Exhibit
10.2


 


EXECUTION COPY


 


 




 





EXCHANGE AGREEMENT


 


 


among


 


 


OHI FINANCING, INC.,


 


 


ORLEANS HOMEBUILDERS,
INC.


 


 


and


 


 


TABERNA PREFERRED FUNDING
III, LTD.,


 


 


TABERNA PREFERRED FUNDING
IV, LTD.,


 


 


and


 


 


TABERNA PREFERRED FUNDING
VI, LTD.


 


 


Dated
as of August 3, 2009






 





 

















 


EXCHANGE
AGREEMENT


 


THIS EXCHANGE AGREEMENT, dated as of August 3, 2009 (this “Agreement”),
is entered into by and among OHI
FINANCING, INC., a Delaware
corporation (the “Company”),
ORLEANS HOMEBUILDERS, INC., a Delaware corporation, as guarantor (“Guarantor”), and TABERNA PREFERRED FUNDING III, LTD. (“Taberna III”), TABERNA PREFERRED FUNDING IV, LTD. (“Taberna IV”), and TABERNA PREFERRED FUNDING VI, LTD. (“Taberna VI”, and together with Taberna III and Taberna IV, collectively, “Taberna”).


 


RECITAL:


 


A.                                 Reference is made to that certain Junior
Subordinated Indenture dated as of November 23,
2005, as amended by that certain Supplemental Indenture No. 1, dated as of
August 10, 2007 (collectively, the “Existing Indenture”),
by and between the Company and The Bank of New York Mellon Trust Company,
National Association (“BNYM”) (as
successor to JPMorgan Chase Bank, National Association), as trustee (the “Existing Indenture Trustee”).


 


B.                                   Reference is made to that certain Amended
and Restated Trust Agreement dated as of November 23, 2005 (the “Trust Agreement”),
by and among the Company, as depositor, BNYM (successor to JPMorgan Chase Bank,
National Association), as property trustee (the “Property
Trustee”), BNY Mellon Trust of Delaware (as successor to Chase Bank
USA, National Association), as Delaware trustee (the “Delaware
Trustee”), and the respective administrative trustees named therein.


 


C.                                   Orleans
Homebuilders Trust II
(“Trust II”) is the holder of the Junior
Subordinated Note due 2036 in
the original principal amount of $77,320,000
issued by the Company pursuant to the Existing
Indenture (“Subordinated Note II”).


 


D.                                  Taberna III, Taberna IV and Taberna VI are the holders of Preferred Securities in the original
aggregate principal amount of $75,000,000
issued by Trust II pursuant to the Trust Agreement, copies of which are
attached hereto as Exhibit A-1 ( the “Original
Preferred Securities”).


 


E.                                    Simultaneously herewith, the Company and
The Bank of New York Mellon, as trustee (the “New Indenture
Trustee”) have entered into that certain Junior Subordinated
Indenture (the “New Indenture”) pursuant to which
Company proposes to issue Ninety Three
Million Seven Hundred Fifty Thousand Dollars ($93,750,000) in aggregate principal amount of the Junior Subordinated
Notes due 2036 as follows
(collectively, the “Securities”):


 


(i)                                    Junior Subordinated Note due 2036 in the original principal amount
of $35,156,000 issued by the
Company to Taberna III, a copy
of which is attached hereto as Exhibit B-1 (“Note 1”);


 


(ii)                                Junior Subordinated Note due 2036 in the original principal amount
of $30,469,000 issued by the
Company to Taberna IV, a copy of
which is attached hereto as Exhibit B-2 (“Note 2”);
and


 

















 


(iii)                            Junior Subordinated Note due 2036 in the original principal amount
of $28,125,000 issued by the
Company to Taberna VI, a copy of
which is attached hereto as Exhibit B-3 (“Note 3”).


 


F.                                     The Securities will be guaranteed by the
Guarantor as to the payment of the Parent Guarantee Payments, as defined in and
in accordance with that certain Parent Guarantee Agreement, dated as of the
date hereof, by and between the Guarantor and the New Indenture Trustee (the “Parent Guarantee”).


 


G.                                  On the terms and subject to the
conditions set forth in this Agreement, the Company and Taberna have agreed to
exchange the Original Preferred Securities for the Securities.


 


NOW, THEREFORE, in consideration of the mutual agreements and subject
to the terms and conditions herein set forth, the parties hereto agree as
follows:


 


1.                                       Definitions.                                This Agreement, the New Indenture, the Securities and
the Parent Guarantee are collectively referred to herein as the “Operative Documents.”  All other capitalized terms used but not
defined in this Agreement shall have the respective meanings ascribed thereto
in the New Indenture.


 


“1934 Act Reports” has the meaning set forth in Section 4(z).


 


“Bankruptcy Code” means the Bankruptcy
Reform Act of 1978, 11 U.S.C. §§101 et seq., as amended.


 


“Benefit Plan” means an “employee
benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, a
“plan” as defined in Section 4975 of the Code or any entity whose assets
include (for purposes of U.S. Department of Labor Regulations Section 2510.3-101
or otherwise for purposes of Title I of ERISA or Section 4975 of the Code)
the assets of any such “employee benefit plan” or “plan.”


 


“BNYM” has the meaning set forth in the
Recitals.


 


“CDO Trustee” has the meaning set forth
in Section 2(b)(i).


 


“Code” means the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated under it.


 


“Closing Date” has the meaning set forth
in Section 2(b).


 


“Closing Room” has the meaning set forth
in Section 2(b).


 


“Company” has the meaning set forth in
the introductory paragraph hereof.


 


“Company Counsel” has the meaning set
forth in Section 3(b).


 


“Commission” has the meaning set forth
in Section 4(v)


 


2

















 


“Credit Facilities” means the Second Amended and Restated Revolving
Credit Loan Agreement, dated as of September 30, 2008, by and among
Greenwood Financial, Inc., certain affiliates and the Guarantor, as
borrowers and or guarantors, the lenders party thereto and Wachovia Bank
National Association, as Administrative Agent for the lenders, including any
notes, guarantees, collateral and security documents, instruments and
agreements executed in connection therewith (including Hedging Obligations
related to the Debt incurred thereunder), as amended, amended and restated,
supplemented, refinanced or otherwise modified, including any agreement or
instrument extending the maturity of refinancing, replacing or otherwise
restructuring (including refinancing such bank facility with secured or
unsecured debt securities and/or other forms of Debt and/or adding, substituting
or deleting parties thereto (including borrowers, obligors, guarantors,
lenders, creditors and/or agents)) all or any portion of the Debt under any
such agreements with the same of any other agents, creditor, lender or group of
creditors or lenders.


 


“Delaware Trustee” has the meaning set
forth in the Recitals.


 


“Environmental Law” has the meaning set
forth in Section 4(ll).


 


“Environmental Laws” shall have the
correlative meaning.


 


“Equity Interests” means with respect to
any Person (a) if such a Person is a partnership, the partnership
interests (general or limited) in such partnership, (b) if such Person is
a limited liability company, the membership interests in such limited liability
company and (c) if such Person is a corporation, the shares or stock
interests (both common stock and preferred stock) in such corporation.


 


“ERISA” means the Employee Retirement
Income Security Act of 1974, as amended, and the rules and regulations
promulgated under it.


 


“Exchange” has the meaning set forth in Section 2(b).


 


“Exchange Act” has the meaning set forth
in Section 4(j).


 


“Existing Indenture” has the meaning set
forth in the Recitals.


 


“Existing Indenture Trustee” has the
meaning set forth in the Recitals.


 


“Existing Subordinated Notes” has the
meaning set forth in the Recitals.


 


“Financial Statements” has the meaning
set forth in Section 4(w).


 


“GAAP” has the meaning set forth in Section 4(w).


 


“Governmental Entities” has the meaning
set forth in Section 4(o).


 


“Governmental Licenses” has the meaning
set forth in Section 4(r).


 


“Guarantor” means Orleans Homebuilders, Inc.,
a Delaware corporation.


 


3

















 


“Hazardous Materials” has the meaning
set forth in Section 4(ll).


 


“Holder” has the meaning set forth in the
New Indenture.


 


“Impairment” means any claim,
counterclaim, setoff, defense, action, demand, litigation (including
administrative proceedings or derivative actions), encumbrance, right
(including expungement, avoidance, reduction, contractual or equitable
subordination, or otherwise) or defect.


 


“Indemnified  Party”
has the meaning set forth in Section 8(a). 
“Indemnified Parties” shall have the
correlative meaning.


 


“Interim Financial Statements” shall
have the mean set forth in Section 4(w).


 


“Investment Company Act” has the meaning
set forth in Section 4(j).


 


“Letter of Credit” has the meaning set
forth in Section 3(f).


 


“Lien” has the meaning set forth in Section 4(o).


 


“Material Adverse Effect” means a
material adverse effect (other than any Material Adverse Effect directly or
indirectly attributable to the passage of time in connection with the existence
of any default under the Credit Facilities) on the condition (financial or
otherwise), earnings, business, liabilities or assets of the Guarantor and its
Subsidiaries taken as a whole.


 


“Material Adverse Change” has the
meaning set forth in Section 3(e)(ii).


 


“New Indenture” has the meaning set
forth in the Recitals.


 


“New Indenture Trustee” has the meaning
set forth in the Recitals.


 


“Note 1” has the meaning set forth in
the Recitals.


 


“Note 2” has the meaning set forth in
the Recitals.


 


“Note 3” has the meaning set forth in
the Recitals.


 


“Offering Documents” means the documents
set forth as Annex E hereto.


 


“Original Parent Guarantee” means that
certain Parent Guarantee Agreement, dated November 23, 2005 by and between
Orleans Homebuilders, Inc., as Parent Guarantor, and JPMorgan Chase Bank,
National Association, as Guarantee Trustee, as the same may be amended from
time to time.


 


“Original Preferred Securities” has the
meaning set forth in the Recitals.


 


“Properties” has the meaning set forth
in Section 4(ii).


 


“Property Trustee” has the meaning set
forth in the Recitals.


 


4

















 


“Regulation D” has the meaning set forth
in Section 4(h).


 


“Repayment Event” has the meaning set
forth in Section 4(o).


 


“Rule 144A(d)(3)” has the meaning
set forth in Section 4(j).


 


“Securities” has the meaning set forth
in the Recitals.


 


“Securities Act” means the Securities
Act of 1933, 15 U.S.C. §§77a et  seq., as amended, and the rules and
regulations promulgated under it.


 


“Subsidiary” means any Person wherein at
least fifty percent (50%) of the Equity Interests is owned, directly or
indirectly, by the Guarantor.  “Subsidiaries” means, collectively, each and every
Subsidiary.


 


“Subordinated Note II” has the meaning
set forth in the Recitals.


 


“Taberna” has the meaning set forth in
the introductory paragraph hereof.


 


“Taberna III” has the meaning set forth
in the introductory paragraph hereof.


 


“Taberna IV” has the meaning set forth
in the introductory paragraph hereof.


 


“Taberna VI” has the meaning set forth
in the introductory paragraph hereof.


 


“Taberna Capital Management, LLC” means Taberna Capital Management, LLC and its successors
and/or assigns as collateral manager of the Holders, as applicable.


 


“Taberna Transferred Rights” means any
and all of Taberna’s right, title, and interest in, to and under the Original
Preferred Securities, together with the following:


 


(i)                                     the Existing Indenture and the Original
Parent Guarantee;


 


(ii)                                  all amounts payable to Taberna under the
Original Preferred Securities, and the Existing Indenture;


 


(iii)                               all claims (including “claims” as defined
in Bankruptcy Code §101(5)), suits, causes of action, and any other right of
Taberna, whether known or unknown, against the Company or any of its affiliates
(including the Trusts), agents, representatives, contractors, advisors, or any
other entity that in any way is based upon, arises out of or is related to any
of the foregoing, including all claims (including contract claims, tort claims,
malpractice claims, and claims under any law governing the exchange of,
purchase and sale of, or indentures for, securities), suits, causes of action,
and any other right of Taberna against any attorney, accountant, financial
advisor, or other entity arising under or in connection with the Original
Preferred Securities, the Existing Indenture or the transactions related
thereto or contemplated thereby;


 


(iv)                              all guarantees and all collateral and
security of any kind for or in respect of the foregoing;


 


5

















 


(v)                                 all cash, securities, or other property,
and all setoffs and recoupments, to be received, applied, or effected by or for
the account of Taberna under the Original Preferred Securities (including that
certain letter of credit dated as of August 17, 2007 related thereto),
other than fees, costs and expenses payable to Taberna hereunder and all cash,
securities, interest, dividends, and other property that may be exchanged for,
or distributed or collected with respect to, any of the foregoing; and


 


(vi)                              all proceeds of the foregoing.


 


“Trust II” has
the meaning set forth in the Recitals.


 


“Trust Agreement”
has the meaning set forth in the Recitals.


 


2.                                       Exchange of Original
Preferred Securities for Securities.


 


(a)                                  The Company agrees to issue the
Securities in accordance with the New Indenture and has requested that Taberna
accept such Securities in exchange for the Original Preferred Securities, and
Taberna hereby accepts such Securities in exchange for the Original Preferred
Securities upon the terms and conditions set forth herein.


 


(b)                                 The closing of the exchange contemplated
herein shall occur at the offices of Nixon Peabody, LLP in New York, New York
(the “Closing Room”), or such other place as
the parties hereto and BNYM shall agree, at 11:00 a.m. New York time, on August 3,
2009 or such later date as the parties may agree (such date and time of
delivery the “Closing Date”).
The Company and Taberna hereby agree that the exchange (the “Exchange”) will occur in accordance with the following
requirements:


 


(i)                                     Taberna Capital Management, LLC (as
collateral manager for each of the Taberna entities) shall have delivered an
issuer order instructing each trustee (in each such capacity, a “CDO Trustee”) under the applicable indenture pursuant to
which such CDO Trustee serves as trustee for the holders of the Original
Preferred Securities to exchange the Original Preferred Securities for the
Securities and to deliver the Original Preferred Securities to the Property
Trustee for cancellation and reissuance in the name of the Company.


 


(ii)                                  The Original Preferred Securities and the
Securities shall have been delivered to the Closing Room, copies of which
Original Preferred Securities and Securities shall have previously been made
available for inspection, if so requested.


 


(iii)                               Company shall have directed the New
Indenture Trustee to authenticate the Securities and deliver them to the applicable
CDO Trustee, as follows: (i) Note 1 to Taberna III, (ii) Note 2 to
Taberna IV, and (iii) Note 3 to Taberna VI.


 


(iv)                              New Indenture Trustee shall have
authenticated the Securities in accordance with the terms of the New Indenture
and delivered them as provided above.


 


6

















 


(v)                                 BNYM, shall have obtained the Original
Preferred Securities and shall promptly thereafter, if requested by the
Company, cancel and reissue them in the name of the Company.


 


(vi)                              the Company shall have paid to the BNYM
all of such party’s legal fees, costs and other expenses in connection with the
Exchange, as well as all other accrued and unpaid fees, costs and expenses
under the Existing Indenture and the Trust Agreement, if any.


 


(vii)                           The Company shall have paid to the
Trustee, for applications upon the Original Preferred Securities and for
distribution to the applicable Taberna entities holding such Original Preferred
Securities pursuant to the terms of the Existing Indenture, all accrued
interest for the period commencing on the most recent interest payment date
under the Original Preferred Securities and continuing through and including July 30,
2009, provided, that the Company and Taberna agree that the amount of interest
payable for such period with respect to the Original Preferred Securities shall
be based upon an interest rate of one percent (1.0%) per annum.


 


(viii)                        Upon the occurrence of the events
described in subsections (i) through (vii) above and all of the
conditions precedent set forth in Section 3, Taberna shall consummate the
Exchange and (A) each Taberna entity holding the applicable Original
Preferred Securities irrevocably transfers, assigns, grants and conveys the
related Taberna Transferred Rights to the Company and the Company assumes all
rights and obligations of Taberna with respect to the Original Preferred
Securities and the Taberna Transferred Rights and (B) each Holder shall be
entitled to all of the rights, title and interest of a Holder of the Securities
under the terms of the Securities, the New Indenture and any other Operative
Documents.


 


3.                                       Conditions Precedent. 
The obligations of the parties under this Agreement are subject to the
following conditions precedent:


 


(a)                                  The representations and warranties
contained herein shall be accurate as of the date of delivery of the
Securities.


 


(b)                                 Cahill Gordon & Reindel LLP,
counsel for the Company and Guarantor (the “Company Counsel”), shall have delivered an opinion, dated
the Closing Date, addressed to each Holder and to the New Indenture Trustee, in
substantially the form set out in Annex A-1 hereto, Lawrence J. Dugan,
General Counsel to the Guarantor, shall have delivered an opinion, dated the
Closing Date, addressed to each Holder and to the New Indenture Trustee, in
substantially the same form set out in Annex A-2 hereto and the Company shall
have furnished to the Holders of the Securities a certificate signed by the
Guarantor’s Chief Executive Officer, President, an Executive Vice President,
Chief Financial Officer, Treasurer or Assistant Treasurer, dated the Closing
Date, addressed to the Holders of the Securities, in substantially the form set
out in Annex D hereto.  In
rendering its opinion, the Company Counsel may rely as to factual matters upon
certificates or other documents furnished by officers and directors of the
Company and the Guarantor and by government officials.  The Company Counsel may specify the
jurisdictions in which it is admitted to practice and that it is not admitted
to practice in any 


 


7

















 


other jurisdiction and is not an expert in the law of any other
jurisdiction.  Such Company Counsel
Opinion shall not state that it is to be governed or qualified by, or that it
is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).


 


(c)                                  The Offering Documents shall state that
an opinion of Ernst & Young LLP, tax counsel to the Company, has been
rendered to the Company regarding the treatment of the Securities as debt for
U.S. Federal income tax purposes and Taberna shall have been furnished a copy
of such opinion.


 


(d)                                 The Holders of the Securities shall have
received the opinion of Gardere Wynne Sewell LLP, special counsel for the New
Indenture Trustee, dated as of the Closing Date, addressed to the Holders of
the Securities and their successors and assigns, in substantially the form set
out in Annex C hereto.


 


(e)                                  Each of the Guarantor and the Company
shall have furnished to the Holders of the Securities a certificate of the
Guarantor and the Company, as applicable, signed by its Chief Executive
Officer, President or an Executive Vice President, and Chief Financial Officer,
Treasurer or Assistant Treasurer, dated as of the Closing Date, as to (i) and
(ii) below:


 


(i)                                     the representations and warranties in
this Agreement, the New Indenture and the Parent Guarantee are true and correct
on and as of the Closing Date, and the Company and the Guarantor have complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; and


 


(ii)                                  since the date of the latest Financial
Statements, there has been no material adverse change (other than any Material
Adverse Change directly or indirectly attributable to the passage of time in
connection with the existence of any default under the Credit Facilities) in
the condition (financial or other), earnings, business or assets of the
Guarantor and its Subsidiaries, taken as a whole, whether or not arising from
transactions occurring in the ordinary course of business (a “Material Adverse Change”).


 


(f)                                    On the Closing Date, the Company shall
have delivered to and in favor of the Trustee, as beneficiary, an original,
irrevocable letter of credit in the notional amount of Five Million Dollars
($5,000,000) (the “Letter of Credit”)
in form and substance reasonably satisfactory to Taberna Capital Management,
LLC and otherwise in accordance with the terms and provisions of the New
Indenture.


 


(g)                                 Prior to the Closing Date, the Company
and the Guarantor shall have furnished to the Holders of the Securities and
their counsel such further information, certificates and documents as the
Holders of the Securities or such counsel may reasonably request.


 


Each certificate signed by any officer of the Company and/or the
Guarantor and delivered to the Holders of the Securities or the Holders’
counsel in connection with the Operative Documents and the transactions
contemplated hereby and thereby shall be deemed to be a 


 


8
















 


representation and warranty of the Company and/or the
Guarantor, as applicable, and not by such officer in any individual capacity.


 


4.                                       Representations and
Warranties of the Company and the Guarantor.  Each of the
Company and the Guarantor jointly and severally, as of the date hereof and as
of the Closing Date, represent and warrant to, and agree with Taberna, as
holders of the Original Preferred Securities and with the Holders of the
Securities, as follows:


 


(a)                                  Each of the Company and the Guarantor (i) is
duly organized and validly existing under the laws of its jurisdiction of
organization or incorporation, (ii) is in good standing under such laws
and (iii) has full power and authority to execute, deliver and perform its
obligations under this Agreement and the other Operative Documents.


 


(b)                                 It is an “accredited investor” as defined
in Rule 501 under the Securities Act. Without characterizing the Original
Preferred Securities or any of the Taberna Transferred Rights as a “security”
within the meaning of applicable securities laws, it is not acquiring the
Original Preferred Securities or the Taberna Transferred Rights with a view
towards the sale or distribution thereof in violation of the Securities Act.


 


(c)                                  Intentionally omitted.


 


(d)                                 None of the Securities or the Letter of
Credit is subject to any Lien. The Company has received reasonable
consideration in exchange for its obligations under the Operative Documents.


 


(e)                                  Each of the Company and the Guarantor (i) is
a sophisticated entity with respect to the Exchange and/or the Parent
Guarantee, as applicable, (ii) has such knowledge and experience, and has
made investments of a similar nature, so as to be aware of the risks and
uncertainties inherent in the Exchange and the Parent Guarantee and (iii) has
independently and without reliance upon Taberna, any Holder of the Securities,
Taberna Capital Management, LLC or Trustee or any of their affiliates, and
based on such information as it has deemed appropriate, made its own analysis
and decision to enter into this Agreement, except that it has relied upon
Taberna’s express representations, warranties, covenants and agreements in this
Agreement.  The Company and the Guarantor
acknowledge that none of Taberna, any Holders of the Securities, Taberna
Capital Management, LLC or Trustee or any of their affiliates has given it any
investment advice, credit information or opinion on whether the Exchange is
prudent.


 


(f)                                    None of the Company or the Guarantor has
engaged any broker, finder or other entity acting under the authority of it or
any of its affiliates that is entitled to any broker’s commission or other fee
in connection with the transaction for which Taberna, any Holder, Trustee or
any of their affiliates could be responsible.


 


(g)                                 No interest in the Taberna Transferred
Rights is being acquired by or on behalf of an entity that is, or at any time
while the Taberna Transferred Rights are held thereby will be, one or more
Benefit Plans.


 


(h)                                 None of the Company or the Guarantor or
any of their respective “Affiliates” (as defined in Rule 501(b) of
Regulation D (“Regulation D”)
under the Securities 


 


9

















 


Act (as defined below)), nor any person acting on its or their behalf,
has, directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of any of the Securities under the Securities Act.


 


(i)                                     None of the Company or the Guarantor or
any of their respective Affiliates, or any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or sale of
any of the Securities.


 


(j)                                     The Securities (i) are not and have
not been listed on a national securities exchange registered under Section 6
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or quoted on a U.S. automated inter-dealer
quotation system and (ii) are not of an open-end investment company, unit
investment trust or face-amount certificate company that are, or are required
to be, registered under Section 8 of the Investment Company Act of 1940,
as amended (the “Investment Company
Act”), and the Securities otherwise satisfy the eligibility requirements
of Rule 144A(d)(3) promulgated pursuant to the Securities Act (“Rule 144A(d)(3)”).


 


(k)                                  None of the Company or the Guarantor or
any of their respective Affiliates, or any person acting on its or their
behalf, has engaged, or will engage, in any “directed selling efforts” within
the meaning of Regulation S under the Securities Act with respect to the
Securities.


 


(l)                                     Assuming the accuracy of the
representations made by Taberna hereunder, neither the Company nor the
Guarantor is, and immediately following consummation of the transactions
contemplated hereby, will be, an “investment company” or an entity “controlled”
by an “investment company,” in each case within the meaning of Section 3(a) of
the Investment Company Act.


 


(m)                               Each of this Agreement, the New Indenture
and the Parent Guarantee, as applicable, and the consummation of the
transactions contemplated herein and therein have been duly authorized by the
Company and the Guarantor and, on the Closing Date, will have been duly
executed and delivered by the Company and the Guarantor, and, assuming due
authorization, execution and delivery by Taberna and/or the Trustee, as
applicable, will be the legal, valid and binding obligations of the Company and
the Guarantor enforceable against it in accordance with their respective terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and to general principles of equity.


 


(n)                                 The Securities have been duly authorized
by the Company and, on the Closing Date, will have been duly executed and
delivered to the Trustee for authentication in accordance with the New
Indenture and, when authenticated in the manner provided for in the New
Indenture and delivered to the Holders, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the New Indenture,
enforceable against the Company in accordance with their terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
generally and to general principles of equity.


 


10

















 


(o)                                 Neither the issue of the Securities and
exchange of the Securities for the Original Preferred Securities, nor the
execution and delivery of and compliance with the Operative Documents by the
Company or the Guarantor, nor the consummation of the transactions contemplated
herein or therein, (i) will conflict with or constitute a violation or
breach of (x) the charter or bylaws or similar organizational documents of
the Company or the Guarantor or (y) any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, governmental
authority, agency or instrumentality or court, domestic or foreign, having
jurisdiction over the Company, the Guarantor or any of their respective
subsidiaries or their respective properties or assets (collectively, the “Governmental Entities”), (ii) will
conflict with or constitute a violation or breach of, or a default or Repayment
Event (as defined below) under, or result in the creation or imposition of any
pledge, security interest, claim, lien or other encumbrance of any kind (each,
a “Lien”) upon
any property or assets of the Company, the Guarantor or any of their respective
subsidiaries pursuant to any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which (A) the Company, the
Guarantor or any of their respective subsidiaries is a party or by which it or
any of them may be bound, or (B) to which any of the property or assets of
any of them is subject, or any judgment, order or decree of any court,
Governmental Entity or arbitrator, except, in the case of clause (i)(y) or
this clause (ii), for such conflicts, breaches, violations, defaults, Repayment
Events (as defined below) or Liens which (X) would not, singly or in the
aggregate, adversely affect the consummation of the transactions contemplated
by the Operative Documents and (Y) would not, singly or in the aggregate,
have a Material Adverse Effect or (iii) will require the consent,
approval, authorization or order of any court or Governmental Entity.  As used herein, a “Repayment Event” means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company, the Guarantor or any of its subsidiaries prior to its scheduled
maturity.


 


(p)                                 Each of the Company and the Guarantor has
all requisite power and authority to own, lease and operate its properties and
assets and conduct the business it transacts and proposes to transact, and is
duly qualified to transact business and is in good standing in each
jurisdiction where the nature of its activities requires such qualification,
except where the failure of the Company or the Guarantor to be so qualified
would not, singly or in the aggregate, have a Material Adverse Effect.


 


(q)                                 Neither the Company nor the Guarantor has
any subsidiaries that are material to its business, financial condition or
earnings, other than those Subsidiaries listed in Schedule 1 attached
hereto.  Each Subsidiary is a
corporation, partnership, limited partnership or limited liability company duly
and properly incorporated or organized or formed, as the case may be, validly
existing and in good standing under the laws of the jurisdiction in which it is
chartered or organized or formed, with all requisite power and authority to
own, lease and operate its properties and conduct the business it transacts,
except where the failure to be so incorporated, organized, formed, existing or
in good standing would not singly or in the aggregate have a Material Adverse
Effect.  Each Subsidiary is duly
qualified to transact business as a foreign corporation, partnership or limited
liability company, as applicable, and is in good standing in each jurisdiction
where the nature of its activities requires such qualification, except where
the failure to be so qualified would not, singly or in the aggregate, have a
Material Adverse Effect.


 


11

















 


(r)                                    The Company, the Guarantor and each of
their respective Subsidiaries hold all necessary approvals, authorizations,
orders, licenses, consents, registrations, qualifications, certificates and
permits (collectively, the “Governmental
Licenses”) of and from Governmental Entities necessary to conduct
their respective businesses as now being conducted, and none of the Company,
the Guarantor nor any of their respective Subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
Government License, except where the failure to be so licensed or approved or
the receipt of an unfavorable decision, ruling or finding, would not, singly or
in the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except where the invalidity or
the failure of such Governmental Licenses to be in full force and effect, would
not, singly or in the aggregate, have a Material Adverse Effect; and the
Company, the Guarantor and their respective subsidiaries are in compliance with
all applicable laws, rules, regulations, judgments, orders, decrees and
consents, except where the failure to be in compliance would not, singly or in
the aggregate, have a Material Adverse Effect.


 


(s)                                  All of the issued and outstanding Equity
Interests of the Company and the Guarantor are validly issued, fully paid and
non-assessable, free and clear of any Lien, claim or equitable right; and none
of the issued and outstanding Equity Interests of the Company or the Guarantor
was issued in violation of any preemptive or similar rights arising by
operation of law, under the charter or by-laws or similar organizational
documents of such entity or under any agreement to which the Company or the
Guarantor is a party.


 


(t)                                    (i) Neither of the Company nor the
Guarantor is in violation of its respective charter or by-laws or similar
organizational documents and (ii) neither the Company, the Guarantor or
any of their respective Subsidiaries is in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other agreement
or instrument to which the Company, the Guarantor or any such subsidiary is a
party or by which it or any of them may be bound or to which any of the
property or assets of any of them is subject, except, in the case of clause
(ii), where such violation or default would not, singly or in the aggregate,
have a Material Adverse Effect.


 


(u)                                 There is no action, suit or proceeding
before or by any Governmental Entity, arbitrator or court, domestic or foreign,
now pending or, to the knowledge of the Company or the Guarantor after due
inquiry, threatened against or affecting the Company, the Guarantor or any of
their respective subsidiaries, except for such actions, suits or proceedings
that, if adversely determined, would not, singly or in the aggregate, adversely
affect the consummation of the transactions contemplated by the Operative
Documents or have a Material Adverse Effect; and the aggregate of all pending
legal or governmental proceedings to which the Company, the Guarantor or any of
their respective subsidiaries is a party or of which any of their respective
properties or assets is subject, including ordinary routine litigation
incidental to the business, are not expected to result in a Material Adverse
Effect.


 


(v)                                 The accountants of the Company and the
Guarantor who certified the Financial Statements(defined below) are independent
public accountants of the Company, the Guarantor and their respective
subsidiaries within the meaning of the Securities Act, and the 


 


12

















 


rules and regulations of the Securities and Exchange Commission
(the “Commission”)
thereunder.


 


(w)                               The audited consolidated financial
statements (including the notes thereto) and schedules of the Guarantor its
consolidated subsidiaries for the fiscal year ended June 30, 2008 (the “Financial Statements”) and the
interim unaudited consolidated financial statements of the Guarantor and its
consolidated subsidiaries for the quarters ended September 30, 2008, December 31,
2008 and March 31, 2008 (the “Interim Financial
Statements”) provided to Taberna are the most recent available
audited and unaudited consolidated financial statements of the Guarantor and
each of its consolidated subsidiaries, including the Company, respectively, and
fairly present in all material respects, in accordance with U.S. generally
accepted accounting principles (“GAAP”),
the financial position of the Guarantor and its consolidated subsidiaries and
the results of operations and changes in financial condition as of the dates
and for the periods therein specified, subject, in the case of Interim
Financial Statements, to year-end adjustments (which are expected to consist
solely of normal recurring adjustments). 
Such consolidated financial statements and schedules have been prepared
in accordance with GAAP consistently applied throughout the periods involved
(except as otherwise noted therein).


 


(x)                                   Neither the Company nor the Guarantor has
any material liability, whether asserted or, to the knowledge of the Company
and Guarantor, unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due, including any liability for taxes (and, to the knowledge of the Company
and Guarantor, there is no past or present fact, situation, circumstance,
condition or other basis for any present or future action, suit, proceeding,
hearing, charge, complaint, claim or demand against the Company or the
Guarantor that could give rise to any such liability), except for (i) liabilities
set forth in the Financial Statements, the Interim Financial Statements or as
disclosed in the Company’s or Guarantor’s 1934 Act Reports (ii) liabilities
relating to the Securities and the Guarantee; and (iii) normal
fluctuations in the amount of the liabilities referred to in clause (i) above
occurring in the ordinary course of business of the Company and the Guarantor
since the date of the most recent balance sheet included in such Financial
Statements.


 


(y)                                 Since the respective dates of the most
recent Interim Financial Statements, there has not been (A) any Material
Adverse Change (other than any Material Adverse Change directly or indirectly
attributable to the passage of time in connection with the existence of any
default under the Credit Facilities) or (B) any dividend or distribution
of any kind declared, paid or made by the Company or the Guarantor on any class
of its capital stock.


 


(z)                                   The documents of the Guarantor filed with
the Commission in accordance with the Exchange Act, from and including the
commencement of the fiscal year covered by the Guarantor’s most recent Annual
Report on Form 10-K, at the time they were or hereafter are filed the
Guarantor with the Commission (collectively, the “1934 Act Reports”),  complied and will comply in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder (the “1934 Act Regulations”), and, at
the date of this Agreement and on the Closing Date, do not and will not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
other than such instruments, agreements, contracts and other documents as are 


 


13

















 


filed
as exhibits to the Guarantor’s Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q or Current Reports on Form 8-K, there are no
instruments, agreements, contracts or documents of a character described in
Item 601 of Regulation S-K promulgated by the Commission to which the Company,
the Guarantor or any of their respective Subsidiaries is a party.  The Company and the Guarantor are in compliance
in all material respects with all currently applicable requirements
of the Exchange Act that were added by the Sarbanes-Oxley Act of 2002.


 


(aa)                            No labor dispute with the employees of
the Company, the Guarantor or any of their respective subsidiaries exists or,
to the knowledge of the Company or the Guarantor, is imminent, except those
which would not, singly or in the aggregate, have a Material Adverse Effect.


 


(bb)                          No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of,
any Governmental Entity, other than those that have been made or obtained, is
necessary or required for the performance by the Company, the Guarantor of
their respective obligations under the Operative Documents, as applicable, or the
consummation by the Company or the Guarantor of the transactions contemplated
by the Operative Documents.


 


(cc)                            Intentionally Omitted.


 


(dd)                          Intentionally Omitted.


 


(ee)                            Except for failures that would not
individually or in the aggregate have a Material Adverse Effect, the Company,
the Guarantor and each of their respective Subsidiaries has timely and duly
filed (taking into account extensions thereof) all Tax Returns (as defined
below) required to be filed by them, and all such Tax Returns are true, correct
and complete in all material respects. 
The Company, the Guarantor and each of their respective Subsidiaries has
timely and duly paid in full all material Taxes (as defined below) required to
be paid by them (whether or not such amounts are shown as due on any Tax
Return).  Neither the Company nor the
Guarantor has received notice of, and to the Company’s and Guarantor’s
knowledge, there are no federal, state, or other Tax audits or deficiency
assessments proposed, pending or threatened with respect to the Company, the
Guarantor or any of their respective Subsidiaries.  As used herein, the terms “Tax” or “Taxes” mean (i) all
federal, state, local, and foreign taxes, and other assessments of a similar
nature (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto, imposed by any
Governmental Entity, and (ii) all liabilities in respect of such amounts
arising as a result of being a member of any affiliated, consolidated,
combined, unitary or similar group, as a successor to another person or by
contract.  As used herein, the term “Tax
Returns” means all federal, state, local, and foreign Tax returns,
declarations, statements, reports, schedules, forms, and information returns
and any amendments thereto filed or required to be filed with any Governmental
Entity.


 


(ff)                                Intentionally Omitted.


 


14

















 


(gg)                          The books, records and accounts of the
Company, the Guarantor and their respective Subsidiaries accurately and fairly
reflect, in all material respects and in reasonable detail, the transactions
in, and dispositions of, the assets of, and the results of operations of, the
Company, the Guarantor and their respective Subsidiaries.  The Company, the Guarantor and each of their
respective subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in
accordance with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.


 


(hh)                          The Company, the Guarantor and their
respective Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts in all
material respects as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions contemplated hereby.


 


(ii)                                  None of the Company, the Guarantor, or
their respective Subsidiaries, or any person acting on behalf of the Company,
the Guarantor and/or their respective Subsidiaries including, without
limitation, any director, officer, manager, agent or employee of the Company,
the Guarantor or their respective Subsidiaries has, directly or indirectly,
while acting on behalf of the Company, the Guarantor and/or their respective
Subsidiaries (i) used any corporate, partnership or company funds for
unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (ii) made any unlawful payment to foreign
or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate, partnership or company funds; (iii) violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any other unlawful payment.


 


(jj)                                  The 1934 Act Reports, the Financial
Statements, the Interim Financial Statements and any certificates of the
Company and the Guarantor delivered to the Trustee or the Holders do not, as of
the date hereof, and will not as of the Closing Date, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.


 


(kk)                            Except as would not, individually or in
the aggregate, result in a Material Adverse Effect, (i) the Company, the
Guarantor and their respective subsidiaries have been and are in material
compliance with applicable Environmental Laws (as defined below), (ii) none
of the Company, the Guarantor or their respective subsidiaries has at any time
released (as such term is defined in CERCLA (as defined below)) or otherwise
disposed of Hazardous Materials (as defined below) on, to, in, under or from
the properties owned, leased or operated by the Company, the Guarantor or their
respective Subsidiaries (the “Properties”)
other than in compliance with all applicable Environmental Laws, (iii) none
of the Company, the Guarantor, nor any of their respective subsidiaries has
used nor intends to use the Properties or any subsequently acquired properties,
other than in compliance with applicable Environmental Laws, (iv) none of the
Company, the Guarantor, nor any of their respective subsidiaries has received
any notice of, or have any knowledge of any occurrence or circumstance which,
with notice or 


 


15

















 


passage of time or both, would give rise to a claim under or pursuant
to any Environmental Law with respect to the Properties, or their respective
assets or arising out of the conduct of the Company, the Guarantor and their
respective subsidiaries, (v) none of the Properties are included or, to
the best knowledge of the Company, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA by the United States Environmental
Protection Agency or, to the best of the Company’s knowledge, proposed for
inclusion on any similar list or inventory issued pursuant to any other
Environmental Law or issued by any other Governmental Entity, (vi) none of
the Company, the Guarantor, their respective subsidiaries or agents has
generated, manufactured, refined, transported, treated, stored, handled,
disposed, transferred, produced or processed any Hazardous Material at any of
the Properties, except in compliance with all applicable Environmental Laws,
and has not transported or arranged for the transport of any Hazardous Material
from the Properties to another property, except in compliance with all
applicable Environmental Laws, (vii) no lien has been imposed on the
Properties by any Governmental Entity in connection with the presence on or off
such Property of any Hazardous Material or with respect to an Environmental
Law, and (viii) none of the Company, the Guarantor, or their respective
Subsidiaries or, to the best knowledge of the Company’s and Guarantor’s, any
other person or entity for whose conduct any of them is or may be held
responsible, has entered into or been subject to any consent decree, compliance
order, or administrative order in connection with an Environmental Law with
respect to the Properties or any facilities or improvements or any operations
or activities thereon.


 


(ll)                                  As used herein, “Hazardous Materials” shall include, without limitation, any
flammable materials, explosives, radioactive materials, hazardous materials,
hazardous substances, hazardous wastes, toxic substances or related materials,
asbestos, petroleum, petroleum products and any hazardous material as defined
by any federal, state or local environmental law, statute, ordinance, rule or
regulation, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
§§ 9601-9675 (“CERCLA”), the
Hazardous Materials Transportation Act, as amended, 49 U.S.C.
§§ 5101-5127, the Resource Conservation and Recovery Act, as amended, 42
U.S.C. §§ 6901-6992k, the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. §§ 11001-11050, the Toxic Substances Control Act,
15 U.S.C. §§ 2601-2692, the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. §§ 136-136y, the Clean Air Act, 42 U.S.C. §§ 7401-7642,
the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C.
§§ 1251-1387, the Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j-26,
and the Occupational Safety and Health Act, 29 U.S.C. §§ 651-678, and any
analogous state laws, as any of the above may be amended from time to time and
in the regulations promulgated pursuant to each of the foregoing (including
environmental statutes and laws not specifically defined herein) (individually,
an “Environmental Law”
and collectively, the “Environmental
Laws”) or by any Governmental Entity.


 


Except as expressly stated herein, in the Operative Documents, or in
any of the other documents delivered by the Company or Guarantor in connection
herewith or therewith, the Company makes no representations or warranties,
express or implied, with respect to the Exchange.


 


5.                                       Representations and
Warranties of Taberna.  Each Taberna
entity, for itself, represents and warrants to, and agrees with, the Company as
follows:


 


16

















 


(a)                                  It is a company duly formed, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized with all requisite power and authority to execute, deliver and
perform under Operative Documents to which it is a party, to make the
representations and warranties specified herein and therein and to consummate
the transactions contemplated in the Operative Documents.


 


(b)                                 This Agreement and the consummation of
the transactions contemplated herein has been duly authorized by it and, on the
Closing Date, will have been duly executed and delivered by it and, assuming
due authorization, execution and delivery by the Company, the Guarantor and
Trustee of the Operative Documents to which each is a party, will be a legal,
valid and binding obligation of such Taberna, enforceable against such Taberna
in accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally and to general principles of
equity.


 


(c)                                  No filing with, or authorization,
approval, consent, license, order registration, qualification or decree of, any
Governmental Entity or any other Person, other than those that have been made
or obtained, is necessary or required for the performance by such Taberna of
its obligations under this Agreement or to consummate the transactions
contemplated herein.


 


(d)                                 It is a “Qualified Holder” as such term
is defined in Section 2(a)(51) of the Investment Company Act.


 


(e)                                  Taberna III, Taberna IV and Taberna VI
are the legal and beneficial owners of the applicable Original Preferred
Securities and the related Taberna Transferred Rights and shall deliver the
Original Preferred Securities free and clear of any Lien created by each such
Taberna entity, as applicable.


 


(f)                                    There is no action, suit or proceeding
before or by any Governmental Entity, arbitrator or court, domestic or foreign,
now pending or, to its knowledge, threatened against or affecting it, except
for such actions, suits or proceedings that, if adversely determined, would
not, singly or in the aggregate, adversely affect the consummation of the
transactions contemplated by the Operative Documents.


 


(g)                                 The outstanding principal amount of its
respective Original Preferred Securities is the face amount as set forth in
such Original Preferred Securities.


 


(h)                                 It is aware that the Securities have not
been and will not be registered under the Securities Act and may not be offered
or sold within the United States or to “U.S. persons” (as defined in Regulation
S under the Securities Act) except in accordance with Rule 903 of
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act.


 


(i)                                     It is an “accredited investor,” as such
term is defined in Rule 501(a) of Regulation D under the Securities
Act. Without characterizing the Original Preferred Securities or the Taberna
Transferred Rights as a “security” within the meaning of applicable securities
laws, it has not made any offers to sell, or solicitations of any offers to
buy, all or any portion of 


 


17

















 


the Original Preferred Securities or Taberna Transferred Rights in
violation of any applicable securities laws.


 


(j)                                     Neither it nor any of its Affiliates, nor
any person acting on its or its Affiliate’s behalf has engaged, or will engage,
any form of “general solicitation or general advertising” (within the meaning
of Regulation D under the Securities Act) in connection with any offer or sale
of the Securities.


 


(k)                                  It understands and acknowledges that (i) no
public market exists for any of the Securities and that it is unlikely that a
public market will ever exist for the Securities, (ii) such Holder is
purchasing the Securities for its own account, for investment and not with a
view to, or for offer or sale in connection with, any distribution thereof in
violation of the Securities Act or other applicable securities laws, subject to
any requirement of law that the disposition of its property be at all times
within its control and subject to its ability to resell such Securities
pursuant to an effective registration statement under the Securities Act or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
it agrees to the legends and transfer restrictions applicable to the Securities
contained in the New Indenture, and (iii) it has had the opportunity to
ask questions of, and receive answers and request additional information from,
the Company and the Guarantor and is aware that it may be required to bear the
economic risk of an investment in the Securities.


 


(l)                                     It has not engaged any broker, finder or
other entity acting under its authority that is entitled to any broker’s
commission or other fee in connection with this Agreement and the consummation
of transactions contemplated in this Agreement and the New Indenture for which
the Company could be responsible.


 


(m)                               It (i) is a sophisticated entity
with respect to the Exchange, (ii) has such knowledge and experience, and
has made investments of a similar nature, so as to be aware of the risks and
uncertainties inherent in the Exchange and (iii) has independently and
without reliance upon the Company or any of their affiliates, and based on such
information as it has deemed appropriate, made its own analysis and decision to
enter into this Agreement, except that it has relied upon the Company’s express
representations, warranties, covenants and agreements in the Operative
Documents and the other documents delivered by the Company in connection
therewith.


 


Except as expressly stated in this Agreement, Taberna make no
representations or warranties, express or implied, with respect to the
Exchange, the Taberna Transferred Rights, the Original Preferred Securities,
the Existing Indenture, or any other matter.


 


6.                                       Covenants and Agreements
of the Company.  The Company and the Guarantor
jointly and severally agree with the Taberna and the Holders as follows:


 


(a)                                  The Company and Guarantor have taken all
action reasonably necessary or appropriate to cause their representations and
warranties contained in Section 4 hereof to be true as of the
Closing Date, and after giving effect to the Exchange.


 


(b)                                 The Company will arrange for the
qualification of the Securities for sale under the laws of such jurisdictions
as the Holders of the Securities may designate and will 


 


18
















 


maintain such qualifications in effect so long as required for the sale
of the Securities.  The Company will
promptly advise the Holders of the Securities of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.


 


(c)                                  Intentionally Omitted.


 


(d)                                 Intentionally Omitted.


 


(e)                                  Neither the Company nor the Guarantor
will or will permit any of their respective Affiliates or any person acting on
its or their behalf to, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that would
require the registration of any of the Securities under the Securities Act.


 


(f)                                    Neither the Company nor the Guarantor
will, or will not permit any of their respective Affiliates or any person
acting on its or their behalf to, engage in (i) any form of “general
solicitation or general advertising” (within the meaning of Regulation D), or (ii) any
“directed selling efforts” within the meaning of Regulation S under the
Securities Act, in connection with any offer or sale of the any of the
Securities.


 


(g)                                 So long as any of the Securities are
outstanding, (i) the Securities shall not be listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system and (ii) the
Company shall not be an open-end investment company, unit investment trust or
face-amount certificate company that is, or is required to be, registered under
Section 8 of the Investment Company Act, and, the Securities shall
otherwise satisfy the eligibility requirements of Rule 144A(d)(3).


 


(h)                                 Intentionally Omitted.


 


(i)                                     The Company will, during any period in
which it is not subject to and in compliance with Section 13 or 15(d) of
the Exchange Act, or it is not exempt from such reporting requirements pursuant
to and in compliance with Rule 12g3-2(b) under the Exchange Act,
provide to each Holder of the Securities, upon the request of such Holder, any
information required to be provided by Rule 144A(d)(4) under the
Securities Act.  If the Company is
required to register under the Exchange Act, such reports filed in compliance
with Rule 12g3-2(b) shall be sufficient information as required
above.  This covenant is intended to be
for the benefit of the Holders of the Securities.


 


(j)                                     Neither the Company nor the Guarantor
will, until one hundred eighty (180) days following the Closing Date, without
the Holders’ or their assignees’ prior written consent in their sole
discretion, offer, sell, contract to sell, grant any option to purchase or
otherwise dispose of, directly or indirectly, (i) any Securities or other
securities substantially similar to the Securities other than as expressly
contemplated by the New Indenture, if at all, or (ii) any other securities
convertible into, or exercisable or exchangeable for, any of the Securities or
other securities substantially similar to the Securities or (iii) any
preferred securities, provided, however, that the Company and the Guarantor may
enter into an exchange offer with the holders of thirty million dollars
liquidation preference preferred securities of a trust holding as an asset 


 


19

















 


an intercompany note issued to such trust by the Company which may
involve the issuance of securities covered by subsections (i) — (iii) above.


 


(k)                                  Except as may be required by law or other
governmental regulation, neither the Company nor the Guarantor will identify
any of the Indemnified Parties (as defined below) in a press release or any
other public statement without the prior written consent of such Indemnified
Party.


 


(l)                                     Intentionally Omitted.


 


7.                                       Payment of Expenses. 
In addition to the obligations agreed to by the Company under Section 2(b)(vi) herein,
the Company agrees to pay all costs and expenses incident to the performance of
the obligations of the Company under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is
terminated, including all costs and expenses incident to (i) the
authorization, issuance, sale and delivery of the Securities and any
documentary, stamp or similar taxes payable in connection therewith; (ii) the
fees and expenses of counsel, accountants and any other experts or advisors
retained by the Company; and (iv) the fees and all reasonable expenses of
the New Indenture Trustee and any other trustee or paying agent appointed under
the Operative Documents, including the fees and disbursements of counsel for
such trustees.  The fees of the New
Indenture Trustee (excluding fees and disbursements of counsel) shall not
exceed the amounts set forth in that certain Fee Agreement dated as of the date
hereof between the Company and The Bank of New York Mellon Trust, National
Association, executed in connection with this Agreement and the New Indenture.


 


8.                                       Indemnification.  (a)  The
Company and the Guarantor jointly and severally agree to indemnify and hold
harmless BNYM, the Holders, Taberna, Taberna Capital Management, LLC, Taberna
Securities, LLC, and their respective affiliates (collectively, the “Indemnified Parties”) each person, if any, who controls any
of the Indemnified Parties within the meaning of the Securities Act or the
Exchange Act, and the Indemnified Parties’ respective directors, officers,
employees and agents against any and all losses, claims, damages or
liabilities, joint or several, to which the Indemnified Parties may become
subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in this Agreement, the Operative
Documents, the Financial Statements, the Interim Financial Statements or the
1934 Act Reports, (ii) any omission or alleged omission to state a
material fact required to be stated or necessary to make the statements
contained in this Agreement, the Operative Documents, the Financial Statements,
the Interim Financial Statements or the 1934 Act Reports not misleading, or (iii) the
breach or alleged breach of any representation, warranty, or agreement of the
Company or the Guarantor contained herein, and agrees to reimburse each such
Indemnified Party, as incurred, for any legal or other expenses reasonably
incurred by the Indemnified Parties in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability that the Company and the
Guarantor may otherwise have.


 


(b)                                 Promptly after receipt by an Indemnified
Party under this Section 8 of notice of the commencement of any action,
such Indemnified Party will, if a claim in respect 


 


20

















 


thereof is to be made against the indemnifying party under this Section 8,
promptly notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve
the indemnifying party from liability under paragraph (a) above unless and
to the extent that such failure results in the forfeiture by the indemnifying
party of material rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any Indemnified Party
other than the indemnification obligation provided in paragraph (a) above.  The Indemnified Parties shall be entitled to
appoint counsel to represent the Indemnified Parties in any action for which
indemnification is sought.  An
indemnifying party may participate at its own expense in the defense of any
such action; provided, that counsel to the
indemnifying party shall not (except with the consent of the Indemnified Party)
also be counsel to the Indemnified Party. 
In no event shall the indemnifying parties be liable for fees and expenses
of more than one counsel (in addition to any local counsel) separate from their
own counsel for all Indemnified Parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, unless an Indemnified Party
elects to engage separate counsel because such Indemnified Party believes that
its interests are not aligned with the interests of another Indemnified Party
or that a conflict of interest might result. 
An indemnifying party will not, without the prior written consent of the
Indemnified Parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not the Indemnified Parties are actual or potential parties to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Party from all liability
arising out of such claim, action, suit or proceeding.


 


9.                                       Representations and
Indemnities to Survive.  The respective
agreements, representations, warranties, indemnities and other statements of
the Company, the Guarantor and/or their respective officers set forth in or
made pursuant to this Agreement will remain in full force and effect and will
survive the Exchange.  The provisions of
Sections 7 and 8 shall survive the termination or cancellation of this
Agreement.


 


10.                                 Amendments. 
This Agreement may not be modified, amended, altered or supplemented,
except upon the execution and delivery of a written agreement by each of the
parties hereto.


 


11.                                 Notices. 
All communications hereunder will be in writing and effective only on
receipt, and will be mailed, delivered by hand or courier or sent by facsimile
and confirmed or by any other reasonable means of communication, including by
electronic mail, to the relevant party at its address specified in Exhibit D.


 


12.                                 Successors and Assigns. 
This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.  Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
parties hereto and the affiliates, directors, officers, employees, agents and
controlling persons referred to in Section 8 hereof and their successors,
assigns, heirs and legal representatives, any right or obligation
hereunder.  None of the rights or
obligations of the Company under this Agreement may be assigned, whether by
operation of law or otherwise, without Taberna’s prior written consent.  The rights and obligations of the Holders
under this 


 


21

















 


Agreement may be assigned
by the Holders without the Company’s consent; provided that the assignee
assumes the obligations of any such Holders under this Agreement.


 


13.                                 Applicable Law. 
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW).


 


14.                                 Submission to Jurisdiction. 
ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH
RESPECT TO OR ARISING OUT OF THIS AGREEMENT MAY BE BROUGHT IN OR REMOVED
TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR
OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH
CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND
COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT.


 


15.                                 Counterparts and Facsimile. 
This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same
instrument.  This Agreement may be
executed by any one or more of the parties hereto by facsimile.


 


16.                                 Entire Agreement.  This Agreement constitutes the entire agreement of the
parties to this Agreement and supercedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect
to the subject matter hereof.


 


[Signature Page Follows]


 


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IN WITNESS WHEREOF, this Agreement has been entered into as of the date
first written above.


 


 


	
   

  	
  OHI FINANCING, INC., a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Garry P. Herdler

  
	
   

  	
   

  	
  Name:

  	
  Garry P. Herdler

  
	
   

  	
   

  	
  Title:

  	
  EVP & CFV

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ORLEANS HOMEBUILDERS, INC., a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Garry P. Herdler

  
	
   

  	
   

  	
  Name:

  	
  Garry P. Herdler

  
	
   

  	
   

  	
  Title:

  	
  EVP & CFV

  



 


(Signatures continue on
the next page)


 


23

















 


TABERNA,
AS HOLDERS OF THE ORIGINAL PREFERRED SECURITIES AND AS

HOLDERS (AS DEFINED IN THE NEW INDENTURE):


 


	
   

  	
  TABERNA PREFERRED FUNDING III LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mora Goddard

  
	
   

  	
   

  	
  Name:

  	
  Mora Goddard

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TABERNA PREFERRED FUNDING IV, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mora Goddard

  
	
   

  	
   

  	
  Name:

  	
  Mora Goddard

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TABERNA PREFERRED FUNDING VI, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mora Goddard

  
	
   

  	
   

  	
  Name:

  	
  Mora Goddard

  
	
   

  	
   

  	
  Title:

  	
  Director

  



 


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