LAWS AND ALL ORDERS, WRITS, INJUNCTIONS AND DECREES
APPLICABLE TO IT OR TO ITS PROPERTIES, EXCEPT IN SUCH INSTANCES IN WHICH
(A) SUCH REQUIREMENT OF LAW OR ORDER, WRIT, INJUNCTION OR DECREE IS BEING
CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY CONDUCTED OR
(B) THE FAILURE TO COMPLY THEREWITH, EITHER
64
INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.
5.17
INTELLECTUAL PROPERTY; LICENSES, ETC. THE BORROWER
AND ITS RESTRICTED SUBSIDIARIES OWN, OR POSSESS THE RIGHT TO USE, ALL OF THE
TRADEMARKS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS, PATENTS, PATENT RIGHTS,
FRANCHISES, LICENSES AND OTHER INTELLECTUAL PROPERTY RIGHTS (COLLECTIVELY, "IP
RIGHTS") THAT ARE REASONABLY NECESSARY FOR THE OPERATION OF THEIR RESPECTIVE
BUSINESSES, WITHOUT CONFLICT WITH THE RIGHTS OF ANY OTHER PERSON. TO THE BEST
KNOWLEDGE OF THE BORROWER, NO SLOGAN OR OTHER ADVERTISING DEVICE, PRODUCT,
PROCESS, METHOD, SUBSTANCE, PART OR OTHER MATERIAL NOW EMPLOYED, OR NOW
CONTEMPLATED TO BE EMPLOYED, BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY
INFRINGES UPON ANY RIGHTS HELD BY ANY OTHER PERSON. NO CLAIM OR LITIGATION
REGARDING ANY OF THE FOREGOING IS PENDING OR, TO THE BEST KNOWLEDGE OF THE
BORROWER, THREATENED, WHICH, EITHER INDIVIDUALLY OR IN THE AGGREGATE, COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
5.18
SOLVENCY. THE BORROWER IS, AND THE BORROWER AND ITS
RESTRICTED SUBSIDIARIES ARE ON A CONSOLIDATED BASIS, SOLVENT.
5.19
BUSINESSES. THE BORROWER IS PRESENTLY ENGAGED, OR
MAY IN THE FUTURE ENGAGE, DIRECTLY OR THROUGH WHOLLY OWNED SUBSIDIARIES IN THE
BUSINESS OF HOME BUILDING; LAND ACQUISITION, DEVELOPMENT AND SALE FOR HOME
BUILDING; HOME SALES; AND MORTGAGE LOAN ORIGINATION, TITLE INSURANCE AND OTHER
RELATED ANCILLARY BUSINESS TO SUCH HOME SALES, INCLUDING COMMERCIAL DEVELOPMENT
FOR LIGHT RETAIL AND MIXED USE ANCILLARY TO THE BORROWER'S MASTER PLAN
COMMUNITIES; PROVIDED THAT REAL ESTATE ACTIVITY OUTSIDE OF HOME BUILDING
ACTIVITY AND NOT ANCILLARY TO EXISTING BUSINESS OF THE BORROWER (INCLUDING
INDUSTRIAL, RETAIL AND OFFICE DEVELOPMENT OTHER THAN AS SET FORTH ABOVE WITH
RESPECT TO THE BORROWER'S MASTER PLAN COMMUNITIES, BUT EXCLUDING DEVELOPMENT OF
CORPORATE HEADQUARTERS FOR THE BORROWER) SHALL NOT BE A PERMITTED BUSINESS
ACTIVITY.
5.20
COMMON ENTERPRISE. THE BORROWER AND ITS RESTRICTED
SUBSIDIARIES ARE ENGAGED IN THE BUSINESSES SET FORTH IN SECTION 5.19 AS OF THE
CLOSING DATE, AS WELL AS IN CERTAIN OTHER BUSINESSES. THESE OPERATIONS REQUIRE
FINANCING ON A BASIS SUCH THAT THE CREDIT SUPPLIED CAN BE MADE AVAILABLE FROM
TIME TO TIME TO THE BORROWER AND VARIOUS OF ITS RESTRICTED SUBSIDIARIES, AS
REQUIRED FOR THE CONTINUED SUCCESSFUL OPERATION OF THE BORROWER AND ITS
RESTRICTED SUBSIDIARIES AS A WHOLE. THE BORROWER HAS REQUESTED THE LENDER TO
MAKE CREDIT AVAILABLE HEREUNDER PRIMARILY FOR THE PURPOSES SET FORTH IN
SECTION 6.11 AND GENERALLY FOR THE PURPOSES OF FINANCING THE OPERATIONS OF THE
BORROWER AND ITS RESTRICTED SUBSIDIARIES. THE BORROWER AND EACH OF ITS
RESTRICTED SUBSIDIARIES EXPECTS TO DERIVE BENEFIT (AND THE BOARD OF DIRECTORS OF
THE BORROWER AND EACH OF ITS RESTRICTED SUBSIDIARIES HAS DETERMINED THAT SUCH
RESTRICTED SUBSIDIARY MAY REASONABLY BE EXPECTED TO