Document:

Unassociated Document

    EXECUTION
      COPY

    

     

    
 

    ASSET
      CONTRIBUTION AND EXCHANGE AGREEMENT

    

    

    dated
      as of July 19, 2006

    

    

    by
      and among

    

    

    NOVAMED
      ACQUISITION COMPANY, INC.,

    

    

    NOVAMED
      OF LAREDO, INC.,

    

    

    CLEARVIEW
      SURGICAL INSTITUTE, LTD.,

    

    

    CLEARVIEW
      SURGICAL INSTITUTE MANAGEMENT LLC 

    

    

    AND

    

    

    MICHAEL
      A. HOCHMAN, M.D.

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ASSET
      CONTRIBUTION AND EXCHANGE AGREEMENT

    

    

    This
      ASSET
      CONTRIBUTION AND EXCHANGE AGREEMENT
      (this
“Agreement”)
      is
      dated effective as of 12:01 a.m. on July 19, 2006 (the
      “Closing
      Date”),
      by
      and among NovaMed
      Acquisition Company, Inc., a Delaware corporation (“NovaMed”),
      NovaMed of Laredo, Inc., a Delaware corporation (“NovaMed
      Laredo,”
and
      together with NovaMed, “Buyer”),
      Clearview Surgical Institute, Ltd., a Texas limited
      partnership (“Clearview”),
      Clearview Surgical Institute Management LLC, a Texas limited liability company
      and the general partner of Clearview (“CSIM”),
      and
      Michael A. Hochman, M.D. (“Seller”).
      Clearview, CSIM and Seller shall sometimes be individually referred to herein
      as
      a “Selling
      Party”
and
      collectively as the “Selling
      Parties.”
      Certain capitalized terms have the meanings provided in Section
      13.1.

    

    RECITALS

    

    A. 
      Clearview is engaged in the business of owning and operating a licensed
      ambulatory surgery center located at 5313
      McPherson Road, Laredo, Texas 78041 (the
      “Business”).

    

    B. Pursuant
      to the terms hereof, prior to the date of Closing (as defined herein), Clearview
      will transfer substantially all of its assets, and certain liabilities described
      herein, to a newly formed Delaware limited partnership, NovaMed Surgery Center
      of Laredo, LP (the “New
      LP”)
      in
      exchange for ninety-nine percent (99%) of the partnership interests in the
      New
      LP, as a limited partner, and CSIM contributing assets into New LP in exchange
      for one percent (1%) of the partnership interests in the New LP, as the general
      partner (hereinafter defined as the New LP Asset Transfer). All such partnership
      interests in the New LP, both general and limited, shall be collectively
      referred to herein as the “Partnership
      Interests”).
      

    

    C. Clearview
      will then distribute its ninety-nine percent (99%) Partnership Interests in
      New
      LP as a limited partner to its individual partners, Seller and Jose
      Garcia-Davalos, M.D. (“Davalos”),
      as
      provided below in a non-liquidation distribution (the “Distribution
      Transactions”).
      Following the New LP Asset Transfer and the Distribution Transactions, the
      New
      LP Partnership Interests shall be held as follows: (i) CSIM shall own a one
      percent (1%) Partnership Interest in New LP as the general partner; (ii) Davalos
      shall own a four and ninety-five one hundredths of one percent (4.95%)
      Partnership Interest in New LP as a limited partner; and (iii) Seller shall
      own
      a ninety-four and five one hundredths of one percent (94.05%) Partnership
      Interest in New LP as a limited partner. 

    

    D. Following
      the consummation of the New LP Asset Transfer and the Distribution Transactions,
      (i) Seller desires to transfer to NovaMed, and NovaMed desires to acquire from
      Seller, fifty-nine percent and five one hundredths of one percent (59.05%)
      of
      the New LP’s Partnership Interests as a limited partner in exchange for the LP
      Purchase Price (as defined herein), and (ii) CSIM desires to transfer to NovaMed
      Laredo, and NovaMed Laredo desires to acquire from CSIM, CSIM’s one percent (1%)
      Partnership Interest as general partner in exchange for the GP Purchase Price
      (as defined herein), all on the terms and conditions hereinafter set forth.
      

    

    E. Contemporaneous
      with the Closing, Seller shall contribute his remaining thirty-five percent
      (35%) Partnership Interests in the New LP into Michael A. Hochman Family Limited
      Partnership, a Texas family limited partnership (the “Family
      Limited Partnership”),
      of
      which Seller controls the general partner and is also a limited partner (the
      “FLP
      Contribution”).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    F. Contemporaneous
      with the purchase of a collective sixty and five one hundredths of one percent
      (60.05%) Partnership Interest from the Selling Parties, NovaMed shall also
      be
      acquiring a ninety-five one hundredths of one percent (0.95%) Partnership
      Interest from Davalos (the “Davalos
      Purchase Transaction”).

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants of the parties as hereinafter set forth
      and other good and valuable consideration, the receipt and sufficiency of which
      hereby are acknowledged, the parties hereto hereby agree as
      follows:

    

    ARTICLE
      I.

     CONTRIBUTION
      OF ASSETS
      TO NEW LP AND OTHER
      PRE-CLOSING COVENANTS

    

    1.1. Formation
      of the New LP.
      Prior
      to the Closing, the New LP shall be: (a) formed pursuant to the Certificate
      of
      Limited Partnership in the form attached hereto as Exhibit
      1.1,
      and (b)
      qualified to conduct business in the State of Texas. 

    

    1.2. Transfer
      of Assets to New LP. Prior
      to
      or contemporaneously with the Closing, and as a condition precedent to the
      transactions contemplated herein (collectively, the “New
      LP Asset Transfer”):
      (i)
      Clearview will transfer to New LP substantially all of the Assets (as
      hereinafter defined), free and clear of all Liens, in exchange for its
      ninety-nine percent (99%) Partnership Interest as a limited partner, and (ii)
      CSIM will transfer to New LP the remaining Assets, free and clear of all Liens,
      in exchange for its one percent (1%) Partnership Interest as a general partner.
      The New LP Asset Transfer shall be evidenced by a Contribution Agreement which
      shall effectively vest the New LP with full, complete and marketable right,
      title and interest in and to the Assets, in the form attached hereto as
Exhibit
      1.2 (the
      “Contribution
      Agreement”).
      As of
      the Closing, the assets
      contributed into the New LP as set forth herein will consist of all of the
      assets and property necessary to conduct the Business (the “Assets”),
      including, without limitation, the following (except to the extent that any
      of
      the following are designated as Excluded Assets in Section
      1.3
      below):

    

    (a) all
      inventory and supplies with respect to the Business (collectively, the
“Inventory”),
      including all rights to that portion of the Inventory on consignment as
      designated on Schedule
      1.2(a);

    

    (b) all
      of
      the tangible and intangible personal property with respect to the Business,
      including, without limitation, the machinery, equipment, fixtures, phone
      numbers, computer hardware and software that are listed on Schedule
      1.2(b)
      (collectively, the “Personal
      Property”);

    

    (c) all
      prepaid expenses relating to the Business set forth on Schedule
      1.2(c);

    

    (d) all
      contract rights with respect to those Material Contracts (as defined herein)
      identified as Assumed Contracts on Schedule
      4.9
      (collectively, the “Assumed
      Contracts”),
      purchase orders, licenses and leases pertaining to the Business, including
      all
      leasehold improvements, rights under any restrictive covenants accruing to
      the
      benefit of the Business and any provider agreements relating to the operation
      of
      the Business;

    

    (e) all
      names
      and tradenames of Clearview and the Business, including, without limitation,
      “Clearview Surgical Institute” and all derivations thereof;

    

    (f) all
      records, files and papers primarily pertaining to the Business, including
      general business records, accounting records and Medical Records;

    

    
      
        
        

      

      
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    (g) all
      Permits, licenses and certificates of need relating to the operation of the
      Business;

    

    (h) all
      causes of action, claims, warranties, guarantees, refunds, rights of recovery
      and set-off of every kind and character, relating primarily to the Assets or
      the
      Business;

    

    (i) all
      casualty insurance and warranty proceeds of Clearview received after the Closing
      Date with respect to damage to, nonconformance of, or loss to, the
      Assets;

    

    (j) to
      the
      extent permitted by law, all accounts receivable or other rights to receive
      payment owing to Clearview (the “Accounts
      Receivable”);
      and

    

    (k) all
      of
      the goodwill of and associated with the Business.

    

    To
      the
      extent any personal property, inventory, supplies, equipment and contracts
      owned
      by any Selling Parties’ respective Affiliates (including, without limitation,
      Avery Holdings, Ltd. (“AHL”))
      are
      primarily used in, or are necessary for the continued conduct of the Business,
      and would otherwise be deemed Assets, then such Selling Party or such Affiliate
      (including, without limitation, AHL) will cause such party to transfer such
      assets and property to Clearview for contribution to the New LP, free and clear
      of all Liens, prior to the Closing Date. In this regard, the Selling Parties
      agree to cause AHL to transfer all such personal property, inventory, supplies,
      equipment and contracts to Clearview prior to the New LP Asset Transfer such
      that such Assets are owned by New LP as of the Closing Date, free and clear
      of
      all Liens. 

    

    1.3. -Excluded
      Assets.
      Notwithstanding anything to the contrary contained herein, the Assets do not
      include the following (collectively, the “Excluded
      Assets”):

    

    (a) the
      Selling Parties’ rights under this Agreement, including the consideration paid
      to Seller pursuant to this Agreement;

    

    (b) the
      tax
      records relating to the Business;

    

    (c) Employee
      Benefit Plans relating to the employees of the Business and any and all rights
      therein or in the assets thereof;

    

    (e) all
      contracts not identified as Assumed Contracts on Schedule
      4.9;
      

    

    (f) all
      cash-on-hand and cash equivalents as of the Closing Date;

    

    (g) all
      personal effects of Seller not used in connection with the operation of the
      Business as specified in Schedule
      1.3(g);
      and

    

    (h) the
      retinal laser and related ancillary equipment as described on Schedule
      1.3(h).

    

    
      
        
        

      

      
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    1.4. -Excluded
      Liabilities.
      Notwithstanding anything to the contrary contained in this Agreement or in
      any
      Transaction Document, and regardless of whether such liability is disclosed
      in
      this Agreement, in any of the Transaction Documents or on any Schedule or
      Exhibit hereto or thereto, the New LP will not assume, agree to pay, perform
      and
      discharge or in any way be responsible for any debts, liabilities or obligations
      of the Business, the Selling Parties or any of their respective Affiliates
      of
      any kind or nature whatsoever, arising out of, relating to, resulting from,
      or
      caused by any transaction, status, event, condition, occurrence or situation
      relating to, arising out of or in connection with the Business, the Assets
      or
      the Selling Parties, arising or occurring on or prior to the Closing Date,
      including, without limitation, any liabilities or obligations relating to or
      arising from the Excluded Assets (the “Excluded
      Liabilities”).
      Notwithstanding the foregoing, Clearview will contribute into New LP, and New
      LP
      will assume and thereafter pay and fully satisfy when due, all liabilities
      and
      obligations: (a) which arose prior to the New LP Asset Transfer and represent
      normal and current trade payables incurred by Clearview in connection with
      the
      operation of the Business in the ordinary course of business, consistent with
      past custom and practice, and are specifically set forth on Schedule
      1.4(a)
      (“Accounts
      Payable”);
      (b)
      the other accrued liabilities of Clearview (including, but not limited to,
      the
      personal property or real estate taxes, associated with the Real Property Lease
      for the Facility for the period from January 1, 2006 through the date of
      Closing), all of which have been incurred in the ordinary course of business,
      consistent with past custom and practice (including, without limitation, accrued
      but unpaid paid time off for the Continuing Employees), which do not
      collectively exceed, together with the aggregate amount of the Accounts Payable,
      One Hundred Thousand and No/Dollars ($100,000) (“Accrued
      Liabilities”);
      and
      (c) first arising after the New LP Asset Transfer under any Assumed Contract
      (except for any liability or obligation arising from any breach or failure
      to
      perform under any of the foregoing prior to the Closing Date) (all such
      liabilities and obligations to be so contributed into, and assumed by, the
      New
      LP being collectively referred to herein as the “New
      LP Assumed Liabilities”). 

    

    1.5 Satisfaction
      of Liabilities.
      Excluding the New LP Assumed Liabilities, the Selling Parties agree to satisfy
      all liabilities of Clearview relating to the Business prior to the New LP Asset
      Transfer or as soon as is reasonably practicable thereafter,
      which
      liabilities include, without limitation:

    

    (a) all
      payroll expense and other compensation due and owing Seller’s employees for the
      period preceding the Closing Date; and

    

    (b) all
      Taxes, including payroll taxes, sales taxes and income taxes accrued up to
      the
      New LP Asset Transfer. 

    

    1.6 Distribution
      Transaction.
      The
      Distribution Transactions shall have been consummated on or prior to the Closing
      Date in accordance with the Distribution Agreement in the form attached hereto
      as Exhibit
      1.6
      (the
“Clearview
      Distribution Agreement”).

    

    1.7 FLP
      Contribution.
      The FLP
      Contribution shall be consummated contemporaneously with the Closing in
      accordance with the FLP Contribution Agreement in the form attached hereto
      as
Exhibit
      1.7
      (the
“FLP
      Contribution Agreement”).

    

    1.8 Davalos
      Consent.
      As a
      partner in Clearview, Davalos shall have consented in writing to each of the
      New
      LP Asset Transfer, Clearview Distribution Agreement and FLP Contribution
      Agreement (collectively, the “Davalos
      Consents”).

    

    ARTICLE
      II.

     SALE
      OF CLEARVIEW INTERESTS TO NOVAMED
      AND NOVAMED LAREDO

    

    2.1 Sale
      of Limited Partnership Interests.
      The
      Partnership Interests held by Seller are as a limited partner of New LP. In
      reliance upon the representations and warranties of NovaMed contained herein,
      and on the terms and conditions hereinafter set forth, Seller hereby agrees
      to
      sell, assign, transfer, convey and deliver to NovaMed at the Closing, free
      and
      clear of all Liens, all of Seller’s right, title and interest in and to
      fifty-nine percent and five one hundredths of one percent (59.05%) of the New
      LP’s issued and outstanding Partnership Interests (the “Transferred
      LP Interests”).
      In
      reliance upon the representations and warranties of the Selling Parties
      contained herein, and on the terms and conditions hereinafter set forth, NovaMed
      hereby agrees to purchase the Transferred LP Interests from Seller for the
      LP
      Purchase Price set forth in Section
      3.1
      hereof.

    

    
      
        
        

      

      
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    2.2 Sale
      of General Partnership Interests.
      The
      Partnership Interests held by CSIM are as a general partner of New LP. In
      reliance on the representations and warranties of NovaMed Laredo contained
      herein, and on the terms and conditions hereinafter set forth, CSIM hereby
      agrees to sell, assign, transfer, convey and deliver to NovaMed Laredo at the
      Closing, free and clear of all Liens, all of its right, title and interest
      in
      and to one percent (1%) of the New LP’s issued and outstanding Partnership
      Interests (the “Transferred
      GP Interests,” and
      together with the Transferred LP Interests, the “Transferred
      Interests”).
      In
      reliance upon the representations and warranties of the Selling
      Parties contained
      herein, and on the terms and conditions hereinafter set forth, NovaMed hereby
      agrees to purchase the Transferred GP Interests from CSIM for the GP Purchase
      Price set forth in Section
      3.1
      hereof.

    

    2.3 Ownership
      of New LP following Transactions.
      As a
      result of the sales described in this Article
      II and
      following the consummation of the Davalos Purchase Transaction and the FLP
      Contribution: (a) NovaMed will own sixty percent (60%) percent of the
      Partnership Interests in the New LP, as a limited partner; (b) the Family
      Limited Partnership will own thirty-five percent (35%) of the Partnership
      Interests, as a limited partner; (c) Davalos will own four percent (4%) of
      the
      Partnership Interests, as a limited partner; and (d) NovaMed Laredo will own
      one
      percent (1%) of the Partnership Interests, as the general partner of the New
      LP.

    

    ARTICLE
      III.

     CONSIDERATION
      AND MANNER OF PAYMENT

    

    3.1. -Purchase
      Price.
      The
      aggregate purchase price for the Transferred LP Interests (the “LP
      Purchase Price”)
      shall
      be Eight Million Eight Hundred Fifty Seven Thousand Five Hundred and No/Dollars
      ($8,857,500), and the aggregate purchase price for Transferred GP Interests
      shall be One Hundred Fifty Thousand and No/100 Dollars ($150,000) (the
“GP
      Purchase Price,” and
      together with the LP Purchase Price, the “Purchase
      Price”).
      

    

    3.2. -Payment
      of Purchase Price.
      At the
      Closing: (a) NovaMed will pay to Seller an amount equal to the LP Purchase
      Price; and (b) NovaMed Laredo will pay to CSIM an amount equal to the GP
      Purchase Price, all by wire transfer of immediately available funds to Seller
      and CSIM’s respective designated bank accounts, according to the wire transfer
      instructions attached as Exhibit
      3.2.
      

    

    ARTICLE
      IV.

     SELLING
      PARTIES’ REPRESENTATIONS AND WARRANTIES

    

    Each
      of
      the Selling Parties hereby
      represents and warrants, jointly and severally, to Buyer as of the Closing
      Date,
      as follows

    

    4.1. Organization,
      Good Standing and Authority.
      Clearview is a limited partnership duly organized, validly existing and in
      good
      standing under Texas law.
      CSIM is
      a limited liability company duly organized validly existing and in good standing
      under Texas law. Each Selling Party has full capacity, power, right and
      authority to enter into and perform their respective obligations under this
      Agreement and each of the Transaction Documents to which each of them is a
      party. This Agreement and each of the Transaction Documents to which each
      Selling Party is a party have been duly executed and delivered by each Selling
      Party, and constitute the valid and binding obligations of each Selling Party,
      enforceable against them in accordance with their respective terms, except
      as
      the same may be limited by applicable bankruptcy, insolvency, reorganization,
      moratorium or other similar laws affecting the rights of creditors generally
      and
      the availability of equitable remedies. 

    

    
      
        
        

      

      
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    4.2. Assets.
      Clearview has full power and authority to carry on the Business as it is now
      being conducted and to own and hold under lease the properties and assets it
      now
      owns or holds under lease. The Assets constitute all tangible or intangible
      property, rights and assets necessary for the conduct of the Business as
      conducted during the twelve (12) months preceding the Closing Date and, to
      the
      knowledge of any Selling Party, there is no need to acquire or replace any
      material assets. Clearview has good and marketable title to the Assets, in
      each
      case free and clear of any and all Liens. Upon the consummation of the
      transactions contemplated by this Agreement, Clearview will have conveyed,
      and
      the New LP will be vested with, good and marketable title to the Assets, free
      and clear of all Liens. All of the Assets that are personal property are in
      operable condition and repair and none of such property requires any repair
      or
      replacement except for maintenance in the ordinary course of business. Except
      as
      set forth on Schedule
      4.2,
      none of
      the Assets are held under any lease, security agreement, conditional sales
      contract or other title retention or security agreement or is located other
      than
      at the Facility. 

    

    4.3. Approvals.
      Except
      as set forth on Schedule
      4.3,
      no
      consent, approval, order or authorization of, or registration, declaration,
      notice or filing with, any national, state, provincial, local, governmental,
      judicial, public, quasi-public or administrative authority or agency
      (collectively, “Governmental
      Authority”)
      or
      other Person is required to be made or obtained by any Selling Party in
      connection with the authorization, execution, delivery and performance of this
      Agreement or any other Transaction Document, or the consummation of the
      transactions contemplated hereby or thereby.

    

    4.4. Partnership
      Interests.
      

    

    (a) Transferred
      LP Interests.
      Prior
      to the Closing Date, Seller will be the only record and beneficial holder of
      the
      Transferred LP Interests. Seller has good and marketable title to the
      Transferred LP Interests free and clear of all Liens, and has full right, power
      and authority to transfer the Transferred LP Interests to NovaMed as provided
      herein, without obtaining the consent of any third party (other than the general
      partner of the New LP, pursuant to and in accordance with the terms of the
      Partnership Agreement (as hereinafter defined)). Upon the consummation of the
      transactions contemplated herein, Seller shall have transferred good and
      marketable title to the Transferred LP Interests to NovaMed free and clear
      of
      all Liens. Immediately prior to Closing, Seller, CSIM and Davalos will own
      one
      hundred percent (100%) of the equity interests of Clearview.

    

    (b) Transferred
      GP Interests.
      Prior
      to the Closing Date, CSIM will be the only record and beneficial holder of
      the
      Transferred GP Interests. CSIM has good and marketable title to the Transferred
      GP Interests free and clear of all Liens, and has full right, power and
      authority to transfer the Transferred GP Interests to NovaMed Laredo as provided
      herein, without obtaining the consent of any third party (other than the general
      partner of the New LP, pursuant to and in accordance with the terms of the
      Partnership Agreement). Upon the consummation of the transactions contemplated
      herein, CSIM shall have transferred good and marketable title to the Transferred
      GP Interests to NovaMed Laredo free and clear of all Liens.

    

    4.5. Financial
      Statements.
      Clearview has previously delivered to Buyer unaudited financial statements
      of
      Clearview for the years ending
      December
      31, 2003, December 31, 2004 and December 31, 2005, consisting of an income
      statement and balance sheet, and the profit and loss statements for the months
      ended January 31, 2006, February 28, 2006, March 31, 2006 and April 30,
      2006
      (collectively, the “Financial
      Statements”).
      Except as set forth on Schedule
      4.5,
      each of
      the Financial Statements: (a) has
      been
      prepared in accordance with the cash-basis method of accounting; (b) is true,
      complete and correct in all material respects as of the respective dates and
      for
      the respective periods above stated; (c) fairly presents in all material
      respects the financial position of Clearview at such dates and the results
      of
      its operations for the periods ended on such dates; and (d) is consistent with
      Clearview’s books and records.

    

    
      
        
        

      

      
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    4.6. -Absence
      of Undisclosed Liabilities.
      None of
      the Selling Parties, with respect to the Business, has any material debts,
      liabilities or obligations of any nature (whether accrued, absolute, contingent,
      direct, indirect, perfected, inchoate, unliquidated or otherwise and whether
      due
      or to become
      due) arising out of transactions entered into at or prior to the Closing, or
      any
      transaction, series of transactions, action or inaction at or prior to the
      Closing, or any state of facts or condition
      existing at or prior to the Closing (regardless of when such liability or
      obligation is asserted),
      including, but in no way limited to, guarantees, liabilities or obligations
      on
      account of Taxes or governmental charges or penalties, interest or fines thereon
      or in respect thereof, except: (a) to the extent specifically reflected and
      accrued for or reserved against in the Financial Statements, or (b) for
      liabilities specifically delineated on Schedule
      4.6.

    

    4.7. Inventory.
      All of
      the Inventory is usable in the ordinary course of business, is fully paid for
      and, except as described on Schedule
      1.2(a),
      is not
      subject to consignment or conditional sales arrangements and no material portion
      of the Inventory is obsolete or damaged.

    

    4.8. Taxes.
      Clearview and Seller have filed all Tax Returns on
      a
      timely basis that it is required to have filed in connection with the operation
      of the Business, and such returns are true, complete and correct. Clearview
      and Seller have paid all Taxes, interest and penalties, if any, reflected on
      such Tax Returns or otherwise due and payable by them. Any deficiencies proposed
      as a result of any governmental audits of such Tax Returns have been paid or
      settled, and there are no present disputes as to Taxes payable by Clearview
      in
      connection with the operation of the Business. With respect to all amounts
      of
      Taxes imposed on Clearview for which Clearview is or could be liable, whether
      to
      taxing authorities (as, for example, under the law) or to other Persons, with
      respect to all
      taxable periods or portions of periods ending on or before the Closing Date,
      all
      applicable Tax laws and agreements have been fully complied with, and all such
      amounts required to be paid by Clearview to taxing authorities or others on
      or
      before the Closing Date have been paid, or have been fully accrued for or fully
      reserved against on the Financial Statements. No issues have been raised and
      are
      currently pending by any taxing authority in connection with any of the Tax
      Returns. No waivers of statutes of limitations with respect to the Tax Returns
      have been given by or requested from CSIM, Seller or Clearview. There are no
      Liens for Taxes (other than current taxes not yet due and payable) upon any
      asset of Clearview. Clearview is not a party to any Tax-indemnity, Tax-sharing,
      Tax allocation or other similar agreements or arrangements.

    

    4.9. Material
      Contracts.
      Schedule
      4.9
      is a
      correct and complete list of every material written contract, agreement,
      relationship or commitment, every material oral contract, commitment, agreement
      or relationship, to which any Selling Party is a party or by which any Selling
      Party is bound, as they relate to the Business (the “Material
      Contracts”),
      correct and complete copies of which previously have been furnished to Buyer.
      Except as set forth on Schedule
      4.9,
      no
      Selling Party is in default, and no event has occurred which with the giving
      of
      notice or the passage of time or both would constitute a default by such party,
      under any Material Contract or any
      other
      obligation owed by a Selling Party, and, to the knowledge of any Selling Party,
      no event has occurred which with the giving of notice or the passage of time
      or
      both would constitute such a default by any party to any such Material Contract
      or obligation.

    

    4.10. Real
      Property.
      As it
      relates to the Business, Clearview does not own any real property. Clearview
      has
      a valid leasehold interest in the real property which it holds
      under
      the lease described in Schedule
      4.10
      (collectively, the “Leased
      Real Property”),
      free
      and clear of all Liens, except for Liens for current property taxes not yet
      due
      and payable. The Leased Real Property constitutes all real properties used
      or
      occupied by Clearview in connection with the Business or reflected on the
      Financial Statements.
      Upon
      execution of the Lease Agreement (as hereinafter defined), the New LP will
      have
      a valid leasehold interest in the Leased Real Property, which leasehold interest
      will be free and clear of all Liens, except for Liens created by the New LP.
      With respect to the Leased Real Property: (a) Clearview has all easements
      and rights necessary to conduct the Business; (b) no portion thereof is subject
      to any pending or, to the knowledge of any Selling Party, threatened
      condemnation proceeding or proceeding by any public
      authority; (c) the buildings, plants and structures, including
      heating, ventilation
      and air conditioning systems, roof, foundation and floors, are in good operating
      condition and repair, subject only to ordinary wear and tear, and are not in
      violation of any zoning or other Rules; (d) there are no leases, subleases,
      licenses, concessions or other agreements, written or oral, granting to any
      party or parties the right of use or occupancy of any portion of any parcel
      of Leased
      Real Property; and (e) the Leased Real Property is supplied with utilities
      and
      other services necessary for the operation of such facilities.

    

    
      
        
        

      

      
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    4.11. -Litigation.
      Except
      as set forth on Schedule
      4.11,
      there
      are no claims, counterclaims, actions, suits, orders, proceedings (arbitration,
      mediation or otherwise), investigations or judgments pending or, to the
      knowledge of any Selling Party, threatened against or involving Clearview,
      the
      Business or, with respect to the Business, any other Selling Party, or relating
      to the transactions contemplated hereby, at law or in equity, in any court
      or
      agency, or before or by any Governmental Authority, nor, to the knowledge of
      any
      Selling Party, are there any facts, conditions or incidents that could be
      reasonably expected to result in any such actions, suits, proceedings
      (arbitration, mediation or otherwise) or investigations or
      judgments.
      Except
      as set forth on Schedule
      4.11,
      no
      Selling Party is subject to any judgment, order or decree of any court or
      Governmental Authority.
      None of
      the matters set forth on Schedule
      4.11
      could
      result in any Material Adverse Effect on Seller, the Assets, the Business or
      New
      LP.

    

    4.12. -Compliance
      with Applicable Laws; Permits.
      

    

    (a) Each
      of
      the Selling Parties, in their conduct of the Business, has complied with
      applicable federal, state and local laws and the rules and regulations of all
      Governmental Authorities having authority over them, including, without
      limitation, agencies concerned with occupational safety, environmental
      protection, employment practices, Fraud and Abuse Laws and Medicare and
      Medicaid
      requirements applicable to the Selling Parties’ billing procedures (except
      denials of claims in the ordinary course of business). No Selling Party has
      received any notice of Clearview’s violation of any such rules or regulations,
      whether corrected or not, within the last five (5) years. Clearview is eligible
      to receive payment under Titles XVIII and XIX of the Social Security
      Act.
      Clearview has timely and accurately filed all requisite reports, returns, data,
      and other information required by all Governmental Authorities which control,
      directly or indirectly, any of Clearview’s activities to be filed with any
      commissions, boards, bureaus, and agencies and has paid all sums heretofore
      due
      with respect to such reports and returns. No such report or return has been
      inaccurate, incomplete or misleading. Clearview has timely and accurately filed
      all requisite reimbursable claims and other reports required to be filed or
      otherwise filed in connection with all state and federal Medicare and Medicaid
      programs in which Clearview participates that are due on or before the Closing
      Date or which relate to services provided on or before the Closing Date, and
      Clearview has not billed for any services that were not provided at the
      Facility. There are no claims pending, threatened or scheduled before any
      authority, including, without limitation, any intermediary, carrier, or other
      state or federal agency with respect to any Medicare and Medicaid claim filed
      by
      Clearview on or before the Closing Date, or program compliance matters. Except
      for routinely scheduled Medicare and Medicaid program participation and
      certification surveys pursuant to Clearview’s Medicare and Medicaid contracts
      and filings, no valid program integrity review related to Clearview has been
      conducted by any authority in connection with the Medicare or Medicaid programs
      and no such review is scheduled, pending, or to any Selling Party’s knowledge,
      threatened against or affecting Clearview, the Business, the Facility, or the
      consummation of the transactions contemplated hereby.

    

    (b) Clearview
      holds all the permits, licenses, certificates of need and other approvals of
      Governmental Authorities necessary or material for the current conduct,
      ownership, use, occupancy and operation of the Business and the Leased Real
      Property, including, without limitation, those identified on Schedule
      4.12(b)
      (“Permits”).
      Clearview is in compliance with such Permits, all of which are in full force
      and
      effect, and Clearview has not received any notices (written or oral) to the
      contrary. All of the Permits are in good standing, and to the knowledge of
      any
      Selling Party, no suspension, cancellation or adverse action is threatened
      against the Permits, and there is no basis for believing that any Permits will
      not be renewed upon expiration.

    

    
      
        
        

      

      
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    (c) The
      Selling Parties are not in violation of any applicable Fraud and Abuse Laws
      including, without limitation, 18 U.S.C. §201 (bribery of public officials); 18
      U.S.C. §286 (conspiracy to defraud government with respect to claims); 18 U.S.C.
§287 (false, fictitious or fraudulent claims); 18 U.S.C. §371 (conspiracy to
      commit offense or to defraud the government); 18 U.S.C. §666 (theft or bribery
      concerning programs receiving federal funds); 42 U.S.C. §1320a-7a (civil
      monetary penalties); 42 U.S.C. §1320a-7b (criminal penalties); and 42 U.S.C.
§1395nn (prohibited referrals), each as they may be amended or renumbered from
      time to time.

    

    4.13. -Transaction
      Not a Breach.
      The
      execution, delivery and performance by the Selling Parties of this Agreement
      and
      the Transaction Documents will not:

    

    (a) Result
      in
      a breach of any of the terms or conditions of, or constitute a default under,
      or
      in any manner release any party thereto from any obligation under any mortgage,
      note, bond, indenture, contract, agreement, license or other instrument or
      obligation of any kind or nature by which a Selling Party or the Business may
      be
      bound or affected;

    

    (b) Violate
      or conflict with any order, writ or injunction of any court, administrative
      agency or Governmental Authority to which a Selling Party is subject;

    

    (c) Constitute
      an event which would permit any party to terminate any agreement or accelerate
      the maturity of any indebtedness or other obligation;

    

    (d) Violate
      any provision of the organizational documents of any Selling Party;

    

    (e) Result
      in
      the creation or imposition of any Lien upon any property of Clearview or the
      Assets; or

    

    (f) Require
      any authorization, consent, approval, exemption or other action by or notice
      to
      any court, Governmental Authority or any other Person.

    

    4.14. -Conduct
      of Business.
      Since
      the Review Date, Clearview has conducted the Business in the ordinary course
      of
      business, consistent with past custom and practice, and has incurred no material
      liabilities other than in the ordinary course of business, consistent with
      past
      custom and practice, and there has been no Material Adverse Effect on the
      assets, financial condition, operating results, employee or patient relations,
      business activities or business prospects of Clearview or the Business. Without
      limitation of the foregoing, since the Review Date, Clearview has not, except
      in
      the ordinary course of business, consistent with past custom and practice,
      or as
      otherwise set forth on Schedule
      4.14:

    

    (a) Incurred
      any obligation or liability, absolute, accrued, contingent or otherwise, whether
      due or to become due, whether individually or in the aggregate, that has had
      or
      could be reasonably expected to result in a Material Adverse
      Effect;

    

    (b) Pledged
      or subjected any of its assets to any Lien or restriction;

    

    
      
        
        

      

      
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    (c) Voluntarily
      or involuntarily sold, transferred, abandoned, surrendered, leased or otherwise
      disposed of any of its assets material to the operation of
      Clearview;

    

    (d) Canceled
      or compromised any material debt or claim, or waived or released any right
      of
      substantial value;

    

    (e) Received
      any notice of termination of any contract, lease or other agreement, or suffered
      any damage, destruction or loss that, individually or in the aggregate, has
      had
      or could be reasonably expected to result in a Material Adverse
      Effect;

    

    (f) Instituted,
      settled or agreed to settle any litigation, action, proceeding or arbitration;
      

    

    (g) Made
      a
      material purchase commitment other than in the ordinary course of business,
      consistent with past custom and practice;

    

    (h) Modified
      the timing, course of conduct or other cash management activities with respect
      to the collection of accounts receivable of the Business;

    

    (i) Failed
      to
      pay any accounts or notes payable or any other obligations consistent with
      past
      practices, except for bona fide disputes arising in the ordinary course of
      business;

    

    (j) Entered
      into any material transaction, contract or commitment other than in the ordinary
      course of business, consistent with past custom and practice, other than the
      transactions contemplated by the Transaction Documents;

    

    (k) Suffered
      any event or events, whether individually or in the aggregate, that has had
      or
      could be reasonably expected to result in a Material Adverse Effect;
      or

    

    (l) Issued
      any equity interests or entered into any agreement or understanding to do
      so.

    

    4.15. Health,
      Safety and Environment.
      Clearview has never generated, transported, treated, stored, disposed of or
      otherwise handled any Hazardous Materials at any site, location or facility
      in
      connection with its business or any of its assets in violation of any applicable
      Environmental and Safety Requirements (as hereinafter defined). Clearview:
      (a)
      is in material compliance with all applicable federal, state and local laws,
      rules, regulations, ordinances and requirements relating to public health and
      safety, worker health and safety and pollution and protection of the
      environment, all as amended or hereafter amended (“Environmental
      and Safety Requirements”),
      and
      (b) possesses all required permits, licenses, certifications and approvals
      and
      has filed all notices or applications required thereby or pertaining thereto.
      Clearview has never been subject to, or received any written notice of, any
      private, administrative or judicial inquiry, investigation, order or action,
      or
      any written notice of any intended or threatened private, administrative, or
      judicial inquiry, investigation, order or action relating to the presence or
      alleged presence of Hazardous Materials in, under or upon any property leased
      or
      owned by Clearview, nor is any Selling Party aware of any such inquiry,
      investigation, order, action or notice. There are no pending, or to the
      knowledge of any Selling Party, threatened, investigations, actions, orders
      or
      proceedings (or written notices of potential investigations, actions, orders
      or
      proceedings) from any Governmental Authority or any other entity regarding
      any
      matter relating to Environmental and Safety Requirements. 

    

    
      
        
        

      

      
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    4.16. -Employees.
      Schedule
      4.16
      is a
      true, complete and correct list setting forth as of the Closing Date the names
      and current compensation rate and compensation of all individuals employed
      by
Clearview. There
      has
      been no material increase, other than in the ordinary course of business,
      consistent with past custom and practice, in the compensation or rate of
      compensation payable to any employees of Clearview since the Review Date, nor
      since that date has there been any promise to any employee listed on
Schedule
      4.16,
      orally
      or in writing, of any bonus or increase in compensation, except for increases
      in
      the ordinary course of business consistent with Clearview’s past compensation
      practices and listed on Schedule 4.16,
      and
      obligations incurred under existing bonus, insurance, pension or other Employee
      Benefit Plans described on Schedule
      4.19
      or
Schedule
      4.20.
      Except
      as set forth on Schedule
      4.16,
      there
      has been no promise to any employee listed on Schedule
      4.16,
      orally
      or in writing, of any guaranty of employment following the Closing
      Date.

    

    4.17. -Insurance.
      Clearview has obtained and maintained in full force and effect commercially
      reasonable amounts of insurance to protect it and the Business against the
      types
      of liabilities, including medical malpractice, customarily insured against
      by
      Persons operating a business of similar size and nature to the Business, and
      all
      premiums due on such policies have been paid. Such insureds have complied in
      all
      material respects with the provisions of all such policies. Clearview has
      previously delivered to Buyer complete and correct copies of all such policies,
      together with all riders and amendments thereto in the possession of Clearview.
      Except as set forth on Schedule
      4.17,
      there
      are no claims or asserted claims reported to insurers under such policies,
      including all medical malpractice claims and similar types of claims, actions
      or
      proceedings asserted against any Selling Party at any time within the past
      five
      (5) years.

    

    4.18. Affiliate
      Transactions.
      Excluding ordinary course distributions to its equity holders and except as
      set
      forth on Schedule
      4.18,
      there
      are no transactions involving the transfer of any cash, property or rights
      to or
      from Clearview from, to or for the benefit of any Affiliate or former Affiliate
      of Clearview or any other Selling Party (“Affiliate
      Transactions”)
      during
      the period commencing two (2) years prior to the Closing Date and continuing
      through the Closing Date or any existing commitments of Clearview to engage
      in
      the future in any Affiliate Transactions. 

    

    4.19. -Employee
      Benefit Plans.
      Except
      as set forth in Schedule
      4.19,
      neither
      Clearview nor any Plan Affiliate has maintained, sponsored, adopted, made
      contributions to or obligated itself to make contributions to or to pay any
      benefits or grant rights under or with respect to any “Employee Pension Benefit
      Plan” (as defined in Section 3(2) of ERISA), “Employee Welfare Benefit Plan” (as
      defined in Section 3(1) of ERISA), “multi-employer plan” (as defined in Section
      3(37) of ERISA), any collective bargaining agreement, plan of deferred
      compensation, medical plan, life insurance plan, long-term disability plan,
      dental plan or other plan providing for the welfare of any of Clearview’s
      employees or former employees or beneficiaries thereof, personnel
      policy (including, but not limited to, vacation time, holiday pay, bonus
      programs, moving expense reimbursement programs and sick leave), material fringe
      benefit, excess benefit plan,
      bonus or incentive plan (including, but not limited to, stock options,
      restricted stock, stock bonus and deferred bonus plans), severance agreement,
      salary reduction agreement, top hat plan or deferred compensation plan,
      change-of-control agreement, employment agreement, consulting agreement or
      any
      other benefit, program, policy, arrangement, agreement or contract
      (collectively, “Employee
      Benefit Plans”),
      whether or not written or terminated, which could give rise to or result in
      Clearview or such Plan Affiliate having any debt, liability, claim or obligation
      of any kind or nature, whether accrued, absolute, contingent, direct, indirect,
      known or unknown,
      perfected or inchoate or otherwise and whether or not due or to become due.
      Correct and complete copies of all Employee Benefit Plans previously have been
      furnished to Buyer. The Employee
      Benefit Plans are in compliance in all material respects with governing
      documents and agreements and with applicable laws.
      Clearview acknowledges that it will be solely responsible for administering
      and/or terminating its Employee Benefit Plans following the
      Closing.

    

    
      
        
        

      

      
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    4.20. Personnel
      Agreements, Plans and Arrangements.
      Except
      as listed in Schedule
      4.20,
      no
      Selling Party is a party to or obligated in connection with the Business with
      respect to any outstanding contracts with current or former employees,
      agents, consultants
      or advisers. 

    

    4.21. Certain
      Payments.
      No
      Selling Party or any of their respective officers, agents, or employees or
      any
      other Person associated with or acting for or on behalf of Clearview has,
      directly or indirectly, made any contribution, gift, bribe, rebate, payoff,
      influence payment, kickback, or other payment to any Person, private or public,
      regardless of form, whether in money, property, or services: (a) for securing
      patients or referrals; (b) for patients or referrals secured; (c) to obtain
      special concessions or for special concessions already
      obtained, for or in respect of Clearview; or (d) in violation of any
      law.

    

    4.22. Workers
      Compensation.
      Schedule
      4.22
      sets
      forth all expenses, obligations, duties and liabilities relating to any pending,
      threatened or ongoing claims by employees and former employees (including
      dependents and spouses) of Clearview (or its predecessors),
      and the extent of any specific accrual on or reserve therefor set forth on
      the
      Financial Statements, for costs, expenses and other liabilities under any
      workers compensation laws, regulations, requirements or programs. Except as
      set
      forth on Schedule
      4.22,
      no
      claim, injury, fact, event or condition exists which would give rise to a
      material claim by any employees or
      former
      employees (including dependents and spouses) of Clearview under any workers
      compensation laws, regulations, requirements or programs. Since the Review
      Date,
      there has been no material change, other than in the ordinary course of
      business, in the information disclosed in Schedule
      4.22.

    

    4.23. Accounts
      Receivable/Accounts Payable.
      

    

    (a) Accounts
      Receivable.
      Except
      as set forth on Schedule
      4.23(a),
      the
      Accounts Receivable are valid, binding and legally enforceable obligations
      and
      are owned by Clearview free and clear of all Liens, and, except for contractual
      allowances, reserves for bad debts and other adjustments that are consistent
      with those adjustments made in preparing the Financial Statements, will not
      be
      subject to any offset, counterclaim or other adverse claim or defense, and
      may
      be transferred to the New LP to the extent permitted by law. The Accounts
      Receivable arose in the ordinary and usual course of the business and the
      Accounts Receivable are set forth on the books and records of
      Clearview. Schedule
      4.23(a)
      contains
      a complete and accurate list of all Accounts Receivable as of the date stated
      thereon, which list represents the Accounts Receivable before adjusting for
      contractual allowances and bad debt reserves.
      Seller does not know of any reason why the Accounts Receivable would not be
      collectible according to approximately the same ratios as accounts receivable
      have been historically collectible.

    

    (b) Accounts
      Payable and Accrued Liabilities.
      Schedule
      1.4(a)
      sets
      forth a complete and correct list of the Accounts Payable. The collective amount
      of the Accrued Liabilities, together with the aggregate amount of the Accounts
      Payable, does not exceed One Hundred Thousand and No/Dollars ($100,000). Each
      of
      the Accounts Payable and Accrued Liabilities are valid and have been incurred
      in
      connection with the operation of the Business in the ordinary course of
      business, consistent with Clearview’s past custom and practice. 

    

    4.24. Brokers.
      Except
      as set forth on Schedule
      5.5,
      with
      respect to a broker representing Seller, and for which Buyer shall be
      responsible for paying, all negotiations relating to this Agreement and the
      Transaction Documents, and the transactions contemplated hereby and thereby,
      have been carried on without the intervention of any Person acting on behalf
      of
      any Selling Party in such a manner as to give rise to any valid claim for any
      broker’s or finder’s fee or similar compensation against Buyer.

    

    4.25. HIPAA.
      (a) All
      of the Assets being sold and/or provided to New LP under this Agreement,
      including, without limitation, any computer hardware and/or software, are in
      compliance with the Health Insurance Portability and Accountability Act of
      1996
      (Public Law 104-91, 42 U.S.C. 1301 et.
      seq.)
      and
      regulations promulgated thereunder (collectively, “HIPAA”),
      and
      applicable state laws having similar subject matter to HIPAA (“State
      HIPAA”),
      and
      (b) Clearview has conducted its business and activities, including, without
      limitation, its billing and collection activities, its Medical Records
      management activities, and its general practice management activities, in a
      manner that complied with HIPAA and State HIPAA.

    

    
      
        
        

      

      
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    4.26. Rates
      and Reimbursement Policies.
      Except
      as set forth on Schedule
      4.26,
      Clearview does not have any rate appeal currently pending before any
      Governmental Authority or any administrator of any third-party payor program.
      Except for the YAG laser capsulotomy reimbursement rate issue previously
      disclosed by Buyer to Seller, no Selling Party has any knowledge of any
      applicable state or local law, which affects rates or reimbursement procedures,
      which has been enacted, promulgated or issued within the eighteen (18) months
      preceding the Closing Date or any such legal requirement proposed or currently
      pending in the applicable state or at the federal level which has resulted
      or
      may result in any reductions in rates and reimbursement. 

    

    4.27. Physicians.
      Except
      as set forth on Schedule
      4.14,
      none of
      the physicians who utilize the Facility (collectively, the “Physicians”)
      have
      threatened to discontinue or to terminate his or her relationship with Clearview
      and the provision of services at the Facility. To the knowledge of any Selling
      Party, none of the Physicians have expressed plans to retire from the practice
      of medicine in the next five (5) years or to be involved in the development
      or
      operations of another ambulatory surgery center. During the three (3) years
      preceding the Closing Date, each of the Physicians:

    

    (a) Has
      been
      duly licensed and registered, and is in good standing by their state to engage
      in the practice of medicine, and said license and registration have not been
      suspended, revoked or restricted in any manner, and

    

    (b) Has
      had
      valid professional liability insurance in place in amounts not less than
      commercially reasonable levels and has not indicated any intent to terminate
      or
      reduce his or her professional liability coverage.

    

    4.28. Certain
      Representations With Respect to the Facility.

    

    (a) The
      Facility is qualified for participation in the Medicare program. Complete and
      accurate copies of the Facility’s existing Medicare contracts have been
      furnished to Buyer. Clearview is presently in compliance with all of the terms,
      conditions and provisions of such contracts.

    

    (b) The
      Facility is qualified for participation in the Medicaid program. Complete and
      accurate copies of Clearview’s existing Medicaid contracts have been furnished
      to Buyer. Clearview is presently in compliance with all of the terms, conditions
      and provisions of such contracts.

    

    4.29. No
      Designated Health Services.
      Clearview has not provided, does not provide and has no intention of providing
      any services that constitute “designated health services” with the meaning of 42
      U.S.C. § 1395nn.

    

    4.30. No
      Misrepresentation.
      None of
      the representations and warranties of the Selling Parties set forth in this
      Agreement, in any of the certificates, schedules, lists, documents, exhibits,
      or
      other instruments delivered, or to be delivered, to Buyer as contemplated by
      any
      provision hereof
      (including the Transaction Documents), contain any untrue statement of a
      material fact or omit
      to
      state a material fact necessary to make the statements contained herein or
      therein not misleading.
      To the
      knowledge of any Selling Party, there are no material facts which have not
      been
      disclosed to Buyer which have a Material Adverse Effect, or could reasonably
      be
      anticipated to have a Material Adverse Effect, on the Business or any Selling
      Party’s ability to consummate the transactions contemplated hereby.

    

    
      
        
        

      

      
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    ARTICLE
      V.

    BUYER’S
      REPRESENTATIONS AND WARRANTIES

    

    Each
      of
      NovaMed and NovaMed Laredo hereby represents and warrants, jointly and
      severally, to the Selling Parties as of the Closing Date as
      follows:

    

    5.1. -Organization.
      Each of
      NovaMed and NovaMed Laredo is a corporation duly organized, validly existing
      and
      in good standing under the laws of the State of Delaware.

    

    5.2. -Authorization.
      Each of
      NovaMed and NovaMed Laredo has full power, right and authority to enter into
      and
      perform its obligations under this Agreement and each of the Transaction
      Documents to which it is a party. The execution, delivery and performance by
      each of NovaMed and NovaMed Laredo of this Agreement and each of the Transaction
      Documents to which it is a party have been
      duly
      and properly authorized by all requisite corporate action in accordance with
      applicable law and with each of NovaMed’s and NovaMed Laredo’s Certificate of
      Incorporation.
      This
      Agreement and each of the Transaction Documents to which NovaMed and NovaMed
      Laredo are a party have been duly executed and delivered by them and are the
      valid and binding obligation of Buyer and are enforceable against
      Buyer in accordance with their respective terms, except as the same may be
      limited by applicable bankruptcy, insolvency, reorganization, moratorium or
      other similar laws affecting the rights of creditors generally and the
      availability of equitable remedies. 

    

    5.3. -Transaction
      Not a Breach.
      The
      execution, delivery and performance of this Agreement and the Transaction
      Documents by NovaMed and NovaMed Laredo will not violate and
      conflict with,
      or
      result in the breach of any of the terms, conditions, or provisions of NovaMed’s
      and NovaMed Laredo’s Certificate of Incorporation or of any contract, agreement,
      mortgage, or other instrument or obligation of any nature to which NovaMed
      or
      NovaMed Laredo is a party or by which NovaMed or NovaMed Laredo is
      bound.

    

    5.4. Acquisition
      of Transferred Interests.
      NovaMed
      and NovaMed Laredo are acquiring the Transferred Interests for their own
      respective accounts and not with a view to the distribution or resale thereof.
      Each of NovaMed and NovaMed Laredo has no intention of selling the Transferred
      Interests in a public distribution in violation of federal securities laws
      or
      any applicable state securities laws.

    

    5.5. Broker.
      Except
      as set forth on Schedule
      5.5
      with
      respect to a broker retained by Buyer and for which Buyer shall be responsible
      for paying, all negotiations relating to this Agreement and the Transaction
      Documents, and the transactions contemplated hereby and thereby, have been
      carried on without the intervention of any Person acting on behalf of Buyer
      in
      such a manner as to give rise to any valid claim for any broker’s or finder’s
      fee or similar compensation against a Selling Party. 

    

    5.6. No
      Misrepresentation.
      None of
      the representations and warranties of Buyer set forth in this Agreement or
      in
      any of the certificates, schedules, lists, documents, exhibits, or other
      instruments delivered, or to be delivered, to the Selling Parties as
      contemplated by any provision hereof (including the Transaction Documents),
      contain any untrue statement of a material
      fact or omit
      to
      state a material fact necessary to make the statements contained herein or
      therein not misleading. 

    

    
      
        
        

      

      
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    ARTICLE
      VI.

    ADDITIONAL
      AGREEMENTS

    

    6.1. Liens.
      Other
      than the sole lien set forth on Schedule
      4.2,
      there
      shall be no financing
      statements, judgments, taxes or other Liens outstanding against Clearview or
      any
      of the Assets as of the Closing Date.

    

    6.2. -Employees;
      Labor Relations.

    

    (a) -Continuing
      Employees.
      New LP
      shall offer to employ the employees of Clearview listed on Schedule
      6.2(a)
      (the
“Continuing
      Employees”)
      as of
      the Closing Date, on the terms and conditions established by New LP in its
      sole
      discretion, provided that New LP shall offer such employment at the salary
      or
      wage levels for such Continuing Employees as are set forth on Schedule
      6.2(a).
      Such
      offer of employment by New LP shall not be deemed to create a continuing right
      to employment for any Continuing Employees. Clearview shall be solely
      responsible for all liabilities relating, directly or indirectly, to any of
      Clearview’s employees who do not accept New LP’s offer of
      employment. Clearview shall
      be
      solely responsible for any employment-related claims filed by any employees
      of
      Clearview which relate to facts and circumstances existing on and prior to
      the
      Closing Date, or arise from or relate to completion of the transactions
      contemplated by this Agreement or the Transaction Documents, regardless of
      when
      filed. 

    

    (b) COBRA
      Notice.
      Clearview represents that it has complied, in all material respects, with the
      applicable requirements of COBRA through the Closing Date and shall be
      responsible for all liabilities arising under COBRA with respect to any event
      occurring prior to and on the Closing Date. 

    

    (c) -Noncompetition
      Agreements.
      The
      Selling Parties hereby waive any noncompetition provision that may apply to
      the
      Continuing Employees with
      respect to New LP’s hiring and employment of the Continuing
      Employees.

    

    6.3. Post-Closing
      Remittances; New LP’s Appointment as Attorney-In-Fact.
      If,
      after the Closing Date, a Selling Party shall receive any remittance from any
      account debtors with respect to the Accounts Receivable, such Selling Party
      shall cause Clearview to endorse such remittance to the order of the New LP
      and
      forward it to the New LP promptly following receipt thereof.
      Clearview hereby irrevocably constitutes and appoints New LP and any officer
      or
      agent of New LP as Clearview’s true and lawful attorney-in-fact, with full power
      and authority, in the place and stead of Clearview for the limited purposes
      of
      receiving, collecting, indorsing, negotiating and cashing any and all cash,
      checks, drafts, payments, accounts receivable and other instruments
      (collectively the “Items”)
      which
      are payable to Clearview and which represent Items related to the Business
      or
      which represent payment on Accounts Receivable related to the Business, and
      which in accordance with the terms of this Agreement, have been sold, conveyed,
      assigned or transferred to New LP or are otherwise for the account of New LP
      hereby. Clearview further agrees to execute all documents and take such other
      action as New LP may reasonably request to confirm the power granted to New
      LP
      by this Section
      6.3.
      Notwithstanding the foregoing, in no event shall New LP receive, collect,
      indorse, negotiate or cash such Items pursuant to the above authority if to
      do
      so would be to violate the laws, regulations or other written guidance of any
      state or federal health program. In such event, New LP and Clearview agree
      to
      take such actions as necessary to convey such payments to New LP consistent
      with
      applicable laws and regulations.

    

    6.4. Further
      Assurances.
      The
      parties hereto shall execute such further documents, and perform such further
      acts, as may be reasonably necessary to transfer and convey the Assets to the
      New LP and the Transferred Interests to Buyer, all on the terms contained
      herein, and to otherwise comply with the terms of this Agreement and consummate
      the transactions contemplated herein.

    

    
      
        
        

      

      
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    6.5. Professional
      Liability Tail Coverage.
      To the
      extent Clearview’s professional liability insurance policy for the Facility is
      on a claims-made basis (rather than an occurrence basis), Clearview shall obtain
      an extended reporting (“tail”)
      professional liability insurance policy covering acts and omissions occurring
      at
      the Facility prior to the Closing Date, in an amount equal to the professional
      liability insurance carried immediately prior to the Closing Date, or such
      other
      amount, and for such period of time, as determined by mutual agreement of Buyer
      and Clearview. Clearview shall provide New LP with proof of such tail
      professional liability coverage and the cost and expense thereof. Buyer agrees
      to reimburse Clearview for the cost of such tail professional liability
      coverage. 

    

    6.6 Credentialing.
      As of
      the Closing Date, Seller and the other physicians credentialed by the Facility
      immediately prior to the Closing Date, shall receive provisional privileges
      to
      perform surgical procedures at the Facility that will be owned and operated
      by
      the New LP from and after the Closing Date. As a condition to receiving these
      provisional privileges, Seller hereby agrees that he will comply with all of
      the
      New LP’s credentialing requests (including, without limitation, providing New LP
      with any reasonably requested information and completing any applicable
      credentialing forms) so that the New LP may complete its credentialing review
      process for by the expiration date of the provisional privileges. 

    

    6.7 Admitting
      Privileges.
      As of
      the Closing Date, Seller and the other physicians credentialed by the Facility
      shall have admitting privileges at a local hospital in accordance with all
      applicable federal laws and Texas Administrative Code Section 135.4 and Seller
      shall maintain such privileges and will use his best efforts to cause the other
      physicians credentialed by the Facility to maintain such privileges from and
      after the Closing Date. From and after the Closing Date, the Selling Parties
      shall use their commercially reasonable efforts to assist the New LP in entering
      into a patient transfer agreement with Doctors Hospital of Laredo or other
      local
      hospital, pursuant to which the Facility may immediately transfer to a hospital
      patients requiring emergency medical care beyond the capabilities of the
      Facility.

    

    ARTICLE
      VII.

    CLOSING

    

    7.1. -Time
      and Place.
      The
      transactions that are the subject of this Agreement shall be consummated at
      a
      closing (the “Closing”)
      simultaneous with the execution and delivery of this Agreement and the other
      Transaction Documents by the applicable parties, which execution and delivery
      shall be via facsimile effective as of the Closing Date, with original documents
      to be exchanged by nationally recognized overnight courier for delivery on
      the
      next business day after the Closing Date.

    

    7.2. -Transactions
      Precedent to Closing.
      As a
      condition precedent to the consummation of the transactions contemplated herein,
      the applicable Selling Parties shall have consummated the New LP Asset Transfer,
      the Distribution Transactions and the FLP Contribution, and shall also have
      procured the Davalos Consents, all in accordance with the terms and conditions
      of Article
      I
      hereof.
      

    

    7.3. -Deliveries
      of the Selling Parties.
      At the
      Closing, the Selling Parties shall execute and deliver, or cause to be executed
      and delivered, to Buyer:

    

    (a) the
      Contribution Agreement, duly executed by the Selling Parties and including
      the
      Davalos Consent thereto;

    

    
      
        
        

      

      
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    (b) the
      Limited Partnership Agreement of the New LP, in the form attached hereto as
      Exhibit
      7.3(b)
      (the
“Partnership
      Agreement”),
      duly
      executed by the Family Limited Partnership and Seller;

    

    (c) (i)
      amended and restated certificate of limited partnership of New LP reflecting
      CSIM as general partner, executed by CSIM, and (ii) second amended and restated
      certificate of limited partnership evidencing change in general partner from
      CSIM to NovaMed Laredo, to be filed with the Secretary of States of Delaware
      and
      Texas immediately following the Closing;

    

    (d) any
      required third party consents, filings, and certificates from Clearview or
      any
      third party (including, any Governmental Authority) relating to the transfer
      of
      the Assets, including, without limitation, all consents from the State of Texas
      regarding the transfer of all Permits and licenses relating to the ownership
      and
      operation of the Facility, and copies of all written consents obtained in
      connection with the transfer of the Material Contracts;

    

    (e) clearance
      certificates or similar documents required by any state taxing authority in
      order to relieve Buyer of any obligation to withhold any portion of the Purchase
      Price;

    

    (f) the
      Assignment of Partnership Interests, substantially in the form attached as
      Exhibit
      7.3(f) (the
      “Assignment
      of Partnership Interests”),
      duly
      executed by Seller and CSIM;

    (g) the
      Real
      Property Lease for the Facility and other Leased Real Property listed on
Schedule
      4.10
      (the
“Lease
      Agreement”)
      between AHL, an Affiliate of Seller, as landlord and the New LP, as tenant,
      duly
      executed by AHL; 

    

    (h) a
      certificate of the Secretary of Clearview as to:
      (i)
      copies of resolutions of its general partner and limited partners authorizing
      the execution, delivery and performance of this Agreement and the Transaction
      Documents; (ii) its limited partnership agreement; (iii) incumbency and specimen
      signatures with respect to its authorized representatives executing this
      Agreement and any Transaction Documents; and (iv) its certificate of limited
      partnership certified by the Secretary of State of Texas.

    

    (i) all
      applicable documentation releasing Liens covering, concerning or relating to
      the
      Assets, in form and substance reasonably
      acceptable to Buyer; 

    

    (j) intentionally
      omitted;

    

    (k) the
      Clearview Distribution Agreement, duly executed by Clearview, Seller and
      Davalos; 

    

    (l) the
      FLP
      Contribution Agreement, duly executed by Clearview and Seller, and the Davalos
      Consent related thereto; 

    

    (m) a
      certificate of the Secretary of CSIM as to: (i) copies of resolutions of its
      manager and the members authorizing the execution, delivery and performance
      of
      this Agreement and the Transaction Documents; (ii) its operating agreement;
      (iii) incumbency and specimen signatures with respect to its authorized
      representatives executing this Agreement and any Transaction Documents; and
      (iv)
      its certificate of formation certified by the Secretary of State of
      Texas.

    

    
      
        
        

      

      
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    (n) the
      Assignment of Partnership Interests between NovaMed and Davalos (the
“Davalos
      Purchase Agreement”)
      consummating the Davalos Purchase Transaction contemporaneous with the Closing,
      duly executed by Davalos;

    

    (o) evidence
      satisfactory to Buyer that all of the Assets previously owned by AHL that were
      used in the conduct of the Business have been transferred to Clearview prior
      to
      the New LP Asset Transfer such that such Assets are owned by New LP as of the
      Closing Date, free and clear of all Liens; 

    

    (p) the
      Excimer Laser Sublease in the form attached hereto as Exhibit
      7.3(p)
      (the
“Laser
      Sublease”),
      duly
      executed by Michael A. Hochman, M.D., P.A. (“Practice”);
      

    

    (q) Billing
      and Collection Agreement in the form attached hereto as Exhibit 7.3(q) (the
      “Billing
      Agreement”),
      duly
      executed by Practice; and 

    

    (r) such
      other documents and instruments as Buyer or its counsel reasonably shall deem
      necessary to consummate the transactions contemplated hereby.

    

    All
      documents delivered to Buyer shall be in form and substance reasonably
      satisfactory to counsel for Buyer.

    

    7.4. -Deliveries
      of Buyer.
      At the
      Closing, Buyer will deliver or will cause the New LP to deliver to the
      applicable Selling Party simultaneously with the delivery of the items referred
      to in Section
      7.3
      above:

    

    (a) the
      payment of the Purchase Price to the applicable Selling Parties;

    

    (b) the
      Partnership Agreement, duly executed by NovaMed and NovaMed Laredo;

    

    (c) certificate
      of the Secretary of each of NovaMed and NovaMed Laredo as to: (i) copies of
      resolutions of its board of directors authorizing the execution, delivery and
      performance of this Agreement and the Transaction Documents, and (ii) incumbency
      and specimen signatures with respect to its officers executing this Agreement
      and any Transaction Documents;

    

    (d) the
      Lease
      Agreement, duly
      executed by the New LP;

    

    (e) a
      duly
      executed Management Agreement (the “Management
      Agreement”)
      between NovaMed Management Services, LLC, a Delaware limited liability company,
      and the New LP, substantially in the form attached hereto as Exhibit
      7.4(e).

    

    (f) the
      Assignment of Partnership Interests, duly executed by NovaMed and NovaMed
      Laredo;

    (g) intentionally
      omitted;

    

    (h) the
      Davalos Purchase Agreement, duly executed by NovaMed; 

    

    (i) the
      Laser
      Sublease, duly executed by New LP; and 

    

    (j) such
      other documents and instruments as the Selling Parties or their counsel
      reasonably shall deem necessary to consummate the transactions contemplated
      hereby.

    

    
      
        
        

      

      
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    All
      documents delivered to the Selling Parties shall be in form and substance
      reasonably satisfactory to the counsel for the Selling Parties.

    

    7.5 Change
      of Ownership Process.
      To the
      extent from and after the Closing there are any actions necessary to confirm
      or
      effect all reasonably necessary licensure and regulatory approvals required
      in
      connection with the New LP’s ownership and operation of the Business, the
      Selling Parties and their respective agents and representatives agree to
      cooperate with Buyer and New LP in connection these approvals, and will use
      commercially reasonable efforts to respond in a timely manner to any information
      or signature requests reasonably required in connection with these
      approvals.

    

    ARTICLE
      VIII

    INTENTIONALLY
      OMITTED

    

    ARTICLE
      IX

    INTENTIONALLY
      OMITTED

    

    ARTICLE
      X

    INTENTIONALLY
      OMITTED

     

    ARTICLE
      XI.

    COVENANT
      NOT TO COMPETE

    

    11.1. Acknowledgment.
      Each of
      the Selling Parties acknowledges and agrees that in order to assure that the
      Business will retain its value as a “going concern,” it is necessary that the
      Selling Parties undertake not to utilize their present special knowledge of
      the
      Business to compete with New LP, Buyer and the Business during the Restricted
      Period after the acquisition of Transferred Interests; provided that
      Buyer
      acknowledges that Seller (through the Family Limited Partnership) will continue
      to have an interest in the Business through its ownership of a minority interest
      in the New LP. Each of the parties hereto further acknowledges that: (a) Buyer
      has been and/or will be engaged in the Business; (b) each of the Selling Parties
      possesses extensive knowledge and a unique understanding of the Business, as
      well as (subsequent to the transactions contemplated by this Agreement) the
      proprietary and confidential information
      concerning the Business; (c) the agreements and covenants
      contained in this Section 11.1
      are
      essential to protect Buyer and the value of the Business and are a condition
      precedent to Buyer’s willingness to pay for the Transferred Interests; (d) Buyer
      would be irreparably damaged if any Selling Party were to violate the terms
      and
      conditions of this Article
      XI;
      and (e)
the
      geographic, temporal and business scope of the restrictive covenants in this
      Article
      XI
      are
      reasonable.

    

    11.2. Non-Compete.
      Each of
      the Selling Parties hereby agrees that for the five (5) year period beginning
      on
      the Closing Date (the “Restricted
      Period”);
      provided that
      in the
      event that any such party is determined to have violated the covenants set
      forth
      in this Article
      XI,
      the
      Restricted Period shall be extended day for day for the time period that such
      party is in violation of any such covenant), he, she or it shall not, directly
      or indirectly, act
      as a
      director, officer, member, manager, or partner of, or own any equity or other
      financial interest in, any Person that owns and/or operates an ambulatory
      surgery center, hospital, licensed surgical facility or any other outpatient
      surgical facility, that is located within a thirty-five (35) mile radius of
      the
      location of the Business.
      Notwithstanding
      the foregoing, and without limiting the terms of the Partnership Agreement,
      any
      Selling Party may:
      (a)
      be a director on the Board of Trustees of a hospital; (b) serve on the medical
      staff of any hospital; (c) own an interest in the New LP in accordance with
      the
      terms of the Partnership Agreement; and (d) practice medicine in his or her
      own
      office or the office of the professional entity in which he
      or she
      is an employee or owner;
      provided,
      however,
      that
      Seller shall not be an employee of a hospital. 

    

    
      
        
        

      

      
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    11.3. Property
      of the Business.
      All
      memoranda, notes, lists, records and other documentation or papers (and all
      copies thereof), including such items stored in computer memories, or microfiche
      or by any other means, which will become the New LP’s property (after
      the consummation
      of transactions contemplated by this Agreement), are and shall be the New LP’s
      property and shall be delivered to the New LP promptly on the request of
      Buyer.

    

    11.4. Blue-Pencil.
      If any
      court of competent jurisdiction shall at any time deem the term of this
      Agreement or any particular restrictive covenant contained in this Article
      XI
      too
      lengthy or the territory too extensive, the other provisions of this
Article
      XI shall
      nevertheless stand, the Restricted Period herein shall be deemed to be the
      longest period permissible by law under the circumstances and the territory
      described in Section
      11.2
      shall be
      deemed to comprise the largest territory permissible by law under the
      circumstances. The court in each case shall reduce the Restricted Period and/or
      territory described in Section
      11.2
      to
      permissible duration or size.

    

    11.5. Remedies.
      Each of
      the Selling Parties acknowledges and agrees that the covenants set forth in
      this
Article
      XI
      are
      reasonable and necessary for the protection of Buyer and the New LP’s business
      interests, that irreparable
      injury will result if any Selling Party breaches any of the terms of said
      restrictive covenants,
      and that in the event of actual or threatened breach of any such restrictive
      covenants, Buyer will have no adequate remedy at law. Each of the Selling
      Parties accordingly agrees that in the event of any actual or threatened breach
      by any of them of any of the covenants set forth in this Article XI,
      Buyer
      shall be entitled to immediate temporary injunctive and other equitable relief,
      without bond and without the necessity of showing actual monetary damages,
      subject to hearing as soon thereafter as possible. Nothing contained herein
      shall be construed as prohibiting Buyer from pursuing any other remedies
      available to it for such breach or threatened breach, including the recovery
      of
      any damages which it is able to prove.
      The
      parties also agree that the existence of any claim or cause of action by a
      Selling Party against Buyer, whether predicated upon this Agreement or
      otherwise, shall not constitute a defense to the enforcement of the restrictive
      covenants set forth herein, but shall be litigated separately. 

    

    11.6. Assignment.
      The
      Selling Parties agree that the rights granted in this Article
      XI
      may be
      assigned by Buyer at its sole and absolute discretion. All of the provisions
      of
      this Article
      XI
      shall
      inure to any successors of Buyer, all of which are specifically third-party
      beneficiaries of this Article
      XI
      with
      full rights hereunder. In addition, the parties hereto agree that any assignee
      of the rights hereunder is an intended, direct third-party beneficiary of this
      Article
      XI
      and may
      enforce such rights in its own name in addition to or in lieu of
      Buyer.

    

    11.7. Patient
      Freedom.
      The
      parties hereto agree that the benefits afforded either party hereunder are
      not
      payment for, and are not in any way contingent upon the referral, admission
      or
      any other arrangement for, the provision of any item or service offered by
      any
      party hereto. Nothing in this Agreement shall be construed to limit the freedom
      of any patient of Seller to choose the facility
      or physician from whom any patient shall receive health care services or limit
      or interfere with Seller’s ability to exercise professional judgment in treating
      patients or their ability to provide medical services to patients.

    

    11.8. Texas
      Business and Commerce Code Section 15.50.
      The
      parties hereto agree that Seller is free to provide professional services at
      any
      facility Seller or his patients or payors select, and Seller is able to maintain
      a professional physician practice (but not an ambulatory surgery center or
      any
      other outpatient surgical facility) at any location, including within the
      geographic radius prescribed in Section
      11.2
      hereof.
      Accordingly, the parties hereto acknowledge and agree that Section 15.50(b)
      of
      the Texas Business and Commerce Code should not apply to the restrictive
      covenants set forth in this Agreement. As such, Seller hereby agrees to waive
      any rights to challenge the restrictive covenants set forth herein on the basis
      that such covenants are subject to Section 15.50(b) of the Texas Business and
      Commerce Code, and neither Seller nor any of his agents or representatives
      shall
      commence, participate in or be a party to any litigation or any other type
      of
      action which challenges, directly or indirectly, the restrictive covenants
      set
      forth herein on the basis that such covenants are subject to Section 15.50(b)
      of
      the Texas Business and Commerce Code.  

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

       

    

    ARTICLE
      XII.

    POST-CLOSING
      COVENANTS

     

    12.1 Indemnification
      by Selling Parties.
      From
      and after the Closing, each Selling Party agrees to jointly and severally
      indemnify, defend and save Buyer and its respective Affiliates (including,
      without limitation, the New LP) and each of their respective officers,
      directors, managers, employees, agents and fiduciaries (each, a “Buyer
      Indemnified Party”),
      forever harmless from and against, and to pay to a Buyer Indemnified Party
      or reimburse
      a Buyer Indemnified Party for (in either case within ten business days of its
      receipt of notice in accordance with the terms of this Article
      XII
      from any
      Buyer Indemnified Party), any and all liabilities (whether contingent, fixed
      or
      unfixed, liquidated or unliquidated, or otherwise), obligations, deficiencies,
      demands, claims, suits, actions, or causes of action, assessments,
      losses, costs, expenses, interest, fines, penalties, actual or punitive damages
      or costs or expenses of any and all investigations, proceedings, judgments,
      environmental analyses, remediations,
      settlements and compromises (including reasonable fees and expenses of
      attorneys, accountants
      and
      other experts) (individually and collectively, the “Losses”)
      actually sustained or incurred by any
      Buyer
      Indemnified Party relating to, resulting from, arising out of or otherwise
      by
      virtue of any of the following:

    

    (a) any
      misrepresentation or breach of a representation or warranty contained in this
      Agreement or in the Transaction Documents by any Selling Party, or
      non-compliance with or breach by any Selling Party of any of the covenants
      or
      agreements contained in this Agreement or the Transaction Documents to be
      performed by any Selling Party or any of their respective
      Affiliates;

    

    (b) the
      operation of the Business prior to the Closing Date, including the use of the
      Assets and the Excluded Assets prior to the Closing Date;

    

    (c) any
      Tax
      liability of any Selling Party whatsoever, including, without limitation, any
      Tax liability with respect to or arising from the transactions contemplated
      hereby or the structuring of the transactions contemplated hereby, or any Tax
      liability under Texas bulk sales laws;

    

    (d) any
      violations of or obligations under Environmental and Safety Requirements
      relating to acts, omissions, circumstances or conditions to the extent existing
      or arising on or prior to the Closing Date, whether or not such acts, omissions,
      circumstances or conditions constituted a violation of Environmental and Safety
      Requirements as then in effect;

    

    (e) any
      liabilities relating to or arising from the provision of (or failure to provide)
      professional medical services prior to the Closing Date, including any
      liabilities relating to the failure, prior to the Closing Date, to adhere to
      or
      comply with any Medicare and Medicaid requirements or Fraud and Abuse
      Laws;

    

    (f) any
      action, demand, proceeding, investigation or claim (whenever made) by any third
      party (including Governmental Authorities) against or affecting Buyer or its
      Affiliates which, if successful, would give rise to or evidence the existence
      of
      or relate to a misrepresentation or breach of any of the representations,
      warranties or covenants contained in this Agreement or the Transaction Documents
      of any Selling Party;

    

    (g) the
      Excluded Assets or Excluded Liabilities;

    

    
      
        
        

      

      
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    (h) any
      claim
      for payment of fees and/or expenses as a broker or finder in connection with
      the
      origin, negotiation, execution or consummation of this Agreement based upon
      any
      alleged agreement between the claimant and any Selling Party; 

    

    (i) any
      claim
      by Davalos with respect to the transactions contemplated herein, including,
      without limitation, the New LP Asset Transfer, the Distribution Transactions
      and
      the Selling Parties’ sale of the Transferred Interests to Buyer; or

    

    (j) any
      claim
      relating to, arising out of, or in connection with, the failure of Clearview
      to
      maintain either a Pharmacy Board Permit or a CLIA Certificate at any time prior
      to the Closing Date.

     

    12.2. Indemnification
      by Buyer.
      From
      and after the Closing, each of NovaMed and NovaMed Laredo agrees to indemnify,
      defend and save the Selling Parties and their respective Affiliates, and their
      respective employees, trustees, agents, representatives, heirs and executors
      other than the New LP (each, a “Seller
      Indemnified Party”)
      forever harmless from and against, and to pay to a Seller Indemnified Party
      or
      reimburse a Seller Indemnified Party for (in either case within ten (10)
      business days of its receipt of notice in accordance to the terms of this
Article
      XII
      from any
      Seller Indemnified
      Party), any and all Losses actually sustained or incurred by any Seller
      Indemnified Party relating to, resulting from, arising out of or otherwise
      by
      virtue of any of the following:

    

    (a) any
      misrepresentation or breach of a representation or warranty contained in this
      Agreement or in the Transaction Documents by Buyer, or non-compliance with
      or
      breach by Buyer of any of the covenants or agreements contained in this
      Agreement or in the Transaction Documents to be performed by Buyer;

    

    (b) any
      action, demand, proceeding, investigation or claim (whenever made) by any third
      party (including Governmental Authorities) against or affecting the Selling
      Parties or their respective Affiliates which, if successful, would give rise
      to
      or evidence the existence of or relate to a misrepresentation or breach of
      any
      of the representations, warranties or covenants contained in this Agreement
      or
      the Transaction Documents of Buyer; or

    

    (c) any
      claim
      for payment of fees and/or expenses as a broker or finder in connection with
      the
      origin, negotiation, execution or consummation of this Agreement based upon
      any
      alleged agreement between the claimant and Buyer.

     

    12.3. Indemnification
      Procedure for Third Party Claims.
      In the
      event that subsequent to the Closing any Person entitled to indemnification
      under this Agreement (an “Indemnified Party”)
      asserts a claim for indemnification or receives notice of the assertion of
      any
      claim or of the
      commencement of any action or proceeding by any entity that is not a party
      to
      this Agreement or an Affiliate of a party to this Agreement (including, but
      not
      limited to any domestic or foreign court or Governmental Authority, federal,
      state or local) (a “Third
      Party Claim”)
      against such Indemnified Party, against which a party to this Agreement is
      required to provide indemnification under this Agreement (an “Indemnifying
      Party”),
      the
      Indemnified Party shall give written notice together with a statement of any
      available information regarding such claim to the Indemnifying Party within
      sixty (60) days after learning of such claim (or within such shorter time as
      may
      be necessary to give the Indemnifying Party a reasonable opportunity to respond
      to such claim). The Indemnifying Party shall have the right, upon written notice
      to the Indemnified Party (the “Defense
      Notice”)
      within
      thirty (30) days after receipt from the Indemnified Party of notice of such
      claim, which notice by the Indemnifying Party shall specify the counsel
      it will
      appoint to defend such claim (“Defense
      Counsel”),
      to
      conduct at its expense the defense against such claim in its own name, or if
      necessary in the name of the Indemnified Party; provided,
      however,
      that
      the Indemnified Party shall have the right to approve the Defense Counsel,
      which
      approval shall not be unreasonably withheld, and in the event the Indemnifying
      Party and the Indemnified Party cannot agree upon such counsel within ten (10)
      days after the Defense Notice is provided, then the Indemnifying Party shall
      propose an alternate Defense Counsel, which shall be subject again to the
      Indemnified Party’s approval. If the parties still fail to agree on Defense
      Counsel, then, at such time, they shall mutually agree in good faith on a
      procedure to determine the Defense Counsel. The delivery of a Defense Notice
      shall not constitute an admission with respect to the claim for
      indemnification.

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

    

    (a) In
      the
      event that the Indemnifying Party shall fail to give the Defense Notice, it
      shall be deemed to have elected not to conduct the defense of the subject claim,
      and in such event the Indemnified Party shall have the right to conduct such
      defense in good faith and to compromise and settle the claim without prior
      consent of the Indemnifying Party and the Indemnifying Party will be liable
      for
      all costs, expenses, settlement amounts or other Losses paid or incurred in
      connection therewith.

    

    (b) In
      the
      event that the Indemnifying Party does deliver a Defense Notice and thereby
      elects to conduct the defense of the subject claim, the Indemnified Party will
      cooperate with and make available to the Indemnifying Party such assistance
      and
      materials as it may reasonably request, all at the expense of the Indemnifying
      Party, and the Indemnified Party shall have the right at its expense to
      participate in the defense assisted by counsel of its own choosing; provided that
      the
      Indemnified Party shall have the right to compromise and settle the claim only
      with the prior written consent of the Indemnifying Party, which consent shall
      not be unreasonably withheld or delayed.

    

    (c) Without
      the prior written consent of the Indemnified Party, the Indemnifying Party
      will
      not enter into any settlement of any Third Party Claim or cease to defend
      against such claim, if pursuant to or as a result of such settlement or
      cessation, (i) injunctive or other equitable relief would be imposed against
      the
      Indemnified Party, or (ii) such settlement or cessation would lead to liability
      or create any financial or other obligation on the part of the Indemnified
      Party
      for which the Indemnified Party is not entitled to indemnification
      hereunder.

    

    (d) The
      Indemnifying Party shall not be entitled to control, and the Indemnified Party
      shall be entitled to have sole control over, the defense or settlement of any
      claim to the extent that claim seeks an order, injunction or other equitable
      relief against the Indemnified Party which, if successful, could materially
      interfere with the business, operations, assets, condition (financial or
      otherwise) or prospects of the Indemnified Party (and the cost of such defense
      shall constitute an amount for which the Indemnified Party is entitled to
      indemnification hereunder).

    

    (e) If
      a firm
      decision is made to settle a Third Party Claim, which offer the Indemnifying
      Party is permitted to settle under this Section
      12.3,
      and the
      Indemnifying Party desires to accept and agree to such offer, the Indemnifying
      Party will give written notice to the Indemnified Party to that effect. If
      the
      Indemnified Party fails to consent to such firm offer within fifteen (15)
      calendar days after its receipt of such notice, the Indemnified Party may
      continue to contest or defend such Third Party Claim and, in such event, the
      maximum liability of the Indemnifying Party as to such Third Party Claim will
      not exceed the amount of such settlement offer, plus costs and expenses paid
      or
      incurred by the Indemnified Party through the end of such fifteen (15) day
      period.

    

    (f) Any
      judgment entered or settlement agreed upon in the manner provided herein shall
      be binding upon the Indemnifying Party, and shall conclusively be deemed to
      be
      an obligation with respect to which the Indemnified Party is entitled to prompt
      indemnification hereunder.

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

       

    

    12.4. -Failure
      to Give Timely Notice.
      A
      failure by an Indemnified Party to give timely, complete or accurate notice
      as
      provided in Section
      12.3
      will not
      affect the rights or obligations of any
      party
      hereunder except and only to the extent that, as a result of such failure,
      any
      party entitled to receive such notice was deprived of its right to recover
      any
      payment under its applicable insurance coverage or was otherwise directly and
      materially damaged as a result of such failure to give timely
      notice.

    

    12.5. Survival.
      Notwithstanding anything contained to the contrary in this Agreement, all
      representations and warranties of the parties hereto contained in or arising
      out
      of the Transaction Documents, or in any schedule or certificate given in
      connection herewith and therewith, shall survive the Closing and shall continue
      in effect until the twenty-four (24) month anniversary of the Closing Date;
      provided,
      however,
      that
      the representations and warranties set forth in Sections 4.2,
      4.4, 4.6, 4.8, 4.12, 4.15 and
      4.19 shall
      survive until the expiration of all applicable statutes of limitation. Unless
      a
      specified period is set forth in this Agreement (in which event such specified
      period will control),
      all covenants and indemnities contained in this Agreement will survive the
      Closing and remain in effect indefinitely.

    

    12.6. Right
      of Offset.
      If any
      Selling Party is the Indemnifying Party and fails to make any payment as
      contemplated by this Article
      XII,
      or
      shall fail to make any payment when due under the terms of any of the
      Transaction Documents, then Buyer may elect to offset such amount against any
      amount due and owing by the New LP to Seller or the Family Limited Partnership
      pursuant to the terms of the Partnership Agreement
      (including, without limitation, any distributions payable to Seller or the
      Family Limited Partnership). 

    

    12.7 Limitations.
      Notwithstanding anything in Article
      XI to
      the
      contrary, the following shall apply:

    

    (a) The
      aggregate amount of the Losses required to be paid by the Selling Parties
      pursuant to Section
      12.1(a)
      and
Section
      12.1(f)
      hereof
      shall not exceed the Purchase Price. 

    

    (b) The
      Buyer
      Indemnified Parties shall be entitled to indemnification under Section
      12.1(a)
      and
Section
      12.1(f)
      only if
      the aggregate amount of all Losses thereunder (on a cumulative basis) exceeds
      Fifty Thousand and No/Dollars ($50,000) (the “Basket
      Amount”),
      in
      which case the Selling Parties shall be obligated to indemnify the Buyer
      Indemnified Parties only for the excess of the aggregate amount of all such
      Losses over the Basket Amount.

    

    (c) The
      Seller Indemnified Parties shall be entitled to indemnification under
Section
      12.2(a)
      and
Section
      12.2(b)
      only if
      the aggregate amount of all Losses thereunder (on a cumulative basis) exceeds
      the Basket Amount, in which case Buyer shall be obligated to indemnify the
      Seller Indemnified Parties only for the excess of the aggregate amount of all
      such Losses over the Basket Amount.

     

    ARTICLE
      XIII.

    MISCELLANEOUS

     

    13.1. Definitions.  For
      purposes of this Agreement, the following terms have the meaning set forth
      below:

    

    “Affiliate”
means
      an affiliate as defined in Rule 405 under the Securities Act of 1933, as
      amended, and includes any past and present Affiliate of a Person; provided that
      with
      respect to determining any Affiliate of Buyer, such Affiliates shall include,
      without limitation, NovaMed, Inc. and any of its subsidiaries.

    

    “Closing”
and
      “Closing
      Date”
shall
      have the respective meanings set forth in Section
      7.1.

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

       

    

    “Code”
means
      the Internal Revenue Code of 1986, as amended.

    

    “Employee
      Benefit Plans”
shall
      have the meaning set forth in Section
      4.19.

    

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended.

    

    “Facility”
means
      the Medicare-certified, state-licensed ambulatory surgery center located at
      5313
      McPherson Road, Laredo, Texas 78041.

    

    “Fraud
      and Abuse Laws”
means
      all fraud and abuse laws promulgated under Section 1128(b) of the Social
      Security Act, 42 U.S.C. Section 1320a-7(b) and Section 1877 of the Social
      Security Act, 42 U.S.C. Section 1877, and all rules and regulations promulgated
      thereunder; any other federal, state or local law relating to the referral
      of
      patients to medical facilities owned by providers of medical services; and
      all
      federal statutes (whether set forth in Title XVIII of the Social Security Act
      or
      elsewhere) affecting the health insurance program for the aged and disabled
      established by Title XVIII of the Social Security Act and any statues succeeding
      thereto, together with all rules and regulations promulgated
      thereunder.

    

    “Hazardous
      Materials”
means
      (a) hazardous materials, hazardous substances, extremely hazardous substances
      or
      hazardous wastes, as those terms are defined by the Comprehensive Environmental
      Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq., the Resource
      Conservation and Recovery Act, 42 U.S.C. §6901 et seq., and any other
      Environmental and Safety Requirements; (b) petroleum, including crude oil or
      any
      fraction thereof which is liquid at standard conditions of temperature and
      pressure (60 degrees Fahrenheit and 14.7 pounds per square inch absolute);
      (c)
      any radioactive material, including any source, special nuclear, or by-product
      material as defined in 42 U.S.C. §2011 et seq.; (d) asbestos in any form or
      condition; and (e) any other material, substance or waste to which liability
      or
      standards of conduct may be imposed under any Environmental and Safety
      Requirements.

    

    “Liens”
means
      any claims, liens, charges, restrictions, options, preemptive rights, mortgages,
      hypothecations, assessments, pledges, encumbrances or security interests of
      any
      kind or nature whatsoever.

    

    “Material
      Adverse Effect”
means,
      with respect to any Person, a material adverse effect on the business,
      prospects, financial condition or results of operations of such Person or any
      of
      its subsidiaries, taken as a whole.

    

    “Medical
      Records”
shall
      mean all medical records of patients treated at the Facility, including, without
      limitation, any and all medical charts, files, notes, transcripts, x-ray files,
      lab reports, other diagnostic information or materials, insurance information,
      billing and payment statements or records of any kind, explanations of benefits,
      and other information of or relating to any patient treated at the Facility,
      of
      any kind and in any form whatsoever; provided that
      Medical
      Records shall be limited to the records of the Facility and will not include
      records of the provider of professional medical services. 

    

    “Person”
means
      any individual, sole proprietorship, partnership, joint venture, trust,
      undertaking, unincorporated association, corporation, entity, organization
      or
      Governmental Authority.

    

    “Review
      Date”
shall
      mean December 31, 2005.

    

    “Tax”
means
      any federal, state, local or foreign income, gross receipts, franchise,
      estimated, alternative minimum, add-on minimum, sales, use, transfer,
      registration, value added, excise, natural resources, severance, stamp,
      occupation, premium, windfall profit, environmental, customs, duties, real
      property, personal property, capital stock, social security, unemployment,
      disability, payroll, license, employee or other withholding, or other tax,
      of
      any kind whatsoever, including any interest, penalties or additions to tax
      or
      additional amounts in respect of the foregoing; the foregoing shall include
      any
      transferee or secondary liability for a Tax and any liability assumed by
      agreement or arising as a result of being (or ceasing to be) a member of any
      Affiliated Group, as defined in Section 1504 of the Code (or being included,
      or
      required to be included, in any Tax Return relating thereto).

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

       

    

    “Tax
      Returns”
means
      returns, declarations, reports, claims for refund, information returns or other
      documents (including any related or supporting Schedules, statements or
      information) filed or required to be filed in connection with the determination,
      assessment or collection of any Taxes of any party or the administration of
      any
      laws, regulations or administrative requirements relating to any
      Taxes.

    

    “Transaction
      Documents”
means
      this Agreement and all agreements and instruments contemplated by and being
      delivered pursuant to or in connection with this Agreement.

     

    13.2. Notices,
      Consents, etc.
      Any
      notices, consents or other communication required to be sent or given hereunder
      by any of the parties shall in every case be in writing and shall be deemed
      properly served if: (a) delivered personally; (b) sent by registered or
      certified mail, in all such
      cases with first class postage prepaid, return receipt requested; (c) delivered
      by a nationally recognized overnight courier service; or (d) sent by facsimile
      transmission to the parties at the addresses as set forth below or at such
      other
      addresses as may be furnished in writing. 

    

    
      	
            	(i)	
              If
                to the Selling Parties:

            

    

    

    Clearview
      Surgical Institute, Ltd.

    5313
      McPherson Road

    Laredo,
      Texas 78041

    Attention: Michael
      A. Hochman, M.D.

    Tel: (956)
      725-4003

    Fax: (956)
      725-4220

    

    Clearview
      Surgical Institute Management LLC

    5313
      McPherson Road

    Laredo,
      Texas 78041

    Attention: Michael
      A. Hochman, M.D.

    Tel: (956)
      725-4003

    Fax: (956)
      725-4220

    

    Michael
      A. Hochman, M.D. 

    304
      Emerald Lake Drive

    Laredo,
      Texas 78043

    Tel: (956)
      795-8310

    Fax: (956)
      795-8313

    

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

       

    

    with
      a
      copy to:

    

    Irwin
      D.
      Zucker

    Davidson
      & Troilo

    7550
      IH-10 West, Suite 800

    San
      Antonio, Texas 78229

    Tel:
       (210)
      349-6484

    Fax: (210)
      349-0041

    

    
      	
            	(ii)	
              If
                to Buyer:

            

    

    

    NovaMed
      Acquisition Company, Inc.

    NovaMed
      of Laredo, Inc.

    980
      North
      Michigan Avenue

    Suite
      1620

    Chicago,
      Illinois 60611

    Attention: Thomas
      S.
      Hall 

                       
      John
      W.
      Lawrence, Jr.

    Tel: (312)
      664-4100 

    Fax: (312)
      664-4250 

    

    Date
      of
      service of such notice shall be: (A) the date such notice is personally
      delivered; (B) three (3) days after the date of mailing if sent by certified
      or
      registered mail; (C) one (1) day after date of delivery to the overnight courier
      if sent by overnight courier; or (D) the next succeeding business day after
      transmission by facsimile.

    

    13.3. Certain
      Taxes.
      The
      Selling Parties will (on a joint and several basis) pay all transfer taxes
      and
      other taxes and charges, if any (except for any sales taxes and income tax
      of
      Buyer and its Affiliates),
      which may become payable in connection with the transactions contemplated by
      this Agreement.

    

    13.4. Remedies
      Not Exclusive.
      No
      remedy conferred by any of the specific provisions of this Agreement or the
      Transaction Documents is intended to be exclusive of any other remedy. Each
      such
      remedy shall be cumulative, and in addition to every other such remedy or any
      other remedy existing at law or in equity.

    

    13.5. Severability
      and Reformation.
      The
      unenforceability or invalidity of any provision of this Agreement shall not
      affect the enforceability or validity of any other provision. If any
      of the
      transactions contemplated herein or provisions hereof violates any applicable
      law, then the parties
      hereto agree to negotiate in good faith such changes to the structure and terms
      of the transactions provided for in this Agreement or the Transaction Documents
      as may be necessary to make these transactions, as restructured, lawful under
      applicable laws and regulations, without materially disadvantaging either party.
      The parties to this Agreement shall execute and deliver all documents or
      instruments necessary to effect or evidence the provisions of this Section
      13.5.

    

    13.6. Amendment
      and Waiver.
      This
      Agreement may be amended, or any provision of this Agreement may be waived;
      provided that
      any such
      amendment or waiver will be binding on a party hereto only if such amendment
      or
      waiver is set forth in a writing executed by such party.
      The
      waiver by any party hereto of a breach of any provision of this Agreement shall
      not operate or be construed as a waiver of any other breach.

    

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

       

    

    13.7. Counterparts.
      This
      Agreement may be executed simultaneously via facsimile or otherwise in two
      or
      more counterparts, each of which shall be deemed an original but all of which
      together shall constitute one and the same agreement and shall become effective
      when one or more counterparts have been signed by each of the parties hereto
      and
      delivered to the other.

    

    13.8. Expenses.
      Except
      as otherwise specifically provided herein, each of the parties shall pay all
      costs and expenses incurred or to be incurred by it,
      him
      or her, as the case may be, in negotiating and preparing this Agreement and
      in
      closing and carrying out the transactions contemplated by this
      Agreement.

    

    13.9. Construction.
      This
      Agreement shall be construed and enforced in accordance with, and all questions
      concerning the construction, validity, interpretation and performance
      of this
      Agreement shall be governed by, the laws of the State of Illinois, without
      giving effect to provisions thereof regarding conflict of laws.

    

    13.10. Headings.
      The
      subject headings of Articles and Sections of this Agreement are included for
      purposes of convenience only and shall not affect the construction or
      interpretation of any of its provisions.

    

    13.11. Assignment.
      This
      Agreement may not be assigned by any Selling Party without the prior written
      consent of Buyer. 

    

    13.12. Mediation
      and Arbitration.
      Except
      as expressly set forth herein, the parties hereto agree that any and all
      controversies, disputes or claims arising out of or in connection with this
      Agreement shall be solely and exclusively resolved in accordance with this
      Section
      13.12
      and not
      in any court of law or equity. The parties hereto shall first try in good faith
      to settle the dispute by mediation under the Commercial Mediation Rules of
      the
      American Arbitration Association (“AAA”)
      (such
      mediation session to be held in San Antonio, Texas, and to commence within
      thirty (30) days after the appointment of the mediator by the AAA). If the
      controversy, claim or dispute cannot be settled by mediation, then by
      arbitration administered by the AAA under its Commercial Arbitration Rules
      (such
      arbitration to be held in San Antonio, Texas before a single arbitrator mutually
      agreed upon by Buyer and Seller and to commence within thirty (30) days after
      the appointment of the arbitrator by the AAA), and judgment on the award
      rendered by the arbitrator may be entered in any court having jurisdiction
      thereof. Notwithstanding the foregoing, nothing herein shall limit Buyer’s
      rights to seek and obtain injunctive relief, specific performance or other
      equitable relief in any proceeding commenced in a federal or state court which
      may be brought to enforce any provision in Article
      XI
      hereof.

    

    13.13. -Entire
      Agreement.
      This
      Agreement, the Preamble and all the Schedules attached to this Agreement (all
      of
      which shall be deemed incorporated in the Agreement and made a part hereof)
      set forth the entire understanding of the parties with respect to the subject
      matter hereof, and shall not be modified or affected by any offer, proposal,
      statement or representation, oral or written, made by or for any party in
      connection with the negotiation of the terms hereof, and may be modified only
      by
      instruments signed by all of the parties hereto.

    

    13.14. Third
      Parties.
      Nothing
      herein expressed or implied is intended or shall be construed to confer upon
      or
      give to any Person, other than the parties to this Agreement and
      their respective
      permitted successors and assigns, any rights or remedies under or by reason
      of
      this Agreement.

    

    13.15. No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties hereto to express their mutual intent, and no rule of strict
      construction will be applied against any party hereto.

    

    13.16 Public
      Announcement.
      The
      Selling Parties acknowledge that Buyer intends to publicly announce the
      transactions contemplated herein, whether through a press release, a filing
      with
      the Securities and Exchange Commission, or some other form or medium selected
      by
      Buyer.

    

    [SIGNATURES
      APPEAR ON THE FOLLOWING PAGE]

    

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Asset Contribution and Exchange Agreement as of
      the
      date first written above. 

     

    
      	BUYER: 	 
	 	 
	NOVAMED ACQUISITION COMPANY,
              INC., 	NOVAMED OF LAREDO,
              INC., 
	a Delaware
              corporation 	a Delaware
              corporation 
	 	 
	 	 
	By:/s/
              Thomas S. Hall 	By:/s/
              Thomas S. Hall 
	
              Thomas
                S. Hall, President 

            	
              Thomas
                S. Hall, President 

            
	 	 
	SELLING
              PARTIES: 	 
	 	 
	CLEARVIEW SURGICAL INSTITUTE,
              LTD., 	CLEARVIEW SURGICAL INSTITUTE
              MANAGEMENT, LLC,  
	a Texas limited
              partnership 	a Texas limited liability
              company 
	 	 
	By its General Partner: 	 
	 	 
	
              CLEARVIEW
                SURGICAL INSTITUTE  MANAGEMENT
                LLC., 

            	By:/s/
              Michael A. Hochman 
	
              a
                Texas limited  liability
                company 

            	
              Its:
                President 

            
	 	 
	
              By:/s/
                Michael A. Hochman 

            	 
	
              Its:
                President 

            	 
	 	 
	 	 
	/s/ Michael A. Hochman 	 
	
              MICHAEL
                A. HOCHMAN, M.D., Individually 

            	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	EXHIBITS 	 	 
	 	 	 
	Exhibit 1.1 	
              — 

            	Certificate of Limited
              Partnership 
	Exhibit 1.2 	
              — 

            	Contribution Agreement 
	Exhibit 1.6 	
              — 

            	Clearview Distribution
              Agreement 
	Exhibit 1.7 	
              — 

            	FLP Contribution Agreement 
	Exhibit 3.2 	
              — 

            	Wire Transfer Instructions 
	Exhibit 7.3(b) 	
              — 

            	Partnership Agreement 
	Exhibit 7.3(f) 	
              — 

            	Assignment of Partnership
              Interests 
	Exhibit 7.3(p) 	
              — 

            	Excimer Laser Sublease 
	Exhibit 7.3(q) 	
              — 

            	Billing Agreement 
	Exhibit 7.4(e) 	
              — 

            	Management Agreement 
	 	 	 
	SCHEDULES* 	 	 
	 	 	 
	Schedule 1.2(a) 	
              — 

            	Inventory on Consignment 
	Schedule 1.2(b) 	
              — 

            	Personal Property 
	Schedule 1.2(c) 	
              — 

            	Prepaid Expenses 
	Schedule 1.3(g) 	
              — 

            	Excluded Assets/Personal
              Effects 
	Schedule 1.3(h) 	
              — 

            	Retinal Laser 
	Schedule 1.4(a) 	
              — 

            	Accounts Payable 
	Schedule 4.2 	
              — 

            	Liens and Encumbered
              Assets 
	Schedule 4.3 	
              — 

            	Approvals 
	Schedule 4.5 	
              — 

            	Financial Statements 
	Schedule 4.6 	
              — 

            	Undisclosed Liabilities 
	Schedule 4.9 	
              — 

            	Material Contracts/Assumed
              Contracts 
	Schedule 4.10 	
              — 

            	Leased Real Property 
	Schedule 4.11 	
              — 

            	Litigation 
	Schedule 4.12(b) 	
              — 

            	Licenses and Permits 
	Schedule 4.14 	
              — 

            	Conduct of Business 
	Schedule 4.16 	
              — 

            	Employee Names and
              Compensation 
	Schedule 4.17	
              — 

            	
              Insurance 

            
	Schedule 4.18	
              — 

            	
              Affiliate
                Transactions 

            
	Schedule 4.19 	
              — 

            	Employee Benefit Plans 
	Schedule 4.20 	
              — 

            	Personnel Agreements, Plans and
              Arrangements 
	Schedule 4.22 	
              — 

            	Workers Compensation 
	Schedule 4.23(a) 	
              — 

            	Accounts Receivable 
	Schedule 4.26 	
              — 

            	Rates and Reimbursement
              Policies 
	Schedule 5.5 	
              — 

            	Broker 
	Schedule 6.2(a) 	
              — 

            	Continuing
              Employees 

    

     

    *
      NovaMed, Inc. agrees to furnish supplementally a
      copy of any omitted schedule to the Securities and Exchange Commission upon
      request.EXECUTION
      VERSION

    CREDIT
      AGREEMENT

    among

    LENNAR
      CORPORATION

    and

    the
      Lenders Party Hereto

    and

    JPMORGAN
      CHASE BANK, N.A.,

    as
      Administrative Agent,

    and

    BANK
      OF AMERICA, N.A.

    BARCLAYS
      BANK PLC

    CALYON
      NEW YORK BRANCH

    THE
      ROYAL BANK OF SCOTLAND PLC

    and

    WACHOVIA
      BANK, N.A.

    as
      Documentation Agents,

    and

    LLOYDS
      TSB BANK PLC

    UBS
      LOAN FINANCE LLC

    BNP
      PARIBAS

    and

    SUNTRUST
      BANK

    as
      Senior Managing Agents,

    and

    CITICORP
      NORTH AMERICA, INC.

    HSCS
      BANK USA, N.A.

    COMERICA
      BANK

    GUARANTY
      BANK

    and

    U.S.
      BANK NATIONAL ASSOCIATION

    as
      Managing Agents,

    and

    WASHINGTON
      MUTUAL BANK

    BANKUNITED,
      FSB

    PNC
      BANK, NATIONAL ASSOCIATION

    SOCIETE
      GENERALE

    and

    SUMITOMO
      MITSUI BANKING CORPORATION

    as
      Co-Agents

    _____________________________________________________

    DEUTSCHE
      BANK SECURITIES, INC.,

    as
      Syndication Agent,

    and

    J.P.
      MORGAN SECURITIES INC.

    and

    DEUTSCHE
      BANK SECURITIES, INC.,

    as
      Joint Lead Arrangers and Joint Bookrunners

    

    Dated:
      July 21, 2006

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      Table
        of Contents

    
      	
              ARTICLE
                I     CERTAIN DEFINED
                TERMS

            	
              1

            
	
              SECTION
                1.01. Certain Defined Terms

            	
              1

            
	
              SECTION
                1.02. Computation of Time Periods

            	
              23

            
	
              SECTION
                1.03. Accounting Terms.

            	
              24

            
	 	 
	
              ARTICLE
                II     THE
                CREDITS

            	
              24

            
	
              SECTION
                2.01. Commitment.

            	
              24

            
	
              SECTION
                2.02. Types of Advances

            	
              25

            
	
              SECTION
                2.03. Principal Payments.

            	
              25

            
	
              SECTION
                2.04. Facility Fees; Reductions of Commitments.

            	
              26

            
	
              SECTION
                2.05. Method of Borrowing

            	
              26

            
	
              SECTION
                2.06. Method of Selecting Types and Interest Periods for Revolving
                Advances.

            	
              26

            
	
              SECTION
                2.07. Method of Selecting Types and Interest Periods for Conversion
                and
                Continuation of Revolving Advances.

            	
              27

            
	
              SECTION
                2.08. Minimum Amount of Each Revolving Advance

            	
              28

            
	
              SECTION
                2.09. Competitive Bid Procedure.

            	
              28

            
	
              SECTION
                2.10. Swing Line Loans.

            	
              31

            
	
              SECTION
                2.11. Rate after Maturity

            	
              32

            
	
              SECTION
                2.12. Method of Payment

            	
              32

            
	
              SECTION
                2.13. Notes; Telephonic Notices.

            	
              33

            
	
              SECTION
                2.14. Interest Payment Dates; Interest and Fee Basis

            	
              33

            
	
              SECTION
                2.15. Notification of Advances, Interest Rates, Prepayments and Commitment
                Reductions

            	
              34

            
	
              SECTION
                2.16. Lending Installations

            	
              34

            
	
              SECTION
                2.17. Increase in Aggregate Commitment.

            	
              34

            
	
              SECTION
                2.18. Facility Letters of Credit.

            	
              35

            
	
              SECTION
                2.19. Non-Receipt of Funds by the Administrative Agent

            	
              42

            
	
              SECTION
                2.20. Withholding Tax Exemption

            	
              43

            
	
              SECTION
                2.21. Unconditional Obligation to Make Payment

            	
              43

            
	
              SECTION
                2.22. Compensating Balances

            	
              43

            
	
              SECTION
                2.23. Extension of Termination Date

            	
              44

            
	
              SECTION
                2.24. Replacement of Certain Lenders

            	
              44

            
	 	 
	
              ARTICLE
                III     CHANGE IN
                CIRCUMSTANCES

            	
              45

            
	
              SECTION
                3.01. Yield-Protection

            	
              45

            
	
              SECTION
                3.02. Changes in Capital Adequacy Regulation

            	
              46

            
	
              SECTION
                3.03. Availability of Types of Advances

            	
              46

            
	
              SECTION
                3.04. Funding Indemnification

            	
              47

            
	
              SECTION
                3.05. Lender Statements Survival of Indemnity

            	
              47

            
	 	 
	
              ARTICLE
                IV     REPRESENTATIONS
                AND WARRANTIES

            	
              47

            
	
              SECTION
                4.01. Organization, Powers, etc

            	
              47

            
	
              SECTION
                4.02. Authorization and Validity of this Agreement, etc

            	
              48

            
	
              SECTION
                4.03. Financial Statements

            	
              48

            
	
              SECTION
                4.04. No Material Adverse Effect

            	
              48

            
	
              SECTION
                4.05. Title to Properties

            	
              49

            
	
              SECTION
                4.06. Litigation

            	
              49

            
	
              SECTION
                4.07. Payment of Taxes

            	
              49

            
	
              SECTION
                4.08. Agreements

            	
              50

            

    

     

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

     

    
      	
              SECTION
                4.09. Foreign Direct Investment Regulations

            	
              50

            
	
              SECTION
                4.10. Federal Reserve Regulations.

            	
              50

            
	
              SECTION
                4.11. Consents, etc

            	
              50

            
	
              SECTION
                4.12. Compliance with Applicable Laws

            	
              51

            
	
              SECTION
                4.13. Relationship of the Loan Parties

            	
              51

            
	
              SECTION
                4.14. Subsidiaries; Joint Ventures

            	
              51

            
	
              SECTION
                4.15. ERISA

            	
              51

            
	
              SECTION
                4.16. Investment Company Act

            	
              52

            
	
              SECTION
                4.17. Public Utility Holding Company Act

            	
              52

            
	
              SECTION
                4.18. Subordinated Debt

            	
              52

            
	
              SECTION
                4.19. Post-Retirement Benefits

            	
              52

            
	
              SECTION
                4.20. Insurance

            	
              52

            
	
              SECTION
                4.21. Environmental Representations

            	
              52

            
	
              SECTION
                4.22. Minimum Adjusted Consolidated Tangible Net Worth

            	
              53

            
	
              SECTION
                4.23. No Misrepresentation

            	
              53

            
	 	 
	
              ARTICLE
                V    
                CONDITIONS PRECEDENT

            	
              53

            
	
              SECTION
                5.01. Conditions of Effectiveness

            	
              53

            
	
              SECTION
                5.02. Conditions Precedent to All Advances and Facility Letters of
                Credit.

            	
              54

            
	 	 
	
              ARTICLE
                VI     AFFIRMATIVE
                COVENANTS

            	
              56

            
	
              SECTION
                6.01. Existence, Properties, etc

            	
              56

            
	
              SECTION
                6.02. Notice

            	
              56

            
	
              SECTION
                6.03. Payments of Debts, Taxes, etc

            	
              56

            
	
              SECTION
                6.04. Accounts and Reports

            	
              57

            
	
              SECTION
                6.05. Access to Premises and Records

            	
              60

            
	
              SECTION
                6.06. Maintenance of Properties and Insurance

            	
              60

            
	
              SECTION
                6.07. Financing; New Investing

            	
              60

            
	
              SECTION
                6.08. Compliance with Applicable Laws

            	
              61

            
	
              SECTION
                6.09. Advances to the Mortgage Banking Subsidiaries

            	
              61

            
	
              SECTION
                6.10. Use of Proceeds

            	
              62

            
	
              SECTION
                6.11. REIT Subsidiary

            	
              62

            
	 	 
	
              ARTICLE
                VII     NEGATIVE
                COVENANTS

            	
              62

            
	
              SECTION
                7.01. Minimum Adjusted Consolidated Tangible Net Worth

            	
              62

            
	
              SECTION
                7.02. Limitation on Indebtedness.

            	
              62

            
	
              SECTION
                7.03. Guaranties

            	
              63

            
	
              SECTION
                7.04. Sale of Assets; Acquisitions; Merger.

            	
              63

            
	
              SECTION
                7.05. Investments

            	
              64

            
	
              SECTION
                7.06. Disposition; Encumbrance or Issuance of Certain
                Stock

            	
              64

            
	
              SECTION
                7.07. Subordinated Debt

            	
              64

            
	
              SECTION
                7.08. Housing Units

            	
              64

            
	
              SECTION
                7.09. Construction in Progress

            	
              65

            
	
              SECTION
                7.10. No Margin Stock

            	
              65

            
	
              SECTION
                7.11. Mortgage Banking Subsidiaries’ Capital Ratio

            	
              65

            
	
              SECTION
                7.12. Transactions with Affiliates

            	
              65

            
	
              SECTION
                7.13. Restrictions on Advances to Mortgage Banking
                Subsidiaries

            	
              65

            
	
              SECTION
                7.14. Mortgage Banking Subsidiaries Adjusted Net Worth

            	
              66

            
	
              SECTION
                7.15. Investments in Land

            	
              66

            
	
              SECTION
                7.16. Liens and Encumbrances.

            	
              66

            

    

     

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	 	 
	
              ARTICLE
                VIII     PLEDGE OF
                MORTGAGE BANKING SUBSIDIARIES NOTE

            	
              66

            
	
              SECTION
                8.01. Mortgage Banking Subsidiaries Note.

            	
              67

            
	 	 
	
              ARTICLE
                IX     EVENTS OF
                DEFAULT

            	
              68

            
	
              SECTION
                9.01. Events of Default

            	
              68

            
	
              SECTION
                9.02. Remedies.

            	
              69

            
	
              SECTION
                9.03. Application of Payments

            	
              70

            
	 	 
	
              ARTICLE
                X     THE
                ADMINISTRATIVE AGENT

            	
              71

            
	
              SECTION
                10.01. Appointment

            	
              71

            
	
              SECTION
                10.02. Powers

            	
              71

            
	
              SECTION
                10.03. General Immunity

            	
              71

            
	
              SECTION
                10.04. No Responsibility for Loans, Recitals, Etc

            	
              71

            
	
              SECTION
                10.05. Employment of Agents and Counsel

            	
              72

            
	
              SECTION
                10.06. Reliance on Documents; Counsel

            	
              72

            
	
              SECTION
                10.07. No Waiver of Rights

            	
              72

            
	
              SECTION
                10.08. Knowledge of Event of Default

            	
              72

            
	
              SECTION
                10.09. Administrative Agent’s Reimbursement and
                Indemnification

            	
              73

            
	
              SECTION
                10.10. Notices to the Borrower

            	
              73

            
	
              SECTION
                10.11. Action on Instructions of Lenders

            	
              73

            
	
              SECTION
                10.12. Lender Credit Decision

            	
              73

            
	
              SECTION
                10.13. Mortgage Banking Subsidiaries Note.

            	
              74

            
	
              SECTION
                10.14. Resignation or Removal of the Administrative Agent

            	
              74

            
	
              SECTION
                10.15. Benefits of Article X

            	
              75

            
	 	 
	
              ARTICLE
                XI     SETOFF; RATABLE
                PAYMENTS

            	
              75

            
	
              SECTION
                11.01. Set-off

            	
              75

            
	
              SECTION
                11.02. Ratable Payments

            	
              75

            
	 	 
	
              ARTICLE
                XII     BENEFIT OF
                AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

            	
              75

            
	
              SECTION
                12.01. Successors and Assigns

            	
              76

            
	
              SECTION
                12.02. Assignments.

            	
              76

            
	
              SECTION
                12.03. Participations.

            	
              77

            
	
              SECTION
                12.04. Pledge to Federal Reserve Bank

            	
              77

            
	 	 
	
              ARTICLE
                XIII    
                MISCELLANEOUS

            	
              77

            
	
              SECTION
                13.01. Notice.

            	
              78

            
	
              SECTION
                13.02. Survival of Representations

            	
              78

            
	
              SECTION
                13.03. Expenses

            	
              78

            
	
              SECTION
                13.04. Indemnification of the Lenders and the Administrative
                Agent

            	
              78

            
	
              SECTION
                13.05. Maximum Interest Rate

            	
              79

            
	
              SECTION
                13.06. Modification of Agreement.

            	
              79

            
	
              SECTION
                13.07. Register

            	
              80

            
	
              SECTION
                13.08. Preservation of Rights

            	
              81

            
	
              SECTION
                13.09. Several Obligations of Lenders

            	
              81

            
	
              SECTION
                13.10. Severability

            	
              81

            
	
              SECTION
                13.11. Counterparts

            	
              81

            
	
              SECTION
                13.12. Loss, etc., Notes

            	
              81

            
	
              SECTION
                13.13. Governmental Regulation

            	
              82

            
	
              SECTION
                13.14. Taxes

            	
              82

            
	
              SECTION
                13.15. Headings

            	
              82

            
	
              SECTION
                13.16. USA PATRIOT ACT

            	
              82

            
	
              SECTION
                13.17. Entire Agreement

            	
              82

            
	
              SECTION
                13.18. CHOICE OF LAW

            	
              82

            
	
              SECTION
                13.19. CONSENT TO JURISDICTION

            	
              82

            
	
              SECTION
                13.20. WAIVER OF JURY TRIAL

            	
              83

            

    

    

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    SCHEDULES

     

    
      	
              Schedule

            	
              Description

            	
              References

            
	 	 	 
	
              I

            	
              Commitments

            	
              Definitions
                of Commitment and Lenders

            
	 	 	 
	
              II

            	
              Existing
                Letters Of
                Credit

            	
              Definitions
                of “Existing Letters Of
                Credit” and “Issuer”

            
	 	
               

            	
               

            
	
              III

            	
              Intentionally
                Deleted

            	 
	 	 	 
	
              IV

            	
              Permitted
                Liens

            	
              Definition

            
	 	 	 
	
              V

            	
              Consents

            	
              Section
                4.11

            
	 	 	 
	
              VI

            	
              Subsidiaries
                and Joint
                Ventures

            	
              Sections
                4.14 and 6.04(n)

            
	 	 	 
	
              VII

            	
              Guarantors

            	
              Definition

            
	 	 	 
	
              VIII

            	
              Subordinated
                Debt

            	
              Section
                4.18

            
	 	
               

            	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBITS

     

    
      	
              Exhibit

            	
              Description

            	
              Reference

            
	 	 	 
	
              A

            	
              Requirements
                for Entitled Land

            	
              Definition
                of “Entitled Land” 

            
	 	 	 
	
              B

            	
              Competitive
                Loan Note

            	
              Definition
                

            
	 	 	 
	C	
              
                Revolving
                  Loan Note

              

            	
              Definition

            
	 	 	 
	
              D

            	
              Swing
                Line Note

            	
              Definition

            
	 	 	 
	
              E

            	
              Guaranty

            	
              Definition

            
	 	 	 
	
              F

            	
              Pricing
                Grid

            	
              Definition

            
	 	 	 
	
              G

            	
              Commitment
                and Acceptance

            	
              Section
                2.17(a)

            
	 	 	 
	
              H

            	
              Compliance
                Report

            	
              Section
                6.04(i)

            
	 	 	 
	
              I

            	
              Assignment
                and Assumption

            	
              Section
                12.02(b)(ii)

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This
      CREDIT AGREEMENT, dated as of July 21, 2006, among LENNAR CORPORATION, a
      corporation organized and existing under the laws of the State of Delaware
      (the
“Borrower”), the lenders that are identified on the signature pages hereto
      (hereinafter collectively referred to as the “Lenders”), and JPMORGAN CHASE
      BANK, N.A., as Administrative Agent (the “Administrative Agent”).

    

    RECITALS

    

    WHEREAS,
      the Borrower, certain of the Lenders (and certain other lenders) and
      Administrative Agent are parties to that certain Credit Agreement dated as
      of
      June 17, 2005 (as amended, the “Existing Credit Agreement”);

    

    WHEREAS,
      the parties hereto desire to replace the Existing Credit Agreement.

    

    NOW,
      THEREFORE, the parties hereto hereby agree as follows:

    

    

    

    AGREEMENT

    

    

    ARTICLE
      I

     

    CERTAIN
      DEFINED TERMS

    SECTION
      1.01. Certain
      Defined Terms.
      As used
      herein, each of the following terms shall have the meaning ascribed to it below,
      which meaning shall be applicable to both the singular and plural forms of
      the
      terms defined:

    

    “ABR
      Advance”
means
      a
      Revolving Advance which bears interest at the Alternate Base Rate.

    

    “ABR
      Loan”
means
      a
      Revolving Loan which bears interest at the Alternate Base Rate.

    

    “Acquisition”
means
      any transaction, or any series of related transactions, consummated after the
      Closing Date, by which the Borrower or any of its Subsidiaries (a) acquires
      any
      going business or all or substantially all of the assets of any firm,
      corporation or division thereof, whether through purchase of assets, merger
      or
      otherwise or (b) directly or indirectly acquires (in one transaction or as
      the
      most recent transaction in a series of transactions) at least a majority (in
      the
      number of votes) of the Securities of a corporation which have ordinary voting
      power for the election of directors (other than Securities having such power
      only by reason of the happening of a contingency) or a majority (by percentage
      of voting power) of the outstanding equity interests of another
      Person.

    

    “Adjusted
      Consolidated Tangible Net Worth”
means,
      at any date, Consolidated Tangible Net Worth at such date less,
      to the
      extent not already deducted in the definition of Consolidated Tangible Net
      Worth, the consolidated stockholders’ equity of the Mortgage Banking
      Subsidiaries.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Adjusted
      LIBO Rate”
means,
      with respect to any Eurodollar Advance for any Interest Period, an interest
      rate
      per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to
      (a)
      the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve
      Rate.

    

    “Administrative
      Agent”
means
      JPMorgan Chase Bank, N.A. in its capacity as Administrative Agent for the
      Lenders pursuant to Article
      X,
      and not
      in its individual capacity as a Lender, and any successor Administrative Agent
      appointed pursuant to Article
      X.

    

    “Advance”
means
      (a) any Revolving Advance, (b) any Competitive Loan and (c) any Swing Line
      Loan.

    

    “Affiliate”
of
      any
      Person means any other Person directly or indirectly controlling, controlled
      by
      or under common control with such Person. Solely for purposes of this
      definition, a Person shall be deemed to control another Person if the
      controlling Person owns 50% or more of any class of voting securities (or other
      ownership interests) of the controlled Person or possesses, directly or
      indirectly, the power to direct or cause the direction of the management or
      policies of the controlled Person, whether through ownership of stock, by
      contract or otherwise.

    

    “AFSI”
means
      Ameristar Financial Services, Inc.

    

    “Aggregate
      Commitment”
means
      $2,700,000,000 as such amount may be increased from time to time pursuant
      to
Section
      2.17
      hereof
      or reduced from time to time pursuant to the terms of this
      Agreement.

    

    “Aggregate
      Credit Exposure”
means
      at any time the sum of the outstanding principal balance of all Revolving
      Advances, the outstanding principal balance of all Competitive Loans, the
      outstanding principal balance of all Swing Line Loans and all Facility Letter
      of
      Credit Obligations.

    

    “Aggregate
      Letter of Credit Commitment”
means
      $1,000,000,000, as such amount may be reduced from time to time pursuant to
      the
      terms hereof.

    

    “Agreement”
means
      this Credit Agreement, including the exhibits and schedules hereto, as it may
      be
      amended, renewed, modified or restated and in effect from time to
      time.

    

    “Agreement
      Date”
      means
      July 21, 2006.

    

    “Alternate
      Base Rate”
means,
      for any day, a rate per annum equal to the greatest of (a) the Prime Rate in
      effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
      (c)
      the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1%. Any change
      in the Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate
      or the Federal Funds Effective Rate shall be effective from and including the
      effective date of such change in the Prime Rate, the Base CD Rate or the Federal
      Funds Effective Rate, respectively.

    

    “Applicable
      Facility Fee Rate”
means
      a
      rate per annum equal to the “Facility Fee” as determined from time to time
      pursuant to the Pricing Grid.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Applicable
      Margin”
means
      a
      rate per annum equal to the “Applicable Margin for Eurodollar Loans” as
      determined from time to time pursuant to the Pricing Grid.

    

    “Approved
      Fund”
means
      any Person (other than a natural person) that is engaged in making, purchasing,
      holding or investing in bank loans and similar extensions of credit in the
      ordinary course of its business and that is administered or managed by (a)
      a
      Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
      entity that administers or manages a Lender.

    

    “Article”
means
      an article of this Agreement unless another document is specifically
      referenced.

    

    “Assessment
      Rate”
means,
      for any day, the annual assessment rate in effect on such day that is payable
      by
      a member of the Bank Insurance Fund classified as “well-capitalized” and within
      supervisory subgroup “B” (or a comparable successor risk classification) within
      the meaning of 12 C.F.R. Part 327 (or any successor provision) to the Federal
      Deposit Insurance Corporation for insurance by such Corporation of time deposits
      made in dollars at the offices of such member in the United States; provided
      that if,
      as a result of any change in any law, rule or regulation, it is no longer
      possible to determine the Assessment Rate as aforesaid, then the Assessment
      Rate
      shall be such annual rate as shall be determined by the Administrative Agent
      to
      be representative of the cost of such insurance to the Lenders.

    

    “Assignment
      and Assumption”
is
      defined in Section
      12.02(b)(ii).

    

    “Authorized
      Financial Officer”
means
      any of the chief financial officer, treasurer or controller of the
      Borrower.

    

    “Authorized
      Officer”
means
      any of an Authorized Financial Officer, chief executive officer, president
      or
      general counsel of the Borrower, or any duly appointed successors to them or
      other Person duly designated by the Borrower, in each case designated by the
      Borrower in writing to act as an Authorized Officer hereunder, acting
      singly.

    

    “Base
      CD Rate”
means
      the sum of (a) the Three-Month Secondary CD Rate multiplied by the Statutory
      Reserve Rate plus (b) the Assessment Rate.

    

    “Board”
means
      the Board of Governors of the Federal Reserve System of the United States of
      America.

    

    “Borrower”
is
      defined in the introductory paragraph of this Agreement.

    

    “Borrower
      Audited Financial Statements”
is
      defined in Section
      4.03.

    

    “Borrower
      Unaudited Financial Statements”
is
      defined in Section
      4.03.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Borrowing
      Base”
means,
      from time to time, the sum of the following amounts, all as reflected from
      time
      to time in accordance with GAAP consistently applied in the consolidated balance
      sheet of the Borrower: (a) 100% of the Loan Parties’ unrestricted cash up to a
      maximum of $30,000,000 (with any excess cash being excluded from the Borrowing
      Base); (b) 100% of the Net Housing Unit Proceeds due to any Loan Party at
      closing as a result of the consummation of the sale of any Housing Unit, which
      Net Housing Unit Proceeds have been paid to the closing agent handling such
      sale
      but which have not yet been received by such Loan Party; provided,
      however, that
      if,
      and to the extent that, such Net Housing Unit Proceeds which are reported as
      outstanding on the last day of any fiscal quarter of the Borrower are not
      received by such Loan Party on or before the tenth (10th) day following the
      end
      of any such fiscal quarter, such Net Housing Unit Proceeds shall not be included
      in the Borrowing Base; (c) 90% of the Net Book Value of all Housing Units Under
      Contract; (d) 75% of the Net Book Value of all Housing Units (including, without
      limitation, model Housing Units) that are not subject to a contract for sale;
      (e) 70% of the Net Book Value of all Finished Lots; (f) 50% of the Net Book
      Value of all Land Under Development; and (g) 30% of the Net Book Value of all
      Unimproved Entitled Land, provided
      that
      the
      sum of the amounts determined pursuant to clauses
      (f)
      and
(g)
      shall
      not exceed 40% of the Borrowing Base (with any excess being excluded from the
      Borrowing Base); provided
      further, that
      notwithstanding anything to the contrary provided herein, any asset which is
      encumbered by a Lien (other than a Lien described in clauses
      (b),
      (c),
      (e)
      or
(j)
      of the
      definition of “Permitted Liens”) shall not be included in the calculation of the
      Borrowing Base pursuant to clauses
      (a)
      through
(g)
      above.

    

    “Borrowing
      Base Debt”
means
      all Consolidated Indebtedness, including without limitation the Obligations
      but
      excluding (a) any Subordinated Debt of the Borrower and (b) any Non-Recourse
      Indebtedness secured solely by Real Estate that is owned by any Loan Party
      and
      that, if the same did not secure such Indebtedness, would be included in the
      determination of the Borrowing Base.

    

    “Borrowing
      Base Limitation”
is
      defined in Section
      7.02.

    

    “Borrowing
      Date”
means
      a
      date on which an Advance is made hereunder.

    

    “Borrowing
      Notice”
is
      defined in Section
      2.06.

    

    “Business
      Day”
means
      (a) with respect to any borrowing, payment or rate selection of Eurodollar
      Advances, a day (other than a Saturday or Sunday) on which banks are open for
      business in Chicago, Illinois and New York, New York and on which dealings
      in
      United States dollars are carried on in the London interbank market, (b) with
      respect to Facility Letters of Credit, a day (other than a Saturday or Sunday)
      on which banks are open for business in Chicago, Illinois, New York, New York,
      and the city in which the office of the applicable Issuer is located and (c)
      for
      all other purposes, a day (other than a Saturday or Sunday) on which banks
      are
      open for business in Chicago, Illinois and New York, New York.

    

    “Capitalized
      Lease”
of
      a
      Person means any lease of property by such Person as lessee which would be
      capitalized on a balance sheet of such Person prepared in accordance with
      GAAP.

    

    “Capitalized
      Lease Obligations”
of
      a
      Person means the amount of the obligations of such Person under Capitalized
      Leases which would be shown as a liability on a balance sheet of such Person
      prepared in accordance with GAAP.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Capitalized
      Mortgage Servicing”
of
      the
      Mortgaged Banking Subsidiaries means, at any date, the following capitalized
      assets of the Mortgaged Banking Subsidiaries net of any amortization or write
      downs with respect thereto, all as determined in accordance with GAAP: (a)
      purchased mortgage servicing rights, (b) originated mortgage servicing rights
      and (c) excess servicing.

    

    “Capital
      Stock”
means,
      with respect to any corporation, any and all shares, interests, rights to
      purchase (other than convertible or exchangeable Indebtedness), warrants,
      options, participations or other equivalents of or interests (however
      designated) in stock issued by that corporation.

    

    “Change
      in Control”
means
      the acquisition by any Person, or two or more Persons acting in concert, of
      beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
      Exchange Commission under the Securities Exchange Act of 1934, as amended)
      of
      the outstanding shares of voting stock of the Borrower that hold in excess
      of
      50% of the voting rights held by all stockholders of all classes of common
      stock
      of the Borrower.

    

    “Change
      in Status”
means
      an event that results in a Subsidiary that was a Guarantor (a “Status
      Capacity”), for legitimate business reasons, without any intent to avoid any
      requirements of this Agreement, ceasing to have an obligation under this
      Agreement to be a Guarantor, which legitimate business reasons may include
      (i) a
      former wholly-owned Subsidiary of Borrower ceasing, for legitimate business
      reasons, to be wholly-owned by Borrower, including as a result of (A) a Person
      that is not a wholly-owned Subsidiary of Borrower acquiring an ownership
      interest in such wholly-owned Subsidiary of Borrower in a bona fide transaction,
      or (B) the dissolution of such wholly-owned Subsidiary, (ii) the entry by such
      Subsidiary into a bona fide agreement with an unaffiliated third person for
      legitimate business reasons as a result of which a wholly-owned Subsidiary
      that
      was a Guarantor is required not to be a Guarantor or (iii) a Guarantor ceasing
      to be a Material Subsidiary.

    

    “Closing
      Date”
means
      the date on which the Lenders shall first become obligated to make Advances
      after satisfaction or waiver of all of the conditions precedent set forth in
      Sections
      5.01
      and
5.02.

    

    “Code”
means
      the Internal Revenue Code of 1986, as amended, reformed or otherwise modified
      from time to time.

    

    “Commitment”
means,
      for each of the Lenders, the obligation of such Lender to make Revolving Loans
      hereunder and to purchase participations in Facility Letters of Credit hereunder
      in the aggregate not exceeding the amount set forth on Schedule
      1
      hereto
      as its “Commitment,” as such amount may be decreased from time to time pursuant
      to the terms hereof or increased pursuant to Section
      2.17
      hereof;
provided,
      however,
      that
      the Commitment of a Lender may not be increased without its prior written
      approval.

    

    “Commitment
      and Acceptance”
is
      defined in Section
      2.17(a).

    

    “Commitment
      Increase”
is
      defined in Section
      2.17(a).

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    “Competitive
      Bid”
means
      an offer by a Lender to make a Competitive Loan in accordance with Section
      2.09.

    

    “Competitive
      Bid Rate”
means,
      with respect to any Competitive Bid, the fixed rate of interest per annum
      offered by the Lender making such Competitive Bid.

    

    “Competitive
      Bid Request”
means
      a
      request by the Borrower for Competitive Bids in accordance with Section
      2.09.

    

    “Competitive
      Loan”
means
      a
      Loan made pursuant to Section
      2.09.

    

    “Competitive
      Loan Note”
means
      a
      promissory note in substantially the form of Exhibit
      B
      hereto
      payable to the order of a Lender evidencing any Competitive Loan made by such
      Lender, including any amendment, modification, renewal, restatement or
      replacement of such note.

    

    “Completed
      Housing Unit”
means,
      at any time, a Housing Unit the construction of which was commenced more than
      10
      months, in the case of a single family home, more than 12 months, in the case
      of
      a townhouse, or more than 18 months, in the case of a condominium, before that
      time or was completed prior to the expiration of the applicable
      period.

    

    “Consolidated
      EBITDA”
means,
      for any period, the Consolidated Net Income of the Loan Parties plus, to the
      extent deducted from revenues in determining Consolidated Net Income, (a)
      Consolidated Interest Expense, (b) expense for income taxes paid or accrued,
      (c)
      depreciation, (d) amortization and (e) extraordinary losses incurred other
      than
      in the ordinary course of business, minus, to the extent included in
      Consolidated Net Income, extraordinary gains realized other than in the ordinary
      course of business, all calculated for the Loan Parties (and excluding the
      Mortgage Banking Subsidiaries and any other Subsidiary of the Borrower that
      is
      not a Loan Party) on a consolidated basis. 

    

    “Consolidated
      Indebtedness”
means
      the Indebtedness of the Borrower and its Subsidiaries on a consolidated basis,
      and shall not include (i) Indebtedness of any Mortgage Banking Subsidiary,
      (ii)
      Indebtedness of a Loan Party to the REIT Subsidiary or (iii) any other
      Indebtedness of a Loan Party to another Loan Party.

    

    “Consolidated
      Interest Expense”
means,
      for any period, the interest charged to cost of sales of the Loan Parties (and
      excluding the Mortgage Banking Subsidiaries and any other Subsidiary of the
      Borrower that is not a Loan Party) calculated on a consolidated basis for such
      period.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Consolidated
      Interest Incurred”
means,
      for any period, the aggregate amount (without duplication and determined in
      each
      case in accordance with GAAP) of (a) interest (excluding interest on
      Indebtedness of a Loan Party to another Loan Party) incurred, whether such
      interest was expensed or capitalized, paid, accrued, or scheduled to be paid
      or
      accrued by any of the Loan Parties (and excluding the Mortgage Banking
      Subsidiaries and any other Subsidiary of the Borrower that is not a Loan Party)
      during such period, including (i) original issue discount and non-cash interest
      payments or accruals, (ii) the interest portion of all deferred payment
      obligations, and (iii) all commissions, discounts and other fees and charges
      owed with respect to bankers’ acceptances and letter of credit financings and
      interest swap and Hedging Obligations, in each case to the extent attributable
      to such period plus (b) the amount of dividends accrued or payable by the Loan
      Parties (and excluding the Mortgage Banking Subsidiaries and any other
      Subsidiary of the Borrower that is not a Loan Party) in respect of Disqualified
      Capital Stock (excluding any amount payable to any Loan Party), which amount
      shall be “grossed up” to include applicable taxes on income that would be used
      to pay such dividends, provided,
      however, that
      interest, dividends or other payments or accruals of a consolidated Subsidiary
      that is not wholly owned shall be included only to the extent of the interest
      of
      such Person in such Subsidiary. For purposes of this definition, (x) interest
      on
      Capitalized Lease Obligations shall be deemed to accrue at an interest rate
      reasonably determined by the Borrower to be the rate of interest implicit in
      such Capitalized Lease Obligations in accordance with GAAP and (y) interest
      expense attributable to any Indebtedness represented by the guaranty of an
      obligation of another Person shall be deemed to be the interest expense
      attributable to the Indebtedness guaranteed.

    

    “Consolidated
      Net Income”
means,
      with respect to any Person for any period, the net income (or loss) of such
      Person and its Subsidiaries for such period, determined on a consolidated basis
      in accordance with GAAP; provided,
      that
      (a)
      the net income (or loss) of any other Person acquired by such specified Person
      or a Subsidiary of such Person in a pooling of interests transaction for any
      period prior to the date of such acquisition shall be excluded, (b) all gains
      and losses which are either extraordinary (as determined in accordance with
      GAAP) or are either unusual or nonrecurring (including any gain from the sale
      or
      other disposition of assets outside the ordinary course of business or from
      the
      issuance or sale of any Capital Stock), shall be excluded, and (c) the net
      income, if positive, of any of such Person’s consolidated Subsidiaries (other
      than non-guarantor Subsidiaries) to the extent that the declaration or payment
      of dividends or similar distributions is not at the time permitted by operation
      of the terms of its charter or bylaws or any other agreement, instrument,
      judgment, decree, order, statute, rule or governmental regulation applicable
      to
      such consolidated Subsidiary shall be excluded, provided,
      however, in
      the
      case of exclusions from Consolidated Net Income set forth in clauses (a), (b)
      and (c) above, such amounts shall be excluded only to the extent included in
      computing such net income (or loss) in accordance with GAAP and without
      duplication; provided
      further, however, that
      for
      purposes of determining Consolidated Net Income of the Loan Parties, the net
      income of the Mortgage Banking Subsidiaries and any other Subsidiary of the
      Borrower that is not a Loan Party shall be excluded.

    

    “Consolidated
      Tangible Net Worth”
means,
      at any date, the Net Worth of the Borrower and its Subsidiaries less the
      aggregate amount of all goodwill and other assets that are properly classified
      as “intangible assets” at such date in accordance with GAAP.

    

    “Contingent
      Obligation”
of
      a
      Person means any agreement, undertaking or arrangement by which such Person
      assumes, guarantees, endorses, contingently agrees to purchase or provide funds
      for the payment of, or otherwise becomes or is contingently liable upon, the
      obligation or liability of any other Person, or agrees to maintain the net
      worth
      or working capital or other financial condition of any other Person, or
      otherwise assures any creditor of such other Person against loss, including,
      without limitation, any comfort letter, operating agreement, take-or-pay
      contract, “put” agreement or other similar arrangement, but excluding Repurchase
      Guaranties. With respect to the Borrower and its Subsidiaries (other than the
      Mortgage Banking Subsidiaries), Contingent Obligation includes, without
      limitation of the foregoing, obligations under reimbursement agreements with
      financial institutions (including the Lenders) relating to Letters of Credit
      (other than Performance Letters of Credit) issued by such financial institutions
      for the account of such Person and does not include reimbursement obligations
      to
      an issuer of a performance bond.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    “Controlled
      Group”
means
      all members of a controlled group of corporations and all trades or businesses
      (whether or not incorporated) under common control which, together with the
      Borrower or any of its Subsidiaries, are treated as a single employer under
      Section 414 of the Code.

    

    “Conversion/Continuation
      Notice”
is
      defined in Section
      2.07(d).

    

    “Default
      Rate”
means,
      for any day, a rate per annum equal to the sum of (a) the Alternate Base Rate
      for such date plus (b) two percent (2%) per annum.

    

    “Disqualified
      Capital Stock”
means
      (a) except as set forth in clause (b) below, with respect to any Person, Capital
      Stock of such Person that, by its terms or by the terms of any security into
      which it is convertible, exercisable or exchangeable, is, or upon the happening
      of an event or the passage of time would be, required to be redeemed or
      repurchased (including at the option of the holder thereof) by such Person
      or
      any of its Subsidiaries, in whole or in part, on or prior to the stated maturity
      of the securities, and (b) with respect to any Subsidiary of such Person
      (including with respect to any Subsidiary of the Borrower), any Capital Stock
      other than any common stock with no preference, privileges, or redemption or
      repayment provisions.

    

    “Dollars”
and
      the
      sign “$” each means lawful money of the United States of America.

    

    “Eligible
      Assignee”
means
      a
      commercial bank, financial institution, other “accredited investor” (as defined
      in Regulation D of the Securities Act) or a “qualified institutional buyer” as
      defined in Rule 144A of the Securities Act.

    

    “Entitled
      Land”
means
      a
      parcel of Real Estate owned by a Loan Party which is to be developed primarily
      for residential dwelling units and which satisfies the requirements for the
      state and county wherein it is located as more particularly described in the
      Requirements for Entitled Land attached hereto as Exhibit
      A.

    

    “Environmental
      Laws”
means
      any and all federal, state, local and foreign statutes, laws, judicial
      decisions, regulations, ordinances, rules, judgments, orders, decrees, plans,
      injunctions, permits, concessions, grants, franchises, licenses, agreements
      and
      other governmental restrictions relating to (a) the protection of the
      environment, (b) the effect of the environment on human health, (c) emissions,
      discharges or releases of pollutants, contaminants, Hazardous Substances or
      wastes into surface water, ground water or land, or (d) the manufacture,
      processing, distribution, use, treatment, storage, disposal, transport or
      handling of pollutants, contaminants, Hazardous Substances or wastes or the
      clean-up or other remediation thereof.

    

    “Equity
      Investment”
means
      the ownership of, or participation in the ownership of, an equity interest
      in
      Real Estate or an equity interest in a Person in the business of owning,
      developing, improving, operating or managing Real Estate.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time, and any rule or regulation issued thereunder.

    

    “Eurodollar
      Advance”
means
      a
      Revolving Advance which bears interest at a Eurodollar Rate.

    

    “Eurodollar
      Loan”
means
      a
      Revolving Loan which bears interest at a Eurodollar Rate.

    

    “Eurodollar
      Rate”
means,
      with respect to a Eurodollar Advance for the relevant Interest Period, the
      sum
      of (a) the Adjusted LIBO Rate applicable to such Interest Period plus (b) the
      Applicable Margin.

    

    “Event”
means
      an event, circumstance, condition or state of facts.

    

    “Event
      of Default”
is
      defined in Section
      9.01.

    

    “Excluded
      Subsidiaries”
means
      the following Subsidiaries of Borrower (none of which is required to be a
      Guarantor hereunder): (a) the Mortgage Banking Subsidiaries; (b) any Joint
      Venture Subsidiary with respect to which the terms of the agreement creating
      such Joint Venture prohibit the joint venturers therein from being or becoming
      liable for any Indebtedness other than Indebtedness of such Joint Venture;
      (c)
      any Subsidiary that under applicable laws or regulations (such as, by way of
      example, laws regulating insurance companies or providers of cable services)
      is
      prohibited from delivering a Guaranty; and (d) any Subsidiary that is not a
      Wholly-Owned Subsidiary.

    

    “Existing
      Borrower Public Debt”
means
      the Borrower’s 7-5/8% Senior Notes due 2009, 5.95% Senior Notes due 2013, 5.5%
      Senior Notes due 2014, 5.6% Senior Notes due 2015, Senior Floating Rate Notes
      due 2007, Senior Floating-Rate Note due 2009, 5.125% Senior Notes due 2010,
      5.95% Senior Notes due 2016 and 6.50% Senior Notes due 2016.

    

    “Existing
      Credit Agreement”
is
      defined in the Recitals. 

    

    “Existing
      Letters of Credit”
means
      the outstanding Letters of Credit listed in Schedule
      II
      hereto
      issued for the account of the Borrower prior to the Agreement Date by the
      applicable Lender identified in Schedule
      II.

    

    “Extension
      Request”
is
      defined in Section
      2.23.

    

    “Facility
      Fee”
means
      the fee provided for in Section
      2.04(a).

    

    “Facility
      Letter of Credit”
means
      (a) each of the Existing Letters of Credit and (b) a Letter of Credit issued
      by
      an Issuer pursuant to Section
      2.18.

    

    “Facility
      Letter of Credit Fee”
is
      defined in Section
      2.18(f).

    

    “Facility
      Letter of Credit Fee Rate”
means
      a
      rate per annum equal to the Applicable Margin in effect from time to time during
      the term of any Facility Letter of Credit.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    “Facility
      Letter of Credit Obligations”
means,
      as at the time of determination thereof, without duplication, an amount equal
      to
      the sum of (a) the aggregate of the amount then available for drawing under
      each
      of the Facility Letters of Credit, (b) the face amount of all outstanding drafts
      on Facility Letters of Credit, which drafts have been honored by the applicable
      Issuer, (c) the aggregate amount of all Reimbursement Obligations at such time
      and (d) the face amount of all Facility Letters of Credit requested by the
      Borrower but not yet issued (unless the request for an unissued Facility Letter
      of Credit has been denied or revoked).

    

    “Federal
      Funds Effective Rate”
means,
      for any day, the weighted average (rounded upwards, if necessary, to the next
      1/100 of 1%) of the rates on overnight Federal funds transactions with members
      of the Federal Reserve System arranged by Federal funds brokers, as published
      on
      the next succeeding Business Day by the Federal Reserve Bank of New York, or,
      if
      such rate is not so published for any day that is a Business Day, the average
      (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations
      for
      such day for such transactions received by the Administrative Agent from three
      Federal funds brokers of recognized standing selected by it.

    

    “Fee
      Letter”
means
      that certain letter dated June 13, 2006 from JPMSI and the Administrative Agent
      to the Borrower, and accepted by the Borrower on June 13, 2006.

    

    “Finished
      Lot”
means
      a
      parcel of Entitled Land which satisfies the requirements for Land Under
      Development and in which the owner (including any prior owner) thereof has
      invested 85% or more of the cost to complete the Improvements thereon, and
      which
      constitutes a valid, legally subdivided lot within the meanings of the
      applicable laws of the states, county and/or municipality within which it is
      located, and other requirements governing the subdivision of land and
      constitutes a lot reflected on a duly recorded plat, subdivision map or parcel
      map in compliance with the requirements of all applicable laws and other
      requirements governing the subdivision of land and approved by the appropriate
      Governmental Authority.

    

    “Fitch”
means
      Fitch, Inc. or any Person succeeding to the securities rating business of such
      company.

    

    “GAAP”
means
      United States generally accepted accounting principles set forth in the opinions
      and pronouncements of the Accounting Principles Board of the American Institute
      of Certified Public Accountants and pronouncements of the Financial Accounting
      Standards Board or in such other statements by such other entity as approved
      by
      a significant segment of the accounting profession as in effect as of the
      Agreement Date, applied on a consistent basis from time to time.

    

    “Governmental
      Authority”
means
      any foreign governmental authority, the United States of America, any state
      of
      the United States of America and any subdivision of any of the foregoing, and
      any agency, department, commission, board, authority or instrumentality, bureau
      or court having jurisdiction over the Lender, the Borrower, any Subsidiaries
      of
      the Borrower or any of their respective properties.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    “Guarantor”
means
      each Subsidiary of the Borrower that executes a Guaranty (including, if
      applicable, a Supplemental Guaranty) pursuant to
      Section 5.01(b)
      or
Section
      6.07
      of this
      Agreement. The Guarantors as of the Closing Date are listed in Schedule
      VII
      hereto.

    

    “Guaranty”
means
      each of those certain guaranties executed pursuant to Section
      5.01(b)
      on the
      Closing Date or from time to time after the Closing Date pursuant to
Section
      6.07
      by
      Subsidiaries of the Borrower, in substantially the form of Exhibit
      E
      hereto,
      in each case in favor of the Administrative Agent, for the benefit of the
      Lenders, as any such guaranties may be amended, restated, supplemented
      (including by delivery of a Supplemental Guaranty) or otherwise modified from
      time to time.

    

    “Hazardous
      Substances”
means
      any toxic or hazardous wastes, pollutants or substances, including, without
      limitation, asbestos, PCBs, petroleum products and by-products, substances
      defined or listed as “hazardous substances” or “toxic substances” or similarly
      identified in or pursuant to the Comprehensive Environmental Response,
      Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9061
et seq.,
      hazardous materials identified in or pursuant to the Hazardous Materials
      Transportation Act 49 U.S.C. § 1802 et seq.,
      hazardous wastes identified in or pursuant to The Resource Conservation and
      Recovery Act, 42 U.S.C. § 6901 et seq.,
      any
      chemical substance or mixture regulated under the Toxic Substance Control Act
      of
      1976, as amended, 15 U.S.C. § 2601 et seq.,
      any
“toxic pollutant” under the Clean Water Act, 33 U.S.C. § 466 et seq.,
      as
      amended, any hazardous air pollutant under the Clean Air Act, 42 U.S.C. § 7401
et seq.,
      and
      any hazardous or toxic substance or pollutant regulated under any other
      applicable federal, state or local Environmental Laws.

    

    “Hedging
      Obligations”
of
      a
      Person means any and all obligations of such Person, whether absolute or
      contingent and howsoever and whensoever created, arising, evidenced or acquired
      (including all renewals, extensions and modifications thereof and substitutions
      therefor), under (a) any and all agreements, devices or arrangements designed
      to
      protect at least one of the parties thereto from the fluctuations of interest
      rates, commodity prices, exchange rates or forward rates applicable to such
      party’s assets, liabilities or exchange transactions, including, but not limited
      to, dollar-denominated or cross-currency interest rate exchange agreements,
      forward currency exchange agreements, interest rate cap or collar protection
      agreements, forward rate currency or interest rate options, puts and warrants,
      and (b) any and all cancellations, buy backs, reversals, terminations or
      assignments of any of the foregoing.

    

    “Housing
      Unit”
means
      a
      residential housing unit owned by a Loan Party that is (or, upon completion
      of
      construction thereof, will be) available for sale.

    

    “Housing
      Unit Closing”
means
      a
      closing of the sale of a Housing Unit by a Loan Party to a bona fide purchaser
      for value that is not an Affiliate of a Loan Party.

    

    “Housing
      Unit Under Contract”
means
      a
      Housing Unit owned by a Loan Party as to which such Loan Party has a bona fide
      contract of sale, in a form customarily employed by such Loan Party and
      reasonably satisfactory to the Administrative Agent, entered into not more
      than
      15 months prior to the date of determination with a Person who is not an
      Affiliate of a Loan Party, under which contract no defaults then exist;
provided,
      however, that
      in
      the case of any Housing Unit the purchase of which is to be financed in whole
      or
      in part by a loan insured by the Federal Housing Administration or guaranteed
      by
      the Veterans Administration, the minimum down payment shall be the amount (if
      any) required under the rules of the relevant agency.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    “Improvements”
means
      on and off-site development work, including but not limited to filling to grade,
      main water distribution and sewer collection systems and drainage system
      installation, paving, and other improvements necessary for the use of
      residential dwelling units and as required pursuant to development agreements
      which may have been entered into with Governmental Authorities.

    

    “Indebtedness”
of
      any
      Person means, without duplication, (a) all liabilities and obligations,
      contingent or otherwise, of such Person, (i) in respect of borrowed money
      (whether or not the recourse of the lender is to the whole of the assets of
      such
      Person or only to a portion thereof), (ii) evidenced by bonds, notes, debentures
      or similar instruments, (iii) representing the balance deferred and unpaid
      of
      the purchase price of any property or services, except those incurred in the
      ordinary course of its business that would constitute ordinarily a trade payable
      to trade creditors (but specifically excluding from such exception the deferred
      purchase price of Real Estate), (iv) evidenced by bankers’ acceptances, (v)
      consisting of obligations, whether or not assumed, secured by Liens or payable
      out of the proceeds or production from property now or hereafter owned or
      acquired by such Person, (vi) consisting of Capitalized Lease Obligations
      (including any Capitalized Leases entered into as a part of a sale/leaseback
      transaction), (vii) consisting of liabilities and obligations under any
      receivable sales transactions, (viii) consisting of a Letter of Credit, other
      than a Performance Letter of Credit, or a reimbursement obligation of such
      Person with respect to any Letter of Credit, (ix) consisting of Hedging
      Obligations, (x) consisting of Off-Balance Sheet Liabilities or (xi) consisting
      of Contingent Obligations; and (b) obligations of such Person to purchase
      Securities or other property arising out of or in connection with the sale
      of
      the same or substantially similar securities or property. With respect to the
      Borrower, Indebtedness includes, without limitation of the foregoing, (x) the
      Loans and (y) the Borrower’s and any Subsidiary’s pro rata shares of the
      Indebtedness of any Joint Venture.

    

    “Interest
      Coverage Ratio”
on
      any
      date means the ratio of (a) Consolidated EBITDA for the four fiscal quarters
      ended on such date to (b) total Consolidated Interest Incurred for such fiscal
      quarters.

    

    “Interest
      Period”
means
      (a) with respect to any Eurodollar Advance, the period commencing on the date
      of
      such Eurodollar Advance and ending seven days or fourteen days thereafter or
      on
      the numerically corresponding day in the calendar month that is one, two, three
      or six months thereafter, as the Borrower may elect, and (b) with respect to
      any
      Competitive Loan, the period (which shall not be less than five days or more
      than thirty days) commencing on the date of such Competitive Loan and ending
      on
      the date specified in the applicable Competitive Bid Request; provided,
      that
      (i) if any Interest Period would end on a day other than a Business Day, such
      Interest Period shall be extended to the next succeeding Business Day unless
      (but only in the case of a Eurodollar Advance for an Interest Period in excess
      of fourteen days) such next succeeding Business Day would fall in the next
      calendar month, in which case such Interest Period shall end on the next
      preceding Business Day and (ii) any Interest Period in excess of fourteen days
      pertaining to a Eurodollar Advance that commences on the last Business Day
      of a
      calendar month (or on a day for which there is no numerically corresponding
      day
      in the last calendar month of such Interest Period) shall end on the last
      Business Day of the last calendar month of such Interest Period. For purposes
      hereof, the date of an Advance initially shall be the date on which such Advance
      is made and, in the case of a Revolving Advance, thereafter shall be the
      effective date of the most recent conversion or continuation of such
      Advance.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    “Investment”
of
      a
      Person means any loan, advance (other than commission, travel and similar
      advances to officers and employees made in the ordinary course of business),
      extension of credit (other than accounts receivable arising in the ordinary
      course of business on terms customary in the trade), deposit account or
      contribution of capital by such Person to any other Person or any investment
      in,
      or purchase or other acquisition of, the stock, partnership interests,
      membership interests, notes, debentures or other securities of any other Person
      made by such Person.

    

    “Investment
      Grade Rating”
means
      a
      senior unsecured public debt rating of BBB- or higher or
      Baa3 or
      higher.

    

    “Issuance
      Date”
is
      defined in Section
      2.18(c)(i)(B).

    

    “Issuance
      Notice”
is
      defined in Section
      2.18(c)(iii).

    

    “Issuer”
means,
      with respect to each Existing Letter of Credit, the Issuer thereof identified
      in
Schedule
      II,
      and
      with respect to each Facility Letter of Credit issued on or after the Closing
      Date, JPMorgan Chase Bank or such other Lender selected by the Borrower with
      the
      approval of the Administrative Agent, to issue such Facility Letter of Credit,
      provided
      such
      other Lender consents to act in such capacity. An Issuer may, in its discretion,
      arrange for one or more Facility Letters of Credit to be issued by Affiliates
      of
      such Issuer, in which case the term “Issuer” shall include any such Affiliate
      with respect to Facility Letters of Credit issued by such
      Affiliate.

    

    “Joint
      Lead Arrangers”
means
      JPMSI and Deutsche Bank Securities, Inc.

    

    “Joint
      Venture”
means
      a
      joint venture (whether in the form of a corporation, a partnership, limited
      liability company or otherwise) (a) to which the Borrower or a Joint Venture
      Subsidiary is or becomes a party (other than tenancies in common), (b) whether
      or not Borrower is required to consolidate the joint venture in its financial
      statements in accordance with GAAP, and (c) in which the Borrower or any Joint
      Venture Subsidiary has or will have a total investment exceeding $25,000 or
      which has total assets plus contingent liabilities exceeding $100,000. For
      the
      purposes of this definition, the Borrower’s or Joint Venture Subsidiary’s
      investment in a joint venture shall be deemed to include any Securities of
      the
      joint venture owned by the Borrower or any Joint Venture Subsidiary, any loans,
      advances or accounts payable to the Borrower or any Joint Venture Subsidiary
      from the joint venture, any commitment, arrangement or other agreement by the
      Borrower or any Joint Venture Subsidiary to provide funds or credit to the
      joint
      venture and the Borrower’s or Joint Venture Subsidiary’s share of the
      undistributed profits of the joint venture.

    

    “Joint
      Venture Subsidiary”
means
      a
      Subsidiary of the Borrower which is a partner, shareholder or other equity
      owner
      in a Joint Venture which is not a Loan Party.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    “JPMorgan
      Chase Bank”
means
      JPMorgan Chase Bank, N.A., in its individual capacity, and its
      successors.

    

    “JPMSI”
means
      J.P. Morgan Securities Inc., one of the Joint Lead Arrangers
      hereunder.

    

    “Land
      Under Development”
means
      Entitled Land upon which construction of Improvements has commenced but not
      been
      completed and for which: (a) to the extent required, a performance bond, surety
      or other security has been issued to and in favor of and unconditionally
      accepted by each local agency and all relevant Governmental Authorities,
      including any municipal utility district in which the Real Estate is situated
      with regard to all work to be performed pursuant to each and all of said
      subdivision improvement agreements or other agreements; (b) all necessary plans
      have been approved by all relevant Governmental Authorities for the installation
      of any and all Improvements required to be installed upon such Real Estate;
      (c)
      all necessary permits have been issued for the installation of said
      Improvements; and (d) utility services necessary for construction of
      Improvements and residential dwelling units and the operation thereon for the
      purpose intended will be available to such Real Estate upon completion of the
      Improvements and there exists a binding obligation on the part of each and
      every
      utility company to deliver necessary utility services to such Real
      Estate.

    

    “Lenders”
means
      the Persons listed on Schedule
      I
      and any
      other Person that shall have become a party hereto pursuant to a Commitment
      and
      Acceptance or an Assignment and Assumption, other than any such Person that
      ceases to be a party hereto pursuant to an Assignment and Assumption. Unless
      the
      context otherwise requires, the term “Lenders” includes the Swing Line
      Lender.

    

    “Lending
      Installation”
means,
      with respect to a Lender or the Administrative Agent, any office, branch,
      subsidiary or affiliate of such Lender or the Administrative Agent.

    

    “Letter
      of Credit”
of
      a
      Person means a letter of credit or similar instrument which is issued upon
      the
      application of such Person or upon which such Person is an account party or
      for
      which such Person is in any way liable.

    

    “Letter
      of Credit Collateral Account”
is
      defined in Section
      2.18(h).

    

    “Letter
      of Credit Commitment”
means,
      for each Lender, the obligation of such Lender to participate in Facility
      Letters of Credit in an amount not exceeding the lesser of (a) its Pro Rata
      Share of the Aggregate Letter of Credit Commitment or (b) its Unused
      Commitment.

    

    “Letter
      of Credit Request”
is
      defined in Section
      2.18(c)(i).

    

    “Leverage
      Ratio”
means
      a
      fraction (expressed as the percentage equivalent), the numerator of which is
      the
      sum of (i) all Consolidated Indebtedness, less
      (ii) the
      lesser of (A) $500,000,000 and (B) unrestricted cash of the Loan Parties in
      excess of $15,000,000, and the denominator of which is the sum of (x) all
      Consolidated Indebtedness plus (y) Adjusted Consolidated Tangible Net Worth
      plus
      (z) the lesser of (A) fifty percent (50%) of Subordinated Debt and (B)
      $300,000,000.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    “LIBO
      Rate”
means,
      with respect to any Eurodollar Advance for any Interest Period, the rate
      appearing on Telerate Page 3750 (formerly the Dow Jones Market Service), or
      on
      any successor or substitute page of such service, or any successor to or
      substitute for such service, providing rate quotations comparable to those
      currently provided on such page of such service, as determined by the
      Administrative Agent from time to time for purposes of providing quotations
      of
      interest rates applicable to dollar deposits in the London interbank market,
      at
      approximately 11:00 a.m., London time, two Business Days prior to the
      commencement of such Interest Period, as the rate for dollar deposits with
      a
      maturity comparable to such Interest Period. In the event that such rate is
      not
      available at such time for any reason, then the “LIBO
      Rate”
with
      respect to such Eurodollar Advance for such Interest Period shall be the rate
      at
      which dollar deposits of $5,000,000 and for a maturity comparable to such
      Interest Period are offered by the principal London office of the Administrative
      Agent in immediately available funds in the London interbank market at
      approximately 11:00 a.m., London time, two Business Days prior to the
      commencement of such Interest Period.

    

    “Lien”
means
      any lien (statutory or other), mortgage (including, without limitation, purchase
      money mortgages), pledge, hypothecation, assignment, deposit arrangement,
      encumbrance or preference, priority or other security agreement or preferential
      arrangement of any kind or nature whatsoever (including, without limitation,
      the
      interest of a vendor or lessor under any conditional sale, Capitalized Lease
      or
      other title retention agreement or any financing lease having substantially
      the
      same economic effect as any of the foregoing) and, in the case of Securities,
      any purchase option, call or similar right of any Person (other than the issuer
      of such Securities) with respect to such Securities.

    

    “Loan
      Documents”
means
      (a) this Agreement, the Notes, the Guaranties, and (if and when delivered)
      the
      Mortgage Banking Subsidiaries Note Pledge Agreement and (b) any and all other
      instruments or documents delivered or to be delivered by the Loan Parties
      pursuant hereto or pursuant to any of the other documents described in
clause (a)
      above,
      as such documents in clause
      (a)
      or
(b)
      may be
      amended or modified and in effect from time to time.

    

    “Loan
      Parties”
means
      the Borrower and the Guarantors (including any Subsidiary that executes and
      delivers a Guaranty after the Closing Date); “Loan
      Party”
means
      any of the Loan Parties.

    

    “Loans”
means
      (a) the Revolving Loans, (b) the Competitive Loans and (c) the Swing Line Loans.
      “Loan”
means
      any of the Loans.

    

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (a) the business, properties, assets, condition
      (financial or otherwise), results of operations, or prospects of (i) the Loan
      Parties, taken as a whole, or (ii) if so specified, the Borrower or any
      Guarantor, (b) the ability of any Loan Party to perform any of its obligations
      under the Loan Documents, or (c) the validity or enforceability of any of the
      Loan Documents or the rights or remedies of the Administrative Agent or the
      Lenders thereunder.

    

    “Material
      Subsidiary”
means
      any Subsidiary of the Borrower (other than an Excluded Subsidiary), now owned
      or
      hereafter acquired, that has a Net Worth of $10,000,000 or greater, provided
      that, in
      no event may there exist Subsidiaries of the Borrower (other than the Excluded
      Subsidiaries) that have, in the aggregate, a Net Worth in excess of $50,000,000
      that are not Guarantors.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    “Maturity
      Date”
means
      the date upon which the outstanding principal amount of all of the Loans, all
      accrued and unpaid interest thereon, and all other Obligations become due and
      payable, whether as a result of the occurrence of the stated maturity date
      or
      the acceleration of maturity pursuant to the terms of any of the Loan
      Documents.

    

    “Monthly
      Payment Date”
means
      the first Business Day of each calendar month, commencing in August,
      2006.

    

    “Moody’s”
means
      Moody’s Investors Service, Inc. or any Person succeeding to the securities
      rating business of such company.

    

    “Mortgage”
means
      any mortgage, deed of trust or other security deed in Real Estate, or in rights
      or interests, including leasehold interests, in Real Estate. 

    

    “Mortgage
      Banking Subsidiaries Adjusted Net Worth”
means,
      at any date, the Net Worth of the Mortgage Banking Subsidiaries on a
      consolidated basis as determined in accordance with GAAP (including in the
      assets used to determine Net Worth the amount of the Capitalized Mortgage
      Servicing as of such date), less
      the
      amount of all goodwill and other assets that are properly classified as
“intangible assets” at such date in accordance with GAAP.

    

    “Mortgage
      Banking Subsidiaries Note”
means
      a
      promissory note executed by the Mortgage Banking Subsidiaries as joint makers
      payable to the order of the Borrower and each Guarantor that lends funds to
      any
      of the Mortgage Banking Subsidiaries evidencing such loans. 

    

    “Mortgage
      Banking Subsidiaries Note Pledge Agreement”
is
      defined in Section
      8.01(a)(i),
      and
      includes any amendment, supplement, restatement or other modification of such
      agreement.

    

    “Mortgage
      Banking Subsidiary”
means
      a
      Subsidiary of the Borrower which is engaged or hereafter engages in the mortgage
      banking business, including the origination, servicing, packaging and/or selling
      of mortgages on residential single- and multi-family dwellings and/or commercial
      property, and in any event shall include AFSI, UAMC, UAMC Asset Corp. II,
      Universal American Mortgage Corporation of California and Eagle Home Mortgage,
      Inc.

    

    “Multiemployer
      Plan”
means
      a
      Plan maintained pursuant to a collective bargaining agreement or any other
      arrangement to which the Borrower or any member of the Controlled Group is
      a
      party to which more than one employer is obligated to make contributions.

    

    “Net
      Book Value”
means,
      with respect to an asset owned by a Loan Party, the gross investment of such
      Loan Party in the asset, less all reserves (including loss reserves and reserves
      for depreciation) attributable to that asset, all determined in accordance
      with
      GAAP consistently applied, including, in the case of Unimproved Entitled Land,
      any unamortized land credits.

    

    “Net
      Housing Unit Proceeds”
means,
      in connection with the sale of any Housing Unit by a Loan Party, the gross
      sales
      price less (a) all bona fide prorations and adjustments to the sales price
      required to be made pursuant to the terms of the sales contract and (b) the
      aggregate amount of bona fide closing costs due to any Person, provided
      that,
      if
      such closing costs are due to an Affiliate of a Loan Party, such costs comply
      with Section
      7.12.

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    “Net
      Worth”
means,
      at any date, with respect to any Person the amount of consolidated stockholders’
equity of such Person and its consolidated Subsidiaries as shown on its balance
      sheet as of such date in accordance with GAAP.

    

    “New
      Lender”
means
      either a Lender or an Eligible Assignee, in each case approved by the Borrower
      and the Administrative Agent, that agrees to become a Lender or that agrees
      to
      increase its Commitment, in accordance with the provisions of Section
      2.17.

    

    “Non-Consenting
      Lender”
is
      defined in Section
      2.23.

    

    “Non-Recourse
      Indebtedness”
means
      Indebtedness of a Loan Party for which its liability is limited to the Real
      Estate upon which it grants a Lien to the holder of such Indebtedness as
      security for such Indebtedness, but only to the extent that the amount of such
      Indebtedness does not exceed such Loan Party’s original cost of purchase of such
      Real Estate or the most current appraised value of such Real
      Estate.

    

    “Notes”
means
      the Revolving Loan Notes, the Competitive Loan Notes and the Swing Line
      Note.

    

    “Obligations”
means
      all Loans, Facility Letter of Credit Obligations, advances, debts, liabilities,
      obligations, covenants and duties owing by any Loan Party to the Administrative
      Agent, any Lender, the Swing Line Bank, the Joint Lead Arrangers, any Affiliate
      of the Administrative Agent or any Lender, any Issuer or any Person entitled
      to
      indemnification by any Loan Party under this Agreement or any other Loan
      Document, of any kind or nature, present or future, arising under this Agreement
      or any other Loan Documents, whether or not evidenced by any note, guaranty
      or
      other instrument, whether or not for the payment of money, whether arising
      by
      reason of an extension of credit, loan, guaranty, indemnification, or in any
      other manner, whether direct or indirect (including those acquired by
      assignment), absolute or contingent, due or to become due, now existing or
      hereafter arising and however acquired. The term includes, without limitation,
      all interest, charges, expenses, fees, reasonable attorneys’ fees and
      disbursements, reasonable paralegals’ fees and any other sum chargeable to any
      Loan Party under this Agreement or any other Loan Document. 

    

    “Off-Balance
      Sheet Liabilities”
of
      a
      Person means (a) any repurchase obligation or liability of such Person or any
      of
      its Subsidiaries with respect to accounts or notes receivable sold by such
      Person or any of its Subsidiaries, (b) any liability of such Person or any
      of
      its Subsidiaries under any financing lease, any synthetic lease (under which
      all
      or a portion of the rent payments made by the lessee are treated, for tax
      purposes, as payments of interest, notwithstanding that the lease may constitute
      an operating lease under GAAP) or any other similar lease transaction, or (c)
      any obligations of such Person or any of its Subsidiaries arising with respect
      to any other transaction which is the functional equivalent of or takes the
      place of borrowing and which has an actual or implied interest component but
      which does not constitute a liability on the consolidated balance sheets of
      such
      Person and its Subsidiaries. 

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    “Participants”
is
      defined in Section
      12.03.

    

    “PBGC”
means
      the Pension Benefit Guaranty Corporation, or any successor thereto.

    

    “Performance
      Letter of Credit”
means
      a
      Letter of Credit issued to a Governmental Authority or a quasi-governmental
      agency to insure the completion by a Loan Party of a development of land
      improvements or to insure payment by a Loan Party of escrow
      accounts.

    

    “Permitted
      Liens”
means
      (a) Liens existing on the date of this Agreement and described on Schedule
      IV
      hereto;
      (b) Liens imposed by governmental authorities for taxes, assessments or other
      charges not yet subject to penalty or which are being contested in good faith
      and by appropriate proceedings, if adequate reserves with respect thereto are
      maintained on the books of the Borrower in accordance with GAAP; (c) statutory
      liens of carriers, warehousemen, mechanics, materialmen, landlords, repairmen
      or
      other like Liens arising by operation of law in the ordinary course of business
      provided
      that (i)
      the underlying obligations are not overdue for a period of more than 30 days
      or
      (ii) such Liens are being contested in good faith and by appropriate proceedings
      and adequate reserves with respect thereto are maintained on the books of the
      Borrower in accordance with GAAP; (d) Liens securing the performance of bids,
      trade contracts (other than borrowed money), leases, statutory obligations,
      surety and appeal bonds, performance bonds and other obligations of a like
      nature incurred in the ordinary course of business; (e) easements,
      rights-of-way, zoning restrictions, assessment district or similar Liens in
      connection with municipal financing, and similar restrictions, encumbrances
      or
      title defects which, singly or in the aggregate, do not in any case materially
      detract from the value of the Real Estate subject thereto (as such Real Estate
      is used by the Borrower or any of its Subsidiaries) or interfere with the
      ordinary conduct of the business of the Borrower or any of its Subsidiaries;
      (f)
      Liens arising by operation of law in connection with judgments, only to the
      extent, for an amount and for a period not resulting in a default with respect
      thereto; (g) pledges or deposits made in the ordinary course of business in
      connection with workers’ compensation, unemployment insurance and other types of
      social security legislation; (h) Liens securing Indebtedness of a Person
      existing at the time such Person becomes a Subsidiary or is merged with or
      into
      the Borrower or a Subsidiary or Liens securing Indebtedness incurred in
      connection with an acquisition of Real Estate, provided
      that
      (1)
      such Liens were in existence prior to the date of such acquisition, merger
      or
      consolidation, were not incurred in anticipation thereof, and do not extend
      to
      any other assets or (2) such Liens are granted to the seller of such Real Estate
      to secure the purchase price therefor; (i) Liens securing Indebtedness incurred
      to refinance any Indebtedness that was previously so secured and permitted
      hereunder (which refinancing Indebtedness may exceed the amount refinanced,
      provided
      such
      refinancing Indebtedness is otherwise permitted under this Agreement) in a
      manner no more adverse to the Lenders than the terms of the Liens securing
      such
      refinanced Indebtedness, provided, however, that, Liens securing refinancing
      of
      the Indebtedness held by the REIT Subsidiary (as described in clause
      (j)
      below)
      shall not be permitted; (j) mortgages, deeds of trust and other similar
      instruments granted by any Loan Party to the REIT Subsidiary and held by the
      REIT Subsidiary as security for Indebtedness of such Loan Party to the REIT
      Subsidiary, provided that (i) the REIT Subsidiary is a Guarantor, (ii) such
      mortgages, deeds of trust and similar instruments are in a form reasonably
      approved by Administrative Agent and are not recorded or filed in any real
      property records or other public or official records and (iii) the REIT
      Subsidiary executes and delivers to Administrative Agent an agreement reasonably
      satisfactory to Administrative Agent subordinating to the Obligations, the
      REIT
      Subsidiary’s rights, liens and claims against the Borrower and the other Loan
      Parties, together with certified resolutions, opinions of counsel and other
      supporting documentation with respect to such subordination reasonably
      satisfactory to Administrative Agent, and (k) a Lien, solely against the
      ownership interest of the Borrower or any Subsidiary in a Joint Venture or
      Subsidiary that is not a Guarantor, granted under the limited partnership
      agreement, joint venture agreement or limited liability company agreement for
      such Joint Venture or Subsidiary, solely to secure the obligation of the
      Borrower or the Subsidiary to make capital contributions pursuant to such
      agreement; provided,
      however,
      that
      such Lien shall be a Permitted Lien only as long as there are no outstanding
      obligations secured thereby. 

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    “Person”
means
      any natural person, corporation, firm, enterprise, trust, association, company,
      partnership, limited liability company, joint venture or other entity or
      organization, or any government or political subdivision or any agency,
      department, or instrumentality thereof.

    

    “Plan”
means
      an employee pension benefit plan which is covered by Title IV of ERISA or
      subject to the minimum funding standards under Section 412 of the Code as to
      which the Borrower or any member of the Controlled Group may have any
      liability.

    

    “Pricing
      Grid”
means
      the pricing grid attached hereto as Exhibit
      F.

    

    “Prime
      Rate”
means
      the rate of interest per annum publicly announced from time to time by JPMorgan
      Chase Bank, N.A. as its prime rate in effect at its principal office in New
      York
      City; each change in the Prime Rate shall be effective from and including the
      date such change is publicly announced as being effective.

    

    “Project”
means
      a
      parcel of Real Estate owned by a Loan Party which is to be developed or sold
      as
      part of a common scheme.

    

    “Pro
      Rata Share”
means,
      at any time for any Lender, the ratio that such Lender’s Commitment bears to the
      Aggregate Commitment.

    

    “Qualified
      Finished Lots”
means,
      at any date, the sum of (a) the Net Book Value of Finished Lots that are under
      a
      bona fide contract for sale by a Loan Party to a Person that is not an Affiliate
      of a Loan Party and (b) the lesser of (i) the product of (A) the total number
      of
      Housing Units with respect to which the Loan Parties entered into such contracts
      during the period of six consecutive calendar months most recently ended at
      such
      date, provided that Housing Units shall include housing units of entities that
      were acquired and became Loan Parties during the applicable period, multiplied
      by (B) the average Net Book Value of all Finished Lots as of the end of such
      six-month period and (ii) an amount equal to 40% of Adjusted Consolidated
      Tangible Net Worth at such date.

    

    “Quarterly
      Payment Date”
means
      the first Business Day of each January, April, July and October, commencing
      in
      October, 2006.

    

    “Rating
      Agency”
means
      any one of Fitch, Moody’s or S&P.

    

    “Real
      Estate”
means
      land, rights in land and interests therein (including, without limitation,
      leasehold interests), and equipment, structures, improvements, furnishings,
      fixtures and buildings (including a mobile home of the type usually installed
      on
      a developed site) located on or used in connection with land, rights in land
      or
      interests therein (including leasehold interests), but shall not include
      Mortgages or interests therein.

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    “Real
      Estate Business”
means
      homebuilding, housing construction, home sales, real estate development or
      construction, a plant/tree nursery for landscaping of Housing Units, and related
      real estate activities, including the provision of mortgage financing, title
      insurance and other goods and services to home buyers, home owners and other
      occupants of homes, including without limitation, cable TV services, home
      security, home design, broadband communications and other communications
      services and home office support services.

    

    “Recent
      Balance Sheet”
is
      defined in Section
      4.05.

    

    “Register”
is
      defined in Section
      13.07.

    

    “Regulation
      D”
means
      Regulation D of the Board of Governors of the Federal Reserve System as from
      time to time in effect and any successor thereto or other regulation or official
      interpretation of said Board of Governors relating to reserve requirements
      applicable to member banks of the Federal Reserve System.

    

    “Regulation
      U”
means
      Regulation U of the Board of Governors of the Federal Reserve System as from
      time to time in effect and any successor or other regulation or official
      interpretation of said Board of Governors relating to the extension of credit
      by
      banks for the purpose of purchasing or carrying margin stocks applicable to
      member banks of the Federal Reserve System.

    

    “Reimbursement
      Obligations”
means
      at any time, the aggregate of the Obligations of the Borrower to the Lenders,
      the Issuers and the Administrative Agent in respect of all unreimbursed payments
      or disbursements made by the Lenders, the Issuers and the Administrative Agent
      under or in respect of the Facility Letters of Credit.

    

    “REIT
      Subsidiary”
means
      a
      corporation or business trust that the Borrower has caused or may hereafter
      cause to be organized as an indirect Subsidiary of the Borrower and that elects
      to be treated as a “qualified real estate investment trust” in accordance with
      Section 856 of the Code, the business purpose of which Subsidiary is to
      centralize the internal financing of the Borrower’s real estate development and
      construction activities.

    

    “Replacement
      Lender”
is
      defined in Section
      2.24.

    

    “Reply
      Date”
is
      defined in Section
      2.23.

    

    “Reportable
      Event”
means
      a
      reportable event as defined in Section 4043 of ERISA and the regulations issued
      under such section, with respect to a Plan, excluding, however, such events
      as
      to which the PBGC by regulation waived the requirement of Section 4043(a) of
      ERISA that it be notified within 30 days of the occurrence of such event,
provided,
      however, that
      a
      failure to meet the minimum funding standard of Section 412 of the Code and
      of
      Section 302 of ERISA shall be a Reportable Event regardless of the issuance
      of
      any such waiver of the notice requirement in accordance with either Section
      4043(a) of ERISA or Section 412(d) of the Code.

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    “Repurchase
      Guaranty”
means
      a
      guaranty by Borrower or any other Loan Party of the obligations of any Mortgage
      Banking Subsidiary (i) as seller under an agreement for the sale of mortgage
      loans to a special purpose entity in connection with the securitization of
      such
      mortgage loans and (ii) as servicer of such mortgage loans following such sale,
      provided, however, that such obligations shall not include any guaranty of
      the
      obligations of any obligor under any mortgage loan.

    

    “Required
      Lenders”
means,
      subject to the provisions of Section
      13.06(c),
      Lenders
      whose Pro Rata Shares, in the aggregate, are greater than 66-2/3%; provided,
      however, that if all of the Commitments have been terminated pursuant to the
      terms of this Agreement, “Required Lenders” means Lenders whose aggregate
      ratable shares (stated as a percentage) of the aggregate outstanding principal
      balance of all Loans and Facility Letter of Credit Obligations are greater
      than
      66-2/3%.

    

    “Reserve
      Requirement”
means,
      with respect to a Interest Period, the maximum aggregate reserve requirement
      (including all basic, supplemental, marginal and other reserves) which is
      imposed under Regulation D on Eurocurrency liabilities.

    

    “Revolving
      Advance”
means
      a
      borrowing under Section
      2.01
      (or the
      conversion or continuation of any such borrowing) consisting of the aggregate
      amount of the several Revolving Loans made by the Lenders to the Borrower of
      the
      same Type and, in the case of Eurodollar Advances, for the same Interest
      Period.

    

    “Revolving
      Credit Exposure”
means,
      with respect to any Lender at any time (without duplication), the sum of the
      outstanding principal amount of such Lender’s Revolving Loans, its Pro Rata
      Share of all outstanding Swing Line Loans and its Pro Rata Share of all Facility
      Letter of Credit Obligations at such time.

    

    “Revolving
      Loan”
means,
      with respect to a Lender, a loan made by such Lender pursuant to Section
      2.01
      and any
      conversion or continuation thereof.

    

    “Revolving
      Loan Note”
means
      a
      promissory note in substantially the form of Exhibit
      C
      hereto
      executed by the Borrower payable to the order of a Lender in the amount of
      its
      Commitment, including any amendment, modification, renewal, restatement or
      replacement of such note.

    

    “Section”
means
      a
      numbered section of this Agreement, unless another document is specifically
      referenced.

    

    “Securities”
of
      any
      Person means equity securities and debt securities and any other instrument
      commonly understood to be a security issued by that Person.

    

    “Securities
      Act”
is
      defined in Section
      6.04(g).

    

    “Single
      Employer Plan”
means
      a
      Plan maintained by the Borrower or any member of the Controlled Group for
      employees of the Borrower or any member of the Controlled Group.

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    “S&P”
means
      Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies,
      Inc., or any Person succeeding to the securities rating business of such
      company.

    

    “Statutory
      Reserve Rate”
means
      a
      fraction (expressed as a decimal), the numerator of which is the number one
      and
      the denominator of which is the number one minus the aggregate of the maximum
      reserve percentages (including any marginal, special, emergency or supplemental
      reserves) expressed as a decimal established by the Board to which the
      Administrative Agent is subject (a) with respect to the Base CD Rate, for new
      negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
      approximately equal to three months and (b) with respect to the Adjusted LIBO
      Rate, for eurocurrency funding (currently referred to as “Eurocurrency
      Liabilities” in Regulation D of the Board). Such reserve percentages shall
      include those imposed pursuant to such Regulation D. Eurodollar Loans shall
      be
      deemed to constitute eurocurrency funding and to be subject to such reserve
      requirements without benefit of or credit for proration, exemptions or offsets
      that may be available from time to time to any Lender under such Regulation
      D or
      any comparable regulation. The Statutory Reserve Rate shall be adjusted
      automatically on and as of the effective date of any change in any reserve
      percentage.

    

    “Subordinated
      Debt”
means
      any Indebtedness of the Borrower which by its terms is subordinated, in form
      and
      substance and in a manner satisfactory to the Administrative Agent, in time
      and
      right of payment to the prior payment in full of the Obligations, but which
      in
      any event matures not earlier than twelve months after the Termination
      Date.

    

    “Subsidiary”
of
      a
      Person means (a) any corporation more than 50% of the outstanding securities
      having ordinary voting power of which shall at the time be owned or controlled,
      directly or indirectly, by such Person or by one or more of its Subsidiaries
      or
      by such Person and one or more of its Subsidiaries, or (b) any partnership,
      limited liability company, association, joint venture or similar business
      organization more than 50% of the ownership interests having ordinary voting
      power of which shall at the time be so owned or controlled. 

    

    “Subsidiary
      Unmatured Defaults”
is
      defined in Section
      2.07(c).

    

    “Supplemental
      Guaranty”
means
      a
“Supplemental Guaranty” in the form provided for and as defined in the form of
      Guaranty attached hereto as Exhibit
      E.

    

    “Swing
      Line Bank”
means
      JPMorgan Chase Bank or any other Lender as a successor Swing Line
      Bank.

    

    “Swing
      Line Commitment”
means
      the obligation of the Swing Line Bank to make Swing Line Loans up to a maximum
      of $150,000,000 at any one time outstanding.

    

    “Swing
      Line Loan”
means
      a
      Loan made available to the Borrower by the Swing Line Bank pursuant to
Section
      2.10
      hereof.

    

    “Swing
      Line Note”
means
      the promissory note in substantially the form of Exhibit
      D
      hereto
      executed by the Borrower payable to the order of the Swing Line Bank in the
      amount of the Swing Line Commitment, including any amendment, modification,
      renewal, restatement or replacement of such note.

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    “Termination
      Date”
means
      July 20, 2011, or such later date, if any, to which the Termination Date may
      be
      extended pursuant to Section
      2.23,
      subject, however, to earlier termination in whole of the Aggregate Commitment
      pursuant to the terms of this Agreement.

    

    “Three-Month
      Secondary CD Rate”
means,
      for any day, the secondary market rate for three-month certificates of deposit
      reported as being in effect on such day (or, if such day is not a Business
      Day,
      the next preceding Business Day) by the Board through the public information
      telephone line of the Federal Reserve Bank of New York (which rate will, under
      the current practices of the Board, be published in Federal Reserve Statistical
      Release H.15(519) during the week following such day) or, if such rate is not
      so
      reported on such day or such next preceding Business Day, the average of the
      secondary market quotations for three-month certificates of deposit of major
      money center banks in New York City received at approximately 10:00 a.m., New
      York City time, on such day (or, if such day is not a Business Day, on the
      next
      preceding Business Day) by the Administrative Agent from three negotiable
      certificate of deposit dealers of recognized standing selected by
      it.

    

    “Type”
means,
      with respect to any Revolving Advance, its nature as an ABR Advance or
      Eurodollar Advance.

    

    “UAMC”
means
      Universal American Mortgage Company, LLC.

    

    “Unfunded
      Liabilities”
means
      the amount (if any) by which the present value of all vested nonforfeitable
      benefits under all Single Employer Plans exceeds the fair market value of all
      such Plan assets allocable to such benefits, all determined as of the then
      most
      recent valuation date for such Plans.

    

    “Unimproved
      Entitled Land”
means
      Entitled Land upon which no Improvements have been commenced.

    

    “Unmatured
      Default”
means
      an event, act or condition which but for the lapse of time or the giving of
      notice, or both, would constitute an Event of Default.

    

    “Unused
      Commitment”
means,
      at any date, with respect to each Lender, the amount by which its Commitment
      exceeds the sum of the outstanding balance of its Revolving Loans and its Pro
      Rata Share of the aggregate amount then available for drawing under the Facility
      Letters of Credit.

    

    “Wholly-Owned
      Subsidiary”
of
      a
      Person means (i) any Subsidiary all of the outstanding voting securities of
      which shall at the time be owned or controlled, directly or indirectly, by
      such
      Person or one or more Wholly-Owned Subsidiaries of such Person, or by such
      Person and one or more Wholly-Owned Subsidiaries of such Person, or (ii) any
      partnership, association, joint venture or similar business organization 100%
      of
      the ownership interests having ordinary voting power of which shall at the
      time
      be so owned or controlled.

    SECTION
      1.02. Computation
      of Time Periods.
      For the
      purposes of this Agreement, in the computation of periods of time from a
      specified date to a later specified date, the word “from” means “from and
      including”, the words “to” and “until” each means “to but excluding” and the
      word “through” means “to and including”.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    SECTION
      1.03. Accounting
      Terms. 

    

    (a) All
      accounting terms used and not specifically defined herein shall be construed
      in
      accordance with GAAP. All references herein to GAAP shall be deemed to refer
      to
      those principles; provided,
      however, that
      notwithstanding the requirements imposed by GAAP which require the consolidation
      of the operations of the Mortgage Banking Subsidiaries with the operations
      of
      the Borrower, for the purposes of the calculations set forth in Article
      VII
      hereof,
      the operations of such Subsidiary shall be so included only as specifically
      provided for herein.

    

    (b) In
      the
      event that the Borrower shall acquire, pursuant to a transaction permitted
      under
      this Agreement, all of the equity Securities of a corporation (the “Acquired
      Company”) which have ordinary voting power for the election of directors of the
      Acquired Company and, provided that (i) the Borrower shall have furnished to
      the
      Administrative Agent, and the Administrative Agent shall have approved (A)
      consolidated balance sheets and related consolidated statements of earnings,
      stockholders’ equity and cash flows of the Acquired Company for the most
      recently concluded fiscal year of the Acquired Company, prepared in accordance
      with GAAP consistently applied and audited and reported upon by a firm of
      independent certified public accountants of recognized standing acceptable
      to
      the Administrative Agent (such audit to be unqualified) and (B) for any quarters
      of the next succeeding fiscal year that are concluded as of the date of such
      Acquisition, a consolidated balance sheet of the Acquired Company as of the
      end
      of the most recent quarter, and the related consolidated statement of earnings
      and cash flows of the Acquired Company for the period from the beginning of
      the
      current fiscal year to the end of that quarter, all prepared in accordance
      with
      GAAP consistently applied, unaudited but certified to be true and accurate,
      subject to normal year-end audit adjustments, by the chief financial officer
      of
      the Acquired Company and (ii) the Acquired Company shall either become or be
      merged into a Guarantor hereunder, then, from and after such Acquisition, the
      Borrower shall include in the determination of Consolidated EBITDA, Consolidated
      Interest Expense, Consolidated Interest Incurred and Consolidated Net Income,
      for any applicable period for which such amounts are to be determined pursuant
      to this Agreement, such Acquired Company as if such Acquired Company had been
      a
      Loan Party during such period.

    

    ARTICLE
      II

     

    THE
      CREDITS

    SECTION
      2.01. Commitment.

    

    (a) Revolving
      Credit Advances.
      On and
      after the Closing Date and prior to the Termination Date, upon the terms and
      conditions set forth in this Agreement and in reliance upon the representations
      and warranties of the Borrower herein set forth, each Lender severally agrees
      to
      make Revolving Loans to the Borrower from time to time in amounts not to exceed
      in the aggregate at any one time outstanding the amount of its Commitment,
      provided
      that in
      no event may the Aggregate Credit Exposure exceed the Aggregate Commitment.
      Subject to the terms of this Agreement, the Borrower may borrow, repay and
      reborrow under this Agreement at any time prior to the Termination Date. The
      Commitments to lend hereunder shall expire on the Termination Date.

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (b) Letter
      of Credit Commitment.
      On and
      after the Closing Date and prior to the Termination Date, each Lender severally
      agrees, on the terms and conditions set forth in this Agreement and in reliance
      upon the representations and warranties of the Borrower herein set forth, to
      participate in the Existing Letters of Credit and in other Facility Letters
      of
      Credit issued pursuant to Section
      2.18
      for the
      account of the Borrower, provided
      that
      in
      no event may the aggregate amount of all Facility Letter of Credit Obligations
      exceed the lesser of (A) the Aggregate Letter of Credit Commitment and (B)
      the
      amount by which the Aggregate Commitment exceeds the Aggregate Credit
      Exposure.

    

    (c) Revolving
      Advances and Participations Pro Rata.
      Revolving Advances hereunder shall be made ratably by the several Lenders in
      accordance with their respective Pro Rata Shares. Participations in Facility
      Letters of Credit hereunder shall be ratable among the several Lenders in
      accordance with their respective Pro Rata Shares.

    

    (d) Maturity.
      All
      Obligations shall be due and payable by the Borrower on the Termination Date
      unless such Obligations shall sooner become due and payable pursuant to
Section
      9.02
      or as
      otherwise provided in this Agreement.

    SECTION
      2.02. Types
      of Advances.
      The
      Revolving Advances may be ABR Advances, or Eurodollar Advances, or a combination
      thereof, selected by the Borrower in accordance with Section
      2.06;
      provided,
      however, that
      there shall not be more than five Eurodollar Advances outstanding at any
      time.

    SECTION
      2.03. Principal
      Payments.

    

    (a) Optional
      Principal Payments.
      The
      Borrower may from time to time pay, without penalty or premium, all outstanding
      ABR Advances, or, in a minimum aggregate amount of $5,000,000 or any integral
      multiple of $1,000,000 in excess thereof, any portion of the outstanding ABR
      Advances upon notice to the Administrative Agent not later than 11:00 a.m.
      New
      York time) on the date of payment, and (ii) the Borrower may, upon three
      Business Days’ prior notice to the Administrative Agent, (A) pay any Eurodollar
      Advance in full on the last day of the Interest Period for such Eurodollar
      Advance, and (B) prepay any Eurodollar Advance in full prior to the last day
      of
      the Interest Period for such Eurodollar Advance.

    

    (b) Payments
      of Mortgage Banking Subsidiaries Note.
      The
      Borrower shall prepay the principal of the Loans in the amount, and promptly
      upon its receipt, of any principal payment made with respect to the Mortgage
      Banking Subsidiaries Note from and after the date the Administrative Agent
      is
      granted a security interest therein pursuant to Section
      8.01.

    

    (c) Funding
      Indemnification.
      The
      provisions of Section
      3.04
      shall
      apply to any payment or prepayment provided for in this Section
      2.03.

    

    (d) Application
      of Payments.
      Unless
      this Agreement specifically provides for the application of principal payments
      to specified Obligations, the Borrower may, as long as no Event of Default
      has
      occurred that is continuing, direct the Administrative Agent to apply
      prepayments of the principal amount of the Obligations against any Swing Line
      Loans, any Competitive Bid Loans or any Revolving Advances.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    SECTION
      2.04. Facility
      Fees; Reductions of Commitments.

    

    (a) Facility
      Fees.
      The
      Borrower agrees to pay to the Administrative Agent for the account of each
      Lender a Facility Fee, at a rate per annum equal to the Applicable Facility
      Fee
      Rate on the daily amount of such Lender’s Commitment (whether used or unused)
      from the date hereof to and including the date on which such Commitment
      terminates; provided
      that, if
      such Lender continues to have any Revolving Credit Exposure after its Commitment
      terminates, then such Facility Fee shall continue to accrue on the daily amount
      of such Lender’s Revolving Credit Exposure from and including the date on which
      its Commitment terminates to the date on which such Lender ceases to have any
      Revolving Credit Exposure. Accrued Facility Fees shall be payable in arrears
      on
      each Quarterly Payment Date and on the date on which the Commitments terminate,
      commencing on the first such date to occur after the date hereof; provided
      that any
      Facility Fees accruing after the date on which the Commitments terminate shall
      be payable on demand. The fees payable under this Section
      2.04,
      once
      paid, shall not be refundable for any reason.

    

    (b) Voluntary
      Reduction of Commitments.
      The
      Borrower may permanently reduce the Aggregate Commitment in whole, or in part
      ratably among the Lenders in the minimum amount of $5,000,000, and, if in excess
      thereof, in integral multiples of $1,000,000, upon at least three Business
      Days’
written notice to the Administrative Agent, which notice shall specify the
      amount of any such reduction, provided,
      however, that
      the
      amount of the Aggregate Commitment may not be reduced below the Aggregate Credit
      Exposure. 

    SECTION
      2.05. Method
      of Borrowing.
      Not
      later than 1:00 p.m. (New York time) on each Borrowing Date, each Lender shall
      make available its Revolving Loan, in funds immediately available to the
      Administrative Agent at its address specified pursuant to Section
      13.01.
      The
      Administrative Agent will make the funds so received from the Lenders available
      to the Borrower by deposit into an account maintained by the Borrower at
      JPMorgan Chase Bank.

    SECTION
      2.06. Method
      of Selecting Types and Interest Periods for Revolving Advances.

    

    (a) Borrowing
      Notices.
      The
      Borrower shall select the Type of each Revolving Advance and, in the case of
      each Eurodollar Advance, the Interest Period applicable to each Advance from
      time to time. The Borrower shall give the Administrative Agent irrevocable
      notice (a “Borrowing Notice”) not later than 11:00 a.m. (New York time) on the
      Borrowing Date for each ABR Advance and prior to 11:00 a.m. (New York time)
      on
      the date which is two Business Days before the Borrowing Date for each
      Eurodollar Advance, specifying:

    

    (i) the
      Borrowing Date, which shall be a Business Day, of such Revolving
      Advance,

    

    (ii) the
      aggregate amount of such Revolving Advance,

    

    (iii) the
      Type
      of Revolving Advance selected, and

    

    (iv) in
      the
      case of each Eurodollar Advance, the Interest Period applicable
      thereto.

    

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    The
      Borrower shall be entitled to obtain, on the Closing Date, only one Revolving
      Advance and, on any single Business Day after the Closing Date, only one
      Revolving Advance, each of which Revolving Advances may (subject to the
      provisions of Section
      2.02)
      be
      comprised in whole or in part of any Eurodollar Advance. Changes in the rate
      of
      interest on that portion of any Revolving Advance maintained as a ABR Advance
      will take effect simultaneously with each change in the Alternate Base Rate.
      Each Eurodollar Advance shall bear interest from and including the first day
      of
      the Interest Period applicable thereto to (but not including) the last day
      of
      such Interest Period at the interest rate determined as applicable to such
      Eurodollar Advance. The Borrower shall select Interest Periods with respect
      to
      Eurodollar Advances so that it is not necessary to repay a Eurodollar Advance
      prior to the last day of the applicable Interest Period in order to make any
      mandatory payment required to be made pursuant to this Agreement or to repay
      all
      Loans in full on the Termination Date. In the case of a Eurodollar Advance
      made
      during the continuance of an Subsidiary Unmatured Default, the Interest Period
      for such Advance may not extend beyond the date on which such Subsidiary
      Unmatured Default would (if not cured) become an Event of Default.

    

    (b) Borrowing
      Notices Irrevocable.
      Each
      Borrowing Notice shall be irrevocable and binding on the Borrower and, in
      respect of the borrowing specified in the Borrowing Notice, the Borrower shall
      indemnify each Lender against any loss or expense incurred by that Lender as
      a
      result of any failure to fulfill the applicable conditions set forth in
Section
      5.02
      on or
      before the proposed Borrowing Date specified in the Borrowing Notice, including,
      without limitation, any loss (including loss of profit) or expense incurred
      by
      reason of the liquidation or reemployment of deposits or other funds acquired
      by
      any Lender to fund the Loan to be made by that Lender as part of that borrowing
      when that Loan, as a result of that failure, is not made on that
      date.

    SECTION
      2.07. Method
      of Selecting Types and Interest Periods for Conversion and Continuation of
      Revolving Advances.

    

    (a) Right
      to Convert.
      The
      Borrower may elect from time to time, subject to the provisions of Section
      2.07(c),
      to
      convert all or any part of a Revolving Advance of any Type into any other Type
      or Types of Revolving Advances; provided
      that
      any
      conversion of any Eurodollar Advance shall be made on, and only on, the last
      day
      of the Interest Period applicable thereto.

    

    (b) Automatic
      Conversion and Continuation.
      ABR
      Advances shall continue as ABR Advances unless and until such ABR Advances
      are
      converted into Eurodollar Advances. Eurodollar Advances of any Type shall
      continue as Eurodollar Advances of such Type until the end of the then
      applicable Interest Period therefor, at which time such Eurodollar Advance
      shall
      be automatically converted into a ABR Advance unless the Borrower shall have
      given the Administrative Agent notice in accordance with Section
      2.07(d),
      requesting that, at the end of such Interest Period, such Eurodollar Advance
      either continue as a Eurodollar Advance of such Type for the same or another
      Interest Period or be converted into a Revolving Advance of another
      Type.

    

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (c) No
      Conversion in Case of an Event of Default or Unmatured Default.
      Notwithstanding anything to the contrary contained in Section
      2.07(a)
      or
2.07(b),
      no
      Revolving Advance may be converted into or continued as a Eurodollar Advance
      (except with the consent of the Required Lenders) when there has occurred and
      is
      continuing any Event of Default or Unmatured Default, except for Unmatured
      Defaults (other than the failure to pay any Obligation) that with respect to
      Subsidiaries of the Borrower whose assets constitute in the aggregate less
      than
      5% of the assets of the Borrower and its Subsidiaries (other than the Mortgage
      Banking Subsidiaries) on a consolidated basis (calculated as at the Borrower’s
      then most recent fiscal quarter end) (“Subsidiary Unmatured Defaults”);
provided
      the
      Borrower certifies (either in the Conversion/Continuation Notice or in a
      separate certificate addressed to the Administrative Agent for the benefit
      of
      the Lenders) that (a) such Subsidiary Unmatured Defaults are not reasonably
      likely to have a Material Adverse Effect and (b) the Borrower reasonably expects
      to cure such Subsidiary Unmatured Defaults before the date on which the same
      becomes an Event of Default, which certificate shall provide reasonable detail
      regarding the Subsidiary Unmatured Defaults and the Borrower’s proposed cure
      thereof. The Administrative Agent shall furnish a copy of such certification
      to
      the Lenders.

    

    (d) Conversion/Continuation
      Notice.
      The
      Borrower shall give the Administrative Agent irrevocable notice (a
“Conversion/Continuation Notice”) of each conversion of a Revolving Advance or
      continuation of a Eurodollar Advance not later than 11:00 a.m. (New York time)
      on the day of any conversion into an ABR Advance or prior to 11:00 a.m. (New
      York time) on the date which is two Business Days prior to the date of the
      requested conversion into or continuation of a Eurodollar Advance,
      specifying:

    

    (i) the
      requested date (which shall be a Business Day) of such conversion or
      continuation;

    

    (ii) the
      amount and Type of the Revolving Advance to be converted or continued;
      and

    

    (iii) the
      amount and Type(s) of Revolving Advance(s) into which such Revolving Advance
      is
      to be converted or continued and, in the case of a conversion into or
      continuation of a Eurodollar Advance, the duration of the Interest Period
      applicable thereto.

    

    In
      the
      case of a conversion or continuation of Eurodollar Advance made during the
      continuance of an Subsidiary Unmatured Default, the Interest Period for such
      Advance may not extend beyond the date on which such Subsidiary Unmatured
      Default would (if not cured) become an Event of Default.

    

    SECTION
      2.08. Minimum
      Amount of Each Revolving Advance.
      Each
      Revolving Advance shall be in the minimum amount of $5,000,000 (and in multiples
      of $1,000,000 if in excess thereof) provided,
      however, that
      any
      ABR Advance may be in the amount by which the Aggregate Commitment exceeds
      the
      Aggregate Credit Exposure.

     

    SECTION
      2.09. Competitive
      Bid Procedure. 

    

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    (a) Competitive
      Bid Request.
      Subject
      to the terms and conditions set forth herein, from time to time prior to the
      Termination Date, the Borrower may request Competitive Bids and may (but shall
      not have any obligation to) accept Competitive Bids and borrow Competitive
      Loans, provided
      that (i)
      in no event may the aggregate principal balance of all outstanding Competitive
      Loans exceed $300,000,000 and (ii) in no event may the Aggregate Credit Exposure
      exceed the Aggregate Commitment. To request Competitive Bids, the Borrower
      shall
      notify the Administrative Agent of such request by telephone not later than
      11:00 a.m., New York time, one Business Day before the date of the proposed
      Competitive Loan; provided
      that the
      Borrower may submit up to (but not more than) three (3) Competitive Bid Requests
      on the same day, but a Competitive Bid Request shall not be made within five
      Business Days after the date of any previous Competitive Bid Request, unless
      any
      and all such previous Competitive Bid Requests shall have been withdrawn or
      all
      Competitive Bids received in response thereto rejected. Each such telephonic
      Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy
      to the Administrative Agent of a written Competitive Bid Request in a form
      approved by the Administrative Agent and signed by the Borrower. Each such
      telephonic and written Competitive Bid Request shall specify the following
      information:

    

    (i) the
      aggregate amount of the requested Competitive Loan;

    

    (ii) the
      Borrowing Date of such Competitive Loan, which shall be a Business
      Day;

    

    (iii) the
      Interest Period to be applicable to such Competitive Loan, which shall be a
      period contemplated by the definition of the term “Interest Period”;
      and

    

    (iv) the
      location and number of the Borrower’s account to which funds are to be
      disbursed, which shall comply with the requirements of Section
      2.05.

    

    Promptly
      following receipt of a Competitive Bid Request in accordance with this Section,
      the Administrative Agent shall notify the Lenders of the details thereof by
      telecopy, inviting the Lenders to submit Competitive Bids.

    

    (b) Competitive
      Bid.
      Each
      Lender may (but shall not have any obligation to) make one or more Competitive
      Bids to the Borrower in response to a Competitive Bid Request. Each Competitive
      Bid by a Lender must be in a form approved by the Administrative Agent and
      must
      be received by the Administrative Agent by telecopy not later than 10:00 a.m.,
      New York time on the proposed date of such Competitive Loan. Competitive Bids
      that do not conform substantially to the form approved by the Administrative
      Agent may be rejected by the Administrative Agent, and the Administrative Agent
      shall notify the applicable Lender as promptly as practicable. Each Competitive
      Bid shall specify (i) the principal amount (which shall be a minimum of
      $5,000,000 and an integral multiple of $1,000,000 and which may equal the entire
      principal amount of the Competitive Loan requested by the Borrower) of the
      Competitive Loan or Loans that the Lender is willing to make, (ii) the
      Competitive Bid Rate or Competitive Bid Rates at which the Lender is prepared
      to
      make such Competitive Loan or Competitive Loans (expressed as a percentage
      rate
      per annum in the form of a decimal to no more than four decimal places) and
      (iii) the Interest Period applicable to each such Competitive Loan and the
      last
      day thereof.

    

    (c) Notice
      of Competitive Bid.
      The
      Administrative Agent shall notify the Borrower by telecopy not later than 10:30
      a.m., New York time, on the proposed date of the Competitive Loan of the
      Competitive Bid Rate and the principal amount specified in each Competitive
      Bid
      and the identity of the Lender that shall have made such Competitive
      Bid.

    

    
      
        
        

      

      
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    (d) Acceptance
      of Competitive Bid.
      Subject
      only to the provisions of this paragraph, the Borrower may accept or reject
      any
      Competitive Bid. The Borrower shall notify the Administrative Agent by
      telephone, confirmed by telecopy in a form approved by the Administrative Agent,
      whether and to what extent it has decided to accept or reject each Competitive
      Bid not later than 11:30 a.m., New York time, on the proposed date of the
      Competitive Loan; provided
      that (i)
      the failure of the Borrower to give such notice shall be deemed to be a
      rejection of each Competitive Bid, (ii) the Borrower shall not accept a
      Competitive Bid made at a particular Competitive Bid Rate if the Borrower
      rejects a Competitive Bid made at a lower Competitive Bid Rate, (iii) the
      aggregate amount of the Competitive Bids accepted by the Borrower shall not
      exceed the aggregate amount of the requested Competitive Loan specified in
      the
      related Competitive Bid Request, (iv) to the extent necessary to comply with
      clause (iii) above, the Borrower may accept Competitive Bids at the same
      Competitive Bid Rate in part, which acceptance, in the case of multiple
      Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
      accordance with the amount of each such Competitive Bid, and (v) except pursuant
      to clause (iv) above, no Competitive Bid shall be accepted for a Competitive
      Loan unless such Competitive Loan is in a minimum principal amount of $5,000,000
      and an integral multiple of $1,000,000; provided further
      that if
      a Competitive Loan must be in an amount less than $5,000,000 because of the
      provisions of clause (iv) above, such Competitive Loan may be for a minimum
      of
      $1,000,000 or any integral multiple thereof, and in calculating the pro rata
      allocation of acceptances of portions of multiple Competitive Bids at a
      particular Competitive Bid Rate pursuant to clause (iv) above the amounts shall
      be rounded to integral multiples of $1,000,000 in a manner determined by the
      Borrower. A notice given by the Borrower pursuant to this paragraph shall be
      irrevocable.

    

    (e) Notice
      of Acceptance of Competitive Bid.
      The
      Administrative Agent shall promptly notify each bidding Lender by telecopy
      whether or not its Competitive Bid has been accepted (and, if so, the amount
      and
      Competitive Bid Rate so accepted), and each successful bidder will thereupon
      become bound, subject to the terms and conditions hereof, to make and, subject
      to the terms and conditions hereof, shall advance on the Borrowing Date set
      forth in the applicable Competitive Bid Request the Competitive Loan in respect
      of which its Competitive Bid has been accepted.

    

    (f) Acceptance
      Irrevocable.
      The
      Borrower’s acceptance of a Competitive Bid shall be irrevocable and binding on
      the Borrower and the Borrower shall indemnify the applicable Lender or Lenders
      against any loss or expense incurred by such Lender or Lenders as a result
      of
      any failure to fulfill the applicable conditions set forth in Section
      5.02
      on or
      before the proposed Borrowing Date of such proposed Competitive Loan, including,
      without limitation, any loss (including loss of profit) or expense incurred
      by
      reason of the liquidation or reemployment of deposits or other funds acquired
      by
      such Lender or Lenders to fund the Competitive Loan to be made by such Lender
      or
      Lenders when that Competitive Loan, as a result of that failure, is not made
      on
      that date.

    

    (g) Competitive
      Bids by Administrative Agent.
      If the
      Administrative Agent shall elect to submit a Competitive Bid in its capacity
      as
      a Lender, it shall submit such Competitive Bid directly to the Borrower at
      least
      one quarter of an hour earlier than the time by which the other Lenders are
      required to submit their Competitive Bids to the Administrative Agent pursuant
      to paragraph (b) of this Section.

    

    
      
        
        

      

      
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    (h) No
      Effect on Commitment.
      The
      Commitment of a Lender that makes a Competitive Loan shall not be reduced or
      otherwise affected by the making of such Competitive Loan. 

     

    SECTION
      2.10. Swing
      Line Loans. 

    

    (a) Swing
      Line Commitment.
      In
      addition to the Revolving Advances pursuant to Sections
      2.01
      and
      Competitive Bid Loans pursuant to Section
      2.09,
      but
      subject to the terms and conditions of this Agreement (including but not limited
      to those limitations set forth in Section
      2.01),
      the
      Swing Line Bank agrees to make the Swing Line Loans to the Borrower in
      accordance with this Section
      2.10
      up to
      the amount of the Swing Line Commitment. Swing Line Loans shall not be limited
      by the amount of the Swing Line Bank’s Commitment but shall be subject to the
      limitations set forth in Section
      2.10.
      Amounts
      borrowed under this Section
      2.10
      may be
      borrowed, repaid and reborrowed to, but not including, the Termination Date.
      All
      outstanding Swing Line Loans shall bear interest at the Alternate Base
      Rate.

    

    (b) Swing
      Line Request.
      The
      Borrower may request a Swing Line Loan from the Swing Line Bank on any Business
      Day before the Termination Date by giving the Administrative Agent and the
      Swing
      Line Bank notice by 2:00 p.m. (New York time) on such Borrowing Date specifying
      the aggregate amount of such Swing Line Loan, which shall be an amount not
      less
      than $500,000. The Administrative Agent shall promptly notify each Lender of
      such request.

    

    (c) Making
      of Swing Line Loans.
      The
      Swing Line Bank shall, no later than 4:00 p.m. (New York time) on such Borrowing
      Date, make the funds for such Swing Line Loan available to the Borrower at
      the
      Administrative Agent’s address, or at such other place as indicated in written
      money transfer instructions from the Borrower, signed by an Authorized
      Officer.

    

    (d) Swing
      Line Note.
      The
      Swing Line Loans shall be evidenced by the Swing Line Note and each Swing Line
      Loan shall be paid in full by the Borrower on or before the earlier of the
      fifth
      Business Day after the Borrowing Date for such Swing Line Loan or the
      Termination Date.

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    (e) Repayment
      of Swing Line Loans.
      The
      Borrower may at any time pay, without penalty or premium, all outstanding Swing
      Line Loans, or, in a minimum amount of $500,000, any portion of the outstanding
      Swing Line Loans upon notice to the Administrative Agent and the Swing Line
      Bank. In addition, the Administrative Agent: (i) may at any time in its sole
      discretion or (ii) shall on the fifth Business Day after the Borrowing Date
      for
      such Swing Line Loan, require the Lenders (including the Swing Line Bank) to
      make a Revolving Advance at the Alternate Base Rate in an amount up to the
      amount of Swing Line Loans outstanding on such date for the purpose of repaying
      Swing Line Loans; provided,
      however,
      that
      the obligation of each Lender to make any such Revolving Advance is subject
      to
      the condition that the Swing Line Bank believed in good faith that all
      conditions under Section
      5.02
      were
      satisfied at the time the Swing Line Loan was made. If the Swing Line Bank
      receives notice from any Lender that a condition under Section
      5.02
      has not
      been satisfied, no Swing Line Loan shall be made until (A) such notice is
      withdrawn by that Lender or (B) the Required Lenders have waived satisfaction
      of
      any such condition. The Lenders shall deliver the proceeds of such Revolving
      Advance to the Administrative Agent by 1:00 p.m. (New York time) on the
      applicable Borrowing Date for application to the Swing Line Bank’s outstanding
      Swing Line Loans. Subject to the proviso contained in the second sentence of
      this Section
      2.10(e),
      each
      Lender’s obligation to make available its Pro Rata Share of the Revolving
      Advance referred to in this Section shall be absolute and unconditional and
      shall not be affected by any circumstances, including without limitation, (1)
      any set-off, counterclaim, recoupment, defense or other right which such Lender
      may have against the Swing Line Bank, or anyone else, (2) the occurrence or
      continuance of an Event of Default or Unmatured Default, (3) any adverse change
      in the condition (financial or otherwise) of the Borrower or (4) any Event
      whatsoever. If for any reason a Lender does not make available its Pro Rata
      Share of the foregoing Revolving Advance, such Lender shall be deemed to have
      unconditionally and irrevocably purchased from the Swing Line Bank, without
      recourse or warranty, an undivided interest and participation in each Swing
      Line
      Loan then being repaid, equal to its Pro Rata Share of all such Swing Line
      Loans
      being repaid, so long as such purchase would not cause such Lender to exceed
      its
      Commitment. If any portion of any amount paid (or deemed paid) to the
      Administrative Agent is recovered by or on behalf of the Borrower from the
      Administrative Agent in bankruptcy or otherwise, the loss of the amount so
      recovered shall be shared ratably among all Lenders in accordance with their
      respective Pro Rata Shares.

     

    SECTION
      2.11. Rate
      after Maturity.
      Any
      Loan which is not paid at maturity for such Loan, whether by acceleration or
      otherwise, shall bear interest until paid in full at a rate per annum equal
      to
      the Default Rate.

     

    SECTION
      2.12. Method
      of Payment.
      All
      payments of principal, interest, and fees hereunder shall be made, without
      setoff, deduction, or counterclaim, in immediately available funds to the
      Administrative Agent at the Administrative Agent’s address specified pursuant to
Article
      XIII,
      or at
      any other Lending Installation of the Administrative Agent specified in writing
      by the Administrative Agent to the Borrower, by 2:00 p.m. (New York time) on
      the
      date when due and (except in the case of payments in respect of Swing Line
      Loans
      which shall be paid to the Swing Line Bank and payments in respect of
      Competitive Loans which shall be paid to the Lenders holding such Competitive
      Loans) shall, upon receipt by the Administrative Agent be paid ratably by the
      Administrative Agent among the Lenders with respect to their Loans. Each payment
      delivered to the Administrative Agent for the account of any Lender shall be
      delivered promptly by the Administrative Agent to such Lender in the same type
      of funds which the Administrative Agent received at its address specified
      pursuant to Article
      XIII
      or at
      any Lending Installation specified in a notice received by the Administrative
      Agent from such Lender. The Administrative Agent is hereby authorized to charge
      any account of the Borrower maintained with JPMorgan Chase Bank for each payment
      of principal, interest and fees as it becomes due hereunder. The Administrative
      Agent shall endeavor in good faith to provide telephonic notice to Borrower
      prior to any such charge, but the Administrative Agent shall not be liable
      to
      Borrower or any other Person if Administrative Agent fails to provide any such
      notice. If and to the extent payment owed to any Lender is not made by the
      Borrower to the Administrative Agent or that Lender, as the case may be, when
      due hereunder or under any Loan held by that Lender, the Borrower further
      authorizes such Lender to charge from time to time against any or all of the
      accounts maintained by the Borrower with the Lender, its subsidiaries,
      affiliates or branches any amount so due, subject to the provisions of
Article
      XI.

     

    
      
        
        

      

      
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    SECTION
      2.13. Notes;
      Telephonic Notices. 

    

    (a) Any
      Lender may request, by written notice to the Administrative Agent, that any
      Loans made or to be made by it hereunder each be evidenced by a Note or Notes
      payable to such Lender, and, in such event, the Borrower shall execute and
      deliver to the Administrative Agent a Revolving Loan Note or Competitive Loan
      Note (as the case may be) payable to the order of such Lender. Upon the
      execution and delivery of (i) a Revolving Loan Note, the Revolving Loans
      theretofore or thereafter made by such Lender shall be evidenced by the
      applicable Revolving Loan Note payable to such Lender and (ii) a Competitive
      Loan Note, the Competitive Loans theretofore or thereafter payable to such
      Lender shall be evidenced by such Competitive Loan Note.

    

    (b) The
      Borrower hereby authorizes the Administrative Agent to extend, convert or
      continue Advances, effect selections of Types of Advances and to transfer funds
      based on telephonic notices made by any person that the Administrative Agent
      in
      good faith believes to be an Authorized Officer designated herein or otherwise
      in writing by the Borrower. All actions taken by the Lenders and the
      Administrative Agent upon such telephonic notices are hereby approved by the
      Borrower, and the Lenders and the Administrative Agent shall incur no liability
      as a result of any such actions. The Borrower agrees to deliver promptly to
      the
      Administrative Agent a written confirmation, if such confirmation is requested
      by the Administrative Agent or any Lender, of each telephonic notice signed
      by
      an Authorized Officer. If the written confirmation differs in any material
      respect from the action taken by the Administrative Agent and the Lenders,
      the
      records of the Administrative Agent and the Lenders shall govern absent manifest
      error.

     

    SECTION
      2.14. Interest
      Payment Dates; Interest and Fee Basis.
      Interest accrued on each ABR Advance and Swing Line Loan shall be payable on
      each Monthly Payment Date, commencing with the first such date to occur after
      the date hereof, on any date on which the ABR Advance or Swing Line Loan is
      prepaid, whether due to acceleration or otherwise, and on the Termination Date.
      Interest accrued on that portion of the outstanding principal amount of any
      ABR
      Advance converted into a Eurodollar Advance on a day other than a Monthly
      Payment Date shall be payable on the date of conversion. Interest accrued on
      each Eurodollar Advance and Competitive Loan shall be payable on the last day
      of
      its applicable Interest Period, on any date on which the Eurodollar Advance
      or
      Competitive Loan is prepaid, whether by acceleration or otherwise, and at
      maturity. Interest accrued on each Eurodollar Advance having an Interest Period
      longer than three months shall also be payable on the last day of each
      three-month interval during such Interest Period. Interest on ABR Loans, Swing
      Line Loans and Competitive Loans, Facility Fees and Facility Letter of Credit
      Fees shall be calculated for actual days elapsed on the basis of a 365-day
      (or,
      if applicable, 366-day) year; interest on Eurodollar Advances shall be
      calculated for actual days elapsed on the basis of a 360-day year. Interest
      shall be payable for the day an Advance is made but not for the day of any
      payment on the amount paid if payment is received prior to 2:00 p.m. (New York
      time) at the place of payment. If any payment of principal of or interest on
      an
      Advance shall become due on a day which is not a Business Day, such payment
      shall be made on the next succeeding Business Day and, in the case of a
      principal payment, such extension of time shall be included in computing
      interest in connection with such payment.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    SECTION
      2.15. Notification
      of Advances, Interest Rates, Prepayments and Commitment
      Reductions.
      Promptly after receipt thereof, the Administrative Agent will notify each Lender
      of the contents of each notice of reduction of the Aggregate Commitment received
      by the Administrative Agent and will notify each Lender of the contents of
      each
      Borrowing Notice, Conversion/Continuation Notice and repayment notice received
      by the Administrative Agent hereunder. The Administrative Agent will notify
      each
      Lender of the interest rate applicable to each Eurodollar Advance promptly
      upon
      determination of such interest rate.

     

    SECTION
      2.16. Lending
      Installations.
      Each
      Lender may book its Loans at any Lending Installation selected by such Lender
      and may change its Lending Installation from time to time. All terms of this
      Agreement shall apply to any such Lending Installation and the Notes shall
      be
      deemed held by each Lender for the benefit of such Lending Installation. Each
      Lender may, by written or telex notice to the Administrative Agent and the
      Borrower, designate a Lending Installation through which Loans will be made
      by
      it and for whose account Loan payments are to be made.

     

    SECTION
      2.17. Increase
      in Aggregate Commitment. 

    

    (a) Request
      for Increase.
      The
      Borrower may, at any time and from time to time, request, by notice to the
      Administrative Agent, the Administrative Agent’s approval of an increase of the
      Aggregate Commitment (a “Commitment Increase”) within the limitations hereafter
      described, which request shall set forth the amount of each such requested
      Commitment Increase. Within twenty (20) days of such request, the Administrative
      Agent shall advise the Borrower of its approval or disapproval of such request;
      failure to so advise the Borrower shall constitute disapproval. If the
      Administrative Agent approves any such Commitment Increase, then the Aggregate
      Commitment may be so increased (up to the amount of such approved Commitment
      Increase) by having one or more New Lenders increase the amount of their then
      existing Commitments or become Lenders. Any Commitment Increase shall be subject
      to the following limitations and conditions: (i) any increase (in the aggregate)
      in the Aggregate Commitment and the amount (in the aggregate) of any new
      Commitment and/or any amount (in the aggregate) of any increase in the
      Commitment of any New Lender, shall not be less than $5,000,000 (and shall
      be in
      integral multiples of $1,000,000 if in excess thereof); (ii) no Commitment
      Increase pursuant to this Section
      2.17
      shall
      increase the Aggregate Commitment to an amount in excess of $3,200,000,000;
      (iii) the Borrower and each New Lender shall have executed and delivered a
      commitment and acceptance (the “Commitment and Acceptance”) substantially in the
      form of Exhibit
      G
      hereto,
      and the Administrative Agent shall have accepted and executed the same; (iv)
      the
      Borrower shall have executed and delivered to the Administrative Agent such
      Note
      or Notes as any such New Lender shall request to reflect such Commitment
      Increase; (v) the Borrower shall have delivered to the Administrative Agent
      opinions of counsel (substantially similar to the forms of opinions provided
      for
      in Section
      5.01
      modified
      to apply to the Commitment Increase and each Note and Commitment and Acceptance
      executed and delivered in connection therewith); (vi) the Guarantors shall
      have
      consented in writing to the Commitment Increase and shall have agreed that
      their
      Guaranties continue in full force and effect; and (vii) the Borrower and each
      New Lender shall otherwise have executed and delivered such other instruments
      and documents as the Administrative Agent shall have reasonably requested in
      connection with such Commitment Increase. The form and substance of the
      documents required under clauses
      (iii)
      through
(vii)
      above
      shall be fully acceptable to the Administrative Agent. The Administrative Agent
      shall provide written notice to all of the Lenders hereunder of any Commitment
      Increase.

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    (b) Revolving
      Loans by New Lenders.
      Upon
      the effective date of any increase in the Aggregate Commitment pursuant to
      the
      provisions hereof, which effective date shall be mutually agreed upon by the
      Borrower, each New Lender and the Administrative Agent, each New Lender shall
      make a payment to the Administrative Agent in an amount sufficient, upon the
      application of such payments by all New Lenders to the reduction of the
      outstanding Revolving Advances held by the Lenders, to cause the principal
      amount outstanding under the Revolving Loans made by each Lender (including
      any
      New Lender) to be in the amount of its Pro Rata Share (upon the effective date
      of such increase) of all outstanding Revolving Advances. The Borrower hereby
      irrevocably authorizes each New Lender to fund to the Administrative Agent
      the
      payment required to be made pursuant to the immediately preceding sentence
      for
      application to the reduction of the outstanding Revolving Loans held by the
      other Lenders hereunder. If, as a result of the repayment of the Revolving
      Advances provided for in this Section
      2.17(b),
      any
      payment of a Eurodollar Advance occurs on a day which is not the last day of
      the
      applicable Interest Period, the Borrower will pay to the Administrative Agent
      for the benefit of any of the Lenders holding a Eurodollar Loan any loss or
      cost
      incurred by such Lender resulting therefrom in accordance with Section
      3.04.
      Upon
      the effective date of such increase in the Aggregate Commitment, all Revolving
      Loans outstanding hereunder (including any Revolving Loans made by the New
      Lenders on such date) shall be ABR Loans, subject to the Borrower’s right to
      convert the same to Eurodollar Loans on or after such date in accordance with
      the provisions of Section
      2.07.

    

    (c) New
      Lenders’ Participation in Facility Letters of Credit.
      Upon
      the effective date of any increase in the Aggregate Commitment and the making
      of
      the Revolving Loans by the New Lenders in accordance with the provisions of
      Section
      2.17(b),
      each
      New Lender shall also be deemed to have irrevocably and unconditionally
      purchased and received, without recourse or warranty, from the Lenders party
      to
      this Agreement immediately prior to the effective date of such increase, an
      undivided interest and participation in any Facility Letter of Credit then
      outstanding, ratably, such that each Lender (including each New Lender) holds
      a
      participation interest in each such Facility Letter of Credit in proportion
      to
      the ratio that such Lender’s Commitment (upon the effective date of such
      increase in the Aggregate Commitment) bears to the Aggregate Commitment as
      so
      increased.

    

    (d) No
      Obligation to Increase Commitment.
      Nothing
      contained herein shall constitute, or otherwise be deemed to be, a commitment
      or
      agreement on the part of the Borrower or the Administrative Agent to give or
      grant any Lender the right to increase its Commitment hereunder at any time
      or a
      commitment or agreement on the part of any Lender to increase its Commitment
      hereunder at any time, and no Commitment of a Lender shall be increased without
      its prior written approval.

     

    SECTION
      2.18. Facility
      Letters of Credit.

    

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    (a) Obligation
      to Issue.
      Subject
      to the terms and conditions of this Agreement and in reliance upon the
      representations and warranties of the Borrower herein set forth, each Issuer
      hereby agrees to issue upon the request of and for the account of the Borrower,
      through such of the Issuer’s Lending Installations or Affiliates as the Issuer
      and the Borrower may jointly agree, one or more Facility Letters of Credit
      in
      accordance with this Section
      2.18
      from
      time to time during the period commencing on the Closing Date and ending on
      the
      fourteenth day prior to the Termination Date.

    

    (b) Conditions
      for Issuance.
      In
      addition to being subject to the satisfaction of the conditions contained in
      Section
      5.02,
      the
      obligation of an Issuer to issue, and the issuance of, any Facility Letter
      of
      Credit is subject to the satisfaction in full of the following
      conditions:

    

    (i) the
      aggregate maximum amount then available for drawing under Facility Letters
      of
      Credit issued by such Issuer, after giving effect to the Facility Letter of
      Credit requested hereunder, shall not exceed any limit imposed by law or
      regulation upon such Issuer;

    

    (ii) after
      giving effect to the requested issuance of any Facility Letter of Credit, the
      Facility Letter of Credit Obligations do not exceed the lesser of (A) the
      Aggregate Letter of Credit Commitment, or (B) an amount equal to the amount
      by
      which the Aggregate Commitment exceeds the sum of all outstanding Revolving
      Advances, all outstanding Competitive Loans and all outstanding Swing Line
      Loans;

    

    (iii) the
      Facility Letter of Credit shall be a standby Letter of Credit and not a trade
      Letter of Credit, shall only provide for drawings by sight draft and shall
      be
      issued in U.S. Dollars;

    

    (iv) the
      requested Facility Letter of Credit has an expiration date not later than
      fourteen days prior to the Termination Date; 

    

    (v) the
      Borrower shall have delivered to such Issuer at such times and in such manner
      as
      such Issuer may reasonably prescribe such documents and materials as may be
      required pursuant to the terms of the proposed Facility Letter of Credit, and
      the proposed Facility Letter of Credit shall be satisfactory to such Issuer
      as
      to form and content; and

    

    (vi) as
      of the
      Issuance Date, no order, judgment or decree of any court, arbitrator or
      governmental authority shall purport by its terms to enjoin or restrain such
      Issuer from issuing the Facility Letter of Credit and no law, rule or regulation
      applicable to such Issuer and no request or directive (whether or not having
      the
      force of law) from any governmental authority with jurisdiction over the Issuer
      shall prohibit or request that such Issuer refrain from the issuance of Letters
      of Credit generally or the issuance of that Facility Letter of Credit (and
      in
      any such case, such Issuer shall promptly notify the Administrative Agent and
      the Borrower of such fact).

    

    (c) Procedure
      for Issuance.

    

    (i) The
      Borrower shall give an Issuer and the Administrative Agent at least three
      Business Days’ prior written notice of any requested issuance of a Facility
      Letter of Credit under this Agreement (a “Letter of Credit Request”). The Letter
      of Credit Request shall be in a form acceptable to the Administrative Agent,
      the
      Issuer and the Borrower and shall specify:

    

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (A)

            	
              the
                stated amount of the Facility Letter of Credit
                requested;

            

    

    

    
      	 	
              (B)

            	
              the
                effective date (which day shall be a Business Day) of issuance of
                such
                requested Facility Letter of Credit (the “Issuance
                Date”);

            

    

    

    
      	 	
              (C)

            	
              the
                date on which such requested Facility Letter of Credit is to expire
                (which
                date shall comply with the provisions of Section
                2.18(b)(iv));

            

    

    

    
      	 	
              (D)

            	
              the
                name of the Issuer chosen by the Borrower to issue the requested
                Facility
                Letter of Credit;

            

    

    

    
      	 	
              (E)

            	
              the
                purpose for which such Facility Letter of Credit is to be issued;
                and

            

    

    

    
      	 	
              (F)

            	
              the
                Person for whose benefit the requested Facility Letter of Credit
                is to be
                issued.

            

    

    

    At
      the
      time the Letter of Credit Request is made, the Borrower shall also provide
      the
      Administrative Agent and the Issuer with a copy of the form (if specified by
      the
      beneficiary) of the Facility Letter of Credit it is requesting be issued. Such
      Letter of Credit Request, to be effective, must be received by such Issuer
      and
      the Administrative Agent not later than 3:00 p.m. (New York time) on the last
      Business Day on which a Letter of Credit Request can be given under this
Section
      2.18(c)(i).
      Promptly after receipt of any Letter of Credit Request, the Issuer shall confirm
      with the Administrative Agent (by telephone or in writing) that the
      Administrative Agent has received a copy of such Letter of Credit Request from
      the Borrower and, if not, the Issuer shall promptly provide the Administrative
      Agent with a copy thereof.

    

    (ii) Subject
      to the terms and conditions of Section
      2.18(b)
      and
      provided that (A) the applicable conditions set forth in Sections
      5.01
      and
5.02
      hereof
      have been satisfied and (B) the Issuer shall have received written or telephonic
      notice from the Administrative Agent stating that the issuance of such Facility
      Letter of Credit would not violate Section
      2.18(b),
      such
      Issuer shall, on the Issuance Date, issue a Facility Letter of Credit on behalf
      of the Borrower in accordance with the Issuer’s usual and customary business
      practices unless the Issuer has actually received (1) written notice from the
      Borrower specifically revoking the Letter of Credit Request with respect to
      such
      Facility Letter of Credit or (2) written notice from a Lender, which complies
      with the provisions of Section
      2.18(e)(i).
      

    

    (iii) Each
      Issuer shall promptly give the Administrative Agent and the Borrower written
      notice or telex notice, or telephonic notice confirmed promptly thereafter
      in
      writing, of the issuance, amendment, extension of cancellation of a Facility
      Letter of Credit (the “Issuance Notice”), together with (for the Borrower and
      the Administrative Agent) a copy of such Facility Letter of Credit (or amendment
      or extension thereof). Notices and copies of Facility Letters of Credit (or
      amendments or extensions thereof) required to be furnished to the Administrative
      Agent under this Section
      2.18(c)(iii)
      shall
      also be delivered to Floro Alcantara, 420 West Van Buren, Floor 2, Mail Code
      IL1-0236, Chicago, IL 60606. Upon receipt of the Issuance Notice, the
      Administrative Agent shall notify each Lender of the issuance, amendment,
      extension or cancellation of such Facility Letter of Credit, which notice shall
      identify the Issuance Date, the Issuer, the amount and the expiration date
      of
      such Facility Letter of Credit (as amended or extended, if
      applicable).

    

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    (iv) An
      Issuer
      shall not extend or amend any Facility Letter of Credit or allow a Facility
      Letter of Credit to be automatically extended unless the requirements of this
      Section
      2.18(c)
      are met
      as though a new Facility Letter of Credit was being requested and
      issued.

    

    (d) Payment
      of Reimbursement Obligations; Duties of Issuers

    

    (i) Each
      Issuer shall promptly notify the Borrower and the Administrative Agent (which
      shall promptly notify the Lenders) of any draw under a Facility Letter of Credit
      and the Borrower shall reimburse such Issuer in accordance with Section
      2.18(d)(iii).
      Any
      Reimbursement Obligation with respect to any Facility Letter of Credit shall
      bear interest from the date on which the Issuer honors a drawing under such
      Facility Letter of Credit until payment in full is received by such Issuer
      at
      (A) the Alternate Base Rate until the second succeeding Business Day after
      such
      date and (B) the Default Rate thereafter.

    

    (ii) Any
      action taken or omitted to be taken by an Issuer under or in connection with
      any
      Facility Letter of Credit, if taken or omitted in the absence of bad faith,
      willful misconduct or gross negligence as determined in a final judgment by
      a
      court of competent jurisdiction, shall not (A) put that Issuer under any
      resulting liability to any Lender or (B) assuming that such Issuer has complied
      with the procedures specified in Section
      2.18(c),
      all
      conditions to the issuance of a Facility Letter of Credit have been satisfied
      and any such Lender has not given a notice contemplated by Section
      2.18(e)(i)
      that
      continues in full force and effect, relieve any such Lender of its obligations
      hereunder to that Issuer. In determining whether to pay under any Facility
      Letter of Credit, an Issuer shall have no obligation relative to the Lenders
      or
      to the Borrower other than to confirm that any documents required to be
      delivered under such Facility Letter of Credit have been delivered in compliance
      and that they comply on their face (including that any draw request has been
      purportedly executed by an authorized signatory, if and to the extent such
      a
      requirement is specified in the related Facility Letter of Credit), with the
      requirements of such Facility Letter of Credit.

    

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    (iii) The
      Borrower agrees to pay to each Issuer the amount of all Reimbursement
      Obligations, interest and other amounts payable to such Issuer under or in
      connection with any Facility Letter of Credit immediately when due (and in
      any
      event shall reimburse an Issuer for drawings under a Facility Letter of Credit
      issued by it no later than two (2) Business Days after payment by that Issuer),
      irrespective of any claim, set-off, defense or other right which the Borrower
      or
      any Subsidiary may have at any time against any Issuer or any other Person,
      under all circumstances, including without limitation, any of the following
      circumstances:

    

    
      	 	
              (A)

            	
              any
                lack of validity or enforceability of this Agreement or any of the
                other
                Loan Documents;

            

    

    

    
      	 	
              (B)

            	
              the
                existence of any claim, set-off, defense or other right which the
                Borrower
                or any Subsidiary may have at any time against a beneficiary named
                in a
                Facility Letter of Credit or, if such Facility Letter of Credit is
                transferable, any transferee of any Facility Letter of Credit (or
                any
                Person for whom any such transferee may be acting), the Administrative
                Agent, the Issuer, any Lender, or any other Person, whether in connection
                with this Agreement, any Facility Letter of Credit, the transactions
                contemplated herein or any unrelated transactions (including any
                underlying transactions between the Borrower or any Subsidiary and
                the
                beneficiary named in any Facility Letter of
                Credit);

            

    

    

    
      	 	
              (C)

            	
              any
                draft, certificate or any other document presented under the Facility
                Letter of Credit proving to be forged, fraudulent or invalid in any
                respect or any statement therein being untrue or inaccurate in any
                respect
                (except to the extent any such invalidity or insufficiency is found
                in a
                final judgment of a court of competent jurisdiction to have resulted
                from
                the gross negligence or willful misconduct of such
                Issuer).

            

    

    

    
      	 	
              (D)

            	
              the
                surrender or impairment of any guaranty or security for the performance
                or
                observance of any of the terms of any of the Loan Documents;
                or

            

    

    

    
      	 	
              (E)

            	
              the
                occurrence of any Event of Default or Unmatured
                Default.

            

    

    

    (iv) As
      among
      the Borrower, the Issuers, the Administrative Agent and the Lenders, the
      Borrower assumes all risks of the acts and omissions of, or misuse of the
      Facility Letters of Credit by, the respective beneficiaries of the Facility
      Letters of Credit (except such as are found in a final judgment by a court
      of
      competent jurisdiction to have resulted from the gross negligence or willful
      misconduct of an Issuer). In furtherance and not in limitation of the foregoing,
      the Issuers, the Administrative Agent and the Lenders shall not be responsible
      (absent gross negligence or willful misconduct in connection therewith, as
      determined by the final judgment of a court of competent jurisdiction) for
      (A)
      the forms, validity, sufficiency, accuracy, genuineness or legal effect of
      any
      document submitted by any party in connection with the application for and
      issuance of any Facility Letter of Credit, even if it should in fact prove
      to be
      in any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
      (B) the validity or sufficiency of any instrument transferring or assigning
      or
      purporting thereof, in whole or in part, which may prove to be invalid or
      ineffective for any reason; (C) failure of the beneficiary of a Facility Letter
      of Credit to comply fully with underlying conditions required in order to draw
      upon such Facility Letter of Credit, so long a such beneficiary has presented
      the omissions, interruptions or delays in transmission or delivery of any
      messages, by mail, cable, telegraph, telex or otherwise; (E) errors in
      interpretation of technical terms; (F) misapplication by the beneficiary of
      a
      Facility Letter of Credit of the proceeds of any drawing under such Facility
      Letter of Credit; or (G) any consequences arising from causes beyond the control
      of any Issuer, the Administrative Agent or any Lender.

    

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    (e) Participation.

    

    (i) Upon
      the
      Closing Date, each of the Lenders shall be deemed to have irrevocably and
      unconditionally purchased and received from the Issuer, without recourse or
      warranty, an undivided interest and participation equal to its Pro Rata Share
      of
      the Existing Letters of Credit (including, without limitation, all rights and
      obligations of the Issuer with respect thereto) and any security therefor or
      guaranty pertaining thereto. Immediately upon issuance by an Issuer of any
      Facility Letter of Credit in accordance with the procedures set forth in
Section
      2.18(c)
      each
      Lender shall be deemed to have irrevocably and unconditionally purchased and
      received from the Issuer, without recourse or warranty, an undivided interest
      and participation equal to its Pro Rata Share of such Facility Letter of Credit
      (including, without limitation, all rights and obligations of the Issuer with
      respect thereto) and any security therefor or guaranty pertaining thereto,
      provided,
      that a
      Letter of Credit issued by any Issuer shall not be deemed to be a Facility
      Letter of Credit for purposes of this Agreement if the Administrative Agent
      and
      such Issuer shall have received written notice from any Lender on or before
      the
      Business Day prior to the date of its issuance of such Letter of Credit that
      one
      or more of the conditions contained in Sections
      5.01
      and
5.02
      is not
      then satisfied, and in the event an Issuer receives such notice, it shall have
      no further obligation to issue any Facility Letter of Credit until such notice
      is withdrawn by that Lender or the Issuer receives a notice from the
      Administrative Agent that such condition has been effectively waived in
      accordance with the provisions of this Agreement.

    

    (ii) In
      the
      event that any Issuer makes any payment under any Facility Letter of Credit
      and
      the Borrower shall not have repaid such amount to such Issuer pursuant to
Section
      2.18(d),
      such
      Issuer shall promptly notify the Administrative Agent, which shall promptly
      notify each Lender, of such failure, and each Lender shall promptly and
      unconditionally pay to the Administrative Agent for the account of such Issuer
      the amount of such Lender’s Pro Rata Share of the unreimbursed amount of any
      such payment. The failure of any Lender to make available to the Administrative
      Agent its Pro Rata Share of the unreimbursed amount of any such payment shall
      not relieve any other Lender of its obligation hereunder to make available
      to
      the Administrative Agent its Pro Rata Share of the unreimbursed amount of any
      payment on the date such payment is to be made, but no Lender shall be
      responsible for the failure of any other Lender to make available to the
      Administrative Agent its Pro Rata Share of the unreimbursed amount of any
      payment on the date such payment is to be made.

    

    (iii) Whenever
      an Issuer receives a payment on account of a Reimbursement Obligation, including
      any interest thereon, it shall promptly pay to the Administrative Agent and
      the
      Administrative Agent shall promptly pay to each Lender which has funded its
      participating interest therein, in immediately available funds, an amount equal
      to its Pro Rata Share thereof.

    

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    (iv) Upon
      the
      request of the Administrative Agent or any Lender, an Issuer shall furnish
      to
      such Administrative Agent or Lender copies of any Facility Letter of Credit
      to
      which that Issuer is party and such other documentation as may reasonably be
      requested by the Administrative Agent or Lender.

    

    (v) The
      obligations of a Lender to make payments to the Administrative Agent for the
      account of an Issuer with respect to a Facility Letter of Credit shall be
      absolute, unconditional and irrevocable, not subject to any counterclaim,
      set-off, qualification or exception whatsoever and shall be made in accordance
      with the terms and conditions of this Agreement under any
      circumstances.

    

    (vi) In
      the
      event any payment by the Borrower received by an Issuer with respect to a
      Facility Letter of Credit and distributed by the Administrative Agent to the
      Lenders on account of their participations is thereafter set aside, avoided
      or
      recovered from that Issuer in connection with any such distribution, such Lender
      shall, upon demand by that Issuer, contribute such Lender’s Pro Rata Share of
      the amount set aside, avoided or recovered together with interest at the rate
      required to be paid by that Issuer upon the amount required to be repaid by
      it.

    

    (f) Compensation
      for Facility Letters of Credit.

    

    (i) The
      Borrower shall pay to the Administrative Agent, for the account of the Lenders,
      a fee (the “Facility Letter of Credit Fee”) with respect to each Facility Letter
      of Credit for the period from the Issuance Date thereof (or, in the case of
      the
      Existing Letters of Credit, the Closing Date) to and including the final
      expiration date thereof, in a per annum amount equal to the product, calculated
      on a daily basis for each day during such period, of (A) the undrawn amount
      of
      such Facility Letter of Credit for such day multiplied by (B) the Facility
      Letter of Credit Fee Rate for such day, less 0.125% per annum. The Facility
      Letter of Credit Fees shall be due and payable quarterly in arrears not later
      than five (5) Business Days following Administrative Agent’s delivery to
      Borrower of the quarterly statement of Facility Letter of Credit Fees and,
      to
      the extent any such fees are then due and unpaid, on the Termination Date.
      The
      Administrative Agent shall promptly remit such Facility Letter of Credit Fees,
      when received by the Administrative Agent, to the Lenders (including the Issuer)
      in accordance with their Pro Rata Shares thereof. The Facility Letter of Credit
      Fees, once paid, shall not be refundable for any reason.

    

    (ii) The
      Borrower shall also pay to each Issuer, solely for its own account, as an
      issuing fee, with respect to each Facility Letter of Credit issued by such
      Issuer for the period from the Issuance Date thereof (or, in the case of the
      Existing Letters of Credit, the Closing Date) to and including the final
      expiration date thereof, in an amount equal to (A) the product, calculated
      on a
      daily basis for each day during such period, of (x) the undrawn amount of such
      Facility Letter of Credit for such day multiplied by (y) 0.125% per annum,
      plus
      (B) in the case of any Facility Letter of Credit in a stated amount of less
      than
      $10,000.00, an additional fee in an amount to be agreed upon by the Borrower
      and
      the Issuer. The foregoing fees payable to the Issuer shall also be due and
      payable quarterly in arrears on the date on which Facility Letter of Credit
      Fees
      are payable and, to the extent any such fees are then due and unpaid, on the
      Termination Date. The foregoing fees, once paid, shall not be refundable for
      any
      reason. Each Issuer shall be entitled to receive its reasonable out-of-pocket
      costs of issuing and servicing Facility Letters of Credit.

    

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    (iii) The
      Administrative Agent shall, with reasonable promptness following receipt from
      all Issuers of the reports provided for in Section
      2.18(g)
      for the
      months of March, June, September and December, respectively, deliver to the
      Borrower a quarterly statement of the Letter of Credit Fees then due and
      payable.

    

    (g) Issuer
      Reporting Requirements.
      Each
      Issuer shall, no later than the third (3rd)
      Business Day following the last day of each month, provide to the Administrative
      Agent a schedule of the Facility Letters of Credit issued by it, in form and
      substance reasonably satisfactory to the Administrative Agent, showing the
      Issuance Date, account party, original face amount (if any) paid thereunder,
      expiration date and the reference number of each Facility Letter of Credit
      outstanding at any time during such month (and whether such Facility Letter
      of
      Credit is a Performance Letter of Credit or financial Letter of Credit) and
      the
      aggregate amount (if any) payable by the Borrower to such Issuer during the
      month pursuant to Section
      3.02.
      Copies
      of such reports shall be provided promptly to each Lender and the Borrower
      by
      the Administrative Agent. The reporting requirements hereunder are in addition
      to those set forth in Section
      2.18(c).

    

    (h) Letter
      of Credit Collateral Account.
      From
      and after the occurrence and during the continuance of an Event of Default,
      the
      Borrower hereby agrees that it will, until the later of the Termination Date
      or
      the date on which all Facility Letters of Credit have expired and all
      Obligations have been paid in full, maintain a special collateral account (the
      “Letter of Credit Collateral Account”) at the Administrative Agent’s office at
      the address specified pursuant to Article
      XIII,
      in the
      name of the Borrower but under the sole dominion and control of the
      Administrative Agent, and hereby grants to the Administrative Agent for the
      benefit of the Lenders, as security for repayment of the Obligations, a security
      interest in and to the Letter of Credit Collateral Account and any funds that
      may hereafter be on deposit in such account pursuant to Section
      9.03.

     

    SECTION
      2.19. Non-Receipt
      of Funds by the Administrative Agent.
      Unless
      the Borrower or a Lender, as the case may be, notifies the Administrative Agent
      prior to the date on which it is scheduled to make payment to the Administrative
      Agent of (a) in the case of a Lender, the proceeds of a Loan or (b) in the
      case
      of the Borrower, a payment of principal, interest or fees to the Administrative
      Agent for the account of any one or more of the Lenders, that it does not intend
      to make such payment, the Administrative Agent may assume that such payment
      has
      been made. The Administrative Agent may, but shall not be obligated to, make
      the
      amount of such payment available to the intended recipient in reliance upon
      such
      assumption. If such Lender or the Borrower, as the case may be, has not in
      fact
      made such payment to the Administrative Agent, the recipient of such payment
      shall, on demand by the Administrative Agent, repay to the Administrative Agent
      the amount so made available together with interest thereon in respect of each
      day during the period commencing on the date such amount was so made available
      by the Administrative Agent until the date the Administrative Agent recovers
      such amount at a rate per annum equal to (i) in the case of payment by a Lender,
      the Federal Funds Effective Rate for such day or (ii) in the case of payment
      by
      the Borrower, the interest rate applicable to the relevant Loan.

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    SECTION
      2.20. Withholding
      Tax Exemption.
      Each
      Lender that is not incorporated under the laws of the United States of America
      or a state thereof (each a “Non-U.S. Lender”) agrees that (if it has not done so
      prior to the Closing Date) it will, not more than five (5) Business Days after
      the date of this Agreement, (i) deliver to each of the Borrower and the
      Administrative Agent two duly completed copies of United States Internal Revenue
      Service Form W-8BEN or W-8ECI (or a successor form) or, in the case of a Lender
      claiming exemption from withholding of any United States federal income taxes
      under Section 871(h) or 881(c) of the Code with respect to payments of
      "portfolio interest," a certificate representing that such Lender is not (i)
      a
      "bank" for purposes of Section 881(c) of the Code, (ii) a ten-percent
      shareholder of the Borrower (within the meaning of Section 871(h)(3)(B) of
      the
      Code), or (iii) a controlled foreign corporation related to the Borrower (within
      the meaning of Section 864(d)(4) of the Code), and a Form W-8BEN (or a successor
      form), in all cases properly completed and duly executed, certifying in either
      case that such Lender is entitled to receive payments under this Agreement
      without deduction or withholding of any United States federal income taxes,
      and
      (ii) deliver to each of the Borrower and the Administrative Agent a United
      States Internal Revenue Form W-8 or W-9, as the case may be, and certify that
      it
      is entitled to an exemption from United States backup withholding tax. Each
      Non-U.S. Lender further undertakes to deliver to each of the Borrower and the
      Administrative Agent (x) renewals or additional copies of such form (or any
      successor form) on or before the date that such form expires or becomes
      obsolete, and (y) after the occurrence of any event requiring a change in the
      most recent forms so delivered by it, such additional forms or amendments
      thereto as may be reasonably requested by the Borrower or the Administrative
      Agent. All forms or amendments described in the preceding sentence shall certify
      that such Lender is entitled to receive payments under this Agreement without
      deduction or withholding of any United States federal income taxes, unless
      an
      event (including without limitation any change in treaty, law or regulation)
      has
      occurred prior to the date on which any such delivery would otherwise be
      required which renders all such forms inapplicable or which would prevent such
      Lender from duly completing and delivering any such form or amendment with
      respect to it and such Lender advises the Borrower and the Administrative Agent
      that it is not capable of receiving payments without any deduction or
      withholding of United States federal income tax.

     

    SECTION
      2.21. Unconditional
      Obligation to Make Payment.
      To the
      fullest extent permitted by law, the Borrower shall make all payments hereunder,
      under the Notes and under all of the other Loan Documents regardless of any
      defense or counterclaim, including any defense or counterclaim based on any
      law,
      rule or policy which is now or hereafter promulgated by any governmental
      authority or regulatory body and which may adversely affect the Borrower’s
      obligations to make, or the right of the holder of any Note to receive, those
      payments.

     

    SECTION
      2.22. Compensating
      Balances.
      JPMorgan Chase Bank shall have the right (but no obligation) to enter into
      a
      separate agreement with the Borrower which provides for the reduction of the
      interest rate payable to JPMorgan Chase Bank hereunder in the event that the
      Borrower maintains collected balances in non-interest bearing accounts at
      JPMorgan Chase Bank, but in no event shall such agreement affect the amounts
      payable under this Agreement to any other Lender. Similarly, each other Lender
      shall have the right (but no obligation) to enter into a separate agreement
      with
      the Borrower which provides for the rebate to Borrower of a portion of the
      interest paid to such Lender under this Agreement in the event that the Borrower
      maintains collected balances in non-interest bearing accounts at such Lender,
      but in no event shall any such agreement affect the amounts payable under this
      Agreement to such Lender.

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    SECTION
      2.23. Extension
      of Termination Date.
      Not
      more than once in any fiscal year of the Borrower, the Borrower may request
      a
      one-year extension of the Termination Date by submitting a written request
      for
      an extension to the Administrative Agent (an “Extension Request”), provided
      the
      Extension Request shall be delivered not later than one year before the
      Termination Date and that the requested Termination Date shall be no more than
      five (5) years after the date on which the Extension Request is received.
      Promptly following receipt of a Extension Request, the Administrative Agent
      shall notify each Lender of the contents thereof, shall request each Lender
      to
      approve the Extension Request, and shall specify the date (which must be at
      least 30 days after the Extension Request is delivered to the Lenders) as of
      which the Lenders must respond to the Extension Request (the “Reply Date”). If
      Lenders whose Pro Rata Shares equal or exceed in the aggregate 66-2/3% of all
      Pro Rata Shares do not consent in writing to such extension on or before the
      Reply Date, the Extension Request shall be denied. If such written consent
      is
      received on or before the Reply Date from Lenders whose Pro Rata Shares equal
      or
      exceed in the aggregate 66 2/3% of all Pro Rata Shares, the Termination Date
      shall be extended by one year as requested in such Extension Request, but such
      extension shall only apply to the Lenders that have so consented and shall
      not
      apply to any Lender that has not so consented (each, a “Non-Consenting Lender”).
      Except to the extent that a Non-Consenting Lender is replaced (as provided
      in
Section
      2.24
      hereof)
      prior to the Termination Date (as determined prior to such Extension Request),
      then on such date (i) the Commitment of each such Non-Consenting Lender shall
      terminate, (ii) the Aggregate Commitment shall be reduced by the aggregate
      amount of such terminated Commitments and (iii) all Loans and other Obligations
      to each such Non-Consenting Lender shall be paid in full by the
      Borrower.
      If the
      Aggregate Credit Exposure following the payment provided for in clause
      (iii)
      above
      exceeds the Aggregate Commitment (as reduced as provided in clause
      (ii)
      above),
      (A) the Borrower shall pay, on the date on which the Commitment of the
      Non-Consenting Lender terminates, Loans in the amounts necessary to cause such
      Aggregate Credit Exposure to equal but not exceed the Aggregate Commitment
      (as
      so reduced) and (B) if the outstanding Facility Letter of Credit Obligations
      exceed the Aggregate Commitment (as so reduced), the Borrower shall pay to
      the
      Administrative Agent on such date an amount equal to the amount by which the
      outstanding Facility Letter of Credit Obligations exceed the Aggregate
      Commitment (as so reduced), which funds shall be held in the Letter of Credit
      Collateral Account in accordance with and subject to the terms of Section
      2.17(h).

    SECTION
      2.24. Replacement
      of Certain Lenders.
      In the
      event a Lender (the “Affected Lender”) is a Non-Consenting Lender under
Section
      2.23 or
      a
      non-consenting Lender under Section
      13.06(b),
      the
      Borrower may, upon written notice to such Affected Lender and to the
      Administrative Agent, require such Affected Lender to assign, and such Affected
      Lender shall assign, within five Business Days after the date of such notice,
      to
      one or more assignees selected by the Borrower and that are Eligible Assignees
      and otherwise comply with the provisions of Section
      12.02
      (each, a
“Replacement Lender”), all of such Affected Lender’s rights and obligations
      under this Agreement and the other Loan Documents (including without limitation
      its Commitments and all Loans owing to it) in accordance with Section
      12.02.
      With
      respect to any such assignment, the Affected Lender shall concurrently with
      such
      assignment receive payment in full of all amounts due and owing to it hereunder
      or under any of the other Loan Documents with respect to the Loans and
      Commitments so assigned, including without limitation the aggregate outstanding
      principal amount of such Loans owed to such Affected Lender, together with
      accrued interest thereon through the date of such assignment, amounts payable
      to
      such Affected Lender under Article
      III
      with
      respect to such Loans and all fees payable to such Affected Lender hereunder
      with respect to such Loans and Commitments so assigned. Any assignment to a
      Replacement Lender pursuant to the provisions of this Section
      2.24
      shall be
      in accordance with the provisions of Section
      12.02
      hereof.
      In no event shall any Lender have any obligation to issue a new or increased
      Commitment to replace all or any part of any Commitment of any Non-Consenting
      Lender or any non-consenting Lender under Section
      13.06(b).

    

    
      
        
        

      

      
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    ARTICLE
      III

     

    CHANGE
      IN CIRCUMSTANCES

    SECTION
      3.01. Yield-Protection.
      If the
      adoption, on or after the Agreement Date, of any law or any governmental or
      quasi-governmental rule, regulation, policy, guideline or directive (whether
      or
      not having the force of law), or any change, on or after the Agreement Date,
      in
      interpretation thereof, or the compliance of any Lender (which term, for
      purposes of this Article
      III,
      shall
      be deemed to include each Issuer in such capacity) therewith, 

    

    (i) subjects
      any Lender or any applicable Lending Installation to any tax, duty, charge
      or
      withholding on or from payments due from the Borrower (excluding federal
      taxation of the overall net income of any Lender or applicable Lending
      Installation), or changes the basis of taxation of payments to any Lender in
      respect of its Loans or other amounts due it hereunder, or

    

    (ii) imposes
      or increases or deems applicable any reserve, assessment, insurance charge,
      special deposit or similar requirement against assets of, deposits with or
      for
      the account of, or credit extended by, any Lender or any applicable Lending
      Installation (other than reserves and assessments taken into account in
      determining the interest rate applicable to Eurodollar Advances),
      or

    

    (iii) imposes
      any other condition the result of which is to increase the cost to any Lender
      or
      any applicable Lending Installation of making, funding or maintaining loans
      (or
      letters of credit or participations therein) or reduces any amount receivable
      by
      any Lender or any applicable Lending Installation in connection with loans
      (or
      letters of credit or participations therein), or requires any Lender or any
      applicable Lending Installation to make any payment calculated by reference
      to
      the amount of loans (or letters of credit or participations therein) held or
      interest received by it, by an amount deemed material by such
      Lender,

    

    
      
        
        

      

      
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    then,
      within 15 days of demand by such Lender, the Borrower shall pay such Lender
      that
      portion of such increased expense incurred or reduction in an amount received
      which such Lender determines is attributable to making, funding and maintaining
      its Loans, its applicable Commitment, the Facility Letters of Credit or any
      participations therein.

     

    SECTION
      3.02. Changes
      in Capital Adequacy Regulation.
      If a
      Lender reasonably determines the amount of capital required or expected to
      be
      maintained by such Lender, any Lending Installation of such Lender or any
      corporation controlling such Lender is increased as a result of a Change, and
      such increase will have the effect of reducing the rate of return on such
      Lender’s capital as a consequence of such Lender’s obligations hereunder to a
      level below that which such Lender or such corporation, as the case may be,
      could have achieved but for such Change (taking into account such Lender’s or
      such corporation’s policies, as the case may be, with respect to capital
      adequacy and any payments made to such Lender pursuant to Section
      3.01
      which
      relate to capital adequacy and assuming that such Lender’s capital was fully
      utilized prior to such Change), then within 15 days of demand by such Lender,
      the Borrower shall pay to the Administrative Agent, for the account of such
      Lender, such additional amount or amounts as will compensate such Lender for
      such reduction. If any Lender becomes entitled to claim any additional amounts
      pursuant to this Section
      3.02
      it shall
      promptly notify the Borrower through the Administrative Agent of the event
      by
      reason of which it has become so entitled, but in any event within 90 days,
      after such Lender obtains actual knowledge thereof; provided
      that
      if
      such Lender fails to give such notice within the 90-day period after it obtains
      actual knowledge of such an event, such Lender shall, with respect to such
      compensation in respect of any costs resulting from such event, only be entitled
      to payment for costs incurred from and after the date 90 days prior to the
      date
      that such Lender does give such notice. A certificate setting forth in
      reasonable detail the computation of any additional amount payable pursuant
      to
      this Section
      3.02,
      submitted by such Lender to the Borrower through the Administrative Agent,
      shall
      be delivered to the Borrower promptly after the initial incurrence of such
      additional amounts. “Change” means (i) any change after the Agreement Date in
      the Risk-Based Capital Guidelines or (ii) any adoption of or change in any
      other
      law, governmental or quasi-governmental rule, regulation, policy, guideline,
      interpretation, or directive (whether or not having the force of law) after
      the
      date of this Agreement which affects the amount of capital required or expected
      to be maintained by any Lender or any Lending Installation or any corporation
      controlling any Lender or any Lending Institution. “Risk-Based Capital
      Guidelines” means (i) the risk-based capital guidelines in effect in the United
      States on the date of this Agreement, including transition rules, and (ii)
      the
      corresponding capital regulations promulgated by regulatory authorities outside
      the United States implementing the July 1988 report of the Basle Committee
      on
      Banking Regulation and Supervisory Practices entitled “International Convergence
      of Capital Measurements and Capital Standards,” including transition rules, and
      any amendments to such regulations adopted prior to the date of this
      Agreement.

     

    SECTION
      3.03. Availability
      of Types of Advances.
      If any
      Lender determines that maintenance of its Eurodollar Loans at a suitable Lending
      Installation would violate any applicable law, rule, regulation, or directive,
      whether or not having the force of law, or if the Administrative Agent
      determines that (i) deposits of a type and maturity appropriate to match fund
      Eurodollar Advances are not available or (ii) the interest rate applicable
      to a
      Type of Revolving Advance does not accurately reflect the cost of making or
      maintaining such Revolving Advance, then the Administrative Agent shall suspend
      the availability of the affected Type of Revolving Advance and require any
      Eurodollar Advances of the affected Type of Revolving Advance to be repaid
      or to
      be converted (in accordance with the terms of this Agreement) to any Type of
      Revolving Advance which is not affected and is then available under this
      Agreement.

     

    
      
        
        

      

      
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    SECTION
      3.04. Funding
      Indemnification.
      If any
      payment of a Eurodollar Advance or Competitive Loan occurs on a date which
      is
      not the last day of the applicable Interest Period, whether because of
      acceleration, prepayment or otherwise, or a Eurodollar Advance or Competitive
      Loan is not made on the date specified by the Borrower for any reason other
      than
      default by the Lenders or applicable Lender, the Borrower will indemnify each
      Lender for any loss or cost incurred by it resulting therefrom, including,
      without limitation, any loss or cost in liquidating or employing deposits
      acquired to fund or maintain the Eurodollar Advance or Competitive
      Loan.

     

    SECTION
      3.05. Lender
      Statements Survival of Indemnity.
      To the
      extent reasonably possible, each Lender shall designate an alternate Lending
      Installation with respect to its Eurodollar Loan to reduce any liability of
      the
      Borrower to such Lender under Sections
      3.01
      and
3.02
      or to
      avoid the unavailability of a Type of Revolving Advance under Section
      3.03,
      so long
      as such designation is not disadvantageous to such Lender. Each Lender shall
      deliver a written statement of such Lender as to the amount due, if any, under
      Sections
      3.01,
      3.02
      or
3.04.
      Such
      written statement shall set forth in reasonable detail the calculations upon
      which such Lender determined such amount and shall be final, conclusive and
      binding on the Borrower in the absence of manifest error. Determination of
      amounts payable under such Sections in connection with a Eurodollar Loan or
      Competitive Loan shall be calculated as though each Lender or the applicable
      Lender or Lenders funded their Eurodollar Loans through the purchase of a
      deposit of the type and maturity corresponding to the deposit used as a
      reference in determining the Eurodollar Rate applicable to such Loan or funded
      their Competitive Loans through the purchase of a deposit of a maturity
      corresponding to the Interest Period for such Competitive Loan, whether in
      fact
      that is the case or not. Unless otherwise provided herein, the amount specified
      in the written statement shall be payable on demand after receipt by the
      Borrower of the written statement. The obligations of the Borrower under
Sections
      3.01,
      3.02
      and
3.04
      shall
      survive payment of the Obligations and termination of this
      Agreement.

    

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES

    

    The
      Borrower represents and warrants to each of the Lenders that:

     

    SECTION
      4.01. Organization,
      Powers, etc.
      Each of
      the Loan Parties (a) is a corporation, limited partnership or limited liability
      company (as applicable) duly organized or formed, validly existing and in good
      standing under laws of its state of incorporation or formation, (b) has the
      power and authority to own or hold under lease the properties it purports to
      own
      or hold under lease and to carry on its business as now conducted, (c) is duly
      qualified or licensed to transact business in every jurisdiction in which such
      qualification or licensing is necessary to enable it to enforce all of its
      material contracts and other material rights and to avoid any material penalty
      or forfeiture.

     

    
      
        
        

      

      
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    SECTION
      4.02. Authorization
      and Validity of this Agreement, etc.
      Each of
      the Loan Parties has the power and authority to execute and deliver this
      Agreement, the Notes, the Guaranties and the other Loan Documents to which
      it is
      a party and to perform all its obligations hereunder and thereunder. The
      execution and delivery by the Borrower of this Agreement and the Notes and
      by
      each of the Loan Parties of the Guaranties and the other Loan Documents to
      which
      it is a party and its performance of its obligations hereunder and thereunder
      and any and all actions taken by the Loan Parties (a) have been duly authorized
      by all requisite corporate action or other applicable limited partnership or
      limited liability company action, (b) will not violate or be in conflict with
      (i) any provisions of law (including, without limitation, any applicable usury
      or similar law), (ii) any order, rule, regulation, writ, judgment, injunction,
      decree or award of any court or other agency of government, or (iii) any
      provision of its certificate of incorporation or by-laws, certificate of limited
      partnership or limited partnership agreement, or articles or certificate of
      formation or operating agreement (as applicable), (c) will not violate, be
      in
      conflict with, result in a breach of or constitute (with or without the giving
      of notice or the passage of time or both) a default under any material
      indenture, agreement or other instrument to which such Loan Party is a party
      or
      by which it or any of its properties or assets is or may be bound (including
      without limitation any indentures pursuant to which any debt Securities of
      the
      Borrower), and (d) except as otherwise contemplated by this Agreement, will
      not
      result in the creation or imposition of any lien, charge or encumbrance upon,
      or
      any security interest in, any of its properties or assets. Each of this
      Agreement, the Notes, the Guaranties and the other applicable Loan Documents
      has
      been duly executed and delivered by the applicable Loan Parties. The Loan
      Documents constitute legal, valid and binding obligations of the applicable
      Loan
      Parties enforceable against the applicable Loan Parties in accordance with
      their
      terms, except as enforceability may be limited by bankruptcy, insolvency or
      similar laws affecting the enforcement of creditors’ rights
      generally.

     

    SECTION
      4.03. Financial
      Statements.
      The
      Borrower heretofore has provided to the Lenders (i) the consolidated balance
      sheet of the Borrower and its Subsidiaries as November 30, 2005, and the related
      consolidated statements of earnings, stockholders’ equity and cash flows for the
      12-month period ended on that date, audited and reported upon by Deloitte &
Touche, an independent registered public accounting firm (the “Borrower Audited
      Financial Statements”), and (ii) the consolidated balance sheet of the Borrower
      as of May 31, 2006, and the consolidated statements of earnings and cash flows
      of the Borrower and its Subsidiaries for the three-month period ended on that
      date, unaudited but certified to be true and accurate (subject to normal
      year-end audit adjustments) by the President and an Authorized Financial Officer
      of the Borrower (the “Borrower Unaudited Financial Statements”). Those financial
      statements and reports (subject, in the case of the Borrower Unaudited Financial
      Statements, to normal year-end audit adjustments), and the related notes and
      schedules (if any), (a) were prepared in accordance with GAAP consistently
      applied throughout the period covered thereby, (b) present fairly the
      consolidated financial condition of the Borrower and its Subsidiaries as of
      the
      date thereof, (c) show all material liabilities, direct or contingent, of the
      Borrower and its Subsidiaries as of that date (including, without limitation,
      liabilities for taxes and material commitments), and (d) present fairly the
      consolidated shareholders’ equity, results of operations and cash flows of the
      Borrower and its Subsidiaries at the date and for the period covered
      thereby.

     

    SECTION
      4.04. No
      Material Adverse Effect.
      Since
      the date of the Borrower Audited Financial Statements, no event has occurred
      which has had or could reasonably be expected to have a Material Adverse Effect.
      There are no material unrealized or expected losses in connection with loans,
      advances and other commitments of the Loan Parties.

     

    
      
        
        

      

      
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    SECTION
      4.05. Title
      to Properties.
      Each of
      the Loan Parties has good and marketable fee title, or title insurable by a
      reputable and nationally recognized title insurance company, to the Real Estate
      owned by it, and to all the other assets owned by it and either reflected on
      the
      balance sheet and related notes and schedules most recently delivered by the
      Borrower to the Lenders (the “Recent Balance Sheet”) or acquired by it after the
      date of that balance sheet and prior to the date hereof, except for those
      properties and assets which have been disposed of since the date of the Recent
      Balance Sheet or which no longer are used or useful in the conduct of its
      business. All such Real Estate and other assets owned by the Loan Parties are
      free and clear of all Mortgages, Liens, charges and other encumbrances (other
      than Permitted Liens), except (i) in the case of Real Estate, as reflected
      on
      title insurance policies insuring the interest of the applicable Loan Party
      in
      the Real Estate or in title insurance binders issued with respect to the Real
      Estate (some of which title insurance binders have expired but were valid at
      the
      time of acquisition of the relevant Real Estate), and (ii) as reflected in
      the
      Recent Balance Sheet, and none of those Mortgages, Liens, charges or other
      encumbrances, individually or in the aggregate, prevents or has a Material
      Adverse Effect upon the use by the Loan Parties of any of their respective
      properties or assets as currently conducted or as planned for the
      future.

     

    SECTION
      4.06. Litigation.
      There
      is no action, suit, proceeding, arbitration, inquiry or investigation (whether
      or not purportedly on behalf of the Borrower or any of its Subsidiaries) pending
      or, to the best knowledge of the Borrower, threatened against or affecting
      the
      Borrower or any of the Subsidiaries which could reasonably be expected to have
      a
      Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries is
      in
      default with respect to any final judgment, writ, injunction, decree, rule
      or
      regulation of any court or federal, state, municipal or other governmental
      department, commission, board, bureau, agency or instrumentality, domestic
      or
      foreign, which default would or could have a Material Adverse Effect. Neither
      the Borrower nor any of the other Loan Parties has any material contingent
      obligations not provided for or disclosed in the Borrower Audited Financial
      Statements or Borrower Unaudited Financial Statements or in any financial
      statements delivered hereafter in accordance with this Agreement.

     

    SECTION
      4.07. Payment
      of Taxes.
      There
      have been filed all federal, state and local tax returns with respect to the
      operations of the Loan Parties which are required to be filed, except where
      extensions of time to make those filings have been granted by the appropriate
      taxing authorities and the extensions have not expired. The Loan Parties have
      paid or caused to be paid to the appropriate taxing authorities all taxes as
      shown on those returns and on any assessment received by any of them, to the
      extent that those taxes have become due, except for taxes the failure to pay
      which do not violate the provisions of Section
      6.03
      hereof.
      The Internal Revenue Service has completed an examination of the Borrower’s
      federal income tax returns for the years ended 1980 through 2001, and the
      Borrower has paid all additional taxes, assessments, interest and penalties
      with
      respect to such years, provided,
      however,
      that,
      with respect to the years 2000 and 2001, (a) the Borrower has appealed the
      adjustments made by the Internal Revenue Service and has fully reserved for
      such
      adjustments and interest thereon and (b) no penalties have been assessed or
      are
      anticipated by the Borrower. 

     

    
      
        
        

      

      
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    SECTION
      4.08. Agreements.
      Neither
      the Borrower nor any Subsidiary is a party to any agreement or instrument or
      is
      subject to any charter or other restriction that could reasonably be expected
      to
      have a Material Adverse Effect on it. Neither the Borrower nor any Subsidiary
      is
      in material default in the performance, observance or fulfillment of any of
      the
      obligations, covenants or conditions contained in any material agreement or
      instrument to which it is a party, and consummation of the transactions
      contemplated hereby and in the other Loan Documents will not cause any Loan
      Party to be in material default thereof.

     

    SECTION
      4.09. Foreign
      Direct Investment Regulations.
      Neither
      the making of the Advances nor the repayment thereof nor any other transaction
      contemplated hereby will involve or constitute a violation by any Loan Party
      of
      any provision of the Foreign Direct Investment Regulations of the United States
      Department of Commerce or of any license, ruling, order, or direction of the
      Secretary of Commerce thereunder. 

     

    SECTION
      4.10. Federal
      Reserve Regulations.

    

    (a) Regulations
      U and X.
      Neither
      the Borrower nor any other Loan Party is engaged principally, or as one of
      its
      important activities, in the business of extending credit for the purpose of
      purchasing or carrying any margin stock (within the meaning of Regulation U
      or
      Regulation X of the Board of Governors of the Federal Reserve System of the
      United States). Margin stock (as defined in Regulation U) constitutes less
      than
      25% of those assets of the Borrower and its Subsidiaries which are subject
      to
      any limitation on sale, pledge, or other restriction hereunder.

    

    (b) Use
      of
      Proceeds.
      No part
      of the proceeds of any of the Advances will be used to purchase or carry any
      such margin stock or to extend credit to others for the purpose of purchasing
      or
      carrying any such margin stock. If requested by the Lenders, the Borrower shall
      furnish to the Lenders a statement in conformity with the requirements of
      Federal Reserve Form U-1 referred to in Regulation U of said Board of Governors.
      No part of the proceeds of the Advances will be used for any purpose that
      violates, or which is inconsistent with, the provisions of Regulation X of
      said
      Board of Governors.

     

    SECTION
      4.11. Consents,
      etc.
      Except
      as set forth on Schedule
      V
      hereto,
      no order, license, consent, approval, authorization of, or registration,
      declaration, recording or filing (except for the filing of a Current Report
      on
      Form 8-K, and a Quarterly Report on Form 10-Q, in each case with the Securities
      and Exchange Commission) with, or validation of, or exemption by, any
      governmental or public authority (whether federal, state or local, domestic
      or
      foreign) or any subdivision thereof is required in connection with, or as a
      condition precedent to, the due and valid execution, delivery and performance
      by
      any Loan Party of this Agreement, the Notes, the Guaranties or the other Loan
      Documents, or the legality, validity, binding effect or enforceability of any
      of
      the respective terms, provisions or conditions thereof. To the extent that
      any
      franchises, licenses, certificates, authorizations, approvals or consents from
      any federal, state or local (domestic or foreign) government, commission, bureau
      or agency are required for the acquisition, ownership, operation or maintenance
      by any Loan Party of properties now owned, operated or maintained by any of
      them, those franchises, licenses, certificates, authorizations, approvals and
      consents have been validly granted, are in full force and effect and constitute
      valid and sufficient authorization therefor.

     

    
      
        
        

      

      
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    SECTION
      4.12. Compliance
      with Applicable Laws.
      The
      Borrower and its Subsidiaries are in compliance with and conform to all
      statutes, laws, ordinances, rules, regulations, orders, restrictions and all
      other legal requirements of all domestic or foreign governments or any
      instrumentality thereof having jurisdiction over the conduct of their respective
      businesses or the ownership of their respective properties, the violation of
      which would have a Material Adverse Effect on it, including, without limitation,
      regulations of the Board of Governors of the Federal Reserve System, the Federal
      Interstate Land Sales Full Disclosure Act, the Florida Land Sales Act or any
      comparable statute in any other applicable jurisdiction. Neither the Borrower
      nor any Subsidiary has received any notice to the effect that its operations
      are
      not in material compliance with any of the requirements of applicable
      Environmental Laws or any applicable federal, state and local health and safety
      statutes and regulations or the subject of any federal or state investigation
      evaluating whether any remedial action is needed to respond to a release of
      any
      Hazardous Substances into the environment, which non-compliance or remedial
      action could reasonably be expected to have a Material Adverse
      Effect.

     

    SECTION
      4.13. Relationship
      of the Loan Parties.
      The
      Loan Parties are engaged as an integrated group in the business of owning,
      developing and selling Real Estate and of providing the required services,
      credit and other facilities for those integrated operations. The Loan Parties
      require financing on such a basis that funds can be made available from time
      to
      time to such entities, to the extent required for the continued successful
      operation of their integrated operations. The Advances to be made to the
      Borrower under this Agreement are for the purpose of financing the integrated
      operations of the Loan Parties, and the Loan Parties expect to derive benefit,
      directly or indirectly, from the Advances, both individually and as a member
      of
      the integrated group, since the financial success of the operations of the
      Loan
      Parties is dependent upon the continued successful performance of the integrated
      group as a whole.

     

    SECTION
      4.14. Subsidiaries;
      Joint Ventures.
      Schedule
      VI
      hereto
      contains a complete and accurate list of (a) all Subsidiaries of the Borrower,
      including, with respect to each Subsidiary, (i) its state of incorporation,
      (ii)
      all jurisdictions (if any) in which it is qualified as a foreign corporation,
      (iii) the number of shares of its Capital Stock outstanding, and (iv) the number
      and percentage of those shares owned by the Borrower and/or by any other
      Subsidiary, and (b) each Joint Venture, including, with respect to each such
      Joint Venture, (i) its jurisdiction of organization, (ii) all other
      jurisdictions in which it is qualified as a foreign entity and (c) all Persons
      other than the Borrower that are parties thereto. All the outstanding shares
      of
      Capital Stock of each Subsidiary of the Borrower are validly issued, fully
      paid
      and nonassessable, except as otherwise provided by state wage claim laws of
      general applicability. All of the outstanding shares of Capital Stock of each
      Subsidiary owned by the Borrower or another Subsidiary as specified in
Schedule
      VI
      are
      owned free and clear of all Liens, security interests, equity or other
      beneficial interests, charges and encumbrances of any kind whatsoever, except
      for Permitted Liens. Neither
      the Borrower nor any other Loan Party owns of record or beneficially any shares
      of the Capital Stock or other equity interests of any Person that is not a
      Guarantor, except (x) Joint Ventures in which such Loan Party is permitted
      to
      invest pursuant to this Agreement, (y) Subsidiaries that are not Material
      Subsidiaries and (z) Excluded Subsidiaries.

     

    SECTION
      4.15. ERISA.
      Neither
      the Borrower nor any other Loan Party is executing or delivering any of the
      Loan
      Documents or entering into any of the transactions contemplated hereby, directly
      or indirectly, in connection with any arrangement or understanding in any
      respect involving any “employee benefit plan” with respect to which the Borrower
      or any other Loan Party is a “party in interest” within the meaning of the
      Employee Retirement Income Security Act of 1974, or a “disqualified person”,
      within the meaning of the Internal Revenue Code 1986, as amended. No Unfunded
      Liabilities exist with respect to any Single Employer Plans. Each Plan complies
      in all material respects with all applicable requirements of law and
      regulations, no Reportable Event has occurred with respect to any Plan, neither
      the Borrower nor any other Loan Party nor any other members of the Controlled
      Group has withdrawn from any Plan or initiated steps to do so, and no steps
      have
      been taken to reorganize or terminate any Plan.

     

    
      
        
        

      

      
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    SECTION
      4.16. Investment
      Company Act.
      Neither
      the Borrower nor any Subsidiary of the Borrower is an “investment company” or a
      company “controlled” by an “investment company” within the meaning of the
      Investment Company Act of 1940, as amended.

     

    SECTION
      4.17. Intentionally
      Omitted.
      

     

    SECTION
      4.18. Subordinated
      Debt.
      The
      Obligations constitute senior indebtedness which is entitled to the benefits
      of
      the subordination provisions of all outstanding Subordinated Debt, which
      outstanding Subordinated Debt as of the Closing Date is identified in
Schedule
      VIII.

     

    SECTION
      4.19. Post-Retirement
      Benefits.
      The
      present value of the expected cost of post-retirement medical and insurance
      benefits payable by the Borrower and its Subsidiaries to its employees and
      former employees, as estimated by the Borrower in accordance with procedures
      and
      assumptions deemed reasonable by the Administrative Agent, does not exceed
      $5,000,000.

     

    SECTION
      4.20. Insurance.
      The
      certificate signed by an Authorized Financial Officer of the Borrower, that
      attests to the existence and adequacy of, and summarizes, the property,
      casualty, and liability insurance programs carried by the Loan Parties and
      that
      has been furnished by the Borrower to the Administrative Agent and the Lenders,
      is complete and accurate. This summary includes the insurer’s or insurers’
name(s), policy number(s), expiration date(s), amount(s) of coverage, type(s)
      of
      coverage, exclusion(s), and deductibles. This summary also includes similar
      information, and describes any reserves, relating to any self-insurance program
      that is in effect.

     

    SECTION
      4.21. Environmental
      Representations.
      To the
      best of the Borrower’s knowledge and belief, no Hazardous Substances in material
      violation of any Environmental Laws are present upon any of the Real Estate
      owned by the Borrower or any Subsidiary or any Real Estate which is encumbered
      by any Mortgage held by the Borrower or any Subsidiary, and neither the Borrower
      nor any Subsidiary has received any notice to the effect that any of the Real
      Estate owned by the Borrower or any Subsidiary or any of their respective
      operations are not in compliance with any of the requirements of applicable
      Environmental Laws or are the subject of any federal or state investigation
      evaluating whether any remedial action is needed to respond to a release of
      any
      Hazardous Substance into the environment which non-compliance or remedial action
      could be reasonably expected to have a Material Adverse Effect.

     

    
      
        
        

      

      
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    SECTION
      4.22. Minimum
      Adjusted Consolidated Tangible Net Worth.
      On the
      Agreement Date, Adjusted Consolidated Tangible Net Worth exceeds the amount
      required as of the Agreement Date under Section
      7.01.

     

    SECTION
      4.23. No
      Misrepresentation.
      No
      representation or warranty by any Loan Party contained herein or made hereunder
      and no certificate, schedule, exhibit, report or other document provided or
      to
      be provided by any Loan Party in connection with the transactions contemplated
      hereby or thereby (including, without limitation, the negotiation of and
      compliance with the Loan Documents) contains or will contain a misstatement
      of a
      material fact or omit to state a material fact required to be stated therein
      in
      order to make the statements contained therein, in the light of the
      circumstances under which made, not misleading.

    

    ARTICLE
      V

     

    CONDITIONS
      PRECEDENT

    SECTION
      5.01. Conditions
      of Effectiveness.
      This
      Agreement shall become effective when (i) the Administrative Agent shall have
      received counterparts of this Agreement executed by the Borrower and all Lenders
      party hereto, (ii) the Administrative Agent shall have received the fees
      provided to be paid pursuant to the Fee Letter and (iii) the Administrative
      Agent shall have received each of the following items (with all documents
      required below, except as otherwise specified, to be dated the Closing Date,
      which date shall be the same for all such documents, and each of such documents
      to be in form and substance satisfactory to the Administrative Agent, to be
      fully and properly executed by all parties thereto and the conditions specified
      below shall have been satisfied:

    

    (a) A
      Revolving Loan Note payable to the order of each Lender that shall have
      requested a Revolving Loan Note in accordance with this Agreement and the Swing
      Line Note payable to the Swing Line Bank.

    

    (b) From
      each
      Material Subsidiary, including any Subsidiary that has a Net Worth of less
      than
      $10,000,000 but is required to be a Guarantor hereunder by reason of the proviso
      contained in the definition of “Material Subsidiary” (except the Excluded
      Subsidiaries), a Guaranty executed and delivered as of the Closing Date.

    

    (c) The
      favorable written opinions addressed to the Lenders, and in form and substance
      satisfactory to the Administrative Agent, from (i) Bilzin Sumberg Baena Price
      & Axelrod, LLP (counsel to the Borrower), with respect to the Borrower and
      (ii) Bilzin Sumberg Baena Price & Axelrod LLP or any other firm reasonably
      satisfactory to the Administrative Agent (as counsel for such other Loan Parties
      as the Administrative Agent may require) which opinions shall be reasonably
      satisfactory to the Administrative Agent. The Borrower hereby instructs such
      counsel to prepare their opinions and deliver such opinions to the Lenders
      for
      the benefit of the Lenders, and such opinions shall contain a statement to
      such
      effect.

    

    
      
        
        

      

      
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    (d) The
      following supporting documents with respect to the Borrower and (to the extent
      required by Administrative Agent in its sole discretion) each other Loan Party:
      (i) a copy of its certificate or articles of incorporation or formation or
      certificate of limited partnership (as applicable) certified as of a date
      reasonably close to the Closing Date to be a true and accurate copy by the
      Secretary of State of its state of incorporation or formation; (ii) a
      certificate of that Secretary of State, dated as of a date reasonably close
      to
      the Closing Date, as to its existence and (if available) good standing; (iii)
      a
      certificate of the Secretary of State of each jurisdiction, other than its
      state
      of incorporation, in which it does business, as to its qualification as a
      foreign corporation; (iv) a copy of its by-laws, partnership agreement or
      operating agreement (as applicable), certified by its secretary or assistant
      secretary, general partner, manager or other appropriate Person (as applicable)
      to be a true and accurate copy of its by-laws, partnership agreement or
      operating agreement (as applicable) in effect on the Closing Date; (v) a
      certificate of its secretary or assistant secretary, general partner, manager
      or
      other appropriate Person (as applicable), as to the incumbency and signatures
      of
      its officers or other Persons who have executed any documents on behalf of
      such
      Loan Party in connection with the transactions contemplated by this Agreement;
      (vi) a copy of resolutions of its Board of Directors, certified by its secretary
      or assistant secretary to be a true and accurate copy of resolutions duly
      adopted by such Board of Directors, or other appropriate resolutions or consents
      of, its partners or members certified by its general partner or manager (as
      applicable) to be true and correct copies thereof duly adopted, approved or
      otherwise delivered by its partners or members (to the extent necessary and
      applicable), each of which is certified to be in full force and effect on the
      Closing Date, authorizing the execution and delivery by it of this Agreement
      and
      any Notes, Guaranties and other Loan Documents delivered on the Closing Date
      to
      which it is a party and the performance by it of all its obligations thereunder;
      and (vii) such additional supporting documents and other information with
      respect to its operations and affairs as the Administrative Agent may reasonably
      request.

    

    (e) Certificates
      signed by a duly authorized officer of the Borrower stating that: (i) the
      representations and warranties of the Borrower contained in Article
      IV
      hereof
      are correct and accurate on and as of the Closing Date as though made on and
      as
      of the Closing Date and (ii) no event has occurred and is continuing which
      constitutes an Event of Default or Unmatured Default hereunder.

    

    (f) The
      certified financial statements provided for in Section
      6.04(b)
      hereof
      for the quarter ending May 31, 2006.

    

    (g) The
      certified report provided for in Section
      6.04(i)
      hereof
      for the quarter ending May 31, 2006.

    

    (h) An
      Affidavit confirming the execution and delivery of this Agreement and the Notes
      outside the State of Florida.

    

    (i) Evidence
      of payment in full of all amounts outstanding under the Existing Credit
      Agreement.

    

    (j) Such
      other documents as the Administrative Agent or its counsel may reasonably
      request.

     

    SECTION
      5.02. Conditions
      Precedent to All Advances and Facility Letters of Credit.

    

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

    (a) No
      Lender
      shall be required to make any Advance (but excluding any Revolving Advance
      that,
      after giving effect thereto and to the application of the proceeds thereof,
      does
      not increase the aggregate amount of outstanding Revolving Advances) and no
      Issuer shall be required to issue any Facility Letter of Credit, unless on
      the
      applicable Borrowing Date or Issuance Date:

    

    (i) the
      Administrative Agent shall have received notice of Borrower’s request for the
      Advance as provided in Section
      2.06(a)
      or
      Letter of Credit Request as provided in Section
      2.18(a)
      and such
      other approvals, opinions or documents as the Administrative Agent may
      reasonably request;

    

    (ii) the
      representations and warranties of the Borrower contained in Article
      IV
      hereof
      are true and correct as of such Borrowing Date or Issuance Date; provided,
      however, that
      for
      the purposes hereof, (A) from and after the date of delivery by the Borrower
      pursuant to Section
      6.04(a)
      of the
      consolidated financial statements for the year ended November 30, 2006, the
      references in Section
      4.03
      to
“Borrower Audited Financial Statements” shall be deemed to be references to the
      annual audited financial statements most recently delivered by the Borrower
      pursuant to Section
      6.04(a)
      as of
      the date of the request for a Advance or Letter of Credit Request and (B) from
      and after that date of delivery by the Borrower pursuant to Section
      6.04(b)
      of its
      consolidated financial statements for the quarter ending August 31, 2006, the
      references in Section
      4.03
      to
“Borrower Unaudited Financial Statements” shall be deemed to be references to
      the quarterly unaudited financial statements most recently delivered by the
      Borrower pursuant to Section
      6.04(b)
      as of
      the date of that request for an Advance or Letter of Credit Request and
provided,
      further,
      that
      the representation and warranty contained in the first sentence of Section
      4.04
      shall not be required to be true and correct as of the Borrowing Date for an
      Advance of which the proceeds are used solely to repay maturing commercial
      paper
      issued by the Borrower;

    

    (iii) All
      legal
      matters incident to the making of such Advance shall be satisfactory to the
      Lenders and their counsel;

    

    (iv) There
      exists no Event of Default or Unmatured Default, except for Subsidiary Unmatured
      Defaults; provided
      the
      Borrower certifies (either in the Borrowing Notice or in a separate certificate
      addressed to the Administrative Agent for the benefit of the Lenders) that
      (a)
      such Subsidiary Unmatured Defaults are not reasonably likely to have a Material
      Adverse Effect and (b) the Borrower reasonably expects to cure such Subsidiary
      Unmatured Defaults before the date on which the same become an Event of Default,
      which certification shall provide reasonable detail regarding the Subsidiary
      Unmatured Defaults and the Borrower’s proposed cure thereof. The Administrative
      Agent shall furnish a copy of such certification to the Lenders;
      and

    

    (v) The
      making of the Advance or issuance of the Facility Letter of Credit will not
      result in any Event of Default or Unmatured Default.

    

    
      
        
        

      

      
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    (b) Each
      Borrowing Notice with respect to each such Advance and each Letter of Credit
      Request shall constitute a representation and warranty by the Borrower that
      all
      of the conditions contained in this Section
      5.02
      have
      been satisfied.

    

    ARTICLE
      VI

     

    AFFIRMATIVE
      COVENANTS

    

    The
      Borrower covenants and agrees that from the date hereof until payment in full
      of
      all the Obligations, termination of all Facility Letters of Credit and
      termination of all Commitments, unless the Required Lenders otherwise shall
      consent in writing as provided in Section
      13.06
      hereof,
      the Borrower will, and will cause each of the other Loan Parties (and, where
      so
      specified, each of the Borrower’s Subsidiaries) to:

     

    SECTION
      6.01. Existence,
      Properties, etc.
      Do or
      cause to be done all things or proceed with due diligence with any actions
      or
      courses of action which may be necessary to preserve and keep in full force
      and
      effect its existence under the laws of their respective states of incorporation
      or formation and all qualifications or licenses in jurisdictions in which such
      qualification or licensing is required for the conduct of its business or in
      which the Lenders shall request such qualification; provided,
      however, that
      nothing herein shall be deemed to prohibit (a) a Loan Party from (i) merging
      into or consolidating with any other Loan Party or any other Subsidiary of
      the
      Borrower; provided
      (A)
      the
      Borrower is the surviving entity in the case of a merger involving the Borrower
      and (B) the surviving entity in the case of a merger involving a Loan Party
      and
      a Subsidiary that is not a Loan Party is, or upon such merger becomes, a Loan
      Party and (ii) declaring and paying dividends in complete liquidation or (b)
      a
      Subsidiary that is not a Loan Party from merging into or consolidating with
      any
      other Subsidiary that is not a Loan Party. The Borrower will, and will cause
      each Subsidiary to, carry on and conduct its business in substantially the
      same
      manner and in substantially the same fields of enterprise as it is presently
      conducted and maintain all requisite authority to conduct its business in each
      jurisdiction in which its business is conducted. The primary business of the
      Borrower and its Subsidiaries shall at all times be the acquisition, development
      and sale of real estate assets.

     

    SECTION
      6.02. Notice.
      Give
      prompt written notice to the Administrative Agent of (a) any proceeding
      instituted by or against the Borrower or any of its Subsidiaries in any federal
      or state court or before any commission or other regulatory body, federal,
      state
      or local, or any such proceedings threatened against the Borrower or any
      Subsidiary in writing by any federal, state or other governmental agency, which,
      if adversely determined, could reasonably be expected to have a Material Adverse
      Effect on any Loan Party, and (b) any other Event which could reasonably be
      expected to lead to or result in a Material Adverse Effect on any Loan Party,
      or
      which, with or without the giving of notice or the passage of time or both,
      would constitute an Event of Default or a default (beyond all applicable grace
      and cure periods) under any material agreement other than this Agreement to
      which any Loan Party is a party or by which any of its properties or assets
      is
      or may be bound.

     

    SECTION
      6.03. Payments
      of Debts, Taxes, etc.
      Pay all
      its debts and perform all its obligations promptly and in accordance with the
      respective terms thereof, and pay and discharge or cause to be paid and
      discharged promptly all taxes, assessments and governmental charges or levies
      imposed upon any Loan Party or upon any of their respective incomes or receipts
      or upon any of their respective properties before the same shall become in
      default or past due, as well as all lawful claims for labor, materials and
      supplies or otherwise which, if unpaid, might result in the imposition of a
      Lien
      or charge upon such properties or any part thereof; provided,
      however, that
      it
      shall not constitute a violation of the provisions of this Section
      6.03
      if any
      Loan Party shall fail to perform any such obligation or to pay any such debt
      (except for obligations for money borrowed), tax, assessment, governmental
      charge or levy or claim for labor, materials or supplies which is being
      contested in good faith, by proper proceedings diligently pursued, and as to
      which adequate reserves have been provided.

     

    
      
        
        

      

      
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    SECTION
      6.04. Accounts
      and Reports.
      Maintain a standard system of accounting established and administered in
      accordance with GAAP, and provide to the Lenders the following:

    

    (a) as
      soon
      as available and in any event within 120 days after the end of each fiscal
      year
      of the Borrower (commencing with the fiscal year ending November 30, 2006),
      a
      consolidated balance sheet of the Borrower and its Subsidiaries as of the end
      of
      that fiscal year and the related consolidated statements of earnings,
      stockholders’ equity and cash flows for that fiscal year, all with accompanying
      notes and schedules, prepared in accordance with GAAP consistently applied
      and
      audited and reported upon by Deloitte & Touche or another firm of
      independent certified public accountants of similar recognized standing selected
      by the Borrower and acceptable to the Administrative Agent (such audit report
      shall be unqualified except for qualifications relating to changes in GAAP
      and
      required or approved by the Borrower’s independent certified public
      accountants);

    

    (b) as
      soon
      as available and in any event within 60 days after the end of each of the first
      three quarters, and within 120 days after the end of the fourth quarter, of
      each
      fiscal year of the Borrower (commencing with the quarter ending August 31,
      2006), a consolidated balance sheet of the Borrower and its Subsidiaries as
      of
      the end of that quarter, and the related consolidated statement of earnings
      and
      cash flows of the Borrower and its Subsidiaries for the period from the
      beginning of the fiscal year to the end of that quarter, all prepared in
      accordance with GAAP consistently applied, unaudited but certified to be true
      and accurate, subject to normal year-end audit adjustments, by an Authorized
      Financial Officer of the Borrower;

    

    (c) concurrently
      with the delivery of the financial statements described in subsection
      (a)
      above, a
      letter signed by that firm of independent certified public accountants to the
      effect that, during the course of their examination, nothing came to their
      attention which caused them to believe that any Event of Default or Unmatured
      Default has occurred, or if such Event of Default or Unmatured Default has
      occurred, specifying the facts with respect thereto; and concurrently with
      the
      delivery of the financial statements described in subsection
      (b)
      above, a
      certificate signed by the President or Executive Vice President and an
      Authorized Financial Officer of the Borrower to the effect that having read
      this
      Agreement, and based upon an examination which they deemed sufficient to enable
      them to make an informed statement, there does not exist any Event of Default
      or
      Unmatured Default, or if such Event of Default or Unmatured Default has
      occurred, specifying the facts with respect thereto;

    

    
      
        
        

      

      
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    (d) within
      30
      days after the end of each quarter of each fiscal year of Borrower (commencing
      with the quarter ending August 31, 2006), a report, in reasonable detail and
      in
      form and substance satisfactory to the Administrative Agent, setting forth,
      as
      of the end of that quarter, with respect to each Project owned by the Loan
      Parties, (i) the number of Housing Unit Closings, (ii) the number of Housing
      Units either completed or under construction, specifying the number thereof
      that
      are Completed Housing Units, (iii) the number of Housing Units Under Contract,
      provided,
      however,
      that
      the foregoing report shall only be required if, as of the last day of the
      applicable quarter or fiscal year, the Borrower does not have an Investment
      Grade Rating from at least one of the three Rating Agencies;

    

    (e) Concurrently
      with the quarterly financial statements described in subsection
      (b)
      above,
      an updated Schedule
      VI
      accurately identifying the Subsidiaries and Joint Venturers as of the last
      day
      of such fiscal quarter.

    

    (f) within
      90
      days after the beginning of each fiscal year of the Borrower, a projection,
      in
      reasonable detail and in form and substance satisfactory to the Administrative
      Agent, on a quarterly basis, of the cash flow and of the earnings of the
      Borrower and its Subsidiaries for that fiscal year and for the immediately
      succeeding fiscal year;

    

    (g) promptly
      upon becoming available, copies of all financial statements, reports, notices
      and proxy statements sent by the Borrower to its stockholders, and of all
      regular and periodic reports and other material (including copies of all
      registration statements and reports under the Securities Act of 1933, as amended
      (the “Securities Act”), and the Securities Exchange Act of 1934, as amended)
      filed by the Borrower with or furnished to any securities exchange or any
      governmental authority or commission, except material filed with or furnished
      to
      governmental authorities or commissions relating to the development of Real
      Estate in the ordinary course of the business of the Loan Parties and which
      does
      not relate to or disclose any Material Adverse Effect; the reports and financial
      statements filed with or furnished to the Securities and Exchange Commission
      by
      the Borrower (and which are available online) shall be deemed to have been
      provided by the Borrower under this Section
      6.04;

    

    (h) as
      soon
      as available and in any event within 90 days after the end of each of the first
      three quarters, and within 120 days after the end of the fourth quarter, of
      each
      fiscal year of each Joint Venture, a balance sheet of that Joint Venture as
      of
      the end of that quarter and a statement of earnings of that Joint Venture for
      the period from the beginning of the fiscal year to the end of that quarter,
      in
      the form furnished by the Joint Venture; 

    

    (i) within
      60
      days after the end of each of the first three quarters, and within 90 days
      after
      the end of each fiscal year of the Borrower (commencing with the quarter ending
      August 31, 2006 and fiscal year ending November 30, 2006), a report which
      (subject to the last sentence of this subsection
      (i))
      shall
      include the information and calculations provided for in Exhibit
      H
      attached
      hereto and such other condition in reasonable detail and be in form and
      substance satisfactory to the Administrative Agent, with calculations indicating
      that the Borrower is in compliance, as of the last day of such quarterly or
      annual period, as the case may be, with the provisions of Articles
      VI
      and
VII
      of this
      Agreement. Without limiting the generality of the foregoing, (but subject to
      the
      last sentence of this subsection
      (i))
      the
      Borrower shall provide to the Lenders (i) a report calculating the Borrowing
      Base in form and substance satisfactory to Administrative Agent, provided,
      however,
      that
      the Borrower may, and upon request from the Administrative Agent shall, also
      deliver such report as of the end of any calendar month, and, (ii) a report
      containing the calculations necessary to indicate that the Borrower is in
      compliance with the provisions of Sections
      6.09
      (if
      applicable) and 7.14,
      including (if applicable) a certification of the outstanding principal amount
      of
      all loans and advances made by any Loan Party to each of the applicable Mortgage
      Banking Subsidiaries, as the case may be, and that all such loans and advances
      are duly evidenced by the Mortgage Banking Subsidiaries Note in the possession
      of Administrative Agent. The reports furnished pursuant to this subsection
      (i)
      shall be
      certified to be true and correct by an Authorized Financial Officer of the
      Borrower and shall also contain a representation and warranty by the Borrower
      that it is in full compliance with the provisions of Article
      VII
      of this
      Agreement. Notwithstanding the foregoing, the Borrowing Base report and the
      report evidencing compliance with Section
      7.02(a)
      shall
      only be required if, as of the last day of the applicable quarter or fiscal
      year, the Borrower does not have an Investment Grade Rating from at least two
      of
      the three Rating Agencies, and the reports evidencing compliance with
Sections
      6.09,
      7.08
      and
7.15
      shall
      only be required if, as of the last day of the applicable quarter or fiscal
      year, the Borrower does not have an Investment Grade Rating from at least one
      of
      the three Rating Agencies;

    

    
      
        
        

      

      
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    (j) if
      requested by Administrative agent, within 270 days after the close of each
      fiscal year a statement of the Unfunded Liabilities of each Single Employer
      Plan, certified as correct by an actuary enrolled under ERISA, but the foregoing
      statement shall be required only if any Single Employer Plan shall
      exist;

    

    (k) as
      soon
      as possible and in any event within 10 days after the Borrower knows that any
      Reportable Event has occurred with respect to any Plan, a statement, signed
      by
      an Authorized Financial Officer of the Borrower, describing said Reportable
      Event and the action which the Borrower proposes to take with respect
      thereto;

    

    (l) as
      soon
      as possible and in any event within 10 days after receipt thereof by the
      Borrower or any of its Subsidiaries, a copy of (i) any notice or claim to the
      effect that the Borrower or any of its Subsidiaries is or may be liable to
      any
      Person as a result of the release by the Borrower, any of its Subsidiaries,
      or
      any other Person of any Hazardous Substance into the environment, and (ii)
      any
      notice alleging any violation of any Environmental law or any federal, state
      or
      local health or safety law or regulation by the Borrower or any of its
      Subsidiaries, which, in either case, could reasonably be expected to have a
      Material Adverse Effect;

    

    (m) promptly
      upon the request of the Administrative Agent or any Lender, an accurate legal
      description with respect to any Real Estate included in the calculation of
      the
      Borrowing Base;

    

    (n) concurrently
      with the quarterly financial statements described in subsection
      (b)
      above
      following the end of any quarter in which there occurred an event described
      in
clause
      (a),
      (b)
      or
(c)
      of
Section
      6.07
      hereof
      that requires a Subsidiary that is not then a Guarantor to become a Guarantor
      under Section
      6.07
      hereof
      (or at any time that the Borrower may elect to cause any other Subsidiary to
      be
      a Guarantor), the Borrower shall deliver to the Administrative Agent (i) a
      Supplemental Guaranty, substantially in the form provided for in the Guaranty,
      executed by a duly authorized officer of such Subsidiary; (ii) a copy of the
      certificate of incorporation or other organizational document of such
      Subsidiary, certified by the secretary of state or other official of the state
      or other jurisdiction of its incorporation; (iii) a copy of the bylaws of such
      Subsidiary, certified by the secretary or other appropriate officer or partner
      of such Subsidiary; and (iv) if requested by the Administrative Agent, an
      opinion of the Borrower’s counsel in the form provided for in Section
      5.01(d),
      modified to apply to the foregoing documents delivered hereunder;
      and

    

    
      
        
        

      

      
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    (o) such
      supplements to the aforementioned documents and additional information
      (including, but not limited to, leasing, occupancy and non-financial
      information) and reports as the Administrative Agent or any Lender may from
      time
      to time reasonably require.

     

    SECTION
      6.05. Access
      to Premises and Records.
      At all
      reasonable times and as often as any Lender may reasonably request, permit
      authorized representatives and agents (including accountants) designated by
      that
      Lender to (a) have access to the premises of the Borrower and each Subsidiary
      and to their respective corporate books and financial records, and all other
      records relating to their respective operations and procedures, (b) make copies
      of or excerpts from those books and records and (c) upon reasonable notice
      to
      the Borrower, discuss the respective affairs, finances and operations of the
      Borrower and its Subsidiaries with, and to be advised as to the same by, their
      respective officers and directors.

     

    SECTION
      6.06. Maintenance
      of Properties and Insurance.
      Maintain all its properties and assets in good working order and condition
      and
      make all necessary repairs, renewals and replacements thereof so that its
      business carried on in connection therewith may be properly conducted at all
      times; and maintain or require to be maintained (a) adequate insurance, by
      financially sound and reputable insurers, on all properties of the Loan Parties
      which are of character usually insured by Persons engaged in the same or a
      similar business (including, without limitation, all Real Estate encumbered
      by
      Mortgages securing mortgage loans made by any Loan Party, to the extent normally
      required by prudent mortgagees, and all Real Estate which is subject of an
      Equity Investment by any Loan Party, to the extent normally carried by prudent
      builder-developers) against loss or damage resulting from fire, defects in
      title
      or other risks insured against by extended coverage and of the kind customarily
      insured against by those Persons, (b) adequate public liability insurance
      against tort claims which may be incurred by any Loan Party, and (c) such other
      insurance as may be required by law. Upon the request of the Administrative
      Agent, the Borrower will furnish to the Lenders full information as to the
      insurance carried. Notwithstanding the foregoing provisions of this Section
      6.06,
      the
      Borrower shall be permitted to self-insure against all property and casualty
      risks associated with its construction of dwelling units up to a maximum
      aggregate construction exposure for any Project not to exceed at any time 10%
      of
      Adjusted Consolidated Tangible Net Worth.

     

    SECTION
      6.07. Financing;
      New Investing.
      Give
      the Administrative Agent written notice of (a) the formation or acquisition
      of
      any Material Subsidiary, (b) the increase of the Net Worth of any Subsidiary
      that is not a Guarantor (other than an Excluded Subsidiary) that results in
      such
      Subsidiary becoming a Material Subsidiary or (c) the increase in the aggregate
      Net Worth of all Subsidiaries (other than Excluded Subsidiaries) that are not
      Guarantors to an amount in excess of $50,000,000, in each case not later than
      ninety (90) days after such occurrence. In the case of an event described in
      clause
      (a)
      or
(b)
      above,
      such Material Subsidiary shall be required to become a Guarantor in accordance
      with the provisions of Section
      6.04(n)
      and, in
      the case of an event described in clause
      (c)
      above,
      the applicable Subsidiary or Subsidiaries selected by the Borrower necessary
      to
      satisfy the requirements of the proviso contained in the definition of “Material
      Subsidiary” shall be required to become Guarantors in accordance with
Section
      6.04(n),
      provided,
      however, that
      (A)
      nothing in this Section
      6.07
      shall be
      deemed to authorize the Borrower or any of its Subsidiaries to acquire or
      otherwise invest in any Subsidiary if the same would violate any of the
      limitations set forth in Article
      VII
hereof
      and (B) the Borrower may elect to cause a Subsidiary that is not required to
      be
      a Guarantor to become a Guarantor in accordance with the provisions of
Section
      6.04(n).
      Notwithstanding anything to the contrary in this Agreement, if at any time
      or
      from time to time any event results in a Change in Status of a Guarantor, the
      Borrower shall deliver notice thereof to the Administrative Agent, including
      a
      reasonably detailed description of the Change in Status and a statement of
      the
      effective date of the Change in Status. Such notice shall be delivered no later
      than 60 days after the end of the fiscal quarter during which such Change in
      Status occurs; provided,
      however,
      that
      with respect to any Change in Status occurring during the last quarter of
      Borrower’s fiscal year, such notice shall be delivered no later than 120 days
      after the end of such final fiscal quarter. Each Change in Status event shall
      be
      effective as of the effective date of such Change in Status, automatically,
      without any further action by any party to this Agreement, and the Subsidiary
      that is subject to such Change in Status shall no longer be a Guarantor. In
      connection with each Change in Status, the Administrative Agent, on behalf
      of
      Lenders, shall promptly following receipt of written notice of Change in Status,
      execute and deliver to the Borrower a written confirmation of such Change in
      Status.

     

    
      
        
        

      

      
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    SECTION
      6.08. Compliance
      with Applicable Laws.
      Promptly and fully, comply with, conform to and obey all present and future
      laws, ordinances, rules, regulations, orders, writs, judgments, injunctions,
      decrees, awards and all other legal requirements applicable to the Borrower,
      its
      Subsidiaries and their respective properties, including, without limitation,
      Regulation Z of the Board of Governors of the Federal Reserve System, the
      Federal Interstate Land Sales Full Disclosure Act, ERISA, the Florida Land
      Sales
      Act or any similar statute in any applicable jurisdiction, the violation of
      which would have a Material Adverse Effect on any Loan Party.

     

    SECTION
      6.09. Advances
      to the Mortgage Banking Subsidiaries.
      At any
      time at which the Borrower does not have an Investment Grade Rating from at
      least one of the three Rating Agencies, cause the Mortgage Banking Subsidiaries
      to execute and deliver the Mortgage Banking Subsidiaries Note in order to
      evidence all loans and advances that then exist or are thereafter made by any
      Loan Party to any of the Mortgage Banking Subsidiaries, respectively; deposit
      the original Mortgage Banking Subsidiaries Note with Administrative Agent;
      and
      obtain written acknowledgments from each Mortgage Banking Subsidiary that the
      aggregate of all loans and advances thereafter made by any applicable Loan
      Party
      to such Mortgage Banking Subsidiary shall be evidenced and governed by the
      Mortgage Banking Subsidiaries Note held by Administrative Agent. At any time
      at
      which the Borrower does not have an Investment Grade Rating from at least one
      of
      the three Rating Agencies, the principal amount of the Mortgage Banking
      Subsidiaries Note held by Administrative Agent must equal or exceed the
      aggregate principal amount of all loans and advances made by any Loan Party
      to
      Mortgage Banking Subsidiaries, and upon the request of Administrative Agent
      (but
      no more frequently than monthly), the Borrower shall obtain and deliver to
      the
      Administrative Agent specific written acknowledgments from each of the Mortgage
      Banking Subsidiaries to the effect that loans and advances theretofore made
      by
      any applicable Loan Party to the Mortgage Banking Subsidiaries are evidenced
      by
      the Mortgage Banking Subsidiaries Note. In the event that at any time after
      the
      initial delivery of the Mortgage Banking Subsidiaries Note to the Administrative
      Agent any Loan Party organizes or acquires any Mortgage Banking Subsidiary,
      such
      Mortgage Banking Subsidiary shall, upon such organization or acquisition, join
      in and become a maker of a replacement Mortgage Banking Subsidiaries Note,
      such
      new Mortgage Banking Subsidiaries Note shall be deposited with the
      Administrative Agent pursuant to this Section
      6.09,
      and all
      references in this Agreement to Mortgage Banking Subsidiaries shall thereafter
      be deemed references to all such Mortgage Banking Subsidiaries.

     

    
      
        
        

      

      
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    SECTION
      6.10. Use
      of
      Proceeds.
      Use and
      cause to be used the proceeds of the Advances for working capital and general
      corporate purposes (including repayment of maturing commercial paper of the
      Borrower) and to finance Acquisitions consummated with the prior approval of
      the
      Board of Directors or a majority of the shareholders of the Person to be
      acquired. 

     

    SECTION
      6.11. REIT
      Subsidiary.
      For as
      long as it remains a financing entity, cause the REIT Subsidiary at all times
      to
      maintain its status as a qualified real estate investment trust in accordance
      with Section 856 of the Code.

    

    ARTICLE
      VII

     

    NEGATIVE
      COVENANTS

    

    The
      Borrower covenants and agrees that from the date hereof until payment in full
      of
      all the Obligations, termination of all Facility Letters of Credit and
      termination of the Commitments, unless the Required Lenders otherwise shall
      consent in writing as provided in Section
      13.06
      hereof,
      the Borrower will not, nor will it permit any other Loan Party (and, where
      specified, any of the Borrower’s Subsidiaries) to:

     

    SECTION
      7.01. Minimum
      Adjusted Consolidated Tangible Net Worth.
      Permit
      Adjusted Consolidated Tangible Net Worth at any time to be less than the sum
      of
      (a) $2,903,000,000, plus
      (b) an
      amount equal to the amount (if any) by which (i) 50% of the cumulative amount
      of
      positive Consolidated Net Income of the Loan Parties for each fiscal quarter
      of
      the Borrower ending after November 30, 2004 for which the Loan Parties, taken
      as
      a whole, had Consolidated Net Income exceeds (ii) the aggregate amount paid
      by
      the Borrower after November 30, 2004 to purchase or redeem its equity
      Securities, plus
      (c) an
      amount equal to 50% of the aggregate amount of the increase in Adjusted
      Consolidated Tangible Net Worth resulting from the issuance of equity Securities
      of the Borrower after November 30, 2004. For purposes of this Section
      7.01,
      the
      term “Consolidated Net Income,” when used in respect of any period, shall not
      include any loss for such period.

     

    SECTION
      7.02. Limitation
      on Indebtedness.

    

    (a) Borrowing
      Base Limitation.
      At any
      time at which the Borrower does not have an Investment Grade Rating from at
      least two of the Rating Agencies, permit the aggregate outstanding amount of
      the
      sum of all Borrowing Base Debt to exceed the Borrowing Base at such time (the
      “Borrowing Base Limitation”).

    

    
      
        
        

      

      
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    (b) Maximum
      Leverage Ratio.
      At any
      time, permit the Leverage Ratio to equal or exceed sixty percent
      (60%).

    

    (c) Minimum
      Interest Coverage Ratio.
      At any
      time, permit the Interest Coverage Ratio to be less than 2.00 to
      1.00.

    SECTION
      7.03. Guaranties.
      Make or
      suffer to exist any guaranty or other Contingent Obligation in respect of the
      obligations of any Mortgage Banking Subsidiaries (other than a Repurchase
      Guaranty) or any Subsidiary that is not a Guarantor if the same would cause
      a
      violation of Section
      7.02.

    SECTION
      7.04. Sale
      of Assets; Acquisitions; Merger.

    

    (a) Do
      or
      permit any of its Subsidiaries to do any of the following:

    

    (i) sell,
      assign, lease or otherwise dispose of (whether in one transaction or in a series
      of transactions) all or substantially all of the assets (whether now owned
      or
      hereafter acquired) of the Borrower and the Subsidiaries (on a consolidated
      basis) except for the sale of inventory in the ordinary course of
      business;

    

    (ii) merge
      into or consolidate with any other Person or permit any other Person to merge
      into or consolidate with it;

    

    (iii) dissolve,
      liquidate or wind up its business by operation of law or otherwise;
      or

    

    (iv) distribute
      to the stockholders of the Borrower any Securities of any
      Subsidiary;

    

    provided,
      however, that
      any
      Subsidiary or any other Person may merge into or consolidate with or may
      dissolve and liquidate into a Loan Party and any Subsidiary that is not a Loan
      Party may merge into or consolidate with or may dissolve and liquidate into
      another Subsidiary that is not a Loan Party, if (and only if), (1) in the case
      of a merger or consolidation involving a Loan Party other than the Borrower,
      the
      surviving Person is, or upon such merger or consolidation becomes, a Loan Party,
      (2) in the case of a merger or consolidation involving the Borrower, the
      Borrower is the surviving Person, (3) the character of the business of the
      Borrower and the Subsidiaries on a consolidated basis will not be materially
      changed by such occurrence, and (4) such occurrence shall not constitute or
      give
      rise to (a) an Event of Default or Unmatured Default or (b) a default (beyond
      all applicable grace and cure periods) in respect of any of the covenants
      contained in any agreement to which the Borrower or any such Subsidiary is
      a
      party or by which its property may be bound if such default would have a
      Material Adverse Effect.

    

    (b) Acquire
      another Person unless (i) the primary business of such Person is the Real Estate
      Business and (ii) the majority of shareholders (or other equity interest
      holders), the board of directors or other governing body of such Person approves
      such Acquisition.

    

    
      
        
        

      

      
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    Nothing
      contained in this Section
      7.04,
      however, shall restrict any sale of assets among the Borrower and its
      Subsidiaries which is in the ordinary course of business or is otherwise in
      compliance with all other provisions of this Agreement.

     

    SECTION
      7.05. Investments.
      Purchase or otherwise acquire, hold or invest in the Securities (whether Capital
      Stock or instruments evidencing debt) of, make loans or advances to, enter
      into
      any arrangements for the purpose of providing funds or credit to, or make any
      Equity Investment in, any Person which is not a Loan Party on the Closing Date
      or a Subsidiary which becomes a Guarantor upon the making of the investment
      (or
      permit any of its Subsidiaries to do any of the foregoing), except for: (i)
      (A)
      Investments in or loans or advances to (1) Joint Ventures to which the Borrower
      or a Subsidiary is a party and (2) Subsidiaries (other than the Mortgage Banking
      Subsidiaries) that are not Guarantors; and (B) Investments in or loans or
      advances to the Mortgage Banking Subsidiaries, provided
      that
      the
      sum of the aggregate of all Investments, loans and advances outstanding at
      any
      time under clause
      (A)
      and (at
      any time at which the Borrower does not have an Investment Grade Rating from
      at
      least one of the three Rating Agencies) the loans and advances (but not equity
      Investments) outstanding at any time under clause
      (B)
      does not
      exceed 40% of Adjusted Consolidated Tangible Net Worth; and (ii) (A) purchases
      of direct obligations of the government of the United States of America or
      any
      agency thereof, or obligations unconditionally guaranteed by the United States
      of America; (B) certificates of deposit of any bank, organized or licensed
      to
      conduct a banking business under the laws of the United States or any state
      thereof having capital, surplus and undivided profits of not less than
      $100,000,000; (C) Investments in commercial paper which, at the time of
      acquisition by the Borrower or a Subsidiary, is accorded an “A” or equivalent
      rating by any of the Rating Agencies or any other nationally recognized credit
      rating agency of similar standing; (D) investments in publicly traded, readily
      marketable securities traded on a recognized national exchange or
      over-the-counter; (E) loans or advances by the Borrower or a Guarantor to,
      or
      Securities or Indebtedness of, a real estate or homebuilding company to be
      acquired by the Borrower for the purpose of obtaining control of specific
      homebuilding assets of that homebuilding company, provided,
      however, that
      to
      the extent that such loans, advances or Indebtedness exceed (in the aggregate)
      $100,000,000, they are secured by Mortgages on land, homes under construction
      and/or homes
      inventory of such real estate or homebuilding company; and (F) loans by the
      REIT
      Subsidiary to other Loan Parties.

     

    SECTION
      7.06. Disposition;
      Encumbrance or Issuance of Certain Stock.
      Sell,
      transfer or otherwise dispose of, or pledge, grant a security interest, equity
      interest or other beneficial interest in or otherwise encumber any of the
      outstanding shares of Capital Stock of any Mortgage Banking Subsidiary, or
      permit any Mortgage Banking Subsidiary to sell, issue or otherwise transfer any
      shares of its Capital Stock to any Person other than a Loan Party.

     

    SECTION
      7.07. Subordinated
      Debt.
      Directly or indirectly make any payment of principal or interest with respect
      to
      any Subordinated Debt prior to the date the same is due, or amend or modify
      the
      terms of any Subordinated Debt except for extensions of the due date thereof,
      or
      directly or indirectly redeem, retire, defease, purchase or otherwise acquire
      any Subordinated Debt.

     

    SECTION
      7.08. Housing
      Units.
      At any
      time at which the Borrower does not have an Investment Grade Rating from at
      least one of the three Rating Agencies, permit the total number of Housing
      Units
      owned by the Loan Parties, including Housing Units under construction, but
      excluding model Housing Units and Housing Units Under Contract, at any time
      to
      exceed 35% of the total number of Housing Unit Closings during the immediately
      preceding 12-month period, provided that Housing Unit Closings shall include
      closings of the sale of housing units by entities that were acquired, and became
      Loan Parties, during the applicable period.

     

    
      
        
        

      

      
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    SECTION
      7.09. Construction
      in Progress.
      Cause,
      suffer or permit to exist any Mortgage, security interest or other encumbrance
      (other than Liens described in clause
      (j)
      of the
      definition of “Permitted Liens”) to secure Indebtedness on any Housing Unit or
      other building or structure (including, without limitation, any asset reported
      as “Construction in Progress” in the financial statements of the Borrower) that
      is under construction on any land owned or leased by any Loan Party;
provided,
      however, that
      the
      Borrower may cause, suffer or permit to exist purchase money Mortgages having
      an
      aggregate outstanding principal balance not exceeding $50,000,000 at any time
      on
      assets so reported as “Construction in Progress.”

     

    SECTION
      7.10. No
      Margin Stock.
      Use or
      permit to be used any of the proceeds of the Advances to purchase or carry
      any
“margin stock” (as defined in Regulation U).

     

    SECTION
      7.11. Mortgage
      Banking Subsidiaries’ Capital Ratio.
      Permit
      the ratio of the combined total Indebtedness of the Mortgage Banking
      Subsidiaries to the Mortgage Banking Subsidiaries Adjusted Net Worth to exceed,
      at any time, eight (8) to one (1).

     

    SECTION
      7.12. Transactions
      with Affiliates.
      Enter
      into any transaction (including, without limitation, the purchase or sale of
      any
      property or service) with, or make any payment or transfer to, any Affiliate
      (or
      permit any Subsidiary to do any of the foregoing), except in the ordinary course
      of business and pursuant to the reasonable requirements of the Borrower’s or a
      Subsidiary’s business and upon fair and reasonable terms no less favorable to
      the Borrower or such Subsidiary than the Borrower or such Subsidiary would
      obtain in a comparable arms’-length transaction.

     

    SECTION
      7.13. Restrictions
      on Advances to Mortgage Banking Subsidiaries.
      Subject
      to Section
      7.05,
      (a) at
      any time at which the Borrower does not have an Investment Grade Rating from
      at
      least one of the three Rating Agencies, permit any loan or advance to be made
      by
      a Loan Party to a Mortgage Banking Subsidiary, except for loans and advances
      from a Loan Party to the Mortgage Banking Subsidiaries which are made under,
      and
      evidenced by, the Mortgage Banking Subsidiaries Note that is in the possession
      of Administrative Agent and for which the Borrower shall have obtained a written
      acknowledgment from each Mortgage Banking Subsidiary that the same are evidenced
      and governed by the Mortgage Banking Subsidiaries Note; (b) permit the aggregate
      amount of all loans and advances made by the Loan Parties to any Mortgage
      Banking Subsidiary outstanding at any time to exceed the sum of (i) the net
      carrying value of all mortgage loans held by such Mortgage Banking Subsidiary,
      less the aggregate principal amount of all promissory notes payable by such
      Mortgage Banking Subsidiary to banks or other lenders, and less the aggregate
      principal amount of all mortgage loans held for sale by such Mortgage Banking
      Subsidiaries which are pledged, assigned or otherwise encumbered, to the extent
      that said aggregate amount exceeds the aggregate principal amount of notes
      payable by such Mortgage Banking Subsidiary to banks or other lenders, and
      (ii)
      1.5% of the principal amount of all mortgages serviced by such Mortgage Banking
      Subsidiary, less any loans or other financing to such Mortgage Banking
      Subsidiary associated with the servicing portfolio (exclusive of those amounts
      deducted in the calculation required under clause
      (i)
      above)
      if, and to the extent that, the servicing rights with respect to such mortgages
      are not subject to any Lien; (c) assign, transfer, pledge, hypothecate or
      encumber in any way any indebtedness of any Mortgage Banking Subsidiary to
      any
      Loan Party (including without limitation the Mortgage Banking Subsidiaries
      Note), any interest therein or any sums due or to become due thereunder; (d)
      at
      any time at which the Borrower does not have an Investment Grade Rating from
      at
      least one of the three Rating Agencies, modify, amend, extend or in any way
      change the terms of the Mortgage Banking Subsidiaries Note; (e) make any
      principal advances to any Mortgage Banking Subsidiary, under the Mortgage
      Banking Subsidiaries Note or otherwise, at any time after the Administrative
      Agent has been granted a security interest in the Mortgage Banking Subsidiaries
      Note pursuant to Section
      8.01
      except
      to the extent of any principal prepayments under the Mortgage Banking
      Subsidiaries Note in excess of the mandatory principal payments required
      thereunder; or (f) permit a Mortgage Banking Subsidiary to enter into any
      agreement or agreements which (i) in any way restrict the payment of dividends
      by such Mortgage Banking Subsidiary or (ii) individually, or in the aggregate,
      impose any restriction on the repayment of any indebtedness of a Mortgage
      Banking Subsidiary to any Person (including, without limitation, the
      indebtedness payable under the Mortgage Banking Subsidiaries Note) other than
      a
      restriction on the payment of the last $5,000,000 of principal indebtedness
      of
      UAMC (i.e., such permitted restriction shall be applicable only after the
      aggregate principal amount of indebtedness owed by UAMC to any Person shall
      be
      less than or equal to $5,000,000).

     

    
      
        
        

      

      
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    SECTION
      7.14. Mortgage
      Banking Subsidiaries Adjusted Net Worth.
      Permit
      the Mortgage Banking Subsidiaries Adjusted Net Worth at any time to be less
      than
      $30,000,000. 

     

    SECTION
      7.15. Investments
      in Land.
      At any
      time at which the Borrower does not have an Investment Grade Rating from at
      least one of the three Rating Agencies, permit (a) the sum of (i) the Loan
      Parties’ investments in unimproved land plus
      (ii) the
      amount by which the Loan Parties’ investments in improved land exceeds Qualified
      Finished Lots to exceed (b) the sum of (i) 100% of Adjusted Consolidated
      Tangible Net Worth plus
      (ii) the
      lesser of (A) $300,000,000 and (B) 50% of Subordinated Debt.

     

    SECTION
      7.16. Liens
      and Encumbrances.
      Do or
      permit any of its Subsidiaries to do any of the following:

    

    (a) Negative
      Pledge.
      Grant
      or suffer or permit to exist any Liens on any of its rights, properties or
      assets other than Permitted Liens.

    

    (b) No
      Agreement for Negative Pledge.
      Agree
      with any third party not to create, assume or suffer to exist any Lien securing
      the Obligations on or of any of its property, real or personal, whether now
      owned or hereafter acquired.

    

    ARTICLE
      VIII

     

    PLEDGE
      OF MORTGAGE BANKING SUBSIDIARIES NOTE

     

    
      
        
        

      

      
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    SECTION
      8.01. Mortgage
      Banking Subsidiaries Note.

    

    (a) Pledge.
      At any
      time at which the Borrower does not have an Investment Grade Rating from at
      least one of the three Rating Agencies, upon the request of the Administrative
      Agent (which may not be made without the prior written consent from the Required
      Lenders and which shall be made upon the written request of the Required
      Lenders), the Borrower shall grant, and shall cause any Guarantor that is a
      payee under the Mortgage Banking Subsidiaries Note to grant, the Administrative
      Agent on behalf of the Lenders as security for the payment in full of all the
      Obligations, a first lien and security interest in any Mortgage Banking
      Subsidiaries Note. Notwithstanding anything to the contrary provided in this
      Agreement, the Borrower agrees that the Mortgage Banking Subsidiaries Note
      Pledge Agreement shall require all principal payments payable under the Mortgage
      Banking Subsidiaries Note to be made directly to the Administrative Agent and
      applied to the principal outstanding under the Loans as required under
Section
      2.03(b).

    

    (b) Pledge
      Documentation.
      If and
      when the Borrower is required to grant the Administrative Agent a security
      interest in the Mortgage Banking Subsidiaries Note pursuant to Section
      8.01(a),
      the
      Borrower shall deliver to the Administrative Agent:

    

    (i) a
      pledge
      and security agreement (the “Mortgage Banking Subsidiaries Note Pledge
      Agreement”), in form and substance satisfactory to the Administrative Agent,
      duly executed by the Borrower and each Guarantor that is a payee under the
      Mortgage Banking Subsidiaries Note, granting the Administrative Agent on behalf
      of the Lenders, a first lien on, and security interest in, the Mortgage Banking
      Subsidiaries Note;

    

    (ii) an
      endorsement or allonge to the Mortgage Banking Subsidiaries Note, in form and
      substance satisfactory to the Administrative Agent, duly executed by the
      Borrower and each Guarantor that is a payee under the Mortgage Banking
      Subsidiaries Note, transferring the Mortgage Banking Subsidiaries Note to the
      Administrative Agent on behalf of the Lenders; and

    

    (iii) a
      written
      acknowledgment duly executed by the Borrower and each Guarantor that is a payee
      under the Mortgage Banking Subsidiaries Note, that the Administrative Agent
      holds the Mortgage Banking Subsidiaries Note as security for the
      Obligations.

    

    (c) All
      the
      foregoing documents shall be delivered to the Administrative Agent on or before
      the date that the Borrower is required to grant the Administrative Agent the
      security interest in the Mortgage Banking Subsidiaries Note. All of the
      documentation and other items required under this Section
      8.01
      must be
      fully satisfactory, both in form and substance, to the Administrative Agent.
      In
      addition to the foregoing, at the request of the Administrative Agent, the
      Borrower shall, and shall cause each Guarantor that is a payee under the
      Mortgage Banking Subsidiaries Note to, execute and deliver to the Administrative
      Agent such assignments, pledges, financing statements and other documents,
      and
      cause to be done such further acts, all as the Administrative Agent from time
      to
      time may deem necessary or appropriate to evidence, confirm, perfect or protect
      any security interest required to be granted to the Administrative Agent
      hereunder.

    

    
      
        
        

      

      
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    ARTICLE
      IX

     

    EVENTS
      OF DEFAULT

    SECTION
      9.01. Events
      of Default.
      The
      occurrence of any one or more of the following Events shall constitute an “Event
      of Default”:

    

    (a) any
      representation or warranty made or deemed made by or on behalf of any Loan
      Party
      to the Lenders, the Issuer, the Swing Line Bank or the Administrative Agent
      under or in connection with this Agreement or any Loan Document shall be false
      or misleading in any material respect when made;

    

    (b) any
      report, certificate, financial statement or other document or instrument
      furnished in connection with this Agreement or the Loans hereunder shall be
      false or misleading in any material respect when furnished;

    

    (c) default
      shall be made in the payment of (i) the principal of any of the Loans when
      and
      as due and payable, or (ii) the interest on any of the Loans, any fees or any
      other sums due pursuant to Article
      II,
      which
      default continues for five days after the same becomes due and
      payable;

    

    (d) default
      shall be made with respect to any Indebtedness or Contingent Obligations of
      any
      Loan Party (other than the Loans hereunder, Non-Recourse Indebtedness and
      Indebtedness of a Loan Party to another Loan Party), beyond any applicable
      period of grace, or default shall be made with respect to the performance of
      any
      other obligation incurred in connection with any such Indebtedness or Contingent
      Obligations beyond any applicable period of grace, or default shall be made
      with
      respect to any other liability of $10,000,000 or more, if the effect of any
      of
      the foregoing defaults described in this Section
      9.01(d)
      is to
      accelerate the maturity of such Indebtedness, Contingent Obligation or liability
      or to cause any other liability to become due prior to its stated maturity,
      or
      any such Indebtedness, Contingent Obligation or liability shall not be paid
      when
      due and such default shall not have been remedied or cured by such Loan Party
      or
      waived by the obligee; 

    

    (e) default
      shall be made in the due observance or performance of any of the provisions
      of
Article
      VI
      or
Article
      VII
      or any
      other covenant, agreement or condition on the part of any Loan Party to be
      performed under or in connection with this Agreement or any Loan Document,
      and
      such default shall have continued for a period of thirty (30) days after the
      occurrence thereof;

    

    (f) any
      Loan
      Party shall (i) petition or apply for, seek, consent to, or acquiesce in, the
      appointment of a receiver, trustee, examiner, custodian, liquidator or similar
      official of such Loan Party or any of its properties or assets, (ii) be unable,
      or admit in writing its inability, to pay its debts as they mature, (iii) make
      a
      general assignment for the benefit of or a composition with its creditors,
      (iv)
      have an order for relief entered with respect to it under the Federal bankruptcy
      laws as now or hereafter in effect, (v) institute any proceeding seeking an
      order for relief under the Federal bankruptcy laws as now or hereafter in
      effect, or file a petition or an answer seeking dissolution, winding up,
      liquidation or reorganization or an arrangement with creditors or a composition
      of its debts or to take advantage of any bankruptcy, reorganization, insolvency,
      readjustment of debts, dissolution or liquidation law or statute or other
      statute or law for the relief of debtors, or file any answer admitting the
      material allegations of a petition filed against it in any proceeding under
      such
      law, or fail to file an answer or other pleading denying the material
      allegations of any such proceeding filed against it, or if corporate or other
      action shall be taken by such Loan Party for the purpose of effecting any of
      the
      foregoing, or (vi) fail to contest in good faith any appointment or proceeding
      described in Section
      9.01(g);

    

    
      
        
        

      

      
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    (g) an
      order,
      judgment, or decree shall be entered without the application, approval, or
      consent of any Loan Party by any court of competent jurisdiction appointing
      a
      receiver, trustee or liquidator of any Loan Party or a proceeding described
      in
Section
      9.01(f)
      shall be
      instituted against the any Loan Party, and such appointment shall continue
      undischarged or such proceeding continues undismissed or unstayed for any period
      of 60 days; 

    

    (h) final
      judgment for the payment of money in excess of an aggregate of $10,000,000
      shall
      be rendered against the any Loan Party and the same shall remain undischarged
      or
      not appealed for a period of 30 days during which execution shall not be
      effectively stayed;

    

    (i) there
      shall occur any Event or Events which, individually or in the aggregate, shall
      be deemed by the Required Lenders to have had a Material Adverse
      Effect;

    

    (j) any
      Loan
      Party shall be the subject of any proceeding or investigation pertaining to
      the
      release by any Loan Party, any of its Subsidiaries or any other Person of any
      Hazardous Substance into the environment, or any violation of any Environmental
      Law or any federal, state or local health or safety law or regulation, which,
      in
      either case, could reasonably be expected to have a Material Adverse Effect;
      or

    

    (k) there
      shall occur any Change in Control of the Borrower.

     

    SECTION
      9.02. Remedies.

    

    (a) Acceleration.
      If any
      Event of Default described in Section
      9.01(f)
      or
(g)
      occurs
      with respect to the Borrower, the obligations of the Lenders to make Loans,
      the
      Swing Line Bank to make Swing Line Loans and the Issuer to issue Facility
      Letters of Credit hereunder shall automatically terminate and the Obligations
      (including all Facility Letter of Credit Obligations) shall immediately become
      due and payable without any election or action on the part of the Administrative
      Agent or any Lender. If any other Event of Default occurs and is continuing,
      the
      Administrative Agent may, and upon written direction of the Required Lenders
      shall, terminate or suspend the obligations of the Lenders to make Loans, the
      Swing Line Bank to make Swing Line Loans and the Issuer to issue Facility
      Letters of Credit hereunder, or declare the Obligations (including all Facility
      Letter of Credit Obligations) to be due and payable, or both, whereupon the
      Obligations (including all Facility Letter of Credit Obligations) shall become
      immediately due and payable, without presentment, demand, protest or notice
      of
      any kind, all of which the Borrower hereby expressly waives.

    

    (b) Rescission
      of Acceleration.
      If,
      within 30 days after acceleration of the maturity of the Obligations or
      termination of the obligations of the Lenders to make Loans hereunder as a
      result of any Event of Default (other than any Event of Default as described
      in
Section
      9.01 (f)
      or
(g)
      with
      respect to the Borrower and before any judgment or decree for the payment of
      the
      Obligations due shall have been obtained or entered, the Required Lenders (in
      their sole discretion) shall so direct, the Administrative Agent shall, by
      notice to the Borrower, rescind and annul such acceleration and/or
      termination.

     

    
      
        
        

      

      
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    SECTION
      9.03. Application
      of Payments.
      Subject
      to the provisions of Section
      11.02
      and any
      provisions of this Agreement specifically providing for payments to be applied
      to the Revolving Loans, Swing Line Loans or Competitive Loans (as applicable),
      the Administrative Agent shall, unless otherwise specified at the direction
      of
      the Required Lenders which direction shall be consistent with the last sentence
      of this Section
      9.03,
      apply
      all payments and prepayments in respect of any Obligations (except as
      hereinafter provided) in the following order:

    

    
      	 	
              (i)

            	
              first,
                to pay interest on and then principal of any portion of the Loans
                which
                the Administrative Agent may have advanced on behalf of any Lender
                for
                which the Administrative Agent has not then been reimbursed by such
                Lender
                or the Borrower;

            

    

    

    
      	 	
              (ii)

            	
              second,
                to pay Obligations in respect of any fees, expenses, reimbursements
                or
                indemnities then due to the Administrative
                Agent;

            

    

    

    
      	 	
              (iii)

            	
              third,
                to the ratable payment of Obligations in respect of any fees, expenses,
                reimbursements or indemnities then due to the Lenders and the
                Issuer(s);

            

    

    

    
      	 	
              (iv)

            	
              fourth,
                to pay interest due in respect of Swing Line
                Loans;

            

    

    

    
      	 	
              (v)

            	
              fifth,
                to the ratable payment of interest due in respect of Revolving Loans
                and
                Competitive Loans and Facility Letter of Credit
                Obligations;

            

    

    

    
      	 	
              (vi)

            	
              sixth,
                to the ratable payment or prepayment of principal outstanding on
                Swing
                Line Loans;

            

    

    

    
      	 	
              (vii)

            	
              seventh,
                to the ratable payment or prepayment of principal outstanding on
                Revolving
                Loans and Competitive Loans and Reimbursement Obligations and to
                the
                Letter of Credit Collateral Account in an amount equal to the outstanding
                Facility Letter of Credit Obligations to the extent required under
                Section
                2.18(h);
                and 

            

    

    

    
      	 	
              (viii)
                

            	
              eighth,
                to the ratable payment of all other Obligations.
                

            

    

    

    Unless
      otherwise designated (which designation shall only be applicable prior to the
      occurrence of an Event of Default) by the Borrower, all principal payments
      in
      respect of Revolving Loans shall be applied first, to repay outstanding ABR
      Loans and then to repay outstanding Eurodollar Loan, with those that have
      earlier expiring Interest Period being repaid prior to those that have later
      expiring Interest Periods. The order of priority set forth in this Section
      9.03
      and the
      related provisions of this Agreement are set forth solely to determine the
      rights and priorities of the Administrative Agent, the Lenders, the Swing Line
      Bank and the Issuer(s) as among themselves. The order of priority set forth
      in
clauses
      (i)
      through
(ix)
      of this
Section
      9.03
      may at
      any time and from time to time be changed by the Required Lenders without
      necessity of notice to or consent of or approval by the Borrower or any other
      Person; provided,
      that
      (A) the order of priority set forth in clauses
      (i)
      and
(ii)
      may be
      changed only with the prior written consent of the Administrative Agent, (B)
      the
      order of priority of payments in respect of Swing Line Loans may be changed
      only
      with the prior written consent of the Swing Line Bank, (C) the order of priority
      in respect of payments to an Issuer may be changed only with the prior written
      consent of the Issuer, and (D) the order of priority of payments in respect
      of
      any Competitive Bid Loans may be changed only with the prior written consent of
      each Lender then holding a Competitive Bid Loan.

    

    
      
        
        

      

      
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    ARTICLE
      X

     

    THE
      ADMINISTRATIVE AGENT

    SECTION
      10.01. Appointment.
      JPMorgan Chase Bank is hereby appointed Administrative Agent hereunder and
      under
      each other Loan Document and, subject to the provisions of Section
      10.14
      below,
      each of the Lenders irrevocably authorizes the Administrative Agent to act
      as
      the Administrative Agent of such Lender. The Administrative Agent agrees to
      act
      as such upon the express conditions contained in this Article
      X.
      The
      Administrative Agent shall not have a fiduciary relationship in respect of
      any
      Lender by reason of this Agreement. No Lender identified herein as a Syndication
      Agent, Documentation Agent, Managing Agent or Co-Agent shall have any right,
      power, obligation, liability, responsibility or duty under this Agreement in
      such capacity.

     

    SECTION
      10.02. Powers.
      The
      Administrative Agent shall have and may exercise such powers under the Loan
      Documents as are specifically delegated to the Administrative Agent by the
      terms
      of each thereof, together with such powers as are reasonably incidental thereto.
      The Administrative Agent shall have no implied duties to the Lenders, or any
      obligation to the Lenders to take any action thereunder except any action
      specifically provided by the Loan Documents to be taken by the Administrative
      Agent.

     

    SECTION
      10.03. General
      Immunity.
      Neither
      the Administrative Agent nor any of its directors, officers, agents or employees
      shall be liable to the Borrower, the Lenders or any Lender for any action taken
      or omitted to be taken by it or them hereunder or under any other Loan Document
      or in connection herewith or therewith except for its or their own gross
      negligence or willful misconduct.

     

    SECTION
      10.04. No
      Responsibility for Loans, Recitals, Etc.
      Neither
      the Administrative Agent nor any of its directors, officers, agents or employees
      shall be responsible for or have any duty to ascertain, inquire into, or verify
      (a) any statement, warranty or representation made in connection with any Loan
      Document or any borrowing hereunder; (b) the performance or observance of any
      of
      the covenants or agreements of any obligor under any Loan Document; (c) the
      satisfaction of any condition specified in Article
      V,
      except
      receipt of items required to be delivered to the Administrative Agent; or (d)
      the validity, effectiveness or genuineness (except its own due execution
      thereof) of any Loan Document or any other instrument or
      writing furnished in connection therewith. Further, the Administrative Agent
      assumes no obligation to any other Lender as to the collectibility of any Loans
      made by any Lender to the Borrower. Each Lender expressly acknowledges that
      the
      Administrative Agent has not made any representations or warranties to it on
      or
      prior to the date hereof and that no act by the Administrative Agent hereafter
      taken shall be deemed to constitute any representation or warranty by the
      Administrative Agent to any other Lender. Each Lender acknowledges that it
      has
      taken and will take such action and make such investigation as it deems
      necessary to inform itself as to the affairs and creditworthiness of the
      Borrower.

     

    
      
        
        

      

      
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    SECTION
      10.05. Employment
      of Agents and Counsel.
      The
      Administrative Agent may execute any of its duties as Administrative Agent
      hereunder and under any other Loan Document by or through employees, agents,
      and
      attorneys-in-fact and shall not be answerable to the Lenders, except as to
      money
      or securities received by it or its authorized agents, for the default or
      misconduct of any such agents or attorneys-in-fact selected by it with
      reasonable care. The Administrative Agent shall be entitled to advice of counsel
      concerning all matters pertaining to the agency hereby created and its duties
      hereunder and under any other Loan Document.

     

    SECTION
      10.06. Reliance
      on Documents; Counsel.
      The
      Administrative Agent shall not be under a duty to examine into or pass upon
      the
      validity, effectiveness, genuineness or value of this Agreement, the Notes,
      the
      Guaranties and other Loan Documents or any other document furnished pursuant
      hereto or thereto or in connection herewith, and the Administrative Agent shall
      be entitled to assume that the same are valid, effective and genuine and what
      they purport to be. The Administrative Agent shall be entitled to rely upon
      any
      Note, notice, consent, certificate, affidavit, letter, telegram, statement,
      paper or document reasonably believed by it to be genuine and correct and to
      have been signed or sent by the proper person or persons, and, in respect to
      legal matters, upon the opinion of counsel selected by the Administrative Agent,
      which counsel may be employees of the Administrative Agent. The Administrative
      Agent shall not be liable for any action taken or suffered in good faith by
      it
      based on or in accordance with any of the foregoing.

     

    SECTION
      10.07. No
      Waiver of Rights.
      With
      respect to its Commitments, the Loans (including Swing Line Loans and
      Competitive Loans) made by it and the Notes issued to it, the Administrative
      Agent shall have the same rights and powers hereunder and under any other Loan
      Document as any Lender or Issuer and may exercise the same as though it was
      not
      the Administrative Agent, and the term “Lender” or “Lenders” shall, unless the
      context otherwise indicates, include the Administrative Agent in its individual
      capacity. The Administrative Agent may accept deposits from, lend money to
      and
      issue letters of credit for the account of, and generally engage in any kind
      of
      business with the Borrower or its Affiliates (including, without limitation,
      trust, debt, equity and other transactions) in addition to the transactions
      contemplated by this Agreement or any other Loan Document; it being expressly
      understood and agreed that neither the Administrative Agent nor any other Lender
      shall be deemed by the execution hereof to have waived any rights under any
      loan
      or other agreement with the Borrower or any of its Affiliates relating to any
      other business or loans to the Borrower or any of its Affiliates which are
      not a
      part of the Commitments under this Agreement.

     

    SECTION
      10.08. Knowledge
      of Event of Default.
      It is
      expressly understood and agreed that the Administrative Agent shall be entitled
      to assume that no Event of Default or Unmatured Default has occurred and is
      continuing, unless the officers of the Administrative Agent active on the
      Borrower’s account have actual knowledge of such occurrence or have been
      notified by a Lender that such Lender considers that an Event of Default or
      Unmatured Default has occurred and is continuing and specifying the nature
      thereof.

     

    
      
        
        

      

      
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    SECTION
      10.09. Administrative
      Agent’s Reimbursement and Indemnification.
      The
      Lenders agree to reimburse and indemnify the Administrative Agent ratably in
      accordance with their respective Pro Rata Shares (determined at the time
      indemnification is sought hereunder) (a) for any amounts not reimbursed by
      the
      Borrower for which the Administrative Agent is entitled to reimbursement by
      the
      Borrower under the Loan Documents, (b) for any other expenses incurred by the
      Administrative Agent on behalf of the Lenders, in connection with the
      preparation, execution, delivery, administration and enforcement of the Loan
      Documents and (c) for any liabilities, obligations, losses, damages, penalties,
      actions, judgments, suits, costs, expenses or disbursements of any kind and
      nature whatsoever which may be imposed on, incurred by or asserted against
      the
      Administrative Agent in any way relating to or arising out of the Loan Documents
      or any other document delivered in connection therewith or the transactions
      contemplated thereby, or the enforcement of any of the terms thereof or of
      any
      such other documents, provided
      that
      no
      Lender shall be liable for any of the foregoing to the extent they arise from
      the gross negligence or willful misconduct of the Administrative
      Agent.

     

    SECTION
      10.10. Notices
      to the Borrower.
      In each
      instance that a notice is required, pursuant to the terms hereof, to be given
      by
      one or more of the Lenders to the Borrower or any Subsidiary, the Lenders
      desiring that such notice be given shall so advise the Administrative Agent
      (which advice, if given by telephone, shall be promptly confirmed by telex
      or
      letter to the Administrative Agent at its address listed in the signature pages
      hereto), which shall transmit such notice to the Borrower or such Subsidiary
      promptly after its having been so advised by the appropriate number of Lenders;
      provided,
      however, that
      subject to the provisions of Section
      10.15
      hereof,
      if the Administrative Agent shall fail to transmit such notice within a
      reasonable period of time after its having been so advised by the appropriate
      number of Lenders, the Lenders desiring that such notice be given may transmit
      such notice directly to the Borrower or such Subsidiary. In any event notices
      to
      the Borrower or any Subsidiary shall be sent to the address of the Borrower
      provided for in this Agreement.

     

    SECTION
      10.11. Action
      on Instructions of Lenders.
      The
      Administrative Agent shall in all cases be fully protected in acting, or in
      refraining from acting, hereunder and under any other Loan Document in
      accordance with written instructions signed by the Required Lenders, or all
      of
      the Lenders, as the case may be, and such instructions and any action taken
      or
      failure to act pursuant thereto shall be binding on all of the Lenders and
      on
      all holders of Notes. Except where an action or inaction is expressly required
      under this Agreement, the Administrative Agent shall be fully justified in
      failing or refusing to take any action hereunder and under any other Loan
      Documents unless it shall first be indemnified to its satisfaction by the
      Lenders in accordance with their respective Pro Rata Shares, against any and
      all
      liability, cost and expense that it may incur by reason of taking or continuing
      to take any such action.

     

    SECTION
      10.12. Lender
      Credit Decision.
      Each
      Lender acknowledges that it has, independently and without reliance upon the
      Administrative Agent or any other Lender and based on the financial statements
      prepared by the Borrower and such other documents and information as it has
      deemed appropriate, made its own credit analysis and decision to enter into
      this
      Agreement and the other Loan Documents. Each Lender also acknowledges that
      it
      will, independently and without reliance upon the Administrative Agent or any
      other Lender and based on such documents and information as it shall deem
      appropriate at the time, continue to make its own credit decisions in taking
      or
      not taking action under this Agreement and the other Loan
      Documents.

     

    
      
        
        

      

      
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    SECTION
      10.13. Mortgage
      Banking Subsidiaries Note. 

    

    (a) Each
      Lender authorizes the Administrative Agent to enter into each of the Loan
      Documents to which it is a party and to take all action contemplated by such
      Loan Documents. Each Lender agrees that no Lender, other than the Administrative
      Agent acting on behalf of all Lenders, shall have the right individually to
      seek
      to realize upon the security granted by any Loan Document, it being understood
      and agreed that such rights and remedies may be exercised solely by the
      Administrative Agent for the benefit of the Lenders, upon the terms of the
      Loan
      Documents.

    

    (b) In
      the
      event that the Mortgage Banking Subsidiaries Note is pledged by any Person
      as
      security for the Obligations, the Administrative Agent is hereby authorized
      to
      execute and deliver on behalf of the Lenders any Loan Documents necessary or
      appropriate to grant and perfect a Lien on such Mortgage Banking Subsidiaries
      Note in favor of the Administrative Agent on behalf of the Lenders.

    

    (c) The
      Lenders hereby authorize the Administrative Agent, at its option and in its
      discretion, to release any Lien granted to or held by the Administrative Agent
      upon the Mortgage Banking Subsidiaries Note (i) upon termination of the
      Commitments and payment and satisfaction of all of the Obligations or the
      transactions contemplated hereby; (ii) as permitted by, but only in accordance
      with, the terms of the applicable Loan Document; or (iii) if approved,
      authorized or ratified in writing by the Required Lenders, unless such release
      is required to be approved by all of the Lenders hereunder. Upon request by
      the
      Administrative Agent at any time, the Lenders will confirm in writing the
      Administrative Agent’s authority to release any such Lien pursuant to this
Section
      10.13(c).

     

    SECTION
      10.14. Resignation
      or Removal of the Administrative Agent.
      If, at
      any time, Lenders holding Notes having aggregate outstanding principal balances
      equal to at least 75% of the then outstanding amount of the Aggregate Commitment
      (excluding from such computation the Administrative Agent and its Notes) shall
      deem it advisable, those Lenders may submit to the Administrative Agent
      notification by certified mail, return receipt requested of its removal as
      Administrative Agent under this Agreement, which removal shall be effective
      as
      of the date of receipt of such notice by the Administrative Agent. If, at any
      time, the Administrative Agent shall deem it advisable, in its sole discretion,
      it may submit to each of the Lenders written notification, by certified mail,
      return receipt requested, of its resignation as Administrative Agent under
      this
      Agreement, which resignation shall be effective as of 60 days after the date
      of
      such notice. In the event of any such removal or resignation, the Required
      Lenders may appoint a successor to the Administrative Agent. In the event the
      Administrative Agent shall have resigned and/or have been removed and so long
      as
      no successor shall have been appointed, the Borrower shall make all payments
      due
      each Lender hereunder directly to that Lender and all powers specifically
      delegated to the Administrative Agent by the terms hereof may be exercised
      by
      the Required Lenders. Upon the removal or resignation of the Administrative
      Agent, the retiring Administrative Agent shall be discharged from its duties
      and
      obligations hereunder and under the other Loan Documents. After the removal
      or
      resignation of the Administrative Agent, the provisions of this Article
      X
      shall
      continue in effect for its benefit in respect of any actions taken or omitted
      to
      be taken while it was acting as the Administrative Agent hereunder and under
      the
      other Loan Documents.

     

    
      
        
        

      

      
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    SECTION
      10.15. Benefits
      of Article X.
      None of
      the provisions of this Article
      X
      shall
      inure to the benefit of the Borrower or of any Person other than Administrative
      Agent and each of the Lenders and their respective successors and permitted
      assigns. Accordingly, neither the Borrower nor any Person other than
      Administrative Agent and the Lenders (and their respective successors and
      permitted assigns) shall be entitled to rely upon, or to raise as a defense,
      the
      failure of the Administrative Agent or any Lenders to comply with the provisions
      of this Article
      X.

    

    ARTICLE
      XI

     

    SETOFF;
      RATABLE PAYMENTS

    SECTION
      11.01. Set-off.
      In
      addition to, and without limitation of, any rights of the Lenders under
      applicable law, if any Loan Party becomes insolvent, however evidenced, or
      any
      Event of Default occurs, any indebtedness from any Lender to any Loan Party
      (including all account balances, whether provisional or final and whether or
      not
      collected or available) may be offset and applied toward the payment of the
      Obligations owing to such Lender, whether or not the Obligations, or any part
      hereof, shall then be due. Each Lender agrees promptly to notify the Borrower
      after any such set-off and application made by such Lender; provided,
      however, that
      the
      failure to give such notice shall not affect the validity of any such set-off
      and application. The rights of each Lender under this Section
      11.01
      are in
      addition to any other rights and remedies which that Lender may have under
      this
      Agreement or otherwise.

     

    SECTION
      11.02. Ratable
      Payments.
      If any
      Lender, whether by setoff or otherwise, has payment made to it upon any of
      its
      Revolving Loans (other than payments received pursuant to Sections
      3.01,
      3.02
      or
3.04)
      in a
      greater proportion than that received by any other Lender with respect to the
      Revolving Loans, such Lender agrees, promptly upon demand, to purchase a portion
      of such Loans held by the other Lenders so that after such purchase each Lender
      will hold its Pro Rata Share of all Revolving Loans. If any Lender, whether
      in
      connection with setoff or amounts which might be subject to setoff or otherwise,
      receives collateral or other protection for its Obligations or such amounts
      which may be subject to setoff, such Lender agrees, promptly upon demand, to
      take such action necessary such that all Lenders share in the benefits of such
      collateral ratably in accordance with their respective Pro Rata Shares. In
      case
      any such payment is disturbed by legal process, or otherwise, appropriate
      further adjustments shall be made.

    

    ARTICLE
      XII

     

    BENEFIT
      OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

     

    
      
        
        

      

      
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    SECTION
      12.01. Successors
      and Assigns.
      The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns permitted hereby
      (including any Affiliate of the Issuers that issues any Facility Letter of
      Credit), except that (i) the Borrower may not assign or otherwise transfer
      any
      of its rights or obligations hereunder without the prior written consent of
      each
      Lender (and any attempted assignment or transfer by the Borrower without such
      consent shall be null and void) and (ii) no Lender may assign or otherwise
      transfer its rights or obligations hereunder except in accordance with this
      Article
      XII.
      Nothing
      in this Agreement, expressed or implied, shall be construed to confer upon
      any
      Person (other than the parties hereto, their respective successors and assigns
      permitted hereby (including any Affiliate of the Issuer that issues any Facility
      Letter of Credit), Participants (to the extent provided in Section
      12.03)
      and, to
      the extent contemplated by Section
      13.04,
      the
      officers, directors and employees of each of the Administrative Agent, the
      Issuer and the Lenders) any legal or equitable right, remedy or claim under
      or
      by reason of this Agreement. 

     

    SECTION
      12.02. Assignments. 

    

    (a) Subject
      to the conditions set forth in Section
      12.02(b)(ii),
      any
      Lender may assign to one or more assignees all or a portion of its rights and
      obligations under this Agreement (including all or a portion of its Commitment
      and the Loans at the time owing to it) with the prior written consent (such
      consent not to be unreasonably withheld) of:

    

    (i) the
      Borrower, provided
      that no
      consent of the Borrower shall be required for an assignment to a Lender, an
      Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred
      and is continuing, any other assignee; and

    

    (ii) the
      Administrative Agent, provided
      that no
      consent of the Administrative Agent shall be required for an assignment of
      all
      or any portion of a Loan to a Lender, an Affiliate of a Lender or an Approved
      Fund.

    

    (b) Assignments
      shall be subject to the following additional conditions:

    

    (i) each
      partial assignment shall be made as an assignment of a proportionate part of
      all
      the assigning Lender's rights and obligations under this Agreement, provided
      that
      this clause shall not be
      construed to prohibit the assignment of a proportionate part of all the
      assigning Lender’s rights and obligations in respect of (A) Commitments or
      Revolving Loans or (B) any Competitive Loans;

    

    (ii) the
      parties to each assignment shall execute and deliver to the Administrative
      Agent
      an Assignment and Assumption (“Assignment and Assumption”) in substantially the
      form of Exhibit
      I
      hereto,
      together with a processing and recordation fee of $3,500; and

    

    (iii) the
      assignee, if it shall not be a Lender, shall deliver to the Administrative
      Agent
      an Administrative Questionnaire.

    

    
      
        
        

      

      
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    (c) Upon
      its
      receipt of a duly completed Assignment and Assumption executed by an assigning
      Lender and an assignee, the assignee's completed Administrative Questionnaire
      (unless the assignee shall already be a Lender hereunder), the processing and
      recordation fee referred to in Section
      12.02(b)(ii)
      and any
      written consent to such assignment required by Section
      12.02(a),
      the
      Administrative Agent shall accept such Assignment and Assumption and record
      the
      information contained therein in the Register; provided
      that if
      either the assigning Lender or the assignee shall have failed to make any
      payment required to be made by it pursuant to Section
      2.10(e),
      2.18(e)(ii),
      2.19,
      10.09
      or
11.02,
      the
      Administrative Agent shall have no obligation to accept such Assignment and
      Assumption and record the information therein in the Register unless and until
      such payment shall have been made in full, together with all accrued interest
      thereon. No assignment shall be effective for purposes of this Agreement unless
      it has been recorded in the Register as provided in this paragraph.

     

    SECTION
      12.03. Participations. 

    

    (a) Any
      Lender may, without the consent of the Borrower, the Administrative Agent,
      the
      Issuer or the Swing Line Bank, sell participations to one or more banks or
      other
      entities (a "Participant")
      in all
      or a portion of such Lender's rights and obligations under this Agreement
      (including all or a portion of its Commitment and the Loans owing to it);
provided
      that
      (i) such Lender's obligations under this Agreement shall remain unchanged,
      (ii) such Lender shall remain solely responsible to the other parties
      hereto for the performance of such obligations and (iii) the Borrower, the
      Administrative Agent, the Issuer and the other Lenders shall continue to deal
      solely and directly with such Lender in connection with such Lender's rights
      and
      obligations under this Agreement. Any agreement or instrument pursuant to which
      a Lender sells such a participation shall provide that such Lender shall retain
      the sole right to enforce this Agreement and to approve any amendment,
      modification or waiver of any provision of this Agreement; provided
      that
      such agreement or instrument may provide that such Lender will not, without
      the
      consent of the Participant, agree to any amendment, modification or waiver
      described in the first proviso to Section
      13.06
      that
      affects such Participant. Subject to Section
      12.03(b),
      the
      Borrower agrees that each Participant shall be entitled to the benefits of
      Sections
      3.01,
      3.02
      and
3.04
      to the
      same extent as if it were a Lender and had acquired its interest by assignment
      pursuant to Section
      12.02.
      To the
      extent permitted by law, each Participant also shall be entitled to the benefits
      of Section
      11.01
      as
      though it were a Lender, provided such Participant agrees to be subject to
      Section
      11.02
      as
      though it were a Lender.

    

    (b) A
      Participant shall not be entitled to receive any greater payment under
Section
      3.01,
      3.02
      and
3.04
      than the
      applicable Lender would have been entitled to receive with respect to the
      participation sold to such Participant, unless the sale of the participation
      to
      such Participant is made with the Borrower's prior written consent.

     

    SECTION
      12.04. Pledge
      to Federal Reserve Bank.
      Any
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement to secure obligations of such Lender
      to a Federal Reserve Bank, and this Section shall not apply to any such pledge
      or assignment of a security interest; provided
      that no
      such pledge or assignment of a security interest shall release a Lender from
      any
      of its obligations hereunder or substitute any such pledgee or assignee for
      such
      Lender as a party hereto.

    

    ARTICLE
      XIII

     

    MISCELLANEOUS

     

    
      
        
        

      

      
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    SECTION
      13.01. Notice.

    

    (a) Except
      as
      otherwise permitted by Section
      2.13(b)
      with
      respect to borrowing notices, all notices and other communications provided
      to
      any party hereto under this Agreement or any other Loan Document shall be in
      writing or by telex or by facsimile and addressed or delivered to such party
      at
      its address set forth below its signature hereto in the case of the Borrower
      and
      the Administrative Agent or in the case of any Lender at the address set forth
      in its Administrative Questionnaire (in the case of any party) or at such other
      address as may be designated by such party in a notice to the Administrative
      Agent and the Borrower (in the case of notice by a Lender) or to all other
      parties (in the case of notice given by the Borrower or the Administrative
      Agent). Any notice, if mailed and properly addressed with postage prepaid,
      shall
      be deemed given when received (or when delivery is refused); any notice, if
      transmitted by telex or facsimile, shall be deemed given when transmitted
      (answerback confirmed in the case of telexes and facsimile confirmation in
      the
      case of a facsimile).

    

    (b) The
      Borrower, the Administrative Agent and any Lender may each change the address
      for service of notice upon it by a notice in writing to the other parties
      hereto.

     

    SECTION
      13.02. Survival
      of Representations.
      All
      covenants, agreements, representations and warranties made herein and in the
      certificates delivered pursuant hereto shall survive the making by the Lenders
      of any Loans herein contemplated and the execution and delivery to the Lenders
      of the Notes evidencing the Commitments, and shall continue in full force and
      effect until all of the Obligations have been paid in full, all Facility Letters
      of Credit have been terminated and all of the Commitments have been
      terminated.

     

    SECTION
      13.03. Expenses.
      The
      Borrower shall pay (a) all expenses, including attorneys’ fees and disbursements
      (which attorneys may be employees of the Administrative Agent or any Lender),
      incurred by the Administrative Agent and any Lender in connection with the
      administration of this Agreement and the other Loan Documents, any amendments,
      modifications or waivers with respect to any of the provisions thereof and
      the
      enforcement and protection of the rights of the Lenders and the Administrative
      Agent under this Agreement or any of the other Loan Documents, including all
      recording and filing fees, documentary stamp, intangibles and similar taxes,
      title insurance premiums, appraisal fees and other costs and disbursements
      incurred in connection with the taking of collateral and the perfection and
      preservation of the Lenders’ security therein, and (b) the reasonable fees and
      the disbursements of Administrative Agent’s attorneys (which attorneys may be
      employees of the Administrative Agent) in connection with the preparation,
      negotiation, execution, delivery and review of this Agreement, the Notes and
      the
      other Loan Documents (whether or not the transactions contemplated by this
      Agreement shall be consummated) and the closing of the transactions contemplated
      hereby.

     

    SECTION
      13.04. Indemnification
      of the Lenders and the Administrative Agent.
      The
      Borrower shall indemnify and hold harmless the Administrative Agent and each
      Lender, and their respective directors, officers and employees against all
      losses, claims, damages, penalties, judgments, liabilities and expenses
      (including, without limitation, all expenses of litigation or preparation
      therefor whether or not the Administrative Agent or any Lender is a party
      thereto) which any of them may pay or incur arising out of or relating to,
      directly or indirectly, this Agreement, the other Loan Documents, the
      transactions contemplated hereby or the direct or indirect application or
      proposed application of the proceeds of any Loan hereunder; provided,
      however, that
      in
      no event shall the Administrative Agent or a Lender have the right to be
      indemnified hereunder for its own gross negligence or willful misconduct nor
      shall the Administrative Agent be indemnified against any liabilities which
      arise as a result of any claims made or actions, suits or proceedings commenced
      or maintained against any Lender (including the Administrative Agent, in its
      capacity as such) (i) by that Lender’s shareholders or any governmental
      regulatory body or authority asserting that such Lender or any of its directors,
      officers, employees or agents violated any banking or securities law or
      regulation or any duty to its own shareholders, customers (excluding the
      Borrower) or creditors in any manner whatsoever in entering into or performing
      any of its obligations contemplated by this Agreement or (ii) by any other
      Lender. The obligations of the Borrower under this Section shall survive the
      termination of this Agreement.

     

    
      
        
        

      

      
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    SECTION
      13.05. Maximum
      Interest Rate.
      It is
      the intention of the Lenders and the Borrower that the interest (as defined
      under applicable law) on the Indebtedness evidenced by the Notes which may
      be
      charged to, or collected or received from the Borrower shall not exceed the
      maximum rate permissible under applicable law. Accordingly, anything herein
      or
      in any of the Notes to the contrary notwithstanding, should any interest (as
      so
      defined) be charged to, or collected or received from the Borrower by the
      Lenders pursuant hereto or thereto in excess of the maximum legal rate, then
      the
      excess payment shall be applied to the Obligations with respect to which such
      excess payment applies, and any portion of the excess payment remaining after
      payment in full thereof shall be returned by the Lenders to the
      Borrower.

     

    SECTION
      13.06. Modification
      of Agreement.

    

    (a) Neither
      this Agreement nor any Note or Guaranty nor any terms hereof or thereof may
      be
      changed, waived, discharged or terminated unless such change, waiver, discharge
      or termination is in writing signed by the Borrower (or other applicable Loan
      Party to such Loan Document) and the Required Lenders, provided
      that no
      such change, waiver, discharge or termination shall, without the consent of
      each
      Lender (with Obligations being directly affected in the case of the following
      clause
      (i)):
      (i)
      extend the final scheduled maturity of any Loan or Note or any portion thereof
      or extend the stated maturity of any Facility Letter of Credit beyond the
      Termination Date, or reduce the rate or extend the time of payment of interest
      or fees thereon, or reduce the principal amount thereof (except to the extent
      repaid in cash), (ii) amend, modify or waive any provision of Article
      XI
      or this
Section
      13.06,
      (iii)
      reduce the percentage specified in the definition of the Required Lenders or
      change the definition of Pro Rata Share, (iv) consent to the assignment or
      transfer by the Borrower of any of its rights and obligations under this
      Agreement, or (v) other than pursuant to a transaction permitted by the terms
      of
      this Agreement, release any Guarantor from its obligations under its Guaranty;
      provided,
      further,
      that no
      such change, waiver, discharge or termination shall (A) increase any Commitment
      of any Lender over the amount thereof then in effect (it being understood that
      waivers or modifications of conditions precedent, covenants, any Unmatured
      Default or Event of Default or of a mandatory reduction to the Aggregate
      Commitment or of a mandatory prepayment shall not constitute an increase of
      the
      Commitment of any Lender, and that an increase in the available portion of
      any
      Commitment of any Lender shall not constitute an increase in the Commitment
      of
      such Lender), without the consent of such Lender, provided,
      however,
      that in
      any case the Required Lenders may waive, in whole or in part, any such
      prepayment, repayment or Commitment reduction, so long as the application of
      any
      such prepayment, repayment or Commitment reduction which is still required
      to be
      made is not altered; (B) without the consent of each Issuer affected thereby,
      amend, modify or waive any provision of Section
      2.18
      or alter
      its rights or obligations with respect to Facility Letters of Credit; (C)
      without the consent of the Swing Line Bank, amend, modify or waive any provision
      relating to the rights or obligations of the Swing Line Bank or with respect
      to
      the Swing Line Loans (including, without limitation, the obligations of the
      Lenders to make Advances in repayment of Swing Line Loans); or (D) without
      the
      consent of the Administrative Agent, amend, modify or waive any provision of
      Article
      X
      or any
      other provision relating to the rights or obligations of the Administrative
      Agent;

    

    
      
        
        

      

      
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    (b) If,
      in
      connection with any proposed change, waiver, discharge or termination of or
      to
      any of the provisions of this Agreement or other Loan Documents as contemplated
      in clauses
      (i)
      through
(v),
      inclusive, of the first proviso to Section
      13.06(a),
      the
      consent of the Required Lenders is obtained but the consent of one or more
      of
      such other Lenders whose consent is required is not obtained, then the Borrower
      shall have the right, so long as all non-consenting Lenders whose individual
      consent is required are treated as described in either clauses
      (i)
      or
(ii)
      below,
      either (i) to replace each such non-consenting Lender with one or more
      Replacement Lenders pursuant to Section
      2.24
      so long
      as at the time of such replacement, each such Replacement Lender consents to
      the
      proposed change, waiver, discharge or termination or (ii) to terminate each
      such
      non-consenting Lender’s Commitments and repay in full its outstanding Loans,
provided
      that,
      unless the Commitments that are terminated, and Loans that are repaid, pursuant
      to the preceding clause
      (ii)
      are
      immediately replaced in full at such time through the addition of new Lenders
      or
      the increase of the Commitments and/or outstanding Loans of existing Lenders
      (who in each case must specifically consent thereto in writing), then in the
      case of any action pursuant to preceding clause
      (ii)
      the
      Required Lenders (determined before giving effect to the proposed action) shall
      specifically consent thereto and, provided
      further,
      that in
      any event the Borrower shall not have the right to replace a Lender, terminate
      its Commitments or repay its Loans solely as a result of the exercise of such
      Lender’s rights (and the withholding of any required consent by such Lender)
      pursuant to the second proviso to Section
      13.06(a).

    

    (c) Anything
      in this Agreement to the contrary notwithstanding, if at a time when the
      conditions precedent set forth in Article
      V
      hereof
      to any Loan are, in the opinion of the Required Lenders, satisfied, any Lender
      (a “Defaulting Lender”) shall fail to fulfill its obligations to make such Loan
      and such failure continues for at least two Business Days then, for so long
      as
      such failure shall continue, such Defaulting Lender shall (unless the Required
      Lenders, determined as if such Defaulting Lender were not a “Lender” hereunder,
      shall otherwise consent in writing) be deemed for all purposes relating to
      changes, waivers, discharges and termination under this Agreement (including,
      without limitation, under Section
      13.06(a))
      to have
      no Loans or Commitments, shall not be treated as a “Lender” hereunder when
      performing the computation of Required Lenders, and shall have no rights under
      the first proviso of Section
      13.06(a);
      provided
      that
      any
      action taken by the other Lenders with respect to the matters referred to in
      clauses
      (i)
      through
(iv),
      inclusive, of the first proviso of Section
      13.06(a)
      shall
      not be effective as against such Defaulting Lender.

     

    SECTION
      13.07. Register.
      The
      Administrative Agent, acting for this purpose as an agent of the Borrower,
      shall
      maintain at one of its offices a copy of each Assignment and Assumption
      delivered to it and a register for the recordation of the names and addresses
      of
      the Lenders, and the Commitment of, and principal amount of the Loans and
      Reimbursement Obligations owing to, each Lender pursuant to the terms hereof
      from time to time (the "Register").
      The
      entries in the Register shall be conclusive, absent manifest error, and the
      Borrower, the Administrative Agent, the Issuer and the Lenders may treat each
      Person whose name is recorded in the Register pursuant to the terms hereof
      as a
      Lender hereunder for all purposes of this Agreement, notwithstanding notice
      to
      the contrary. The Register shall be available for inspection by the Borrower,
      the Issuer and any Lender, at any reasonable time and from time to time upon
      reasonable prior notice.

     

    
      
        
        

      

      
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    SECTION
      13.08. Preservation
      of Rights.
      No
      notice to or demand of the Borrower in any case shall entitle the Borrower
      to
      any other or further notice or demand in the same or similar circumstances.
      No
      delay or omission of the Lenders or the Administrative Agent to exercise any
      right under the Loan Documents shall impair such right or be construed to be
      a
      waiver of any Event of Default or an acquiescence therein, and the making of
      a
      Loan notwithstanding the existence of an Event of Default or Unmatured Default,
      or the inability of the Borrower to satisfy the conditions precedent to such
      Loan shall not constitute any waiver or acquiescence. Any single or partial
      exercise of any such right shall not preclude other or further exercise thereof
      or the exercise of any other right, and no waiver, amendment or other variation
      of the terms, conditions or provisions of the Loan Documents whatsoever shall
      be
      valid unless in writing signed by the Lenders required pursuant to Section
      13.06,
      and
      then only to the extent in such writing specifically set forth. All remedies
      contained in the Loan Documents or by law afforded shall be cumulative and
      all
      shall be available to the Administrative Agent and the Lenders until the
      Obligations have been paid in full and all Facility Letters of Credit have
      terminated and all Commitments have terminated. 

     

    SECTION
      13.09. Several
      Obligations of Lenders.
      The
      respective obligations of the Lenders hereunder are several and not joint,
      and
      no Lender shall be the partner or agent of any other (except to the extent
      to
      which the Administrative Agent is authorized to act as such). The failure of
      any
      Lender to perform any of its obligations hereunder shall not relieve any other
      Lender from any of its obligations hereunder. This Agreement shall not be
      construed so as to confer any right or benefit upon any Person other than the
      parties to this Agreement and their respective successors and
      assigns.

     

    SECTION
      13.10. Severability.
      If any
      one or more of the provisions contained in this Agreement or the Notes is held
      invalid, illegal or unenforceable in any respect, the validity, legality or
      enforceability of the remaining provisions contained herein and therein shall
      not in any way be affected or impaired thereby.

     

    SECTION
      13.11. Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which may be
      executed by one or more of the parties hereto, but all of which, when taken
      together, shall constitute a single agreement binding on all the parties
      hereto.

     

    SECTION
      13.12. Loss,
      etc., Notes.
      Upon
      receipt by the Borrower of reasonably satisfactory evidence of the loss, theft,
      destruction or mutilation of any of the Notes, upon reimbursement to the
      Borrower of all reasonable expenses incidental thereto and upon surrender and
      cancellation of the relevant Note, if mutilated, the Borrower shall make and
      deliver in lieu of that Note (the “Prior Note”) a new Note of like tenor, except
      that no reference need be made in the new Note to any installment or
      installments of principal, if any, previously due and paid upon the Prior Note.
      Any Note made and delivered in accordance with the provisions of this Section
      shall be dated as of the date to which interest has been paid on the unpaid
      principal amount of the Prior Note.

     

    
      
        
        

      

      
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    SECTION
      13.13. Governmental
      Regulation.
      Anything contained in this Agreement to the contrary notwithstanding, no Lender
      shall be obligated to extend credit to the Borrower in violation of any
      limitation or prohibition provided by any applicable statute or
      regulation.

     

    SECTION
      13.14. Taxes.
      Any
      taxes (excluding federal, state or local income taxes on the overall net income
      of any Lender) or other similar assessments or charges payable or ruled payable
      by any governmental authority in respect of the Loan Documents shall be paid
      by
      the Borrower, together with interest and penalties, if any.

     

    SECTION
      13.15. Headings.
      Section
      headings in the Loan Documents are for convenience of reference only, and shall
      not govern the interpretation of any of the provisions of the Loan
      Documents.

     

    SECTION
      13.16. USA
      PATRIOT ACT.
      Each
      Lender that is subject to the requirements of the USA PATRIOT Act (Title III
      of
      Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies
      the Borrower that pursuant to the requirements of the Act, it is required to
      obtain, verify and record information that identifies the Borrower, which
      information includes the name and address of the Borrower and other information
      that will allow such Lender to identify the Borrower in accordance with the
      Act.

     

    SECTION
      13.17. Entire
      Agreement.
      This
      Agreement sets forth the entire agreement of the parties hereto with respect
      to
      the subject matter hereof, provided,
      however, that
      the
      fees payable by Borrower are set forth in the Fee Letter.

     

    SECTION
      13.18. CHOICE
      OF LAW.
      THE
      LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW
      PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
      LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK BUT GIVING EFFECT
      TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

     

    SECTION
      13.19. CONSENT
      TO JURISDICTION.
      THE
      BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
      UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK CITY IN ANY
      ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE
      BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
      OR
      PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
      ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
      ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
      INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE
      AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS
      OF
      ANY OTHER JURISDICTION. ANY
      JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE ADMINISTRATIVE AGENT OR ANY
      LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING,
      DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
      CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK,
      NEW YORK.

    

    
      
        
        

      

      
        82

        
          

        

      

      
        
        

      

    

    

    SECTION
      13.20. WAIVER
      OF JURY TRIAL.
      THE
      BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY
      IN
      ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
      SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED
      TO,
      OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
      THEREUNDER.

    

    [Signatures
      appear on following pages]

    

    

    
      
        
        

      

      
        83

        
          

        

      

      
        
        

      

    

    

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

     

    
      	 	 	 
	 	Borrower:
	 	 
	 	LENNAR
              CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ Jonathan M. Jaffe
	 	
              
Jonathan
              M. Jaffe
	 	Chief
              Operating Officer
	 	 
	 	
              Address:

              Lennar
                Corporation

              700
                Northwest 107th Avenue

              Miami,
                Florida 33172

              Attention:
                Bruce Gross, Chief Financial Officer

              Fax
                No.: (305) 227-7115

              

              with
                copies to:

              

              Lennar
                Corporation

              700
                Northwest 107th Avenue

              Miami,
                Florida 33172

              Attention:
                Mark Sustana, General Counsel

              Fax
                No.: (305) 229-6650

              

              and

              

              Bilzin
                Sumberg Baena Price & Axelrod LLP

              200
                South Biscayne Boulevard

              Suite
                2500

              Miami,
                FL 33131-2336

              Attention:
                Brian Bilzin

              Fax
                No.: (305) 374-7593

            

    

     

     

    
      
        
        

      

      
        84

        
          

        

      

      
        
        

      

    

    

    

    
      	 	Lenders:
	 	 
	 	JPMORGAN CHASE BANK,
              N.A.,
	 	As Lender, Administrative Agent, Issuer
              
	 	and Swing Line
              Bank

    

     

    

    
      
        	 	By:	/s/ Kimberly L. Turner
	 	Name:	Kimberly L. Turner
	 	Its:
                	Vice President

      

    

     

     

    
      	 	
              Address:

              

              JPMorgan
                Chase Bank, N.A.

              277
                Park Avenue - 3rd
                Floor

              New
                York, NY 10172

              Attention:
                Kimberly L. Turner 

              Fax
                No.: (646) 534-0574

            

    

    

 

    
      
        
        

      

      
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    EXHIBIT
      E

    

    FORM
      OF

    GUARANTY

    

    THIS
      GUARANTY (this
      “Guaranty”) is made as of July 21, 2006 by the undersigned parties hereto
      (collectively, the “Guarantors”) in favor of the Administrative Agent, for the
      benefit of the Lenders under the Credit Agreement referred to
      below.

    

    

    WITNESSETH:

    

    WHEREAS,
      Lennar
      Corporation, a Delaware corporation (the “Company”) and JPMorgan Chase Bank,
      N.A., as Administrative Agent (the “Administrative Agent”), and certain other
      Lenders from time to time party thereto have entered into a certain Credit
      Agreement dated as of July 21, 2006 (as same may be amended or modified from
      time to time, the “Credit Agreement”), providing, subject to the terms and
      conditions thereof, for extensions of credit to be made by the Lenders to the
      Company;

    

    WHEREAS,
      it is a
      condition precedent to the execution of the Credit Agreement by the
      Administrative Agent and the Lenders that each of the Guarantors execute and
      deliver this Guaranty whereby each of the Guarantors shall guarantee the payment
      when due, subject to Section 9 hereof, of all Guaranteed Obligations, as defined
      below; and

    

    WHEREAS,
      in
      consideration of the financial and other support that the Company has provided
      (the Company being referred to collectively as the “Principal”), and in
      consideration of such financial and other support as the Principal may in the
      future provide, to the Guarantors, and in order to induce the Lenders and the
      Administrative Agent to enter into the Credit Agreement, and because each
      Guarantor has determined that executing this Guaranty is in its interest and
      to
      its financial benefit, each of the Guarantors is willing to guarantee the
      obligations of the Principal under the Credit Agreement, any Note and any other
      Loan Documents;

    

    NOW,
      THEREFORE,
      in
      consideration of the premises and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, the parties hereto
      agree as follows:

    

    SECTION
      1. Defined
      Terms.
      “Guaranteed Obligations” is defined in Section 3 below. Other capitalized terms
      used herein but not defined herein shall have the meaning set forth in the
      Credit Agreement.

    

    SECTION
      2.1. Representations
      and Warranties.
      Each of
      the Guarantors represents and warrants (which representations and warranties
      shall be deemed to have been renewed upon each Borrowing Date and each Issuance
      Date under the Credit Agreement) that:

    

    (a) It
      is a
      corporation, limited partnership or limited liability company (as applicable)
      duly and properly incorporated or formed, validly existing and in good standing
      under the laws of its jurisdiction of incorporation or formation, has the power
      and authority to own or hold under lease the properties it purports to own
      or
      hold under lease and to carry on its business as now conducted, and is duly
      qualified or licensed to transact business in every jurisdiction in which such
      qualification or licensing is necessary to enable it to enforce all of its
      material contracts and other material rights and to avoid any material penalty
      or forfeiture.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (b) It
      has
      the power and authority to execute and deliver this Guaranty and to perform
      its
      obligations hereunder. The execution and delivery by it of this Guaranty and
      the
      performance of its obligations hereunder have been duly authorized by all
      requisite corporate, limited partnership or limited liability company action
      (as
      applicable).

    

    (c) Neither
      its execution and delivery of this Guaranty nor performance of its obligations
      hereunder nor its compliance with the provisions hereof (i) will violate or
      be
      in conflict with (A) any provisions of law, (B) any order, rule, regulation,
      write, judgment, injunction, decree or award of any court or other agency of
      government, or (C) any provision of its certificate of incorporation or by-laws,
      or certificate of limited partnership or limited partnership agreement, or
      certificate or articles of formation or operating agreement (as applicable),
      (ii) will violate, be in conflict with, result in a breach of or constitute
      (with or without the giving of notice or the passage of time or both) a default
      under any material indenture, agreement or other instrument to which it is
      a
      party or by which it or any of its properties or assets is or may be bound,
      and
      (iii) except as otherwise contemplated by the Credit Agreement, will result
      in
      the creation or imposition of any lien, charge or encumbrance upon, or any
      security interest in, any of its properties or assets.

    

    (d) It
      has
      duly executed and delivered this Guaranty, and this Guaranty constitutes its
      legal, valid and binding obligation enforceable against it in accordance with
      the terms hereof, except as enforceability may be limited by bankruptcy,
      insolvency or similar laws affecting the enforcement of creditors’ rights
      generally.

    

    (e) No
      order,
      license, consent, approval, authorization of, or registration, declaration,
      recording or filing with, or validation of, or exemption by, any governmental
      or
      public authority (whether federal, state or local, domestic or foreign) or
      any
      subdivision thereof is required in connection with, or as a condition precedent
      to, the due and valid execution, delivery and performance by it of this
      Guaranty, or the legality, validity, binding effect or enforceability of any
      of
      the terms, provisions or conditions hereof.

    

    SECTION
      2.2. Covenants.
      Each of
      the Guarantors covenants that, so long as any Lender has any Commitment
      outstanding under the Credit Agreement or any of the Guaranteed Obligations
      shall remain unpaid, that it will, and, if necessary, will enable the Principal
      to, fully comply with those covenants and agreements set forth in the Credit
      Agreement.

    

    SECTION
      3. The
      Guaranty.
      Subject
      to Section 9 hereof, each of the Guarantors hereby absolutely and
      unconditionally guarantees, as primary obligor and not as surety, the full
      and
      punctual payment (whether at stated maturity, upon acceleration or early
      termination or otherwise, and at all times thereafter) and performance of the
      Obligations, including without limitation any such Obligations incurred or
      accrued during the pendency of any bankruptcy, insolvency, receivership or
      other
      similar proceeding, whether or not allowed or allowable in such proceeding
      (collectively, subject to the provisions of Section 9 hereof, being referred
      to
      collectively as the “Guaranteed Obligations”). Upon failure by the Principal to
      pay punctually any such amount, each of the Guarantors agrees that it shall
      forthwith on demand pay to the Administrative Agent for the benefit of the
      Lenders, the amount not so paid at the place and in the manner specified in
      the
      Credit Agreement, any Note or any other Loan Document, as the case may be.
      This
      Guaranty is a guaranty of payment and not of collection. Each of the Guarantors
      waives any right to require the Lender to sue the Principal, any other
      guarantor, or any other Person obligated for all or any part of the Guaranteed
      Obligations, or otherwise to enforce its payment against any collateral securing
      all or any part of the Guaranteed Obligations.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    SECTION
      4. Guaranty
      Unconditional.
      Subject
      to Section 9 hereof, the obligations of each of the Guarantors hereunder shall
      be unconditional and absolute and, without limiting the generality of the
      foregoing, shall not be released, discharged or otherwise affected
      by:

    

    (i) 
      any
      extension, renewal, settlement, compromise, waiver or release in respect of
      any
      of the Guaranteed Obligations, by operation of law or otherwise, or any
      obligation of any other guarantor of any of the Guaranteed Obligations, or
      any
      default, failure or delay, willful or otherwise, in the payment or performance
      of the Guaranteed Obligations;

     

    (ii) any
      modification or amendment of or supplement to the Credit Agreement, any Note
      or
      any other Loan Document;

     

    (iii) any
      release, nonperfection or invalidity of any direct or indirect security for
      any
      obligation of the Principal under the Credit Agreement, any Note or any other
      Loan Document or any obligations of any other guarantor of any of the Guaranteed
      Obligations, or any action or failure to act by the Administrative Agent, any
      Lender or any Affiliate of any Lender with respect to any collateral securing
      all or any part of the Guaranteed Obligations;

     

    (iv) any
      change in the corporate existence, structure or ownership of the Principal
      or
      any other guarantor of any of the Guaranteed Obligations, or any insolvency,
      bankruptcy, reorganization or other similar proceeding affecting the Principal,
      or any other guarantor of the Guaranteed Obligations, or its assets or any
      resulting release or discharge of any obligation of the Principal, or any other
      guarantor of any of the Guaranteed Obligations;

     

    (v) the
      existence of any claim, setoff or other rights which the Guarantors may have
      at
      any time against the Principal, any other guarantor of any of the Guaranteed
      Obligations, the Administrative Agent, any Lender or any other Person, whether
      in connection herewith or any unrelated transactions;

     

    (vi) any
      invalidity or unenforceability relating to or against the Principal, or any
      other guarantor of any of the Guaranteed Obligations, for any reason related
      to
      the Credit Agreement, any Note, any other Loan Document or any provision of
      applicable law or regulation purporting to prohibit the payment by the
      Principal, or any other guarantor of the Guaranteed Obligations, of the
      principal of or interest on any Note or any other amount payable by the
      Principal under the Credit Agreement, any Note or any other Loan Document;
      or

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (vii) any
      other
      act or omission to act or delay of any kind by the Principal, any other
      guarantor of the Guaranteed Obligations, the Administrative Agent, any Lender
      or
      any other Person or any other circumstance whatsoever which might, but for
      the
      provisions of this paragraph, constitute a legal or equitable discharge of
      any
      Guarantor’s obligations hereunder.

    

    SECTION
      5. Discharge
      Only Upon Payment In Full: Reinstatement In Certain
      Circumstances.
      Each of
      the Guarantor’s obligations hereunder shall remain in full force and effect
      until all Guaranteed Obligations shall have been indefeasibly paid in full
      and
      the Commitments under the Credit Agreement shall have terminated or expired.
      If
      at any time any payment of the principal of or interest on any Note or any
      other
      amount payable by the Principal or any other party under the Credit Agreement,
      any Note or any other Loan Document is rescinded or must be otherwise restored
      or returned upon the insolvency, bankruptcy or reorganization of the Principal
      or otherwise, each of the Guarantor’s obligations hereunder with respect to such
      payment shall be reinstated as though such payment had been due but not made
      at
      such time.

    

    SECTION
      6. Waivers.
      Each of
      the Guarantors irrevocably waives acceptance hereof, presentment, demand,
      protest and, to the fullest extent permitted by law, any notice not provided
      for
      herein, as well as any requirement that at any time any action be taken by
      any
      Person against the Principal, any other guarantor of any of the Guaranteed
      Obligations, or any other Person.

    

    SECTION
      7. Subordination;
      Subrogation.
      Each of
      the Guarantors hereby subordinates to the Guaranteed Obligations all
      indebtedness or other liabilities of the Principal or any other Guarantor to
      such Guarantor. Each of the Guarantors hereby further agrees not to assert
      any
      right, claim or cause of action, including, without limitation, a claim for
      subrogation, reimbursement, indemnification or otherwise, against the Principal
      arising out of or by reason of this Guaranty or the obligations hereunder,
      including, without limitation, the payment or securing or purchasing of any
      of
      the Guaranteed Obligations by any of the Guarantors unless and until the
      Guaranteed Obligations are indefeasibly paid in full and any commitment to
      lend
      under the Credit Agreement and any other Loan Documents is
      terminated.

    

    SECTION
      8. Stay
      of Acceleration.
      If
      acceleration of the time for payment of any of the Guaranteed Obligations is
      stayed upon the insolvency, bankruptcy or reorganization of the Principal,
      all
      such amounts otherwise subject to acceleration under the terms of the Credit
      Agreement, any Note or any other Loan Document shall nonetheless be payable
      by
      each of the Guarantors hereunder forthwith on demand by the Administrative
      Agent
      made at the request of the Required Lenders.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    SECTION
      9. Limitation
      on Obligations.
      (a) The
      provisions of this Guaranty are severable, and in any action or proceeding
      involving any state corporate law, or any state, federal or foreign bankruptcy,
      insolvency, reorganization or other law affecting the rights of creditors
      generally, if the obligations of any Guarantor under this Guaranty would
      otherwise be held or determined to be avoidable, invalid or unenforceable on
      account of the amount of such Guarantor’s liability under this Guaranty, then,
      notwithstanding any other provision of this Guaranty to the contrary, the amount
      of such liability shall, without any further action by the Guarantors, the
      Administrative Agent or any Lender, be automatically limited and reduced to
      the
      highest amount that is valid and enforceable as determined in such action or
      proceeding (such highest amount determined hereunder being the relevant
      Guarantor’s “Maximum Liability”). This Section 9(a) with respect to the Maximum
      Liability of the Guarantors is intended solely to preserve the rights of the
      Administrative Agent hereunder to the maximum extent not subject to avoidance
      under applicable law, and neither the Guarantor nor any other person or entity
      shall have any right or claim under this Section 9(a) with respect to the
      Maximum Liability, except to the extent necessary so that the obligations of
      the
      Guarantors hereunder shall not be rendered voidable under applicable
      law.

     

    (b) Each
      of
      the Guarantors agrees that the Guaranteed Obligations may at any time and from
      time to time exceed the Maximum Liability of each Guarantor, and may exceed
      the
      aggregate Maximum Liability of all other Guarantors, without impairing this
      Guaranty or affecting the rights and remedies of the Administrative Agent
      hereunder. Nothing in this Section 9(b) shall be construed to increase any
      Guarantor’s obligations hereunder beyond its Maximum Liability.

    

    (c) In
      the
      event any Guarantor (a “Paying Guarantor”) shall make any payment or payments
      under this Guaranty or shall suffer any loss as a result of any realization
      upon
      any collateral granted by it to secure its obligations under this Guaranty,
      each
      other Guarantor (each a “Non-Paying Guarantor”) shall contribute to such Paying
      Guarantor an amount equal to such Non-Paying Guarantor’s “Pro Rata Share” of
      such payment or payments made, or losses suffered, by such Paying Guarantor.
      For
      the purposes hereof, each Non-Paying Guarantor’s “Pro Rata Share” with respect
      to any such payment or loss by a Paying Guarantor shall be determined as of
      the
      date on which such payment or loss was made by reference to the ratio of (i)
      such Non-Paying Guarantor’s Maximum Liability as of such date (without giving
      effect to any right to receive, or obligation to make, any contribution
      hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been
      determined, the aggregate amount of all monies received by such Non-Paying
      Guarantor from the Principal after the date hereof (whether by loan, capital
      infusion or by other means) to (ii) the aggregate Maximum Liability of all
      Guarantors hereunder (including such Paying Guarantor) as of such date (without
      giving effect to any right to receive, or obligation to make, any contribution
      hereunder), or to the extent that a Maximum Liability has not been determined
      for any Guarantors, the aggregate amount of all monies received by such
      Guarantors from the Principal after the date hereof (whether by loan, capital
      infusion or by other means). Nothing in this Section 9 (c) shall affect any
      Guarantor’s several liability for the entire amount of the Guaranteed
      Obligations (up to such Guarantor’s Maximum Liability). Each of the Guarantors
      covenants and agrees that its right to receive any contribution under this
      Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right
      of
      payment to all the Guaranteed Obligations. The provisions of this Section 9(c)
      are for the benefit of both the Administrative Agent and the Guarantors and
      may
      be enforced by any one, or more, or all of them in accordance with the terms
      hereof.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    SECTION
      10. Application
      of Payments.
      All
      payments received by the Administrative Agent hereunder shall be applied by
      the
      Administrative Agent to payment of the Guaranteed Obligations in the order
      of
      priority set forth in Section 9.03 of the Credit Agreement unless a court of
      competent jurisdiction shall otherwise direct.

    

    SECTION
      11. Notices.
      All
      notices, requests and other communications to any party hereunder shall be
      given
      or made by telecopier or other writing and telecopied, or mailed or delivered
      to
      the intended recipient at its address or telecopier number set forth on the
      signature pages hereof or such other address or telecopy number as such party
      may hereafter specify for such purpose by notice to the Administrative Agent
      in
      accordance with the provisions of Section 13.01 of the Credit Agreement. Except
      as otherwise provided in this Guaranty, all such communications shall be deemed
      to have been duly given when transmitted by telecopier, or personally delivered
      or, in the case of a mailed notice sent by certified mail return-receipt
      requested, on the date set forth on the receipt (provided, that any refusal
      to
      accept any such notice shall be deemed to be notice thereof as of the time
      of
      any such refusal), in each case given or addressed as aforesaid.

    

    SECTION
      12. No
      Waivers.
      No
      failure or delay by the Administrative Agent or any Lenders in exercising any
      right, power or privilege hereunder shall operate as a waiver thereof nor shall
      any single or partial exercise thereof preclude any other or further exercise
      thereof or the exercise of any other right, power or privilege. The rights
      and
      remedies provided in this Guaranty, the Credit Agreement, any Note and the
      other
      Loan Documents shall be cumulative and not exclusive of any rights or remedies
      provided by law.

    

    SECTION
      13. No
      Duty to Advise.
      Each of
      the Guarantors assumes all responsibility for being and keeping itself informed
      of the Principal’s financial condition and assets, and of all other
      circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
      and the nature, scope and extent of the risks that each of the Guarantors
      assumes and incurs under this Guaranty, and agrees that neither the
      Administrative Agent nor any Lender has any duty to advise any of the Guarantors
      of information known to it regarding those circumstances or risks.

    

    SECTION
      14. Successors
      and Assigns.
      This
      Guaranty is for the benefit of the Administrative Agent and the Lenders and
      their respective successors and permitted assigns and in the event of an
      assignment of any amounts payable under the Credit Agreement, any Note or any
      other Loan Documents, the rights hereunder, to the extent applicable to the
      indebtedness so assigned, shall be transferred with such indebtedness. This
      Guaranty shall be binding upon each of the Guarantors and their respective
      successors and permitted assigns.

    

    SECTION
      15. Changes
      in Writing.
      Neither
      this Guaranty nor any provision hereof may be changed, waived, discharged or
      terminated orally, but only in writing signed by each of the Guarantors and
      the
      Administrative Agent with the consent of the Required Lenders.

    

    SECTION
      16. Costs
      of Enforcement.
      Each of
      the Guarantors agrees to pay all costs and expenses including, without
      limitation, all court costs and attorneys’ fees and expenses paid or incurred by
      the Administrative Agent or any Lender or any Affiliate of any Lender in
      endeavoring to collect all or any part of the Guaranteed Obligations from,
      or in
      prosecuting any action against, the Principal, the Guarantors or any other
      guarantor of all or any part of the Guaranteed Obligations.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    SECTION
      17. GOVERNING
      LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
      THIS
      GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
      STATE OF NEW YORK. EACH OF THE GUARANTORS HEREBY SUBMITS TO THE NONEXCLUSIVE
      JURISDICTION OF THE UNITED STATES DISTRICT COURT, AND ANY NEW YORK STATE COURT,
      SITTING IN NEW YORK, NEW YORK AND FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
      OUT OF OR RELATING TO THIS GUARANTY (INCLUDING, WITHOUT LIMITATION, ANY OF
      THE
      OTHER LOAN DOCUMENTS) OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE
      GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
      OBJECTION WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
      VENUE
      OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
      PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
      EACH OF THE GUARANTORS, AND THE ADMINISTRATIVE AGENT AND THE LENDERS ACCEPTING
      THIS GUARANTY, HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
      IN
      ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE
      TRANSACTIONS CONTEMPLATED HEREBY.

    

    SECTION
      18. Taxes,
      etc.
      All
      payments required to be made by any of the Guarantors hereunder shall be made
      without setoff or counterclaim and free and clear of and without deduction
      or
      withholding for or on account of, any present or future taxes, levies, imposts,
      duties or other charges of whatsoever nature imposed by any government or any
      political or taxing authority thereof (excluding federal taxation of the overall
      income of any Lender), provided, however, that if any of the Guarantors is
      required by law to make such deduction or withholding, such Guarantor shall
      forthwith (i) pay to the Administrative Agent or any Lender, as applicable,
      such
      additional amount as results in the net amount received by the Administrative
      Agent or any Lender, as applicable, equaling the full amount which would have
      been received by the Administrative Agent or any Lender, as applicable, had
      no
      such deduction or withholding been made, (ii) pay the full amount deducted
      to
      the relevant authority in accordance with applicable law, and (iii) furnish
      to
      the Administrative Agent or any Lender, as applicable, certified copies of
      official receipts evidencing payment of such withholding taxes within 30 days
      after such payment is made.

    

    SECTION
      19. Supplemental
      Guarantors.
      Pursuant to Section 6.07 of the Credit Agreement, additional Subsidiaries shall
      become obligated as Guarantors hereunder (each as fully as though an original
      signatory hereto) by executing and delivering to the Administrative Agent a
      supplemental guaranty in the form of Exhibit A attached hereto (with blanks
      appropriately filled in), together with such additional supporting documentation
      required pursuant to Section 6.04(n) of the Credit Agreement.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to be duly
      executed, under seal, by its authorized officer as of the day and year first
      above written.

    

    
 

    
      	 	By:
	 	Title:

    

     

     

    
      	 	By:
	 	Title:

    

    

      
         

      

    

    
      
        	 	By:
	 	Title:

      

      
 

    

    
      
        	 	By:
	 	Title:

      

       

    

    
      

      
        	 	By:
	 	Title:

      

       

      
 

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

         

      

    

    SCHEDULE
      I

    

    LENDERS
      AND COMMITMENTS 

    
      	
              Lender

            	
              Commitment

            
	 	 
	
              JPMorgan
                Chase Bank, N.A.

            	
            
	
              Deutsche
                Bank Trust Company Americas

            	
            
	
              Bank
                of America, N.A.

            	
            
	
              Barclays
                Bank PLC

            	
            
	
              Calyon
                New York Branch

            	
            
	
              The
                Royal Bank of Scotland plc

            	
            
	
              Wachovia
                Bank, N.A.

            	
            
	
              Lloyds
                TSB Bank plc

            	
            
	
              UBS
                Loan Finance LLC

            	
            
	
              BNP
                Paribas

            	
            
	
              SunTrust
                Bank

            	
            
	
              Citicorp
                North America, Inc.

            	
            
	
              HSBC
                Bank USA, N.A.

            	
            
	
              Comerica
                Bank

            	
            
	
              Guaranty
                Bank

            	
            
	
              U.S.
                Bank National Association

            	
            
	
              Washington
                Mutual Bank

            	
            
	
              BankUnited,
                FSB

            	
            
	
              PNC
                Bank, National Association

            	
            
	
              Societe
                Generale

            	
            
	
              Sumitomo
                Mitsui Banking Corporation

            	
            
	
              AmSouth
                Bank

            	
            
	
              City
                National Bank

            	
            
	
              Commerzbank
                AG, New York and Grand Cayman Branches

            	
            
	
              Fifth
                Third Bank

            	
            
	
              The
                International Commercial Bank of China, New York Agency

            	
            
	
              LaSalle
                Bank National Association

            	
            
	
              MidFirst
                Bank

            	
            
	
              Mitzuho
                Corporate Bank, Ltd.

            	
            
	
              Natexis
                Banques Populaires

            	
            
	
              Bank
                Hapoalim B.M.

            	
            
	
              Chang
                Hwa Commercial Bank, Ltd., New York Branch

            	
            
	
              First
                Commercial Bank, Los Angeles Branch

            	
            
	
              Manufacturers
                and Traders Trust Company

            	
            
	
              Regions
                Bank

            	
            
	
              United
                Overseas Bank Limited

            	
            
	
              Cathay
                United Bank, Ltd.

            	
            
	
              Chiao
                Tung Bank, Co., Ltd. New York Agency

            	
            
	
              Commercebank
                N.A. Florida

            	
            
	
              Compass
                Bank

            	
            
	
              Israel
                Discount Bank of New York

            	
            
	
              Malayan
                Banking Berhad, New York Branch

            	
            
	
              RBC
                Centura Bank

            	
            
	
              Bank
                of Communications, New York Branch

            	
            
	
              The
                Norinchukin Bank, New York Branch

            	
            
	
              Taiwan
                Business Bank

            	
            
	 	 
	
              Total

            	
              $2,700,000,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]