the “Purchaser
Documents”), and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and each Purchaser Document have been duly
authorized by all necessary corporate action on behalf of Purchaser or its designees. This
Agreement has been, and each Purchaser Document will be at or prior to the Closing, duly executed
and delivered and (assuming the due authorization, execution and delivery by the other parties
hereto and thereto) this Agreement constitutes, and each Purchaser Document when so




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executed and delivered will constitute, the legal, valid and binding obligations of Purchaser or its designees,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).




          SECTION 6.3 Conflicts; Consents of Third Parties.




          (a) Except as set forth on the Disclosure Schedule, none of the execution and delivery by
Purchaser of this Agreement or the Purchaser Documents, the consummation of the transactions
contemplated hereby or thereby, or the compliance by Purchaser with any of the provisions hereof or
thereof will conflict with, or result in any violation of or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination or cancellation under any
provision of (i) the organizational documents of Purchaser, (ii) any Contract or Permit to which
Purchaser is a party or by which Purchaser or its properties or assets are bound or (iii) any Order
of any Governmental Body applicable to Purchaser or by which any of the properties or assets of
Purchaser are bound or (iv) any applicable Law, other than any such conflicts, violations, or
defaults that would not reasonably be expected to have a material adverse effect on the ability of
Purchaser to perform its obligations under this Agreement or to consummate the transactions
contemplated hereby.




          (b) No material consent, waiver, approval, Order, Permit or authorization of, or declaration
or filing with, or notification to, any Person or Governmental Body is required on the part of
Purchaser in connection with the execution and delivery of this Agreement or the Purchaser
Documents, the compliance by Purchaser with any of the provisions hereof or thereof, the
consummation of the transactions contemplated hereby or thereby or the taking by Purchaser of any
other action contemplated hereby or thereby, or for Purchaser to conduct the Business, except for
compliance with the applicable requirements of the HSR Act, the entry of the Sale Order, and to the
extent the failure to obtain such consents would not reasonably be expected to have a material
adverse effect on the ability of Purchaser to perform its obligations under this Agreement or to
consummate the transactions contemplated hereby.




          SECTION 6.4 Financial Advisors. No Person is entitled to any brokerage, financial
advisory, finder’s or similar fee or commission payable by the Purchaser or any of its Affiliates
in connection with the transactions contemplated by this Agreement for which any of the Sellers or
their Affiliates could be liable.




          SECTION 6.5 Independent Investigation; No Other Seller Warranties. Purchaser has
conducted its own independent review and analysis of the Purchased Assets and financial information
relating thereto, and acknowledges that the Sellers have provided it with access to their
personnel, properties and books and records such purpose. In entering into this Agreement
Purchaser has relied solely upon its own investigation and analysis and agrees that, except as
expressly provided otherwise in this Agreement, (i) none of the Sellers has made any representation
or warranty, either express or implied, as to the accuracy or completeness of any of the
information (including pursuant to any statement, certificate or document delivered pursuant to
this Agreement or any financial statements or projections, estimates or forward-
looking




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information) made available to Purchaser and (ii) except as and only to the extent expressly set
forth and subject to the exceptions and limitations in the specific representations
and warranties of the Sellers set forth in this Agreement, Purchaser has not relied upon any
information made available or statements made to it.




          SECTION 6.6 No Knowledge of Misrepresentation. Purchaser has no knowledge that the
representations and warranties of Parent and Sellers in this Agreement are untrue or inaccurate in
any respect and no knowledge of any errors in, or omissions from, the Disclosure Schedule.




ARTICLE VII

BANKRUPTCY COURT MATTERS




          SECTION 7.1 Competing Transaction.




          (a) Purchaser expressly acknowledges and agrees that this Agreement is subject to approval by
the Bankruptcy Court and the consideration by Parent of competing bids (each a “Competing
Bid”) for all or part of the Purchased Assets (other than such assets that in the aggregate
would constitute an immaterial portion of the Purchased Assets). From the date hereof (and any
prior time) and until the date of the entry of the Sale Order (such date, the “Sale Order
Approval Date”), Parent is permitted to cause its representatives and Affiliates to initiate
contact with, solicit or encourage submission of or response to any inquiries, proposals or offers
by, any Person (in addition to Purchaser and its Affiliates, agents and representatives) in
connection with any Qualified Bid; provided, however, that any such contact,
solicitation, or encouragement shall be undertaken in accordance with the terms of the Bidding
Procedures Order. Parent and Sellers shall use reasonable best efforts to seek entry of the
Bidding Procedures Order.




          (b) Following the Sale Order Approval Date and until such time as this Agreement has been
terminated, Parent shall not, nor shall any Seller authorize or permit any Representative of any
Seller to, (A) directly or indirectly solicit, initiate or encourage the submission of any offer or
proposal concerning any Competing Bid, (B) directly or indirectly participate in any discussions or
negotiations regarding, or furnish to any Person any information with respect to, or take any other
action to facilitate the making of, any proposal or expression of interest that constitutes or is
reasonably likely to lead to a Competing Bid or (C) enter into any agreement with respect to any
Competing Bid.




          SECTION 7.2 Bankruptcy Court Filings. As more fully set forth in Section
8.10, Purchaser agrees that it will promptly take such actions as are reasonably requested by
Parent to assist in obtaining entry of the Sale Order and the Bidding Procedures Order and a
finding of adequate assurance of future performance by Purchaser, including furnishing affidavits
or other documents or information for filing with the Bankruptcy Court for the purposes, among
others, of providing necessary assurances of performance by Purchaser under this Agreement and
demonstrating that Purchaser is a “good faith” purchaser under Section 363(m) of the Bankruptcy
Code. In the event the entry of the Bidding Procedures Order shall be appealed, Sellers and
Purchaser shall use their respective commercially reasonable efforts to defend such appeal.







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ARTICLE VIII

COVENANTS




          SECTION 8.1 Access to Information.




          (a) Parent agrees that, prior to the Closing Date, Purchaser shall, at its own expense, upon
one (1) Business Day advance notice during business hours, be entitled, through its officers,
employees and representatives (including, without limitation, its legal advisors and accountants),
to make such investigation of the properties, businesses and operations of the Business and such
examination of the books and records of the Business, the Purchased Assets and the Assumed
Liabilities as it reasonably requests and to make extracts and copies of such books and records.
Any such investigation and examination shall be subject to restrictions under applicable Law.
Parent shall cause the officers, employees, consultants, agents, accountants, attorneys and other
representatives of Parent and its subsidiaries to cooperate with Purchaser and Purchaser’s
representatives in connection with such investigation and examination, and Purchaser and its
representatives shall cooperate with Parent and its representatives and shall use their reasonable
efforts to minimize any disruption to the Business. Notwithstanding anything herein to the
contrary, no such investigation or examination shall be permitted to the extent that it would
require any Seller to disclose information that Parent reasonably determines is (x) subject to
attorney-client privilege, or (y) would violate any confidentiality obligations to which Seller or
any of its subsidiaries is bound.




          (b) Following the Closing, upon reasonable advance notice, Parent shall afford to Purchaser
and Purchaser’s officers, employees and representatives, reasonable access during normal business
hours to any documents or information in the Parent or any Seller’s possession, to the extent
relating to any Purchased Asset, in order to facilitate concluding the transactions contemplated
herein, audits, compliance with governmental requirements and regulations and the prosecution and
defense of third-party claims.




          SECTION 8.2 Conduct of the Business Pending the Closing. Prior to the Closing, except
(1) as set forth on Schedule 8.2(I), (2) as required by applicable Law, (3) as otherwise
expressly contemplated by this Agreement, or (4) with the prior written consent of Purchaser (which
consent shall not be unreasonably withheld or delayed), Parent and the other Sellers shall, and
shall cause their Affiliates to, conduct their operations and operations of the Purchased Assets in
the ordinary course of business, consistent with the historical conduct of the Business and good
business practice in the homebuilding industry (taking into account the fact that the Bankruptcy
Case has been commenced and the limitations to which the Sellers are subject pursuant to
debtor-in-possession financing arrangements), including to continue construction in accordance with
the customary construction cycle (other than with respect to homes without foundations on the
Petition Date), cause all homes set forth on Schedule 8.2(II) to be reasonably weatherized
as an enclosed shell (having a roof, shingles, siding (including by stone, brick or stucco or,
alternatively, appropriate underlayment), windows and doors) on or before June 25, 2010, keep in
full force and effect all existing Permits and entitlements related to the Purchased Assets (and
prosecute all applications therefor), retain and maintain storm water, erosion and other
environmental controls, maintain and keep in good order, subject to ordinary wear and tear, the
Purchased Assets (subject to ordinary course sales of completed residential homes), market for sale
homes on the Real Property, and preserve intact in all material respects






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current relationships with customers, clients, suppliers and contractors. If Sellers fail to
comply with their obligation to so weatherize any such home by June 25, 2010, such home shall be
excluded from the Closing (unless Purchaser elects to include such home in the Closing), the
Purchase Price shall be reduced by an amount equal to 56% of the impaired book value of such
excluded home set forth on Schedule 8.2(II) and the parties shall proceed to Closing with
respect to the remaining homes. Without the prior written consent of Purchaser which shall not be
unreasonably withheld, to the extent the same relates to the Purchased Assets, Sellers shall not:





     (i) sell, lease (as lessor), transfer or otherwise dispose of any Purchased Assets,
other than (A) the sale of Real Property to purchasers of completed residential single
family homes, townhomes and condominium units, (B) the collection of receivables in the
ordinary course of business and (C) the use of prepaid assets and documentary materials in
the ordinary course of business;




     (ii) enter into any Contract, understanding or commitment relating to the Real Property
and other Purchased Assets, other than (x) contracts for sales of homes to homebuyers; and
(y) contracts that can be terminated by Purchaser without cost or penalty at the closing;




     (iii) terminate, amend, restate, reject, supplement or waive any rights under any
Purchased Contract or Purchased Lease;




     (iv) grant or allow any Liens with respect to any Individual Property that are not
Permitted Liens; or




     (v) authorize any of the foregoing, or commit or agree to do any of the foregoing.



          SECTION 8.3 Consents. Parent shall use (and shall cause each of its subsidiaries to
use) its commercially reasonable efforts, and Purchaser shall cooperate with any reasonable request
of Parent, to obtain at the earliest practicable date all consents and approvals required to
consummate the transactions contemplated by this Agreement, including, without limitation, the
consent or approval of the Parent’s official committee of unsecured creditors, the consent or
approval of Parent’s lenders under both the Credit Agreement and any debtor-in-possession financing
arrangements in effect from time to time, consents, if any, in connection with the transfer of the
interests in the JV Investors and the consents and approvals referred to in Section 5.3(b)
hereof; provided, however, that neither Parent nor any other Seller shall be
obligated to pay any consideration therefor to any third party from whom consent or approval is
requested or to initiate any litigation or legal proceedings to obtain any such consent or
approval. Sellers shall oppose any proceedings brought by a third party that challenges the right
of Sellers to consummate any of the transactions contemplated by this Agreement or contends that
any such transaction would constitute a breach of any agreement with such third party.




          SECTION 8.4 Regulatory Approvals.




          (a) If necessary, Purchaser and Parent shall (a) make or cause to be made all filings required
of each of them or any of their respective subsidiaries or Affiliates under the HSR Act or other
Antitrust Laws with respect to the transactions contemplated hereby as






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promptly as practicable after the date of this Agreement in the case of all filings required
under the HSR Act, (b) comply at the earliest practicable date with any request under the HSR Act
or other Antitrust Laws for additional information, documents, or other materials received by each
of them or any of their respective subsidiaries from the Federal Trade Commission (the
“FTC”), the Antitrust Division of the United States Department of Justice (the
“Antitrust Division”) or any other Governmental Body in respect of such filings or such
transactions, and (c) cooperate with each other in connection with any such filing (including, to
the extent permitted by applicable law, providing copies of all such documents to the non-filing
parties prior to filing and considering all reasonable additions, deletions or changes suggested in
connection therewith) and in connection with resolving any investigation or other inquiry of any of
the FTC, the Antitrust Division or other Governmental Body under any Antitrust Laws with respect to
any such filing or any such transaction. Each such party shall use best efforts to furnish to each
other all information required for any application or other filing to be made pursuant to any
applicable Law in connection with the transactions contemplated by this Agreement. Each such party
shall promptly inform the other parties hereto of any oral communication with, and provide copies
of written communications with, any Governmental Body regarding any such filings or any such
transaction. No party hereto shall independently participate in any formal meeting with any
Governmental Body in respect of any such filings, investigation, or other inquiry without giving
the other parties hereto prior notice of the meeting (to the extent legally permissible) and, to
the extent permitted by such Governmental Body, the opportunity to attend and/or participate.
Subject to applicable Law, the parties hereto will consult and cooperate with one another in
connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions
and proposals made or submitted by or on behalf of any party hereto relating to proceedings under
the HSR Act or other Antitrust Laws. Parent and Purchaser may, as each deems advisable and
necessary, reasonably designate any competitively sensitive material provided to the other under
this Section 8.4 as “outside counsel only.” Such materials and the information contained
therein shall be given only to the outside legal counsel of the recipient and will not be disclosed
by such outside counsel to employees, officers, or directors of the recipient, unless express
written permission is obtained in advance from the source of the materials (Parent or Purchaser, as
the case may be).




          (b) Each of Purchaser and Parent shall use its best efforts to resolve such objections, if
any, as may be asserted by any Governmental Body with respect to the transactions contemplated by
this Agreement under the HSR Act, the Sherman Act, as amended, the Clayton Act, as amended, the
Federal Trade Commission Act, as amended, and any other United States federal or state or foreign
statutes, rules, regulations, orders, decrees, administrative or judicial doctrines or other laws
that are designed to prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade (collectively, the “Antitrust Laws”). In connection
therewith, if any Legal Proceeding is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement is in violation of any Antitrust Law, each of Purchaser
and Parent shall cooperate and use its best efforts to contest and resist any such Legal
Proceeding, and to have vacated, lifted, reversed, or overturned any decree, judgment, injunction
or other order whether temporary, preliminary or permanent, that is in effect and that prohibits,
prevents, or restricts consummation of the transactions contemplated by this Agreement, including
by pursuing all available avenues of administrative and judicial appeal and all available
legislative action, unless, by mutual agreement, Purchaser and Parent decide that litigation is not
in their respective best interests. Each of Purchaser and Parent shall use its






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best efforts to take such action as may be required to cause the expiration of the notice
periods under the HSR Act or other Antitrust Laws with respect to such transactions as promptly as
possible after the execution of this Agreement. In connection with and without limiting the
foregoing, each of Purchaser and Parent agrees to use its best efforts to take promptly any and all
steps necessary to avoid or eliminate each and every impediment under any Antitrust Laws that may
be asserted by any Federal, state and local and non-United States antitrust or competition
authority, so as to enable the parties to close the transactions contemplated by this Agreement as
expeditiously as possible.




          SECTION 8.5 Further Assurances. Each of Parent and Purchaser shall use commercially
reasonable efforts to (i) take all actions necessary or appropriate to consummate the transactions
contemplated by this Agreement, and (ii) cause the fulfillment at the earliest practicable date of
all of the conditions to their respective obligations to consummate the transactions contemplated
by this Agreement.




          SECTION 8.6 Confidentiality.




          (a) Purchaser acknowledges that the confidential information provided to it in connection with
this Agreement, including under Section 8.1, and the consummation of the transactions
contemplated hereby, is subject to the terms of the confidentiality agreement between Purchaser and
Parent dated March 21, 2010 (the “Confidentiality Agreement”), the terms of which are
incorporated herein by reference. Effective upon, and only upon, the Closing Date, the
Confidentiality Agreement shall terminate with respect to information relating solely to the
Purchased Assets; provided, however, that Purchaser acknowledges that any and all
other confidential information provided to it by Parent or its representatives concerning any
Seller shall remain subject to the terms and conditions of the Confidentiality Agreement after the
Closing Date.




          (b) Sellers covenant and agree to keep and maintain the results of Purchaser’s investigations,
studies, tests, memoranda, analyses, and any other work product, strictly confidential and shall
not disclose any information regarding the results of Buyer’s investigation, studies, tests,
memoranda, analyses, and any other work product, directly or indirectly, to any Person, other than
their respective attorneys or employees (provided Sellers ensure that any such Persons are
required to be legally bound by the terms and provisions of this Section 8.6(b)) or
otherwise required by applicable Law without the prior written consent of the other party;
provided, that (i) the terms and provisions of this Section 8.6(b) shall not be
deemed violated as a result of any act of the Sellers taken in accordance with the Bidding
Procedures Order and (ii) with respect to any Individual Properties that are excluded from the
Closing hereunder, Sellers shall be permitted to provide summaries and other descriptions of such
investigations, studies, tests, memoranda, analyses and other work product to interested Persons in
connection with the Bankruptcy Case (including to facilitate the submission of Qualified Bids);
provided that Sellers shall provide Purchaser with an opportunity to review and comment on
any such summaries and other descriptions within a reasonable time prior to Sellers’ provision
thereof to such interested Persons.




          SECTION 8.7 Publicity. Neither Parent nor Purchaser shall issue any press release or
public announcement concerning this Agreement or the transactions contemplated






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hereby without obtaining the prior written approval of the other party hereto, which approval
will not be unreasonably withheld or delayed, unless, in the sole judgment of Purchaser or Parent,
disclosure is otherwise required by applicable Law or by the Bankruptcy Court with respect to
filings to be made with the Bankruptcy Court in connection with this Agreement or by the applicable
rules of any stock exchange on which Purchaser or Parent lists securities, provided that
the party intending to make such release shall use its best efforts consistent with such applicable
Law or Bankruptcy Court requirement to consult with the other party with respect to the text
thereof.




          SECTION 8.8 Supplementation and Amendment of the Disclosure Schedule. Parent or as
applicable, Purchaser, may, at its option, include in the Disclosure Schedule items that are not
material in order to avoid any misunderstanding, and such inclusion, or any references to dollar
amounts, shall not be deemed to be an acknowledgement or representation that such items are
material except to the extent a particular representation is qualified by materiality, to establish
any standard of materiality or to define further the meaning of such terms for purposes of this
Agreement. The disclosure of any fact or item in any section of the Disclosure Schedule shall be
deemed disclosure with respect to any other Section or subsection of this Agreement or the
Disclosure Schedule. From time to time prior to the Closing, Parent shall have the right to
supplement or amend the Disclosure Schedule with respect to any matter hereafter arising or
discovered after the delivery of the Disclosure Schedule pursuant to this Agreement;
provided, however, no such supplement or amendment shall have any effect on, and
shall not be taken into consideration in determining, the satisfaction of the condition to closing
set forth in Section 9.1(a); provided, however, if the Closing shall occur,
then Purchaser shall be deemed to have waived any right or claim pursuant to the terms of this
Agreement or otherwise, including pursuant to Article X hereof, with respect to any and all
matters disclosed pursuant to any such supplement or amendment at or prior to the Closing.




          SECTION 8.9 Court Order. Subject to Article VII, Parent shall use reasonable
best efforts to obtain entry by the Bankruptcy Court of the Bidding Procedures Order by May 7, 2010
and the Sale Order by June 30, 2010. If an objection is filed or otherwise made to the Sale
Motion, which is an objection which would prohibit or otherwise prevent the Closing from occurring
pursuant to the terms of this Agreement, Sellers shall use best efforts to have such objection
overruled.




          SECTION 8.10 Adequate Assurance of Future Performance. Purchaser shall be required to
provide adequate assurance of future performance by Purchaser or any designee thereof with respect
to the Purchased Contracts and Purchased Leases and, notwithstanding anything to the contrary,
neither Parent nor any Seller shall have any liability for Purchaser’s failure to satisfy such
requirements of the Bankruptcy Code. Purchaser agrees that it will promptly take all actions
reasonably requested by Parent or ordered by the Bankruptcy Court to assist in obtaining the
Bankruptcy Court’s entry of an order approving this Agreement, such as furnishing affidavits,
financial information, confidential information subject to a reasonable form of confidentiality
agreement or other documents or information for filing with the Bankruptcy Court and making
Purchaser’s employees and representatives available to be interviewed by Parent’s attorneys and to
testify before the Bankruptcy Court and at depositions, with respect to demonstrating adequate
assurance of future performance by Purchaser and its designees of the Assumed Liabilities.





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          SECTION 8.11 Purchaser Covenants after Closing; Access. Without prejudice to
Section 8.15, Purchaser covenants and agrees that it shall, from and after the Closing Date
(unless otherwise agreed with Parent) do each of the following:





     (a) during the first ninety (90) days following the Closing, upon reasonable advance
notice, afford to Parent’s officers, independent public accountants, attorneys, lenders,
consultants and other representatives, reasonable access during normal business hours to the
Purchased Assets and all records pertaining to the Purchased Assets.




     (b) not pursue any avoidance actions or claims under chapter 5 of the Bankruptcy Code
against all parties covered by avoidance actions that are Excluded Assets.



          SECTION 8.12 Replacement of Commitments. In connection with Sellers’ development work
for the Purchased Assets, Sellers have posted with the appropriate Governmental Body certain surety
bonds, letters of credit and escrows as more particularly described on Schedule 8.12
attached hereto and incorporated herein by reference (collectively, the “Commitments”). As
soon as reasonably possible after the Closing Date, Purchaser, at Purchaser’s sole cost and
expense, shall (i) deliver to the appropriate Governmental Body, and use commercially reasonable
efforts to cause such Governmental Body to accept, substitute bonds, letters of credit and escrows
(collectively, the “Substitute Commitments”) for Sellers’ Commitments, and (ii) use
commercially reasonable efforts to cause the appropriate Governmental Bodies to return Sellers’
Commitments to Sellers so that the same are of no further force or effect. Sellers agree to
reasonably cooperate with Purchaser in order for Purchaser to perform the obligations of Purchaser
described in clauses (i) and (ii) above. To the extent any of the Commitments have been drawn by a
beneficiary at or prior to Closing, the Purchase Price shall be increased (i) pursuant to the
Closing Adjustment, by the amount of any Qualified Development Costs paid from the amounts so
drawn, and (ii) by the amount so drawn, so long as such amounts are held in the form of cash or
cash equivalents. Purchaser agrees to indemnify, defend and hold Sellers harmless from and against
all costs, expenses, liabilities and causes of action (including, without limitation, court costs
and reasonable attorneys’ fees) resulting from any draws on Sellers’ Commitments on or after the
Closing Date and prior to the date that the Substitute Commitments have been delivered to and
accepted by the appropriate Governmental Body and Sellers’ Commitments have been returned to
Sellers and the Sellers’ Agreements have been terminated and canceled; provided that, if
the events giving rise to such draws occurred prior to the Closing Date, the amounts so drawn are
held in the form of cash or used to pay Qualified Development Costs. At the Closing, Sellers shall
assign to Purchaser the right to receive the return of any cash deposits then held by, or
subsequently drawn and held by, the beneficiaries of the Commitments. In the event that, following
Closing, Sellers receive any cash payments in respect of Commitments drawn by a beneficiary at or
prior to or following Closing, Seller shall promptly pay the amount so received to Purchaser. This
Section 8.12 shall survive Closing hereunder.




          SECTION 8.13 Name Changes. Following Closing, Purchaser shall have the right to the
use of the name “Orleans” or similar names or any service marks, trademarks, trade names,
identifying symbols, logos, emblems or signs containing or comprising the foregoing, including any
name or mark confusingly similar thereto in connection with the Purchased Assets.




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For the
avoidance of doubt, Sellers shall have the right to use such name, together with a nonexclusive
royalty-free license to use any other Intellectual Property included in the Purchased Assets, as
may be necessary solely in connection with the orderly operation and disposal of the Excluded
Assets. In furtherance of the foregoing, at Closing, the applicable Seller and Purchaser shall
enter into a perpetual, non-exclusive, royalty-free license under which the applicable Seller shall
license such Intellectual Property to Purchaser.




          SECTION 8.14 Financial Statements. Prior to Closing, Parent shall cause to be delivered to Purchaser the following, prepared
in accordance with GAAP and other relevant SEC requirements: (a) audited financial statements and
related footnotes as of and for the fiscal year ended June 30, 2009, and an audit report of the
Seller’s Independent Registered Accounting Firm (“IRAF”) thereon; (b) reviewed interim
financial statements as of and for the three (3) months ended September 30, 2009, and a review
report of the IRAF thereon; (c) reviewed interim financial statements as of and for the three (3)
and six (6) months ended December 31, 2009, and a review report of the IRAF thereon; and (d)
reviewed interim financial statements as of and for the three (3) and nine (9) months ended March
31, 2010, and a review report of the IRAF thereon. Sellers acknowledge and agree that Purchaser
may be required to include financial statements of Parent or combined financial statements of the
Purchased Assets in reports that Purchaser is required to file pursuant to applicable securities
laws. Parent agrees that Purchaser may execute and deliver an engagement letter with the IRAF,
pursuant to which the IRAF shall provide to Purchaser, at Purchaser’s expense, a certification of
such historical financial statements of Parent, or shall reasonably assist Purchaser in preparing
such combined financial statements of the Purchased Assets, as may be required to enable Purchaser
to comply with its reporting obligations under applicable securities laws. In addition, prior to
Closing, Sellers agree to reasonably cooperate with the Purchaser and its independent accountants
(including the IRAF) and to give each access, during business hours upon reasonable prior notice,
to such of its books and records and to direct their management personnel to cooperate with the
Purchaser and its independent accountants (including the provision of customary management
representation letters), in each case to the extent necessary to enable the Purchaser to produce
and, where applicable, audit any financials statement of Parent or the Purchased Assets that
Purchaser may require in order to comply with its reporting obligations.




          SECTION 8.15 Transition Arrangements. Purchaser will, and will cause its Affiliates
to, provide Sellers and their authorized agents and representatives (including lenders) with such
access and administrative services as are reasonably necessary to permit Sellers to wind down and
liquidate their estates after Closing, including the administration of a plan of liquidation,
reconciliation of claims and making distributions, provided that the provision of such access and
services shall not disrupt the conduct of the business of Purchaser and its Affiliates. Such
services will include (a) reasonable access, during normal business hours upon reasonable advance
notice, to any of Purchaser’s and its Affiliates’ personnel who have knowledge of the Purchased
Assets, information technology systems (if Purchaser shall have acquired Sellers’ information
technology systems) and books and records relating to the Purchased Assets for periods prior to the
Closing and (b) the use of office space and office support for employees of Sellers and their
authorized agents and representatives (including lenders) engaged in such wind-down and liquidation
process, to the extent that Purchaser and its Affiliates have available office space. Sellers will
reimburse Purchaser for reasonable out-of-pocket costs and expenses incurred by Purchaser and its
Affiliates in connection with providing such services (which for the




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avoidance of doubt will not
include overhead of, or salaries paid to employees of, Purchaser or its Affiliates).




ARTICLE IX

CONDITIONS TO CLOSING




          SECTION 9.1 Conditions Precedent to Obligations of Purchaser. The obligation of
Purchaser to consummate the transactions contemplated by this Agreement is subject to the
fulfillment, on or prior to the Closing Date, of each of the following conditions (any or all of
which may be waived by Purchaser in its sole discretion in whole or in part to the extent permitted
by applicable Law):





     (a) the representations and warranties of Parent and Sellers set forth in this
Agreement (disregarding all exceptions and qualifications with regard to materiality or
Material Adverse Effect) shall be true and correct as of the Closing Date (except to the
extent such representations and warranties relate to another date, in which case as of such
other date), except for such failures to be true and correct as do not have a Material
Adverse Effect (provided that if any such failure has a material adverse effect as
to any Individual Property, Purchaser may exclude such Individual Property from the Closing
and the Purchase Price payable at the Closing shall be reduced by the amount of the Purchase
Price allocable to such Individual Property), and Purchaser shall have received a
certificate signed by an authorized officer of Parent, dated the Closing Date, to the
foregoing effect;




     (b) Parent and Sellers shall have performed and complied in all material respects with
all obligations and agreements required by this Agreement to be performed or complied with
by them on or prior to the Closing Date and Purchaser shall have received a certificate
signed by an authorized officer of Parent, dated the Closing Date, to the foregoing effect;
and




     (c) Purchaser shall have received the other items to be delivered to it pursuant to
Section 4.2; provided that if Purchaser shall not have received any such
items that relate solely to one or more Individual Properties (other than by reason of a
breach by Sellers of their obligations hereunder), (i) the Individual Properties to which
such undelivered items relate shall be excluded from the Closing, unless Purchaser elects to
include one or more of such Individual Properties, (ii) the Purchase Price payable at the
Closing shall be reduced by the amount of the Purchase Price allocable to the Individual
Properties so excluded, and (iii) the Parties shall proceed to Closing with respect to the
remaining Individual Properties; and provided further that such exclusion of
an Individual Property from the Closing shall not be Purchaser’s exclusive remedy with
respect to the failure to receive all deliveries at the Closing and Purchaser may exercise
any and all rights and remedies granted to it hereunder or provided by Law.



          SECTION 9.2 Conditions Precedent to Obligations of Sellers. The obligations of
Sellers to consummate the transactions contemplated by this Agreement are subject to the
fulfillment, prior to or on the Closing Date, of each of the following conditions (any or all of
which may be waived by Sellers in whole or in part to the extent permitted by applicable Law):







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     (a) the representations and warranties of Purchaser set forth in this Agreement
(disregarding all exceptions and qualifications with regard to materiality) shall be true
and correct in all material respects as of the Closing Date (except to the extent such
representations and warranties relate to another date, in which case as of such other date),
and Parent shall have received a certificate signed by an authorized officer of Purchaser,
dated the Closing Date, to the foregoing effect;




     (b) Purchaser shall have performed and complied in all material respects with all
obligations and agreements required by this Agreement to be performed or complied with by it
on or prior to the Closing Date, and Parent shall have received a certificate signed by an
authorized officer of Purchaser, dated the Closing Date, to the foregoing effect; and




     (c) Parent shall have received the other items to be delivered to it pursuant to
Section 4.3.



          SECTION 9.3 Conditions Precedent to Obligations of Purchaser and Sellers. The
respective obligations of Purchaser and Sellers to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, on or prior to the Closing Date, of each of the following
conditions (any or all of which may be waived by Purchaser and Parent in whole or in part to the
extent permitted by applicable Law):





     (a) there shall not be in effect any final nonappealable Order by a Governmental Body
(other than the Bankruptcy Court) of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby and there
shall not have been adopted any law or regulation making all or any portion of the
transactions contemplated by this Agreement illegal;




     (b) the Bankruptcy Court shall have entered the Bidding Procedures Order and the Sale
Order, which shall each be in full force and not subject to any stay pending appeal; and




     (c) if the parties have determined that any filing under the HSR Act is required, the
waiting period applicable to the transactions contemplated by this Agreement under the HSR
Act shall have expired or early termination shall have been granted.



          SECTION 9.4 Frustration of Closing Conditions. Neither Sellers nor Purchaser may rely
on the failure of any condition set forth in Section 9.1, Section 9.2 or
Section 9.3, as the case may be, if such failure was caused by such party’s failure to
comply with any provision of this Agreement, to act in good faith or to use its commercially
reasonable efforts to cause the Closing to occur.




ARTICLE X

NO SURVIVAL




          SECTION 10.1 Survival of Representations and Warranties. The parties hereto agree
that the representations and warranties contained in this Agreement shall not survive the




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Closing
hereunder, and none of the parties shall have any liability to each other after the Closing for any
breach thereof. The parties hereto agree that the covenants contained in this Agreement to be
performed at or after the Closing shall survive the Closing hereunder, and each party hereto shall
be liable to the other after the Closing for any breach thereof.




          SECTION 10.2 No Consequential Damages. Notwithstanding anything to the contrary
elsewhere in this Agreement, except in the case of third party claims, fraud, or criminal
misconduct, no party shall, in any event, be liable to any other Person for any consequential,
incidental, indirect, special or punitive damages of such other Person, including loss of future
revenue, income or profits, diminution of value or loss of business reputation or opportunity
relating to the breach or alleged breach hereof.




ARTICLE XI

TAXES




          SECTION 11.1 Tax Matters.




          (a) Any sales, use, property transfer, documentary, stamp, recording or similar Tax payable as
a result of the sale or transfer of the Purchased Assets and the assumption of the Assumed
Liabilities hereunder (“Transfer Taxes”) shall be borne one-half each by Parent and
Purchaser; provided that, for the avoidance of doubt, any mortgage recording or similar
Taxes relating to any financing by the Purchaser or their respective Affiliates shall be borne 100%
by the Purchaser. Seller shall prepare and file all necessary Tax Returns or other documents with
respect to all such Transfer Taxes to the extent permitted under applicable Tax Law.




          (b) All ad valorem real estate Taxes and personal property Taxes for the Real Property shall
be prorated based on the most current available tax bills taking into account only the discount
then available to the Sellers for early payment as of 12:01 A.M. (New York time) on the Closing
Date, so that credits and charges for all days preceding the Closing Date shall be allocated to the
Sellers and credits and charges for all days from and after the Closing Date shall be allocated to
Purchaser. In the event that a party hereto pays a Tax that is properly allocable in whole or in
part to the other party pursuant to the provisions of the preceding sentence, the other party shall
promptly reimburse the paying party for the portion of the Tax so allocable to the other party.
The Sellers shall pay all installments and special assessments, including any assessments or
special assessments imposed by the homeowners associations, if any, accruing or payable prior to
the Closing Date or payable upon the conveyance of the Real Property (subject to proration to the
extent such items related to any post-Closing Date periods or portions thereof).




          (c) After the Closing Date, each of the Sellers and the Purchaser shall, and shall cause their
respective Affiliates to: (i) cooperate fully in preparing for any audits of, or disputes with any
tax authority regarding Taxes attributable to the Purchased Assets; (ii) make available to the
other party and to any tax authority as reasonably requested all information, records and documents
relating to Taxes attributable to the Purchased Assets; and (iii) timely sign and deliver such
certificates or forms as may be necessary or appropriate to establish an exemption from (or
otherwise reduce), or file Tax Returns or other reports with respect to, Transfer Taxes.




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ARTICLE XII

MISCELLANEOUS




          SECTION 12.1 Expenses. Except as otherwise provided in this Agreement, each of Parent
and Purchaser shall bear its own expenses incurred in connection with the negotiation and execution
of this Agreement and each other agreement, document and instrument contemplated by this Agreement
and the consummation of the transactions contemplated hereby and thereby; provided,
however, that Purchaser and Seller shall share any governmental charges relating to HSR Act
filing fees, UCC-3 filing fees, ICC, DOT, real estate, title recording or filing fees and other
amounts payable in respect of transfer filings in connection with the transactions contemplated by
this Agreement and shall jointly determine, in good faith, the proper allocation thereof.




          SECTION 12.2 Injunctive Relief. Damages at law may be an inadequate remedy for the
breach of this Agreement and, accordingly, any party hereto shall be entitled to injunctive relief
with respect to any such breach, including without limitation specific performance of the
covenants, promises or agreements or an order enjoining a party from any threatened, or from the
continuation of any actual, breach of the covenants, promises or agreements contained herein. The
rights set forth in this Section 12.2 shall be in addition to any other rights which a
Party may have at law or in equity pursuant to this Agreement.




          SECTION 12.3 Submission to Jurisdiction; Consent to Service of Process.




          (a) Without limiting any party’s right to appeal any order of the Bankruptcy Court, (i) the
Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of this Agreement and to
decide any claims or disputes which may arise or result from, or be connected with, this Agreement,
any breach or default hereunder, or the transactions contemplated hereby, and (ii) any and all
proceedings related to the foregoing shall be filed and maintained only in the Bankruptcy Court,
and the parties hereby consent to and submit to the jurisdiction and venue of the Bankruptcy Court
and shall receive notices at such locations as indicated in Section 12.7 hereof;
provided, however, that if the Bankruptcy Case has closed, the parties agree to
unconditionally and irrevocably submit to the exclusive jurisdiction of the Chancery Court of the
State of Delaware and any state or federal appellate court therefrom, for the resolution of any
such claim or dispute. The parties hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying of venue of
any such dispute brought in such court or any defense of inconvenient forum for the maintenance of
such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.




          (b) Each of the parties hereto hereby consents to process being served by any party to this
Agreement in any suit, action or proceeding by personal delivery of a copy thereof in accordance
with the provisions of Section 12.7.




          SECTION 12.4 Waiver of Right to Trial by Jury. Each party to this Agreement waives
any right to trial by jury in any action, matter or proceeding regarding this Agreement or any
provision hereof.







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          SECTION 12.5 Entire Agreement; Amendments and Waivers. This Agreement and the other
agreements and documents contemplated hereby (including the Disclosure Schedule and exhibits hereto
and thereto) represent the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof. This Agreement can be amended, supplemented or changed, and
any provision hereof can be waived, only by written instrument making specific reference to this
Agreement signed by the party against whom enforcement of any such amendment, supplement,
modification or waiver is sought. No action taken pursuant to this Agreement, including without
limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver
by the party taking such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver or continuing waiver of such breach or as a
waiver of any other or subsequent breach. No failure on the part of any party to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right, power or remedy. All
remedies hereunder are cumulative and are not exclusive of any other remedies provided by Law.




          SECTION 12.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made and performed in
such State without regard to conflicts of laws principles thereof.




          SECTION 12.7 Notices. All notices and other communications under this Agreement shall
be in writing and shall be deemed given (i) when delivered personally by hand, (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one (1) Business Day following the
day sent by overnight courier (with written confirmation of receipt), in each case at the following
addresses and facsimile numbers (or to such other address or facsimile number as a party may have
specified by notice given to the other party pursuant to this provision):



If to Seller, to:



Orleans Homebuilders, Inc.

3333 Street Road

Bensalem, PA 19020

Attention: Jeffrey P. Orleans

Facsimile: 215-633-2351



with mandated copies (which shall not constitute notice) to:



Phoenix Management

110 Chadds Ford Commons

Chadds Ford, PA 19317

Attention: Mitchell B. Arden

Facsimile: 610-358-9377





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Cahill Gordon & Reindel llp

80 Pine Street

New York, New York 10005

Attention: Joel H. Levitin

Facsimile: 212-378-2449



If to Purchaser, to:



NVR, Inc.

Plaza America Tower I

11700 Plaza America Drive Suite 500

Reston, Virginia 20190

Attention: Dennis Seremet

Facsimile: 703-956-4750



with a mandated copy (which shall not constitute notice) to:



Hogan & Hartson LLP

555 13th Street NW

Washington, D.C. 20004

Attention: Bruce W. Gilchrist

Facsimile: 202-637-5910




          SECTION 12.8 Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any Law or public policy, all other terms or
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is
invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as closely as possible
in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally contemplated to the
greatest extent possible.




          SECTION 12.9 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and permitted assigns. Nothing
in this Agreement shall create or be deemed to create any third party beneficiary rights in any
Person or entity not a party to this Agreement except as provided below. No assignment of this
Agreement or of any rights or obligations hereunder may be made by either Parent or Purchaser (by
operation of Law or otherwise) without the prior written consent of the other parties hereto and
any attempted assignment without the required consents shall be void; provided,
however, that Purchaser shall be permitted to assign its rights under this Agreement to
acquire all or a portion of the Purchased Assets to one or more Affiliate. No assignment of any
obligations hereunder shall relieve the parties hereto of any such obligations. Upon any such
permitted assignment, the references in this Agreement to Purchaser shall also apply to any such
assignee unless the context otherwise requires. In the event that a Chapter 11 trustee should be
appointed for Parent, or in the event that Parent’s Chapter 11 case should be converted to a case






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under Chapter 7, the obligations of Parent hereunder shall be binding upon such trustee or
successor Chapter 7 estate.




          SECTION 12.10 Non-Recourse. No past, present or future director, officer, employee,
incorporator, member, partner or equityholder of Sellers shall have any liability for any
obligations or liabilities of Sellers under this Agreement or the Seller Documents of or for any
claim based on, in respect of, or by reason of, the transactions contemplated hereby and thereby.




          SECTION 12.11 Counterparts. This Agreement may be executed in as many counterparts as
may be required, which counterparts may be delivered by facsimile or electronic mail, and it shall
not be necessary that the signature of, or on behalf of, each party, appear on each counterpart;
but it shall be sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more such counterparts. All
such counterparts when taken together shall constitute a single and legally binding agreement.




          SECTION 12.12 Purchase Price Allocation. Certain provisions of this Agreement require
adjustments to the payments otherwise required to be made hereunder based on the purchase price
allocable to one or more Individual Properties. Prior to signing this Agreement, Purchaser has
provided to Escrow Agent a schedule allocating the Base Purchase Price to each Individual Property.
Escrow Agent shall maintain the confidentiality of such allocations and not disclose them except
as provided in this Section 12.12. The allocations will be used in determining any
Purchase Price adjustments to be made hereunder. In the event that the parties exclude any Real
Property from the Purchased Assets to be purchased at Closing or if Parent determines that any
Individual Property cannot be conveyed to Purchaser, or that there is a material risk that any
Individual Property cannot be conveyed to Purchaser, in each case in accordance with the terms of
this Agreement, Parent and
Purchaser shall deliver a joint written notice thereof to the Escrow Agent, and the Escrow
Agent shall disclose to the parties the allocation assigned to such Individual Property and, if
such disclosure is made prior to conclusion of any auction pursuant to the Bidding Procedures
Order, Parent shall be entitled to disclose the adjustment to the Purchase Price that would result
if such Individual Property were to be excluded from the Closing.




[Signature page follows]




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




	 	 	 	 	 
	 	ORLEANS HOMEBUILDERS, INC.

 	 
	 	By:  	/s/ Jeffrey P. Orleans
 	 
	 	 	Name:  	Jeffrey P. Orleans 	 
	 	 	Title:  	Chairman & CEO 	 
	 
	 
	 	THE SELLING AFFILIATES NAMED ON EXHIBIT A HERETO

 	 
	 	By:  	/s/ Garry P. Herdler
 	 
	 	 	Name:  	Garry P. Herdler 	 
	 	 	Title:  	EVP & CFO 	 
	 
	 
	 	NVR, INC.

 	 
	 	By::  	 /s/ Dennis M. Seremet
 	 
	 	 	Name:  	Dennis M. Seremet 	 
	 	 	Title:  	Chief Financial Officer 	 



 









 






	 	 	 	 	 



Exhibit A

Selling Affiliates




	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	Orleans Homebuilders, Inc.

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Brookshire Estates, L.P.

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Greenwood Financial Inc.

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Masterpiece Homes, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	OHB Homes, Inc.

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	OHI Financing, Inc.

	 	1064 Greenwood Blvd., #106

Lake Mary, FL 32746
	 
	 	 
	OHI PA GP, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	OHI PA, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	OHI NJ, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	OPCNC, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans Arizona Realty, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans Arizona, Inc.

	 	1105 North Market Street, Suite 609

Wilmington, DE 19801
	 
	 	 
	Orleans at Covington Manor, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Crofton Chase, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 





 









 






	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	Orleans at East Greenwich, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Elk Township, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Hamilton, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Harrison, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Hidden Creek, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Jennings Mill, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Lambertville, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Lyons Gate, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Mansfield LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Meadow Glen, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Millstone, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Millstone River Preserve, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Tabernacle, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Thornbury, L.P.

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Upper Freehold, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020






-2-









 






	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	Orleans at Upper Saucon, L.P.

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Upper Uwchlan, LP

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at West Bradford, LP

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at West Vincent, LP

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Westampton Woods, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Windsor Square, LP

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Woolwich, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans at Wrightstown, LP

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans Construction Corp.

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans Corporation

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Orleans RHIL, LP

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Parker & Lancaster Corporation

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Parker & Orleans Homebuilders, Inc.

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Parker Lancaster, Tidewater, L.L.C.

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Realen Homes, L.P.

	 	3333 Street Road, Suite 101

Bensalem, PA 19020






-3-









 






	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	RHGP LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Stock Grange, LP

	 	3333 Street Road, Suite 101

Bensalem, PA 19020
	 
	 	 
	Wheatley Meadows Associates, LLC

	 	3333 Street Road, Suite 101

Bensalem, PA 19020






-4-









 






EXHIBIT B




FORM OF BIDDING PROCEDURES ORDER




 











 





BIDDING PROCEDURES ORDER




UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE




	 	 	 	 	 	 	 

	 


	)	 	 	 	 	 
	In re:

	)	 	 	 	 	Chapter 11
	 

	)	 	 	 	 	 
	ORLEANS HOMEBUILDERS, INC., et al.,1 

	)	 	 	 	 	Case No. 10-10684 (PJW)
	 

	)	 	 	 	 	 
	Debtors.               

	)	 	 	 	 	Jointly Administered
	 

	)	 	 	 	 	 
	 


	 	 	 	 	 	 






ORDER (A)(I) APPROVING SALE PROCEDURES

AND BIDDING PROTECTIONS TO BE EMPLOYED IN

CONNECTION WITH THE PROPOSED SALE OF THE DEBTORS’



ASSETS, (II) SCHEDULING AN AUCTION AND HEARING TO


CONSIDER APPROVAL OF THE SALE OF THE DEBTORS’ ASSETS,
(III) APPROVING NOTICE OF THE RESPECTIVE DATES, TIMES, AND PLACES






 




			
	1	 	The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s tax identification number,
are: Orleans Homebuilders, Inc. (4323), Brookshire Estates, L.P. (8725),
Community Management Services Group, Inc. (6620), Greenwood Financial Inc.
(7510), Masterpiece Homes, LLC (1971), OHB Homes, Inc. (0973), OHI Financing,
Inc. (6591), OHI PA GP, LLC (2675), OPCNC, LLC (8853), Orleans Arizona Realty,
LLC (9174), Orleans Arizona, Inc. (2640), Orleans at Bordentown, LLC (4968),
Orleans at Cooks Bridge, LLC (4185), Orleans at Covington Manor, LLC (9891),
Orleans at Crofton Chase, LLC (8809), Orleans at East Greenwich, LLC (9814),
Orleans at Elk Township, LLC (6891), Orleans at Evesham, LLC (7244), Orleans at
Falls, LP (2735), Orleans at Hamilton, LLC (9679), Orleans at Harrison, LLC
(4155), Orleans at Hidden Creek, LLC (3301), Orleans at Jennings Mill, LLC
(4693), Orleans at Lambertville, LLC (0615), Orleans at Limerick, LP (7791),
Orleans at Lower Salford, LP (9523), Orleans at Lyons Gate, LLC (2857), Orleans
at Mansfield LLC (1498), Orleans at Maple Glen LLC (7797), Orleans at Meadow
Glen, LLC (4966), Orleans at Millstone River Preserve, LLC (8810), Orleans at
Millstone, LLC (8063), Orleans at Moorestown, LLC (9250), Orleans at
Tabernacle, LLC (9927), Orleans at Thornbury, L.P. (4291), Orleans at Upper
Freehold, LLC (3225), Orleans at Upper Saucon, L.P. (3715), Orleans at Upper
Uwchlan, LP (8394), Orleans at Wallkill, LLC (2875), Orleans at West Bradford,
LP (4161), Orleans at West Vincent, LP (9557), Orleans at Westampton Woods, LLC
(8095), Orleans at Windsor Square, LP (9481), Orleans at Woolwich, LLC (9215),
Orleans at Wrightstown, LP (9701), Orleans Construction Corp. (0893), Orleans
Corporation (8770), Orleans Corporation Of New Jersey (5325), Orleans DK, LLC
(5308), Orleans RHIL, LP (1938), Parker & Lancaster Corporation (1707), Parker
& Orleans Homebuilders, Inc. (5269), Parker Lancaster, Tidewater, L.L.C.
(7432), Realen Homes, L.P. (8293), RHGP LLC (8197), Sharp Road Farms Inc.
(1871), Stock Grange, LP (4027) and Wheatley Meadows Associates (5459).




 









 










FOR AN AUCTION AND FOR HEARING ON APPROVAL OF (a) SALE OF ASSETS, 

(b) ASSUMPTION AND ASSIGNMENT OF

CERTAIN EXECUTORY



CONTRACTS AND UNEXPIRED LEASES, AND (c) OTHER RELATED RELIEF




          The above-captioned debtors and debtors in possession (collectively, the “Debtors”) having
requested by motion dated April 13, 2010 (Docket No. [___]) (the “Sale
Motion”)2 orders (A)(I) approving the sale procedures and bidding protections
to be employed in connection with the proposed sale (the “Sale”) of substantially all of the
Debtors’ assets (collectively, the “Purchased Assets”), (II) scheduling an auction (the “Auction”)
and a hearing (the “Sale Hearing”) to consider approval of (i) the Sale, (ii) the assumption and
assignment of certain executory contracts and unexpired leases in connection with the Sale and the
rejection of other such executory contracts and unexpired leases, and (iii) other related relief,
and (III) approving the proposed notice of the respective dates, times, and places for the Auction
and for the Sale Hearing (the relief requested in such items (A)(I) through (III) is collectively
referred to herein as the “Initial Relief”); and (B)(I) authorizing and approving a proposed asset
purchase agreement, dated as of April 13, 2010, with NVR, Inc. (the “Proposed Buyer”), or such
other purchaser(s) providing a higher or otherwise better offer for the Purchased Assets, as
approved by this Court at the Sale Hearing; (II) authorizing the Sale of the Purchased Assets free
and clear of all Liens and Liabilities (other than the Permitted Liens and the Assumed
Liabilities); (III) authorizing the assumption and assignment of certain executory contracts and
unexpired leases in connection with the Sale and the rejection of other executory contracts and
unexpired leases; (IV) authorizing the Debtors to consummate all transactions related to the above;
and (V) granting other relief; and this Court’s having conducted a hearing on May 4, 2010 to
consider the Initial Relief (the “Bidding Procedures Hearing”); and upon the record of the Bidding
Procedures Hearing and the Bankruptcy Cases; and it appearing that, under the circumstances here,
present, good, sufficient, and timely notice of the relief sought and granted in this Order having
been given, and good and sufficient cause existing to have conducted the Bidding Procedures Hearing
and approve the Initial Relief; and it further appearing that no other or further notice of the
relief provided for herein need be given; and after due deliberation and sufficient cause appearing
therefor, it is hereby




          FOUND AND DETERMINED THAT:




     A. The Court has jurisdiction over the Sale Motion pursuant to 28 U.S.C. §§ 157 and 1334.
This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue of the above-captioned
Chapter 11 cases (the “Cases”) and the Sale Motion in this District is proper under 28





 




			
	2	 	All capitalized terms not otherwise
defined herein shall have the meaning ascribed to them in the Sale Motion, and,
as applicable, any exhibits thereto (including the APA).




3









 









U.S.C. §§ 1408 and 1409.




     B. The statutory and rule-based predicates for the relief sought in the Sale Motion are
Bankruptcy Code §§ 105, 363, and 365; Bankruptcy Rules 2002, 6003, 6004, 6006, 9007, and 9014; and
Local Rule 6004-1.



     C. The findings and conclusions set forth herein constitute this Court’s findings of fact and
conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to
Bankruptcy Rule 9014. To the extent any of the foregoing findings of fact constitute conclusions
of law, they are adopted as such. To the extent any of the following conclusions of law constitute
findings of fact, they are adopted as such.



     D. The Debtors have articulated good and sufficient reasons for approving the Bidding
Procedures (including, without limitation, the payment of the Termination Fee and the Expense
Reimbursement, and requiring the Proposed Buyer to submit the Deposit and any Qualified Bidder to
submit a Bid Deposit) and the Auction and Hearing Notice, in connection with the Sale of the
Purchased Assets. The Debtors have also demonstrated a compelling and sound business justification
for authorization to enter into the APA or to sell (in their discretion) the Excluded Assets.
Entry of this Order is in the best interests of the Debtors and their estates, creditors, and
interest holders and all other parties in interest herein.



     E. The Bidding Procedures, substantially in the form attached hereto as Exhibit 1, are fair,
reasonable, and appropriate and are designed to maximize the recovery on the Purchased Assets. The
APA and its terms and conditions and the Bidding Procedures were negotiated in good faith and at
arms’-length between the Debtors and the Proposed Buyer and their respective legal and financial
advisors.



     F. The
Auction and Hearing Notice, substantially in the form attached hereto as Exhibit 2,



4









 




provides due, adequate, and timely notice of the Auction, the Sale, and the other transactions
contemplated in the APA and the Sale Motion (collectively, the “Transactions”), and all relevant
objection deadlines, in accordance with Bankruptcy Rule 2002 and the applicable provisions of the
Bankruptcy Code.




     G. The scope of the notice of the Sale Motion, the Bidding Procedures, the Auction, the Sale,
the Sale Hearing, and all the other Transactions proposed to be provided by the Debtors in the Sale
Motion and the Bidding Procedures constitutes due, sufficient, and adequate notice to all
parties-in-interest of the Auction, the Sale, and all the other Transactions, and all relevant
objection deadlines. Such proposed notice of the Sale Motion, the Bidding Procedures, the Auction,
the Sale, the Sale Hearing, and all the other Transactions is appropriate and reasonably calculated
to provide all interested parties with timely and proper notice and an opportunity to be heard, and
no other or further notice thereof is required.



     H. The notice to counterparties of the Purchased Contracts and the Purchased Leases provided
in accordance with the Bidding Procedures is reasonably calculated to provide all counterparties to
the Purchased Contracts and the Purchased Leases with proper notice of the potential assumption and
assignment of their executory contract or unexpired lease and any Cure Amounts associated
therewith. The notice to counterparties to any other contracts and leases to be rejected as
provided in the Section 365 Notice with respect to contracts and leases to be rejected by the Debtors in connection with the Sale Order is reasonably calculated to provide
all counterparties to such contracts and leases with proper notice of the potential rejection of
their executory contract or unexpired lease.



     I. The Termination Fee and the Expense Reimbursement are essential inducements and conditions
relating to the Proposed Buyer’s entry into, and continuing obligations under, the



5









 




APA. Unless the Proposed Buyer is assured that the Termination Fee and the Expense Reimbursement will be available,
the Proposed Buyer is unwilling to remain obligated to consummate the Transactions or otherwise be
bound under the APA (including the obligations to maintain its committed offer while such offer is
subject to higher or otherwise better offers as contemplated by the Bidding Procedures). The
Termination Fee and the Expense Reimbursement induced the Proposed Buyer to submit a bid that will
serve as a minimum or floor bid at the Auction on which the Debtors, their creditors, and other
bidders can rely. The Proposed Buyer has provided a material benefit to the Debtors and their
creditors by increasing the likelihood that the best possible purchase price for the Purchased
Assets will be received. Accordingly, the Termination Fee and the Expense Reimbursement provide an
actual benefit to the Debtors’ estates, are necessary to preserve the Debtors’ estates, represent
the best method for maximizing value for the benefit of the Debtors’ estates, and are reasonable
and appropriate under the circumstances.




          NOW, THEREFORE, IT IS HEREBY:




          ORDERED that the Sale Motion is granted to the extent of the Initial Relief; and it is further




          ORDERED that all objections to the Initial Relief that have not been withdrawn, waived, or
settled as announced to this Court at the Bidding Procedures Hearing or by stipulation filed with
this Court, are overruled and deemed dismissed with prejudice; and it is further




          ORDERED that the Debtors are authorized to enter into the APA and sell the Purchased Assets
and/or the Excluded Developments by conducting the Auction in accordance with the Bidding
Procedures, which procedures are hereby approved in their entirety and shall govern all bids and
bid proceedings relating to the Purchased Assets; and it is further




6









 








          ORDERED that the Debtors are authorized to take any and all actions necessary and/or
appropriate to implement the Bidding Procedures; and it is further




          ORDERED that the termination provisions of Article 4 of the APA, including, without
limitation, the Termination Fee and the Expense Reimbursement provisions of Sections 4.6(c) and
4.6(d) of the APA, are hereby approved and shall be binding upon the Debtors. The Termination Fee
and the Expense Reimbursement shall be paid by the Debtors, pursuant to the terms and conditions of
the APA, without any further approval or order of this Court, immediately upon the closing of a
Competing Transaction, provided, however, that the foregoing shall not preclude
payment of the Expense Reimbursement pursuant to the terms and conditions of Section 4.6(c) of the
APA. The Proposed Buyer shall not waive the right to payment of the Termination Fee or the Expense
Reimbursement by bidding or rebidding at the Auction. The Termination Fee and the Expense Reimbursement shall constitute administrative expense claims
pursuant to Bankruptcy Code § 503(b); and it is further




          ORDERED that the form of the Auction and Hearing Notice is hereby approved in all respects,
and the Debtors are authorized to cause the Auction and Hearing Notice to be served in the manner
specified in the Bidding Procedures no later than 5 business days following the entry of this
Order. Such service and the other means of service as described in the Motion shall be deemed due,
timely, good, and sufficient notice of the entry of this Order, the Auction, the Sale Motion, the
Sale Hearing, the Bidding Procedures, the proposed Sale Order, the proposed assumption and
assignment of the Purchased Contracts and Purchased Leases, the proposed rejection of the Rejected
Contracts, and all of the Transactions, and all proceedings to be held thereon and all relevant
objection deadlines; and it is further




7









 








          ORDERED that the Debtors are authorized, but not directed, to publish an abbreviated version
of the Auction and Hearing Notice prior to the Auction in an appropriate publication or
publications, to be determined by the Debtors, if they determine that such publication is in the
best interests of their estates; and it is further




          ORDERED that all bids for the acquisition of the Purchased Assets must in writing, comply with
the Bidding Procedures, and be received by (1) BMO Capital Markets Corp., 115 South LaSalle Street,
35th Floor, Chicago, Illinois 60603, Attn: Mr. Scott W. Humphrey, Executive Managing Director and
Head of U.S. M&A, (2) Lieutenant Island, 5 Leonard Road, Bronxville, New York 10708, Attn.: Mr.
Richard Thaler, and (3) the CRO, c/o PMCM, LLC, 110 Chadds Ford Commons, Chadds Ford, Pennsylvania
19317, Attn.: Mr. Mitchell Arden and Mr. Vincent Colistra, with a copy to (a) co-counsel to the
Debtors, (i) Cahill Gordon & Reindel llp, Eighty Pine Street, New York, New York
10112-2200, Attn: Joel H. Levitin, Esq., and (ii) Elliott Greenleaf, 1105 North Market Street,
Suite 1700, Wilmington, Delaware 19801, Attn.: Rafael X. Zahralddin, Esq.; (b) the Office of the
United States Trustee for the District of Delaware, 844 King Street, Room 2207, Wilmington,
Delaware 19801, Attn.: David Buchbinder, Esq.; (c) counsel to the agent for the Debtors’ primary
pre-petition secured lenders, (i) Reed Smith LLP, 1201 Market Street, Suite 1500, Wilmington,
Delaware 19801, Attn.: Mark W. Eckard, Esq., and (ii) Reed Smith LLP, One Liberty Place, 1650
Market Street, Philadelphia, Pennsylvania 19103-7301, Attn.: Claudia Z. Springer, Esq. and Scott M.
Esterbrook, Esq.; (d) [proposed] counsel to the Creditors Committee, (i) Duane Morris LLP, 1100
North Market Street, Suite 1200, Wilmington, Delaware 19801, Attn.: Richard W. Riley, Esq. and
Sommer L. Ross, Esq., (ii) Duane Morris LLP, 1540 Broadway, New York, New York 10036-4086, Attn.:
Gerard S. Catalanello, Esq. and James J. Vincequerra, Esq., (iii) Duane





8









 







Morris LLP, 30 South 17th Street, Philadelphia, Pennsylvania 19103-4196, Attn.: Lawrence J. Kotler, Esq., and (e) co-counsel
to the Proposed Buyer, (i) Hogan & Hartson LLP, 875 Third Avenue, New York, NY 10022, Attn.: Ira S.
Greene, Esq. and Scott A. Golden, Esq., and (ii) Potter Anderson & Corroon LLP, 1313 North Market
Street, Wilmington, Delaware 19899, Attn.: Steven M. Yoder, Esq., no later than 12:00 noon
(prevailing Eastern Time) on June 16, 2010 (the “Bidding Deadline”); and it is further




          ORDERED that each Initial Competing Bid must not contain any contingencies to closing that are
not also set forth in Article IX of the APA, including, without limitation, any
contingencies for financing, diligence, board approval, or similar contingencies or
conditions; and it is further




          ORDERED that the Debtors have the right to reject any and all Competing Bids at their
discretion in the exercise of their business judgment; and it is further




          ORDERED that the form of the APA substantially attached as Exhibit A to the Sale Motion is
approved and shall be the form of any such agreement utilized in connection with the Sale of the
Purchased Assets and all other Transactions in connection therewith; and it is further




          ORDERED that the Sale shall be on an “as is, where is” basis and without representations or
warranties of any kind, nature, or description by the Debtors, their agents, or their estates,
except to the extent expressly set forth in the APA with the Proposed Buyer or the Winning
Competing Bidder, as the case may be; and it is further






9









 








          ORDERED that if, in addition to the Qualified Bid of the Proposed Buyer as embodied in the
APA, one or more Qualified Bids are received by the Bidding Deadline (a “Competing Bid”), the
Auction will be conducted at the offices of Cahill Gordon & Reindel llp, Eighty Pine
Street, New York, New York 10005-1702, or at another location as may be timely disclosed by the
Debtors to the Qualified Bidders, on or about 9:30 a.m. (prevailing Eastern Time) on June 23, 2010
(the “Auction Date”). If, however, (i) the only Qualified Bid the Debtors have received by the
Bidding Deadline (unless the Debtors have extended such deadline in accordance with the terms of
the Bidding Procedures) is the Proposed Buyer’s Qualified Bid as set forth in the APA, then the
Auction will not be held, and the Proposed Buyer shall be deemed the Winning Bidder, and the
Debtors will be authorized to seek approval thereof at the Sale Hearing; and it is further




          ORDERED that the Debtors may, in their discretion, consider bids for the Excluded Developments
and may in their discretion seek this Court’s authorization to consummate a sale thereof free and
clear of all Liens at the Sale Hearing; and it is further




          ORDERED that to the extent that the Initial Bid of the Proposed Buyer as embodied in the APA
is not the Winning Competing Bid at any Auction, the Debtors are authorized to file with this Court
and serve a supplement (the “Supplement”), as promptly as is reasonably practicable prior to the
Sale Hearing, that will inform this Court of the results of the Auction, the Winning Competing
Bid(s), and the Second Place Bid(s). The Supplement would identify, among other things, (a) the
Winning Competing Bidder as the proposed purchaser(s) of the Purchased Assets, (b) the
consideration to be paid by such purchaser(s) for the Purchased Assets, and (c) any executory
contracts and unexpired leases to be assumed and assigned to the purchaser(s) in connection with
the Sale (to the extent different from the Assigned Agreements






10









 







proposed to be assumed and assigned to the Proposed Buyer under the APA). In addition, the Debtors would attach to the Supplement, as
exhibits, (a) any revised proposed order approving the Sale and (b) copies of the asset purchase
agreement(s) entered into by the Debtors and the Winning Competing Bidder(s), and (c) the Winning
Competing Bidder’s Adequate Assurance Package; and it is further




          ORDERED that the Debtors have the right to (a) amend and/or impose additional terms and/or
conditions at or prior to the Auction (other than the requirements for a Qualified Bid set forth in
the Bidding Procedures and the right of the Proposed Buyer to make a revised higher or better offer
at any time during the Auction) that they believe will better promote the goals of the Auction and
be in the best interests of their estates, and do not otherwise conflict with the terms and
requirements set forth in the APA and (b) subject to the terms of the APA, extend the deadlines set
forth in the Bidding Procedures and/or adjourn the Auction at the Auction and/or the Sale Hearing
in open court or on this Court’s calendar on the date scheduled for said hearing without further
notice to creditors or parties-in-interest; and it is further




          ORDERED that each Competing Bid must fully disclose the identity of all other entities, if
any, which shall be acquiring directly or indirectly after the Closing, a portion of the Purchased
Assets under or in connection with a Bid that has been submitted. Each Competing Bidder is
required to confirm that it has not engaged in any collusion with respect to the bidding or the
proposed Sale, except that different parties may (with the Debtors’ permission, at their discretion
following a request therefor by the potential joint bidders upon full notification of the entities
involved) combine Bids into a joint bid; and it is further




11









 








          ORDERED that all Bids submitted on or prior to the Bidding Deadline, as may be modified by a
Bidder at the Auction, shall remain open and irrevocable until the Sale Hearing; provided,
however, that the Winning Competing Bid and the Second Place Bid shall be deemed to remain
open and irrevocable until the actual closing of the transaction that is the subject of such Bid
(subject to the terms and conditions of the APA with respect to the Proposed Buyer). Acceptance of
a Qualified Bid shall, in all respects, be subject to entry of an order by this Court that, among
other things, authorizes the Debtors to consummate a sale to the Winning Competing Bidder.
Following the Sale Hearing, if the Proposed Buyer or any Winning Competing Bidder (as the case may
be) fails to consummate an approved sale because of a breach or failure to perform on its part, the
next highest or otherwise best Qualified Bid, as disclosed at the Auction (the “Second Place Bid”),
shall be deemed to be the Winning Competing Bid, and the Debtors shall be authorized, but not
required (except if the Second Place Bid is made by the Proposed Buyer), to consummate the Sale
with the Qualified Bidder submitting such Second Place Bid (i) without the need for further notice
or order of this Court and (ii) without prejudice to the Debtors’ right to seek all available
damages from the defaulting bidder (be it the Proposed Buyer or the Winning Competing Bidder at the
Auction, including the party that makes the Second Place Bid, as the case may be); and it is
further




          ORDERED that the Debtors are authorized to cause the Section 365 Notice to be filed with this
Court and served in the manner set forth in the Bidding Procedures no later than 10 days following
the entry of this Order; and it is further




          ORDERED that the Sale Hearing shall be held at the United States Bankruptcy Court for the
District of Delaware, 824 Market Street, 6th Floor, Courtroom #2, Wilmington,





12









 







Delaware
19801, on or about June 24, 2010 at
___:____ __.m. (prevailing Eastern Time), or as soon thereafter as counsel may be
heard (the “Sale Hearing Date”); and it is further




          ORDERED that, except as otherwise set forth herein, objections, if any, to the remaining
relief sought in the Sale Motion must be in writing, stating with particularity the
grounds for such objections or other statements of position, comply with the Bankruptcy Code,
the Bankruptcy Rules and the Local Rules, and be filed and served so as to be actually received by
co-counsel to the Debtors, counsel to the Agent, the United States Trustee, co-counsel to the
Proposed Buyer, and [proposed] counsel to the Creditors Committee, so that they are actually
received by 4:00 p.m. (prevailing Eastern Time) on the date that is 7 days prior to the Sale
Hearing Date; and it is further




          ORDERED that objections, if any, to the information contained in the Supplement must be in
writing, comply with the Bankruptcy Code, the Bankruptcy Rules and the Local Rules, and be filed
and served so as to be actually received by co-counsel to the Debtors, counsel to the Agent, the
United States Trustee, and [proposed] counsel to the Creditors Committee, so that they are
actually received by noon on the date that is one day prior to the Sale Hearing Date; and
it is further




          ORDERED that the procedures set forth in the Sale Motion for the assumption and assignment of
contracts and leases, or the rejection thereof, are hereby approved; and its is further




          ORDERED that upon written request to the Debtors’ counsel by a party to a contract or lease
proposed to be assumed and assigned to the Proposed Buyer or the Winning Competing Bidder, as
applicable, the Debtors will provide to such party evidence of the ability






13









 







of the Proposed Buyer or the Winning Competing Bidder, as applicable, to provide adequate assurance of future performance
under such contract or lease; and it is further




          ORDERED that objections, if any, that relate to (i) the proposed assumption and assignment of
an Assigned Agreement (including, but not limited to, any objections relating to the validity of
the Proposed Cure Amount as determined by the Debtors or otherwise to assert that any amounts,
defaults, conditions, or pecuniary losses must be cured or satisfied under any of the assigned
executory contracts or unexpired leases, not including accrued but not yet due obligations, in
order for such contract to be assumed and/or assigned) or (ii) the rejection of a Rejected
Contract, as applicable (a “Section 365 Objection”) must be in writing, comply with the Bankruptcy
Code, the Bankruptcy Rules and the Local Rules, state the basis of such objection with specificity,
including, without limitation, the cure amount alleged by such counterparty (if applicable), and
include contact information for such counterparty, and be filed and served so as to be actually
received by co-counsel to the Debtors, counsel to the Agent, the United States Trustee, co-counsel
to the Proposed Buyer, and [proposed] counsel to the Creditors Committee, so that they are
actually received by 4:00 p.m. (prevailing Eastern Time) on the date that is 10 days prior
to the Sale Hearing Date, or in the case of Additional Contracts, within 10 days after receipt of a
Section 365 Notice with respect thereto (as applicable, the “Section 365 Objection Deadline”).; and
it is further




          ORDERED that, unless a Section 365 Objection is filed and served by a party to (a) an Assigned
Agreement or a party interested in an Assigned Agreement or (b) a Rejected Contract, as applicable,
by the Section 365 Objection Deadline, all interested parties that have received actual or
constructive notice thereof shall be deemed to have waived and released any right to assert a
Section 365 Objection and to have otherwise consented to either (i) the






14









 







assignment of the applicable Assigned Agreement and shall be forever barred and estopped from
asserting or claiming against the Debtors, the Purchased Assets, the Proposed Buyer, or the
Winning Competing Bidder (as the case may be), or any other assignee of the applicable Assigned
Agreement, that any additional amounts are due or defaults exist, or conditions to assignment must
be satisfied, under such Assigned Agreement for the period prior to the Sale Hearing Date, or (ii)
the rejection of a Rejected Contract, as applicable; and it is further




          ORDERED that hearings with respect to any Section 365 Objections may be held (a) at the Sale
Hearing or (b) at such other date as this Court may designate, provided that if the applicable
Assigned Agreement is assumed and assigned by order of this Court, the cure amount shall be paid in
accordance with the terms of the APA or, if the Winning Bidder is a party other than the Proposed
Buyer, as this Court may direct pending further order of this Court; and it is further




          ORDERED that a properly filed and served Section 365 Objection shall not constitute an
objection to the remaining relief generally requested in the Motion; and it is further




          ORDERED that to the extent this Order is inconsistent with any prior order or pleading with
respect to the Sale Motion in the Bankruptcy Cases, the terms of this Order shall govern; and it is
further




          ORDERED that notwithstanding Bankruptcy Rules 6004, 6006, 7062, 9014, or otherwise, the terms
and conditions of this Order shall be effective and enforceable immediately upon entry and its
provisions shall be self-executing; and it is further





15









 








          ORDERED that all time periods set forth in this Order shall be calculated in accordance with
Bankruptcy Rule 9006(a); and it is further





16









 








          ORDERED that this Court shall retain jurisdiction with respect to all matters arising from or
related to the implementation of this Order, including to resolve any dispute relating to the
interpretation of the terms and conditions of the APA and this Order.




Dated: May ___, 2010

          Wilmington, Delaware




 






UNITED STATES BANKRUPTCY JUDGE





17











 





EXHIBIT 1




BIDDING PROCEDURES



     The following procedures (collectively, the “Bidding Procedures”) shall govern the sale (the
“Sale”) and auction (the “Auction”) of all of the right, title, and interests in substantially all
of the assets (the “Purchased Assets”) of Orleans Homebuilders, Inc., and its debtor-subsidiaries
and affiliates (collectively, the “Debtors”), which are debtors-in-possession in cases pending in
the United States Bankruptcy Court for the District of Delaware (the “Court”). The bankruptcy
cases were commenced on March 1, 2010 (the “Petition Date”).



     These Bidding Procedures have been approved and authorized by an order of the Honorable Peter
J. Walsh, United States Bankruptcy Court Judge, dated May [___], 2010 (the “Bidding Procedures
Order”), upon the motion of the Debtors, dated April 13, 2010, seeking such relief and other
proposed relief in connection with the Sale (the “Sale Motion”). Any party-in-interest who wishes
to receive a copy of the Sale Motion, including the APA and all other exhibits thereto, may make
such request in writing to the Debtors’ co-counsel, (i) Cahill Gordon & Reindel llp,
Eighty Pine Street, New York, New York 10005-1702, Attn: Joel H. Levitin, Esq. (Telephone:
212-701-3000, Facsimile: (212) 378-2439), or (ii) Elliott Greenleaf, 1105 North Market Street,
Suite 1700, Wilmington, Delaware 19801, Attn.: Rafael X. Zahralddin, Esq. (Telephone: (302)
384-9400, Facsimile: (302) 384-9399), or by downloading a copy of same from the Bankruptcy Court’s
website (which is located at http://www.deb.uscourts.gov) or from the website established by the
Debtors’ noticing agent (which is located at www.orleanshomesreorg.com).


1. The Purchased Assets




     The Debtors and certain non-debtor parties, OHI PA, LLC and OHI NJ, LLC (the “Sellers”), have
entered into an Asset Purchase Agreement (the
“APA”),1 dated as of April 13,
2010, with NVR, Inc. (including its permitted designees, the “Proposed Buyer”), pursuant to which
the Proposed Buyer would acquire the Purchased Assets, subject to higher and better offers and
Court approval. As further set forth in, and qualified by, the APA, the Purchased Assets include,
among other things, the Debtors’ real property as set forth on Schedule 2.1(a) to the APA; certain
accounts receivable; the Controlled Jobs; inventory, supplies, and materials; certain rights in or
to joint ventures, strategic alliances, or partnerships; the Purchased Contracts, the Purchased
Leases, and all rights of the Debtors thereunder; deposits and prepaid charges and expenses;
documents used in connection with the Debtors’ real property; permits; the Debtors’ intellectual
property; rights in any homeowner associations or similar organizations; and all other assets used
in connection with or related to the Purchased Assets listed on Schedule 2.1(p) to the APA. The
Purchased Assets will be sold free and clear of all liens, claims, encumbrances, and other
interests, subject to agreement to the contrary with the successful bidder therefor with respect to
the Permitted Liens. The Purchased Assets do not include, among other things, (i) bankruptcy
causes of action, such as avoidance actions against the Debtors’ suppliers, vendors, merchants,
manufacturers, or related parties, or other causes of action not related to the Purchased Assets;
(ii) tax refunds; (iii) rights in respect of the Excluded Developments (which are the communities





 




			
	1	 	All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the APA.




 









 









referred to as Wildflower at Walkill, in Middletown, New York and Woodside Crossing, in Rock
Tavern, New York and related assets); or (iv) the Debtors’ cash on hand. To the extent of any
discrepancy between the description set forth in this paragraph and the terms of the APA, the
latter shall govern.




     The Sale shall be on an “as is, where is” basis and without representations or warranties of
any kind, nature, or description by the Debtors, their agents, or their estates, except to the
extent expressly set forth in the APA with the Proposed Buyer or the Winning Competing Bidder, as
the case may be.


2. The Stalking Horse Agreement with the Proposed Buyer




     The Base Purchase Price under the APA is $170,000,000, subject to certain post-closing
adjustments (including subtracting the aggregate amount of all Sellers’ Assumed Cure Amounts), and
the Proposed Buyer will also assume certain liabilities, including the Assumed Cure Amount and
one-half of the Transfer Taxes due.



     “Assumed Cure Amount” means with respect to each Purchased Lease or Purchased Contract, any
amounts required to be paid pursuant to Bankruptcy Code § 365(b) or otherwise in order to cure any
defaults existing as of the date of assumption in respect of such Purchased Lease or Purchased
Contract, as approved by the Bankruptcy Court (including, for the avoidance of doubt, the Sellers’
Assumed Cure Amounts).



     The Proposed Buyer has agreed to provide the Debtors with a deposit in the amount of $17
million, which is 10% of the amount of the Base Purchase Price (the “Deposit”). The Proposed Buyer
has already provided half of the Deposit, and will pay the balance on or prior to the Bidding
Deadline.



     The APA provides for the payment of a Termination Fee and/or the Expense Reimbursement to the
Proposed Buyer. The Debtors would be required to pay the Termination Fee and the Expense
Reimbursement upon the termination of the APA under certain circumstances as fully set forth in
Section 4.6(d) of the APA. The Termination Fee represents 2% of the Base Purchase Price to be paid
by the Proposed Buyer under the APA. Notwithstanding the foregoing, the Debtors would be required
to pay the Expense Reimbursement (in an amount of up to $1,000,000) upon the termination of the APA
under certain circumstances as more fully set forth in Section 4.6(c) thereof.


3. Submission of Bids




     The Debtors intend to deliver requests for bids to all parties who are known to have expressed
an interest in acquiring the Purchased Assets.



     Also, in the Auction and Hearing Notice, the Debtors will invite all potential bidders who
have not previously executed a confidentiality agreement to request a copy of same from the
Debtors’ Chief Restructuring Officer (the “CRO”) and their advisors, BMO Capital Markets Corp.
(“BMOCM”) and Lieutenant Island Partners LLC (“Lieutenant Island”). These advisors on their own
initiative, may also send a proposed confidentiality agreement to those parties who have not yet
executed one but whom they or the Debtors have identified as potentially being interested in making
an offer to purchase the Purchased Assets and participating in the Auction. All parties who timely
execute and return a confidentiality agreement to the CRO, BMOCM, and Lieutenant Island and who
provide, in the Debtors’ discretion, information demonstrating sufficient financial wherewithal to
acquire the Purchased Assets, will be provided access to the due diligence materials the Debtors
and their advisors have already prepared for this purpose.



2









 





     Thereafter, the Debtors and the CRO, BMOCM, and Lieutenant Island will entertain any further
reasonable requests for additional information and due diligence from any party who has so executed
a confidentiality agreement and provided the required satisfactory evidence of financial
wherewithal, and has also submitted a written non-binding expression of interest to the reasonable
satisfaction of the Debtors and their advisors. The Debtors, in their discretion, may deny any
such requests for additional information, if, after taking into account, among other things,
business factors, legal, regulatory, and other considerations, they determine that doing so would
not be in the best interests of their estates and creditors or is otherwise contrary to the goals
of the Auction and the Sale.



     All bids for the acquisition of the Purchased Assets must in writing, comply with the Bidding
Procedures, and be received by (1) BMO Capital Markets Corp., 115 South LaSalle Street, 35th Floor,
Chicago, Illinois 60603, Attn: Mr. Scott W. Humphrey, Executive Managing Director and Head of U.S.
M&A, (2) Lieutenant Island, 5 Leonard Road, Bronxville, New York 10708, Attn.: Mr. Richard Thaler,
and (3) the Debtors’ Chief Restructuring Officer, c/o PMCM, LLC, 110 Chadds Ford Commons, Chadds
Ford, Pennsylvania 19317, Attn.: Mr. Mitchell Arden and Mr. Vincent Colistra, with a copy to (a)
co-counsel to the Debtors, (i) Cahill Gordon & Reindel llp, Eighty Pine Street, New York,
New York 10112-2200, Attn: Joel H. Levitin, Esq., and (ii) Elliott Greenleaf, 1105 North Market
Street, Suite 1700, Wilmington, Delaware 19801, Attn.: Rafael X. Zahralddin, Esq.; (b) the Office
of the United States Trustee for the District of Delaware, 844 King Street, Room 2207, Wilmington,
Delaware 19801, Attn.: David Buchbinder, Esq.; (c) counsel to the agent for the Debtors’ primary
pre-petition secured lenders, (i) Reed Smith LLP, 1201 Market Street, Suite 1500, Wilmington,
Delaware 19801, Attn.: Mark W. Eckard, Esq., and (ii) Reed Smith LLP, One Liberty Place, 1650
Market Street, Philadelphia, Pennsylvania 19103-7301, Attn.: Claudia Z. Springer, Esq. and Scott M.
Esterbrook, Esq.; (d) [proposed] counsel to the official committee of unsecured creditors appointed
in the Debtors’ Chapter 11 cases (the “Creditors Committee”), (i) Duane Morris LLP, 1100 North
Market Street, Suite 1200, Wilmington, Delaware 19801, Attn.: Richard W. Riley, Esq. and Sommer L.
Ross, Esq., (ii) Duane Morris LLP, 1540 Broadway, New York, New York 10036-4086, Attn.: Gerard S.
Catalanello, Esq. and James J. Vincequerra, Esq., (iii) Duane Morris LLP, 30 South 17th Street,
Philadelphia, Pennsylvania 19103-4196, Attn.: Lawrence J. Kotler, Esq., and (e) co-counsel to the
Proposed Buyer, (i) Hogan & Hartson LLP, 875 Third Avenue, New York, NY 10022, Attn.: Ira S.
Greene, Esq. and Scott A. Golden, Esq., and (ii) Potter Anderson & Corroon LLP, 1313 North Market
Street, Wilmington, Delaware 19899, Attn.: Steven M. Yoder, Esq., no later than 12:00 noon
(prevailing Eastern Time) on June 16, 2010 (the “Bidding Deadline”). The Debtors reserve the right
to (a) amend and/or impose additional terms and/or conditions at or prior to the Auction (other
than the requirements for a Qualified Bid set forth herein and the right of the Proposed Buyer to
make a revised higher or better offer at any time during the Auction) that they believe will
better promote the goals of the Auction and be in the best interests of their estates, and do not
otherwise conflict with the terms and requirements set forth in the APA and (b) subject to the
terms of the APA, extend the deadlines set forth in the Bidding Procedures and/or adjourn the
Auction at the Auction and/or the Sale Hearing in open court or on the Bankruptcy Court’s calendar
on the date scheduled for said hearing without further notice to creditors or parties-in-interest.



     Any party interested in making a Bid must comply with these Bidding Procedures. Only
Qualified Bidders will be eligible and entitled to bid at the Auction, unless the Debtors or the
Bankruptcy Court determine otherwise. The Proposed Buyer will be deemed a Qualified Bidder, and
the APA will be deemed a Qualified Bid, for all purposes of the Auction. Within 3 days after the
Bidding Deadline, the Debtors shall notify all parties who submitted bids whether or not they
constitute a Qualified Bidder.



3









 





     In addition to the Proposed Buyer, a “Qualified Bidder” is one who has complied with the terms
and conditions set forth herein, including, without limitation, having demonstrated the ability to
close the Transactions to the reasonable satisfaction of the Debtors. In order to be considered
for Qualified Bidder status, a Person must: (a) make a Bid prior to the Bidding Deadline (as such
terms are defined below); (b) provide financial statements or other evidence of financial
wherewithal reasonably satisfactory to the Debtors, demonstrating its ability to perform and
consummate the transaction described in its Bid (including, to the extent applicable, by providing
an Adequate Assurance Package (as such term is defined below) and proof of such bidder’s ability to
satisfy the balance of the proposed purchase price or to provide any other consideration to be
given in connection with the Sale); (c) provide a bid letter including a statement that it is
willing to proceed as a buyer on a basis substantially similar to that of the Proposed Buyer with
respect to the Purchased Assets and/or the Region(s) that is the subject of the Bid (including with
respect to the assumption of the Assumed Liabilities, or to the extent the Bid is for fewer than
for all 4 of the Regions, such Assumed Liabilities as relate to the Region(s) in question), and
include a binding, definitive, and irrevocable executed copy of the APA marked with interlineations
indicating any modifications thereto required by the bidder (which agreement shall not contain the
provisions set forth in Section 4.6 of the APA or otherwise entitle such bidder to a Termination
Fee or Expense Reimbursement); (d) complete and execute a confidentiality agreement acceptable to
the Debtors and their professionals; and (e) provide an earnest money deposit of equal to 10% of
the amount of its bid, upon submission of the Bid (the “Bid Deposit”). The Debtors may request
additional information from a Competing Bidder in order to evaluate the bidder’s ability to
consummate a transaction and to fulfill its obligations in connection therewith, and such bidder
will be obligated to provide such information as a precondition to participating further in the
Auction.



     The Bid Deposit shall be in the form of a wire transfer to the account of an escrow agent
selected by the Debtors (the “Escrow Agent”), pursuant to instructions to be provided upon request.
The Bid Deposit, together with any interest earned thereon, shall be returned to any Bidder whose
Bid is not accepted by the Debtors within 3 business days of the conclusion of the Sale Hearing,
except that in the case of the party who submits the Second Place Bid (as such term is defined
below), the Debtors reserve the right to retain such bidder’s Bid Deposit until 3 days after the
Transactions with the Winning Competing Bidder has been consummated. If the entity that makes the
Winning Competing Bid (as such term is defined below) fails to consummate the purchase of the
Purchased Assets, and such failure to consummate the purchase or purchases is the result of a
breach by the Winning Competing Bidder, such bidder’s Bid Deposit shall be forfeited to the Debtors
and the Debtors specifically reserve the right to seek all available damages from the defaulting
bidder.



     To be considered a Qualified Bid, a bid must: (a) specify the portion of the consideration to
be paid in cash and the portion to be paid in any other form of value (if any), including
specifying any liability of the Debtors that the Bidder intends to assume in connection with the
Sale above and beyond the Assumed Liabilities; (b) if any consideration above and beyond the
assumption of the Assumed Liabilities is to be provided in a form other than cash, provide
information concerning such consideration to permit the Debtors to accurately assess the value of
such consideration; (c) if (as described below) the bid contemplates a purchase of fewer than all
of the Purchased Assets (or not all 4 of the Regions), provide sufficient detail concerning which
of the Purchased Assets (and/or Regions, as applicable) would not be purchased thereby, or if the
bid contemplates a purchase of any or all of the Excluded Assets, provide sufficient detail
concerning which of the Excluded Assets would also be purchased thereby; (d) provide sufficient
indicia that such bidder or its representative is legally empowered, by power of attorney or
otherwise, and financially capable (i) to bid on behalf of the prospective bidder and (ii) to
complete and sign, on behalf of the bidder, a binding and enforceable asset purchase agreement; (e)
not contain any contingencies to closing that are not also set forth in Article IX of the APA,
including, without limitation, any contingencies for financing, diligence, board approval, or
similar



4









 




contingencies or conditions; (f) identify with particularity each and every executory contract
or unexpired lease the assumption and assignment of which is a condition to closing, to the extent
different from the Assigned Agreements proposed to be assumed and assigned to the Proposed Buyer
under the APA; and (g) require the competing bidder to consummate the Sale on substantially the
same timing as set forth in the APA.




     Except as otherwise set forth herein, any initial bid of a Competing Bidder (an “Initial
Competing Bid”) made prior to the Bidding Deadline may (a) not be less than $178,000,000,
consisting of the sum of the (i) Base Purchase Price, (ii) the sum of the Termination Fee in the
amount of $3,400,000 plus the Expense Reimbursement in the amount of $1,000,000, and (iii) a
minimum incremental overbid of at least $3,600,000, (b) provide that the bidder will assume or pay
at Closing substantially all of the Assumed Liabilities (or all of the liabilities with respect to
the individual Region(s) that is the subject of such Initial Competing Bid, to the extent it is for
fewer than all 4 of the Regions, as discussed below), and (c) otherwise be on terms that are
substantially similar to, or more favorable to the Debtors, than those set forth in the APA with
the Proposed Buyer with respect to the Purchased Assets and/or the Region(s) that is the subject of
the Bid. Notwithstanding the foregoing, the Debtors may, in their discretion, consider joint or
individual bids from parties who express an interest in acquiring fewer than all of the Debtors’ 4
main regions of operations (North, South, Florida, and the Midwest) (each, a “Region,” and
collectively, the “Regions”) so long as when combined, such bids together would result in
the acquisition of all of the Regions for an aggregate purchase price in excess of the Initial
Competing Bid, and all of the Assumed Liabilities would be assumed by the various bidders, as
applicable (as so combined).



     In any bid for the North Region (separate from a bid for all of the Purchased Assets), the
Competing Bidder must indicate whether its bid also includes the Excluded Developments.
Alternatively, the Debtors, in their discretion may consider a bid for only the Excluded
Developments, solely to the extent that any bid therefor otherwise satisfies all of the other
applicable requirements set forth herein for a Qualified Bid. In the event the Debtors receive an
otherwise Qualified Bid for only the Excluded Developments that they would, in their discretion,
consider acceptable and would not interfere with the Sale of the Purchased Assets or the North
Region (as applicable), the Debtors may also submit such bid to the Bankruptcy Court for approval
at the Sale Hearing. In the event any bid for the Excluded Assets would entail the assumption and
assignment of any contract or lease, the Debtors would provide notice to the applicable non-debtor
contract party and an opportunity to object to the proposed Cure Amount.



     Each Competing Bid must fully disclose the identity of all other entities, if any, which shall
be acquiring directly or indirectly after the Closing a portion of the Purchased Assets under or in
connection with a Bid. Each Competing Bidder is required to confirm that it has not engaged in any
collusion with respect to the bidding or the proposed Sale, except that different parties may (with
the Debtors’ permission, at their discretion (following a request therefor by the potential joint
bidders upon full notification of the entities involved) combine Bids into a joint bid (as
described further herein).



     Bids submitted on or prior to the Bidding Deadline, as may be modified by a Bidder at the
Auction, shall remain open and irrevocable until the Sale Hearing; provided,
however, that the Winning Competing Bid and the Second Place Bid shall be deemed to remain
open and irrevocable until the closing of the transaction that is the subject of such Bid (subject
to the terms and conditions of the APA with respect to the Proposed Buyer). Acceptance of a
Qualified Bid shall, in all respects, be subject to the entry of an order by the Bankruptcy Court
that, among other things, authorizes the Debtors to consummate a sale to the Winning Competing
Bidder. Following the Sale Hearing, if the Proposed Buyer or any Winning Competing Bidder (as the
case may be) fails to consummate an approved sale because of a breach or failure to perform on



5









 




its part, the next highest or otherwise best Qualified Bid, as disclosed at the Auction (the
“Second Place Bid”), shall be deemed to be the Winning Competing Bid, and the Debtors shall be
authorized, but not required (except if the Second Place Bid is made by the Proposed Buyer), to
consummate the Sale with the Qualified Bidder submitting such Second Place Bid (i) without the need
for further notice or order of the Bankruptcy Court and (ii) without prejudice to the Debtors’
right to seek all available damages from the defaulting bidder (be it the Proposed Buyer or the
Winning Competing Bidder at the Auction, including the party that submits the Second Place Bid, as
the case may be).



4. The Auction and Selection of the Winning Bid




     If one or more Qualified Bids (other than the Proposed Buyer’s) are received by the Bidding
Deadline (a “Competing Bid”), the Auction would be conducted at the offices of Cahill Gordon &
Reindel llp, Eighty Pine Street, New York, New York 10005-1702, or at another location as
may be timely disclosed by the Debtors to the Qualified Bidders, on or about June 23, 2010 starting
at 9:30 a.m. (prevailing Eastern Time) (the “Auction Date”). If, however, (i) the only Qualified
Bid the Debtors have received by the Bidding Deadline (unless the Debtors have extended such
deadline in accordance with the terms of the Bidding Procedures) is the Proposed Buyer’s Qualified
Bid as set forth in the APA, then the Auction will not be held, and the Proposed Buyer will be
deemed the Winning Bidder, and the Debtors will be authorized to seek approval thereof at the Sale
Hearing.



     In the event there is an Auction, all bidders must appear in person or through a duly
authorized representative, or else not be eligible or entitled to participate therein. At or prior
to the commencement of the Auction, the Debtors will notify the Proposed Buyer and all Qualified
Bidders of the then highest and best Qualified Bid received by that time.



     Initial bidding at the Auction shall begin with such then highest and best bid. If more than
one Bid is submitted, each such bidder shall have the right to continue to improve its Bid at the
Auction. Each subsequent bid (each, a “Subsequent Overbid”) must have a purchase price that
exceeds the purchase price of the previous highest bid by at least $1,000,000.



     The Auction will continue in one or more rounds of bidding and shall conclude after each
participating bidder has had an opportunity to submit an additional Subsequent Overbid, after being
advised of the then highest bid and the identity of the party making such next highest bid. Each
bid at the Auction must meet each of the criteria of a Qualified Bid, other than the requirement
that it be received prior to the Bidding Deadline. All bids shall be placed on the record, which
shall either be transcribed or videotaped, and each bidder shall be informed of the terms of the
previous bid.



     In considering bids other than the Proposed Buyer’s, the Debtors shall reduce every (i)
bidder’s bid for the Purchased Assets, or (ii) combination of individual bids for fewer than all 4
of the Regions (provided that when so combined, all 4 Regions would be the subject of a bid), in
each instance by an amount equal to (in the aggregate) the sum of the Termination Fee plus the
Expense Reimbursement (or consider any Subsequent Overbid of the Proposed Buyer to be higher by an
amount equal to the Termination Fee plus the Expense Reimbursement). The Proposed Buyer shall be
entitled to make a revised higher or otherwise better offer at any time during the Auction.



     Upon the conclusion of the Auction, the Debtors shall (i) review each Qualified Bid or bids
(as and to the extent such bids were increased at the Auction) on the basis of financial and
contractual terms and the factors relevant to the Sale Process, including those factors affecting
the speed and certainty of consummating the Sale(s), as well as the Debtors’ liability, if any, for



6









 




payment of the Termination Fee and the Expense Reimbursement to the Proposed Buyer, and (ii)
identify the highest and otherwise best offer(s) for the Purchased Assets as the Winning Competing
Bid. The Debtors and the entity (or entities) that made the Winning Competing Bid(s) (each, a
“Winning Competing Bidder”) will enter into a definitive agreement(s) (which will be subject to
Court approval) before the Auction is adjourned. The Debtors will submit the Winning Competing
Bid(s) to the Court for approval at the Sale Hearing.



5. The Supplement




     To the extent that the Initial Bid of the Proposed Buyer embodied in the APA is not the
Winning Competing Bid at the Auction, the Debtors will file with the Bankruptcy Court a supplement
(the “Supplement”) that will inform the Bankruptcy Court of the results of the Auction and the
highest or otherwise best bid(s) for the Purchased Assets. The Supplement will identify, among
other things, (a) the Winning Competing Bidder(s), as the proposed purchaser(s), (b) the
consideration to be paid by such purchaser(s) for the Purchased Assets, and (c) any executory
contracts and unexpired leases to be assumed and assigned to the purchaser in connection with the
Sale(s) (to the extent different from the Assigned Agreements proposed to be assumed and assigned
to the Proposed Buyer under the APA). In addition, the Debtors will attach to the Supplement, as
exhibits, (a) any revised proposed order(s) approving the Sale(s), (b) copies of the asset purchase
agreement(s) entered into by the Debtors and the Winning Competing Bidder(s), and (c) the Winning
Competing Bidder’s Adequate Assurance Package(s). Also, to the extent the Debtors accept a bid for
the Excluded Developments at the Auction, they will include in the Supplement (to the extent then
available) a copy of a proposed asset purchase agreement and sale order with respect thereto. The
Debtors will file and serve the Supplement as promptly as is reasonably practicable prior to the
Sale Hearing in accordance with the Notice Procedures and, in any event, to any person who submits
a written request therefor to either (a) Cahill Gordon & Reindel llp, Eighty Pine Street,
New York, New York 10005-1702, Attn: Joel H. Levitin, Esq. or (b) Elliott Greenleaf, 1105 North
Market Street, Suite 1700, Wilmington, Delaware 19801, Attn.: Rafael X. Zahralddin, Esq.


6. Notice of Proposed Assignment and Cure Amounts




     No later than 10 days following the entry of the Bidding Procedures Order, the Debtors will
file with the Bankruptcy Court and cause to be served on all non-debtor parties to their known
executory contracts and unexpired leases a notice (the “Section 365 Notice”) that will inform such
parties of (A) the possibility that the Debtors may seek to assume, assign, and transfer some or
all of their executory contracts and unexpired leases to the Proposed Buyer or to any Winning
Competing Bidder in connection with the Sale, and, in particular, will indicate whether or not the
Proposed Buyer has already expressed an interest in having that particular contract or lease
assigned to it under the APA as an Assigned Agreement, (B) the amount, if any, that the Debtors
believe would be required to be paid to cure any monetary default related to each such designated
contract or lease if it were so assumed and assigned, in satisfaction of Bankruptcy Code § 365(b)
(the “Proposed Cure Amount”), and (C) the possibility that the Debtors will seek to reject, at the
Sale Hearing, some or all executory contracts and unexpired leases that are not assumed and
assigned to a purchaser(s) of the Purchased Assets in connection with a Sale.



     The APA provides, and the agreement from another bidder may also provide, for the Proposed
Buyer, or the Winning Competing Bidder (as the case may be), to add or remove Purchased Contracts
or Purchased Leases from the Cure Schedule at any time up until Closing. As the Debtors are
advised by the Proposed Buyer, or the Winning Competing Bidder (as the case may be), that it
desires to assume and assign an executory contract or unexpired lease, the Debtors will file an
amended or supplemental Section 365 Notice adding or removing such contracts or leases thereto (any
such added contract, an “Additional Contract”), and shall provide notice of



7









 




the proposed removal of an Assumed Contract or assumption and assignment of the Additional
Contracts to each affected counterparty to such Additional Contracts.



7. Objections




     Objections, if any, to the remaining relief sought in the Sale Motion must be in writing,
stating with particularity the grounds for such objections or other statements of positions, comply
with the Bankruptcy Code, the Bankruptcy Rules and the Local Rules, and be filed and served so as
to be actually received by co-counsel to the Debtors, counsel to the Agent, the United
States Trustee, co-counsel to the Proposed Buyer, and [proposed] counsel to the Creditors
Committee, by 4:00 p.m. (prevailing Eastern Time) on the date that is 7 days prior to the Sale
Hearing Date.



     Objections, if any, to the information contained in the Supplement must be in writing, comply
with the Bankruptcy Code, the Bankruptcy Rules and the Local Rules, and be filed and served so as
to be actually received by co-counsel to the Debtors, counsel to the Agent, the United
States Trustee, and [proposed] counsel to the Creditors Committee, by noon on the date that is one
day prior to the Sale Hearing Date.



     Objections, if any, that relate to (i) the proposed assumption and assignment of an Assigned
Agreement (including, but not limited to, any objections relating to the validity of the Proposed
Cure Amount as determined by the Debtors or otherwise to assert that any amounts, defaults,
conditions, or pecuniary losses must be cured or satisfied under any of the assigned executory
contracts or unexpired leases, not including accrued but not yet due obligations, in order for such
contract to be assumed and/or assigned) or (ii) the rejection of a Rejected Contract, as applicable
(a “Section 365 Objection”) must be in writing, comply with the Bankruptcy Code, the Bankruptcy
Rules and the Local Rules, state the basis of such objection with specificity, including, without
limitation, the cure amount alleged by such counterparty (if applicable), and include contact
information for such counterparty, and be filed and served so as to be actually received by
co-counsel to the Debtors, counsel to the Agent, the United States Trustee, co-counsel to the
Proposed Buyer, and [proposed] counsel to the Creditors Committee, so that they are actually
received by 4:00 p.m. (prevailing Eastern Time) on the date that is 10 days prior to the Sale
Hearing Date, or in the case of Additional Contracts, within 10 days after receipt of a Section 365
Notice with respect thereto (as applicable, the “Section 365 Objection Deadline”).



     Unless a Section 365 Objection is filed and served by a party to (a) an Assigned Agreement or
a party interested in an Assigned Agreement or (b) a Rejected Contract, as applicable, by the
Section 365 Objection Deadline, all interested parties that have received actual or constructive
notice thereof shall be deemed to have waived and released any right to assert a Section 365
Objection and to have otherwise consented to either (i) the assignment of the applicable Assigned
Agreement and shall be forever barred and estopped from asserting or claiming against the Debtors,
the Purchased Assets, the Proposed Buyer, or the Winning Competing Bidder (as the case may be), or
any other assignee of the applicable Assigned Agreement, that any additional amounts are due or
defaults exist, or conditions to assignment must be satisfied, under such Assigned Agreement for
the period prior to the Sale Hearing Date, or (ii) the rejection of a Rejected Contract, as
applicable.


8. Court Approval




     A hearing on all of the remaining relief requested in the Sale Motion and to consider the
results of the Auction (the “Sale Hearing”) will be held before the Honorable Peter J. Walsh,
United States Bankruptcy Court Judge, at the United States Bankruptcy Court for the District of
Delaware, 824 Market Street, 6th Floor, Courtroom #2, Wilmington, Delaware 19801, on or about June
24, 2010 at [___:_ __].m. (prevailing Eastern Time), or as soon thereafter as counsel



8









 




may be heard (the “Sale Hearing Date”). The Sale will be subject to the entry of an order of
the Bankruptcy Court approving same.









9









 








EXHIBIT 2




AUCTION AND HEARING NOTICE



UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE



	 	 	 	 	 	 	 

	 


	 	 	)	 	 	 
	In re:

	 	 	)	 	 	Chapter 11
	 

	 	 	)	 	 	 
	ORLEANS HOMEBUILDERS, INC., et al.,4 

	 	 	)	 	 	Case No. 10-10684 (PJW)
	 

	 	 	)	 	 	 
	Debtors.

	 	 	)	 	 	Jointly Administered
	 

	 	 	)	 	 	 
	 


	 	 	 	 	 	 






NOTICE OF BIDDING PROCEDURES,

AUCTION DATE, AND SALE HEARING




          PLEASE BE ADVISED that, on April 13, 2010, the above-captioned debtors and
debtors-in-possession (collectively, the “Debtors”) filed a motion (the “Sale
Motion”)5 for orders






 




			
	4	 	The Debtors in these chapter 11 cases,
along with the last four digits of each Debtor’s tax identification number,
are: Orleans Homebuilders, Inc. (4323), Brookshire Estates, L.P. (8725),
Community Management Services Group, Inc. (6620), Greenwood Financial Inc.
(7510), Masterpiece Homes, LLC (1971), OHB Homes, Inc. (0973), OHI Financing,
Inc. (6591), OHI PA GP, LLC (2675), OPCNC, LLC (8853), Orleans Arizona Realty,
LLC (9174), Orleans Arizona, Inc. (2640), Orleans at Bordentown, LLC (4968),
Orleans at Cooks Bridge, LLC (4185), Orleans at Covington Manor, LLC (9891),
Orleans at Crofton Chase, LLC (8809), Orleans at East Greenwich, LLC (9814),
Orleans at Elk Township, LLC (6891), Orleans at Evesham, LLC (7244), Orleans at
Falls, LP (2735), Orleans at Hamilton, LLC (9679), Orleans at Harrison, LLC
(4155), Orleans at Hidden Creek, LLC (3301), Orleans at Jennings Mill, LLC
(4693), Orleans at Lambertville, LLC (0615), Orleans at Limerick, LP (7791),
Orleans at Lower Salford, LP (9523), Orleans at Lyons Gate, LLC (2857), Orleans
at Mansfield LLC (1498), Orleans at Maple Glen LLC (7797), Orleans at Meadow
Glen, LLC (4966), Orleans at Millstone River Preserve, LLC (8810), Orleans at
Millstone, LLC (8063), Orleans at Moorestown, LLC (9250), Orleans at
Tabernacle, LLC (9927), Orleans at Thornbury, L.P. (4291), Orleans at Upper
Freehold, LLC (3225), Orleans at Upper Saucon, L.P. (3715), Orleans at Upper
Uwchlan, LP (8394), Orleans at Wallkill, LLC (2875), Orleans at West Bradford,
LP (4161), Orleans at West Vincent, LP (9557), Orleans at Westampton Woods, LLC
(8095), Orleans at Windsor Square, LP (9481), Orleans at Woolwich, LLC (9215),
Orleans at Wrightstown, LP (9701), Orleans Construction Corp. (0893), Orleans
Corporation (8770), Orleans Corporation Of New Jersey (5325), Orleans DK, LLC
(5308), Orleans RHIL, LP (1938), Parker & Lancaster Corporation (1707), Parker
& Orleans Homebuilders, Inc. (5269), Parker Lancaster, Tidewater, L.L.C.
(7432), Realen Homes, L.P. (8293), RHGP LLC (8197), Sharp Road Farms Inc.
(1871), Stock Grange, LP (4027) and Wheatley Meadows Associates (5459).




 









 









(A)(I) approving sale procedures and bidding protections to be employed in connection with the
proposed sale (the “Sale”) of substantially all of the Debtors’ assets (collectively, the
“Purchased Assets”);6 (II) scheduling an auction (the “Auction”) and a hearing
(the “Sale Hearing”) to consider approval of (i) the Sale, (ii) the assumption and assignment of
certain executory contracts and unexpired leases (collectively, the “Assigned Agreements”) in
connection with the Sale and the rejection of other executory contracts and unexpired leases, and
(iii) other related relief; and (III) approving the proposed notice of the respective dates, times,
and places for the Auction and the Sale Hearing (the relief requested in such items (A)(I) through
(III) is collectively referred to herein as the “Initial Relief”); and (B)(I) authorizing and
approving a proposed asset purchase agreement (the “APA”) with NVR, Inc. (the “Proposed Buyer”), or
such other purchaser(s) providing a higher or otherwise better offer for the Purchased Assets, as
approved by the Bankruptcy Court at the Sale Hearing; (II) authorizing the Sale of the Purchased
Assets free and clear of all liens, claims, encumbrances, and other interests (other than the
Permitted Liens); (III) authorizing the assumption and assignment of the Assigned Agreements in
connection with the Sale and the rejection of other executory contracts and unexpired leases; (IV)
authorizing the Debtors to consummate all transactions related to the above; and (V) granting other
relief.




          PLEASE BE FURTHER ADVISED that, on May [___], 2010, the United States Bankruptcy Court for the
District of Delaware (the “Bankruptcy Court”) entered an order (the “Bidding Procedures Order”)
granting the Initial Relief following a hearing to consider same, including approving the bidding
procedures attached thereto as Exhibit 1 (the “Bidding Procedures”) in connection with the proposed
Sale by the Debtors of the Purchased Assets to the Proposed Buyer or another party submitting a
higher or otherwise better offer therefor, and permitting the Debtors to, in their discretion,
consider bids for just the Excluded Developments and to seek approval of any such bid a the Sale
Hearing.




          PLEASE BE FURTHER ADVISED that, as outlined in greater detail in and pursuant to the Bidding
Procedures, all bids for the acquisition of the Purchased Assets must in writing, comply with the
Bidding Procedures, and be received by (1) BMO Capital Markets Corp., 115 South LaSalle Street,
35th Floor, Chicago, Illinois 60603, Attn: Mr. Scott W. Humphrey, Executive Managing Director and
Head of U.S. M&A, (2) Lieutenant Island, 5 Leonard Road, Bronxville, New York 10708, Attn.: Mr.
Richard Thaler, and (3) the Debtors’ Chief Restructuring Officer, c/o PMCM, LLC, 110 Chadds Ford
Commons, Chadds Ford, Pennsylvania 19317, Attn.: Mr. Mitchell Arden and Mr. Vincent Colistra, with
a copy to (a) co-






 



 Footnote continued from previous page.


			
	5	 	All capitalized terms not otherwise
defined herein shall have the meaning ascribed to them in the Sale Motion (and,
as applicable, any exhibits thereto (including the APA)) or the Bidding
Procedures, as applicable.
	 
	6	 	The Sellers under the APA include the
Debtors and certain non-debtor parties, OHI PA, LLC and OHI NJ, LLC.




2









 









counsel to the Debtors, (i) Cahill Gordon & Reindel llp, Eighty Pine Street, New
York, New York 10005-1702, Attn: Joel H. Levitin, Esq., and (ii) Elliott Greenleaf, 1105 North
Market Street, Suite 1700, Wilmington, Delaware 19801, Attn.: Rafael X. Zahralddin, Esq.; (b) the
Office of the United States Trustee for the District of Delaware, 844 King Street, Room 2207,
Wilmington, Delaware 19801, Attn.: David Buchbinder, Esq.; (c) counsel to the agent for the
Debtors’ primary pre-petition secured lenders, (i) Reed Smith LLP, 1201 Market Street, Suite 1500,
Wilmington, Delaware 19801, Attn.: Mark W. Eckard, Esq., and (ii) Reed Smith LLP, One Liberty
Place, 1650 Market Street, Philadelphia, Pennsylvania 19103-7301, Attn.: Claudia Z. Springer, Esq.
and Scott M. Esterbrook, Esq.; (d) [proposed] counsel to the official committee of unsecured
creditors appointed in the Debtors’ Chapter 11 cases (the “Creditors Committee”), (i) Duane Morris
LLP, 1100 North Market Street, Suite 1200, Wilmington, Delaware 19801, Attn.: Richard W. Riley,
Esq. and Sommer L. Ross, Esq., (ii) Duane Morris LLP, 1540 Broadway, New York, New York 10036-4086,
Attn.: Gerard S. Catalanello, Esq. and James J. Vincequerra, Esq., (iii) Duane Morris LLP, 30
South 17th Street, Philadelphia, Pennsylvania 19103-4196, Attn.: Lawrence J. Kotler, Esq., and (e)
co-counsel to the Proposed Buyer, (i) Hogan & Hartson LLP, 875 Third Avenue, New York, NY 10022,
Attn.: Ira S. Greene, Esq. and Scott A. Golden, Esq., and (ii) Potter Anderson & Corroon LLP, 1313
North Market Street, Wilmington, Delaware 19899, Attn.: Steven M. Yoder, Esq., no later than 12:00
noon (prevailing Eastern Time) on June 16, 2010 (the “Bidding Deadline”).




          PLEASE BE FURTHER ADVISED that, as outlined in greater detail in and pursuant to the Bidding
Procedures, if, in addition to the bid of the Proposed Buyer as embodied in the APA, one or more
Qualified Bids are received by the Bidding Deadline, the Auction will be conducted at the offices
of Cahill Gordon & Reindel llp, Eighty Pine Street, New York, New York 10005-1702, or at
another location as may be timely disclosed by the Debtors to Qualified Bidders, on or about 9:30
a.m. (prevailing Eastern Time) on June 23, 2010 (the “Auction Date”). If, however, (i) the only
Qualified Bid the Debtors have received by the Bidding Deadline (unless the Debtors have extended
such deadline in accordance with the terms of the Bidding Procedures) is the Proposed Buyer’s
Qualified Bid as set forth in the APA, then the Auction will not be held, and the Proposed Buyer
shall be deemed the Winning Bidder, and the Debtors will be authorized to seek approval thereof at
the Sale Hearing.




          PLEASE BE FURTHER ADVISED that, to the extent that the Initial Bid of the Proposed Buyer
embodied in the APA is not the Winning Competing Bid at the Auction, the Debtors will file with the
Bankruptcy Court a supplement (the “Supplement”) that will inform the Bankruptcy Court of the
results of the Auction and the highest or otherwise best bid(s) for the Purchased Assets. The
Supplement will identify, among other things, (a) the Winning Competing Bidder(s), as the proposed
purchaser(s), (b) the consideration to be paid by such purchaser(s) for the Purchased Assets, and
(c) any executory contracts and unexpired leases to be assumed and assigned to the purchaser(s) in
connection with the Sale(s) (to the extent different from the Assigned Agreements proposed to be
assumed and assigned to the Proposed Buyer under the APA). In addition, the Debtors will attach to
the Supplement, as exhibits, (a) any revised proposed order(s) approving the Sale(s), (b) copies of
the asset purchase agreement(s) entered into by the Debtors and the Winning Competing Bidder(s),
and (c) the Winning Competing Bidder’s Adequate Assurance Package(s). Also, to the extent the
Debtors accept a bid for the Excluded Developments at the Auction, they will include in the
Supplement a copy of a proposed asset purchase agreement and sale order with respect thereto (to
the extent then






3









 







available). The Debtors will file and serve the Supplement as promptly as is reasonably
practicable prior to the Sale Hearing in accordance with the Notice Procedures and, in any event,
to any person who submits a written request therefor to either (a) Cahill Gordon & Reindel
llp, Eighty Pine Street, New York, New York 10005-1702, Attn: Joel H. Levitin, Esq. or (b)
Elliott Greenleaf, 1105 North Market Street, Suite 1700, Wilmington, Delaware 19801, Attn.: Rafael
X. Zahralddin, Esq.




          PLEASE BE FURTHER ADVISED that, no later than May [___], 2010, the Debtors will file with the
Bankruptcy Court and caused to be served on all non-debtor parties to their known executory
contracts and unexpired leases a notice (the “Section 365 Notice”) that will inform such parties of
(A) the possibility that the Debtors may seek to assume, assign, and transfer some or all of their
executory contracts and unexpired leases to the Proposed Buyer or to any Winning Competing Bidder
in connection with the Sale, and, in particular, will indicate whether or not the Proposed Buyer
has already expressed an interest in having that particular contract or lease assigned to it under
the APA as an Assigned Agreement, (B) the amount, if any, that the Debtors believe would be
required to be paid to cure any monetary default related to each such designated contract or lease
if it were so assumed and assigned, in satisfaction of Bankruptcy Code § 365(b) (the “Proposed Cure
Amount”), and (C) the possibility that the Debtors will seek to reject, at the Sale Hearing, some
or all executory contracts and unexpired leases that are not assumed and assigned to a purchaser(s)
of the Purchased Assets in connection with a Sale.




          PLEASE BE FURTHER ADVISED that a hearing to consider the remaining relief requested in the
Sale Motion and the results of the Auction (the “Sale Hearing”) will be held before the Honorable
Peter J. Walsh, United States Bankruptcy Court Judge, at the United States Bankruptcy Court for the
District of Delaware, 824 Market Street, 6th Floor, Courtroom #2, Wilmington, Delaware 19801, on
June 24, 2010 at [___:_ __].m. (prevailing Eastern Time) (the “Sale Hearing Date”). The Sale will
be subject to the entry of an order of the Bankruptcy Court approving same.




          PLEASE BE FURTHER ADVISED that, as outlined in greater detail in and pursuant to the Bidding
Procedures, objections, if any, to the remaining relief sought in the Sale Motion must be in
writing, stating with particularity the grounds for such objections or other statements of
position, comply with the Bankruptcy Code, the Bankruptcy Rules and the Local Rules, and be filed
and served so as to be actually received by co-counsel to the Debtors, counsel to the Agent, the
United States Trustee, co-counsel to the Proposed Buyer, and [proposed] counsel to the Creditors
Committee, so that they are actually received by 4:00 p.m. (prevailing Eastern Time) on the
date that is 7 days prior to the Sale Hearing Date. Objections, if any, to the information
contained in the Supplement must be in writing, comply with the Bankruptcy Code, the Bankruptcy
Rules and the Local Rules, and be filed and served so as to be actually received by co-counsel to
the Debtors, counsel to the Agent, the United States Trustee, and [proposed] counsel to the
Creditors Committee, so that they are actually received by noon on the date that is one day
prior to the Sale Hearing Date.




          PLEASE BE FURTHER ADVISED that objections, if any, that relate to (i) the proposed assumption
and assignment of an Assigned Agreement (including, but not limited to, any objections relating to
the validity of the Proposed Cure Amount as determined by the






4









 







Debtors or otherwise to assert that any amounts, defaults, conditions, or pecuniary losses
must be cured or satisfied under any of the assigned executory contracts or unexpired leases, not
including accrued but not yet due obligations, in order for such contract to be assumed and/or
assigned) or (ii) the rejection of a Rejected Contract, as applicable (a “Section 365 Objection”)
must be in writing, comply with the Bankruptcy Code, the Bankruptcy Rules and the Local Rules,
state the basis of such objection with specificity, including, without limitation, the cure amount
alleged by such counterparty (if applicable), and include contact information for such
counterparty, and be filed and served so as to be actually received by co-counsel to the Debtors,
counsel to the Agent, the United States Trustee, co-counsel to the Proposed Buyer, and [proposed]
counsel to the Creditors Committee, so that they are actually received by 4:00 p.m.
(prevailing Eastern Time) on the date that is 10 days prior to the Sale Hearing Date, or in the
case of Additional Contracts, within 10 days after receipt of a Section 365 Notice with respect
thereto (as applicable, the “Section 365 Objection Deadline”).




          PLEASE BE FURTHER ADVISED that unless a Section 365 Objection is filed and served by a party
to (a) an Assigned Agreement or a party interested in an Assigned Agreement or (b) a Rejected
Contract, as applicable, by the Section 365 Objection Deadline, all interested parties that have
received actual or constructive notice thereof shall be deemed to have waived and released any
right to assert a Section 365 Objection and to have otherwise consented to either (i) the
assignment of the applicable Assigned Agreement and shall be forever barred and estopped from
asserting or claiming against the Debtors, the Purchased Assets, the Proposed Buyer, or the Winning
Competing Bidder (as the case may be), or any other assignee of the applicable Assigned Agreement,
that any additional amounts are due or defaults exist, or conditions to assignment must be
satisfied, under such Assigned Agreement for the period prior to the Sale Hearing Date, or (ii) the
rejection of a Rejected Contract, as applicable.




          PLEASE BE FURTHER ADVISED that the Debtors reserve the right to reject at and as of the Sale
Hearing any executory contract or unexpired lease not to be assumed and assigned in connection with
Sale.




          PLEASE BE FURTHER ADVISED that, as outlined in greater detail in and pursuant to the Bidding
Procedures, the Debtors reserve the right to (a) amend and/or impose additional terms and/or
conditions at or prior to the Auction (other than the requirements for a Qualified Bid set forth in
the Bidding Procedures and the right of the Proposed Buyer to make a revised higher or better offer
at any time during the Auction) that they believe will better promote the goals of the Auction and
be in the best interests of their estates, and do not otherwise conflict with the terms and
requirements set forth in the APA and (b) subject to the terms of the APA, extend the deadlines set
forth in the Bidding Procedures and/or adjourn the Auction at the Auction and/or the Sale Hearing
in open court or on the Bankruptcy Court’s calendar on the date scheduled for said hearing without
further notice to creditors or parties-in-interest.




          PLEASE BE FURTHER ADVISED that all requests for information concerning the Purchased Assets
and, in particular, any requests for a draft confidentiality agreement, should be in writing and
directed to each of the Debtors’ Chief Restructuring Officer, c/o PMCM, LLC, 110 Chadds Ford
Commons, Chadds Ford, Pennsylvania 19317, Attn.: Mr. Mitchell Arden and Mr. Vincent Colistra; BMO
Capital Markets Corp., 115 South LaSalle Street, 35th Floor, Chicago, Illinois 60603, Attn: Mr.
Scott W. Humphrey, Executive Managing Director and Head






5









 







of U.S. M&A; and Lieutenant Island, 5 Leonard Road, Bronxville, New York 10708, Attn.: Mr.
Richard Thaler.




          PLEASE BE FURTHER ADVISED that all parties who timely execute and return a confidentiality
agreement to the CRO, BMOCM, and Lieutenant Island and who provide, in the Debtors’ discretion,
information demonstrating sufficient financial wherewithal to consummate the Sale, will be provided
access to the due diligence materials the Debtors and their advisors have already prepared for this
purpose. Thereafter, the Debtors and their advisors may entertain any further reasonable requests
for additional information and due diligence from any party who has so executed a confidentiality
agreement and provided the required satisfactory evidence of financial wherewithal, and has also
submitted a written non-binding expression of interest to the reasonable satisfaction of the
Debtors and their advisors. The Debtors, in their discretion, may deny any such requests for
additional information, if, after taking into account, among other things, business factors, legal,
regulatory, and other considerations, they determine that doing so would not be in the best
interests of their estates and creditors or is otherwise contrary to the goals of the Auction and
the Sale.







6









 








          PLEASE BE FURTHER ADVISED that any party that wishes to obtain a copy of the Sale Motion
(including the APA and all other exhibits thereto), the Bidding Procedures, the Bidding Procedures
Order, or any Supplement (following the filing thereof, in the time and manner set forth herein)
may make such a request in writing to the undersigned co-counsel to the Debtors or by downloading a
copy of same from the Bankruptcy Court’s website (which is located at http://www.deb.uscourts.gov),
or from the website maintained by the Debtors’ noticing agent (which is located at
http://www.orleanshomesreorg.com/).




	 	 	 

	Dated: April 14, 2010

	 	ELLIOTT GREENLEAF
	          Wilmington, Delaware
	 	 
	 
	 	 
	 

	 	 
	 

	 	Rafael X. Zahralddin
	 

	 	1105 North Market Street, Suite 1700
	 

	 	Wilmington, Delaware 19801
	 

	 	Telephone: (302) 384-9400
	 

	 	Facsimile: (302) 384-9399
	 
	 	 
	 

	 	- and -
	 
	 	 
	 

	 	CAHILL GORDON & REINDEL llp
	 
	 	 
	 

	 	Joel H. Levitin
	 

	 	Stephen J. Gordon
	 

	 	Michael R. Carney
	 

	 	Maya Peleg
	 

	 	Eighty Pine Street
	 

	 	New York, New York 10005
	 

	 	Telephone: (212) 701-3000
	 

	 	Facsimile: (212) 269-5420
	 

	 	jlevitin@cahill.com
	 

	 	sgordon@cahill.com
	 
	 	 
	 

	 	Attorneys for the Debtors and Debtors-in-Possession











7









 








EXHIBIT C-1




FORM OF ESCROW DEPOSIT AGREEMENT








 









 








ESCROW AGREEMENT

(Deposit)




     THIS ESCROW AGREEMENT (DEPOSIT) (this “Agreement”) is dated as of April 13, 2010
by and among NVR, INC., a Virginia corporation (“Purchaser”), ORLEANS HOMEBUILDERS, INC., a
Delaware corporation (“Parent”), the individual selling affiliates Parent set forth on
Exhibit A hereto (together with Parent, the “Sellers”), and FIRST AMERICAN TITLE
INSURANCE COMPANY (the “Escrow Agent”), and is entered into pursuant to that certain Asset
Purchase Agreement, dated as of April 13, 2010, by and among the Sellers and the Purchaser (the
“Purchase Agreement”). Capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Purchase Agreement.



RECITALS:




     WHEREAS, pursuant to the Purchase Agreement, Purchaser has agreed, among other things, at the
Closing to purchase, acquire and accept from the Sellers, and the Sellers have agreed to sell,
transfer, assign, convey and deliver to the Purchaser and its assignees all of the Sellers’ right,
title and interest in, to and under the Purchased Assets in exchange for payment by Purchaser of
the Purchase Price;



     WHEREAS, pursuant to Section 3.1(a) of the Purchase Agreement, Purchaser has agreed to deliver
to the Escrow Agent, in two equal installments as described below, a deposit aggregating SEVENTEEN
MILLION AND 00/100 DOLLARS ($17,000,000) (the amounts so delivered from time to time, the
“Deposit”), which the Escrow Agent has agreed to hold pursuant to the terms hereof; and



     WHEREAS, the Escrow Agent is agreeable to acting as such upon the terms and conditions set
forth in this Agreement.



     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereby agree as follows:



     1. Escrow Agent. Sellers and Purchaser hereby engage the Escrow Agent to serve as
“Escrow Agent” under the terms hereof pursuant to Section 3.1 of the Purchase Agreement. The
Escrow Agent hereby accepts such engagement and agrees to hold the Deposit in accordance with the
terms hereof. The Deposit (or any portion thereof) shall be deposited with the Escrow Agent by
wire transfer of immediately available funds. Wire transfer instructions are attached hereto as
Schedule 1. All interest will accrue to and be reported to applicable taxing authorities,
including the Internal Revenue Service, for the account of Purchaser. Simultaneously with the
execution and delivery hereof, Purchaser agrees to deliver to the Escrow Agent a properly completed
W-9 form.



     2. Deposit. Purchaser shall deposit the Deposit with the Escrow Agent as follows:




     (i) one half (1/2) of the Deposit shall be deposited on or prior to the first Business
Day following the date hereof; and




     (ii) the balance of the Deposit shall be deposited on or prior to the deadline for
submitting Qualified Bids.


The Deposit shall be held by the Escrow Agent and invested in one or more separate interest-bearing
accounts at PNC Bank doing business in the Philadelphia, Pennsylvania metropolitan area, or as
otherwise jointly directed by Parent and Purchaser. The Escrow Agent shall not commingle the
Deposit with any funds of the Escrow Agent or others, and shall promptly provide Sellers and
Purchaser with confirmation of investments made.






1









 








     3. Release of Deposit.



          (a) Upon receipt by the Escrow Agent of joint written instructions of Purchaser and Parent
directing the Escrow Agent to release the Deposit, the Escrow Agent shall deliver the Deposit,
together with any interest accrued thereon, to Purchaser or Parent, as applicable. In the event
the Escrow Agent does not receive such joint written instructions, the Deposit shall be held and
released pursuant to paragraphs (b) or (c) below.




          (b) In the event the Closing occurs under the Purchase Agreement, the Deposit, together with
any interest accrued thereon, shall be applied to the Purchase Price at Closing.




          (c) In the event Purchaser or any Seller becomes entitled, pursuant to the Purchase Agreement,
to receipt of the Deposit other than pursuant to Section 3(a) or Section 3(b)
above, it shall send a notice thereof (a “Release Notice”) to the other party and to the
Escrow Agent. In the event the party receiving the Release Notice disputes the sending party’s
right to receive the Deposit, it shall, within ten (10) days of the receipt of the Release Notice,
send a notice of such dispute (a “Dispute Notice”) to the sending party and to the Escrow
Agent. In the event the Escrow Agent does not receive a timely Dispute Notice, it shall send the
Deposit to the party that sent the Release Notice following the expiration of the ten (10) day
period. In the event the Escrow Agent receives a timely Dispute Notice, it shall continue to hold
the Deposit until it either receives the joint written instructions of Purchaser and Parent
directing release of the Deposit or until it receives a court order, not subject to appeal,
directing disposition of the Deposit.




     4. Interpleader. Sellers and Purchaser agree that in the event of any controversy
regarding the Deposit, unless mutual written instructions are received by the Escrow Agent
directing the disposition of the Deposit, the Escrow Agent shall not take any action, but instead
shall await the disposition of any proceeding relating to the Deposit or, at the Escrow Agent’s
option, the Escrow Agent may interplead all parties and deposit the Deposit with a court of
competent jurisdiction in which event the Escrow Agent may recover all of its court costs and
reasonable attorneys’ fees. Sellers or Purchaser, whichever loses in any such interpleader action,
shall be solely obligated to pay such costs and fees to the Escrow Agent, as well as the reasonable
attorneys’ fees of the prevailing party in accordance with the other provisions of this Agreement.



     5. Notices. All notices and other communications under this Agreement shall be in
writing and shall be deemed given (i) when delivered personally by hand, (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one (1) Business Day following the
day sent by overnight courier (with written confirmation of receipt), in each case at the following
addresses and facsimile numbers (or to such other address or facsimile number as a party may have
specified by notice given to the other party pursuant to this provision):


If to the Escrow Agent:



First American Title Insurance Company

National Commercial Services

2 Penn Center Plaza, Suite 1910

Philadelphia, PA 19102

                              
Attention: David J. Feldman, Senior Vice President and Regional Director

Facsimile: 215-568-2410





2









 







If to Sellers, to:



Orleans Homebuilders, Inc.

3333 Street Road

Bensalem, PA 19020

Attention: Jeffrey P. Orleans

Facsimile: 215-633-2351



with a mandated copies (which shall not constitute notice) to:



Phoenix Management

110 Chadds Ford Commons

Chadds Ford, PA 19317

Attention: Mitchell B. Arden

Facsimile: 610-358-9377



Cahill Gordon & Reindel llp

80 Pine Street

New York, New York 10005

Attention: Joel H. Levitin

Facsimile: 212-378-2449



If to Purchaser, to:



NVR, Inc.

Plaza America Tower I

11700 Plaza America Drive Suite 500

Reston, Virginia 20190

Attention: Dennis Seremet

Facsimile: 703-956-4750



with a mandated copy (which shall not constitute notice) to:



Hogan & Hartson LLP

555 13th Street NW

Washington, D.C. 20004

Attention: Bruce W. Gilchrist

Facsimile: 202-637-5910




     6. Liability and Duties of Escrow Agent. Acceptance by the Escrow Agent of its duties
under this Agreement is subject to the following terms and conditions:



          (a) The parties acknowledge that the Escrow Agent is acting solely as a stakeholder at their
request and for their convenience, that the Escrow Agent shall not be deemed to be the agent of
either of the parties, and that the Escrow Agent shall not be liable to either of the parties for
any act or omission on its part taken or made in good faith, and not in disregard of this Agreement
and/or the Purchase Agreement, but shall be liable for its negligent acts and willful misconduct
and for any loss, cost or expense incurred by Sellers or Purchaser resulting from the Escrow
Agent’s mistakes of law respecting the Escrow Agent’s scope or nature of its duties;







3









 








          (b) Sellers and Purchaser shall jointly and severally indemnify the Escrow Agent for, and hold
it harmless against all costs, claims and expenses, including but not limited to reasonable
attorneys’ fees, incurred in connection with the performance of the Escrow Agent’s duties
hereunder, except with respect to actions or omissions taken or made by the Escrow Agent in bad
faith, in disregard of this Agreement or involving negligence on the part of the Escrow Agent;




          (c) The Escrow Agent shall be fully protected in acting on and relying upon any written
notice, instruction, direction or other document which the Escrow Agent in good faith believes to
be genuine and to have been signed or presented by the proper party or parties;




          (d) The Escrow Agent may seek the advice of legal counsel in the event of any dispute or
question as to the construction of any of the provisions of this Agreement or its duties hereunder,
and it shall incur no liability and shall be fully protected in respect of any action taken or
suffered by it in good faith in accordance with the opinion of such counsel; and




          (e) The Escrow Agent may resign and be discharged from its duties hereunder at any time by
giving written notice of such resignation to Sellers and Purchaser specifying a date, not less than
fifteen (15) days after the date of such notice, when such resignation will take effect. Upon the
effective date of such resignation, the Escrow Agent shall deliver the funds held in escrow to such
person or persons as Parent and Purchaser shall in writing jointly direct, and upon such delivery
the Escrow Agent shall be relieved of all duties and liabilities thereafter accruing under this
Agreement. Parent and Purchaser shall have the right at any time upon joint action to substitute a
new Escrow Agent by giving notice thereof to the Escrow Agent then acting.




     7. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware (but not the choice of law rules thereof).



     8. Counterparts. This Agreement may be executed in one or more counterparts, each of
which when so executed and delivered shall be deemed an original, all of which taken together shall
constitute one and the same original.



     9. Attorney’s Fees. Should any party employ attorneys to enforce any of the
provisions hereof, the party or parties losing in any final judgment agrees to pay the prevailing
party or parties all reasonable costs, charges and expenses, including reasonable attorneys’ fees,
expended or incurred in connection therewith.



     10. Entirety. This Agreement and the Purchase Agreement together embody the entire
agreement between the parties with respect to the Deposit and supercedes all prior agreements and
understandings related to the Deposit. This Agreement may be amended or supplemented only by an
instrument in writing executed by the party against whom enforcement is sought.



(a)
Remainder of Page
Intentionally Blank

Signature Page Follows









4









 








     IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement (Deposit) to be
executed as of the day and year first above written.



	 	 	 	 	 
	 	ESCROW AGENT:





FIRST AMERICAN TITLE INSURANCE COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	PURCHASER:





NVR, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SELLERS:





ORLEANS HOMEBUILDERS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE SELLING AFFILIATES NAMED ON 

EXHIBIT A HERETO

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
















 





EXHIBIT A




SELLERS



	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	Orleans Homebuilders, Inc.
	 	3333 Street Road, Suite 101
	
	 	Bensalem, PA  19020
	 
	Brookshire Estates, L.P.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Greenwood Financial Inc.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Masterpiece Homes, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	OHB Homes, Inc.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	OHI Financing, Inc.
	 	1064 Greenwood Blvd., #106
		 	Lake Mary, FL  32746
	 
	OHI PA GP, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	OHI PA, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	OHI NJ, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	OPCNC, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans Arizona Realty, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans Arizona, Inc.
	 	1105 North Market Street, Suite 609
		 	Wilmington, DE 19801
	 
	 	 
	Orleans at Covington Manor, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Crofton Chase, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020






 









 






	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	Orleans at East Greenwich, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Elk Township, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Hamilton, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Harrison, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Hidden Creek, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Jennings Mill, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Lambertville, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Lyons Gate, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Mansfield LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Meadow Glen, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Millstone, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Millstone River Preserve, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Tabernacle, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Thornbury, L.P.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Upper Freehold, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020






 









 






	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	Orleans at Upper Saucon, L.P.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Upper Uwchlan, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at West Bradford, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at West Vincent, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Westampton Woods, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Windsor Square, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Woolwich, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Wrightstown, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans Construction Corp.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans Corporation
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans RHIL, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Parker & Lancaster Corporation
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Parker & Orleans Homebuilders, Inc.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Parker Lancaster, Tidewater, L.L.C.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Realen Homes, L.P.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020






 









 






	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	RHGP LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Stock Grange, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Wheatley Meadows Associates, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020






 









 






EXHIBIT C-2




FORM OF ESCROW CLOSING AGREEMENT



 









 





ESCROW AGREEMENT

(Holdback)




     THIS ESCROW AGREEMENT (HOLDBACK) (this “Agreement”) is dated as of ___,
2010 by and among NVR, INC, a Virginia corporation (“Purchaser”), ORLEANS HOMEBUILDERS,
INC., a Delaware corporation (“Parent”), the individual selling affiliates Parent set forth
on Exhibit A hereto (together with Parent, the “Sellers”), and FIRST AMERICAN TITLE
INSURANCE COMPANY (the “Escrow Agent”), and is entered into pursuant to that certain Asset
Purchase Agreement, dated as of April 13, 2010, by and among the Sellers and its affiliates and the
Purchaser (the “Purchase Agreement”). Capitalized terms used but not defined herein shall
have the meanings ascribed thereto in the Purchase Agreement



RECITALS:




     WHEREAS, pursuant to the Purchase Agreement, Purchaser has agreed, among other things, at the
Closing to purchase, acquire and accept from the Sellers, and the Sellers have agreed to sell,
transfer, assign, convey and deliver to the Purchaser and its assignees all of the Sellers’ right,
title and interest in, to and under the Purchased Assets in exchange for payment by Purchaser of
the Purchase Price;



     WHEREAS, pursuant to Section 3.1(b) of the Purchase Agreement, Purchaser has agreed to deliver
to the Escrow Agent, on the Closing Date, an aggregate of ___DOLLARS ($___)
(the “Holdback Amount”) [, of which ___DOLLARS($___) (the
“Environmental Holdback Amount”) will be designated to secure the performance of
Remediation with respect to specified Individual Properties (the “Remediation Projects”)]
7/; and



     WHEREAS, the Escrow Agent is agreeable to acting as such upon the terms and conditions set
forth in this Agreement and holding the Holdback Amount pursuant to the terms hereof.



     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereby agree as follows:



     1. Escrow Agent. Sellers and Purchaser hereby engage the Escrow Agent to serve as
“Escrow Agent” under the terms hereof pursuant to Section 3.1(b)(ii) of the Purchase Agreement.
The Escrow Agent hereby accepts such engagement and agrees to hold the Holdback Amount in
accordance with the terms hereof. The Holdback Amount shall be deposited with the Escrow Agent by
wire transfer of immediately available funds. Wire transfer instructions are attached hereto as
Schedule 1. All interest will accrue to and be reported to applicable taxing authorities,
including the Internal Revenue Service, for the account of Purchaser. Simultaneously with the
execution and delivery hereof, Purchaser agrees to deliver to the Escrow Agent a properly completed
W-9 form.



     2. Holdback Amount. Purchaser shall deposit the Holdback Amount with the Escrow Agent
on the Closing Date. The Holdback Amount shall be held by the Escrow Agent and invested in one or
more separate interest-bearing accounts at PNC Bank doing business in the Philadelphia,
Pennsylvania metropolitan area, or as otherwise jointly directed by Parent and Purchaser. The
Escrow Agent shall not





 




			
	7/	 	Insert if any portion of the Holdback
Amount is designated for use in Remediation.




 









 









commingle the Holdback Amount with any funds of the Escrow Agent or others, and shall promptly
provide Sellers and Purchaser with confirmation of investments made.




     3. Release of Holdback Amount.



          (a) Upon receipt by the Escrow Agent of joint written instructions of Purchaser and Parent
directing the Escrow Agent to release the Holdback Amount or any portion thereof, the Escrow Agent
shall deliver the specified amount, together with any interest accrued thereon in accordance with
Section 3(d) below, to Purchaser and/or Parent, as directed by such instructions.



          (b) Following determination of the Closing Adjustment pursuant to Section 3.2 of the Purchase
Agreement, Purchaser or, if Purchaser has not delivered the Closing Date Schedule within sixty (60)
days following the Closing Date, Seller, shall send a notice thereof (an “Adjustment Release
Notice”) to Parent and to the Escrow Agent specifying the amount of the Holdback Amount to be
released to Purchaser (the “Released Adjustment Funds”), if any (with the balance to be
released to Parent). In the event Parent or Purchaser, as applicable, disputes Purchaser’s right
to receive the Released Adjustment Funds specified in the Adjustment Release Notice, Parent or
Purchaser, as applicable, shall, within fifteen (15) days of the receipt of the Adjustment Release
Notice, send a notice of such dispute (a “Adjustment Dispute Notice”) to Purchaser or
Parent, as applicable, and to the Escrow Agent, including, in the case of Parent, evidence that
Parent timely has delivered a Dispute Notice regarding Purchaser’s calculation of the Closing
Adjustment in accordance with Section 3.2 of the Purchase Agreement.




          a. In the event the Escrow Agent does not receive a timely Adjustment Dispute Notice,
it shall release the specified portion of the Holdback Amount to Purchaser following the
expiration of the fifteen (15) day period.




          b. In the event the Escrow Agent receives a timely Adjustment Dispute Notice, it shall
continue to hold the Released Adjustment Funds until it either receives the joint written
instructions of Purchaser and Parent directing release of the Released Adjustment Funds or
until it receives a court order, not subject to appeal, directing disposition of the
Released Adjustment Funds.



          (c) [Purchaser may request one or more separate releases by the Escrow Agent of the
Environmental Holdback Amount or a portion thereof (any such requested amount, the “Released
Environmental Holdback Funds”) by requesting, pursuant to Section 2.9 of the Purchase Agreement,
reimbursement for Remediation Costs by sending a notice thereof to Parent and the Escrow Agent that
specifies the amount of the Environmental Holdback Funds to be released to Purchaser (a
“Remediation Release Request”). In the event Parent objects to Purchaser’s request for release of
the Released Environmental Holdback Funds, Parent shall, within ten (10) Business Days of the
receipt of the Remediation Release Request, send a notice of such dispute (a “Remediation Dispute
Notice”) to Purchaser and to the Escrow Agent, which Remediation Dispute Notice shall specify the
amount of the Released Environmental Holdback Funds to which Seller objects.




          a. In the event the Escrow Agent does not receive a timely Remediation Dispute Notice
specifying an amount to which Parent objects, the Escrow Agent shall release to Purchaser
the Released Environmental Holdback Funds set forth in the Environmental Holdback Release
Notice on the fifteenth (15th) Business Day after the date of the initial reimbursement
request.



12









 






          b. In the event the Escrow Agent receives a timely Remediation Dispute Notice, the
Escrow Agent shall release to the Purchaser the portion of the Released Environmental
Holdback Funds to which Parent has not objected and shall continue to hold the balance of
the Released Environmental Holdback Funds until it either receives the joint written
instructions of Purchaser and Parent directing release of such portion of the Released
Environmental Holdback Funds or until it receives a court order, not subject to appeal,
directing disposition of such portion of the Released Environmental Holdback Funds.




          c. Upon receipt of notice from Purchaser directing the Escrow Agent to disburse to
Parent the remaining balance, if any, of the Environmental Holdback Amount, the Escrow Agent
shall within five (5) Business Days release to Parent the remaining balance, if any, of the
Environmental Holdback Amount, in accordance with Section 2.9(c) of the Purchase Agreement.


A Remediation Dispute Notice shall apply only to the Environmental Holdback Release Notice in
response to which it is given and shall not restrict the release of any Environmental Holdback
Funds that are the subject of a subsequent Environmental Holdback Release Notice, except to the
extent that Parent sends a timely Remediation Dispute Notice with respect thereto.] 8/




          (d) Interest accrued on the Holdback Amount shall be released to the Purchaser and/or Parent,
as applicable, pro rata in proportion to the portion of the Holdback Amount being released to each
such party pursuant to this Section 3 and simultaneously with the release thereof.



     4. Interpleader. Parent and Purchaser agree that in the event of any controversy
regarding the Holdback Amount, unless mutual written instructions are received by the Escrow Agent
directing the disposition of the Holdback Amount, the Escrow Agent shall not take any action, but
instead shall await the disposition of any proceeding relating to the Holdback Amount or, at the
Escrow Agent’s option, the Escrow Agent may interplead all parties and deposit the Holdback Amount
with a court of competent jurisdiction in which event the Escrow Agent may recover all of its court
costs and reasonable attorneys’ fees. Parent or Purchaser, whichever loses in any such
interpleader action, shall be solely obligated to pay such costs and fees to the Escrow Agent, as
well as the reasonable attorneys’ fees of the prevailing party in accordance with the other
provisions of this Agreement.



     5. Notices. All notices and other communications under this Agreement shall be in
writing and shall be deemed given (i) when delivered personally by hand, (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one (1) Business Day following the
day sent by overnight courier (with written confirmation of receipt), in each case at the following
addresses and facsimile numbers (or to such other address or facsimile number as a party may have
specified by notice given to the other party pursuant to this provision):


If to the Escrow Agent:



First American Title Insurance Company

National Commercial Services

2 Penn Center Plaza, Suite 1910

Philadelphia, PA 19102






 




			
	8/	 	Insert if any portion of the Holdback
Amount is designated for use in Remediation.




13









 









Attention: David J. Feldman, Senior Vice President and Regional Director



Facsimile: 215-568-2410



If to Sellers, to:



Orleans Homebuilders, Inc.

3333 Street Road

Bensalem, PA 19020

Attention: Jeffrey P. Orleans

Facsimile: 215-633-2351



with a mandated copies (which shall not constitute notice) to:



Phoenix Management

110 Chadds Ford Commons

Chadds Ford, PA 19317

Attention: Mitchell B. Arden

Facsimile: 610-358-9377



Cahill Gordon & Reindel llp

80 Pine Street

New York, New York 10005

Attention: Joel H. Levitin

Facsimile: 212-378-2449



If to Purchaser, to:



NVR, Inc.

Plaza America Tower I

11700 Plaza America Drive Suite 500

Reston, Virginia 20190

Attention: Dennis Seremet

Facsimile: 703-956-4750



with a mandated copy (which shall not constitute notice) to:



Hogan & Hartson LLP

555 13th Street NW

Washington, D.C. 20004

Attention: Bruce W. Gilchrist

Facsimile: 202-637-5910




          6. Liability and Duties of Escrow Agent. Acceptance by the Escrow Agent of its duties
under this Agreement is subject to the following terms and conditions:



          (a) The parties acknowledge that the Escrow Agent is acting solely as a stakeholder at their
request and for their convenience, that the Escrow Agent shall not be deemed to be the agent of
either of the parties, and that the Escrow Agent shall not be liable to either of the parties for
any act or omission on its part taken or made in good faith, and not in disregard of this Agreement
and/or the Purchase



14









 




Agreement, but shall be liable for its negligent acts and willful misconduct and for any
loss, cost or expense incurred by Sellers or Purchaser resulting from the Escrow Agent’s mistakes
of law respecting the Escrow Agent’s scope or nature of its duties;




          (b) Sellers and Purchaser shall jointly and severally indemnify the Escrow Agent for, and hold
it harmless against all costs, claims and expenses, including but not limited to reasonable
attorneys’ fees, incurred in connection with the performance of the Escrow Agent’s duties
hereunder, except with respect to actions or omissions taken or made by the Escrow Agent in bad
faith, in disregard of this Agreement or involving negligence on the part of the Escrow Agent;



          (c) The Escrow Agent shall be fully protected in acting on and relying upon any written
notice, instruction, direction or other document which the Escrow Agent in good faith believes to
be genuine and to have been signed or presented by the proper party or parties;



          (d) The Escrow Agent may seek the advice of legal counsel in the event of any dispute or
question as to the construction of any of the provisions of this Agreement or its duties hereunder,
and it shall incur no liability and shall be fully protected in respect of any action taken or
suffered by it in good faith in accordance with the opinion of such counsel; and



          (e) The Escrow Agent may resign and be discharged from its duties hereunder at any time by
giving written notice of such resignation to Sellers and Purchaser specifying a date, not less than
fifteen (15) days after the date of such notice, when such resignation will take effect. Upon the
effective date of such resignation, the Escrow Agent shall deliver the funds held in escrow to such
person or persons as Parent and Purchaser shall in writing jointly direct, and upon such delivery
the Escrow Agent shall be relieved of all duties and liabilities thereafter accruing under this
Agreement. Parent and Purchaser shall have the right at any time upon joint action to substitute a
new Escrow Agent by giving notice thereof to the Escrow Agent then acting.



     7. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware (but not the choice of law rules thereof).



     8. Counterparts. This Agreement may be executed in one or more counterparts, each of
which when so executed and delivered shall be deemed an original, all of which taken together shall
constitute one and the same original.



     9. Attorney’s Fees. Should any party employ attorneys to enforce any of the
provisions hereof, the party or parties losing in any final judgment agrees to pay the prevailing
party or parties all reasonable costs, charges and expenses, including reasonable attorneys’ fees,
expended or incurred in connection therewith.



     10. Entirety. This Agreement and the Purchase Agreement together embody the entire
agreement between the parties with respect to the Holdback Amount and supersedes all prior
agreements and understandings related to the Holdback Amount. This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against whom enforcement is
sought.


(b)
Remainder of Page
Intentionally Blank

Signature Page Follows









15









 








     IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement (Holdback) to be
executed as of the day and year first above written.



	 	 	 	 	 
	 	ESCROW AGENT:



FIRST AMERICAN TITLE INSURANCE COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	PURCHASER:



NVR, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SELLER:



ORLEANS HOMEBUILDERS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SELLING AFFILIATES NAMED ON EXHIBIT A HERETO

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 







EXHIBIT A




SELLERS



	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	Orleans Homebuilders, Inc.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Brookshire Estates, L.P.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Greenwood Financial Inc.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Masterpiece Homes, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	OHB Homes, Inc.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	OHI Financing, Inc.
	 	1064 Greenwood Blvd., #106
		 	Lake Mary, FL  32746
	 
	OHI PA GP, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	OHI PA, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	OHI NJ, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	OPCNC, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans Arizona Realty, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans Arizona, Inc.
	 	1105 North Market Street, Suite 609
		 	Wilmington, DE 19801
	 
	 	 
	Orleans at Covington Manor, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Crofton Chase, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020






 









 






	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	Orleans at East Greenwich, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Elk Township, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Hamilton, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Harrison, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Hidden Creek, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Jennings Mill, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Lambertville, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Lyons Gate, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Mansfield LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Meadow Glen, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Millstone, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Millstone River Preserve, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Tabernacle, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Thornbury, L.P.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Upper Freehold, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020






 









 






	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	Orleans at Upper Saucon, L.P.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Upper Uwchlan, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at West Bradford, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at West Vincent, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Westampton Woods, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Windsor Square, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Woolwich, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans at Wrightstown, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans Construction Corp.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans Corporation
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Orleans RHIL, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Parker & Lancaster Corporation
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Parker & Orleans Homebuilders, Inc.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Parker Lancaster, Tidewater, L.L.C.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Realen Homes, L.P.
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020






 









 






	 	 	 
	DEBTOR/SELLER	 	ADDRESS
	RHGP LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Stock Grange, LP
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020
	 
	Wheatley Meadows Associates, LLC
	 	3333 Street Road, Suite 101
		 	Bensalem, PA  19020






 









 






SCHEDULE 1




WIRING INSTRUCTIONS



FIRST AMERICAN TITLE INSURANCE COMPANY




National Commercial Services



Two Penn Center Plaza, Suite 1910



1500 J.F.K. Boulevard

Philadelphia, PA 19102

(c) WIRE TRANSFER INSTRUCTIONS



	 	 	 	 	 
	(d) Wire to:	 	First American Trust, FSB
	 

	 	5 First American Way
	 

	 	Santa Ana, CA 92707
	 

	 	ARTICLE XIII
	 
	 	 	 	 
	ABA Number:	 	 122241255
	 
	 	 	 	 
	For Credit to:	 	First American Title Insurance Company
	 
	 	 	 	 
	Account Number:	 	 3015160000
	 
	 	 	 	 
	Reference:	 	NCS-436414
	 

	 	Attn:
	 	David Feldman
	 

	 	Phone:
	 	 215-568-0055





Failure to reference all of the above information may result in a delay of your funds being
applied to your file











 









 








EXHIBIT D




FORM OF JV ASSIGNMENT




 












 





PARTNERSHIP INTEREST ASSIGNMENT AGREEMENT




     THIS PARTNERSHIP INTEREST ASSIGNMENT AGREEMENT (this “Assignment”) is dated as of
                    , 2010 by and between [ASSIGNOR], a [•] [•] (“Assignor”), [the general partner]
[the limited partner] of [JV INVESTOR], a [•] [•] (the “JV Investor”), and [PURCHASER], a
[•] [•] (the “Assignee”), and is made pursuant to that certain Asset Purchase Agreement,
dated as of April 13, 2010, by and among the Sellers and Purchaser (the “Purchase
Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Purchase Agreement.



RECITALS:




     WHEREAS, pursuant to the Purchase Agreement, and on the terms and subject to the conditions
and exceptions set forth herein and therein, Assignor has agreed to sell, transfer, assign, convey
and deliver to Purchaser or its designees all of Assignor’s right, title and interest in and to
Assignor’s partnership interest in the JV Investor (the “JV Investor Interest”); and



     WHEREAS, Purchaser has designated Assignee, on behalf of Purchaser, to acquire and accept
assignment of the JV Investor Interest.



     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereby agree as follows:



     Section 1. Assignment. Effective as of 12:01 a.m. Eastern Time on the date hereof
(the “Effective Time”), and upon the terms and subject to the conditions and exceptions set
forth herein and in the Purchase Agreement, Assignor hereby assigns, transfers and conveys to
Assignee all of Assignor’s right, title and interest in and to JV Investor Interest, free and clear
of all Liens other than Permitted Liens, together with all rights and claims related thereto as a
[general] [limited] partner of the JV Investor. Assignee, by its execution of this Assignment,
hereby acquires and accepts from Assignor assignment of the JV Investor Interest and assumes any
Assumed Liabilities with respect to such JV Investor Interest. The JV Investor Interest assigned
hereby constitutes all of Assignor’s interests, equity or otherwise, in the JV Investor. The JV
Investor Interest assigned hereby has not previously been transferred or assigned by the Assignor
to any third party, and the Assignor has not entered into any agreement to transfer or assign such
JV Investor Interest, or grant any rights with respect thereto, to any third party.



     Section 2. Submission to Jurisdiction; Consent to Service of Process.



          (a) Without limiting any party’s right to appeal any order of the Bankruptcy Court, (i) the
Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of this Assignment and to
decide any claims or disputes which may arise or result from, or be connected with, this
Assignment, any breach or default hereunder, or the transactions contemplated hereby, and (ii) any
and all proceedings related to the foregoing shall be filed and maintained only in the Bankruptcy
Court, and the parties hereby consent to and submit to the jurisdiction and venue of the Bankruptcy
Court and shall receive notices at such locations as indicated in Section 6 below;
provided, however, that if the Bankruptcy Case has closed, the parties agree to
unconditionally and irrevocably submit to the exclusive jurisdiction of the Chancery Court of the
State of Delaware and any state or federal appellate court therefrom, for the resolution of any
such claim or dispute. The parties hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying of venue of any such
dispute brought in such court or any defense of inconvenient forum for the maintenance of such
dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by Law.



 









 





          (b) Each of the parties hereto hereby consents to process being served by any party to this
Assignment in any suit, action or proceeding by personal delivery of a copy thereof in accordance
with the provisions of Section 6 below.



     Section 3. Waiver of Right to Trial by Jury. Each party to this Assignment waives any
right to trial by jury in any action, matter or proceeding regarding this Assignment or any
provision hereof.



     Section 4. Entire Agreement; Amendments and Waivers. This Assignment, the Purchase
Agreement and the other agreements and documents contemplated by the Purchase Agreement represent
the entire understanding and agreement among the parties hereto with respect to the subject matter
hereof. This Assignment can be amended, supplemented or changed, and any provision hereof can be
waived, only by written instrument making specific reference to this Assignment signed by the party
against whom enforcement of any such amendment, supplement, modification or waiver is sought. No
action taken pursuant to this Assignment, including without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party taking such action of
compliance with any representation, warranty, covenant or agreement contained herein. The waiver
by any party hereto of a breach of any provision of this Assignment shall not operate or be
construed as a waiver or continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of such right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative
and are not exclusive of any other remedies provided by Law.



     Section 5. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made and performed in
such State without regard to conflicts of laws principles thereof.



     Section 6. Notices. All notices and other communications under this Assignment shall
be in writing and shall be deemed given (i) when delivered personally by hand, (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one (1) Business Day following the
day sent by overnight courier (with written confirmation of receipt), in the case of Assignee, at
the addresses and facsimile numbers (or to such other address or facsimile number as such party may
have specified by notice given to the other party pursuant to this provision) set forth for
“Purchaser” in the Purchase Agreement, and in the case of Assignor, at the addresses and facsimile
numbers (or to such other address or facsimile number as such party may have specified by notice
given to the other party pursuant to this provision) set forth for “Seller” in the Purchase
Agreement.



     Section 7. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted assigns. Nothing in this
Assignment shall create or be deemed to create any third party beneficiary rights in any Person or
entity not a party to this Assignment except as provided in the Purchase Agreement. In the event
that a Chapter 11 trustee should be appointed for Parent, or in the event that Parent’s Chapter 11
case should be converted to a case under Chapter 7, the obligations of Sellers hereunder shall be
binding upon such trustee or successor Chapter 7 estate.



     Section 8. Counterparts. This Assignment may be executed in as many counterparts as
may be required, which counterparts may be delivered by facsimile or electronic mail, and it shall
not be necessary that the signature of, or on behalf of, each party, appear on each counterpart;
but it shall be sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more such counterparts. All
such counterparts when taken together shall constitute a single and legally binding agreement.



 









 





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



	 	 	 	 	 
	 	ASSIGNOR:



[ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ASSIGNEE:



[PURCHASER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



EXHIBIT E




FORM OF BILL OF SALE



 









 





BILL OF SALE





     FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, each
of the undersigned (each a “Seller” and together, the “Sellers”) does hereby sell,
transfer, assign, convey and deliver to the entity designated as a “Purchaser” next to the name of
such Seller on Annex A hereto (each a “Purchaser” and together, the
“Purchasers”), all of such Seller’s right, title and interest in, to and under the
Purchased Assets owned or held by such Seller free and clear of all Liens, other than Permitted
Liens, without representation or warranty, express or implied, except as set forth in that certain
Asset Purchase Agreement, dated as of April 13, 2010, by and among the Sellers and NVR, Inc. (the
“Purchase Agreement”).



     TO HAVE AND TO HOLD all of said property unto such Purchaser, its successors and assigns, to
its own use forever.



     Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the
Purchase Agreement.



     IN
WITNESS WHEREOF, each Seller has duly executed this Bill of Sale as
of the          
            day of
                    , 2010.



	 	 	 	 	 
	 	ORLEANS HOMEBUILDERS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE OTHER ENTITIES LISTED UNDER “SELLERS”

ON ANNEX A HERETO

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Acknowledged and agreed:



NVR, INC.

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 




 











 





Annex A 9 /




	 	 	 
	SELLERS	 	PURCHASERS
	Orleans Homebuilders, Inc.

	 	[Purchaser]








 




			
	9/	 	If any one Seller is to convey Purchased
Assets to more than one Purchaser, then the parties shall prepare and attach
“Annex B” specifying (i) such Seller, (ii) such Purchasers and (iii) the assets
to be conveyed by such Seller to each of such Purchasers. “Annex B” shall
contain this disclosure for each Seller conveying to multiple Purchasers.




 









 










EXHIBIT F




FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT



 









 





ASSIGNMENT AND ASSUMPTION AGREEMENT




     THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”) is dated as of
                    , 2010 by and among each of the undersigned designated as a “Seller” on Annex
A hereto (each a “Seller” and together, the “Sellers”), on one hand, and each
of the undersigned designated as a “Purchaser” on Annex A hereto (each a
“Purchaser” and together, the “Purchasers”), on the other hand. Capitalized terms
used but not defined herein shall have the meanings ascribed thereto in that certain Asset Purchase
Agreement (the “Purchase Agreement”), dated as of April 13, 2010, by and among the Sellers
and NVR, Inc. (“NVR”).



RECITALS:




     WHEREAS, pursuant to the Purchase Agreement, and on the terms and subject to the conditions
and exceptions set forth herein and therein, each Seller has agreed to sell, transfer, assign,
convey and deliver to NVR and its designees all of such Sellers’ right, title and interest in, to
and under the Purchased Contracts and the Purchased Leases to which such Seller is a party;



     WHEREAS, pursuant to the Purchase Agreement, and on the terms and subject to the conditions
and exceptions set forth herein and therein, in connection with NVR’s acquisition of the Purchased
Assets, the NVR has agreed to assume and timely perform and discharge, in accordance with their
respective terms, the Assumed Liabilities of the Sellers under the respective Purchased Contracts
and the Purchased Leases; and



     WHEREAS, NVR has designated each of the Purchasers, on behalf of NVR, to acquire and accept
assignment of the Purchased Contracts and Purchased Leases and assume the Assumed Liabilities under
the Purchased Contracts and Purchased Leases, in each case to which the Seller set forth opposite
such Purchaser’s name on Annex A hereto is a party.



     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereby agree as follows:



     Section 1. Assignment and Assumption. Effective as of 12:01 a.m. Eastern Time on the
date hereof (the “Effective Time”) and upon the terms and subject to the conditions and
exceptions set forth herein and in the Purchase Agreement, each Seller hereby sells, transfer,
assigns, conveys and delivers to the Purchaser set forth opposite such Seller’s name on Annex
A hereto all of such Sellers’ right, title and interest in, to and under the Purchased
Contracts and Purchased Leases to which such Seller is a party, and each such Purchaser hereby
assumes and agrees to perform timely and discharge, in accordance with their respective terms, the
Assumed Liabilities under such Purchased Contracts and Purchased Leases. Purchasers are not
assuming or otherwise agreeing to discharge any Excluded Liabilities, and nothing in this
Assignment shall be so construed. Each Purchaser is hereby assuming only Assumed Liabilities under
the Purchased Contracts and Purchased Leases assigned to such Purchaser pursuant to this Assignment
and is not assuming Assumed Liabilities or Liabilities under any other Purchased Contracts or
Purchased Leases that may be assigned to other Purchasers.



     Section 2. Submission to Jurisdiction; Consent to Service of Process.



          (a) Without limiting any party’s right to appeal any order of the Bankruptcy Court, (i) the
Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of this Assignment and to
decide any claims or disputes which may arise or result from, or be connected with, this
Assignment, any breach or default hereunder, or the transactions contemplated hereby, and (ii) any
and all proceedings related to the foregoing shall be filed and maintained only in the Bankruptcy
Court, and the parties hereby





 









 







consent to and submit to the jurisdiction and venue of the Bankruptcy Court and shall receive
notices at such locations as indicated in Section 6 below; provided,
however, that if the Bankruptcy Case has closed, the parties agree to unconditionally and
irrevocably submit to the exclusive jurisdiction of the Chancery Court of the State of Delaware and
any state or federal appellate court therefrom, for the resolution of any such claim or dispute.
The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any such dispute brought
in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of
the parties hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law.




          (b) Each of the parties hereto hereby consents to process being served by any party to this
Assignment in any suit, action or proceeding by personal delivery of a copy thereof in accordance
with the provisions of Section 6 below.




     Section 3. Waiver of Right to Trial by Jury. Each party to this Assignment waives any
right to trial by jury in any action, matter or proceeding regarding this Assignment or any
provision hereof.



     Section 4. Entire Agreement; Amendments and Waivers. This Assignment, the Purchase
Agreement and the other agreements and documents contemplated by the Purchase Agreement represent
the entire understanding and agreement among the parties hereto with respect to the subject matter
hereof. This Assignment can be amended, supplemented or changed, and any provision hereof can be
waived, only by written instrument making specific reference to this Assignment signed by the party
against whom enforcement of any such amendment, supplement, modification or waiver is sought. No
action taken pursuant to this Assignment, including without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party taking such action of
compliance with any representation, warranty, covenant or agreement contained herein. The waiver
by any party hereto of a breach of any provision of this Assignment shall not operate or be
construed as a waiver or continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of such right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative
and are not exclusive of any other remedies provided by Law.



     Section 5. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made and performed in
such State without regard to conflicts of laws principles thereof.



     Section 6. Notices. All notices and other communications under this Assignment shall
be in writing and shall be deemed given (i) when delivered personally by hand, (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one (1) Business Day following the
day sent by overnight courier (with written confirmation of receipt), in the case of Purchasers, at
the addresses and facsimile numbers (or to such other address or facsimile number as such parties
may have specified by notice given to the other parties pursuant to this provision) set forth for
“Purchaser” in the Purchase Agreement, and in the case of Sellers, at the addresses and facsimile
numbers (or to such other address or facsimile number as such parties may have specified by notice
given to the other parties pursuant to this provision) set forth for “Seller” in the Purchase
Agreement.



     Section 7. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted assigns. Nothing in this
Assignment shall create or be deemed to create any third party beneficiary rights in any Person or
entity not a party to this Assignment



- 2 -









 




except as provided in the Purchase Agreement. In the event that a Chapter 11 trustee
should be appointed for Parent, or in the event that Parent’s Chapter 11 case should be converted
to a case under Chapter 7, the obligations of Sellers hereunder shall be binding upon such trustee
or successor Chapter 7 estate.




     Section 8. Counterparts. This Assignment may be executed in as many counterparts as
may be required, which counterparts may be delivered by facsimile or electronic mail, and it shall
not be necessary that the signature of, or on behalf of, each party, appear on each counterpart;
but it shall be sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more such counterparts. All
such counterparts when taken together shall constitute a single and legally binding agreement.



[Signature page follows]






- 3 -









 








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



	 	 	 	 	 
	 	SELLERS:

ORLEANS HOMEBUILDERS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE OTHER ENTITIES LISTED UNDER “SELLERS” ON ANNEX A HERETO

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	PURCHASERS:



[PURCHASERS]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



- 4 -









 






	 	 	 	 	 



Annex A 10/




	 	 	 
	SELLERS	 	PURCHASERS
	Orleans Homebuilders, Inc.

	 	[Purchaser]








 




			
	10/	 	If any one Seller is to assign
Purchased Contracts and Purchased Leases to more than one Purchaser, then the
parties shall prepare and attach “Annex B” specifying (i) such Seller, (ii)
such Purchasers and (iii) the Purchased Contracts and Purchased Leases to be
assigned by such Seller to each of such Purchasers. “Annex B” shall contain
this disclosure for each Seller assigning to multiple Purchasers.






- 5 -