Document:

Exhibit
10.1

       

      EXECUTION
VERSION

      
 

      ASSET
PURCHASE AGREEMENT

      

      AMONG

      

      ORLEANS
HOMEBUILDERS, INC.

      

      AND

      

      THE
SELLER AFFILIATES NAMED HEREIN,

      

      AS
SELLERS,

      

      AND

      

      NVR,
INC.,

      

      AS
PURCHASER

      

      DATED
AS OF APRIL 13, 2010

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE OF
CONTENTS

      

      
        
          	 
      	
                  Page

                
	 
      
	
                  ARTICLE
      I

                
	
                  DEFINITIONS

                
	 
      	 
      	 
      
	
                  SECTION
      1.1

                	
                  CERTAIN
      DEFINITIONS

                	
                  1

                
	
                  SECTION
      1.2

                	
                  TERMS
      DEFINED ELSEWHERE IN THIS AGREEMENT

                	
                  10

                
	
                  SECTION
      1.3

                	
                  OTHER
      DEFINITIONAL AND INTERPRETIVE MATTERS

                	
                  11

                
	 
      
	
                  ARTICLE
      II

                
	
                  PURCHASE
      AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

                
	 
      	 
      	 
      
	
                  SECTION
      2.1

                	
                  PURCHASE
      AND SALE OF ASSETS

                	
                  12

                
	
                  SECTION
      2.2

                	
                  EXCLUDED
      ASSETS

                	
                  14

                
	
                  SECTION
      2.3

                	
                  ASSUMPTION
      OF LIABILITIES

                	
                  14

                
	
                  SECTION
      2.4

                	
                  EXCLUDED
      LIABILITIES

                	
                  15

                
	
                  SECTION
      2.5

                	
                  ASSIGNMENT
      AND ASSUMPTION; ASSUMED CURE AMOUNTS

                	
                  16

                
	
                  SECTION
      2.6

                	
                  FURTHER
      CONVEYANCES AND ASSUMPTION

                	
                  16

                
	
                  SECTION
      2.7

                	
                  CASUALTY
      EVENTS, CONDEMNATION

                	
                  17

                
	
                  SECTION
      2.8

                	
                  BULK
      SALES LAWS

                	
                  17

                
	
                  SECTION
      2.9

                	
                  ENVIRONMENTAL
      MATTERS

                	
                  18

                
	
                  SECTION
      2.10

                	
                  TITLE
      AND SURVEY

                	
                  19

                
	
                  SECTION
      2.11

                	
                  ASSIGNMENT
      OF HOA DOCUMENTS

                	
                  20

                
	
                  SECTION
      2.12

                	
                  ALLOCATION
      OF PURCHASE PRICE

                	
                  20

                
	 
      
	
                  ARTICLE
      III

                
	
                  CONSIDERATION

                
	 
      
	
                  SECTION
      3.1

                	
                  CONSIDERATION

                	
                  20

                
	
                  SECTION
      3.2

                	
                  CLOSING
      ADJUSTMENT

                	
                  22

                
	
                  SECTION
      3.3

                	
                  SOLE
      ADJUSTMENTS

                	
                  24

                
	 
      
	
                  ARTICLE
      IV

                
	
                  CLOSING
      AND TERMINATION

                
	 
      
	
                  SECTION
      4.1

                	
                  CLOSING
      DATE

                	
                  24

                
	
                  SECTION
      4.2

                	
                  DELIVERIES
      BY SELLERS

                	
                  24

                
	
                  SECTION
      4.3

                	
                  DELIVERIES
      BY PURCHASER

                	
                  25

                
	
                  SECTION
      4.4

                	
                  TERMINATION
      OF AGREEMENT

                	
                  26

                
	
                  SECTION
      4.5

                	
                  PROCEDURE
      UPON TERMINATION

                	
                  27

                
	
                  SECTION
      4.6

                	
                  EFFECT
      OF TERMINATION

                	
                  27

                

        

      

      
        
           

        

        
          -i-

          
            

          

        

        
           

        

      

      

      
        
          	 
      	
                  Page

                
	 
      
	
                  ARTICLE
      V

                
	
                  REPRESENTATIONS
      AND WARRANTIES OF PARENT AND SELLERS

                
	 
      	 
      	 
      
	
                  SECTION
      5.1

                	
                  ORGANIZATION
      AND GOOD STANDING; STATUS OF SELLERS

                	
                  28

                
	
                  SECTION
      5.2

                	
                  AUTHORIZATION
      OF AGREEMENT

                	
                  29

                
	
                  SECTION
      5.3

                	
                  CONFLICTS;
      CONSENTS OF THIRD PARTIES

                	
                  29

                
	
                  SECTION
      5.4

                	
                  FINANCIAL
      ADVISORS

                	
                  30

                
	
                  SECTION
      5.5

                	
                  TITLE
      TO ASSETS

                	
                  30

                
	
                  SECTION
      5.6

                	
                  CONTRACTS

                	
                  30

                
	
                  SECTION
      5.7

                	
                  LEGAL
      COMPLIANCE; PERMITS

                	
                  31

                
	
                  SECTION
      5.8

                	
                  ENVIRONMENTAL

                	
                  31

                
	
                  SECTION
      5.9

                	
                  INTELLECTUAL
      PROPERTY

                	
                  31

                
	
                  SECTION
      5.10

                	
                  TAX
      MATTERS

                	
                  32

                
	
                  SECTION
      5.11

                	
                  JV
      INVESTORS

                	
                  32

                
	 
      	 
      	 
      
	
                  ARTICLE
      VI

                
	
                  REPRESENTATIONS
      AND WARRANTIES OF PURCHASER

                
	 
      
	
                  SECTION
      6.1

                	
                  ORGANIZATION
      AND GOOD STANDING

                	
                  32

                
	
                  SECTION
      6.2

                	
                  AUTHORIZATION
      OF AGREEMENT

                	
                  33

                
	
                  SECTION
      6.3

                	
                  CONFLICTS;
      CONSENTS OF THIRD PARTIES

                	
                  33

                
	
                  SECTION
      6.4

                	
                  FINANCIAL
      ADVISORS

                	
                  33

                
	
                  SECTION
      6.5

                	
                  INDEPENDENT
      INVESTIGATION; NO OTHER SELLER WARRANTIES

                	
                  34

                
	
                  SECTION
      6.6

                	
                  NO
      KNOWLEDGE OF MISREPRESENTATION

                	
                  34

                
	 
      
	
                  ARTICLE
      VII

                
	
                  BANKRUPTCY
      COURT MATTERS

                
	 
      	 
      	 
      
	
                  SECTION
      7.1

                	
                  COMPETING
      TRANSACTION

                	
                  34

                
	
                  SECTION
      7.2

                	
                  BANKRUPTCY
      COURT FILINGS

                	
                  35

                
	 
      
	
                  ARTICLE
      VIII

                
	
                  COVENANTS

                
	 
      
	
                  SECTION
      8.1

                	
                  ACCESS
      TO INFORMATION

                	
                  35

                
	
                  SECTION
      8.2

                	
                  CONDUCT
      OF THE BUSINESS PENDING THE CLOSING

                	
                  36

                
	
                  SECTION
      8.3

                	
                  CONSENTS

                	
                  36

                
	
                  SECTION
      8.4

                	
                  REGULATORY
      APPROVALS

                	
                  37

                
	
                  SECTION
      8.5

                	
                  FURTHER
      ASSURANCES

                	
                  38

                
	
                  SECTION
      8.6

                	
                  CONFIDENTIALITY

                	
                  38

                
	
                  SECTION
      8.7

                	
                  PUBLICITY

                	
                  39

                
	
                  SECTION
      8.8

                	
                  SUPPLEMENTATION
      AND AMENDMENT OF THE DISCLOSURE SCHEDULE

                	
                  39

                
	
                  SECTION
      8.9

                	
                  COURT
      ORDER

                	
                  39

                

        

      

      
        
           

        

        
          -ii-

          
            

          

        

        
           

        

      

      

      
        
          	 
      	 
      	
                  Page

                
	 
      	 
      	 
      
	
                  SECTION
      8.10

                	
                  ADEQUATE
      ASSURANCE OF FUTURE PERFORMANCE

                	
                  40

                
	
                  SECTION
      8.11

                	
                  PURCHASER
      COVENANTS AFTER CLOSING; ACCESS

                	
                  40

                
	
                  SECTION
      8.12

                	
                  REPLACEMENT
      OF COMMITMENTS

                	
                  40

                
	
                  SECTION
      8.13

                	
                  NAME
      CHANGES

                	
                  41

                
	
                  SECTION
      8.14

                	
                  FINANCIAL
      STATEMENTS

                	
                  41

                
	
                  SECTION
      8.15

                	
                  TRANSITION
      ARRANGEMENTS

                	
                  42

                
	 
      
	
                  ARTICLE
      IX

                
	
                  CONDITIONS
      TO CLOSING

                
	 
      	 
      	 
      
	
                  SECTION
      9.1

                	
                  CONDITIONS
      PRECEDENT TO OBLIGATIONS OF PURCHASER

                	
                  42

                
	
                  SECTION
      9.2

                	
                  CONDITIONS
      PRECEDENT TO OBLIGATIONS OF SELLERS

                	
                  43

                
	
                  SECTION
      9.3

                	
                  CONDITIONS
      PRECEDENT TO OBLIGATIONS OF PURCHASER AND SELLERS

                	
                  43

                
	
                  SECTION
      9.4

                	
                  FRUSTRATION
      OF CLOSING CONDITIONS

                	
                  44

                
	 
      	 
      	 
      
	
                  ARTICLE
      X

                
	
                  NO
      SURVIVAL

                
	 
      
	
                  SECTION
      10.1

                	
                  SURVIVAL
      OF REPRESENTATIONS AND WARRANTIES

                	
                  44

                
	
                  SECTION
      10.2

                	
                  NO
      CONSEQUENTIAL DAMAGES

                	
                  44

                
	 
      	 
      	 
      
	
                  ARTICLE
      XI

                
	
                  TAXES

                
	 
      
	
                  SECTION
      11.1

                	
                  TAX
      MATTERS

                	
                  44

                
	 
      	 
      	 
      
	
                  ARTICLE
      XII

                
	
                  MISCELLANEOUS

                
	 
      
	
                  SECTION
      12.1

                	
                  EXPENSES

                	
                  45

                
	
                  SECTION
      12.2

                	
                  INJUNCTIVE
      RELIEF

                	
                  45

                
	
                  SECTION
      12.3

                	
                  SUBMISSION
      TO JURISDICTION; CONSENT TO SERVICE OF PROCESS

                	
                  45

                
	
                  SECTION
      12.4

                	
                  WAIVER
      OF RIGHT TO TRIAL BY JURY

                	
                  46

                
	
                  SECTION
      12.5

                	
                  ENTIRE
      AGREEMENT; AMENDMENTS AND WAIVERS

                	
                  46

                
	
                  SECTION
      12.6

                	
                  GOVERNING
      LAW

                	
                  46

                
	
                  SECTION
      12.7

                	
                  NOTICES

                	
                  46

                
	
                  SECTION
      12.8

                	
                  SEVERABILITY

                	
                  47

                
	
                  SECTION
      12.9

                	
                  BINDING
      EFFECT; ASSIGNMENT

                	
                  48

                
	
                  SECTION
      12.10

                	
                  NON-RECOURSE

                	
                  48

                
	
                  SECTION
      12.11

                	
                  COUNTERPARTS

                	
                  48

                
	
                  SECTION
      12.12

                	
                  PURCHASE
      PRICE ALLOCATION

                	
                  48

                

        

      

       

      
        
           

        

        
          -iii-

          
            

          

        

        
           

        

      

       

      
        
          
            
              
                	 
      	 
      	
                        Page

                      
	 
      	 
      	 
      
	
                        SCHEDULES

                      
	 
      
	
                        Schedule

                      	
                        Subject

                      	 
      
	 	 	 
	
                        1.1(a)

                      	
                        Controlled
      Jobs

                      	 
      
	
                        1.1(b)

                      	
                        Nonassignable
      Documents and Intellectual Property

                      	 
      
	
                        1.1(c)

                      	
                        Individual
      Properties

                      	 
      
	
                        1.1(d)

                      	
                        Seller
      Knowledge Persons

                      	 
      
	
                        1.1(e)

                      	
                        Purchased
      Contracts

                      	 
      
	
                        1.1(f)

                      	
                        Purchased
      Leases

                      	 
      
	
                        1.1(g)

                      	
                        Certain
      Allowable Interest Expense

                      	 
      
	
                        1.1(h)

                      	
                        Construction
      Budgets

                      	 
      
	
                        1.1(i)

                      	
                        Illustration
      of “Qualified Offset” Clause (i) Computation

                      	 
      
	
                        1.1(j)

                      	
                        February
      28, 2010 Backlog Report

                      	 
      
	
                        1.1(k)

                      	
                        February
      28, 2010 Model Home Prices

                      	 
      
	
                        2.1(a)

                      	
                        Scheduled
      Real Property

                      	 
      
	
                        2.1(p)

                      	
                        Other
      Purchased Assets

                      	 
      
	
                        2.2(j)

                      	
                        Other
      Excluded Assets

                      	 
      
	
                        2.3(b)

                      	
                        Specified
      Assumed Liabilities

                      	 
      
	
                        2.4(k)

                      	
                        Certain
      Excluded Land Development Liabilities

                      	 
      
	
                        3.2(b)

                      	
                        Closing
      Adjustment Methodology

                      	 
      
	
                        5.5(b)

                      	
                        JV
      Real Property

                      	 
      
	
                        5.10(b)

                      	
                        Open
      Tax Audits

                      	 
      
	
                        8.2(I)

                      	
                        Exceptions
      to Ordinary Conduct of Business

                      	 
      
	
                        8.2(II)

                      	
                        Units
      to be Weatherized

                      	 
      
	
                        8.12

                      	
                        Commitments

                      	 
      
	 
      	 
      	 
      
	
                        EXHIBITS

                      
	 
      	 
      	 
      
	
                        Exhibit

                      	
                        Subject

                      	 
      
	 	 	 
	
                        A

                      	
                        Selling
      Affiliates

                      	 
      
	
                        B

                      	
                        Bidding
      Procedures Order

                      	 
      
	
                        C-1

                      	
                        Escrow
      Closing Agreement

                      	 
      
	
                        C-2

                      	
                        Escrow
      Deposit Agreement

                      	 
      
	
                        D

                      	
                        JV
      Assignment

                      	 
      
	
                        E

                      	
                        Bill
      of Sale

                      	 
      
	
                        F

                      	
                        Assignment
      and Assumption Agreement

                      	 
      

              

            

          

        

      

       

      
        
           

        

        
          -iv-

          
            

          

        

        
           

        

      

      

      ASSET
PURCHASE AGREEMENT

       

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

       

      WITNESSETH:

       

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

       

      WHEREAS,
the Sellers presently conduct the Business;

       

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

       

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

       

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

       

      ARTICLE
I

      DEFINITIONS

       

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

       

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

       

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

      
        
           

        

        
           

          
            

          

        

        
           

        

      

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      “Documents” means all
files, documents, instruments, papers, books, reports, records, tapes,
microfilms, photographs, letters, budgets, forecasts, ledgers, journals, title
policies, customer lists, regulatory filings, operating data and plans,
technical documentation (design specifications, functional requirements,
operating instructions, logic manuals, flow charts, etc.), site plans,
subdivision plans, development plans, architectural drawings, engineering,
environmental and marketing materials, soil and other studies, surveys, plats,
maps, as-built drawings, cost estimates and budgets, construction and land
development schedules, and budgets, property inspection reports, homeowner and
condominium declarations, title policies, agreements with governmental agencies,
governmental permits, sales and marketing information (including contracts and
historical sales figures), reports and appraisals, warranties relating to
improvements to the Real Property or other Purchased Assets, user documentation
(installation guides, user manuals, training materials, release notes, working
papers, etc.), marketing documentation (sales brochures, flyers, pamphlets, web
pages, etc.), and other similar materials related to the Purchased Assets, in
each case whether or not in electronic form; provided that the
documents set forth on Schedule 1.1(b) shall
only be included in the “Documents” if Sellers’ rights in such documents are
assignable as of the Closing or become assignable thereafter (it being agreed
that, to the extent Sellers’ rights in such documents are not assignable by
Sellers as of the Closing, Sellers shall use their reasonable best efforts to
cause the owner thereof to assign rights to such documents to, and/or permit use
of the same by, Purchaser subject to the payment by Purchaser of a re-use or
similar fee, as set forth on Schedule 1.1(b), with
respect to the construction of any home started after the Closing). Schedule 1.1(b) sets
forth any fees payable with respect to the re-use of any Documents set forth on
such Schedule or other restrictions on use or transfer thereof.

       

      “Escrow Agent” means
the Title Company.

       

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

       

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

       

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

       

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

       

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

       

      “HOA Documents” shall
mean, with respect to any HOA, all articles of incorporation, articles of
association or other formation documents, bylaws and declarations of restrictive
covenants, covenants, conditions and restrictions, including any amendments
thereto, applicable to such HOA.

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

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

       

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

       

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

       

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

       

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

       

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

       

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

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

       

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

       

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

       

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

       

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

       

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

       

      “Petition Date” means
March 1, 2010.

       

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

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      “Purchased Leases”
means those leases set forth on Schedule 1.1(f),
all of which shall be assumed by Sellers and assigned to Purchaser at
Closing.  Notwithstanding anything to the contrary contained in this
Agreement, Schedule 1.1(f)
may be amended or supplemented at any time prior to Closing (i) by Purchaser, in
its sole discretion without the consent of Sellers, to delete any leases from
Schedule 1.1(f),
(ii) by Sellers, but only with the prior consent of Purchaser, to add or delete
any leases to or from Schedule 1.1(f),
and (iii) by Purchaser, but only with the prior consent of Parent, to add any
leases to Schedule 1.1(f)
except those related solely to the Excluded Developments.

       

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

       

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

       

      “Qualified Offsets”
means the sum of—

       

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

       

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

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

                     (iii)(a)  with respect to any unit
(other than a model home) for which a sales contract is entered into after
February 28, 2010, but prior to the Closing, the amount by which the net sales
price for such unit is less than the average net selling price of the backlog
for a comparable unit in the applicable community as set forth in the column
entitled “Net Selling Price” in the February 28, 2010 Backlog report provided to
Purchaser (a copy of which is attached hereto as Schedule 1.1(j)), or,
if there is no backlog for purposes of this comparison, the average net sales
price of homes conveyed to buyers over the preceding 12 months for a comparable
unit in the applicable community; and

       

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

       

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

       

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

       

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

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      “Sale Order” shall be
an order or orders of the Bankruptcy Court in form and substance reasonably
acceptable to Purchaser and Parent approving this Agreement and all of the terms
and conditions hereof, and approving and authorizing the Sellers to consummate
the transactions contemplated hereby.  Without limiting the foregoing,
the Sale Order shall, among other things, (i) approve the sale of the Purchased
Assets to the Purchaser (including the assumption by Sellers and assignment to
Purchaser of the Purchased Contracts and Purchased Leases) on the terms and
conditions set forth in this Agreement and authorize and direct the Sellers to
proceed with the transactions contemplated under this Agreement, (ii) include a
finding that Purchaser is a good faith purchaser of the Purchased Assets under
Section 363(m) of the Bankruptcy Code, (iii) state that the Purchased
Assets shall be sold and transferred to Purchaser free and clear of all Liens
and Liabilities except for Permitted Liens and Assumed Liabilities
(iv) state that the interest in, and claims and rights under, the Purchased
Contracts and Purchased Leases shall be assumed by Sellers and assigned to
Purchaser notwithstanding any provision in any such contract or lease or
applicable Law that prohibits, restricts or conditions the assignment or
transfer of such contract or lease; (v) provide that, as of the Closing, any and
all defaults existing under Purchased Contracts or Purchased Leases as of the
Closing shall be deemed cured and no counter-party to any Purchased Contract or
Purchased Lease shall have any rights against Sellers, Purchaser or under such
Purchased Contract or Purchased Lease on account of such defaults, except the
right to payment from Purchaser of any Assumed Cure Amount required to be paid
with respect to such Purchased Contract or Purchased Lease, (vi) provide for a
waiver of the stays contemplated by Rules 6004(h) and 6006(d) of the
Bankruptcy Rules; and (vii) include a finding that Purchaser has not engaged in
any of the acts prohibited by Section 363(n) of the Bankruptcy
Code.

       

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

       

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

       

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

       

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

       

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

       

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

       

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

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

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

       

      “Title Company” means
First American Title Insurance Company.

       

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

       

      
        	
                Term

              	 
      	
                Section

              
	 
      	 
      	 
      
	
                Agreement

              	 
      	
                Introduction

              
	
                Allocation
      Schedule

              	 
      	
                Section
      2.12

              
	
                Antitrust
      Division

              	 
      	
                Section
      8.4(a)

              
	
                Antitrust
      Laws

              	 
      	
                Section
      8.4(b)

              
	
                Assignment
      and Assumption Agreement

              	 
      	
                Section
      4.2(c)

              
	
                Assumed
      Liabilities

              	 
      	
                Section
      2.3

              
	
                Bankruptcy
      Case

              	 
      	
                Recitals

              
	
                Bankruptcy
      Code

              	 
      	
                Recitals

              
	
                Bankruptcy
      Court

              	 
      	
                Recitals

              
	
                Base
      Purchase Price

              	 
      	
                Section
      3.1

              
	
                Bill
      of Sale

              	 
      	
                Section
      4.2(b)

              
	
                Closing

              	 
      	
                Section
      4.1

              
	
                Closing
      Date

              	 
      	
                Section
      4.1

              
	
                Closing
      Date Schedule

              	 
      	
                Section
      3.2(b)

              
	
                Commitments

              	 
      	
                Section
      8.12

              
	
                Competing
      Bid

              	 
      	
                Section
      7.1(a)

              
	
                Competing
      Transaction

              	 
      	
                Section
      4.6(d)

              
	
                Condemnation

              	 
      	
                Section
      2.7(b)

              
	
                Confidentiality
      Agreement

              	 
      	
                Section
      8.6

              
	
                Damage
      or Destruction Loss

              	 
      	
                Section
      2.7

              
	
                Disclosure
      Schedule

              	 
      	
                Article
      V

              
	
                Dispute
      Notice

              	 
      	
                Section
      3.2(c)

              
	
                Environmental
      Holdback Amount

              	 
      	
                Section
      2.9(b)

              
	
                Estimated
      Closing Adjustment

              	 
      	
                Section
      3.2(a)

              
	
                Excluded
      Assets

              	 
      	
                Section
      2.2

              
	
                Excluded
      Liabilities

              	 
      	
                Section
      2.4

              
	
                Excluded
      Matter

              	 
      	
                Definition
      of Material Adverse Effect

              
	
                FTC

              	 
      	
                Section
      8.4(a)

              
	
                HOA

              	 
      	
                Section
      2.1(n)

              
	
                Holdback
      Amount

              	 
      	
                Section
      3.1(b)

              
	
                IP
      Assignments

              	 
      	
                Section
      4.2(e)

              
	
                JV
      Assignment

              	 
      	
                Section
      4.2(b)

              
	
                Parent

              	 
      	
                Introduction

              
	
                Purchase
      Price

              	 
      	
                Section
      3.1

              
	
                Purchased
      Assets

              	 
      	
                Section
      2.1

              
	
                Purchaser

              	 
      	
                Introduction

              
	
                Purchaser
      Documents

              	 
      	
                Section
      6.2

              

      

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

    

    
      
        
          	
                  Term

                	 
      	
                  Section

                
	 	 	 
	
                  Purchaser’s
      Environmental Diligence

                	 
      	
                  Section
      2.9(a)

                
	
                  Real
      Property

                	 
      	
                  Section
      2.1(a)

                
	
                  Remediation
      Cost

                	 
      	
                  Section
      2.9(c)

                
	
                  Review
      Period

                	 
      	
                  Section
      3.2(c)

                
	
                  Sale
      Order Approval Date

                	 
      	
                  Section
      7.1(a)

                
	
                  Section

                	 
      	
                  Section
      1.3(a)

                
	
                  Seller

                	 
      	
                  Recitals

                
	
                  Seller
      Documents

                	 
      	
                  Section
      5.2

                
	
                  Sellers

                	 
      	
                  Recitals

                
	
                  Sellers’
      Assumed Cure Amounts Purchase Price Reduction

                	 
      	
                  Section
      3.1(c)

                
	
                  Selling
      Affiliates

                	 
      	
                  Introduction

                
	
                  Substitute
      Commitments

                	 
      	
                  Section
      8.12

                
	
                  Title
      Objection

                	 
      	
                  Section
      2.10(a)

                
	
                  Title
      Objection Notice

                	 
      	
                  Section
      2.10(a)

                
	
                  Transfer
      Taxes

                	
                    

                	
                  Section
      12(a)

                

        

      

    

    

    SECTION
1.3      Other Definitional and
Interpretive Matters.

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    ARTICLE
II

    PURCHASE
AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

     

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

     

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

     

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

     

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

     

    (d)        the
Controlled Jobs;

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

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

     

    (f)         all
inventory, supplies, materials and other personal property related to or used in
connection with the Real Property or the other Purchased Assets, including any
furniture, furnishings, fixtures, rugs, mats, carpeting, appliances, computers,
televisions, other electronic equipment, plumbing fixtures and other equipment
located in any model homes included in the Real Estate;

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (g)       
any Documents not transferred under Section 2.1;

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

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

     

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

     

    (e)        the
Assumed Cure Amounts; and

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

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

     

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

     

    SECTION
2.5      Assignment and Assumption;
Assumed Cure Amounts.

     

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

     

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

     

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

     

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

    
      
         

      

      
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    SECTION
2.7      Casualty Events,
Condemnation.

     

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

     

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

     

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

     

    
      
        
        

      

      
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    SECTION
2.9      Environmental
Matters.

    (a)        Until
June 1, 2010, Purchaser will have the right, at its sole cost and expense,
to perform environmental investigations of the Real Property, including but not
limited to, Phase I and Phase II environmental site assessments
(“Purchaser’s
Environmental Diligence”) and Sellers shall reasonably cooperate with
Purchaser in the performance of Purchaser’s Environmental
Diligence.  In connection therewith, Purchaser, its agents or
employees, will not enter upon any of the Real Property without twenty-four (24)
hours prior notice to Parent, and all tests or inspections will be scheduled and
conducted in a manner which does not violate applicable law or interfere with
any Selling Affiliate’s development work on any portion of the Real
Property.  Purchaser, at Purchaser’s sole cost and expense, shall
promptly repair any damage to the Real Property caused in connection with any
investigations conducted by Purchaser on the Real Property pursuant to this
Section 2.9.  Moreover,
prior to any entry upon any portion of the Real Property, Purchaser will deliver
to Parent a certified copy of a commercial general liability insurance policy
with limits of not less than One Million Dollars ($1,000,000.00), combined
single limit, insuring against claims for personal injury or death or property
damage occasioned by accidents occurring on the Real Property and relating to or
arising out of Purchaser’s activities pursuant to this Section
2.9.  Purchaser shall promptly provide to Parent copies of any
reports or other results of Purchaser’s Environmental Diligence.

     

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

     

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

    
      
         

      

      
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    SECTION
2.10    Title and
Survey.

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
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    SECTION
2.11    Assignment of HOA
Documents.  To
the extent that a Seller is the declarant, or an assignee of a declarant, under
the applicable HOA Documents for an Individual Property, such Seller shall
obtain all necessary consents (other than consents of any Governmental Body) to
assignment of its rights as declarant, or assignee of a declarant, and shall
duly and validly assign all such rights to Purchaser at Closing; provided, in the
event that any such assignment is not effected as to any Individual Property at
Closing, Purchaser may exclude such Individual Property from the Closing and the
Purchase Price payable at the Closing shall be reduced by the Purchase Price
allocable to such Individual Property; provided, further, that at such
time as such Seller is capable of effecting such assignment, Purchaser shall
acquire such Individual Property upon payment of the Purchase Price allocable to
such Individual Property.  Seller shall use commercially reasonable
efforts to obtain such consents (and cooperate with Purchaser obtaining such
consents of Governmental Bodies and until receipt thereof, at Purchaser’s sole
cost, expense, and liability, Seller shall take such other actions as declarant
thereunder that Purchaser may reasonably request) and effect such assignments
for each Individual Property, including with respect to any Individual
Properties excluded from Closing pursuant to this Section 2.11.  Once
such consents are obtained and such assignments are effected, Purchaser shall
purchase such Individual Properties in accordance with the terms of this
Agreement.

     

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

     

    ARTICLE
III

    CONSIDERATION

     

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

    
      
         

      

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

     

    (b)        On
the Closing Date, Purchaser shall:

     

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

     

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

     

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

    
      
         

      

      
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    SECTION
3.2      Closing
Adjustment.

     

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

     

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

     

    (c)        Review;
Disputes.

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

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

    
      
         

      

      
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    SECTION
3.3      Sole
Adjustments.  In
determining the Base Purchase Price, the Purchaser has conducted its own
investigation, analysis and evaluation of the assets, liabilities and financial
condition of the Sellers and the Purchased Assets, including without limitation
the vertical construction costs of homes under construction or to be
constructed, site improvement budgets (including related to land expenditures,
dedication costs, lot finishing, land entitlements, developer agreements,
bonding requirements and contingencies), overhead, orders, cancellations, unit
counts, homes under backlog (whether or not construction has commenced),
impairment of the value of the Real Property, the documents relating to the JV
Real Property and the Liabilities of the JV Investors in connection
therewith.  Except to the extent expressly set forth in Sections 2.7,
2.9(b), 2.10(b), 2.11, 3.2, 8.2, 8.12, 9.1(a), or 9.1(c), the Purchase
Price shall not be subject to adjustment, irrespective of any diligence
performed by Purchaser or other events or developments subsequent to the date
hereof.  In that regard, Purchaser acknowledges that Parent will
record material additional impairment charges and accruals and other costs
relating to the Purchased Assets and the restructuring and Bankruptcy Case in
the financial statements to be delivered to Purchaser pursuant to Section 8.14.

     

    ARTICLE
IV

    CLOSING
AND TERMINATION

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (m)       possession
of the Purchased Assets.

     

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

     

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

     

    (b)        executed
counterparts to the JV Assignments;

    
      
         

      

      
        -25-

        
          

        

      

      
         

      

    

     

    (c)        executed
counterparts to the Bill of Sale;

     

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

     

    (e)        executed
counterparts to the IP Assignments;

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

    SECTION
4.5      Procedure Upon
Termination.

     

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

     

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

     

    SECTION
4.6      Effect of
Termination.

     

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

     

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

     

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

    
      
         

      

      
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    (d)        Notwithstanding
Section 4.6(a),
if this Agreement is terminated other than pursuant to Section 4.4(c), (d) (unless Purchaser
terminates this Agreement pursuant to such Section 4.4(d) by
reason of the failure of the condition set forth in Section 9.1 or Section 9.3(b) to be
satisfied), (e)
(unless Sellers terminate this Agreement pursuant to such Section 4.4(e) by
reason of the failure of the condition set forth in Section 9.3(b) to be
satisfied), (g)
or (h), and,
within twelve (12) months after such termination, Parent and/or one or more of
the Sellers sell, transfer or otherwise dispose, directly or indirectly,
including through an asset sale, stock sale, merger or other similar
transaction, all or a material portion of the Purchased Assets or the
homebuilding lots and real estate of the Parent and its subsidiaries located in
any state other than New York acquired subsequently to the date hereof, in a
transaction or series of transactions with one or more parties other than the
Purchaser (such transaction or series of transactions, a “Competing
Transaction”), then, at the closing of any such Competing Transaction,
Sellers shall pay to Purchaser, by wire transfer of immediately available funds,
the Termination Fee plus the Expense Reimbursement (reduced by the amount of any
Expense Reimbursement previously paid hereunder) as liquidated damages, and not
as a penalty, and Sellers shall have no other liability to Purchaser under this
Agreement or in connection with the transactions contemplated
hereby.

     

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

     

    ARTICLE
V

    REPRESENTATIONS
AND WARRANTIES OF PARENT AND SELLERS

     

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

     

    SECTION
5.1      Organization and Good
Standing; Status of Sellers.

     

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

    
      
         

      

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

     

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

     

    SECTION
5.3      Conflicts; Consents of Third
Parties.

     

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

     

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

    
      
         

      

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

     

    SECTION
5.5      Title to
Assets.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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    SECTION
5.7     Legal Compliance;
Permits.

     

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

     

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

     

    SECTION
5.8     Environmental.

     

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

     

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

     

    SECTION
5.9     Intellectual
Property.

     

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

     

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

    
      
         

      

      
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    SECTION
5.10     Tax
Matters.

     

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

     

    (b)           No
deficiency for any amount of Taxes has been proposed, asserted or assessed in
writing by any Governmental Body against any Seller that remains
unpaid.  There are no audits, examinations or other administrative or
judicial Legal Proceedings currently ongoing or pending with respect to any
Taxes of any Seller.  There are no waivers or extensions of any
statute of limitations currently in effect with respect to Taxes of any Seller,
other than with respect to currently open audits that are disclosed on Schedule 5.10(b).

     

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

     

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

     

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

     

    SECTION
5.11     JV
Investors.

     

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

     

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

     

    ARTICLE
VI

    REPRESENTATIONS
AND WARRANTIES OF PURCHASER

     

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

     

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

    
      
         

      

      
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    SECTION
6.2     Authorization of
Agreement.  Purchaser
has full power and authority to execute and deliver this Agreement and each
other agreement, document, instrument or certificate contemplated by this
Agreement or to be executed by Purchaser or its designees in connection with the
consummation of the transactions contemplated hereby and thereby (the “Purchaser
Documents”), and to consummate the transactions contemplated hereby and
thereby.  The execution, delivery and performance of this Agreement
and each Purchaser Document have been duly authorized by all necessary corporate
action on behalf of Purchaser or its designees.  This Agreement has
been, and each Purchaser Document will be at or prior to the Closing, duly
executed and delivered and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes,
and each Purchaser Document when so executed and delivered will constitute, the
legal, valid and binding obligations of Purchaser or its designees, enforceable
in accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

     

    SECTION
6.3     Conflicts; Consents of Third
Parties.

     

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

     

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

     

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

    
      
         

      

      
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    SECTION
6.5     Independent Investigation;
No Other Seller Warranties.  Purchaser
has conducted its own independent review and analysis of the Purchased Assets
and financial information relating thereto, and acknowledges that the Sellers
have provided it with access to their personnel, properties and books and
records such purpose.  In entering into this Agreement Purchaser has
relied solely upon its own investigation and analysis and agrees that, except as
expressly provided otherwise in this Agreement, (i) none of the Sellers has made
any representation or warranty, either express or implied, as to the accuracy or
completeness of any of the information (including pursuant to any statement,
certificate or document delivered pursuant to this Agreement or any financial
statements or projections, estimates or forward-looking information) made
available to Purchaser and (ii) except as and only to the extent expressly set
forth and subject to the exceptions and limitations in the specific
representations and warranties of the Sellers set forth in this Agreement,
Purchaser has not relied upon any information made available or statements made
to it.

     

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

     

    ARTICLE
VII

    BANKRUPTCY
COURT MATTERS

     

    SECTION
7.1     Competing
Transaction.

     

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

     

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

    
      
         

      

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

     

    ARTICLE
VIII

    COVENANTS

     

    SECTION
8.1     Access to
Information.

     

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

     

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

    
      
         

      

      
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    SECTION
8.2     Conduct of the Business
Pending the Closing.  Prior
to the Closing, except (1) as set forth on Schedule 8.2(I),
(2) as required by applicable Law, (3) as otherwise expressly contemplated by
this Agreement, or (4) with the prior written consent of Purchaser (which
consent shall not be unreasonably withheld or delayed), Parent and the other
Sellers shall, and shall cause their Affiliates to, conduct their operations and
operations of the Purchased Assets in the ordinary course of business,
consistent with the historical conduct of the Business and good business
practice in the homebuilding industry (taking into account the fact that the
Bankruptcy Case has been commenced and the limitations to which the Sellers are
subject pursuant to debtor-in-possession financing arrangements), including to
continue construction in accordance with the customary construction cycle (other
than with respect to homes without foundations on the Petition Date), cause all
homes set forth on Schedule 8.2(II)
to be reasonably weatherized as an enclosed shell (having a roof, shingles,
siding (including by stone, brick or stucco or, alternatively, appropriate
underlayment), windows and doors) on or before June 25, 2010, keep in full
force and effect all existing Permits and entitlements related to the Purchased
Assets (and prosecute all applications therefor), retain and maintain storm
water, erosion and other environmental controls, maintain and keep in good
order, subject to ordinary wear and tear, the Purchased Assets (subject to
ordinary course sales of completed residential homes), market for sale homes on
the Real Property, and preserve intact in all material respects current
relationships with customers, clients, suppliers and contractors.  If
Sellers fail to comply with their obligation to so weatherize any such home by
June 25, 2010, such home shall be excluded from the Closing (unless
Purchaser elects to include such home in the Closing), the Purchase Price shall
be reduced by an amount equal to 56% of the impaired book value of such excluded
home set forth on Schedule 8.2(II) and
the parties shall proceed to Closing with respect to the remaining
homes.  Without the prior written consent of Purchaser which shall not
be unreasonably withheld, to the extent the same relates to the Purchased
Assets, Sellers shall not:

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
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    SECTION
8.4     Regulatory
Approvals.

     

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

    
      
         

      

      
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    (b)           Each
of Purchaser and Parent shall use its best efforts to resolve such objections,
if any, as may be asserted by any Governmental Body with respect to the
transactions contemplated by this Agreement under the HSR Act, the Sherman Act,
as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as
amended, and any other United States federal or state or foreign statutes,
rules, regulations, orders, decrees, administrative or judicial doctrines or
other laws that are designed to prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint of trade (collectively, the
“Antitrust
Laws”).  In connection therewith, if any Legal Proceeding is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement is in violation of any Antitrust Law, each of
Purchaser and Parent shall cooperate and use its best efforts to contest and
resist any such Legal Proceeding, and to have vacated, lifted, reversed, or
overturned any decree, judgment, injunction or other order whether temporary,
preliminary or permanent, that is in effect and that prohibits, prevents, or
restricts consummation of the transactions contemplated by this Agreement,
including by pursuing all available avenues of administrative and judicial
appeal and all available legislative action, unless, by mutual agreement,
Purchaser and Parent decide that litigation is not in their respective best
interests.  Each of Purchaser and Parent shall use its best efforts to
take such action as may be required to cause the expiration of the notice
periods under the HSR Act or other Antitrust Laws with respect to such
transactions as promptly as possible after the execution of this
Agreement.  In connection with and without limiting the foregoing,
each of Purchaser and Parent agrees to use its best efforts to take promptly any
and all steps necessary to avoid or eliminate each and every impediment under
any Antitrust Laws that may be asserted by any Federal, state and local and
non-United States antitrust or competition authority, so as to enable the
parties to close the transactions contemplated by this Agreement as
expeditiously as possible.

     

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

     

    SECTION
8.6     Confidentiality.

     

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

     

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

    
      
         

      

      
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    SECTION
8.7     Publicity.  Neither
Parent nor Purchaser shall issue any press release or public announcement
concerning this Agreement or the transactions contemplated hereby without
obtaining the prior written approval of the other party hereto, which approval
will not be unreasonably withheld or delayed, unless, in the sole judgment of
Purchaser or Parent, disclosure is otherwise required by applicable Law or by
the Bankruptcy Court with respect to filings to be made with the Bankruptcy
Court in connection with this Agreement or by the applicable rules of any stock
exchange on which Purchaser or Parent lists securities, provided that the
party intending to make such release shall use its best efforts consistent with
such applicable Law or Bankruptcy Court requirement to consult with the other
party with respect to the text thereof.

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

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

    
      
         

      

      
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    SECTION
8.13   Name
Changes.  Following
Closing, Purchaser shall have the right to the use of the name “Orleans” or
similar names or any service marks, trademarks, trade names, identifying
symbols, logos, emblems or signs containing or comprising the foregoing,
including any name or mark confusingly similar thereto in connection with the
Purchased Assets.  For the avoidance of doubt, Sellers shall have the
right to use such name, together with a nonexclusive royalty-free license to use
any other Intellectual Property included in the Purchased Assets, as may be
necessary solely in connection with the orderly operation and disposal of the
Excluded Assets.  In furtherance of the foregoing, at Closing, the
applicable Seller and Purchaser shall enter into a perpetual, non-exclusive,
royalty-free license under which the applicable Seller shall license such
Intellectual Property to Purchaser.

     

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

    
      
         

      

      
        -41-

        
          

        

      

      
         

      

    

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

     

    ARTICLE
IX

    CONDITIONS
TO CLOSING

     

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

     

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

     

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

    
      
         

      

      
        -42-

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        -43-

        
          

        

      

      
         

      

    

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

     

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

     

    ARTICLE
X

    NO
SURVIVAL

     

    SECTION
10.1   Survival of Representations
and Warranties.  The
parties hereto agree that the representations and warranties contained in this
Agreement shall not survive the Closing hereunder, and none of the parties shall
have any liability to each other after the Closing for any breach
thereof.  The parties hereto agree that the covenants contained in
this Agreement to be performed at or after the Closing shall survive the Closing
hereunder, and each party hereto shall be liable to the other after the Closing
for any breach thereof.

     

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

     

    ARTICLE
XI

    TAXES

     

    SECTION
11.1   Tax
Matters.

     

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

     

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

    
      
         

      

      
        -44-

        
          

        

      

      
         

      

    

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

     

    ARTICLE
XII

    MISCELLANEOUS

     

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

     

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

     

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

     

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

    
      
         

      

      
        -45-

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        -46-

        
          

        

      

      
         

      

    

    If to
Seller, to:

     

    Orleans
Homebuilders, Inc.

    3333
Street Road

    Bensalem,
PA 19020

    Attention:  Jeffrey
P. Orleans

    Facsimile:  215-633-2351

     

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

     

    Phoenix
Management

    110
Chadds Ford Commons

    Chadds
Ford, PA  19317

    Attention:  Mitchell
B. Arden

    Facsimile:  610-358-9377

     

    Cahill
Gordon & Reindel llp

    80 Pine
Street

    New York,
New York  10005

    Attention:  Joel
H. Levitin

    Facsimile:  212-378-2449

     

    If to
Purchaser, to:

     

    NVR,
Inc.

    Plaza
America Tower I

    11700
Plaza America Drive Suite 500

    Reston,
Virginia  20190

    Attention:  Dennis
Seremet

    Facsimile:  703-956-4750

     

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

     

    Hogan
& Hartson LLP

    555 13th
Street NW

    Washington,
D.C.  20004

    Attention:  Bruce
W. Gilchrist

    Facsimile:  202-637-5910

     

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

    
      
         

      

      
        -47-

        
          

        

      

      
         

      

    

    SECTION
12.9   Binding Effect;
Assignment.  This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns.  Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any Person or entity not a party to this Agreement except as provided
below.  No assignment of this Agreement or of any rights or
obligations hereunder may be made by either Parent or Purchaser (by operation of
Law or otherwise) without the prior written consent of the other parties hereto
and any attempted assignment without the required consents shall be void; provided, however, that
Purchaser shall be permitted to assign its rights under this Agreement to
acquire all or a portion of the Purchased Assets to one or more
Affiliate.  No assignment of any obligations hereunder shall relieve
the parties hereto of any such obligations.  Upon any such permitted
assignment, the references in this Agreement to Purchaser shall also apply to
any such assignee unless the context otherwise requires.  In the event
that a Chapter 11 trustee should be appointed for Parent, or in the event
that Parent’s Chapter 11 case should be converted to a case under
Chapter 7, the obligations of Parent hereunder shall be binding upon such
trustee or successor Chapter 7 estate.

     

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

     

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

     

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

    
      
         

      

      
        -48-

        
          

        

      

      
         

      

    

    [Signature
page follows]

    
      
         

      

      
        -49-

        
          

        

      

      
         

      

    

    

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

     

    
      
        	
                ORLEANS
      HOMEBUILDERS, INC.

              
	 
      	 
      
	
                By:

              	
                /s/
      Jeffrey P. Orleans

              
	
                 

              	
                
                  Name:
      Jeffrey P. Orleans

                

              
	
                 

              	
                
                  Title:
      Chairman & CEO

                

              
	 
      	 
      
	
                THE
      SELLING AFFILIATES NAMED ON
      

                EXHIBIT
      A HERETO

              
	 
      	 
      
	
                By:

              	
                /s/
      Garry P. Herdler

              
	
                 

              	
                
                  Name: Garry
      P. Herdler

                

              
	
                 

              	
                
                  Title:
      EVP & CFO

                

              
	 
      	 
      
	
                NVR,
      INC.

              
	 
      	 
      
	
                By:

              	
                /s/
      Dennis M. Seremet

              
	
                 

              	
                
                  Name: Dennis
      M. Seremet

                

              
	
                 

              	
                
                  Title: Chief
      Financial
Officer

                

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
A

     

    APA List of Sellers

    

    
      
        	
                DEBTOR/SELLER

              	 
      	
                ADDRESS

              
	 
      	 
      	 
      
	
                Orleans
      Homebuilders, Inc.

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Brookshire
      Estates, L.P.

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensatem,
      PA 19020

              
	 
      	 
      	 
      
	
                Greenwood
      Financial Inc.

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Masterpiece
      Homes, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                OHB
      Homes, Inc.

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                OHI
      Financing, Inc.

              	 
      	
                1064
      Greenwood Blvd., #106

              
	 
      	 
      	
                Lake
      Mary, FL 32746

              
	 
      	 
      	 
      
	
                OHI
      PA GP, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                OHI
      PA, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                OHI
      NJ, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                OPCNC,
      LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      Arizona Realty, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      Arizona, Inc.

              	 
      	
                1105
      North Market Street, Suite 609

              
	 
      	 
      	
                Wilmington,
      DE 19801

              
	 
      	 
      	 
      
	
                Orleans
      at Covington Manor, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Crofton Chase, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	
                DEBTOR/SELLER

              	 
      	
                ADDRESS

              
	 
      	 
      	 
      
	
                Orleans
      at East Greenwich, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Elk Township, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Hamilton, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Harrison, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Hidden Creek, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Jennings Mill, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Lambertville, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Lyons Gate, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Mansfield LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Meadow Glen, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Millstone, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Millstone River Preserve,

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Tabernacle, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Thornbury, L.P.

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Upper Freehold, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              

      

    

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    

    
      
        	
                DEBTOR/SELLER

              	 
      	
                ADDRESS

              
	 
      	 
      	 
      
	
                Orleans
      at Upper Saucon, L.P.

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Upper Uwehlan, LP

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at West Bradford, LP

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at West Vincent, LP

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Westampton Woods, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Windsor Square, LP

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Woolwich, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      at Wrightstown, LP

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      Construction Corp.

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      Corporation

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Orleans
      RI-IlL, LP

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Parker
      & Lancaster Corporation

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Parker
      & Orleans Homebuilders, Inc.

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Parker
      Lancaster, Tidewater, L.L.C.

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Realen
      Homes, L.P.

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              

      

    

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

    

    
      
        	
                DEBTOR/SELLER

              	 
      	
                ADDRESS

              
	 
      	 
      	 
      
	
                RHGP
      LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Stock
      Grange, LP

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              
	 
      	 
      	 
      
	
                Wheatley
      Meadows Associates, LLC

              	 
      	
                3333
      Street Road, Suite 101

              
	 
      	 
      	
                Bensalem,
      PA 19020

              

      

    

     

     

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

     

    
      EXHIBIT
C-1

      

      FORM OF
ESCROW DEPOSIT AGREEMENT

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      ESCROW
AGREEMENT

      (Deposit)

      

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

      

      RECITALS:

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

      
        
           

        

        
          1

          
            

          

        

        
           

        

         

      

      3.           Release of
Deposit.

      

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

      

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

      

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

      

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

      

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

      

      If to the
Escrow Agent:

       

      First
American Title Insurance Company

      National
Commercial Services

      2 Penn
Center Plaza, Suite 1910

      Philadelphia,
PA 19102

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

      Facsimile:
215-568-2410

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

         

      

      If to
Sellers, to:

      

      Orleans
Homebuilders, Inc.

      3333 Street Road

      Bensalem, PA 19020

      Attention:  Jeffrey P.
Orleans

      Facsimile:  215-633-2351

      

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

      

      Phoenix
Management

      110
Chadds Ford Commons

      Chadds
Ford, PA 19317

      Attention:  Mitchell
B. Arden

      Facsimile:  610-358-9377

      

      Cahill
Gordon & Reindel llp

      80 Pine
Street

      New York,
New York 10005

      Attention:  Joel
H. Levitin

      Facsimile:  212-378-2449

       

      If to
Purchaser, to:

      

      NVR,
Inc.

      Plaza
America Tower I

      11700
Plaza America Drive Suite 500

      Reston,
Virginia 20190

      Attention:  Dennis
Seremet

      Facsimile:   703-956-4750

      

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

       

      Hogan
& Hartson LLP

      555
13th
Street NW

      Washington,
D.C. 20004

      Attention:  Bruce
W. Gilchrist

      Facsimile:  202-637-5910

       

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

      

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

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

         

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

       

      Remainder
of Page Intentionally Blank

      Signature
Page Follows

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

         

      

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

      

      

      
        	 
      	
                ESCROW
      AGENT:

                 

                FIRST
      AMERICAN TITLE INSURANCE COMPANY

                 

                By:          _____________________________

                Name:

                Title:

              
	 	 
	 	 
	 
      	
                PURCHASER:

                 

                NVR,
      INC.

                 

                By:          _____________________________

                Name:

                Title:

              
	 	 
	 	 
	 
      	
                SELLERS:

                 

                ORLEANS
      HOMEBUILDERS, INC.

                 

                By:          _____________________________

                Name:

                Title:

              
	 	 
	 	 
	 
      	
                THE
      SELLING AFFILIATES NAMED ON EXHIBIT A HERETO

                 

                By:          _____________________________

                Name:

                Title:

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      EXHIBIT
A

      

      SELLERS

      

      
        	
                DEBTOR/SELLER

              	
                ADDRESS

              
	
                Orleans
      Homebuilders, Inc.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Brookshire
      Estates, L.P.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Greenwood
      Financial Inc.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Masterpiece
      Homes, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                OHB
      Homes, Inc.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                OHI
      Financing, Inc.

              	
                1064
      Greenwood Blvd., #106

                Lake
      Mary, FL  32746

              
	
                OHI
      PA GP, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                OHI
      PA, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                OHI
      NJ, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                OPCNC,
      LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      Arizona Realty, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      Arizona, Inc.

              	
                1105
      North Market Street, Suite 609

                Wilmington,
      DE 19801

              
	
                Orleans
      at Covington Manor, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Crofton Chase, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        	      
                DEBTOR/SELLER

              	      
                ADDRESS

              
	
                Orleans
      at East Greenwich, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Elk Township, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Hamilton, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Harrison, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Hidden Creek, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Jennings Mill, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Lambertville, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Lyons Gate, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Mansfield LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Meadow Glen, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Millstone, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Millstone River Preserve, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Tabernacle, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Thornbury, L.P.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Upper Freehold, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        	      
                DEBTOR/SELLER

              	      
                ADDRESS

              
	
                Orleans
      at Upper Saucon, L.P.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Upper Uwchlan, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at West Bradford, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at West Vincent, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Westampton Woods, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Windsor Square, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Woolwich, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Wrightstown, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      Construction Corp.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      Corporation

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      RHIL, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Parker
      & Lancaster Corporation

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Parker
      & Orleans Homebuilders, Inc.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Parker
      Lancaster, Tidewater, L.L.C.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Realen
      Homes, L.P.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        	      
                DEBTOR/SELLER

              	      
                ADDRESS

              
	
                RHGP
      LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Stock
      Grange, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Wheatley
      Meadows Associates, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      SCHEDULE
1

      

      WIRING
INSTRUCTIONS

      

      

      FIRST
AMERICAN TITLE INSURANCE COMPANY

      National
Commercial Services

      Two
Penn Center Plaza, Suite 1910

      1500
J.F.K. Boulevard

      Philadelphia,
PA 19102

       

      WIRE TRANSFER
INSTRUCTIONS

       

      
        	
                Wire
      to:

              	
                First
      American Trust, FSB

              
	 
      	
                5
      First American Way

              
	 
      	
                Santa
      Ana, CA 92707

              
	 
      	 
      
	
                ABA
      Number:

              	
                122241255

              
	 
      	 
      
	
                For
      Credit to:

              	
                First
      American Title Insurance Company

              
	 
      	 
      
	
                Account
      Number:

              	
                3015160000

              
	 
      	 
      
	
                Reference:

              	
                NCS-436414

              

      

      

      
        	 	
                Attn:

              	
                David
      Feldman

              
	 	
                Phone:

              	
                215-568-0055

              

      

       

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

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      EXHIBIT
C-2

      

      FORM OF
ESCROW CLOSING AGREEMENT

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      ESCROW
AGREEMENT

      (Holdback)

      

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

      

      RECITALS:

      

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

      

      WHEREAS, pursuant to Section 3.1(b) of
the Purchase Agreement, Purchaser has agreed to deliver to the Escrow Agent, on
the Closing Date, an aggregate of ______________ DOLLARS ($___________) (the
“Holdback
Amount”) [, of which ______________ DOLLARS($___________) (the “Environmental Holdback
Amount”) will be designated to secure the performance of Remediation with
respect to specified Individual Properties (the “Remediation
Projects”)] 1/; and

      

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

      

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

      

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

      

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

       

       

        
          

        

      

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

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      3.           Release of Holdback
Amount.

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

         

      

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

      

      A Remediation Dispute Notice shall apply only to the
Environmental Holdback Release Notice in response to which it is given and shall
not restrict the release of any Environmental Holdback Funds that are the
subject of a subsequent Environmental Holdback Release Notice, except to the
extent that Parent sends a timely Remediation Dispute Notice with respect
thereto.] 2/

      

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

      

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

      

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

      

      If to the
Escrow Agent:

       

      First
American Title Insurance Company

      National
Commercial Services

      2 Penn
Center Plaza, Suite 1910

      Philadelphia,
PA 19102

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

      Facsimile:
215-568-2410

      

      If to
Sellers, to:

      

      Orleans
Homebuilders, Inc.

      3333 Street Road

      Bensalem, PA 19020

      Attention:  Jeffrey P.
Orleans

      Facsimile:  215-633-2351

       

       

      
        

      

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

      
        
           

        

        
          4

          
            

          

        

        
           

        

         

      

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

      

      Phoenix
Management

      110
Chadds Ford Commons

      Chadds
Ford, PA 19317

      Attention:  Mitchell
B. Arden

      Facsimile:  610-358-9377

      

       

      Cahill
Gordon & Reindel llp

      80 Pine
Street

      New York,
New York 10005

      Attention:  Joel
H. Levitin

      Facsimile:  212-378-2449

       

      If to
Purchaser, to:

      

      NVR,
Inc.

      Plaza
America Tower I

      11700
Plaza America Drive Suite 500

      Reston,
Virginia 20190

      Attention:  Dennis
Seremet

      Facsimile:   703-956-4750

      

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

       

      Hogan
& Hartson LLP

      555
13th
Street NW

      Washington,
D.C. 20004

      Attention:  Bruce
W. Gilchrist

      Facsimile:  202-637-5910

       

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

      

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

      

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

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

         

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

       

      Remainder
of Page Intentionally Blank

      Signature
Page Follows

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

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

      

      

      
        	 
      	
                ESCROW
      AGENT:

                 

                FIRST
      AMERICAN TITLE INSURANCE COMPANY

                 

                By:          _____________________________

                Name:

                Title:

              
	 	 
	 	 
	 
      	
                PURCHASER:

                 

                NVR,
      INC.

                 

                By:          _____________________________

                Name:

                Title:

              
	 	 
	 	 
	 
      	
                SELLER:

                 

                ORLEANS
      HOMEBUILDERS, INC.

                 

                By:          _____________________________

                Name:

                Title:

              
	 	 
	 	 
	 
      	
                SELLING
      AFFILIATES NAMED ON EXHIBIT A HERETO

                 

                By:          _____________________________

                Name:

                Title:

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      EXHIBIT
A

      

      SELLERS

      

      
        	
                DEBTOR/SELLER

              	
                ADDRESS

              
	
                Orleans
      Homebuilders, Inc.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Brookshire
      Estates, L.P.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Greenwood
      Financial Inc.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Masterpiece
      Homes, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                OHB
      Homes, Inc.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                OHI
      Financing, Inc.

              	
                1064
      Greenwood Blvd., #106

                Lake
      Mary, FL  32746

              
	
                OHI
      PA GP, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                OHI
      PA, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                OHI
      NJ, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                OPCNC,
      LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      Arizona Realty, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      Arizona, Inc.

              	
                1105
      North Market Street, Suite 609

                Wilmington,
      DE 19801

              
	
                Orleans
      at Covington Manor, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Crofton Chase, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        	      
                DEBTOR/SELLER

              	      
                ADDRESS

              
	
                Orleans
      at East Greenwich, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Elk Township, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Hamilton, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Harrison, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Hidden Creek, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Jennings Mill, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Lambertville, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Lyons Gate, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Mansfield LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Meadow Glen, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Millstone, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Millstone River Preserve, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Tabernacle, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Thornbury, L.P.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Upper Freehold, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        	      
                DEBTOR/SELLER

              	      
                ADDRESS

              
	
                Orleans
      at Upper Saucon, L.P.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Upper Uwchlan, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at West Bradford, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at West Vincent, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Westampton Woods, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Windsor Square, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Woolwich, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      at Wrightstown, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      Construction Corp.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      Corporation

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Orleans
      RHIL, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Parker
      & Lancaster Corporation

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Parker
      & Orleans Homebuilders, Inc.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Parker
      Lancaster, Tidewater, L.L.C.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Realen
      Homes, L.P.

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        	      
                DEBTOR/SELLER

              	      
                ADDRESS

              
	
                RHGP
      LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Stock
      Grange, LP

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              
	
                Wheatley
      Meadows Associates, LLC

              	
                3333
      Street Road, Suite 101

                Bensalem,
      PA  19020

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      SCHEDULE
1

      

      WIRING
INSTRUCTIONS

      

      

      FIRST
AMERICAN TITLE INSURANCE COMPANY

      National
Commercial Services

      Two
Penn Center Plaza, Suite 1910

      1500
J.F.K. Boulevard

      Philadelphia,
PA 19102

       

      WIRE TRANSFER
INSTRUCTIONS

       

      
        	
                Wire
      to:

              	
                First
      American Trust, FSB

              
	 
      	
                5
      First American Way

              
	 
      	
                Santa
      Ana, CA 92707

              
	 
      	 
      
	
                ABA
      Number:

              	
                122241255

              
	 
      	 
      
	
                For
      Credit to:

              	
                First
      American Title Insurance Company

              
	 
      	 
      
	
                Account
      Number:

              	
                3015160000

              
	 
      	 
      
	
                Reference:

              	
                NCS-436414

              

      

      

      
        	 	
                Attn:

              	
                David
      Feldman

              
	 	
                Phone:

              	
                215-568-0055

              

      

       

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

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      EXHIBIT
D

      

      FORM OF
JV ASSIGNMENT

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      PARTNERSHIP
INTEREST ASSIGNMENT AGREEMENT

      

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

       

      RECITALS:

       

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

       

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

       

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

       

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

      

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

      

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

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

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

      

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

      

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

      

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

      

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

      

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

      

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

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

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

       

      
        	 
      	
                ASSIGNOR:

                 

                [ASSIGNOR]

                 

                By:          _________________________

                Name:

                Title:

              
	 	 
	 	 
	 
      	
                ASSIGNEE:

                 

                [PURCHASER]

                 

                By:          _________________________

                Name:

                Title:

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

    

    EXHIBIT
E

    

    FORM OF
BILL OF SALE

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    BILL
OF SALE

     

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

     

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

     

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

     

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

     

    
      	 
      	
              ORLEANS
      HOMEBUILDERS, INC.

               

              By:          _____________________________

              Name:

              Title:

            
	 	 
	 	 
	 
      	
              THE
      OTHER ENTITIES LISTED UNDER “SELLERS” ON ANNEX A HERETO

               

              By:          _____________________________

              Name:

              Title:

            
	 	 
	 	 
	
              Acknowledged
      and agreed:

               

              NVR,
      INC.

               

              By:          _____________________________

              Name:

              Title:

            	 
      

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      Annex
A 1/

    

    

    
      	
              SELLERS

            	
              PURCHASERS

            
	
              Orleans
      Homebuilders, Inc.

            	
              [Purchaser]

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      

    

     

     

    
      
        

      

    

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

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      EXHIBIT
F

      

      FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      ASSIGNMENT
AND ASSUMPTION AGREEMENT

      

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

       

      RECITALS:

       

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

       

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

       

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

       

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

       

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

      

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

      

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

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

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

      

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

      

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

      

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

      

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

      

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

      

      
        
           

        

        
          - 2
-

          
            

          

        

        
           

        

         

      

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

       

      [Signature
page follows]

       

      
        
           

        

        
          - 3
-

          
            

          

        

        
           

        

         

      

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

       

      

      
        	 
      	
                SELLERS:

                ORLEANS
      HOMEBUILDERS, INC.

                 

                By:          _____________________________

                Name:

                Title:

              
	 	 
	 	 
	 
      	
                THE
      OTHER ENTITIES LISTED UNDER “SELLERS” ON ANNEX A HERETO

                 

                By:          _____________________________

                Name:

                Title:

              
	 	 
	 	 
	 
      	
                PURCHASERS:

                 

                [PURCHASERS]

                 

                By:          _____________________________

                Name:

                Title:

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        Annex A 1/

      

      

      
        	
                SELLERS

              	
                PURCHASERS

              
	
                Orleans
      Homebuilders, Inc.

              	
                [Purchaser]

              
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      

      

       

       

        
          

        

      

      
        1/           
If any one Seller is to assign
Purchased Contracts and Purchased Leases to more than one Purchaser, then the
parties shall prepare and attach “Annex B” specifying (i) such Seller, (ii) such
Purchasers and (iii) the Purchased Contracts and Purchased Leases to be assigned
by such Seller to each of such Purchasers.  “Annex B” shall contain
this disclosure for each Seller assigning to multiple
Purchasers.AMENDED
AND RESTATED NOTE CONVERSION AND AMENDMENT AGREEMENT

     

    This
AMENDED AND RESTATED NOTE
CONVERSION AND AMENDMENT
AGREEMENT (this “Agreement”),
effective as of the Effective Date (as defined below), is made by and among
GENTA INCORPORATED, a
Delaware corporation (the “Company”), and the
undersigned parties whose names are set forth on Exhibit A attached
hereto (each a “Holder” and
collectively the “Holders”).

     

    WHEREAS, the Company
previously entered into the June 2008 Purchase Agreement, the April 2009
Purchase Agreement, the April 2009 Consent Agreement, the July 2009 Purchase
Agreement, the July 2009 Registration Rights Agreement and the September 2009
Registration Rights Agreement and previously issued the June 2008 Notes, the
April 2009 Notes, the July 2009 Notes and the September 2009 Notes (each as
defined below) (collectively, the “Prior Financing
Documents”);

     

    WHEREAS, on March 9, 2010, the
Company raised $25,000,000 through the private placement of securities
consisting of Senior Secured Convertible Promissory Notes, Senior Unsecured
Convertible Promissory Notes and Debt Warrants to Purchase Senior Unsecured
Convertible Promissory Notes (the “March 2010
Financing”) pursuant to the terms of that certain Securities Purchase
Agreement dated March 5, 2010 by and among the Company and the purchasers whose
names are set forth on Exhibit A thereto (the “Securities Purchase
Agreement”);

     

    WHEREAS, the undersigned
Holders that are parties to the Prior Financing Documents agreed to amend
certain provisions of the Prior Financing Documents as set forth in the Note
Conversion and Amendment Agreement effective as of March 9, 2010 (the “Prior
Agreement”);

     

    WHEREAS, the Company and the
undersigned Holders wish to amend and restate the Prior Agreement to alter the
conversion obligations of the Holders with respect to the 2009 Notes;
and

     

    WHEREAS, the undersigned
Holders represent the required threshold to amend the Prior
Agreement.

     

    NOW, THEREFORE, in
consideration of the premises and mutual covenants herein below, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

     

    1.           Definitions.

     

    (a)           “2009 Notes” means the
April 2009 Notes, July 2009 Notes and September 2009 Notes.

     

    (b)           “April 2009 Consent
Agreement” means that certain Consent Agreement dated as of April 2,
2009, by and among the Company and the Purchasers listed on Exhibit A thereto,
as amended.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    (c)           “April 2009 Notes”
means the Company’s Senior Secured Convertible Promissory Notes due April 2,
2012, as amended.

     

    (d)           “April 2009 Purchase
Agreement” means that certain Securities Purchase Agreement dated as of
April 2, 2009, by and among the Company and the Purchasers listed on Exhibit A
thereto, as amended.

     

    (e)           “Common Stock” means
the common stock of the Company, par value $0.001 per share.

     

    (f)           “Effective Date” means
the date and time this Agreement has been executed and delivered by the Company
and the Holders representing at least two thirds of the currently outstanding
principal amount of the 2009 Notes.

     

    (g)           “Debt Warrants” has
the meaning set forth in the Securities Purchase Agreement.

     

    (h)           “July 2009 Buyers”
means the buyers listed on Schedule I to the July 2009 Registration Rights
Agreement.

     

    (i)           “July 2009 First Closing
Notes” means July 2009 Notes issued by the Company on July 7,
2009.

     

    (j)           “July 2009 Notes”
means the Company’s Unsecured Subordinated Convertible Promissory Notes due July
7, 2011, as amended, issued by the Company on July 7, 2009 and September 4, 2009
pursuant to the July 2009 Purchase Agreement.

     

    (k)           “July 2009 Purchase
Agreement” means that certain Securities Purchase Agreement dated July 7,
2009, as amended, by and among the Company and the Purchasers listed on Exhibit
A thereto.

     

    (l)           “July 2009 Registrable
Securities” means the Registrable Securities as defined in the July 2009
Registration Rights Agreement.

     

    (m)           “July 2009 Registration
Rights Agreement” means that certain Registration Rights Agreement dated
as of July 7, 2009, by and among the Company and the Buyers listed on Schedule I
attached thereto, as the same may be amended from time to time.

     

    (n)           “July 2009 Second Closing
Notes” means July 2009 Notes issued by the Company on September 4,
2009.

     

    (o)           “June 2008 Notes”
means the Company’s Senior Secured Convertible Notes due June 9, 2011, as
amended.

     

    (p)           “June 2008 Purchase
Agreement” means that certain Securities Purchase Agreement dated as of
June 5, 2008, by and among the Company and the Purchasers listed on Exhibit A
thereto, as amended.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (q)           “September 2009
Buyers” means the buyers listed on Schedule I to the September 2009
Registration Rights Agreement, as may be amended from time to time.

     

    (r)           “September 2009 Notes”
means the Company’s Unsecured Subordinated Convertible Notes due July 7, 2011
issued by the Company pursuant to that certain Securities Purchase Agreement
dated September 4, 2009 by and among the Company and the Purchasers listed on
Exhibit A thereto.

     

    (s)           “September 2009 Registrable
Securities” means the Registrable Securities as defined in the September
2009 Registration Rights Agreement.

     

    (t)           “September 2009 Registration
Rights Agreement” means that certain Registration Rights Agreement dated
as of September 4, 2009, by and among the Company and the Buyers listed on
Schedule I attached thereto, as the same may be amended from time to
time.

     

    (u)           “Signing Day” shall
mean the effective date of the Securities Purchase Agreement.

     

    (v)           “Trading Day” shall
have the meaning given to such term in the B Notes, as defined in the Securities
Purchase Agreement.

     

    2.           Conversion of Outstanding
Notes.

     

    (a)           On
April 20, 2010 (the “Initial Conversion
Date”), each Holder agrees to convert sixteen twenty-eighths (16/28) of
the outstanding aggregate principal amount of the 2009 Notes held by such Holder
immediately prior to the conversion set forth in this section (the “Initial Conversion
Amount”), subject to the limitations set forth in Section 3.4 of each
such 2009 Note, and agrees to deliver on such date a notice of conversion
pursuant to each such 2009 Note being converted (with such Holder able to select
which 2009 Notes shall be converted pursuant to this section), which notice of
conversion shall be irrevocable.

     

    (b)           On
April 21, 2010, each Holder agrees to convert, subject to the limitations set
forth in Section 3.4 of each such 2009 Note, an additional amount of 2009 Notes
held by such Holder equal to the difference between (A) such Holder’s Initial
Conversion Amount and (B) the amount of 2009 Notes actually converted under
Section 2(a) above by such Holder on the Initial Conversion Date, and agrees to
deliver on such date a notice of conversion pursuant to each such 2009 Note
being converted (with such Holder able to select which 2009 Notes shall be
converted pursuant to this section), which notice of conversion shall be
irrevocable.

     

    (c)           Each
Holder agrees not to sell, assign or transfer any shares of Common Stock then
held by such Holder, including, without limitation, any of the shares of Common
Stock received upon conversion of their 2009 Notes in accordance with Sections
2(a) and 2(b) above, or any interest therein, during the period beginning on the
Initial Conversion Date and ending at 11:59 pm Eastern Time on April 26,
2010.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    3.           Conversion
Limitations.  In addition to any other limitations on
conversion of the 2009 Notes, each Holder holding 2009 Notes hereby agrees that
such Holder will not convert any 2009 Note on any day (the “Conversion Test
Date”) to the extent that, together with all prior conversions under such
2009 Note and all other conversions of 2009 Notes effected by the Holder on or
after March 10, 2010, the total amount of such Holder’s 2009 Notes that has been
converted on or prior to the Conversion Test Date and after March 10, 2010
(rounded to the nearest $0.01) exceeds the product (rounded to the nearest
$0.01) of (A) one twenty-eighth (1/28) of the aggregate principal amount of such
2009 Notes on the Signing Day multiplied by (B) the number of whole or partial
Weeks elapsed since March 10, 2010; provided that,
notwithstanding the foregoing restriction, any Holder that converted less than
such Holder’s Initial Conversion Amount pursuant to Section 2 hereof as a result
of the limitations set forth in Section 3.4 of the 2009 Notes shall, in addition
to the amounts set forth in this paragraph, be permitted to convert an
additional amount of 2009 Notes at any time and from time to time during the
sixteen weeks following April 20, 2010 up to a total aggregate amount under this
proviso equal to the difference between the actual amount of 2009 Notes
converted by such Holder pursuant to Section 2 hereof and such Holder’s Initial
Conversion Amount.  For purpose of this Section 3 a “Week” shall mean any
seven consecutive calendar day period.

     

    4.           Amendment to the June 2008
Purchase Agreement.  The Company and the undersigned Holders,
holding at least two-thirds of the principal amount of the currently outstanding
June 2008 Notes, hereby amend Section 3.15(c) of the June 2008 Purchase
Agreement by inserting the following sentence immediately following the last
sentence of Section 3.15(c):

     

    “The
rights under this Section 3.15(c) shall terminate and be of no further force and
effect immediately prior to the Closing Date (as defined in that certain
Securities Purchase Agreement dated as of March 5, 2010, by and among the
Company and the Purchasers listed on Exhibit A thereto, as
amended).”

     

    5.           Amendment to the June 2008
Notes.

     

    (a)           The
Company and the undersigned Holders of currently outstanding June 2008 Notes
hereby amend each June 2008 Note to delete the reference to “June 9, 2010” in
the last sentence of the preamble to and replace such date with “June 9,
2011.”

     

    (b)           In
consideration of the amendment set forth in Section 5(a), promptly following the
Effective Date, the Company shall issue to each of the holders of currently
outstanding June 2008 Notes a warrant to purchase shares of Common Stock
substantially in the form attached hereto as Exhibit B (the “Warrants”).  Each
such Warrant shall be exercisable for a number of shares of Common Stock equal
to one hundred percent (100%) of the shares of Common Stock that would be
issuable if such holder converted all of the outstanding principal and interest
underlying all of such holder’s June 2008 Notes on the Effective Date (without
regard to any restriction on conversion contained therein).

     

    6.           Amendment to the April 2009
Purchase Agreement.  The Company and the undersigned Holders,
holding at least 66 2/3% of the currently outstanding principal amount of the
April 2009 Notes hereby:

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (a)           amend
Section 1.2(b) of the April 2009 Purchase Agreement by deleting Section 1.2(b)
in its entirety and replacing Section 1.2(b) with the following:

     

    “(b)  Each
of the Purchasers shall have the option (the “Purchase Option”), in
each such Purchaser’s sole discretion, to purchase Senior Unsecured Convertible
Promissory Notes in substantially the form attached hereto as Exhibit H (the “F Notes”) in the
principal amount of up to the amount set forth opposite such Purchaser’s name on
Exhibit A in
one or more closings (each an “Additional Closing”,
and along with the First Closing, each a “Closing”).  The
Purchase Option shall be exercisable at any time and from time to time on or
prior to the later of (i) the date that is two weeks after the Company’s public
release of final top-line survival results from the Company’s Phase 3 trial of
Genasense® plus chemotherapy in advanced melanoma, known as AGENDA, and (ii)
March 30, 2011.  The issuance of the F Notes at any Additional Closing
shall be made on the terms and conditions set forth in this Agreement, and the
representations and warranties of the Company set forth in Article 3 and the
representations and warranties of the Purchasers in Article 4 hereof shall speak
as of the date of such Additional Closing.”; and

     

    (b)           insert
the form of note in the form attached hereto as Exhibit C as a
new “Exhibit H”
to the April 2009 Purchase Agreement.

     

    7.           Amendment to the April 2009
Consent Agreement.  The Company and the undersigned Holders,
representing two-thirds of the currently outstanding and unexercised Purchase
Rights (as defined in the April 2009 Consent Agreement) and the currently
outstanding principal amount of the New Notes (as defined in the April 2009
Consent Agreement) issued upon exercise of the Purchase Rights,
hereby:

     

    (a)           amend
Section 4 of the April 2009 Consent Agreement by deleting Section 4 in its
entirety and replacing Section 4 with the following:

     

    “4.  Note Purchase
Right.  At any time, and from time to time after the
Authorization Date (as defined in the Purchase Agreement) each of the Holders
who are not natural persons (the “Institutional
Holders”) shall have the right (the “Purchase Right”), in
each such Institutional Holder’s sole discretion, upon written notice to the
Company (“Purchase
Notice”), to purchase one or more Senior Unsecured Convertible Promissory
Notes in substantially the form attached hereto as Exhibit B (the “F Notes”) in an
aggregate principal amount up to that amount set forth opposite such
Institutional Holder’s name on Exhibit A hereto, in
one or more closings (each a “Closing”).  The
Purchase Right shall be exercisable at any time and from time to time on or
prior to the later of (i) the date that is two weeks after the Company’s public
release of final top-line survival results from the Company’s Phase 3 trial of
Genasense® plus chemotherapy in advanced melanoma, known as AGENDA, and (ii)
March 30, 2011.  At each Closing, the Company shall issue and sell to
the Institutional Holder purchasing notes at such Closing a F Note having the
principal amount set forth in the Purchase Exercise Notice.  At each
such Closing, the purchasing Institutional Holder shall deliver the purchase
price for the F Note, which shall equal the principal amount thereof, by wire
transfer of immediately available funds to the Company.  The Closing
shall take place on the date specified in the Purchase Notice, which shall not
be less than five Trading Days (as defined in the F Note) from the date on which
the Purchase Notice is delivered.”; and

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (b)           insert
the form of note in the form attached hereto as Exhibit C as a
new “Exhibit B”
to the April 2009 Consent Agreement.

     

    8.           Amendment to the July 2009
Registration Rights Agreement.  The Company and the undersigned
Holders, representing the July 2009 Buyers currently holding at least two-thirds
of the July 2009 Registrable Securities, hereby amend the July 2009 Registration
Rights Agreement as follows:

     

    (a)           Section
3(c) is hereby amended by inserting the following sentence immediately following
the last sentence of Section 3(c):

     

    “The
Company’s obligation to file a Registration Statement covering the resale of Cut
Back Securities under this Section 3(c) shall expire on the earlier of the
Expiration Date and the Registration Release Date (each as defined in that
certain Securities Purchase Agreement dated as of March 5, 2010, by and among
the Company and the Purchasers listed on Exhibit A thereto, as
amended).”

     

    (b)           The
words “If at any time during the Registration Period” in the first sentence of
Section 10(c) are hereby replaced with the words “If at any time during the
Registration Period and prior to the earlier of the Expiration Date and the
Registration Release Date”.

     

    9.           Amendment to the September
2009 Registration Rights Agreement.  The Company and the
undersigned Holders, representing the September 2009 Buyers currently holding at
least two-thirds of the September 2009 Registrable Securities, hereby amend the
September 2009 Registration Rights Agreement as follows:

     

    (a)           Section
3(c) is hereby amended by inserting the following sentence immediately following
the last sentence of Section 3(c):

     

    “The
Company’s obligation to file a Registration Statement covering the resale of Cut
Back Securities under this Section 3(c) shall expire on the earlier of the
Expiration Date and the Registration Release Date (each as defined in that
certain Securities Purchase Agreement dated as of March 5, 2010, by and among
the Company and the Purchasers listed on Exhibit A thereto, as
amended).”

     

    (b)           The
words “If at any time during the Registration Period” in the first sentence of
Section 10(c) are hereby replaced with the words “If at any time during the
Registration Period and prior to the earlier of the Expiration Date and the
Registration Release Date”.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    10.           Outstanding
Securities.  Each undersigned Holder represents and warrants
that as of the Effective Date, such Holder holds the Company’s securities in the
amounts set forth on such Holder’s signature page hereto.

     

    11.           Specific Performance;
Consent to Jurisdiction; Venue.

     

    (a)           The
Company and the Holders acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise
breached.  It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof
without the requirement of posting a bond or providing any other security, this
being in addition to any other remedy to which any of them may be entitled by
law or equity.

     

    (b)           The
parties agree that venue for any dispute arising under this Agreement will lie
exclusively in the state or federal courts located in New York County, New York,
and the parties irrevocably waive any right to raise forum non conveniens or any
other argument that New York is not the proper venue.  The parties
irrevocably consent to personal jurisdiction in the state and federal courts of
the state of New York.  The Company and each Holder consent to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process
and notice thereof.  Nothing in this Section 11(b) shall affect or limit any right to
serve process in any other manner permitted by law.  The Company and
the Holders hereby agree that the prevailing party in any suit, action or
proceeding arising out of or relating to this Agreement or the other Transaction
Documents, shall be entitled to reimbursement for reasonable legal fees from the
non-prevailing party.  The parties hereby waive all rights to a trial
by jury.

     

    12.           Entire Agreement;
Amendment. This Agreement contains the entire understanding and agreement
of the parties with respect to the matters covered hereby and, except as
specifically set forth herein, neither the Company nor any Holder make any
representation, warranty, covenant or undertaking with respect to such matters,
and they supersede all prior understandings and agreements with respect to said
subject matter, all of which are merged herein.  No provision of this
Agreement may be waived or amended other than by a written instrument signed by
the Company and the Holders of at least two-thirds of the then-outstanding 2009
Notes; provided
that if any of
the rights under this Agreement of any Holder then holding 2009 Notes are
materially diminished or the obligations under this Agreement of any Holder then
holding 2009 Notes are materially increased by such waiver or amendment, in each
case in a manner that is not similar in all material respects to the effect on
the rights or obligations of other Holders, then such waiver or amendment shall
not be effective with respect to such adversely affected Holder without the
written consent of such adversely affected Holder.  The Holders
acknowledge that any amendment or waiver effected in accordance with this
section shall be binding upon each Holder (and their permitted assigns) and the
Company, including, without limitation, an amendment or waiver that has an
adverse effect on any or all Holders.  Except as amended herein, the
June 2008 Purchase Agreement, the June 2008 Notes, the April 2009 Purchase
Agreement, the April 2009 Notes, the April 2009 Consent Agreement, the July 2009
Notes, the July 2009 Registration Rights Agreement, the September 2009 Notes and
the September 2009 Registration Rights Agreement shall remain in full force and
effect.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    13.           Notices.  Any
notice, demand, request, waiver or other communication required or permitted to
be given hereunder shall be in writing and shall be effective (a) upon hand
delivery by telecopy or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

     

    
      	
              If
      to the Company or its Subsidiaries:

            	
              Genta
      Incorporated

            
	 
      	
              200
      Connell Drive

            
	 
      	
              Berkeley
      Heights, NJ 07922

            
	 
      	
              Attention:
      Raymond P. Warrell, Jr., M.D.

            
	 
      	
              Telephone
      No.: (908) 286-9800

            
	 
      	
              Telecopy
      No.: (908) 286-3966

            
	 
      	 
      
	
              with
      copies to:

            	
              Morgan,
      Lewis & Bockius LLP

            
	 
      	
              502
      Carnegie Center

            
	 
      	
              Princeton,
      NJ 08540

            
	 
      	
              Attention:
      Emilio Ragosa

            
	 
      	
              Telephone
      No.: (609) 919-6633

            
	 
      	
              Telecopy
      No.: (609) 919-6701

            
	 
      	 
      
	
              If
      to any Holder:

            	
              At
      the address of such Holder set forth on Exhibit A to this Agreement, with
      copies to Holder’s counsel as set forth on  Exhibit
      A  or as specified in writing by such Holder, with a copy
      to:

            
	 
      	 
      
	
              With
      a copy to:

            	
              Cooley
      Godward Kronish LLP

            
	 
      	
              4401
      Eastgate Mall

            
	 
      	
              San
      Diego, CA 92121

            
	 
      	
              Attention:
      Ethan Christensen

            
	 
      	
              Telephone
      No.: (858) 550-6076

            
	 
      	
              Telecopy
      No.: (858) 550-6420

            

    

    

    Any party
hereto may from time to time change its address for notices by giving written
notice of such changed address to the other party hereto.

     

    14.           Waivers.  No
waiver by a party of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right accruing to it
thereafter.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    15.           Headings.  The
article, section and subsection headings in this Agreement are for convenience
only and shall not constitute a part of this Agreement for any other purpose and
shall not be deemed to limit or affect any of the provisions
hereof.

     

    16.           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns.  The Holders
may assign the rights under this Agreement without the consent of the
Company.

     

    17.           No Third Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.

     

    18.           Governing
Law.  This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction.  This
Agreement shall not be interpreted or construed with any presumption against the
party causing this Agreement to be drafted.

     

    19.           Counterparts.  This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and shall become effective
when counterparts have been signed by each party and delivered to the other
parties hereto, it being understood that all parties need not sign the same
counterpart.

     

    20.           Publicity.  The
Company agrees that it will not disclose, and will not include in any public
announcement, the names of the Holders without the consent of the Holders, which
consent shall not be unreasonably withheld or delayed, or unless and until such
disclosure is required by law, rule or applicable regulation, and then only to
the extent of such requirement.  Notwithstanding the foregoing, the
Holders consent to being identified in any filings the Company makes with the
SEC to the extent required by law or the rules and regulations of the
SEC.

     

    21.           Severability.  The
provisions of this Agreement are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision or part of a
provision of this Agreement and this Agreement shall be reformed and construed
as if such invalid or illegal or unenforceable provision, or part of such
provision, had never been contained herein, so that such provisions would be
valid, legal and enforceable to the maximum extent possible.

     

    22.           Further
Assurances.  From and after the date of this Agreement, upon
the request of the Holders or the Company, the Company and each Holder shall
execute and deliver such instruments, documents and other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    [REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties have caused this AMENDED AND RESTATED NOTE CONVERSION AND AMENDMENT
AGREEMENT to be executed as of the Effective Date.

     

    
      
        
          
            	
                    GENTA
      INCORPORATED

                  
	 
	
                    By:

                  	 
      
	
                    Name:

                  	
                    Raymond
      P. Warrell, Jr., M.D.

                  
	
                    Title:

                  	
                    Chairman
      and Chief Executive
Office

                  

          

        

      

    

    

    [SIGNATURE
PAGES CONTINUE]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    [HOLDER
SIGNATURE PAGES TO THE

    AMENDED
AND RESTATED NOTE CONVERSION AND AMENDMENT AGREEMENT]

     

    IN
WITNESS WHEREOF, the undersigned have caused this Amended and Restated Note
Conversion and Amendment Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.

     

    Name of
Holder:__________________________________________________________________________

     

    Signature of Authorized Signatory of
Holder:___________________________________________________

     

    Name of
Authorized
Signatory:______________________________________________________________

     

    Title of
Authorized
Signatory:_______________________________________________________________

     

    Email
Address of
Holder:___________________________________________________________________  

     

    Fax
Number of
Holder:_____________________________________________________________________

     

    Principal
Amount of June 2008 Notes Currently
Held:______________________________________________

     

    Principal
Amount of April 2009 Notes Currently
Held:______________________________________________

     

    Amount of
Purchase Options Currently Held:
___________________________________________________

     

    Amount of
Purchase Rights Currently
Held:_____________________________________________________       

     

    Number of
July 2009 First Closing Notes Currently
Held:____________________________________________

     

    Number of
July 2009 Second Closing Notes Currently
Held:_________________________________________

     

    Number of
July 2009 Registrable Securities Currently
Held:__________________________________________

     

    Number of
September 2009 Notes Currently
Held:_________________________________________________

     

    Number of
September 2009 Registrable Securities Currently
Held:_____________________________________

     

    Address
for Notice of Holder:

     

    Address
for Delivery of Securities for Holder (if not same as address for
notice):

     

    [SIGNATURE
PAGES CONTINUE]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    HOLDERS

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    FORM
OF WARRANT

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
C

     

    FORM
OF F NOTE

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