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Exhibit 10.32  

EXECUTION COPY  

 
 

$125,000,000    
    
    CREDIT AGREEMENT    
    
    Dated as of February 18, 2004    
    
    among    
    
    AFFORDABLE RESIDENTIAL COMMUNITIES LP,    

    as Borrower,    
    
    AFFORDABLE RESIDENTIAL COMMUNITIES INC.,    
    
    as Parent Guarantor,    
    
    THE
SUBSIDIARY GUARANTORS NAMED HEREIN,    
    
    as Subsidiary Guarantors,    
    
    THE INITIAL LENDERS, INITIAL ISSUING BANK AND
  SWING LINE BANK NAMED HEREIN,    
    

as Initial Lenders, Initial Issuing Bank and Swing Line Bank    
    
    CITICORP NORTH AMERICA, INC.,    
    
    as Administrative Agent and as Collateral
Agent,    
    
    MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,    
    
    as Syndication Agent,    
    
    BANK ONE, NA,    
    

as Documentation Agent,    
    
    and    
    
    CITIGROUP GLOBAL MARKETS INC.    
    
    and    
    
    MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
   
    
    as Joint Lead Arrangers and Joint Book Running Managers    

  

 
 

TABLE OF CONTENTS    
    

	Section
 
	 	 
	 	Page

	ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS
	

SECTION 1.01.	
 	

Certain Defined Terms	
 	

1
	SECTION 1.02.	 	Computation of Time Periods; Other Definitional Provisions	 	23
	SECTION 1.03.	 	Accounting Terms	 	23
	

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
	

SECTION 2.01.	
 	

The Advances and the Letters of Credit	
 	

24
	SECTION 2.02.	 	Making the Advances	 	25
	SECTION 2.03.	 	Issuance of and Drawings and Reimbursement Under Letters of Credit	 	27
	SECTION 2.04.	 	Repayment of Advances	 	28
	SECTION 2.05.	 	Termination or Reduction of the Commitments	 	29
	SECTION 2.06.	 	Prepayments	 	29
	SECTION 2.07.	 	Interest	 	30
	SECTION 2.08.	 	Fees	 	31
	SECTION 2.09.	 	Conversion of Advances	 	32
	SECTION 2.10.	 	Increased Costs, Etc.	 	32
	SECTION 2.11.	 	Payments and Computations	 	33
	SECTION 2.12.	 	Taxes	 	35
	SECTION 2.13.	 	Sharing of Payments, Etc.	 	37
	SECTION 2.14.	 	Use of Proceeds	 	38
	SECTION 2.15.	 	Evidence of Debt	 	38
	

ARTICLE III

CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT
	

SECTION 3.01.	
 	

Conditions Precedent to Initial Extension of Credit	
 	

39
	SECTION 3.02.	 	Conditions Precedent to Each Borrowing, Issuance and Renewal	 	43
	SECTION 3.03.	 	Determinations Under Section 3.01	 	43
	

ARTICLE IV

REPRESENTATIONS AND WARRANTIES
	

SECTION 4.01.	
 	

Representations and Warranties of the Loan Parties	
 	

44
	

ARTICLE V

COVENANTS OF THE LOAN PARTIES
	

SECTION 5.01.	
 	

Affirmative Covenants	
 	

48
	SECTION 5.02.	 	Negative Covenants	 	54
	SECTION 5.03.	 	Reporting Requirements	 	60
	SECTION 5.04.	 	Financial Covenants	 	62
	

ARTICLE VI

EVENTS OF DEFAULT
	

SECTION 6.01.	
 	

Events of Default	
 	

63
	SECTION 6.02.	 	Actions in Respect of the Letters of Credit upon Default	 	65
	 	 	 	 	 

i

 

	

ARTICLE VII

GUARANTY
	

SECTION 7.01.	
 	

Guaranty; Limitation of Liability	
 	

66
	SECTION 7.02.	 	Guaranty Absolute	 	66
	SECTION 7.03.	 	Waivers and Acknowledgments	 	67
	SECTION 7.04.	 	Subrogation	 	68
	SECTION 7.05.	 	Guaranty Supplements	 	68
	SECTION 7.06.	 	Indemnification by Guarantors	 	68
	SECTION 7.07.	 	Subordination	 	69
	SECTION 7.08.	 	Continuing Guaranty	 	70
	

ARTICLE VIII

THE AGENTS
	

SECTION 8.01.	
 	

Authorization and Action; Appointment of Supplemental Collateral Agents	
 	

70
	SECTION 8.02.	 	Agents' Reliance, Etc.	 	71
	SECTION 8.03.	 	CNAI and Affiliates	 	71
	SECTION 8.04.	 	Lender Party Credit Decision	 	72
	SECTION 8.05.	 	Indemnification by Lender Parties	 	72
	SECTION 8.06.	 	Successor Agents	 	73
	

ARTICLE IX

MISCELLANEOUS
	

SECTION 9.01.	
 	

Amendments, Etc.	
 	

73
	SECTION 9.02.	 	Notices, Etc.	 	74
	SECTION 9.03.	 	No Waiver; Remedies	 	75
	SECTION 9.04.	 	Costs and Expenses	 	75
	SECTION 9.05.	 	Right of Set-off	 	77
	SECTION 9.06.	 	Binding Effect	 	77
	SECTION 9.07.	 	Assignments and Participations	 	77
	SECTION 9.08.	 	Execution in Counterparts	 	80
	SECTION 9.09.	 	No Liability of the Issuing Banks	 	80
	SECTION 9.10.	 	Confidentiality	 	80
	SECTION 9.11.	 	Release of Collateral	 	81
	SECTION 9.12.	 	Patriot Act Notification	 	81
	SECTION 9.13.	 	Jurisdiction, Etc.	 	81
	SECTION 9.14.	 	Governing Law	 	81
	SECTION 9.15.	 	WAIVER OF JURY TRIAL	 	81

ii

 

	SCHEDULES
	

Schedule I	
 	

—	
 	

Commitments and Applicable Lending Offices
	Schedule II	 	—	 	Manufactured Home Communities Constituting Borrowing Base Assets
	Schedule 4.01(b)	 	—	 	Subsidiaries
	Schedule 4.01(d)	 	—	 	Authorizations, Approvals, Actions, Notices and Filings
	Schedule 4.01(f)	 	—	 	Disclosed Litigation
	Schedule 4.01(n)	 	—	 	Existing Debt
	Schedule 4.01(o)	 	—	 	Surviving Debt
	Schedule 4.01(p)	 	—	 	Existing Liens
	Schedule 4.01(q)	 	—	 	Owned Real Property
	Schedule 4.01(r)	 	—	 	Leased Real Property
	Schedule 4.01(s)	 	—	 	Environmental Concerns
	Schedule 4.01(x)	 	—	 	Existing Loans to Directors and Executive Officers
	Schedule 4.01(y)	 	—	 	Excluded Subsidiaries and Excluded Subsidiary Agreements
	Schedule 4.01(z)	 	—	 	Plans and Welfare Plans
	

EXHIBITS
	

Exhibit A	
 	

—	
 	

Form of Note
	Exhibit B	 	—	 	Form of Notice of Borrowing
	Exhibit C	 	—	 	Form of Guaranty Supplement
	Exhibit D	 	—	 	Form of Assignment and Acceptance
	Exhibit E-1	 	—	 	Form of Opinion of Counsel to the Loan Parties
	Exhibit E-2	 	—	 	Form of Opinion of Maryland Counsel to the Loan Parties
	Exhibit E-3	 	 	 	Form of Opinion of Colorado Counsel for the Loan Parties
	Exhibit E-4	 	 	 	Form of Opinion of Wyoming Counsel for the Loan Parties
	Exhibit E-5	 	 	 	Form of Opinion of Delaware Counsel for the Loan Parties
	Exhibit E-6	 	—	 	Form of Opinion of Local Counsel to the Loan Parties
	Exhibit F-1	 	—	 	Form of Primary Security Agreement
	Exhibit F-2	 	—	 	Form of ARC Housing Security Agreement
	Exhibit G	 	—	 	Form of Mortgage
	Exhibit H	 	—	 	Form of Borrowing Base Certificate
	Exhibit I	 	—	 	Form of Collateral Sub-Agency Agreement

iii

 
 

CREDIT AGREEMENT    
    

        CREDIT AGREEMENT dated as of February 18, 2004 (this "Agreement") among AFFORDABLE RESIDENTIAL COMMUNITIES
LP, a Delaware limited partnership (the "Borrower"), AFFORDABLE RESIDENTIAL COMMUNITIES INC., a Maryland corporation (the
"Parent Guarantor"), the entities listed on the signature pages hereof as the guarantors (together with any Additional Guarantors (as hereinafter
defined) acceding hereto pursuant to Section 7.05, the "Subsidiary Guarantors" and, together with the Parent Guarantor, the
"Guarantors") the banks, financial institutions and other institutional lenders listed on the signature pages hereof as the initial lenders (the
"Initial Lenders"), CITICORP NORTH AMERICA, INC. ("CNAI"), as the initial issuer of Letters of
Credit (as hereinafter defined) (the "Initial Issuing Bank"), the Swing Line Bank (as hereinafter defined), CNAI, as administrative agent (together with
any successor administrative agent appointed pursuant to Article VIII, the "Administrative Agent") for the Lender Parties (as hereinafter
defined), CNAI, as collateral agent (together with any successor collateral agent appointed pursuant to Article VIII, the "Collateral Agent", and
together with the Administrative Agent, the "Agents") for the Secured Parties (as hereinafter defined), MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as syndication agent, BANK ONE, NA, as documentation agent, and CITIGROUP GLOBAL MARKETS INC. ("CGMI") and MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, as joint lead arrangers and joint book running managers (the "Arrangers"). 

 
 

ARTICLE I
  DEFINITIONS AND ACCOUNTING TERMS    
    

        SECTION
1.01.    Certain Defined Terms.    As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): 

        "Additional Guarantor" has the meaning specified in Section 7.05. 

        "Adjusted EBITDA" means (a) EBITDA for the fiscal quarter of the Parent Guarantor most recently ended for which financial
statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, less (b) an amount
equal to 25% of the Capital Expenditure Reserve for all Manufactured Home Communities; provided, however, that for purposes of this definition, in the
case of any acquisition or disposition of any direct or indirect interest in any Asset
(including through the acquisition of Equity Interests) by the Parent Guarantor or any of its Subsidiaries during any fiscal quarter, Adjusted EBITDA will be adjusted (1) in the case of an
acquisition, by adding thereto an amount equal to the product of (y) the actual EBITDA generated by the Asset so acquired during such fiscal quarter, multiplied
by (z) a fraction (A) the numerator of which is the total number of days in such fiscal quarter less the actual
number of days in such fiscal quarter that such Asset was owned by the Parent Guarantor or such Subsidiary and (B) the denominator of which is the actual number of days in such fiscal quarter
that such Asset was owned by the Parent Guarantor or such Subsidiary and (2) in the case of a disposition, by subtracting therefrom an amount equal to the actual EBITDA generated by the Asset
so disposed of during such fiscal quarter. 

        "Adjusted Net Operating Income" means, for any Borrowing Base Asset, the Net Operating Income attributable to such Borrowing Base Asset  less the sum of
(a) the amount, if any, by which (i) 5% of all rental and other income from the operation of such Borrowing Base Asset for
the consecutive four fiscal quarters of the Parent Guarantor most recently ended for which financial statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or
(c), as the case may be, exceeds (ii) all management fees payable in respect of such Borrowing Base Asset during such fiscal period and (b) if such Asset is a Manufactured Home
Community, the total Capital Expenditure Reserve for such Borrowing Base Asset. 

        "Administrative Agent" has the meaning specified in the recital of parties to this Agreement. 

 

        "Administrative Agent's Account" means the account of the Administrative Agent maintained by the Administrative Agent with Citibank, N.A.,
at its office at 2 Penns Way, Suite 200, New Castle, Delaware 19720, ABA No. 021000089, Account No. 36852248, Account Name: Agency/Medium Term Finance, Reference: ARC, Attention: Global
Loans/Agency, or such other account as the Administrative Agent shall specify in writing to the Lender Parties. 

        "Advance" means a Revolving Credit Advance, a Swing Line Advance or a Letter of Credit Advance. 

        "Affiliate" means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes of this definition, the term "control" (including the terms "controlling", "controlled by" and "under common control with") of
a Person means the possession, direct or indirect, of the power to vote 5% or more of the Voting Interests of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting Interests, by contract or otherwise. 

        "Agents" has the meaning specified in the recital of parties to this Agreement. 

        "Agreement" has the meaning specified in the recital of parties to this Agreement. 

        "Agreement Value" means, for each Hedge Agreement, on any date of determination, an amount determined by the Administrative Agent equal
to: (a) in the case of a Hedge Agreement documented pursuant to the Master Agreement (Multicurrency-Cross Border) published by the International Swap and Derivatives Association, Inc.
(the "Master Agreement"), the amount, if any, that would be payable by any Loan Party or any of its Subsidiaries to its counterparty to such Hedge
Agreement, as if (i) such Hedge Agreement was being terminated early on such date of determination, (ii) such Loan Party or Subsidiary was the sole "Affected Party", and (iii) the
Administrative Agent was the sole party determining such payment amount (with the Administrative Agent making such determination pursuant to the provisions of the form of Master Agreement); or
(b) in the case of a Hedge Agreement traded on an exchange, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement
to the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement determined by the Administrative Agent based on the settlement price of such Hedge Agreement on such date of
determination, or (c) in all other cases, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party
or Subsidiary of a Loan Party party to such Hedge Agreement determined by the Administrative Agent as the amount, if any, by which (i) the present value of the future cash flows to be paid by
such Loan Party or Subsidiary exceeds (ii) the present value of the future cash flows to be received by such Loan Party or Subsidiary pursuant to such Hedge Agreement; capitalized terms used
and not otherwise defined in this definition shall have the respective meanings set forth in the above described Master Agreement. 

        "Annualized EBITDA" means the product of (a) Adjusted EBITDA for the most recently ended fiscal quarter of the Parent Guarantor for
which financial statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, multiplied
by (b) four. 

        "Applicable Borrowing Base Capitalization Rate" means, with respect to any Manufactured Home Community that constitutes a Borrowing Base
Asset, 8.5%; provided, however, that if the yield to maturity of the then current ten-year
U.S. Treasury obligation (calculated by the Administrative Agent as an average of the five preceding closing date values prior to the end of a fiscal quarter) shall at any time exceed 5.5%, then the
Applicable Borrowing Base Capitalization Rate shall increase by 50% of such excess (rounded downward, as necessary, to the nearest 1/4 of 1%), to a maximum of 9.5%. (By way of example
only, an increase in the 5-day average 10-year 

2

 

treasury
to 6.5% will increase the Applicable Borrowing Base Capitalization Rate by 50 basis points to 9.0%.) 

        "Applicable Lending Office" means, with respect to each Lender Party, such Lender Party's Domestic Lending Office in the case of a Base
Rate Advance and such Lender Party's Eurodollar Lending Office in the case of a Eurodollar Rate Advance. 

        "Applicable Margin" means, at any date of determination, a percentage per annum determined by reference to the Leverage Ratio as set forth
below: 

	Pricing

Level
 
	 	Leverage Ratio
	 	Applicable Margin

for Base Rate

Advances
	 	Applicable Margin

for Eurodollar Rate

Advances
	 
	I	 	3 70%	 	2.500	%	3.500	%
	II	 	< 70% 3 but 60%	 	2.125	%	3.125	%
	III	 	< 60% but 3 50%	 	1.750	%	2.750	%
	IV	 	< 50%	 	1.375	%	2.375	%

The
Applicable Margin for each Base Rate Advance shall be determined by reference to the Leverage Ratio in effect from time to time and the Applicable Margin for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing shall be determined by reference to the Leverage Ratio in effect on the first day of such Interest Period; provided,
however, that (a) no change in the Applicable Margin resulting from the Leverage Ratio shall be effective until three Business Days after the date on which the
Administrative Agent receives (x) the financial statements required to be delivered pursuant to Section 5.03(b) or (c), as the case may be, and (y) a certificate of the Chief
Financial Officer of the Borrower demonstrating the Leverage Ratio, and (b) the Applicable Margin shall be at Pricing Level I for so long as the Borrower has not submitted to the Administrative
Agent as and when required under Section 5.03(b) or (c), as applicable, the information described in clause (a) of this proviso. 

        "Applicable Multiple" means, for purposes of calculating Borrowing Base Asset Value for any Borrowing Base Asset that is a Manufactured
Home Rental Unit, a multiple determined with reference to the age of such Manufactured Home Rental Unit as set forth below (determined in accordance with the model year indicated on the certificate of
title thereof, to the extent provided therein): 

	Age of Manufactured

Home Rental Unit
	 	Applicable Multiple

	Less than or equal to 6 years:	 	3.5
	Greater than 6 years, but less than or equal to 10 years:	 	3.0
	Greater than 10 years:	 	0

        "Appraisal" means an appraisal complying with the requirements of the Federal Financial Institutions Reform, Recovery and Enforcement Act
of 1989, prepared for the account of the Collateral Agent (for the benefit of the Lenders) by a MAI appraiser selected by the Collateral Agent in consultation with the Borrower, and otherwise in
scope, form and substance satisfactory to the Collateral Agent. 

        "Appraised Value" means, for any Borrowing Base Asset that is a Manufactured Home Community, the "as is" market value of such Manufactured
Home Community (excluding any manufactured homes situated thereon), determined by the Administrative Agent based on an Appraisal of such Manufactured Home Community, after discretionary adjustments of
the value shown in such Appraisal following a review by the Administrative Agent's appraisal review department. 

        "ARC Housing Security Agreement" has the meaning specified in Section 3.01(a)(ii). 

3

 

        "Arrangers" has the meaning specified in the recital of parties to this Agreement. 

        "Assets" means Manufactured Home Communities, Manufactured Home Rental Units, Development Properties, Consumer Finance Receivables and
Joint Venture Assets. 

        "Asset Value" means, at any date of determination, (a) in the case of any Asset comprised of a Manufactured Home Community or
Manufactured Home Rental Unit, the Annualized EBITDA of such Asset divided by 8.5%; provided,  however, that
in the case of any such Asset in which the Parent Guarantor or any of its Subsidiaries shall have acquired any direct or indirect interest
(including through the acquisition of Equity Interests) during the fiscal quarter of the Parent Guarantor then most recently ended for which financial statements are required to be delivered pursuant
to Section 5.03(b) or (c), as the case may be, the "Asset Value" of such Asset at such date of determination shall be the lesser of
(i) the Annualized EBITDA of such Asset divided by 8.5% and (ii) the purchase price of such Asset, (b) in the case of any
Development Property, the book value of such Development Property as determined in accordance with GAAP, (c) in the case of any Consumer Finance Receivable, the book value of such Consumer
Finance Receivable net of any related loan loss reserve, each as determined in accordance with GAAP, and (d) in the case of any Joint Venture Asset, the JV Pro Rata Share of the book value of
such Joint Venture Asset as determined in accordance with GAAP. 

        "Assignment and Acceptance" means an assignment and acceptance entered into by a Lender Party and an Eligible Assignee, and accepted by
the Administrative Agent, in accordance with Section 9.07 and in substantially the form of Exhibit D hereto. 

        "Available Amount" of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time with all conditions to drawing). 

        "Bankruptcy Law" means any applicable law governing a proceeding of the type referred to in Section 6.01(f) or Title 11, U.S. Code,
or any similar foreign, federal or state law for the relief of debtors. 

        "Base Rate" means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to
the higher of (a) the rate of interest announced publicly by Citibank, N.A. in New York, New York, from time to time, as Citibank, N.A.'s base rate and (b) 1/2 of 1% per
annum above the Federal Funds Rate. 

        "Base Rate Advance" means an Advance that bears interest as provided in Section 2.07(a)(i). 

        "Borrower" has the meaning specified in the recital of parties to this Agreement. 

        "Borrower's Account" means the account of the Borrower maintained by the Borrower with Compass Bank at its office at 999
18th Street, Suite 2800, Denver, Colorado 80202, ABA No. 107005319, Account No. 2500884595, or such other account as the Borrower shall specify in writing to the
Administrative Agent. 

        "Borrowing" means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type made by the Lenders or a Swing Line
Borrowing. 

        "Borrowing Base Assets" means only such Assets comprised of Manufactured Home Communities and Manufactured Home Rental Units
(a) for which the applicable conditions (as may be determined by the Collateral Agent in its sole discretion) in Section 3.01 and, if applicable, 5.01(s), 5.01(t) and 5.01(j) have been
satisfied and as the Required Lenders, in their sole discretion, shall from time to time elect to consider Borrowing Base Assets for purposes of this Agreement, and (b) (i) in the case of
Manufactured Home Communities, that (A) are wholly-owned in fee, and (B) are listed on Schedule II hereto (as supplemented from time to time pursuant to
Section 5.01(j)(iv)) and (ii) in the case of Manufactured Home Rental Units, (A) at 

4

 

any
time prior to the forty-fifth (45th) day following the occurrence of a Collateral Trigger Event, that are listed as "Rental Units that Reflect the Collateral Agent's UCC Lien" on the
Summary Status Report (as defined in the Collateral Sub-Agency Agreement) most recently delivered to the Collateral Agent pursuant to Section 4.1.2(c) of the Collateral
Sub-Agency Agreement and (B) at any time on or after the forty-fifth (45th) day following the occurrence of a Collateral Trigger Event, that are listed as "Rental
Units that Reflect the Collateral Agent's Certificate of Title Lien" on the Summary Status Report (as defined in the Collateral Sub-Agency Agreement) most recently delivered to the
Collateral Agent pursuant to Section 4.1.3(c) of the Collateral Sub-Agency Agreement. 

        "Borrowing Base Asset Value" means, at any date of determination, (a) for any Borrowing Base Asset that is a Manufactured Home
Community, the lesser of (i) 60% of the Appraised Value of such Borrowing Base Asset and (ii) 75% of the Adjusted Net Operating Income of such Borrowing Base Asset  divided by the Applicable
Borrowing Base Capitalization Rate and (b) for any Borrowing Base Asset that is a Manufactured Home Rental Unit, the
lesser of (i) 45% of the capitalized purchase price of such Borrowing Base Asset determined in accordance with GAAP, (ii) 70% of the depreciated book value of such Borrowing Base Asset
determined in accordance with GAAP and (iii) Adjusted Net Operating Income in respect of such Borrowing Base Asset multiplied by the Applicable
Multiple. 

        "Borrowing Base Certificate" means a certificate in substantially the form of Exhibit H hereto, duly certified by the Chief
Financial Officer of the Parent Guarantor. 

        "Borrowing Base Debt Service Coverage Ratio" means, at any date of determination, the ratio of (a) the aggregate Adjusted Net
Operating Income for all Borrowing Base Assets to (b) the greater of (i) the actual interest expense of the Borrower under this Agreement for the consecutive four fiscal quarters of the
Parent Guarantor most recently ended for which financial statements are required to be delivered pursuant to Section 5.03(b) or (c), as the case may be and (ii) the interest that would
have been required to be paid by the Borrower under this Agreement for such fiscal period had the applicable interest rate been equal to (A) the Applicable Margin for Eurodollar Rate Advances  plus
(B) the greater of (1) 3.0% and (2) the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) as published
on Reuters Page ISDAFIX1 (or any successor page) as the International Swaps and Derivatives Association mid-market par 3-year swap rate, in each case, in effect at such date of
determination. 

        "Business Day" means a day of the year on which banks are not required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market. 

        "Capital Expenditure Reserve" means, with respect to any Manufactured Home Community on any date of determination, the product of
(A) $100 times (B) the total number of Pads within such Manufactured Home Community. 

        "Capitalized Leases" means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases. 

        "Cash Equivalents" means any of the following, to the extent owned by the Borrower or any of its Subsidiaries free and clear of all Liens
other than Liens created under the Collateral Documents and having a maturity of not greater than 90 days from the date of issuance thereof: (a) readily marketable direct obligations of
the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States,
(b) certificates of deposit of or time deposits with any commercial bank that is a Lender Party or a member of the Federal Reserve System, issues (or the parent of which issues) commercial
paper rated as described in clause (c) below, is organized under the laws of the United States or any State thereof and has combined capital and surplus of 

5

 

at
least $1,000,000,000 or (c) commercial paper in an aggregate amount of not more than $50,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any
State of the United States and rated at least "Prime-1" (or the then equivalent grade) by Moody's or "A-1" (or the then equivalent grade) by S&P. 

        "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time. 

        "CERCLIS" means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency. 

        "Certificate of Title Registrations" means the filings and registrations referred to in Section 4.1.3 of the Collateral
Sub-Agency Agreement with respect to Manufactured Home Rental Units, the ownership of which is evidenced by a certificate of title. 

        "CGMI" has the meaning specified in the recital of parties to this Agreement. 

        "Change of Control" means the occurrence of any of the following: (a) any Person (other than a Private Equity Investor) or two or
more Persons (other than Private Equity Investors) acting in concert shall have acquired and shall continue to have following the date hereof beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests of the Parent Guarantor (or other
securities convertible into such Voting Interests) representing 35% or more of the combined voting power of all Voting Interests of the Parent Guarantor; or (b) during any period of up to 24
consecutive months, commencing after the date of this Agreement, individuals who at the beginning of such 24-month period were directors of the Parent Guarantor shall cease for any reason
to constitute a majority of the board of directors of the Parent Guarantor unless Persons replacing such individuals were nominated by the board of directors of the Parent Guarantor or, in the case of
each such individual, the Person replacing such individual was nominated by the same institution that nominated the Person being replaced; or (c) any Person or two or more Persons acting in
concert shall have acquired and shall continue to have following the date hereof, by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in
its or their acquisition of the power to direct, directly or indirectly, the management or policies of the Parent Guarantor; or (d) the Parent Guarantor ceases to be the general partner of the
Borrower; or (e) the Parent Guarantor ceases to be the legal and beneficial owner of all of the general partnership interests in the Borrower; or (f) the Parent Guarantor shall create,
incur, assume or suffer to exist any Lien on the Equity Interests in the Borrower owned by it. 

        "Closing Date" means February 18, 2004 or such other date as may be agreed upon by the Borrower and the Administrative Agent. 

        "CNAI" has the meaning specified in the recital of parties to this Agreement. 

        "Collateral" means all "Collateral" and all "Mortgaged Property" referred to in the Collateral Documents and all other property that is or
is intended to be subject to any Lien in favor of the Collateral Agent for the benefit of the Secured Parties and will include, without limitation, all Borrowing Base Assets, whether or not any
filings or recordings have been made against or in respect of such Borrowing Base Assets prior to or after the occurrence of a Collateral Trigger Event. 

        "Collateral Agent" has the meaning specified in the recital of parties to this Agreement. 

        "Collateral Documents" means the Security Agreements, the Mortgages, the Collateral Sub-Agency Agreement and any other
agreement that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties. 

6

 

        "Collateral Sub-Agency Agreement" has the meaning specified in Section 3.01(a)(iv). 

        "Collateral Trigger Event" has the meaning specified in Section 5.01(j)(i). 

        "Commitment" means a Revolving Credit Commitment, a Swing Line Commitment or a Letter of Credit Commitment. 

        "Communications" has the meaning specified in Section 9.02(b). 

        "Company Debt Service Ratio" means, at any date of determination, the ratio of (a) Annualized EBITDA to (b) the sum of
(i) interest (including capitalized interest) payable on, and amortization of debt discount in respect of, all Debt for Borrowed Money plus
(ii) principal amounts of all Debt for Borrowed Money payable, in each case, of or by the Parent Guarantor and its Subsidiaries (without duplication) for the consecutive four fiscal quarters of
the Parent Guarantor most recently ended for which financial statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be;  provided, however, that:

        (A)  for
purposes of computing the Company Debt Service Ratio at any date of determination occurring during the fiscal quarter of the Parent Guarantor ending March 31,
2004, the amounts described in clauses (b)(i) and (b)(ii) above (as used in this definition only, the "Denominator Items") shall be deemed
to equal (1) the sum of such items for the fiscal quarter of the Parent Guarantor ending December 31, 2003, multiplied by (2) four, 

        (B)  for
purposes of calculating the Company Debt Service Ratio at any date of determination occurring during the fiscal quarter of the Parent Guarantor ending
June 30, 2004, the Denominator Items shall be deemed to equal (1) the sum of such items for the fiscal quarter of the Parent Guarantor ending March 31, 2004,  multiplied by (2) four,

        (C)  for
purposes of calculating the Company Debt Service Ratio at any date of determination occurring during the fiscal quarter of the Parent Guarantor ending
September 30, 2004, the Denominator Items shall be deemed to equal (1) the sum of such items for the two consecutive fiscal quarters of the Parent Guarantor ending June 30, 2004,  multiplied by (2) two, and 

        (D)  for
purposes of calculating the Company Debt Service Ratio at any date of determination occurring during the fiscal quarter of the Parent Guarantor ending
December 31, 2004, the Denominator Items shall be deemed to equal (1) the sum of such items for the three consecutive fiscal quarters of the Parent Guarantor ending September 30,
2004, multiplied by (2) 1.333; 

provided, further, that the calculations described in clause (A) above which pertain to the fiscal quarter of the Parent Guarantor ending
December 31, 2003 shall be made on a pro forma basis after giving effect to the IPO and the Recapitalization. 

        "Confidential Information" means information that any Loan Party furnishes to any Agent or any Lender Party in writing designated as
confidential, but does not include any such information that is or becomes generally available to the public or that is or becomes available to such Agent or such Lender Party from a source other than
the Loan Parties. 

        "Consent Request Date" has the meaning specified in Section 9.01(b). 

        "Consolidated" refers to the consolidation of accounts in accordance with GAAP. 

        "Consumer Finance Credit Facilities" means the credit agreements, dated on or about the date hereof, among Enspire Finance LLC and Merrill
Lynch Mortgage Capital, Inc., on the one hand, and ARC Dealership, Inc. and Merrill Lynch Mortgage Capital, Inc., on the other, consisting of (a) a loan funding facility to
fund the Borrower's retail home sales initiative and (b) a floorplan facility to fund the Borrower's retail home sales initiative, in each case, as amended from time to time to the extent
expressly permitted hereunder. 

7

  

        "Consumer Finance Receivable" means purchase money Debt owed to the Borrower or any of its Subsidiaries in respect of the sale of a
Manufactured Home Rental Unit to a resident or prospective resident of a Manufactured Home Community. 

        "Contingent Obligation" means, with respect to any Person, any Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b) the Obligation to
make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement or (c) any Obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for
the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount
of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith. 

        "Conversion", "Convert" and "Converted"
each refer to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.07(d), 2.09 or 2.10. 

        "Current Assets" of any Person means all assets of such Person that would, in accordance with GAAP, be classified as current assets of a
company conducting a business the same as or similar to that of such Person, after deducting adequate reserves in each case in which a reserve is proper in accordance with GAAP. 

        "Current Liabilities" of any Person means (a) all Debt of such Person that by its terms is payable on demand or matures within one
year after the date of its creation (excluding any Debt renewable or extendible, at the option of such Person, to a date more than one year from such date or arising under a revolving credit or
similar agreement that obligates the lender or lenders to extend credit during a
period of more than one year from such date) and (b) all other items (including taxes accrued as estimated) that in accordance with GAAP would be classified as current liabilities of such
Person. 

        "Customary Carve-Out Agreement" has the meaning specified in the definition of Non-Recourse Debt. 

        "Debt" of any Person means, without duplication for purposes of calculating financial ratios, (a) all Debt for Borrowed Money of
such Person, (b) all Obligations of such Person for the deferred purchase price of property or services other than trade payables incurred in the ordinary course of business and not overdue by
more than 60 days, (c) all Obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), (e) all Obligations of such Person as lessee under Capitalized Leases, (f) all Obligations of such 

8

 

Person
under acceptance, letter of credit or similar facilities, (g) all Obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity
Interests in such Person or any other Person (other than Preferred Interests that are issued by any Loan Party or Subsidiary thereof and classified as either equity or minority interests pursuant to
GAAP) or any warrants, rights or options to acquire such Equity Interests, (h) all Obligations of such Person in respect of Hedge Agreements, valued at the Agreement Value thereof,
(i) all Contingent Obligations of such Person and (j) all indebtedness and other payment Obligations referred to in clauses (a) through (i) above of another Person secured
by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment Obligations; provided,  however,
that in the case of the Parent Guarantor and its Subsidiaries "Debt" shall also include, without duplication, the JV Pro Rata Share of Debt for
each Joint Venture. 

        "Debt for Borrowed Money" of any Person means all items that, in accordance with GAAP, would be classified as indebtedness on a
Consolidated balance sheet of such Person, provided, that in the case of the Parent Guarantor and its Subsidiaries "Debt for Borrowed Money" shall also
include, without duplication, the JV Pro Rata Share of Debt for Borrowed Money for each Joint Venture. 

        "Default" means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given
or time elapse or both. 

        "Default Termination Notice" has the meaning specified in Section 2.01(b). 

        "Development Properties" means real estate assets acquired by the Borrower or any of its Subsidiaries for development into Manufactured
Home Communities that, in accordance with GAAP, would be classified as development properties on a Consolidated balance sheet of the Parent Guarantor and its Subsidiaries. 

        "Disclosed Litigation" has the meaning specified in Section 3.01(f). 

        "Domestic Lending Office" means, with respect to any Lender Party, the office of such Lender Party specified as its "Domestic Lending
Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party, as the case may be, or such other office of such Lender Party as
such Lender Party may from time to time specify to the Borrower and the Administrative Agent. 

        "EBITDA" means, for any period, (a) the sum of (i) net income (or net loss) (excluding gains (or losses) from extraordinary
and unusual items), (ii) interest expense, (iii) income tax expense, (iv) depreciation expense and (v) amortization expense, in each case of the Parent Guarantor and its
Subsidiaries determined on a Consolidated basis and in accordance with GAAP for such period, plus (b) with respect to each Joint Venture, the JV
Pro Rata Share of the sum of (i) net income (or net loss) (excluding gains (or losses) from extraordinary and unusual items), (ii) interest expense, (iii) income tax expense,
(iv) depreciation expense and (v) amortization expense of such Joint Venture, in each case determined on a Consolidated basis and in accordance with GAAP for such period. 

        "Effective Date" means the first date on which the conditions set forth in Article III shall be satisfied. 

        "Eligible Assignee" means (a) with respect to the Revolving Credit Facility, (i) a Lender; (ii) an Affiliate or Fund
Affiliate of a Lender; (iii) a commercial bank organized under the laws of the United States, or any State thereof, respectively, and having total assets in excess of $500,000,000;
(iv) a savings and loan association or savings bank organized under the laws of the United States 

9

 

or
any State thereof, and having total assets in excess of $500,000,000; (v) a commercial bank organized under the laws of any other country that is a member of the OECD or has concluded
special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow, or a political subdivision of any such country, and having total assets in excess
of $500,000,000, so long as such bank is acting through a branch or agency located in the United States; (vi) the central bank of any country that is a member of the OECD; (vii) a
finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and having total assets in excess of $500,000,000; and (viii) any other Person approved by the Administrative Agent and, unless a Default
has occurred and is continuing at the time any assignment is effected pursuant to Section 9.07, the Borrower, each such approval not to be unreasonably withheld or delayed, and (b) with
respect to the Letter of Credit Facility, a Person that is an Eligible Assignee under subclause (iii) or (v) of this definition and is approved by the Administrative Agent and, unless a
Default has occurred and is continuing at the time any assignment is effected pursuant to Section 9.07, approved by the Borrower, such approval not to be unreasonably withheld or delayed;  provided, however,
 that neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition. 

        "Environmental Action" means any action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, any Environmental Permit or Hazardous Material or arising
from alleged injury or threat to health, safety or the environment, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any governmental or regulatory authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive
relief. 

        "Environmental Law" means any Federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials. 

        "Environmental Permit" means any permit, approval, identification number, license or other authorization required under any Environmental
Law. 

        "Equity Interests" means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible
into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of
such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination. 

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. 

        "ERISA Affiliate" means any Person that for purposes of Title IV of ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of the Internal Revenue Code. 

10

 

        "ERISA Event" means (a)(i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect
to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA apply with
respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30 days; (b) the application for a minimum funding waiver with respect to a
Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to
a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances described in
Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined
in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the adoption of
an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee
to administer, such Plan. 

        "Eurocurrency Liabilities" has the meaning specified in Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time. 

        "Eurodollar Lending Office" means, with respect to any Lender Party, the office of such Lender Party specified as its "Eurodollar Lending
Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party (or, if no such office is specified, its Domestic Lending Office),
or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent. 

        "Eurodollar Rate" means, for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing, an interest rate
per annum equal to the rate per annum obtained by dividing (a) the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in U.S. dollars at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period for a period equal to such
Interest Period or, if for any reason such rate is not available, the average (rounded upward, if necessary, to the nearest 1/100 of 1%, if such average is not such a multiple) of the rate per annum
at which deposits in U.S. dollars are offered by the principal office of each of the Reference Banks in London, England to prime banks in the London interbank market at 11:00 A.M. (London time)
two Business Days before the first day of such Interest Period in an amount substantially equal to such Reference Bank's Eurodollar Rate Advance comprising part of such Borrowing to be outstanding
during such Interest Period (or, if such Reference Bank shall not have such a Eurodollar Rate Advance, U.S.$1,000,000) and for a period equal to such Interest Period by (b) a percentage equal
to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period. 

        "Eurodollar Rate Advance" means an Advance that bears interest as provided in Section 2.07(a)(ii). 

        "Eurodollar Rate Reserve Percentage" means, for any Interest Period for all Eurodollar Rate Advances comprising part of the same
Borrowing, the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New 

11

 

York
City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a term equal to such Interest Period. 

        "Events of Default" has the meaning specified in Section 6.01. 

        "Existing Debt" means Debt of each Loan Party and its Subsidiaries outstanding immediately before giving effect to the Recapitalization. 

        "Excluded Subsidiary" at any time means any direct or indirect Subsidiary of the Borrower that is unable to guaranty the Obligations of
the Loan Parties under the Loan Documents at such time because it is party to one or more Excluded Subsidiary Agreements that prohibit such Excluded Subsidiary from entering into the Guaranty set
forth in Article VII or a Guaranty Supplement. 

        "Excluded Subsidiary Agreement" for each Excluded Subsidiary means any agreement set forth opposite the name of such Excluded Subsidiary
on Schedule 4.01(y) hereto (as such Schedule may be supplemented from time to time pursuant to Sections 5.01(j)(ii) and 5.01(j)(iii)) and any agreement pursuant to which such Excluded
Subsidiary incurs Refinancing Debt with regard to the Debt, if any, incurred pursuant to such Excluded Subsidiary Agreement. 

        "Facility" means the Revolving Credit Facility, the Swing Line Facility or the Letter of Credit Facility. 

        "Facility Exposure" means, at any date of determination, the sum of the aggregate principal amount of all outstanding Advances and the
Available Amount under all outstanding Letters of Credit. 

        "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day
for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. 

        "Fee Letter" means the fee letter dated December 22, 2003 among the Borrower, CNAI and CGMI, as the same may be amended from time
to time. 

        "Fiscal Year" means a fiscal year of the Parent Guarantor and its Consolidated Subsidiaries ending on December 31 in any calendar
year. 

        "Fixed Charge Coverage Ratio" means, at any date of determination, the ratio of (a) Annualized EBITDA to (b) the sum of
(i) interest (including capitalized interest) payable on, and amortization of debt discount in respect of, all Debt for Borrowed Money plus
(ii) principal amounts of all Debt for Borrowed Money payable plus (iii) all dividends payable on any Preferred Interests  plus (iv) rentals
payable under leases of real or personal, or mixed, property, in each case, of or by the Parent Guarantor and its Subsidiaries
for the consecutive four fiscal quarters of the Parent Guarantor most recently ended for which financial statements are required to be delivered to the Lender Parties pursuant to
Section 5.03(b) or (c), as the case may be; provided, however, that: 

        (A)  for
purposes of computing the Fixed Charge Coverage Ratio at any date of determination occurring during the fiscal quarter of the Parent Guarantor ending
March 31, 2004, the amounts described in clauses (b)(i), (ii), (iii) and (iv) above (as used in this definition only, the "Denominator
Items") shall be deemed to equal (1) the sum of such items 

12

 

for
the fiscal quarter of the Parent Guarantor ending December 31, 2003, multiplied by (2) four, 

        (B)  for
purposes of calculating the Fixed Charge Coverage Ratio at any date of determination occurring during the fiscal quarter of the Parent Guarantor ending
June 30, 2004, the Denominator Items shall be deemed to equal (1) the sum of such items for the fiscal quarter of the Parent Guarantor ending March 31, 2004,  multiplied by (2) four,

        (C)  for
purposes of calculating the Fixed Charge Coverage Ratio at any date of determination occurring during the fiscal quarter of the Parent Guarantor ending
September 30, 2004, the Denominator Items shall be deemed to equal (1) the sum of such items for the two consecutive fiscal quarters of the Parent Guarantor ending June 30, 2004,  multiplied by (2) two, and 

        (D)  for
purposes of calculating the Fixed Charge Coverage Ratio at any date of determination occurring during the fiscal quarter of the Parent Guarantor ending
December 31, 2004, the Denominator Items shall be deemed to equal (1) the sum of such items for the three consecutive fiscal quarters of the Parent Guarantor ending September 30,
2004, multiplied by (2) 1.333; 

provided, further, that the calculations described in clause (A) above which pertain to the fiscal quarter of the Parent Guarantor ending
December 31, 2003 shall be made on a pro forma basis after giving effect to the IPO and the Recapitalization. 

        "Fund Affiliate" means, with respect to any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans
and is advised or managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor. 

        "Funds From Operations" means net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and
extraordinary and unusual items, plus depreciation and amortization, and after adjustments for unconsolidated Joint Ventures,  provided that the
determination of Funds From Operations shall be made on a pro forma basis after giving
effect to the IPO and the Recapitalization. Adjustments for unconsolidated Joint Ventures will be calculated to reflect funds from operations on the same basis. 

        "GAAP" has the meaning specified in Section 1.03. 

        "Good Faith Contest" means the contest of an item as to which: (a) such item is contested in good faith, by appropriate
proceedings, (b) reserves that are adequate are established with respect to such contested item in accordance with GAAP and (c) the failure to pay or comply with such contested item
during the period of such contest is not reasonably likely to result in a Material Adverse Effect. 

        "Guaranteed Obligations" has the meaning specified in Section 7.01. 

        "Guarantors" means the Parent Guarantor and the Subsidiary Guarantors. 

        "Guaranty" means the Guaranty by the Guarantors pursuant to Article VII, together with any and all Guaranty Supplements required to
be delivered pursuant to Section 5.01(j). 

        "Guaranty Supplement" means a supplement entered into by an Additional Guarantor in substantially the form of Exhibit C hereto. 

        "Hazardous Materials" means (a) petroleum or petroleum products, by-products or breakdown products, radioactive
materials, asbestos-containing materials, polychlorinated biphenyls, radon gas and mold and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law. 

13

 

        "Hedge Agreements" means interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other hedging agreements. 

        "Hedge Bank" means any Lender Party or an Affiliate of a Lender Party in its capacity as a party to a Secured Hedge Agreement. 

        "Indemnified Costs" has the meaning specified in Section 8.05(a). 

        "Indemnified Party" has the meaning specified in Section 7.06(a). 

        "Information Memorandum" means the information memorandum dated November, 2003 used by the Arrangers in connection with the syndication of
the Commitments. 

        "Initial Extension of Credit" means the earlier to occur of the initial Borrowing and the initial issuance of a Letter of Credit
hereunder. 

        "Initial Issuing Bank" has the meaning specified in the recital of parties to this Agreement. 

        "Initial Lenders" has the meaning specified in the recital of parties to this Agreement. 

        "Insufficiency" means, with respect to any Plan, the amount, if any, of its unfunded benefit liabilities, as defined in
Section 4001(a)(18) of ERISA. 

        "Interest Period" means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower
pursuant to the provisions below. The duration of each such Interest Period shall be one, two, three or six months, as the Borrower may, upon notice received by the Administrative Agent not later than
12:00 P.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that: 

        (a)   the
Borrower may not select any Interest Period with respect to any Eurodollar Rate Advance that ends after the Termination Date; 

        (b)   Interest
Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Borrowing shall be of the same duration; 

        (c)   whenever
the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on
the next succeeding Business Day; provided, however, that if such extension would cause the last day of such Interest Period to occur
in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and 

        (d)   whenever
the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar
month. 

        "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. 

        "Investment" in any Person means any loan or advance to such Person, any purchase or other acquisition of any Equity Interests or Debt or
the assets comprising a division or business unit or a substantial part or all of the business of such Person, any capital contribution to such Person or 

14

 

any
other direct or indirect investment in such Person, including, without limitation, any acquisition by way of a merger or consolidation and any arrangement pursuant to which the investor incurs
Debt of the types referred to in clause (i) or (j) of the definition of "Debt" in respect of such Person. 

        "IPO" means the initial public offering of common stock in the Parent Guarantor and its registration as a public company with the
Securities and Exchange Commission. 

        "Issuing Bank" means the Initial Issuing Bank and any other Lender approved as an Issuing Bank by the Administrative Agent and the
Borrower and any Eligible Assignee to which a Letter of Credit Commitment hereunder has been assigned pursuant to Section 9.07 so long as each such Lender or each such Eligible Assignee
expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as an Issuing Bank and notifies the
Administrative Agent of its Applicable Lending Office and the amount of its Letter of Credit Commitment (which information shall be recorded by the Administrative Agent in the Register) for so long as
such Initial Issuing Bank, Lender or Eligible Assignee, as the case may be, shall have a Letter of Credit Commitment. 

        "Joint Venture" means any joint venture (a) in which the Parent Guarantor or any of its Subsidiaries holds any Equity Interest,
(b) that is not a Subsidiary of the Parent Guarantor or any of its Subsidiaries and (c) the accounts of which would not appear on the Consolidated financial statements of the Parent
Guarantor. 

        "Joint Venture Assets" means, with respect to any Joint Venture at any time, the assets owned by such Joint Venture at such time. 

        "JV Pro Rata Share" means, with respect to any Joint Venture at any time, the fraction, expressed as a percentage, obtained by dividing
(a) the total book value of all Equity Interests in such Joint Venture held by the Parent Guarantor and any of its Subsidiaries by (b) the total book value of all outstanding Equity
Interests in such Joint Venture at such time. 

        "L/C Cash Collateral Account" means the account of the Borrower maintained with the Administrative Agent, in the name of the
Administrative Agent and under the sole control and dominion of the Administrative Agent and subject to the terms of this Agreement. 

        "L/C Related Documents" has the meaning specified in Section 2.04(c)(ii)(A). 

        "Lender Party" means any Lender, the Swing Line Bank or any Issuing Bank. 

        "Lenders" means the Initial Lenders and each Person that shall become a Lender hereunder pursuant to Section 9.07 for so long as
such Initial Lender or Person, as the case may be, shall be a party to this Agreement. 

        "Letter of Credit Advance" means an advance made by any Issuing Bank or any Lender pursuant to Section 2.03(c). 

        "Letter of Credit Agreement" has the meaning specified in Section 2.03(a). 

        "Letter of Credit Commitment" means, with respect to any Issuing Bank at any time, the amount set forth opposite such Issuing Bank's name
on Schedule I hereto under the caption "Letter of Credit Commitment" or, if such Issuing Bank has entered into one or more Assignment and Acceptances, set forth for such Issuing Bank in the
Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Issuing Bank's "Letter of Credit Commitment", as such amount may be reduced at or prior to such time pursuant
to Section 2.05. 

        "Letter of Credit Facility" means, at any time, an amount equal to the lesser of (a) the aggregate amount of the Issuing Banks'
Letter of Credit Commitments at such time, and (b) $5,000,000, as such amount may be reduced at or prior to such time pursuant to Section 2.05. 

15

  

        "Letters of Credit" has the meaning specified in Section 2.01(b). 

        "Leverage Ratio" means, at any date of determination, the ratio, expressed as a percentage, of (a) Consolidated Debt of the Parent
Guarantor and its Subsidiaries to (b) Total Asset Value, in each case as at the end of the most recently ended fiscal quarter of the Parent Guarantor for which financial statements are required
to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be. 

        "Lien" means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property. 

        "Limited Subsidiary" has the meaning specified in Section 5.01(j)(iii). 

        "Loan Documents" means (a) this Agreement, (b) the Notes, (c) the Fee Letter, (d) each Letter of Credit
Agreement, (e) each Guaranty Supplement, (f) the Collateral Documents and (g) each Secured Hedge Agreement, in each case, as amended. 

        "Loan Parties" means the Borrower and the Guarantors. 

        "Loan Value" means, with respect to any Borrowing Base Asset, an amount determined by the Administrative Agent equal to the Borrowing Base
Asset Value of such Borrowing Base Asset; provided, however, that to the extent the aggregate Loan Value
of such Borrowing Base Assets that are Manufactured Home Rental Units exceeds 35% of the sum of the aggregate Loan Values of all Borrowing Base Assets, such excess will not be counted for purposes of
determining the aggregate amount (or the sum) of the Loan Values. 

        "Manufactured Home Community" means all right, title and interest of the Borrower and each of its Subsidiaries in and to any land and any
improvements thereon comprising a community designed and improved with homesites for the placement of manufactured homes, together with all equipment, furniture, materials, supplies and personal
property in which such Person has an interest now or hereafter located on or used in connection with such manufactured home community, and all
appurtenances, additions, improvements, renewals, substitutions and replacements thereof now or hereafter acquired by such Person. 

        "Manufactured Home Rental Unit" means a manufactured home that is owned by ARC Housing LLC and is situated in a Manufactured Home
Community. 

        "Marketable Securities" means any of the following, to the extent owned by the Borrower or any of its Subsidiaries free and clear of all
Liens and having a maturity of not greater than 360 days from the date of acquisition thereof: (a) readily marketable direct obligations of the Government of the United States or any
agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) insured certificates of deposit of or time
deposits with any commercial bank that is a Lender or a member of the Federal Reserve System, issues (or the parent of which issues) commercial paper rated as described in clause (c), is
organized under the laws of the United States or any State thereof and has combined capital and surplus of at least $1,000,000,000 or (c) commercial paper in an aggregate amount of no more than
$50,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any State of the United States and rated at least "Prime-1" (or the then equivalent
grade) by Moody's or "A-1" (or the then equivalent grade) by S&P. 

        "Margin Stock" has the meaning specified in Regulation U. 

16

 

        "Material Adverse Change" means any material adverse change in the business, condition (financial or otherwise), results of operations or
prospects of the Borrower and the Guarantors, taken as a whole. 

        "Material Adverse Effect" means a material adverse effect on (a) the business, condition (financial or otherwise), operations or
prospects of the Borrower and the Guarantors, taken as a whole, (b) the rights and remedies of any Agent or any Lender Party under any Loan Document, (c) the ability of any Loan Party to
perform its Obligations under any Loan Document to which it is or is to be a party or (d) the value of the Collateral. 

        "Material Contract" means, with respect to any Loan Party, each contract to which such Loan Party is a party involving aggregate
consideration payable to or by such Loan Party in an amount of $5,000,000 or more per annum or otherwise material to the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and the Guarantors, taken as a whole. 

        "Material Debt" has the meaning specified in Section 6.01(e). 

        "Moody's" means Moody's Investors Services, Inc. and any successor thereto. 

        "Mortgage Policies" has the meaning specified in Section 5.01(s). 

        "Mortgages" has the meaning specified in Section 3.01(a)(iii). 

        "Multiemployer Plan" means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions. 

        "Multiple Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained
for employees of any Loan Party or any ERISA Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan
Party or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated. 

        "Net Operating Income" means, with respect to any Asset, the total rental revenue and other income from the operation of such Asset for
the fiscal quarter of the Parent Guarantor most recently ended for which financial statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case
may be, multiplied by four, minus (a) in the case of any Manufactured Home Rental Unit,
(i) all expenses and other proper charges incurred by the applicable Loan Party in connection with the operation and maintenance of such Manufactured Home Rental Unit during such fiscal period,
including, without limitation, management fees, repairs, real estate and chattel taxes and bad debt expenses, but before payment or provision for debt service charges, income taxes and depreciation,
amortization and other non-cash expenses, multiplied by (ii) four and (b) in the case of any Manufactured Home Community, all
expenses and other proper charges incurred in connection with the operation and maintenance of such Manufactured Home Community during the consecutive four fiscal quarters of the Parent Guarantor most
recently ended for which financial statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, including, without limitation,
management fees, repairs, real estate and chattel taxes and bad debt expenses, but before payment or provision for debt service charges, income taxes and depreciation, amortization and other
non-cash expenses, all as determined in accordance with GAAP, provided that there shall be no rent leveling adjustments made when computing
Net Operating Income. 

        "Non-Consenting Lender" has the meaning specified in Section 9.01(b). 

17

 

        "Non-Recourse Debt" means Debt for Borrowed Money with respect to which recourse for payment is limited to (a) any
building(s) or parcel(s) of real property or any related assets encumbered by a Lien securing such Debt for Borrowed Money and/or (b) the general credit of any Property-Level Subsidiary and/or
the Equity Interests therein and/or the general credit of the immediate parent entity of such Property-Level Subsidiary provided that such parent entity's assets consist solely of Equity Interests in
one or more Property-Level Subsidiaries, it being understood that the instruments governing such Debt may include customary carve-outs to such limited recourse (any such customary
carve-outs or agreements limited to such customary carve-outs, being a "Customary Carve-Out Agreement") such as, for
example, personal recourse to the Parent Guarantor or any Subsidiary of the Parent Guarantor for fraud, willful misrepresentation, misapplication or misappropriation of cash, waste, environmental
claims, damage to properties, non-payment of taxes or other liens despite the existence of sufficient cash flow, interference with the enforcement of loan documents upon maturity or
acceleration, violation of loan document prohibitions against voluntary or involuntary bankruptcy filings, transfer of properties or ownership interests therein and liabilities and other circumstances
customarily excluded by lenders from exculpation provisions and/or included in separate indemnification agreements in non-recourse financings of real estate. 

        "Note" means a promissory note of the Borrower payable to the order of any Lender, in substantially the form of Exhibit A hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Revolving Credit Advances, Swing Line Advances and Letter of Credit Advances made by such Lender. 

        "Notice" has the meaning specified in Section 9.02(c). 

        "Notice of Borrowing" has the meaning specified in Section 2.02(a). 

        "Notice of Issuance" has the meaning specified in Section 2.03(a). 

        "Notice of Renewal" has the meaning specified in Section 2.01(b). 

        "Notice of Swing Line Borrowing" has the meaning specified in Section 2.02(b). 

        "Notice of Termination" has the meaning specified in Section 2.01(b). 

        "NPL" means the National Priorities List under CERCLA. 

        "Obligation" means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(f). Without limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan Documents include (a) the obligation to pay principal, interest,
Letter of Credit commissions, charges, expenses, fees, attorneys' fees and disbursements, indemnities and other amounts payable by such Loan Party under any Loan Document and (b) the obligation
of such Loan Party to reimburse any amount in respect of any of the foregoing that any Lender Party, in its sole discretion, may elect to pay or advance on behalf of such Loan Party. 

        "OECD" means the Organization for Economic Cooperation and Development. 

        "Other Taxes" has the meaning specified in Section 2.12(b). 

        "Pad" means an individual homesite for the placement of a manufactured home within a Manufactured Home Community. 

18

 

        "Parent Guarantor" has the meaning specified in the recital of parties to this Agreement. 

        "Patriot Act" has the meaning specified in Section 9.12. 

        "PBGC" means the Pension Benefit Guaranty Corporation (or any successor). 

        "Permitted Liens" means: (a) Liens for taxes, assessments and governmental charges or levies not yet due and payable;
(b) Liens imposed by law, such as materialmen's, mechanics', carriers', workmen's and repairmen's Liens and other similar Liens arising in the ordinary course of business securing obligations
that (i) are not overdue for a period of more than 30 days and (ii) individually or together with all other Permitted Liens outstanding on any date of determination do not
materially adversely affect the use of the property to which they relate unless, in the case of (i) or (ii) above, such liens are the subject of a Good Faith Contest; (c) pledges
or deposits to secure obligations under workers' compensation laws or similar legislation or to secure public or statutory obligations; (d) easements, zoning restrictions, rights of way and
other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially adversely affect the use or value of such property for its present
purposes; (e) Tenancy Leases; and (f) with respect to real property encumbered by Non-Recourse Debt and not comprising Collateral as defined herein, easements, zoning
restrictions, rights of way and other encumbrances affecting such real property that are permitted to exist under the terms of the agreements governing such Non-Recourse Debt. 

        "Person" means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. 

        "Plan" means a Single Employer Plan or a Multiple Employer Plan. 

        "Platform" has the meaning specified in Section 9.02(b). 

        "Post Petition Interest" has the meaning specified in Section 7.07(c). 

        "Preferred Interests" means, with respect to any Person, Equity Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon any distribution of such Person's property and assets, whether by dividend or upon liquidation. 

        "Private Equity Investors" means Thomas H. Lee Equity Fund IV, L.P. and Affiliates thereof that hold at the relevant time of measurement
investments in the Parent Guarantor and are advised or managed by the same investment advisor as (or whose general partner or managing member is the entity that is the general partner of) Thomas H.
Lee Equity Fund IV, L.P. or by an Affiliate of such investment advisor. 

        "Property-Level Subsidiary" means any Subsidiary of the Borrower or any Joint Venture that holds a direct fee or leasehold interest in any
single building (or group of related buildings, including, without limitation, buildings pooled for purposes of a Non-Recourse Debt financing) or parcel (or group of related parcels,
including, without limitation, parcels pooled for purposes of a Non-Recourse Debt financing) of real property and related assets and not in any other building or parcel of real property. 

        "Proposed Borrowing Base Community" has the meaning specified in Section 5.01(j)(iv). 

        "Proposed Borrowing Base Unit" has the meaning specified in Section 5.01(j)(v). 

        "Pro Rata Share" of any amount means, with respect to any Lender at any time, the product of such amount  times a fraction the numerator of which is the amount of
such Lender's Revolving Credit Commitment at such time (or, if the Commitments shall have been
terminated pursuant to 

19

 

Section 2.05
or 6.01, such Lender's Revolving Credit Commitment as in effect immediately prior to such termination) and the denominator of which is the Revolving Credit Facility at such time
(or, if the Commitments shall have been terminated pursuant to Section 2.05 or 6.01, the Revolving Credit Facility as in effect immediately prior to such termination). 

        "Recapitalization" means the acquisition by the Company of a portfolio of manufactured home communities and related community assets from
Hometown America, L.L.C. in exchange for consideration of cash and assumption of debt and other obligations and the offering of 4,000,000 shares of the Company's Series A preferred stock, in
each case, all as more fully described in the Company's Form S-11 Registration Statement filed with the Securities and Exchange Commission in connection with the IPO and otherwise
on terms reasonably acceptable to the Administrative Agent. 

        "Redeemable" means, with respect to any Equity Interest, any Debt or any other right or Obligation, any such Equity Interest, Debt, right
or Obligation that (a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether by operation of a sinking fund or otherwise, or upon the occurrence of a condition
not solely within the control of the issuer or (b) is redeemable at the option of the holder. 

        "Reference Banks" means Citibank, N.A., Bank One, National Association and Wachovia Bank, National Association. 

        "Refinancing Debt" means, with respect to any Debt, any Debt extending the maturity of, or refunding or refinancing, in whole or in part,
such Debt, provided that (a) the terms of any Refinancing Debt, and of any agreement entered into and of any instrument issued in connection
therewith, do not provide for any Lien on any Borrowing Base Assets and are otherwise permitted by the Loan Documents, and (b) the material terms, taken as a whole, of any such Refinancing Debt
are no less favorable in any material respect to the Loan Parties or the Lender Parties than the terms governing the Debt being extended, refunded or refinanced (it being understood that the mere
extension of the maturity of any
Surviving Debt that is Non-Recourse Debt shall be deemed to qualify as Refinancing Debt hereunder). 

        "Register" has the meaning specified in Section 9.07(d). 

        "Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time. 

        "REIT" means a Person that is qualified to be treated for tax purposes as a real estate investment trust under Sections
856-860 of the Internal Revenue Code. 

        "Replacement Lender" has the meaning specified in Section 9.01(b). 

        "Required Lenders" means, at any time, Lenders owed or holding greater than 662/3% of the sum of (a) the aggregate
principal amount of the Advances outstanding at such time, (b) the aggregate Available Amount of all Letters of Credit outstanding at such time and (c) the aggregate Unused Revolving
Credit Commitments at such time. For purposes of this definition, the aggregate principal amount of Swing Line Advances owing to the Swing Line Bank and of Letter of Credit Advances owing to any
Issuing Bank and the Available Amount of each Letter of Credit shall be considered to be owed to the Revolving Lenders ratably in accordance with their respective Revolving Credit Commitments. 

        "Responsible Officer" means any officer of, or any officer of any general partner or managing member of, any Loan Party or any of its
Subsidiaries. 

        "Revolving Credit Advance" has the meaning specified in Section 2.01(a). 

20

 

        "Revolving Credit Commitment" means, (a) with respect to any Lender at any time, the amount set forth opposite such Lender's name
on Schedule I hereto under the caption "Revolving Credit Commitment" or (b) if such Lender has entered into one or more Assignment and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Lender's "Revolving Credit Commitment", as such amount may be reduced at or prior to such time pursuant to
Section 2.05. 

        "Revolving Credit Facility" means, at any time, the aggregate amount of the Lenders' Revolving Credit Commitments at such time. 

        "S&P" means Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc. and any successor
thereto. 

        "Sarbanes-Oxley" means the Sarbanes-Oxley Act of 2002, as amended. 

        "Secured Hedge Agreement" means any Hedge Agreement required or permitted under Article V that is entered into by and between any
Loan Party and any Hedge Bank and that is secured by the Collateral Documents. 

        "Secured Obligations" means, collectively, the "Secured Obligations" as defined in the Primary Security Agreement and the "Secured
Obligations" as defined in the ARC Housing Security Agreement. 

        "Secured Parties" means the Agents, the Lender Parties and the Hedge Banks. 

        "Securities Act" means the Securities Act of 1933, as amended to the date hereof and from time to time hereafter, and any successor
statute. 

        "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended to the date hereof and from time to time hereafter, and
any successor statute. 

        "Security Agreements" have the meaning specified in Section 3.01(a)(ii). 

        "Single Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any
ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated. 

        "Solvent" means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such
Person, on a going-concern basis, is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person, on a going-concern basis, is not less than the amount
that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time (including, without limitation, after taking into account appropriate discount factors for the present value of future contingent
liabilities), represents the amount that can reasonably be expected to become an actual or matured liability. 

        "Standby Letter of Credit" means any Letter of Credit issued under the Letter of Credit Facility, other than a Trade Letter of Credit. 

        "Subordinated Obligations" has the meaning specified in Section 7.07(a). 

21

 

        "Subsidiary" of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in
which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at
the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of
such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate, in each case, is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person's other Subsidiaries. 

        "Subsidiary Guarantor" has the meaning specified in the recital of parties to this Agreement. 

        "Supplemental Collateral Agent" has the meaning specified in Section 8.01(b). 

        "Surviving Debt" means Debt of each Loan Party and its Subsidiaries outstanding immediately before and after giving effect to the
Recapitalization. 

        "Swing Line Advance" means an advance made by (a) the Swing Line Bank pursuant to Section 2.01(c) or (b) any Lender
pursuant to Section 2.02(b). 

        "Swing Line Bank" means CNAI, in its capacity as the Lender of Swing Line Advances, and its successors and permitted assigns in such
capacity. 

        "Swing Line Borrowing" means a borrowing consisting of a Swing Line Advance made by the Swing Line Bank pursuant to Section 2.01(c)
or the Lenders pursuant to Section 2.02(b). 

        "Swing Line Commitment" means, with respect to the Swing Line Bank, the amount of the Swing Line Facility set forth in
Section 2.01(b), as such amount may be reduced at or prior to such time pursuant to Section 2.05. 

        "Swing Line Facility" has the meaning specified in Section 2.01(c). 

        "Taxes" has the meaning specified in Section 2.12(a). 

        "Tenancy Leases" means operating leases, subleases, licenses, occupancy agreements and
rights-of-use entered into by the Borrower or any of its Subsidiaries in its capacity as a lessor or a similar capacity in the ordinary course of business that do not
materially and adversely affect the use of the Manufactured Home Community or other real property encumbered thereby for its intended purpose. 

        "Termination Date" means the earlier of (a) the third anniversary of the Closing Date and (b) the date of termination in
whole of the Revolving Credit Commitments, the Letter of Credit Commitments and the Swing Line Commitment pursuant to Section 2.05 or 6.01. 

        "Total Asset Value" means, on any date of determination, the sum of the Asset Values for all Assets at such date  plus cash on hand and cash reserves of the
Borrower and its Subsidiaries and Cash Equivalents. 

        "Trade Letter of Credit" means any Letter of Credit that is issued under the Letter of Credit Facility for the benefit of a supplier of
inventory to the Borrower or any of its Subsidiaries to effect payment for such Inventory. 

        "Transfer" has the meaning specified in Section 5.02(e). 

        "Type" refers to the distinction between Advances bearing interest at the Base Rate and Advances bearing interest at the Eurodollar Rate. 

        "Unit Collateral Agent" has the meaning specified in the Collateral Sub-Agency Agreement. 

22

 

        "Unused Fee" has the meaning specified in Section 2.08(a). 

        "Unused Revolving Credit Commitment" means, with respect to any Lender at any time, (a) such Lender's Revolving Credit Commitment
at such time minus (b) the sum of (i) the aggregate principal amount of all Revolving Credit Advances, Swing Line Advances and Letter of
Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time plus (ii) such Lender's Pro Rata Share of
(A) the aggregate Available Amount of all Letters of Credit outstanding at such time, (B) the aggregate principal amount of all Letter of Credit Advances made by the Issuing Banks
pursuant to Section 2.03(c) and outstanding at such time and (C) the aggregate principal amount of all Swing Line Advances made by the Swing Line Bank pursuant to Section 2.01(c)
and outstanding at such time. 

        "Voting Interests" means shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency. 

        "Welfare Plan" means a welfare plan, as defined in Section 3(1) of ERISA, that is maintained for employees of any Loan Party or in
respect of which any Loan Party could have liability. 

        SECTION
1.02.    Computation of Time Periods; Other Definitional Provisions.    In this Agreement and the other Loan
Documents in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding". References in the Loan Documents to any agreement
or contract "as amended" shall mean and be a reference to such agreement or contract as amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with its terms. 

        SECTION
1.03.    Accounting Terms.    All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(g)
("GAAP"). 

23

   ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT  

        SECTION
2.01.    The Advances and the Letters of Credit.    (a) The Revolving Credit
Advances. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make advances (each a "Revolving Credit
Advance") to the Borrower from time to time on any Business Day during the period from the date hereof until the Termination Date in an amount for each such Advance not to
exceed such Lender's Unused Revolving Credit Commitment at such time. Each Borrowing shall be in an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and shall
consist of Revolving Credit Advances made simultaneously by the Lenders ratably according to their Revolving Credit Commitments. Within the limits of each Lender's Unused Revolving Credit Commitment
in effect from time to time and prior to the Termination Date, the Borrower may borrow under this Section 2.01(a), prepay pursuant to Section 2.06(a) and reborrow under this
Section 2.01(a). 

        (b)    Letters of Credit.    Each Issuing Bank severally agrees, on the terms and conditions hereinafter set forth, to
issue (or cause its Affiliate that is a commercial bank to issue on its behalf) letters of credit (the "Letters of Credit"), for the account of the
Borrower from time to time on any Business Day during the period from the date hereof until 60 days before the Termination Date in an aggregate Available Amount (i) for all Letters of
Credit not to exceed at any time the Letter of Credit Facility at such time, (ii) for all Letters of Credit issued by such Issuing Bank not to exceed such Issuing Bank's Letter of Credit
Commitment at such time, and (iii) for each such Letter of Credit not to exceed the Unused Revolving Credit Commitments of the Lenders at such time. No Letter of Credit shall have an expiration
date (including all rights of the Borrower or the beneficiary to require renewal) later than the earlier of 60 days before the Termination Date and (A) in the case of a Standby Letter of
Credit one year after the date of issuance thereof, but may by its terms be renewable annually upon notice (a "Notice of Renewal") given to the Issuing
Bank that issued such Standby Letter of Credit and the Administrative Agent on or prior to any date for notice of renewal set forth in such Letter of Credit but in any event at least three Business
Days prior to the date of the proposed renewal of such Standby Letter of Credit and upon fulfillment of the applicable conditions set forth in Article III unless such Issuing Bank has notified
the Borrower (with a copy to the Administrative Agent) on or prior to the date for notice of termination set forth in such Letter of Credit but in any event at least 30 Business Days prior to the date
of automatic renewal of its election not to renew such Standby Letter of Credit (a "Notice of Termination") and (B) in the case of a Trade Letter
of Credit, 60 days after the date of issuance thereof; provided, however, that the terms of each
Standby Letter of Credit that is automatically renewable annually shall (x) require the Issuing Bank that issued such Standby Letter of Credit to give the beneficiary named in such Standby
Letter of Credit notice of any Notice of Termination, (y) permit such beneficiary, upon receipt of such notice, to draw under such Standby Letter of Credit prior to the date such Standby Letter
of Credit otherwise would have been automatically renewed and (z) not permit the expiration date (after giving effect to any renewal) of such Standby Letter of Credit in any event to be
extended to a date later than 60 days before the Termination Date. If either a Notice of Renewal is not given by the Borrower or a Notice of Termination is given by the relevant Issuing Bank
pursuant to the immediately preceding sentence, such Standby Letter of Credit shall expire on the date on which it otherwise would have been automatically renewed; provided,
however, that even in the absence of receipt of a Notice of Renewal the relevant Issuing Bank may in its discretion, unless instructed to the contrary by the Administrative
Agent or the Borrower, deem that a Notice of Renewal had been timely delivered and in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under this Agreement.
Each Standby Letter of Credit shall contain a provision authorizing the Issuing Bank that issued such Letter of Credit to deliver to the beneficiary of such Letter of Credit, upon the occurrence and
during the continuance of an Event of Default, a notice (a "Default Termination Notice") terminating such Letter of Credit and giving such beneficiary
15 days to draw such Letter of Credit. Within the limits of the 

24

 

Letter
of Credit Facility, and subject to the limits referred to above, the Borrower may request the issuance of Letters of Credit under this Section 2.01(b), repay any Letter of Credit
Advances resulting from drawings thereunder pursuant to Section 2.03(c) and request the issuance of additional Letters of Credit under this Section 2.01(b). 

        (c)    The Swing Line Advances.    The Borrower may request the Swing Line Bank to make, and the Swing Line Bank
agrees to make, on the terms and conditions hereinafter set forth, Swing Line Advances to the Borrower from time to time on any Business Day during the period from the date hereof until the
Termination Date (i) in an aggregate amount not to exceed at any time outstanding $1,000,000 (the "Swing Line Facility") and (ii) in an
amount for each such Swing Line Borrowing not to exceed the
aggregate of the Unused Revolving Credit Commitments of the Lenders at such time. No Swing Line Advance shall be used for the purpose of funding the payment of principal of any other Swing Line
Advance. Each Swing Line Borrowing shall be in an amount of $250,000 or an integral multiple of $250,000 in excess thereof and shall be made as a Base Rate Advance. Within the limits of the Swing Line
Facility and within the limits referred to in clause (ii) above, the Borrower may borrow under this Section 2.01(c), repay pursuant to Section 2.04(b) or prepay pursuant to
Section 2.06(a) and reborrow under this Section 2.01(c). 

        SECTION
2.02.    Making the Advances.    (a) Except as otherwise provided in Section 2.03, each
Borrowing shall be made on notice, given not later than 12:00 P.M. (New York City time) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Eurodollar Rate Advances, or not later than 1:00 P.M. (New York City time) on the first Business Day prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances, by the Borrower to the Administrative Agent, which shall give to each Lender prompt notice thereof by telex or telecopier. Each such notice of a Borrowing (a
"Notice of Borrowing") shall be by telephone, confirmed immediately in writing, or telex or telecopier or e-mail, in each case in
substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate
amount of such Borrowing and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Advance. Each Lender shall, before 12:00 P.M.
(New York City time) on the date of such Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances and 1:00 P.M. (New York City time) on the date of such Borrowing in the case
of a Borrowing consisting of Base Rate Advances, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent's Account, in same day funds,
such Lender's ratable portion of such Borrowing in accordance with the respective Commitments of such Lender and the other Lenders. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower by crediting the Borrower's Account;  provided, however,
that the Administrative Agent shall first make a portion of such funds equal to the aggregate principal amount of any Swing Line
Advances and Letter of Credit Advances made by the Swing Line Bank or any Issuing Bank, as the case may be, and by any other Lender and outstanding on the date of such Borrowing, plus interest accrued
and unpaid thereon to and as of such date, available to the Swing Line Bank or such Issuing Bank, as the case may be, and such other Lenders for repayment of such Swing Line Advances and Letter of
Credit Advances. 

        (b)   Each
Swing Line Borrowing shall be made on notice, given not later than 12:00 P.M. (New York City time) on the date of the proposed Swing Line Borrowing, by the
Borrower to the Swing Line Bank and the Administrative Agent. Each such notice of a Swing Line Borrowing (a "Notice of Swing Line Borrowing") shall be
by telephone, confirmed immediately in writing or by telecopier or e-mail, in each case specifying therein the requested (i) date of such Borrowing, (ii) amount of such
Borrowing and (iii) maturity of such Borrowing (which maturity shall be no later than the earlier of (A) the seventh day after the requested date of such Borrowing and (B) the
Termination Date). The Swing Line Bank shall, before 1:00 P.M. (New York City time) on the date of such Swing Line Borrowing, 

25

 

make
the amount thereof available to the Administrative Agent at the Administrative Agent's Account, in same day funds. After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower by crediting the Borrower's Account. Upon written demand by the Swing
Line Bank, with a copy of such demand to the Administrative Agent, each other Lender shall purchase from the Swing Line Bank, and the Swing Line Bank shall sell and assign to each such other Lender,
such other Lender's Pro Rata Share of such outstanding Swing Line Advance as of the date of such demand, by making available for the account of its Applicable Lending Office to the Administrative
Agent for the account of the Swing Line Bank, by deposit to the Administrative Agent's Account, in same day funds, an amount equal to the portion of the outstanding principal amount of such Swing Line
Advance to be purchased by such Lender. The Borrower hereby agrees to each such sale and assignment. Each Lender agrees to purchase its Pro Rata Share of an outstanding Swing Line Advance on
(i) the Business Day on which demand therefor is made by the Swing Line Bank, provided that notice of such demand is given not later than
12:00 P.M. (New York City time) on such Business Day or (ii) the first Business Day next succeeding such demand if notice of such demand is given after such time. Upon any such
assignment by the Swing Line Bank to any other Lender of a portion of a Swing Line Advance, the Swing Line Bank represents and warrants to such other Lender that the Swing Line Bank is the legal and
beneficial owner of such interest being assigned by it, but makes no other representation or warranty and assumes no responsibility with respect to such Swing Line Advance, the Loan Documents or any
Loan Party. If and to the extent that any Lender shall not have so made the amount of such Swing Line Advance available to the Administrative Agent, such Lender agrees to pay to the Administrative
Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by the Swing Line Bank until the date such amount is paid to the Administrative Agent, at the
Federal Funds Rate. If such Lender shall pay to the Administrative Agent such amount for the account of the Swing Line Bank on any Business Day, such amount so paid in respect of principal shall
constitute a Swing Line Advance made by such Lender on such Business Day for purposes of this Agreement, and the outstanding principal amount of the Swing Line Advance made by the Swing Line Bank
shall be reduced by such amount on such Business Day. 

        (c)   Anything
in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for the initial Borrowing
hereunder or for any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant
to Section 2.07(d)(ii), 2.09 or 2.10 and (ii) there may not be more than 10 separate Borrowings outstanding at any time. 

        (d)   Each
Notice of Borrowing and Notice of Swing Line Borrowing shall be irrevocable and binding on the Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such
Advance, as a result of such failure, is not made on such date. 

        (e)   Unless
the Administrative Agent shall have received notice from a Lender prior to (x) the date of any Borrowing consisting of Eurodollar Rate Advances or
(y) 12:00 Noon (New York City time) on the date of any Borrowing consisting of Base Rate Advances that such Lender will not make available to the Administrative Agent such Lender's ratable
portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with subsection
(a) of this Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make available to 

26

 

the
Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the Administrative Agent, such Lender and the Borrower
severally agree to repay or pay to the Administrative Agent forthwith on demand such corresponding amount and to pay interest thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid or paid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable at such time under Section 2.07 to
Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall pay to the Administrative Agent such corresponding amount, such amount so
paid shall constitute such Lender's Advance as part of such Borrowing for all purposes. 

        (f)    The
failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make
its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing. 

        SECTION
2.03.    Issuance of and Drawings and Reimbursement Under Letters of
Credit.    (a) Request for Issuance. Each Letter of Credit shall be issued upon notice, given not later than
12:00 P.M. (New York City time) on the fifth Business Day prior to the date of the proposed issuance of such Letter of Credit, by the Borrower to any Issuing Bank, which shall give to the
Administrative Agent and each Lender prompt notice thereof by telex, telecopier or e-mail or by means of the Platform. Each such notice of issuance of a Letter of Credit (a
"Notice of Issuance") shall be by telephone, confirmed immediately in writing, telex, telecopier or e-mail, in each case specifying therein
the requested (i) date of such issuance (which shall be a Business Day), (ii) Available Amount of such Letter of Credit, (iii) expiration date of such Letter of Credit,
(iv) name and address of the beneficiary of such Letter of Credit and (v) form of such Letter of Credit, and shall be accompanied by such application and agreement for letter of credit
as such Issuing Bank may specify to the Borrower
for use in connection with such requested Letter of Credit (a "Letter of Credit Agreement"). If (y) the requested form of such Letter of Credit
is acceptable to such Issuing Bank in its sole discretion and (z) it has not received notice of objection to such issuance from the Required Lenders, such Issuing Bank will, upon fulfillment of
the applicable conditions set forth in Article III, make such Letter of Credit available to the Borrower at its office referred to in Section 9.02 or as otherwise agreed with the
Borrower in connection with such issuance. In the event and to the extent that the provisions of any Letter of Credit Agreement shall conflict with this Agreement, the provisions of this Agreement
shall govern. 

        (b)    Letter of Credit Reports.    Each Issuing Bank shall furnish (i) to each Lender on the first Business
Day of each month a written report summarizing issuance and expiration dates of Letters of Credit issued by such Issuing Bank during the preceding month and drawings during such month under all
Letters of Credit issued by such Issuing Bank and (ii) to the Administrative Agent and each Lender on the first Business Day of each calendar quarter a written report setting forth the average
daily aggregate Available Amount during the preceding calendar quarter of all Letters of Credit issued by such Issuing Bank. 

        (c)    Drawing and Reimbursement.    The payment by any Issuing Bank of a draft drawn under any Letter of Credit shall
constitute for all purposes of this Agreement the making by such Issuing Bank of a Letter of Credit Advance, which shall be a Base Rate Advance, in the amount of such draft. Upon written demand by any
Issuing Bank with an outstanding Letter of Credit Advance, with a copy of such demand to the Administrative Agent, each Lender shall purchase from such Issuing Bank, and such Issuing Bank shall sell
and assign to each such Lender, such Lender's Pro Rata Share of such outstanding Letter of Credit Advance as of the date of such purchase, by making available for the account of its Applicable Lending
Office to the Administrative Agent for the account of such Issuing Bank, by deposit to the Administrative Agent's Account, in same day funds, an amount equal to the portion of the outstanding
principal amount of such Letter of Credit Advance to be purchased by such Lender. Promptly after receipt thereof, the Administrative Agent shall transfer such funds to such 

27

 

Issuing
Bank. The Borrower hereby agrees to each such sale and assignment. Each Lender agrees to purchase its Pro Rata Share of an outstanding Letter of Credit Advance on (i) the Business Day
on which demand therefor is made by the Issuing Bank which made such Advance, provided that notice of such demand is given not later than
11:00 A.M. (New York City time) on such Business Day, or (ii) the first Business Day next succeeding such demand if notice of such demand is given after such time. Upon any such
assignment by an Issuing Bank to any Lender of a portion of a Letter of Credit Advance, such Issuing Bank represents and warrants to such other Lender that such Issuing Bank is the legal and
beneficial owner of such interest being assigned by it, free and clear of any liens, but makes no other representation or warranty and assumes no responsibility with respect to such Letter of Credit
Advance, the Loan Documents or any Loan Party. If and to the extent that any Lender shall not have so made the amount of such Letter of Credit Advance available to the Administrative Agent, such
Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by such Issuing Bank until the date such amount is
paid to the Administrative Agent, at the Federal Funds Rate for its account or the account of such Issuing Bank, as applicable. If such Lender shall pay to the Administrative Agent such amount for the
account of such Issuing Bank on any Business Day, such amount so paid in respect of principal shall constitute a Letter of Credit Advance made by such Lender on such Business Day for purposes of this
Agreement, and the outstanding principal amount of the Letter of Credit Advance made by such Issuing Bank shall be reduced by such amount on such Business Day. 

        (d)    Failure to Make Letter of Credit Advances.    The failure of any Lender to make the Letter of Credit Advance to
be made by it on the date specified in Section 2.03(c) shall not relieve any other Lender of its obligation hereunder to make its Letter of Credit Advance on such date, but no Lender shall be
responsible for the failure of any other Lender to make the Letter of Credit Advance to be made by such other Lender on such date. 

        SECTION
2.04.    Repayment of Advances.    (a) Revolving Credit
Advances. The Borrower shall repay to the Administrative Agent for the ratable account of the Lenders on the Termination Date the aggregate outstanding principal amount of the
Revolving Credit Advances then outstanding. 

        (b)    Swing Line Advances.    The Borrower shall repay to the Administrative Agent for the account of (i) the
Swing Line Bank and (ii) each other Lender that has made a Swing Line Advance by purchase from the
Swing Line Bank pursuant to Section 2.02(b), the outstanding principal amount of each Swing Line Advance made by each of them on the earlier of the maturity date specified in the applicable
Notice of Swing Line Borrowing (which maturity shall be no later than the seventh day after the requested date of such Swing Line Borrowing) and the Termination Date. 

        (c)    Letter of Credit Advances.    (i) The Borrower shall repay to the Administrative Agent for the account
of each Issuing Bank and each other Lender that has made a Letter of Credit Advance on the same day on which such Advance was made the outstanding principal amount of each Letter of Credit Advance
made by each of them. 

        (ii)   The
Obligations of the Borrower under this Agreement, any Letter of Credit Agreement and any other agreement or instrument relating to any Letter of Credit (and the
obligations of each Lender to reimburse the Issuing Bank with respect thereto) shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or instrument under all circumstances, including, without limitation, the following circumstances: 

        (A)  any
lack of validity or enforceability of any Loan Document, any Letter of Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto
(all of the foregoing being, collectively, the "L/C Related Documents"); 

28

 

        (B)  any
change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of the Borrower in respect of any L/C Related Document or
any other amendment or waiver of or any consent to departure from all or any of the L/C Related Documents; 

        (C)  the
existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of a Letter of
Credit (or any Persons for which any such beneficiary or any such transferee may be acting), any Issuing Bank or any other Person, whether in connection with the transactions contemplated by the L/C
Related Documents or any unrelated transaction; 

        (D)  any
statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; 

        (E)  payment
by any Issuing Bank under a Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of
Credit; 

        (F)  any
exchange, release or non-perfection of any Collateral or other collateral, or any release or amendment or waiver of or consent to departure from the
Guaranties or any other guarantee, for all or any of the Obligations of the Borrower in respect of the L/C Related Documents; or 

        (G)  any
other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including, without limitation, any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor; 

provided that, notwithstanding the foregoing, an Issuing Bank shall not be relieved of any liability it may otherwise have as a result of its gross
negligence or willful misconduct. 

        SECTION
2.05.    Termination or Reduction of the
Commitments.    (a) Optional. The Borrower may, upon at least three Business Days' notice to the Administrative
Agent, terminate in whole or reduce in part the unused portions of the Swing Line Facility, the Letter of Credit Facility and the Unused Revolving Credit Commitments; provided,
however, that each partial reduction of a Facility (i) shall be in an aggregate amount of $10,000,000 (or in the case of the Swing Line Facility, $250,000) or an
integral multiple of $1,000,000 (or in the case of the Swing Line Facility, $250,000) in excess thereof and (ii) shall be made ratably among the Lenders in accordance with their Commitments
with respect to such Facility. 

        (b)    Mandatory.    (i) The Letter of Credit Facility shall be permanently reduced from time to time on the
date of each reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Letter of Credit Facility exceeds the Revolving Credit Facility after giving effect to such
reduction of the Revolving Credit Facility. 

        (ii)   The
Swing Line Facility shall be permanently reduced from time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any, by which
the amount of the Swing Line Facility exceeds the Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility. 

        SECTION
2.06.    Prepayments.    (a) Optional. The Borrower
may, upon same day notice in the case of Base Rate Advances and two Business Days' notice in the case of Eurodollar Rate Advances, in each case to the Administrative Agent stating the proposed date
and aggregate principal amount of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding aggregate principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the aggregate principal amount prepaid; provided,
however, that (i) each partial prepayment shall be in an aggregate principal amount of 

29

 

$5,000,000
or an integral multiple of $1,000,000 in excess thereof or, if less, the amount of the Advances outstanding and (ii) if any prepayment of a Eurodollar Rate Advance is made on a date
other than the last day of an Interest Period for such Advance, the Borrower shall also pay any amounts owing pursuant to Section 9.04(c). 

        (b)    Mandatory.    (i) The Borrower shall, on each Business Day, prepay an aggregate principal amount of the
Revolving Credit Advances comprising part of the same Borrowings, the Swing Line Advances and the Letter of Credit Advances and deposit an amount in the L/C Cash Collateral Account in an amount equal
to the amount by which (A) the sum of the aggregate principal amount of (1) the Revolving Credit Advances then outstanding, (2) the Swing Line Advances then outstanding and
(3) the Letter of Credit Advances then outstanding plus the aggregate Available Amount of all Letters of Credit then outstanding exceeds
(B) the lesser of the Revolving Credit Facility and the sum of the Loan Values of the Borrowing Base Assets on such Business Day. 

         (ii)  The
Borrower shall, on each Business Day, pay to the Administrative Agent for deposit in the L/C Cash Collateral Account an amount sufficient to cause the aggregate
amount on deposit in the L/C Cash Collateral Account to equal the amount by which the aggregate Available Amount of all Letters of Credit then outstanding exceeds the Letter of Credit Facility on such
Business Day. 

        (iii)  Prepayments
of the Revolving Credit Facility made pursuant to clause (i) above shall be first applied to prepay
Letter of Credit Advances then outstanding until such Advances are paid in full, second applied to prepay Swing Line Advances then outstanding until
such Advances are paid in full, third applied to prepay Revolving Credit Advances then outstanding comprising part of the same Borrowings until such
Advances are paid in full and fourth deposited in the L/C Cash Collateral Account to cash collateralize 100% of the Available Amount of the Letters of
Credit then outstanding. Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account, such funds shall be applied to reimburse the relevant Issuing Bank
or Lenders, as applicable. 

        (iv)  All
prepayments under this subsection (b) shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid. 

        SECTION
2.07.    Interest.    (a) Scheduled Interest. The
Borrower shall pay interest on the unpaid principal amount of each Advance owing to each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates
per annum: 

          (i)  Base Rate Advances. During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to
the sum of (A) the Base Rate in effect from time to time plus (B) the Applicable Margin in effect from time to time, payable in arrears
quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full. 

         (ii)  Eurodollar Rate Advances. During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at
all times during each Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance plus
(B) the Applicable Margin in effect on the first day of such Interest Period, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than
three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid
in full. 

        (b)    Default Interest.    Upon the occurrence and during the continuance of a Default of the type described in
Section 6.01(a) or (f) or, at the election of the Administrative Agent or the Required Lenders, upon the occurrence and during the continuance of an Event of Default, the Borrower shall
pay interest on (i) the unpaid principal amount of each Advance owing to each Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above and on
demand, at a rate per annum 

30

 

equal
at all times to 2% per annum above the rate per annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest extent
permitted by law, the amount of any interest, fee or other amount payable under the Loan Documents that is not paid when due, from the date such amount shall be due until such amount shall be paid in
full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid, in the case
of interest, on the Type of Advance on which such interest has accrued pursuant to clause (a)(i) or (a)(ii) above and, in all other cases, on Base Rate Advances pursuant to
clause (a)(i) above. 

        (c)    Notice of Interest Period and Interest Rate.    Promptly after receipt of a Notice of Borrowing pursuant to
Section 2.02(a), a notice of Conversion pursuant to Section 2.09 or a notice of selection of an Interest Period pursuant to the terms of the definition of "Interest Period", the
Administrative Agent shall give notice to the Borrower and each Lender of the applicable Interest Period and the applicable interest rate determined by the Administrative Agent for purposes of
clause (a)(i) or (a)(ii) above, and the applicable rate, if any, furnished by each Reference Bank for the purpose of determining the applicable interest rate under
clause (a)(ii) above. 

        (d)    Interest Rate Determination.    (i) Each Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining each Eurodollar Rate. If any one or more of the Reference Banks shall not furnish such timely information to the Administrative Agent for the purpose
of determining any such interest rate, the Administrative Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks. 

         (ii)  If
Telerate Page 3750 is unavailable and fewer than two Reference Banks are able to furnish timely information to the Administrative Agent for determining the
Eurodollar Rate for any Eurodollar Rate Advances, 

        (A)  the
Administrative Agent shall forthwith notify the Borrower and the Lenders that the interest rate cannot be determined for such Eurodollar Rate Advances, 

        (B)  each
such Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance (or if such Advance is then a Base
Rate Advance, will continue as a Base Rate Advance), and 

        (C)  the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer exist. 

        SECTION
2.08.    Fees.    (a) Unused Fee. The Borrower shall
pay to the Administrative Agent for the account of the Lenders an unused commitment fee (the "Unused Fee"), from the date hereof in the case of each
Initial Lender and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Termination Date, payable in
arrears on the date of the initial Borrowing hereunder, and thereafter quarterly on the last day of each March, June, September and December, commencing March 31, 2004, and on the Termination
Date. The Unused Fee payable for the account of each Lender shall be calculated for each period for which the Unused Fee is payable on the average daily Unused Revolving Credit Commitment of such
Lender during such period at the rate of 1/2 of 1% per annum. 

        (b)    Letter of Credit Fees, Etc.    (i) The Borrower shall pay to the Administrative Agent for the account
of each Lender a commission, payable in arrears, (a) quarterly on the last day of each March, June, September and December, commencing March 31, 2004, and (b) on the earliest to
occur of the full drawing, expiration, termination or cancellation of any Letter of Credit, and (c) on the Termination Date, on such Lender's Pro Rata Share of the average daily aggregate
Available Amount during such quarter of all Letters of Credit outstanding from time to time at the rate per annum equal to the Applicable Margin for Eurodollar Rate Advances in effect from time to
time. 

31

 

         (ii)  The
Borrower shall pay to each Issuing Bank, for its own account, (A) a fronting fee for each Letter of Credit issued by such Issuing Bank in an amount equal to
0.125% of the Available Amount of such Letter of Credit on the date of issuance of such Letter of Credit, payable on such date and (B) such other commissions, issuance fees, transfer fees and
other fees and charges in connection with the issuance or administration of each Letter of Credit as the Borrower and such Issuing Bank shall agree. 

        (c)    Agents' Fees.    The Borrower shall pay to each Agent for its own account such fees as may from time to time be
agreed between the Borrower and such Agent. 

        SECTION
2.09.    Conversion of Advances.    (a) Optional. The
Borrower may on any Business Day, upon notice given to the Administrative Agent not later than 12:00 P.M. (New York City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.07 and 2.10, Convert all or any portion of the Advances of one Type comprising the same Borrowing into Advances of the other Type;  provided, however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for
such Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than the minimum amount specified in Section 2.02(c), no
Conversion of any Advances shall result in more separate Borrowings than permitted under Section 2.02(c) and each Conversion of Advances comprising part of the same Borrowing under any Facility
shall be made ratably among the Lenders in accordance with their Commitments under such Facility. Each such notice of Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for such Advances.
Each notice of Conversion shall be irrevocable and binding on the Borrower. 

        (b)    Mandatory.    (i) On the date on which the aggregate unpaid principal amount of Eurodollar Rate
Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $5,000,000, such Advances shall automatically Convert into Base Rate Advances. 

         (ii)  If
the Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition
of "Interest Period" in Section 1.01, the Administrative Agent will forthwith so notify the Borrower and the Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate Advance. 

        (iii)  Upon
the occurrence and during the continuance of any Event of Default, (y) each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (z) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended. 

        SECTION
2.10.    Increased Costs, Etc.    (a) If, due to either (i) the introduction of or any change
in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force
of law), there shall be any increase in the cost to any Lender Party of agreeing to make or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of issuing or
maintaining or participating in Letters of Credit or of agreeing to make or of making or maintaining Letter of Credit Advances (excluding, for purposes of this Section 2.10, any such increased
costs resulting from (y) Taxes or Other Taxes (as to which Section 2.12 shall govern) and (z) changes in the basis of taxation of overall net income or overall gross income by the
United States or by the foreign jurisdiction or state under the laws of which such Lender Party is organized or has its Applicable Lending Office or any political subdivision thereof), then the
Borrower shall from time to time, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party
additional amounts sufficient to compensate such Lender Party for 

32

 

such
increased cost; provided, however, that a Lender Party claiming additional amounts under this Section 2.10(a) agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost that may thereafter accrue and would not, in the reasonable judgment of such Lender Party, be otherwise disadvantageous to such Lender Party. A certificate as
to the amount of such increased cost, submitted to the Borrower by such Lender Party, shall be conclusive and binding for all purposes, absent manifest error. 

        (b)   If
any Lender Party determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or
not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such Lender Party's commitment to lend or to issue or participate in Letters of Credit hereunder and other commitments of such
type or the issuance or maintenance of or participation in the Letters of Credit (or similar contingent obligations), then, upon demand by such Lender Party or such corporation (with a copy of such
demand to the Administrative Agent), the Borrower shall pay to the Administrative Agent for the account of such Lender Party, from time to time as specified by such Lender Party, additional amounts
sufficient to compensate such Lender Party in the light of such circumstances, to the extent that such Lender Party reasonably determines such increase in capital to be allocable to the existence of
such Lender Party's commitment to lend or to issue or participate in Letters of Credit hereunder or to the issuance or maintenance of or participation in any Letters of Credit. A certificate as to
such amounts submitted to the Borrower by such Lender Party shall be conclusive and binding for all purposes, absent manifest error. 

        (c)   If,
with respect to any Eurodollar Rate Advances, the Required Lenders notify the Administrative Agent that the Eurodollar Rate for any Interest Period for such Advances
will not adequately reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Rate Advances for such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and
(ii) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lenders
have determined that the circumstances causing such suspension no longer exist. 

        (d)   Notwithstanding
any other provision of this Agreement, if the introduction of or any change in or in the interpretation of any law or regulation shall make it unlawful,
or any central bank or other governmental authority shall assert that it is unlawful, for any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof and demand therefor by such Lender to the Borrower through the Administrative Agent,
(i) each Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist;  provided, however,
 that, before making any such demand, such Lender agrees to use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Eurodollar Lending Office if the making of such a designation would allow such Lender or its Eurodollar Lending Office to continue to perform its
obligations to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances and would not, in the judgment of such Lender, be otherwise disadvantageous to such Lender. 

        SECTION
2.11.    Payments and Computations.    (a) The Borrower shall make each payment hereunder and under
the Notes, irrespective of any right of counterclaim or set-off (except as otherwise provided in Section 2.13), not later than 12:00 P.M. (New York City time) on the day when
due in U.S. 

33

 

dollars
to the Administrative Agent at the Administrative Agent's Account in same day funds, with payments being received by the Administrative Agent after such time being deemed to have been received
on the next succeeding Business Day. The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of principal,
interest, commitment fees or any other Obligation then payable hereunder and under the Notes to more than one Lender Party, to such Lender Parties for the account of their respective Applicable
Lending Offices ratably in accordance with the amounts of such respective Obligations then payable to such Lender Parties and (ii) if such payment by the Borrower is in respect of any
Obligation then payable hereunder to one Lender Party, to such Lender Party for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.
Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 9.07(d), from and after the effective date of such
Assignment and Acceptance, the Administrative Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender Party assignee thereunder, and the
parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves. 

        (b)   The
Borrower hereby authorizes each Lender Party and each of its Affiliates, if and to the extent payment owed to such Lender Party is not made when due hereunder or, in
the case of a Lender, under the Note held by such Lender, to charge from time to time, to the fullest extent permitted by law, against any or all of the Borrower's accounts with such Lender Party any
amount so due. 

        (c)   All
computations of interest based on the Base Rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and
all computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of fees and Letter of Credit commissions shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, fees or commissions are payable. Each
determination by the Administrative Agent of an interest rate, fee or commission hereunder shall be conclusive and binding for all purposes, absent manifest error. 

        (d)   Whenever
any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the computation of payment of interest or commitment fee, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall
be made on the next preceding Business Day. 

        (e)   Unless
the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to any Lender Party hereunder that the
Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each such Lender Party on such due date an amount equal to the amount then due such Lender Party. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each such Lender Party shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender Party
together with interest thereon, for each day from the date such amount is distributed to such Lender Party until the date such Lender Party repays such amount to the Administrative Agent, at the
Federal Funds Rate. 

34

  

        (f)    Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and
payable to the Agents and the Lender Parties under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied
by the Agents and the Lender Parties in the following order of priority: 

          (i)  first, to the payment of all of the fees, indemnification payments, costs and expenses that are due and payable to the
Agents (solely in their respective capacities as Agents) under or in respect of this Agreement and the other Loan Documents on such date, ratably based upon the respective aggregate amounts of all
such fees, indemnification payments, costs and expenses owing to the Agents on such date; 

         (ii)  second, to the payment of all of the fees, indemnification payments, costs and expenses that are due and payable to the
Issuing Banks (solely in their respective capacities as such) under or in respect of this Agreement and the other Loan Documents on such date, ratably based upon the respective aggregate amounts of
all such fees, indemnification payments, costs and expenses owing to the Issuing Banks on such date; 

        (iii)  third, to the payment of all of the indemnification payments, costs and expenses that are due and payable to the
Lenders under Section 9.04, Section 24 of the Primary Security Agreement, Section 20 of the ARC Housing Security Agreement and any similar section of any of the other Loan
Documents on such date, ratably based upon the respective aggregate amounts of all such indemnification payments, costs and expenses owing to the Lenders on such date; 

        (iv)  fourth, to the payment of all of the amounts that are due and payable to the Administrative Agent and the Lender Parties
under Sections 2.10 and 2.12 on such date, ratably based upon the respective aggregate amounts thereof owing to the Administrative Agent and the Lender Parties on such date; 

         (v)  fifth, to the payment of all of the fees that are due and payable to the Lenders under Section 2.08(a) on such
date, ratably based upon the respective aggregate Commitments of the Lenders under the Facilities on such date; 

        (vi)  sixth, to the payment of all of the accrued and unpaid interest on the Obligations of the Borrower under or in respect
of the Loan Documents that is due and payable to the Administrative Agent and the Lender Parties under Section 2.07(b) on such date, ratably based upon the respective aggregate amounts of all
such interest owing to the Administrative Agent and the Lender Parties on such date; 

       (vii)  seventh, to the payment of all of the accrued and unpaid interest on the Advances that is due and payable to the
Administrative Agent and the Lender Parties under Section 2.07(a) on such date, ratably based upon the respective aggregate amounts of all such interest owing to the Administrative Agent and
the Lender Parties on such date; 

      (viii)  eighth, to the payment of the principal amount of all of the outstanding Advances and any reimbursement obligations
that are due and payable to the Administrative Agent and the Lender Parties on such date, ratably based upon the respective aggregate amounts of all such principal and reimbursement obligations owing
to the Administrative Agent and the Lender Parties on such date, and to deposit into the L/C Cash Collateral Account any contingent reimbursement obligations in respect of outstanding Letters of
Credit to the extent required by Section 6.02; and 

        (ix)  ninth, to the payment of all other Obligations of the Loan Parties owing under or in respect of the Loan Documents that
are due and payable to the Administrative Agent and the other Secured Parties on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative
Agent and the other Secured Parties on such date. 

        SECTION
2.12.    Taxes.    (a) Any and all payments by the Borrower hereunder or under the Notes shall be
made, in accordance with Section 2.11, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender Party and the Administrative Agent, taxes 

35

 

that
are imposed on its overall net income by the United States and taxes that are imposed on its overall net income (and franchise or other similar taxes imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Lender Party or the Administrative Agent, as the case may be, is organized or any political subdivision thereof and, in the case of each Lender Party,
taxes that are imposed on its overall net income (and franchise or other similar taxes imposed in lieu thereof) by the state or foreign jurisdiction of such Lender Party's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or
under any Note to any Lender Party or the Administrative Agent, (i) the sum payable by the Borrower shall be increased as may be necessary so that after the Borrower and the Administrative
Agent have made all required deductions (including deductions applicable to additional sums payable under this Section 2.12) such Lender Party or the Administrative Agent, as the case may be,
receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make all such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in accordance with applicable law. 

        (b)   In
addition, the Borrower shall pay any present or future stamp, documentary, excise, property, intangible, mortgage recording or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Agreement, or any other Loan Document
(hereinafter referred to as "Other Taxes"). 

        (c)   The
Borrower shall indemnify each Lender Party and the Administrative Agent for and hold them harmless against the full amount of Taxes and Other Taxes, and for the full
amount of taxes of any kind imposed by any jurisdiction on amounts payable under this Section 2.12, imposed on or paid by such Lender Party or the Administrative Agent (as the case may be) and
any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such
Lender Party or the Administrative Agent (as the case may be) makes written demand therefor. 

        (d)   Within
30 days after the date of any payment of Taxes, the Borrower shall furnish to the Administrative Agent, at its address referred to in Section 9.02,
the original or a certified copy of a receipt evidencing such payment or, if such receipts are not obtainable, other evidence of such payments by the Borrower reasonably satisfactory to the
Administrative Agent. In the case of any payment hereunder or under the Notes by or on behalf of the Borrower through an account or branch outside the United States or by or on behalf of the Borrower
by a payor that is not a United States person, if the Borrower determines that no Taxes are payable in respect thereof, the Borrower shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the Administrative Agent stating that such payment is exempt from Taxes. For purposes of subsections (d) and
(e) of this Section 2.12, the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Internal Revenue Code. 

        (e)   Each
Lender Party organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in
the case of each Initial Lender Party, and on the date of the Assignment and Acceptance pursuant to which it becomes a Lender Party in the case of each other Lender Party, and from time to time
thereafter as requested in writing by the Borrower (but only so long thereafter as such Lender Party remains lawfully able to do so), provide each of the Administrative Agent and the Borrower with two
original Internal Revenue Service forms W8-ECI or W8-BEN, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Lender
Party is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or the Notes. If the forms provided by a Lender Party at the time such Lender
Party first becomes a party to this Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and
until such Lender Party provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such forms; provided, however,

36

 

that
if, at the effective date of the Assignment and Acceptance pursuant to which a Lender Party becomes a party to this Agreement, the Lender Party assignor was entitled to payments under subsection
(a) of this Section 2.12 in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender Party assignee on such
date. If any form or document referred to in this subsection (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on
the date hereof by Internal Revenue Service form W8-ECI or W8-BEN, that the applicable Lender Party reasonably considers to be confidential, such Lender Party shall give notice
thereof to the Borrower and shall not be obligated to include in such form or document such confidential information. Upon the request of the Borrower, any Lender that is a United States person and is
not an exempt recipient for U.S. backup withholding purposes shall deliver to the Borrower two copies of Internal Revenue Service form W-9 (or any successor form). 

        (f)    For
any period with respect to which a Lender Party has failed to provide the Borrower with the appropriate form described in subsection (e) above
(other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided or if such form
otherwise is not required under subsection (e) above), such Lender Party shall not be entitled to indemnification under subsection (a) or (c) of this Section 2.12 with
respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender Party become subject to Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take such steps as such Lender Party shall reasonably request to assist such Lender Party to recover such Taxes. 

        (g)   Any
Lender Party claiming any additional amounts payable pursuant to this Section 2.12 agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to change the jurisdiction of its Eurodollar Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional
amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender Party, be otherwise disadvantageous to such Lender Party. 

        (h)   If
any Lender Party or the Administrative Agent receives a refund of Taxes or Other Taxes paid by the Borrower or for which the Borrower has indemnified any Lender Party
or the Administrative Agent, as the case may be, pursuant to this Section 2.12, then such Lender Party or the Administrative Agent, as applicable, shall pay such amount, net of any expenses
incurred by such Lender Party or the Administrative Agent, to the Borrower within 30 days of the receipt of such Taxes or Other Taxes. Notwithstanding the foregoing, (i) the Borrower
shall not be entitled to review the tax records or financial information of any Lender Party or the Administrative Agent and (ii) neither the Administrative Agent nor any Lender Party shall
have any obligation to pursue (and no Loan Party shall have any right to assert) any refund of Taxes or Other Taxes that may be paid by the Borrower. 

        SECTION
2.13.    Sharing of Payments, Etc.    If any Lender Party shall obtain at any time any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or otherwise, other than as a result of an assignment pursuant to Section 9.07) (a) on account of
Obligations due and payable to such Lender Party hereunder and under the Notes at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due
and payable to such Lender Party at such time to (ii) the aggregate amount of the Obligations due and payable to all Lender Parties hereunder and under the Notes at such time) of payments on
account of the Obligations due and payable to all Lender Parties hereunder and under the Notes at such time obtained by all the Lender Parties at such time or (b) on account of Obligations
owing (but not due and payable) to such Lender Party hereunder and under the Notes at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations
owing to such Lender Party at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the Notes at such time) of
payments on account of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the Notes at such time obtained by all of the Lender Parties at such time, such Lender
Party shall forthwith purchase from the other Lender Parties such interests or participating interests in the Obligations due and payable or owing to them, as 

37

 

the
case may be, as shall be necessary to cause such purchasing Lender Party to share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender Party, such purchase from each other Lender Party shall be rescinded and such other Lender Party
shall repay to the purchasing Lender Party the purchase price to the extent of such Lender Party's ratable share (according to the proportion of (i) the purchase price paid to such Lender Party
to (ii) the aggregate purchase price paid to all Lender Parties) of such recovery together with an amount equal to such Lender Party's ratable share (according to the proportion of
(i) the amount of such other Lender Party's required repayment to (ii) the total amount so recovered from the purchasing Lender Party) of any interest or other amount paid or payable by
the purchasing Lender Party in respect of the total amount so recovered. The Borrower agrees that any Lender Party so purchasing an interest or participating interest from another Lender Party
pursuant to this Section 2.13 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender Party were the direct creditor of the Borrower in the amount of such interest or participating interest, as the case may be. 

        SECTION
2.14.    Use of Proceeds.    The proceeds of the Advances and issuances of Letters of Credit shall be
available (and the Borrower agrees that it shall use such proceeds and Letters of Credit) solely for the acquisition and development of Manufactured Home Communities and Manufactured Home Rental
Units, to refinance Debt, to make capital expenditures and the general corporate purposes of the Borrower and its Subsidiaries. 

        SECTION
2.15.    Evidence of Debt.    (a) Each Lender Party shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to such Lender Party resulting from each Advance owing to such Lender Party from time to time, including the amounts of
principal and interest payable and paid to such Lender Party from time to time hereunder. The Borrower agrees that upon notice by any Lender Party to the Borrower (with a copy of such notice to the
Administrative Agent) to the effect that a promissory note or other evidence of indebtedness is required or appropriate in order for such Lender Party to evidence (whether for purposes of pledge,
enforcement or otherwise) the Advances owing to, or to be made by, such Lender Party, the Borrower shall promptly execute and deliver to such Lender Party, with a copy to the Administrative Agent, a
Note, in substantially the form of Exhibit A hereto, payable to the order of such Lender Party in a principal amount equal to the Revolving Credit Commitment of such Lender Party. All
references to Notes in the Loan Documents shall mean Notes, if any, to the extent issued hereunder. 

        (b)   The
Register maintained by the Administrative Agent pursuant to Section 9.07(d) shall include a control account, and a subsidiary account for each Lender Party,
in which accounts (taken together) shall be recorded (i) the date and amount of each Borrowing made hereunder, the Type of Advances comprising such Borrowing and, if appropriate, the Interest
Period applicable thereto, (ii) the terms of each Assignment and Acceptance delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender Party hereunder, and (iv) the amount of any sum received by the Administrative Agent from the Borrower hereunder and each Lender Party's share
thereof. 

        (c)   Entries
made in good faith by the Administrative Agent in the Register pursuant to subsection (b) above, and by each Lender Party in its account or accounts
pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register, each Lender Party and, in the case of such account or accounts, such Lender Party, under this Agreement, absent manifest error;  provided, however, that the failure of the Administrative Agent or such Lender Party to make an entry, or any finding that an entry is incorrect, in the
Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrower under this Agreement. 

38

 

 
 

ARTICLE III
  CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT    
    

        SECTION
3.01.    Conditions Precedent to Initial Extension of Credit.    The obligation of each Lender to make an
Advance or of any Issuing Bank to issue a Letter of Credit on the occasion of the Initial
Extension of Credit hereunder is subject to the satisfaction of the following conditions precedent before or concurrently with the Initial Extension of Credit: 

        (a)   The
Administrative Agent shall have received on or before the day of the Initial Extension of Credit the following, each dated such day (unless otherwise specified), in
form and substance satisfactory to the Administrative Agent (unless otherwise specified) and (except for the Notes) in sufficient copies for each Lender Party: 

          (i)  A
Note payable to the order of each Lender that has requested a Note prior to the Effective Date. 

         (ii)  Security
agreements in substantially the form of (x) Exhibit F-1 hereto (the "Primary Security
Agreement"), duly executed by each Loan Party that owns Borrowing Base Assets, and (y) Exhibit F-2 hereto (the "ARC Housing
Security Agreement"), duly executed by ARC Housing LLC (the Primary Security Agreement and the ARC Housing Security Agreement, together with each other security agreement and
security agreement supplement delivered pursuant to Section 5.01(j), in each case as amended, being the "Security Agreements"), together with: 

        (A)  acknowledgment
copies of proper financing statements, duly filed on or before the day of the Initial Extension of Credit under the Uniform Commercial Code of all
jurisdictions that the Collateral Agent may deem necessary or desirable in order to perfect and protect the first priority liens and security interests created under the Collateral Documents, covering
the Collateral described therein, 

        (B)  completed
requests for information, dated on or before the date of the Initial Extension of Credit, listing all effective financing statements filed in the jurisdictions
referred to in clause (A) above and in such other jurisdictions specified by the Administrative Agent that name any Loan Party as debtor, together with copies of such other financing
statements, 

        (C)  evidence
of the completion of all other recordings and filings of or with respect to the Security Agreements that the Collateral Agent may deem necessary or desirable in
order to perfect and protect the Liens created thereby, 

        (D)  evidence
of the insurance required by the terms of the Security Agreements, 

        (E)  duly
executed account control agreements in respect of the concentration accounts referred to in Section 5.01(r) in form and substance satisfactory to the
Collateral Agent, and 

        (F)  evidence
that all other action that the Collateral Agent may deem necessary in order to perfect and protect the first priority liens and security interests created under
the Security Agreements has been
taken (including, without limitation, receipt of duly executed payoff letters, UCC termination statements and landlords' and bailees' waiver and consent agreements). 

        (iii)  Deeds
of trust, trust deeds and mortgages, in substantially the form of Exhibit G hereto (with such changes as may be required to account for local law matters
and otherwise reasonably satisfactory in form and substance to the Collateral Agent) and covering all Manufactured Home Communities that could constitute Borrowing Base Assets (together with each
other deed of trust, trust deed and mortgage delivered pursuant to Section 5.01(j), in 

39

 

each
case as amended, the "Mortgages"), duly executed by the appropriate Loan Party, together with: 

        (A)  evidence
that counterparts of the Mortgages have been duly executed, acknowledged and delivered on or before the day of the Initial Extension of Credit and are in form
suitable for filing or recording in all filing or recording offices that the Collateral Agent may deem necessary or desirable in order to create a valid first and subsisting Lien on the property
described therein in favor of the Collateral Agent for the benefit of the Secured Parties and that all required affidavits, tax forms and filings pertaining to any applicable documentary stamp,
intangible and mortgage recordation taxes have been executed and delivered by all appropriate parties and are in form suitable for filing with all applicable governmental authorities, 

        (B)  with
respect to all Manufactured Home Communities that could constitute Borrowing Base Assets, engineering, soils, environmental and other similar reports as to the
properties described in the Mortgages, in form and substance and from professional firms reasonably acceptable to the Collateral Agent, 

        (C)  evidence
of the insurance required by the terms of the Mortgages, 

        (D)  an
Appraisal of each Manufactured Home Community that could constitute a Borrowing Base Asset, and 

        (E)  such
other consents, agreements and confirmations of lessors and third parties as the Administrative Agent may reasonably deem necessary and evidence that all other
action that the Collateral Agent may deem necessary in order to create valid first and subsisting Liens on the property described in the Mortgages has been taken. 

        (iv)  A
collateral sub-agency and services agreement in substantially the form of Exhibit I hereto, duly executed by the Borrower, ARC Housing LLC, the
Collateral Agent and the Unit Collateral Agent (as the same may be amended, supplemented or otherwise modified from time to time, the "Collateral Sub-Agency
Agreement"), together with evidence of delivery by ARC
Housing LLC to the Unit Collateral Agent of such original powers of attorney as the Collateral Agent or the Unit Collateral Agent may deem necessary or desirable to authorize the Unit Collateral Agent
to execute and file all documents necessary under the applicable provisions of the Uniform Commercial Code and any applicable certificate of title statutes in effect in any applicable jurisdiction to
create and perfect first priority security interests in all Manufactured Home Rental Units that could constitute Borrowing Base Assets. 

         (v)  Certified
copies of the resolutions of the Board of Directors, general partner or managing member, as applicable, of each Loan Party and of each general partner or
managing member (if any) of each Loan Party approving the transactions contemplated by the Loan Documents and each Loan Document to which it is or is to be a party, and of all documents evidencing
other necessary corporate action and governmental and other third party approvals and consents, if any, with respect to the transactions under the Loan Documents and each Loan Document to which it is
or is to be a party. 

        (vi)  A
copy of a certificate of the Secretary of State (or equivalent authority) of the jurisdiction of incorporation, organization or formation of each Loan Party and of
each general partner or managing member (if any) of each Loan Party, dated reasonably near the Closing Date, certifying, if and to the extent such certification is generally available for entities of
the type of such Loan Party, (A) as to a true and correct copy of the charter, certificate of limited partnership, limited liability company agreement or other organizational document of such
Loan Party, general partner or managing member, as the case may be, and each amendment thereto on file in such Secretary's office and (B) that (1) such amendments are the only amendments
to the charter, certificate of limited partnership, limited liability company agreement or other organizational document, as applicable, of such Loan Party, general partner or managing member, as the
case may be, on file in such Secretary's office and (2) such Loan Party, general partner or managing member, as the case may be, has paid 

40

 

all
franchise taxes to the date of such certificate and (C) such Loan Party, general partner or managing member, as the case may be, is duly incorporated, organized or formed and in good
standing or presently subsisting under the laws of the jurisdiction of its incorporation, organization or formation. 

       (vii)  A
copy of a certificate of the Secretary of State (or equivalent authority) of each jurisdiction in which any Loan Party or any general partner or managing member of a
Loan Party owns or leases property or in which the conduct of its business requires it to qualify or be licensed as a foreign corporation except where the failure to so qualify or be licensed would
not be reasonably likely to have a Material Adverse Effect, dated reasonably near (but prior to) the Closing Date, stating, with respect to each such Loan Party, general partner or managing member,
that such Loan Party, general partner or managing member, as the case may be, is duly qualified and in good standing as a foreign corporation, limited partnership or limited liability company in such
State and has filed all annual reports required to be filed to the date of such certificate. 

      (viii)  A
certificate of each Loan Party and of each general partner or managing member (if any) of each Loan Party, signed on behalf of such Loan Party, general partner or
managing member, as applicable, by its President or a Vice President and its Secretary or any Assistant Secretary (or those of its general partner or managing member, if applicable), dated the Closing
Date (the statements made in which certificate shall be true on and as of the date of the Initial Extension of Credit), certifying as to (A) the
absence of any amendments to the constitutive documents of such Loan Party, general partner or managing member, as applicable, since the date of the certificate referred to in
Section 3.01(a)(vi), (B) a true and correct copy of the bylaws, operating agreement, partnership agreement or other governing document of such Loan Party, general partner or managing
member, as applicable, as in effect on the date on which the resolutions referred to in Section 3.01(a)(v) were adopted and on the date of the Initial Extension of Credit, (C) the
due incorporation, organization or formation and good standing or valid existence of such Loan Party, general partner or managing member, as applicable, as a corporation, limited liability company or
partnership organized under the laws of the jurisdiction of its incorporation, organization or formation and the absence of any proceeding for the dissolution or liquidation of such Loan Party,
general partner or managing member, as applicable, (D) the truth of the representations and warranties contained in the Loan Documents as though made on and as of the date of the Initial
Extension of Credit and (E) the absence of any event occurring and continuing, or resulting from the Initial Extension of Credit, that constitutes a Default. 

        (ix)  A
certificate of the Secretary or an Assistant Secretary of each Loan Party (or Responsible Officer of the general partner or managing member of any Loan Party) and of
each general partner or managing member (if any) of each Loan Party certifying the names and true signatures of the officers of such Loan Party, or of the general partner or managing member of such
Loan Party, authorized to sign each Loan Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder. 

         (x)  Such
financial, business and other information regarding each Loan Party and its Subsidiaries as the Lender Parties shall have requested, including, without limitation,
information as to possible contingent liabilities, tax matters, environmental matters, obligations under Plans, Multiemployer Plans and Welfare Plans, collective bargaining agreements and other
arrangements with employees, audited annual financial statements for the year ending December 31, 2002, interim financial statements dated the end of the most recent fiscal quarter for which
financial statements are available (or, in the event the Lender Parties' due diligence review reveals material changes since such financial statements, as of a later date within 45 days of the
day of the Initial Extension of Credit). 

        (xi)  Evidence
of insurance naming the Administrative Agent as loss payee and additional insured with such responsible and reputable insurance companies or associations, and
in such amounts and covering such risks, as is satisfactory to the Lender Parties. 

41

 

       (xii)  An
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Loan Parties, in substantially the form of Exhibit E-1 hereto and as
to such other matters as any Lender Party through the Administrative Agent may reasonably request. 

      (xiii)  An
opinion of Venable LLP, Maryland counsel for the Loan Parties, in substantially the form of Exhibit E-2 hereto and as to such other matters as
any Lender Party through the Administrative Agent may reasonably request. 

      (xiv)  An
opinion of Brownstein Hyatt & Farber, P.C., Colorado counsel for the Loan Parties, in substantially the form of Exhibit E-3 hereto and as
to such other matters as any Lender Party through the Administrative Agent may reasonably request. 

       (xv)  An
opinion of Holland & Hart LLP, Wyoming counsel for the Loan Parties, in substantially the form of Exhibit E-4 hereto and as to such other
matters as any Lender Party through the Administrative Agent may reasonably request. 

      (xvi)  An
opinion of Richards, Layton & Finger, P.A., Delaware counsel for the Loan Parties, in substantially the form of Exhibit E-5 hereto and as
to such other matters as any Lender Party through the Administrative Agent may reasonably request. 

     (xvii)  An
opinion of Shearman & Sterling LLP, counsel for the Administrative Agent, in form and substance satisfactory to the Administrative Agent. 

    (xviii)  A
Notice of Borrowing or Notice of Issuance, as applicable, and a Borrowing Base Certificate relating to the Initial Extension of Credit. 

        (b)   The
Lender Parties shall be satisfied with the corporate and legal structure and capitalization of each Loan Party and its Subsidiaries, including the terms and
conditions of the charter and bylaws, operating agreement, partnership agreement or other governing document of each of them. 

        (c)   The
Lender Parties shall be satisfied that all Existing Debt, other than Surviving Debt, has been prepaid, redeemed or defeased in full or otherwise satisfied and
extinguished and that all Surviving Debt shall be on terms and conditions satisfactory to the Lender Parties. 

        (d)   (i) The
Recapitalization and the IPO shall have been, substantially concurrently herewith, consummated, (ii) the Parent Guarantor shall have received net
cash proceeds from the IPO in an amount not less than $350,000,000, and (iii) the common shares of the Parent Guarantor shall have been listed on the New York Stock Exchange. 

        (e)   Before
and after giving effect to the transactions contemplated by the Loan Documents, there shall have occurred no Material Adverse Change since December 31,
2002. 

        (f)    There
shall exist no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries pending or threatened before any court,
governmental agency or arbitrator that (i) would be reasonably likely to have a Material Adverse Effect other than the matters described on Schedule 4.01(f) hereto (the
"Disclosed Litigation") or (ii) purports to affect the legality, validity or
enforceability of any Loan Document or the consummation of the transactions contemplated thereby, and there shall have been no adverse change in the status, or financial effect on any Loan Party or
any of its Subsidiaries, of the Disclosed Litigation from that described on Schedule 4.01(f) hereto. 

        (g)   All
governmental and third party consents and approvals necessary in connection with the transactions contemplated by the Loan Documents shall have been obtained
(without the imposition of any conditions that are not acceptable to the Lender Parties) and shall remain in effect, and no law or regulation shall be applicable in the reasonable judgment of the
Lender Parties that restrains, prevents or imposes materially adverse conditions upon the transactions contemplated by the Loan Documents. 

        (h)   The
Borrower shall have entered into the Hedge Agreements required under Section 5.01(n). 

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        (i)    The
Borrower shall have delivered each of the items required under Section 5.01(s). 

        (j)    The
Borrower shall have paid all accrued fees of the Administrative Agent and the Lender Parties and all reasonable, out-of-pocket expenses of
the Administrative Agent (including the reasonable fees and expenses of counsel to the Administrative Agent). 

        SECTION
3.02.    Conditions Precedent to Each Borrowing, Issuance and Renewal.    The obligation of each Lender to
make an Advance (other than a Letter of Credit Advance made by an Issuing Bank or a Lender pursuant to Section 2.03(c) and a Swing Line Advance made by a Lender pursuant to
Section 2.02(b)) on the occasion of each Borrowing (including the initial Borrowing), the obligation of each Issuing Bank to issue a Letter of Credit (including the initial issuance) or renew a
Letter of Credit and the right of the Borrower to request a Swing Line Borrowing shall be subject to the further conditions precedent that on the date of such Borrowing, issuance or renewal
(a) the following statements shall be true and the Administrative Agent shall have received for the account of such Lender, the Swing Line Bank or such Issuing Bank (x) a Borrowing Base
Certificate dated the date of such Borrowing, issuance or renewal and (y) a certificate signed by a duly authorized officer of the Borrower, dated the date of such Borrowing, issuance or
renewal, stating that: 

          (i)  the
representations and warranties contained in each Loan Document are true and correct on and as of such date, before and after giving effect to (A) such
Borrowing, issuance or renewal and (B) in the case of any Borrowing or issuance or renewal, the application of the proceeds therefrom, as though made on and as of such date; 

         (ii)  no
Default has occurred and is continuing, or would result from (A) such Borrowing, issuance or renewal or (B) in the case of any Borrowing or issuance or
renewal, from the application of the proceeds therefrom; and 

        (iii)  for
each Revolving Credit Advance or Swing Line Advance made by the Swing Line Bank or issuance or renewal of any Letter of Credit, (A) the sum of the Loan
Values of the Borrowing Base Assets equals or exceeds the aggregate principal amount of the Revolving Credit Advances plus Swing Line Advances  plus Letter
of Credit Advances to be outstanding plus the aggregate Available Amount of all Letters of
Credit to be outstanding after giving effect to such Advance or issuance or renewal, respectively, and (B) before and after giving effect to such Advance, issuance or renewal, the Parent
Guarantor shall be in compliance with the covenants contained in Section 5.04, together with supporting information in form satisfactory to the Administrative Agent showing the computations
used in determining compliance with such covenants; 

and
(b) the Administrative Agent shall have received such other approvals, opinions or documents as any Lender Party through the Administrative Agent may reasonably request. 

        SECTION
3.03.    Determinations Under Section 3.01.    For purposes of determining compliance with the
conditions specified in Section 3.01, each Lender Party shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to
be consented to or approved by or acceptable or satisfactory to the Lender Parties unless an officer of the Administrative Agent responsible for the transactions contemplated by the Loan Documents
shall have received notice from such Lender Party prior to the Initial Extension of Credit specifying its objection thereto and, if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender Party's ratable portion of such Borrowing. 

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ARTICLE IV
  REPRESENTATIONS AND WARRANTIES    
    

        SECTION
4.01.    Representations and Warranties of the Loan Parties.    Each Loan Party represents and warrants as
follows: 

        (a)   Each
Loan Party and each of its Subsidiaries and each general partner or managing member, if any, of each Loan Party (i) is a corporation, limited liability
company or partnership duly incorporated, organized or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, (ii) is
duly qualified and in good standing as a foreign corporation, limited liability company or partnership in each other jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so qualify or be licensed would not be reasonably likely to have a Material Adverse Effect and (iii) has all
requisite corporate, limited liability company or partnership power and authority (including, without limitation, all governmental licenses, permits and other approvals) to own or lease and operate
its properties and to carry on its business as now conducted and as proposed to be conducted. Since December 31, 1998, which is the date from which the Parent Guarantor first qualified as a
REIT under the Internal Revenue Code, the Parent Guarantor has at all times maintained its qualification as a REIT under the Internal Revenue Code. All of the outstanding Equity Interests in the
Parent Guarantor have been validly issued, are fully paid and non-assessable, all of the general partner Equity Interests in the Borrower are owned by the Parent Guarantor, and all such
general partner Equity Interests are owned by the Parent Guarantor free and clear of all Liens. 

        (b)   Set
forth on Schedule 4.01(b) hereto is a complete and accurate list of all Subsidiaries of each Loan Party, showing as of the date hereof (as to each such
Subsidiary) the jurisdiction of its incorporation, organization or formation, the number of shares (or the equivalent thereof) of each class of its Equity Interests authorized, and the number
outstanding, on the date hereof and the percentage of each such class of its Equity Interests owned (directly or indirectly) by such Loan Party and the number of shares (or the equivalent thereof)
covered by all outstanding options, warrants, rights of conversion or purchase and similar rights at the date hereof. All of the outstanding Equity Interests in each Loan Party's Subsidiaries has been
validly issued, are fully paid and non-assessable and are owned by such Loan Party or one or more of its Subsidiaries free and clear of all Liens. 

        (c)   The
execution and delivery by each Loan Party and of each general partner or managing member (if any) of each Loan Party of each Loan Document to which it is or is to be
a party, and the performance of its obligations thereunder, and the consummation of the IPO, the Recapitalization and the transactions contemplated by the Loan Documents, are within the corporate,
limited liability company or partnership powers of such Loan Party, general partner or managing member, have been duly authorized by all necessary corporate, limited liability company or partnership
action, and do not (i) contravene the charter or bylaws, operating agreement, partnership agreement or other governing document of such Loan Party, general partner or managing member,
(ii) violate any law, rule, regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or constitute a default or require any payment to be made under, any material contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties, or any general partner or managing member of any Loan
Party or (iv) except for the Liens created under the Loan Documents, result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party
or any of its Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach
of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which would be reasonably likely to have a Material Adverse Effect. 

44

 

        (d)   No
authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for
(i) the due execution, delivery, recordation, filing or performance by any Loan Party or any general partner or managing member of any Loan Party of any Loan Document to which it is or is to be
a party or for the consummation of the IPO, the Recapitalization or the transactions contemplated by the Loan Documents, (ii) the grant by any Loan Party (or the general partner or managing
member of such Loan Party) of the Liens granted by it pursuant to the Collateral Documents, (iii) other than filing such Mortgages and Certificate of Title Registrations not required to be
filed hereunder or under the other Loan Documents, the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof) or, (iv) the
exercise by the Administrative Agent, the Collateral Agent or any Lender Party of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents,
except for the authorizations, approvals, actions, notices and filings listed on Schedule 4.01(d) hereto, all of which have been duly obtained, taken, given or made and are in full force and
effect. 

        (e)   This
Agreement has been, and each other Loan Document when delivered hereunder will have been, duly executed and delivered by each Loan Party and general partner or
managing member (if any) of each Loan Party party thereto. This Agreement is, and each other Loan Document when delivered hereunder will be, the legal, valid and binding obligation of each Loan Party
and general partner or managing member (if any) of each Loan Party party thereto, enforceable against such Loan Party, general partner or managing member, as the case may be, in accordance with its
terms. 

        (f)    There
is no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries or any general partner or managing member (if any)
of any Loan Party, including any Environmental Action, pending or threatened before any court, governmental agency or arbitrator that
(i) would be reasonably likely to have a Material Adverse Effect (other than the Disclosed Litigation) or (ii) purports to affect the legality, validity or enforceability of any Loan
Document or the consummation of the IPO, the Recapitalization or the transactions contemplated by the Loan Documents, and there has been no adverse change in the status, or financial effect on any
Loan Party or any of its Subsidiaries or any general partner or managing member (if any) of any Loan Party, of the Disclosed Litigation from that described on Schedule 4.01(f) hereto. 

        (g)   The
Consolidated balance sheets of the Parent Guarantor and its Subsidiaries as at December 31, 2002 and the related Consolidated statements of income and
Consolidated statement of cash flows of the Parent Guarantor and its Subsidiaries for the fiscal year then ended, accompanied by an unqualified opinion of PricewaterhouseCoopers LLP, independent
public accountants, and the Consolidated balance sheets of the Parent Guarantor and its Subsidiaries as at September 30, 2003, and the related Consolidated statements of income and Consolidated
statement of cash flows of the Parent Guarantor and its Subsidiaries for the nine months then ended, duly certified by the Chief Financial Officer of the Parent Guarantor, copies of which have been
furnished to each Lender Party, fairly present, subject, in the case of said balance sheet as at September 30, 2003, and said statements of income and cash flows for the nine months then ended,
to year-end audit adjustments, the Consolidated financial condition of the Parent Guarantor and its Subsidiaries as at such dates and the Consolidated results of operations of the Parent
Guarantor and its Subsidiaries for the periods ended on such dates, all in accordance with generally accepted accounting principles applied on a consistent basis, and since December 31, 2002,
there has been no Material Adverse Change. 

        (h)   The
Consolidated forecasted balance sheets, statements of income and statements of cash flows of the Parent Guarantor and its Subsidiaries delivered to the Lender
Parties pursuant to Section 3.01(a)(x) or 5.03 were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing
at the time of delivery of such forecasts, and represented, at the time of delivery, the Parent Guarantor's best estimate of its future financial performance. 

45

 

        (i)    Neither
the Information Memorandum nor any other information, exhibit or report furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender
Party in connection with the negotiation and syndication of the Loan Documents or pursuant to the terms of the Loan Documents contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein not misleading. 

        (j)    No
Loan Party is engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance or drawings under any
Letter of Credit will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock. 

        (k)   Neither
any Loan Party nor any of its Subsidiaries nor any general partner or managing member of any Loan Party, as applicable, is an "investment company", or an
"affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended. Without limiting the generality of the foregoing, each Loan Party
and each of its Subsidiaries and each general partner or managing member of any Loan Party, as applicable: (i) is primarily engaged, directly or through a wholly-owned subsidiary or
subsidiaries, in a business or businesses other than that of (A) investing, reinvesting, owning, holding or trading in securities or (B) issuing face-amount certificates of
the installment type; (ii) is not engaged in, does not propose to engage in and does not hold itself out as being engaged in the business of (A) investing, reinvesting, owning, holding
or trading in securities or (B) issuing face-amount certificates of the installment type; (iii) does not own or propose to acquire investment securities (as defined in the
Investment Company Act of 1940, as amended) having a value exceeding forty percent (40%) of the value of such company's total assets (exclusive of government securities and cash items) on an
unconsolidated basis; (iv) has not in the past been engaged in the business of issuing face-amount certificates of the installment type; and (v) does not have any outstanding
face-amount certificates of the installment type. Neither any Loan Party nor any of its Subsidiaries nor any general partner or managing member of any Loan Party or Subsidiary of a Loan
Party that is a partnership or a limited liability company, as applicable, is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", as such terms are defined in the Public Utility Holding Company Act of 1935, as amended. Neither the making of any Advances, nor the issuance of any
Letters of Credit, nor the application of the proceeds or repayment thereof by the Borrower, nor the consummation of the other transactions contemplated by the Loan Documents, will violate any
provision of any such Act or any rule, regulation or order of the Securities and Exchange Commission thereunder. 

        (l)    Neither
any Loan Party nor any of its Subsidiaries is a party to any indenture, loan or credit agreement or any lease or other agreement or instrument or subject to any
charter, corporate, partnership, membership or other governing restriction that would be reasonably likely to have a Material Adverse Effect. 

        (m)  Other
than filing such Mortgages and Certificate of Title Registrations not required to be filed hereunder or under the other Loan Documents, as applicable, all filings
and other actions necessary to perfect and protect the security interest in the Collateral created under the Collateral Documents have been duly made or taken and are in full force and effect, and the
Collateral Documents create in favor of the Administrative Agent for the benefit of the Secured Parties a valid and, together with such filings and other actions, perfected first priority security
interest in the Collateral, securing the payment of the Secured Obligations, and all filings and other actions necessary or desirable to perfect and protect such security interest have been duly
taken. The Loan Parties are the legal and beneficial owners of the Collateral free and clear of any Lien, except for the liens and security interests created or permitted under the Loan Documents. 

        (n)   Set
forth on Schedule 4.01(n) hereto is a complete and accurate list of all Existing Debt (other than Surviving Debt), showing as of the date hereof the obligor
and the principal amount outstanding thereunder. 

46

 

        (o)   Set
forth on Schedule 4.01(o) hereto is a complete and accurate list of all Surviving Debt, showing as of the date hereof the obligor and the principal amount
outstanding thereunder, the maturity date thereof and the amortization schedule therefor. 

        (p)   Set
forth on Schedule 4.01(p) hereto is a complete and accurate list of all Liens on the property or assets of any Loan Party or any of its Subsidiaries, showing
as of the date hereof the lienholder thereof, the principal amount of the obligations secured thereby and the property or assets of such Loan Party or such Subsidiary subject thereto. 

        (q)   Set
forth on Schedule 4.01(q) hereto is a complete and accurate list of all Manufactured Home Communities owned by any Loan Party or any of its Subsidiaries,
showing as of the date hereof the street address, county or other relevant jurisdiction, state, record owner and book value thereof. Each Loan Party or such Subsidiary has good, marketable and
insurable fee simple title to such Manufactured Home Communities, free and clear of all Liens, other than Liens created or permitted by the Loan Documents. 

        (r)   Set
forth on Schedule 4.01(r) hereto is a complete and accurate list of all leases of real property under which any Loan Party or any of its Subsidiaries is the
lessee, showing as of the date hereof the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof. Each such lease is the legal,
valid and binding obligation of the lessor thereof, enforceable in accordance with its terms. 

        (s)   (i) Except
as otherwise set forth on Part I of Schedule 4.01(s) hereto, the operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable Environmental Laws and Environmental Permits, all past non-compliance with such Environmental Laws and Environmental
Permits has been resolved without material ongoing obligations or costs, and to the knowledge of each Loan Party or any of its Subsidiaries, no circumstances exist that could be reasonably likely to
(A) form the basis of an Environmental Action against any Loan Party or any of its Subsidiaries or any of their properties that could have a Material Adverse Effect or (B) cause any such
property to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law. 

         (ii)  Except
as otherwise set forth on Part II of Schedule 4.01(s) hereto, none of the properties currently or to the knowledge of each Loan Party and any of
its Subsidiaries, formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or to the knowledge of each Loan Party and any of its Subsidiaries, proposed for listing on the NPL
or on the CERCLIS or any analogous foreign, state or local list or is adjacent to any such property; any and all asbestos or asbestos-containing material on any property currently owned or operated by
any Loan Party or any of its Subsidiaries is in good condition and is arranged in accordance with Environmental Laws; and Hazardous Materials have not been released, discharged or disposed of on any
property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries in a manner that could reasonably be expected to result in a material liability. 

        (iii)  Except
as otherwise set forth on Part III of Schedule 4.01(s) hereto, neither any Loan Party nor any of its Subsidiaries is undertaking, and has not
completed, either individually or together with other
potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site,
location or operation, either voluntarily or pursuant to the order of any governmental or regulatory authority or the requirements of any Environmental Law; and all Hazardous Materials generated,
used, treated, handled or stored at, or transported to or from, any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries have been disposed of in a manner not
reasonably expected to result in material liability to any Loan Party or any of its Subsidiaries. 

        (t)    Each
Loan Party and each Subsidiary is in compliance with the requirements of all Laws (including, without limitation, the Securities Act and the Securities Exchange
Act, and the applicable rules and regulations thereunder, state securities law and "Blue Sky" laws) applicable to 

47

 

it
and its business, where the failure to so comply could reasonably be expected to have a Material Adverse Effect. 

        (u)   Neither
the business nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that could be reasonably likely to have a Material Adverse
Effect. 

        (v)   Each
Loan Party has, independently and without reliance upon the Administrative Agent or any other Lender Party and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement (and in the case of the Guarantors, to give the guaranty under this Agreement) and each other Loan Document
to which it is or is to be a party, and each Loan Party has established adequate means of obtaining from each other Loan Party on a continuing basis information pertaining to, and is now and on a
continuing basis will be completely familiar with, the business, condition (financial or otherwise), operations, performance, properties and prospects of such other Loan Party. 

        (w)  Each
Loan Party is individually and together with its Subsidiaries, Solvent. 

        (x)   Except
as set forth on Schedule 4.01(x), no Loan Party has made any extension of credit to any of its directors or executive officers in contravention of any
applicable restrictions set forth in Section 402(a) of Sarbanes-Oxley. 

        (y)   Set
forth on Schedule 4.01(y) hereto is a complete and accurate list of all Excluded Subsidiaries and their respective Excluded Subsidiary Agreements existing on
the date hereof. 

        (z)   (i) Set
forth on Schedule 4.01(z) hereto is a complete and accurate list of all Plans and Welfare Plans. 

         (ii)  No
ERISA Event has occurred or is reasonably expected to occur with respect to any Plan that has resulted in or is reasonably expected to result in a material liability
of any Loan Party or any ERISA Affiliate. 

        (iii)  Schedule B
(Actuarial Information) to the most recent annual report (Form 5500 Series) for each Plan, copies of which have been filed with the Internal
Revenue Service and furnished to the Lender Parties, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no
material adverse change in such funding status. 

        (iv)  Neither
any Loan Party nor any ERISA Affiliate has contributed to or been required to contribute to any Multiemployer Plan within the past six years prior to the date
hereof. 

         (v)  Neither
any Loan Party nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA. 

 
 

ARTICLE V
  COVENANTS OF THE LOAN PARTIES    
    

        SECTION
5.01.    Affirmative Covenants.    So long as any Advance or any other Obligation of any Loan Party under any
Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, each Loan Party will: 

        (a)    Compliance with Laws, Etc.    Comply, and cause each of its Subsidiaries to comply, in all material respects,
with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970; provided, however, that the failure to comply with the provisions of this Section 5.01(a) shall not
constitute a default 

48

 

hereunder
so long as such non-compliance is the subject of a Good Faith Contest or would not reasonably be expected to have a Material Adverse Effect. 

        (b)    Payment of Taxes, Etc.    Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before
the same shall become delinquent, (i) all material taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all lawful claims that, if unpaid,
might by law become a Lien upon its property; provided, however, that neither the Loan Parties nor any of their Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable against its other creditors. 

        (c)    Compliance with Environmental Laws.    Comply, and cause each of its Subsidiaries and all lessees and other
Persons operating or occupying its properties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; obtain and renew and cause each of its Subsidiaries
to obtain and renew all Environmental Permits necessary for its operations and properties; and conduct, and cause each of its Subsidiaries to conduct, any investigation, study, sampling and testing,
and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all
Environmental Laws; provided, however, that neither the Loan Parties nor any of their Subsidiaries shall be required to undertake any such cleanup,
removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to
such circumstances. 

        (d)    Maintenance of Insurance.    Maintain, and cause each of its Subsidiaries to maintain, insurance (including,
with respect to the Borrowing Base Assets, the insurance required by the terms of the Mortgages) with responsible and reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which such Loan Party or such Subsidiaries operate. 

        (e)    Preservation of Partnership or Corporate Existence, Etc.    Preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its existence (corporate or otherwise), rights (charter and statutory), permits, licenses, approvals and franchises except, in the case of Subsidiaries of the
Borrower only, if in the reasonable business judgment of such Subsidiary it is in its best economic interest not to preserve and maintain such rights or franchises and such failure to preserve and
maintain such rights or franchises is not reasonably likely to result in a Material Adverse Effect (it being understood that the foregoing shall not prohibit, or be violated as a result of, any
transactions by or involving any Loan Party or Subsidiary thereof otherwise permitted under Section 5.02(d) or (e) below). 

        (f)    Visitation Rights.    At any reasonable time and from time to time, permit any of the Agents or Lender Parties,
or any Agent or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, any Loan Party and any of its Subsidiaries,
and to discuss the affairs, finances and accounts of any Loan Party and any of its Subsidiaries with any of their general partners, managing members, officers or directors and with their independent
certified public accountants. 

        (g)    Keeping of Books.    Keep, and cause each of its Subsidiaries to keep, proper books of record and account, in
which full and correct entries shall be made of all financial transactions and the assets and business of such Loan Party and each such Subsidiary in accordance with GAAP. 

        (h)    Maintenance of Properties, Etc.    Maintain and preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted and will from time to time make or cause to
be made all appropriate repairs, renewals and replacement thereof except where failure to do so would not have a Material Adverse Effect. 

49

 

        (i)    Transactions with Affiliates and Excluded Subsidiaries.    Conduct, and cause each of its Subsidiaries to
conduct, all transactions otherwise permitted under the Loan Documents with any of their Affiliates (other than any Loan Party) or with any Excluded Subsidiary on terms that are fair and reasonable
and no less favorable to such Loan Party or such Subsidiary than it would obtain in a comparable arm's-length transaction with a Person not an Affiliate. 

        (j)    Covenant to Guarantee Obligations and Give Security.    (i) Upon the earlier to occur of (y) the
Company Debt Service Ratio being less than or equal to 1.25:1.00 and (z) the occurrence of an Event of Default (either such event, a "Collateral Trigger
Event"), then each applicable Loan Party shall, in each case at its expense: 

        (A)  as
promptly as practicable take, and cause each of its Subsidiaries to take, and hereby acknowledges that the Collateral Agent or the Unit Collateral Agent, as the case
may be, may immediately take, whatever action, whether pursuant to the Collateral Sub-Agency Agreement or otherwise (including, without limitation, the recording of instruments, the filing
of Uniform Commercial Code financing statements and Certificate of Title Registrations, the giving of notices, the delivery of opinions of counsel in form and substance satisfactory to the Collateral
Agent and other actions) as may be necessary or advisable in the opinion of the Collateral Agent to vest, and confirm the vesting, in the Collateral Agent (or in any representative of the Collateral
Agent designated by it) valid and subsisting first priority Liens on the Assets purported to be subject to the Mortgages, pledges, assignments, security agreements and security agreement supplements
delivered pursuant to Section 3.01 or pursuant to this Section 5.01(j), enforceable against all third parties in accordance with their terms, 

        (B)  within
10 days after the request of the Collateral Agent (acting in its sole discretion or at the direction of the Required Lenders acting in their sole
discretion) made at any time following the occurrence of such Collateral Trigger Event, furnish to the Collateral Agent account control agreements duly executed by each bank or other financial
institution at which the Borrower or any of its Subsidiaries maintains an account in substantially the form of Exhibit A to the ARC Housing Security Agreement or Exhibit B to the Primary
Security Agreement, as the case may be, or otherwise in form and substance satisfactory to the Collateral Agent and its counsel, and 

        (C)  upon
the request of the Collateral Agent (acting in its sole discretion or at the direction of the Required Lenders acting in their sole discretion), promptly implement
(i) a lockbox account into which tenants or subtenants, as applicable, of all Manufactured Home Rental Units and (ii) such other lockbox accounts into which tenants of all Manufactured
Home Communities that constitute Borrowing Base Assets, in each case, will be required to make payments directly to Citibank, N.A. or one or more banks acceptable to the Collateral Agent that have
accepted the assignment of such accounts to the Collateral Agent for the benefit of the Secured Parties pursuant to the Security Agreements. 

         (ii)  Within
10 days after any Excluded Subsidiary Agreement terminates or otherwise becomes ineffective as to the Excluded Subsidiary party to such agreement, cause
such Excluded Subsidiary to duly execute and deliver to the Administrative Agent a Guaranty Supplement in substantially the form of Exhibit C hereto, or such other guaranty supplement in form
and substance satisfactory to the Administrative Agent, guaranteeing the Obligations of the other Loan Parties under the Loan Documents, unless such Excluded Subsidiary shall incur
Non-Recourse Debt permitted under Section 5.02(b)(ii)(G) within 90 days after the termination of such Excluded Subsidiary Agreement, and in such case the agreement in respect
of such Non-Recourse Debt shall be deemed to be an Excluded Subsidiary Agreement and the Borrower shall, or cause such Excluded Subsidiary to, promptly deliver to the Administrative Agent
(x) a copy of such agreement in respect of such Non-Recourse Debt and (y) an amended Schedule 4.01(y) that sets forth such agreement in respect of such
Non-Recourse Debt opposite the name of such Excluded Subsidiary. 

50

 

        (iii)  Within
10 days after the formation or acquisition of any new direct or indirect Subsidiary by any Loan Party, cause each such Subsidiary (other than a
Subsidiary (x) that is prohibited by the terms of any loan agreement or indenture or other material agreement to which it is a party from providing guarantees of the Obligations of the Loan
Parties under the Loan Documents or (y) that is being formed for the purpose of incurring Non-Recourse Debt permitted under Section 5.02(b)(ii)(G) in respect of Assets that
are not Borrowing Base Assets (any Subsidiary described in clauses (x) or (y) of this parenthetical, a "Limited Subsidiary")), and cause
each direct and indirect parent of such Subsidiary (if it has not already done so), to duly execute and deliver to the Administrative Agent a Guaranty Supplement in substantially the form of
Exhibit C hereto, or such other guaranty supplement in form and substance satisfactory to the Administrative Agent, guaranteeing the other Loan Parties' Obligations under the Loan Documents,  provided that upon the formation or acquisition of any Limited Subsidiary, each such Limited Subsidiary shall be deemed to be an Excluded Subsidiary and
each such loan agreement or indenture or other material agreement that restricts such Limited Subsidiary from providing guarantees of the Obligations of the Loan Parties under the Loan Documents shall
be deemed to be an Excluded Subsidiary Agreement, and the
Borrower shall, or cause such Limited Subsidiary to, promptly deliver to the Administrative Agent (1) copies of such agreements or indentures in respect of such Non-Recourse Debt
and (2) an amended Schedule 4.01(y) that sets forth such agreements or indentures in respect of such Non-Recourse Debt opposite the name of such Limited Subsidiary. 

        (iv)  Upon
the request by the Borrower that any additional Manufactured Home Community (a "Proposed Borrowing Base Community")
be included as a Borrowing Base Asset, if such Proposed Borrowing Base Community, in the judgment of the Collateral Agent, shall not already be subject to a perfected first priority Lien in favor of
the Collateral Agent for the benefit of the Secured Parties, in each case at the Borrower's expense: 

        (A)  within
10 days after such request, furnish to the Collateral Agent (1) a description, in detail satisfactory to the Collateral Agent, of the Proposed
Borrowing Base Community, (2) each of the items set forth in Sections 3.01(a)(ii), (iii) and (xii) and Section 5.01(s), mutatis
mutandis, in each case in respect of such Proposed Borrowing Base Community and (3) a revised Schedule II hereto reflecting the addition of such Proposed
Borrowing Base Community, provided that for purposes of the definition of Borrowing Base Assets, such revised Schedule II shall become effective
only upon satisfaction of each of the conditions set forth in this Section 5.01(j)(iv), and 

        (B)  as
promptly as possible, furnish to the Collateral Agent such other approvals, opinions or documents as any Lender Party through the Administration Agent may reasonably
request. 

         (v)  Upon
the request by the Borrower that any additional Manufactured Home Rental Unit (a "Proposed Borrowing Base Unit") be
included as a Borrowing Base Asset, if such Proposed Borrowing Base Unit, in the judgment of the Collateral Agent, shall not already be subject to a perfected first priority Lien in favor of the
Collateral Agent for the benefit of the Secured Parties, in each case at the Borrower's expense: 

        (A)  within
10 days after such request, furnish to the Collateral Agent (1) a description, in detail satisfactory to the Collateral Agent, of the Proposed
Borrowing Base Unit (including a revised Schedule III to the ARC Housing Security Agreement reflecting the addition of such Proposed Borrowing Base Unit), (2) to the extent not
theretofore provided, each of the items of the type set forth in Section 3.01(a)(iv) in respect of such Proposed Borrowing Base Unit and (3) evidence reasonably satisfactory to
the Collateral Agent that the certificate of title of such Proposed Borrowing Base Unit has been delivered to the Unit Collateral Agent in accordance with the terms of the Collateral
Sub-Agency Agreement and that such certificate of title is free and clear of any Lien (or notation of a Lien) thereon (other than a Lien or notation of a Lien in favor of the 

51

 

Collateral
Agent for the benefit of the Secured Parties) and, if after the occurrence of a Collateral Trigger Event, such other items as may be necessary or advisable in the opinion of the Unit
Collateral Agent or the Collateral Agent to vest in the Unit Collateral Agent or the Collateral Agent (or any representative of either of them designated by either of them), as the case may be, valid
and subsisting first priority Liens on such Proposed Borrowing Base Unit, 

        (B)  within
10 days after such request (to the extent not theretofore provided), duly execute and deliver, or cause the applicable Subsidiary to duly execute and
deliver, to the Collateral Agent such pledges, assignments, security agreements and security agreement supplements, as specified by and in form and substance satisfactory to the Collateral Agent,
securing payment of all the Obligations of the applicable Loan Party under the Loan Documents and sufficient in the judgment of the Unit Collateral Agent or the Collateral Agent to create for the
benefit of the Unit Collateral Agent or the Collateral Agent (or in any representative of either of them designated by either of them), as the case may be, valid and subsisting Liens on such Proposed
Borrowing Base Unit, and 

        (C)  as
promptly as possible, take, and cause such Subsidiary to take, such other actions as may be contemplated by or required under the Collateral Sub-Agency
Agreement and the ARC Housing Security Agreement. 

        (vi)  At
any time and from time to time, promptly execute and deliver any and all further instruments and documents and take all such other action as any Agent may deem
necessary or desirable in obtaining the full benefits of, or in perfecting and preserving the Liens of, such guaranties, Mortgages, pledges, assignments, security agreements and security agreement
supplements. 

        (k)    Further Assurances.    (i) Promptly upon request by any Agent, or any Lender Party through the
Administrative Agent, correct, and cause each of its Subsidiaries promptly to correct, any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment,
filing or recordation thereof. 

         (ii)  Promptly
upon request by any Agent, or any Lender Party through the Administrative Agent, do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register any and all such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust deeds, assignments, financing
statements and continuations thereof, termination statements, notices of assignment, transfers, certificates, assurances and other instruments as any Agent, or any Lender Party through the
Administrative Agent, may reasonably require from time to time in order to (A) carry out more effectively the purposes of the Loan Documents, (B) to the fullest extent permitted by
applicable law, subject any Loan Party's or any of its Subsidiaries' properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents,
(C) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (D) assure, convey, grant,
assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document
or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so. 

        (iii)  Promptly
upon the request of the Administrative Agent, deliver to the Collateral Agent a recent Appraisal of each Borrowing Base Asset, including, without limitation,
each Manufactured Home Community, provided that the Loan Parties shall be required to comply with only one such request by the Administrative Agent per
calendar year. 

        (l)    Performance of Material Contracts.    Perform and observe all the terms and provisions of each Material
Contract to be performed or observed by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all 

52

 

such
action to such end as may be from time to time requested by the Administrative Agent and, upon request of the Administrative Agent, make to each other party to each such Material Contract such
demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do
so. 

        (m)    Compliance with Terms of Leaseholds.    Make all payments and otherwise perform all obligations in respect of
all leases of real property to which the Borrower or any of its Subsidiaries is a party, keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to
renew such leases to be forfeited or cancelled, notify the Administrative Agent of any default by any party with respect to such leases and cooperate with the Administrative Agent in all respects to
cure any such default, and cause each of its Subsidiaries to do so. 

        (n)    Interest Rate Hedging.    Enter into prior to the Closing Date, and maintain at all times thereafter, interest
rate Hedge Agreements (i) with Persons acceptable to the Administrative Agent, (ii) providing either an interest-rate swap for a fixed rate of interest acceptable to the
Administrative Agent or and interest-rate cap at an interest rate acceptable to the Administrative Agent, (iii) covering a notional amount equal to the amount, if any, by which
(A) 75% of Consolidated Debt for Borrowed Money of the Parent Guarantor exceeds (B) all Debt for Borrowed Money of the Parent Guarantor
and its Subsidiaries then accruing interest at a fixed rate acceptable to the Administrative Agent and (iv) otherwise on terms and conditions acceptable to the Administrative Agent. 

        (o)    Maintenance of REIT Status.    In the case of the Parent Guarantor, at all times, conduct its affairs and the
affairs of its Subsidiaries in a manner so as to continue to qualify as a REIT and elect to be treated as a REIT. 

        (p)    NYSE Listing.    In the case of the Parent Guarantor, at all times (i) cause its common shares to be
duly listed on the New York Stock Exchange and (ii) timely file all reports required to be filed by it in connection therewith. 

        (q)    Sarbanes-Oxley.    Comply at all times with all applicable provisions of Section 402(a) of
Sarbanes-Oxley. 

        (r)    Cash Concentration Accounts.    Maintain, and cause each of its Subsidiaries (including, without limitation,
ARC Housing LLC) to maintain, main cash concentration accounts with Citibank, N.A. (or such other bank or financial institution that has executed and delivered an account control agreement
with respect to each such concentration account to the Collateral Agent in form and substance satisfactory to the Collateral Agent) into which all income and revenue received in respect of
Manufactured Home Rental Units shall be deposited. 

        (s)    Title Insurance, Surveys and Legal Opinions.    Deliver to the Collateral Agent within 45 days after the
Closing Date (provided that such time period may be extended by up to an additional 30 days in the Administrative Agent's sole discretion): 

          (i)  signed
copies of favorable opinions, addressed to the Administrative Agent and the other Secured Parties, of local counsel for the Loan Parties in substantially the
form of Exhibit E-6 hereto and as to such other matters as any Lender Party through the Collateral Agent may reasonably request, 

53

  

         (ii)  fully
paid American Land Title Association Lender's Extended Coverage title insurance policies (the "Mortgage Policies")
in form and substance, with endorsements (including zoning endorsements where available) and in amounts reasonably acceptable to the Collateral Agent, issued, coinsured and reinsured by title insurers
reasonably acceptable to the Collateral Agent, evidencing the recordation of the Mortgages and insuring the Mortgages to be valid first and subsisting Liens on the property described therein, free and
clear of all defects (including, but not limited to, mechanics' and materialmen's Liens) and encumbrances, excepting only Permitted Liens, and providing for such other affirmative insurance (including
endorsements for future advances under the Loan Documents and for mechanics' and materialmen's Liens) and such coinsurance and direct access reinsurance as the Collateral Agent may reasonably deem
necessary or desirable, and with respect to any such property located in a State in which a zoning endorsement is not available, a zoning compliance letter from the applicable municipality in a form
reasonably acceptable to the Collateral Agent, and 

        (iii)  American
Land Title Association/American Congress on Surveying and Mapping form surveys for which all necessary fees have been paid, dated not earlier than
45 days before the date of their delivery to the Collateral Agent, certified to the Collateral Agent and the issuer of the Mortgage Policies in a manner reasonably satisfactory to the
Collateral Agent by a land surveyor duly registered and licensed in the States in which the property described in such surveys is located and acceptable to the Collateral Agent, showing all buildings
and other improvements, any off-site improvements, the location of any easements, rights of way, building set-back lines and other dimensional regulations and the absence of
encroachments, either by such improvements or on to such property, and other defects, other than encroachments and other defects reasonably acceptable to the Collateral Agent. 

        (t)    Manufactured Home Rental Unit Certificates of Title.    Deliver to the Collateral Agent as promptly as
practicable and in any event within 90 days after the Closing Date (provided that such time period may be extended by up to an additional 90 days in the Administrative Agent's sole
discretion) evidence that not less than 85% of the certificates of title pertaining to those Manufactured Home Rental Units that could constitute Borrowing Base Assets have been delivered to the Unit
Collateral Agent to be held in accordance with the terms of the Collateral Sub-Agency Agreement and that no such certificate of title is subject to any Lien or contains any notation of a
Lien thereon (other than a Lien or notation of a Lien in favor of the Collateral Agent for the benefit of the Secured Parties). 

        SECTION
5.02.    Negative Covenants.    So long as any Advance or any other Obligation of any Loan Party under any
Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, no Loan Party will, at any time: 

        (a)    Liens, Etc.    Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any Lien on or with respect to any of its properties of any character (including, without limitation, accounts) whether now owned or hereafter acquired, or sign or file or
suffer to exist, or permit any of its Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial Code of any jurisdiction, a financing statement that names such Loan Party or any of
its Subsidiaries as debtor, or sign or suffer to exist, or permit any of its Subsidiaries to sign or suffer to exist, any security agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any of its Subsidiaries to assign, any accounts or other right to receive income, except, in the case of the Loan Parties (other than the Parent Guarantor)
and their respective Subsidiaries: 

          (i)  Liens
created under the Loan Documents; 

         (ii)  Permitted
Liens; 

        (iii)  Liens
described on Schedule 4.01(p) hereto; 

        (iv)  purchase
money Liens upon or in equipment acquired or held by such Loan Party or any of its Subsidiaries in the ordinary course of business to secure the purchase price
of such equipment or to secure Debt incurred solely for the purpose of financing the acquisition of 

54

 

any
such equipment to be subject to such Liens, or Liens existing on any such equipment at the time of acquisition (other than any such Liens created in contemplation of such acquisition that do not
secure the purchase price), or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount; provided, however, that no
such Lien shall extend to or cover any property other than the equipment being acquired, and no such extension, renewal or replacement shall extend to or cover any property not theretofore subject to
the Lien being extended, renewed or replaced; and provided further that the aggregate principal amount of the Debt secured by Liens permitted by this
clause (iv) shall not exceed the amount permitted under Section 5.02(b)(ii)(B) at any time outstanding; 

         (v)  Liens
arising in connection with Capitalized Leases permitted under Section 5.02(b)(ii)(C), provided that no such
Lien shall extend to or cover any Collateral or assets other than the assets subject to such Capitalized Leases; 

        (vi)  Liens
on property of a Person existing at the time such Person is merged into or consolidated with any Loan Party or any Subsidiary of any Loan Party or becomes a
Subsidiary of any Loan Party, provided that such Liens were not created in contemplation of such merger, consolidation or acquisition and do not extend
to any assets other than those of the Person so merged into or consolidated with such Loan Party or such Subsidiary or acquired by such Loan Party or such Subsidiary; 

       (vii)  other
Liens securing Non-Recourse Debt permitted under Section 5.02(b)(ii)(G), provided that no such
Lien shall extend to or cover any Collateral; and 

      (viii)  the
replacement, extension or renewal of any Lien permitted by clause (iii) above upon or in the same property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change in any direct or contingent obligor) of the Debt secured thereby. 

        (b)    Debt.    Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume
or suffer to exist, any Debt, except: 

          (i)  in
the case of any Loan Party or any Subsidiary of a Loan Party, Debt owed to any other Loan Party or any wholly-owned Subsidiary of any Loan Party (other than an
Excluded Subsidiary), provided that, in each case, such Debt (y) shall be on terms acceptable to the Administrative Agent and (z) shall be
evidenced by promissory notes in form and substance satisfactory to the Administrative Agent, which promissory notes shall (unless payable to the Borrower) by their terms be subordinated to the
Obligations of the Loan Parties under the Loan Documents; 

         (ii)  in
the case of each Loan Party (other than the Parent Guarantor) and its Subsidiaries, 

        (A)  Debt
under the Loan Documents, 

        (B)  Debt
secured by Liens permitted by Section 5.02(a)(iv) not to exceed in the aggregate $5,000,000 at any time outstanding, 

        (C)  (1)
Capitalized Leases not to exceed in the aggregate $5,000,000 at any time outstanding, and (2) in the case of Capitalized Leases to which any Subsidiary of a
Loan Party is a party, Debt of such Loan Party of the type described in clause (i) of the definition of "Debt" guaranteeing the Obligations of
such Subsidiary under such Capitalized Leases, 

        (D)  the
Surviving Debt described on Schedule 4.01(o) hereto and any Refinancing Debt, extending, refunding or refinancing such Surviving Debt, 

        (E)  Debt
in respect of Hedge Agreements entered into by the Borrower and designed to hedge against fluctuations in interest rates or foreign exchange rates incurred in the
ordinary course of business and consistent with prudent business practice, 

55

 

        (F)  unsecured
Debt incurred in the ordinary course of business for borrowed money, maturing within one year from the date created, and aggregating, on a Consolidated basis,
not more than $5,000,000 at any one time outstanding, and 

        (G)  Non-Recourse
Debt (including, without limitation, the JV Pro Rata Share of Non-Recourse Debt of any Joint Venture) the incurrence of which would
not result in a Default under Section 5.04 or any other provision of this Agreement; 

        (iii)  in
the case of the Parent Guarantor, Debt under the Loan Documents and under Customary Carve-Out Agreements; 

        (iv)  in
the case of Enspire Finance LLC, ARC Dealership, Inc. and the Borrower, Debt under the Consumer Finance Credit Facilities not to exceed $250,000,000 in the
aggregate at any time outstanding; and 

         (v)  endorsement
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business. 

        (c)    Change in Nature of Business.    Make, or permit any of its Subsidiaries to make, any material change in the
nature of its business as carried on at the date hereof; or engage in, or permit any of its Subsidiaries to engage in, any business other than ownership, development and management of commercial real
estate properties in the United States consistent in quality with the Manufactured Home Communities, and other business activities incidental thereto. 

        (d)    Mergers, Etc.    Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether
in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, any Person, or permit any of its Subsidiaries to do so;  provided,
however, that (i) any Subsidiary of a Loan Party may merge or consolidate with or into,
or dispose of assets to, any other Subsidiary of such Loan Party (provided that if one or more Subsidiaries is also a Loan Party, any such Loan Party shall be the surviving entity) or any other Loan
Party (provided that such Loan Party or, in the case of any Loan Party other than the Borrower, another Loan Party shall be the surviving entity), and (ii) any Loan Party may merge with any
other Person so long as such Loan Party or another Loan Party is the surviving entity, provided, in each case, that no Default shall have occurred and
be continuing at the time of such proposed transaction or would result therefrom. Notwithstanding any other provision of this Agreement, (y) any Subsidiary of a Loan Party (other than the
Borrower) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and the assets or proceeds from the
liquidation or dissolution of such Subsidiary are transferred to the Borrower or another Loan Party, provided that (A) no Collateral Trigger
Event shall have occurred and no Default or Event of Default shall have occurred and be continuing at the time of such proposed transaction and (B) no Collateral Trigger Event, Default or Event
of Default would result therefrom, and (z) any Loan Party or Subsidiary of a Loan Party shall be permitted to effect any Transfer of Assets through the sale of Equity Interests in the
Subsidiary of such Loan Party that owns such Assets so long as Section 5.02(e) would otherwise permit the Transfer of all Assets owned by such Subsidiary at the time of such sale of Equity
Interests. 

        (e)    Sales, Etc. of Assets.    (i) In the case of the Parent Guarantor, sell, lease, transfer or otherwise
dispose of, or grant any option or other right to purchase, lease or otherwise acquire any assets and (ii) in the case of the Loan Parties (other than the Parent Guarantor), sell, lease (other
than enter into Tenancy Leases), transfer or otherwise dispose of, or grant any option or other right to purchase, lease (other than any option or other right to enter into Tenancy Leases) or
otherwise acquire, or permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of, or grant any option or other right to purchase, lease or otherwise acquire (each action described
in clause (ii) of this subsection (e) being a "Transfer"), any Asset or Assets (or any Equity Interests in connection therewith) other
than: 

        (A)  (1)
the Transfer of any Asset or Assets that are not Borrowing Base Assets from any Loan Party to another Loan Party or from a Subsidiary of a Loan Party to another 

56

 

Subsidiary
of such Loan Party or any other Loan Party or (2) the Transfer of any Asset or Assets (other than Transfers of Manufactured Home Rental Units permitted pursuant to clause (B)
below) of which the aggregate Asset Value, when added to the Asset Values of all other Assets (other than Manufactured Home Rental Units the Transfer of which was permitted pursuant to
clause (B) below) that had been the subject of any previous Transfer (as determined at the time of each such Transfer), is less than 20% of Total Asset Value at such time, and 

        (B)  the
Transfer of any Manufactured Home Rental Unit in the ordinary course of business and in accordance with Section 9(e) of the ARC Housing Security Agreement, 

provided that (1) no Transfer of any Borrowing Base Asset that is a Manufactured Home Community shall be permitted without the prior written
consent of the Required Lenders acting in their sole discretion, (2) in the case of any Transfer described in clause (A) above, the Loan Parties are in compliance with the covenants
contained in Section 5.04 (both before and after giving effect to such Transfer), as evidenced by a certificate of the Chief Financial Officer (or such person performing similar functions) of
the Borrower delivered to the Administrative Agent prior to such Transfer demonstrating such compliance and that the Transfer does not otherwise cause or result in a Default, Event of Default or
Collateral Trigger Event and (3) following the occurrence of any Collateral Trigger Event, no Transfer of any Borrowing Base Asset that is a Manufactured Home Rental Unit shall be permitted
without the prior written consent of the Required Lenders acting in their sole discretion unless such Transfer is made pursuant to the terms of a contract for the sale thereof entered into prior to
the occurrence of such Collateral Trigger Event in the ordinary course of business of the Borrower and its Subsidiaries on market terms with a Person that is not an Affiliate of a Loan Party or any
Subsidiary of a Loan Party. 

        (f)    Investments in Other Persons.    Make or hold, or permit any of its Subsidiaries to make or hold, any
Investment in any Person other than: 

          (i)  Investments
by the Loan Parties and their Subsidiaries in their Subsidiaries outstanding on the date hereof and additional Investments in wholly-owned Subsidiaries and,
in the case of the Loan Parties (other than the Parent Guarantor) and their respective Subsidiaries, Investments in Assets (including by asset or Equity Interest acquisitions), in each case subject,
where applicable, to the limitations set forth in Section 5.02(f)(iv); 

         (ii)  Investments
in Cash Equivalents; 

        (iii)  Investments
consisting of intercompany Debt permitted under Section 5.02(b)(i); 

        (iv)  Investments
consisting of the following items so long as (y) the aggregate amount outstanding, without duplication, of all Investments described in this
subsection does not exceed, at any time, 15% of Total Asset Value at such time, and (z) the aggregate amount of each of the following items of Investments does not exceed the specified
percentage of Total Asset Value set forth below: 

        (A)  loans,
advances and extensions of credit to any Person (other than an officer or director of the Parent Guarantor and its Subsidiaries) using proceeds of Debt permitted
under Section 5.02(b)(iv), 

        (B)  loans,
advances and extensions of credit to any Person (other than an officer or director of the Parent Guarantor and its Subsidiaries) so long as the aggregate amount
of such Investments does not at any time exceed 2.5% of Total Asset Value at such time, in each case after giving effect to such Investments, 

        (C)  unimproved
real estate, so long as the aggregate amount of such Investment, calculated on the basis of cost, does not at any time exceed 1.5% of Total Asset Value at
such time, 

        (D)  Development
Property that is being constructed or developed as a Manufactured Home Community, but is not yet completed (including such assets that such Person has 

57

 

contracted
to purchase for development with or without options to terminate the purchase agreement), so long as the aggregate amount of such Investment, calculated on the basis of the greater of
actual cost or budgeted cost, does not at any time exceed 2.5% of Total Asset Value at such time, 

        (E)  Investments
outstanding on the date hereof in Subsidiaries that are Excluded Subsidiaries or Subsidiaries that are not wholly-owned Subsidiaries of any Loan Party and
additional Investments after the date hereof in Subsidiaries that are Excluded Subsidiaries or Subsidiaries that are not wholly-owned
Subsidiaries of any Loan Party so long as the aggregate amount of such additional Investments outstanding does not at any time exceed 10% of Total Asset Value at such time, and 

        (F)  Investments
in Joint Ventures of any Loan Party so long as the aggregate amount of such Investments outstanding does not at any time exceed (i) 5% of Total Asset
Value at any time during which the Leverage Ratio exceeds 60%, or (ii) 10% of Total Asset Value at any time during which the Leverage Ratio does not exceed 60%; and 

         (v)  Investments
by the Borrower in Hedge Agreements permitted under Section 5.02(b)(ii)(E). 

        (g)    Restricted Payments.    In the case of the Parent Guarantor only, declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its Equity Interests now or hereafter outstanding, return any capital to its stockholders, partners or members (or the equivalent Persons
thereof) as such, make any distribution of assets, Equity Interests, obligations or securities to its stockholders, partners or members (or the equivalent Persons thereof) as such;  provided,
however, that the Parent Guarantor may declare and pay dividends or make other distributions
of common stock or cash only (i) so long as no Default or Event of Default shall have occurred and be continuing, (y) in an aggregate amount not to exceed (1) during any four
consecutive fiscal quarters of the Parent Guarantor occurring from and after April 1, 2003, 90% of Funds From Operations for such four fiscal quarter period,  plus (2) $30,000,000 in the
aggregate during the four fiscal quarters of the Parent Guarantor ending March 31, 2005 so long as the
dividend per share of common stock of the Parent Guarantor does not change during such four fiscal quarter period, or (z) as may otherwise be required to avoid the imposition of income or
excise taxes on the Parent Guarantor, and (ii) so long as no Default or Event of Default of the type described in Sections 6.01(a) or (e) shall have occurred and be continuing, as may be
required to comply with Section 5.01(o). 

        (h)    Amendments of Constitutive Documents.    Amend, or permit any of its Subsidiaries to amend, in each case in any
material respect, its limited partnership agreement, certificate of incorporation or bylaws or other constitutive documents, provided that any amendment
to any such constitutive document that would be adverse to any of the Secured Parties shall be deemed "material" for purposes of this Section. 

        (i)    Accounting Changes.    Make or permit, or permit any of its Subsidiaries to make or permit, any change in
(i) accounting policies or reporting practices, except as required or permitted by generally accepted accounting principles, or (ii) Fiscal Year. 

        (j)    Speculative Transactions.    Engage, or permit any of its Subsidiaries to engage, in any transaction involving
commodity options or futures contracts or any similar speculative transactions. 

58

  

        (k)    Payment Restrictions Affecting Subsidiaries.    Directly or indirectly, enter into or suffer to exist, or
permit any of its Subsidiaries to enter into or suffer to exist, any agreement or arrangement limiting the ability of any of its Subsidiaries to declare or pay dividends or other distributions in
respect of its Equity Interests or repay or prepay any Debt owed to, make loans or advances to, or otherwise transfer assets to or invest in, the Borrower or any Subsidiary of the Borrower (whether
through a covenant restricting dividends, loans, asset transfers or investments, a financial covenant or otherwise), except (i) the Loan Documents, (ii) any agreement or instrument
evidencing Surviving Debt, (iii) any agreement in effect at the time such Subsidiary becomes a Subsidiary of the Borrower, so long as such agreement was not entered into solely in contemplation
of such Person becoming a Subsidiary of the Borrower, and (iv) any Excluded Subsidiary Agreement. 

        (l)    Amendment, Etc. of Material Contracts.    Cancel or terminate any Material Contract or consent to or accept any
cancellation or termination thereof, amend or otherwise modify any Material Contract or give any consent, waiver or approval thereunder, waive any default under or breach of any Material Contract,
agree in any manner to any other amendment, modification or change of any term or condition of any Material Contract or take any other action in connection with any Material Contract that would impair
the value of the interest or rights of any Loan Party thereunder or that would impair the interest or rights of the Administrative Agent or any Lender Party, or permit any of its Subsidiaries to do
any of the foregoing, in each case in a manner that could reasonably be expected to have a Material Adverse Effect, in each case taking into account the effect of any agreements that supplement or
serve to substitute for, in whole or in part, such Material Contract. 

        (m)    Negative Pledge.    Enter into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to
exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon any of its property or assets (including, without limitation, any Borrowing Base Assets), except
(i) pursuant to the Loan Documents, (ii) pursuant to any Excluded Subsidiary Agreement entered into in connection with any Non-Recourse Debt permitted under
Section 5.02(b)(ii)(G), or (iii) in connection with (A) any Surviving Debt and any Refinancing Debt extending, refunding or refinancing such Surviving Debt, (B) any
purchase money Debt permitted by Section 5.02(b)(ii)(B) solely to the extent that the agreement or instrument governing such Debt prohibits a Lien on the property acquired with the proceeds of
such Debt, (C) any Capitalized Lease permitted by Section 5.02(b)(ii)(C) solely to the extent that such Capitalized Lease prohibits a Lien on the property subject thereto, or
(D) any Debt outstanding on the date any Subsidiary of the Borrower becomes such a Subsidiary (so long as such agreement was not entered into solely in contemplation of such Subsidiary becoming
a Subsidiary of the Borrower). 

        (n)    Parent Guarantor as Holding Company.    In the case of the Parent Guarantor, not enter into or conduct any
business, or engage in any activity (including, without limitation, any action or transaction that is required or restricted with respect to the Borrower and its Subsidiaries under Sections 5.01 and
5.02 without regard to any of the enumerated exceptions to such covenants), other than (i) the holding of the Equity Interests of the Borrower; (ii) the performance of its duties as
general partner of the Borrower; (iii) the performance of its Obligations (subject to the limitations set forth in the Loan Documents) under each Loan Document to which it is a party;
(iv) the making of equity Investments in
the Borrower and its Subsidiaries; provided each such Investment (A) shall be on terms acceptable to the Administrative Agent and
(B) shall be evidenced by stock certificates, promissory notes or instruments in form and substance satisfactory to the Administrative Agent; (v) the maintenance of any deposit accounts
permitted or required pursuant to the Security Agreements; (vi) engaging in any activity necessary to continue to qualify as a REIT and (vii) activities incidental to each of the
foregoing. 

        (o)    Excluded Subsidiaries.    Enter into or suffer to exist, or permit any Excluded Subsidiary to enter into or
suffer to exist, any agreement prohibiting or conditioning (i) the guaranty by such Excluded Subsidiary of the Obligations of the Loan Parties under the Loan Documents or (ii) the
creation or assumption of any Lien upon any of such Excluded Subsidiary's property or assets, except (x) as would be permitted under Section 5.02(m), (y) pursuant to an Excluded
Subsidiary Agreement in effect on the later of the Effective Date and the date on which such Excluded 

59

 

Subsidiary
becomes a Subsidiary of such Loan Party or (z) in connection with the incurrence by such Excluded Subsidiary of Non-Recourse Debt permitted under
Section 5.02(b)(ii)(G). 

        (p)    Multiemployer Plans.    Neither any Loan Party nor any ERISA Affiliate will contribute to or be required to
contribute to any Multiemployer Plan. 

        SECTION
5.03.    Reporting Requirements.    So long as any Advance or any other Obligation of any Loan Party under any
Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, the Borrower will furnish to the Administrative Agent for
transmission to the Lender Parties in accordance with Section 9.02(b): 

        (a)    Default Notice.    As soon as possible and in any event within two days after the occurrence of each Default or
any event, development or occurrence reasonably likely to have a Material Adverse Effect continuing on the date of such statement, a statement of the Chief Financial Officer (or person performing
similar functions) of the Parent Guarantor setting forth details of such Default or such event, development or occurrence and the action that the Parent Guarantor has taken and proposes to take with
respect thereto. 

        (b)    Annual Financials.    As soon as available and in any event within 90 days after the end of each Fiscal
Year, a copy of the annual audit report for such year for the Parent Guarantor and its Subsidiaries, including therein Consolidated balance sheets of the Parent Guarantor and its Subsidiaries as of
the end of such Fiscal Year and Consolidated statements of income and a Consolidated statement of cash flows of the Parent Guarantor and its Subsidiaries for such Fiscal Year, in each case accompanied
by an opinion acceptable to the Required Lenders of PricewaterhouseCoopers LLP or other independent public accountants of recognized standing acceptable to the Required Lenders, together with
(i) a certificate of such accounting firm to the Lender Parties stating that in the course of the regular audit of the business of the Parent Guarantor and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the
opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (ii) a
schedule in form satisfactory to the Administrative Agent of the computations used by such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in
Section 5.04, provided that in the event of any change in GAAP used in the preparation of such financial statements, the Parent Guarantor shall
also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP and (iii) a certificate of
the Chief Financial Officer (or person performing similar functions) of the Parent Guarantor stating that no Default has occurred and is continuing or, if a default has occurred and is continuing, a
statement as to the nature thereof and the action that the Parent Guarantor has taken and proposes to take with respect thereto. 

        (c)    Quarterly Financials.    As soon as available and in any event within 45 days after the end of each of
the first three quarters of each Fiscal Year, Consolidated balance sheets of the Parent Guarantor and its Subsidiaries as of the end of such quarter and Consolidated statements of income and a
Consolidated statement of cash flows of the Parent Guarantor and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter and
Consolidated statements of income and a Consolidated statement of cash flows of the Parent Guarantor and its Subsidiaries for the period commencing at the end of the previous Fiscal Year and ending
with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding Fiscal Year, all in reasonable detail and
duly certified (subject to normal year-end audit adjustments) by the Chief Financial Officer (or person performing similar functions) of the Parent Guarantor as having been prepared in
accordance with GAAP, together with (i) a certificate of said officer stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Parent Guarantor has taken and proposes to take with respect thereto and (ii) a schedule in form satisfactory to the Administrative Agent of the
computations used by the Parent Guarantor in determining compliance with the covenants contained in Section 5.04, provided that in the event of
any change in GAAP used in the preparation of such financial statements, the Parent Guarantor shall also 

60

 

provide,
if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP. 

        (d)    Borrowing Base Certificate.    As soon as available and in any event within 45 days after the end of
each fiscal quarter of the Parent Guarantor, a Borrowing Base Certificate, as at the end of such fiscal quarter, certified by the Chief Financial Officer (or person performing similar functions) of
the Parent Guarantor. 

        (e)    Borrowing Base Financials.    As soon as available and in any event within 15 days after the end of each
month, financial information in respect of all Borrowing Base Assets, in form and detail satisfactory to the Administrative Agent. 

        (f)    Annual Budgets.    As soon as available and in any event no later than 45 days after the end of each
Fiscal Year, forecasts prepared by management of the Parent Guarantor, in form satisfactory to the Administrative Agent, of balance sheets, income statements and cash flow statements on a monthly
basis for the then current Fiscal Year and on an annual basis for each Fiscal Year thereafter until the Termination Date. 

        (g)    Material Litigation.    Promptly after the commencement thereof, notice of all actions, suits, investigations,
litigation and proceedings before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting any Loan Party or any of its Subsidiaries
of the type described in Section 4.01(f), and promptly after the occurrence thereof, notice of any adverse change in the status or the financial effect on any Loan Party or any of its
Subsidiaries of the Disclosed Litigation from that described on Schedule 4.01(f) hereto. 

        (h)    Securities Reports.    Promptly after the sending or filing thereof, copies of all proxy statements, financial
statements and reports that any Loan Party or any of its Subsidiaries sends to its stockholders, and copies of all regular, periodic and special reports, and all registration statements, that any Loan
Party or any of its Subsidiaries files with the Securities and Exchange Commission or any governmental authority that may be substituted therefor, or with any national securities exchange. 

        (i)    Real Property.    As soon as available and in any event within 30 days after the end of each Fiscal
Year, a report supplementing Schedules 4.01(q) and 4.01(r) hereto, including an identification of all owned and leased real property disposed of by any Loan Party or any of its Subsidiaries during
such Fiscal Year, a list and description (including the street address, county or other relevant jurisdiction, state, record owner, book value thereof and, in the case of leases of property, lessor,
lessee, expiration date and annual rental cost thereof) of all real property acquired or leased by any Loan Party or any of its Subsidiaries during such Fiscal Year and a description of such other
changes in the information included in such Schedules as may be necessary for such Schedules to be accurate and complete. 

        (j)    Environmental Conditions.    Give notice in writing to the Administrative Agent (i) promptly upon
obtaining knowledge of any material violation of any Environmental Law affecting any Asset or the operations thereof or the operations of any of its Subsidiaries, (ii) promptly upon obtaining
knowledge of any known release, discharge or disposal of any Hazardous Materials at, from, or into any Asset which it reports in writing or is reportable by it in writing to any governmental authority
and which is material in amount or nature or which could materially adversely affect the value of such Asset, (iii) promptly upon its receipt of any notice of material violation of any
Environmental Laws or of any material release, discharge or disposal of Hazardous Materials in violation of any Environmental Laws or any matter that may result in an Environmental Action, including a
notice or claim of liability or potential responsibility from any third party (including without limitation any federal, state or local governmental officials) and including notice of any formal
inquiry, proceeding, demand, investigation or other action with regard to (A) such Loan Party's or any other Person's operation of any Asset, (B) contamination on, from or into any
Asset, or (C) investigation or remediation of off-site locations at which such Loan Party or any of its predecessors are alleged to have directly or indirectly disposed of Hazardous
Materials, or (iv) upon such Loan Party's obtaining knowledge that any expense or loss has been incurred by such governmental authority in connection with the assessment, containment, 

61

 

removal
or remediation of any Hazardous Materials with respect to which such Loan Party or any Joint Venture may be liable or for which a Lien may be imposed on any Asset,  provided that any of the events
described in clauses (i) through (iv) above would have a Material Adverse Effect or could reasonably be
expected to result in an Environmental Action with respect to any Borrowing Base Asset. 

        (k)    Borrowing Base Asset Value.    Promptly after discovery of any setoff, claim, withholdings or other defenses to
which any Borrowing Base Assets are subject, which (i) would have a material adverse effect on the value of such Borrowing Base Asset, (ii) would have a Material Adverse Effect or
(iii) with respect to such Borrowing Base Asset, would constitute a Lien which is not a Permitted Lien, provide the Administrative Agent with notice thereof. 

        (l)    Other Information.    Promptly, such other information respecting the business, condition (financial or
otherwise), operations, performance, properties or prospects of any Loan Party or any of its Subsidiaries as the Administrative Agent, or any Lender Party through the Administrative Agent, may from
time to time reasonably request. 

        SECTION
5.04.    Financial Covenants.    So long as any Advance or any other Obligation of any Loan Party under any
Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have, at any time after the Initial Extension of Credit, any Commitment hereunder, the Parent
Guarantor will: 

        (a)    Parent Guarantor Financial Covenants.    

        (i)    Maximum Total Leverage Ratio:    Maintain (A) at the end of each fiscal quarter of the Parent Guarantor
ending during any of the periods set forth below and (B) on the date of each Advance occurring during any of the periods indicated below (both before and after giving effect to such Advance), a
Leverage Ratio of less than the correlative ratio indicated: 

	Period
 
	 	Leverage Ratio
	 
	12/31/03 through 12/30/04	 	75.0	%
	12/31/04 through 12/30/05	 	70.0	%
	12/31/05 through 6/29/06	 	65.0	%
	6/30/06 and thereafter	 	60.0	%

        (ii)    Minimum Tangible Net Worth:    Maintain at all times an excess of Total Asset Value  plus unrestricted cash and Cash
Equivalents on hand over Consolidated total liabilities, in each case, of the Parent Guarantor and its Subsidiaries, of
not less than the sum of $190,000,000 plus an amount equal to 75% of the proceeds of all issuances or sales of Equity Interests of the Parent Guarantor
or any of its Subsidiaries consummated following the Closing Date. 

        (iii)    Minimum Company Debt Service Ratio:    Maintain (A) at the end of each fiscal quarter of the Parent
Guarantor ending during any of the periods indicated below and (B) on the date of each Advance occurring during any of the periods indicated below (both before and after giving effect to such
Advance), a Company Debt Service Ratio greater than the correlative ratio indicated: 

	Period
 
	 	Company Debt Service Ratio

	12/31/03 through 12/30/04	 	1.50:1.00
	12/31/04 through 6/29/06	 	1.75:1.00
	6/30/06 and thereafter	 	2.00:1.00

        (iv)    Minimum Fixed Charge Coverage Ratio.    Maintain (A) at the end of each fiscal quarter of the Parent
Guarantor ending during any of the periods indicated below and (B) on the date of each Advance occurring during any of the periods indicated below (both before 

62

 

and
after giving effect to such Advance), a Fixed Charge Coverage Ratio greater than the correlative ratio indicated: 

	Period
 
	 	Fixed Charge Coverage Ratio

	12/31/03 through 12/30/04	 	1.25:1.00
	12/31/04 through 6/29/06	 	1.50:1.00
	6/30/06 and thereafter	 	1.75:1.00

        (v)    Manufactured Home Rental Unit Net Operating Income.    Not permit at any time the aggregate Net Operating
Income in respect of all Manufactured Home Rental Units at such time to exceed 20% of the aggregate Net Operating Income in respect of all Assets at such time. 

        All
calculations described above in this Section 5.04(a) which pertain to the fiscal quarter of the Parent Guarantor ending December 31, 2003 shall be made on a  pro forma basis after giving effect
to the IPO and the Recapitalization. 

        (b)    Borrowing Base Financial Covenants.    

        (i)    Maximum Facility Exposure to Borrowing Base Asset Value:    Not permit at any time (A) the Facility
Exposure at such time to exceed the sum of the Loan Values of all Borrowing Base Assets at such time or (B) the sum of the Loan Values of all Borrowing Base Assets that are Manufactured Home
Communities to be less than 65% of the Facility Exposure at such time. 

        (ii)    Minimum Borrowing Base Debt Service Coverage Ratio:    Maintain (A) at the end of each fiscal quarter
of the Parent Guarantor and (B) as of the time of each Advance occurring during any of the periods indicated below (both before and after giving effect to such Advance) a Borrowing Base Debt
Service Coverage Ratio of not less than 2.0:1.0. 

        (iii)    Minimum Occupancy of Manufactured Home Communities:    Not permit at any time the percentage of tenants or
subtenants (in each case exclusive of any Affiliates of the Loan Parties) paying rent and in occupancy of the Pads in all Manufactured Home Communities constituting Borrowing Base Assets, in the
aggregate, to be less than 50%. 

 
 

ARTICLE VI
  EVENTS OF DEFAULT    
    

        SECTION
6.01.    Events of Default.    If any of the following events ("Events of
Default") shall occur and be continuing: 

        (a)   (i) the
Borrower shall fail to pay any principal of any Advance when the same shall become due and payable or (ii) the Borrower shall fail to pay any
interest on any Advance, or any Loan Party shall fail to make any other payment under any Loan Document, in each case under this clause (ii) within three Business Days after the same becomes
due and payable; or 

        (b)   any
representation or warranty made by any Loan Party (or any of its officers or the officers of its general partner or managing member, as applicable) under or in
connection with any Loan Document shall prove to have been incorrect in any material respect when made; or 

        (c)   the
Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 2.14, 5.01(d), (e), (f), (i), (j), (n), (o), (p) or (q),
5.02, 5.03 or 5.04; or 

        (d)   any
Loan Party shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document on its part to be performed or observed if such
failure shall remain unremedied for 30 days after the earlier of the date on which (i) a Responsible Officer becomes aware of such failure or (ii) written notice thereof shall
have been given to the Borrower by the Administrative Agent or any Lender Party; or 

        (e)   (i) any
Loan Party or any of its Subsidiaries shall fail to pay any principal of, premium or interest on or any other amount payable in respect of any Debt of
such Loan Party or such Subsidiary (as the case may be) that is outstanding in a principal amount (or, in the case of any 

63

 

Hedge
Agreement, an Agreement Value) of at least $10,000,000 either individually or in the aggregate (such Debt, whether the obligation of one or more of the Loan Parties or their respective
Subsidiaries, and whether the subject of one or more separate debt instruments or agreements, exclusive of Debt outstanding hereunder is referred to herein as "Material
Debt") but excluding Debt outstanding hereunder), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise),
and following the expiration of the applicable grace period, if any, specified in the agreement or instrument relating to such Debt or in such Hedge Agreement; or (ii) any other event shall
occur or condition shall exist under any agreement or instrument relating to any such Material Debt, if (A) the effect of such event or condition is to permit the acceleration of the maturity
of such Material Debt or otherwise permit the holders thereof to cause such Material Debt to mature, and (B) such event or condition shall remain unremedied or otherwise uncured for a period of
30 days; or (iii) the maturity of any such Material Debt shall be accelerated or any such Material Debt shall be declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Material Debt shall be required to be made, in
each case prior to the stated maturity thereof; or 

        (f)    any
Loan Party or any of its Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Loan Party or any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property
and, in the case of any such proceeding instituted against it (but not instituted by it) that is being diligently contested by it in good faith, either such proceeding shall remain undismissed or
unstayed for a period of 30 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or any substantial part of its property) shall occur; or any Loan Party or any of its Subsidiaries shall take any corporate action to authorize any
of the actions set forth above in this subsection (f); or 

        (g)   any
judgments or orders, either individually or in the aggregate, for the payment of money in excess of $10,000,000 shall be rendered against any Loan Party or any of
its Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; provided,  however, that
any such judgment or order shall not give rise to an Event of Default under this Section 6.01(g) if and so long as (A) the
amount of such judgment or order which remains unsatisfied is covered by a valid and binding policy of insurance between the respective Loan Party and the insurer covering full payment of such
unsatisfied amount and (B) such insurer, which shall be rated at least "A" by A.M. Best Company, has been notified, and has not disputed the claim made for payment, of the amount of such
judgment or order; or 

        (h)   any
non-monetary judgment or order shall be rendered against any Loan Party or any of its Subsidiaries that could have a Material Adverse Effect, and there
shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or 

        (i)    any
provision of any Loan Document after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason (other than pursuant to the terms thereof)
cease to be valid and binding on or enforceable against any Loan Party party to it, or any such Loan Party shall so state in writing; or 

        (j)    any
Collateral Document or financing statement after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason (other than pursuant to the terms
thereof) cease to 

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create
a valid and perfected first priority lien on and security interest in the Collateral purported to be covered thereby; or 

        (k)   a
Change of Control shall occur; or 

        (l)    any
ERISA Event shall have occurred with respect to a Plan and the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan
and the Insufficiency of any and all other Plans with respect to which an ERISA Event shall have occurred and then exist (or the liability of the Loan Parties and the ERISA Affiliates related to such
ERISA Event) exceeds $10,000,000; 

then,
and in any such event, the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Commitments of each
Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by an Issuing Bank or a Lender pursuant to Section 2.03(c) and Swing Line Advances by
a Lender pursuant to Section 2.02(b)) and of each Issuing Bank to issue Letters of Credit to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request,
or may with the consent, of the Required Lenders, (A) by notice to the Borrower, declare the Notes, all interest thereon and all other amounts payable under this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower, (B) by notice to each party required under the terms of any agreement in support of which a Letter of Credit is
issued, request that all Obligations under such agreement be declared to be due and payable and (C) by notice to each Issuing Bank, direct such Issuing Bank to deliver a Default Termination
Notice to the beneficiary of each Letter of Credit issued by it, and each Issuing Bank shall deliver such Default Termination Notices; provided,
however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under any Bankruptcy Law, (y) the Commitments of each Lender
Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by an Issuing Bank or a Lender pursuant to Section 2.03(c) and Swing Line Advances by a
Lender pursuant to Section 2.02(b)) and of each Issuing Bank to issue Letters of Credit shall automatically be terminated and (z) the Notes, all such interest
and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. 

        SECTION
6.02.    Actions in Respect of the Letters of Credit upon Default.    If any Event of Default shall have
occurred and be continuing, the Administrative Agent may, or shall at the request of the Required Lenders, irrespective of whether it is taking any of the actions described in Section 6.01 or
otherwise, make demand upon the Borrower to, and forthwith upon such demand the Borrower will, pay to the Administrative Agent on behalf of the Lender Parties in same day funds at the Administrative
Agent's office designated in such demand, for deposit in the L/C Cash Collateral Account, an amount equal to the aggregate Available Amount of all Letters of Credit then outstanding. If at any time
the Administrative Agent or the Issuing Bank determines that any funds held in the L/C Cash Collateral Account are subject to any right or claim of any Person other than the Administrative Agent and
the Lender Parties with respect to the Obligations of the Loan Parties under the Loan Documents, or that the total amount of such funds is less than the aggregate Available Amount of all Letters of
Credit, the Borrower will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held in the L/C Cash Collateral Account, an
amount equal to the excess of (a) such aggregate Available Amount over (b) the total amount of funds, if any, then held in the L/C Cash Collateral Account that the Administrative Agent,
as the case may be, determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account, such funds
shall be applied to reimburse the relevant Issuing Bank or Lenders, as applicable, to the extent permitted by applicable law. 

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ARTICLE VII
  GUARANTY    
    

        SECTION
7.01.    Guaranty; Limitation of Liability.    (a) Each Guarantor hereby absolutely, unconditionally
and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of all Obligations of the
Borrower and each other Loan Party now or hereafter existing under or in respect of the Loan Documents (including, without limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether for principal, interest, premiums, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the "Guaranteed Obligations"), and agrees to pay any and all expenses (including, without
limitation, fees and expenses of counsel) incurred by the Administrative Agent or any other Secured Party in enforcing any rights under this Agreement or any other Loan Document. Without limiting the
generality of the foregoing, each Guarantor's liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any other Loan Party to any Secured Party
under or in respect of the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such other
Loan Party. This Guaranty is a guaranty of payment and not merely of collection. 

        (b)   Each
Guarantor, the Administrative Agent and each other Lender Party and, by its acceptance of the benefits of this Guaranty, each other Secured Party, hereby confirms
that it is the intention of all such Persons that this Guaranty and the Obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Guaranty and the Obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the Guarantors, the Administrative Agent, the other Lenders Parties and, by their acceptance of the benefits of this Guaranty, the other Secured
Parties hereby irrevocably agree that the Obligations of each Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the Obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or conveyance. 

        (c)   Each
Guarantor hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to any Secured Party under this Guaranty or any
other guaranty, such Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other Guarantor and each other guarantor so as to maximize the aggregate amount paid to the
Secured Parties under or in respect of the Loan Documents. 

        SECTION
7.02.    Guaranty Absolute.    Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly
in accordance with the terms of this Agreement and the other Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Administrative Agent or any other Secured Party with respect thereto. The Obligations of each Guarantor under or in respect of this Guaranty are independent of the Guaranteed
Obligations or any other Obligations of any other Loan Party under or in respect of this Agreement or the other the Loan Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Borrower or any other Loan Party or whether the Borrower or any other Loan Party is joined in
any such action or actions. The liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any
defenses it may now have or hereafter acquire in any way relating to, any or all of the following: 

        (a)   any
lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto; 

        (b)   any
change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other Obligations of any other Loan Party
under or in respect of the Loan Documents, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed 

66

 

Obligations
resulting from the extension of additional credit to the Borrower, any other Loan Party or any of their Subsidiaries or otherwise; 

        (c)   any
taking, exchange, release or non-perfection of any collateral, or any taking, release or amendment or waiver of, or consent to departure from, any other
guaranty, for all or any of the Guaranteed Obligations; 

        (d)   any
manner of application of collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any collateral
for all or any of the Guaranteed Obligations or any other Obligations of any Loan Party under the Loan Documents or any other assets of any Loan Party or any of its Subsidiaries; 

        (e)   any
change, restructuring or termination of the corporate structure or existence of any Loan Party or any of its Subsidiaries; 

        (f)    any
failure of the Administrative Agent or any other Secured Party to disclose to any Loan Party any information relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other Loan Party now or hereafter known to the Administrative Agent or such other Secured Party (each Guarantor waiving any duty on
the part of the Administrative Agent and each other Secured Party to disclose such information); 

        (g)   the
failure of any other Person to execute or deliver this Agreement, any other Loan Document, any Guaranty Supplement (as hereinafter defined) or any other guaranty or
agreement or the release or reduction of liability of any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or 

        (h)   any
other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Administrative Agent or
any other Secured Party that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other guarantor or surety. 

This
Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any
Secured Party or any other Person upon the insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party or otherwise, all as though such payment had not been made. 

        SECTION
7.03.    Waivers and Acknowledgments.    (a) Each Guarantor hereby unconditionally and irrevocably
waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and any other notice with respect to any
of the Guaranteed Obligations and this Guaranty and any requirement that the Administrative Agent or any other Secured Party protect, secure, perfect or insure any Lien or any property subject thereto
or exhaust any right or take any action against any Loan Party or any other Person or any collateral. 

        (b)   Each
Guarantor hereby unconditionally and irrevocably waives any right to revoke this Guaranty and acknowledges that this Guaranty is continuing in nature and applies to
all Guaranteed Obligations, whether existing now or in the future. 

        (c)   Each
Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by the
Administrative Agent or any other Secured Party that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any of the other Loan Parties, any other guarantor or any other Person or any collateral and
(ii) any defense based on any right of set-off or counterclaim against or in respect of the Obligations of such Guarantor hereunder. 

        (d)   Each
Guarantor acknowledges that the Administrative Agent may, without notice to or demand upon such Guarantor and without affecting the liability of such Guarantor
under this Guaranty, foreclose under any mortgage by nonjudicial sale, and each Guarantor hereby waives any defense to the recovery by the Administrative Agent and the other Secured Parties against
such Guarantor of any deficiency after such nonjudicial sale and any defense or benefits that may be afforded by applicable law. 

67

 

        (e)   Each
Guarantor hereby unconditionally and irrevocably waives any duty on the part of the Administrative Agent or any other Secured Party to disclose to such Guarantor
any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower, any other Loan Party or any of their
Subsidiaries now or hereafter known by the Administrative Agent or such other Secured Party. 

        (f)    Each
Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by this Agreement and the other
Loan Documents and that the waivers set forth in Section 7.02 and this Section 7.03 are knowingly made in contemplation of such benefits. 

        SECTION
7.04.    Subrogation.    Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or hereafter acquire against the Borrower, any other Loan Party or any other insider guarantor that arise from the existence, payment, performance or enforcement of such
Guarantor's Obligations under or in respect of this Guaranty, this Agreement or any other Loan Document, including, without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or remedy of any Secured Party against the Borrower, any other Loan Party or any other insider guarantor or any collateral,
whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Borrower, any other Loan
Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right,
unless and until all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash, all Letters of Credit shall have expired or been
terminated and the Commitments shall have expired or been terminated. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the latest of
(a) the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, (b) the Termination Date and (c) the latest date of expiration or
termination of all Letters of Credit, such amount shall be received and held in trust for the benefit of the Secured Parties, shall be segregated from other property and funds of such Guarantor and
shall forthwith be paid or delivered to the Administrative Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations
and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents. If (i) any Guarantor shall make payment to any Secured Party
of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash, (iii) the
Termination Date shall have occurred and (iv) all Letters of Credit shall have expired or been terminated, the Administrative Agent and the other Secured Parties will, at such Guarantor's
request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such
Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to this Guaranty. 

        SECTION
7.05.    Guaranty Supplements.    Upon the execution and delivery by any Person of a Guaranty Supplement,
(i) such Person shall be referred to as an "Additional Guarantor" and shall become and be a Guarantor hereunder, and each reference in this
Agreement to a "Guarantor" or a "Loan Party" shall also mean and be a reference to such Additional Guarantor, and each reference in any other Loan Document to a "Guarantor" shall also mean and be a
reference to such Additional Guarantor, and (ii) each reference herein to "this Agreement", "this Guaranty", "hereunder", "hereof" or words of like import referring to this Agreement and this
Guaranty, and each reference in any other Loan Document to the "Loan Agreement", "Guaranty", "thereunder", "thereof" or words of like import referring to this Agreement and this Guaranty, shall mean
and be a reference to this Agreement and this Guaranty as supplemented by such Guaranty Supplement. 

        SECTION
7.06.    Indemnification by Guarantors.    (a) Without limitation on any other Obligations of any
Guarantor or remedies of the Administrative Agent or the Secured Parties under this Agreement, this Guaranty or the other Loan Documents, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Administrative Agent, each Secured Party and each of their Affiliates and their respective officers, directors, employees, agents and 

68

 

advisors
(each, an "Indemnified Party") from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party in connection with or as a result of any failure
of any Guaranteed Obligations to be the legal, valid and binding obligations of any Loan Party enforceable against such Loan Party in accordance with their terms. 

        (b)   Each
Guarantor hereby also agrees that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) to any of
the Guarantors or any of their respective Affiliates or any of their respective officers, directors, employees, agents and advisors, and each Guarantor hereby agrees not to assert any claim against
any Indemnified Party on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Facilities, the actual or proposed use of the
proceeds of the Advances or the Letters of Credit, the Loan Documents or any of the transactions contemplated by the Loan Documents. 

        SECTION
7.07.    Subordination.    (a) Each Guarantor hereby subordinates any and all debts, liabilities and
other Obligations owed to such Guarantor by each other Loan Party (the "Subordinated Obligations") to the Guaranteed Obligations to the extent and in
the manner hereinafter set forth in this Section 7.07. 

        (b)    Prohibited Payments, Etc.    Except during the continuance of a Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any other Loan Party), each Guarantor may receive regularly scheduled payments from any other Loan Party on account of the
Subordinated Obligations. After the occurrence and during the continuance of any Default (including the commencement and continuation of any proceeding under any Bankruptcy Law relating to any other
Loan Party), however, unless the Administrative Agent otherwise agrees, no Guarantor shall demand, accept or take any action to collect any payment on account of the Subordinated Obligations. 

69

  

        (c)    Prior Payment of Guaranteed Obligations.    In any proceeding under any Bankruptcy Law relating to any other
Loan Party, each Guarantor agrees that the Secured Parties shall be entitled to receive payment in full in cash of all Guaranteed Obligations (including all interest and expenses accruing after the
commencement of a proceeding under any Bankruptcy Law, whether or not constituting an allowed claim in such proceeding ("Post Petition Interest"))
before such Guarantor receives payment of any Subordinated Obligations. 

        (d)    Turn-Over.    After the occurrence and during the continuance of any Default (including the
commencement and continuation of any proceeding under any Bankruptcy Law relating to any other Loan Party), each Guarantor shall, if the Administrative Agent so requests, collect, enforce and receive
payments on account of the Subordinated Obligations as trustee for the Secured Parties and deliver such payments to the Administrative Agent on account of the Guaranteed Obligations (including all
Post Petition Interest), together with any necessary endorsements or other instruments of transfer, but without reducing or affecting in any manner the liability of such Guarantor under the other
provisions of this Guaranty. 

        (e)    Administrative Agent Authorization.    After the occurrence and during the continuance of any Default
(including the commencement and continuation of any proceeding under any Bankruptcy Law relating to any other Loan Party), the Administrative Agent is authorized and empowered (but without any
obligation to so do), in its discretion, (i) in the name of each Guarantor, to collect and enforce, and to submit claims in respect of, Subordinated Obligations and to apply any amounts
received thereon to the Guaranteed Obligations (including any and all Post Petition Interest), and (ii) to require each Guarantor (A) to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and (B) to pay any amounts received on such obligations to the Administrative Agent for application to the Guaranteed Obligations (including any and all
Post Petition Interest). 

        SECTION
7.08.    Continuing Guaranty.    This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, (ii) the Termination Date and
(iii) the latest date of expiration or termination of all Letters of Credit, (b) be binding upon the Guarantors, their successors and assigns and (c) inure to the benefit of and
be enforceable by the Administrative Agent and the other Secured Parties and their successors, transferees and assigns. 

 
 

ARTICLE VIII
  THE AGENTS    
    

        SECTION
8.01.    Authorization and Action; Appointment of Supplemental Collateral Agents.    (a) Each Lender
Party (in its capacities as a Lender, the Swing Line Bank (if applicable) and as an Issuing Bank (if applicable) and on behalf of itself and its Affiliates as potential Hedge Banks) hereby appoints
and authorizes each Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and the other Loan Documents as are delegated to such Agent by the
terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto. As to any matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of the Notes), no Agent shall be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding upon all Lender Parties and all holders of Notes;  provided, however,
that no Agent shall be required to take any action that exposes such Agent to personal liability or that is contrary to this
Agreement or applicable law. Each Agent agrees to give to each Lender Party prompt notice of each notice given to it by the Borrower pursuant to the terms of this Agreement. Notwithstanding anything
to the contrary in any Loan Document, no Person identified as a syndication agent, documentation agent, senior manager, joint lead arranger or joint book running manager, in such Person's capacity as
such, shall have any obligations or duties to any Loan Party, the Administrative Agent or any other Secured Party under any of such Loan Documents. 

        (b)   Anything
contained herein or in the Collateral Documents to the contrary notwithstanding, the Collateral Agent may from time to time, when the Collateral Agent deems it
to be necessary, 

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appoint
one or more trustees, co-trustees, collateral co-agents or collateral subagents (each, a "Supplemental Collateral
Agent") with respect to all or any part of the Collateral. In the event that the Collateral Agent so appoints any Supplemental Collateral Agent with respect to any Collateral,
(i) such Supplemental Collateral Agent shall automatically be vested, in addition to the Collateral Agent, with all rights, powers, privileges, interests and remedies of the Collateral Agent
under the Collateral Documents with respect to such Collateral; (ii) such Supplemental Collateral Agent shall be deemed to be an "Agent" for purposes of this Agreement and the other Loan
Documents, and the provisions of Section 24 of the Primary Security Agreement, Section 20 of the ARC Housing Security Agreement, this Article and Section 9.04 hereof that refer to
the Agents (or either of them) shall inure to the benefit of such Supplemental Collateral Agent, and all references therein and in the other Loan Documents to the Collateral Agent shall be deemed to
be references to the Collateral Agent and/or such Supplemental Collateral Agent, as the context may require; and (iii) the term "Collateral Agent," when used herein or in any applicable
Collateral Document in relation to the Liens on or security interests in such Collateral granted in favor of the Collateral Agent, and any rights, powers, privileges, interests and remedies of the
Collateral Agent with respect to such Collateral, shall be deemed to include such Supplemental Collateral Agent; provided, however, that no such
Supplemental Collateral Agent shall be authorized to take any action with respect to any such Collateral unless and except to the extent expressly authorized in writing by the Collateral Agent. Should
any instrument in writing from the Borrower or any other Loan Party be required by any Supplemental Collateral Agent so appointed by the Collateral Agent to more fully or certainly vest in and
confirming to such Supplemental Collateral Agent such rights, powers, privileges and duties, the Borrower shall, or shall cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by the Collateral Agent. If any Supplemental Collateral Agent, or successor thereto, shall die, become incapable of acting, resign or be removed, all the rights,
powers, privileges and duties of such Supplemental Collateral Agent, to the extent permitted by law, shall automatically vest in and be exercised by the Collateral Agent until the appointment of a new
Supplemental Collateral Agent. Without limiting the generality of the foregoing, the Unit Collateral Agent shall constitute a Supplemental Collateral Agent hereunder. 

        SECTION
8.02.    Agents' Reliance, Etc.    Neither any Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under or in connection with the Loan Documents, except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, each Agent: (a) in the case of the Administrative Agent, may treat the payee of any Note as the holder thereof until the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by the Lender that is the payee of such Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any other Agent,
such Agent has received notice from the Administrative Agent that it has received and accepted such Assignment and Acceptance, as provided in Section 9.07; (b) may consult with legal
counsel (including counsel for any Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it
in accordance with the advice of such counsel, accountants or experts; (c) makes no warranty or representation to any Lender Party and shall not be responsible to any Lender Party for any
statements, warranties or representations (whether written or oral) made in or in connection with the Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance, observance or satisfaction of any of the terms, covenants or conditions of any Loan Document on the part of any Loan Party or the existence at any time of any Default under the Loan
Documents or to inspect the property (including the books and records) of any Loan Party; (e) shall not be responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto; and
(f) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, telecopy or
telex) believed by it to be genuine and signed or sent by the proper party or parties. 

        SECTION
8.03.    CNAI and Affiliates.    With respect to its Commitments, the Advances made by it and the Notes issued
to it, CNAI shall have the same rights and powers under the Loan Documents as 

71

 

any
other Lender Party and may exercise the same as though it were not the Administrative Agent or the Collateral Agent; and the term "Lender Party" or "Lender Parties" shall, unless otherwise
expressly indicated, include CNAI in its individual capacity. CNAI and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements
from and generally engage in any kind of business with, any Loan Party, any Subsidiary of any Loan Party and any Person that may do business with or own securities of any Loan Party or any such
Subsidiary, all as if CNAI were not the Administrative Agent or the Collateral Agent and without any duty to account therefor to the Lender Parties. 

        SECTION
8.04.    Lender Party Credit Decision.    Each Lender Party acknowledges that it has, independently and
without reliance upon any Agent or any other Lender Party and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender Party also acknowledges that it will, independently and without reliance upon any Agent or any other
Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. 

        SECTION
8.05.    Indemnification by Lender Parties.    (a) Each Lender Party severally agrees to indemnify
each Agent (to the extent not promptly reimbursed by the Borrower) from and against such Lender Party's ratable share (determined as provided below) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against such Agent in any way relating
to or arising out of the Loan Documents or any action taken or omitted by such Agent under the Loan Documents (collectively, the "Indemnified Costs");  provided, however,
 that no Lender Party shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from any Agent's gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent
jurisdiction. Without limitation of the foregoing, each Lender Party agrees to reimburse each Agent promptly upon demand for its ratable share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by the Borrower under Section 9.04, to the extent that such Agent is not promptly reimbursed for such costs and expenses by the Borrower. In the case of
any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 8.05 applies whether any such investigation, litigation or proceeding is brought by any Lender
Party or any other Person. 

        (b)   Each
Lender Party severally agrees to indemnify each Issuing Bank (to the extent not promptly reimbursed by the Borrower) from and against such Lender Party's ratable
share (determined as provided below) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever
that may be imposed on, incurred by, or asserted against such Issuing Bank in any way relating to or arising out of the Loan Documents or any action taken or omitted by such Issuing Bank under the
Loan Documents; provided, however, that no Lender Party shall be liable for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such Issuing Bank's gross negligence or willful misconduct as found in a final, non-appealable judgment by a
court of competent jurisdiction. Without limitation of the foregoing, each Lender Party agrees to reimburse such Issuing Bank promptly upon demand for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by the Borrower under Section 9.04, to the extent that such Issuing Bank is not promptly reimbursed for such costs and
expenses by the Borrower. 

        (c)   For
purposes of this Section 8.05, the Lender Parties' respective ratable shares of any amount shall be determined, at any time, according to their respective
Revolving Credit Commitments at such time. The failure of any Lender Party to reimburse any Agent or any Issuing Bank, as the case may be, promptly upon demand for its ratable share of any amount
required to be paid by the Lender Parties to such Agent or such Issuing Bank, as the case may be, as provided herein shall not relieve any other Lender Party of its obligation hereunder to reimburse
such Agent or such Issuing Bank, as the case may be, for its ratable share of such amount, but no Lender Party shall be responsible for the failure of any other Lender Party to reimburse such Agent or
such Issuing Bank, as the case may be, for such 

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other
Lender Party's ratable share of such amount. Without prejudice to the survival of any other agreement of any Lender Party hereunder, the agreement and obligations of each Lender Party contained
in this Section 8.05 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the other Loan Documents. 

        SECTION
8.06.    Successor Agents.    Any Agent may resign at any time by giving 30 days' prior written notice
thereof to the Lender Parties and the Borrower and may be removed at any time with or without cause by the Required Lenders; provided, however, that any
removal of the Administrative Agent will not be effective until it has been replaced as Collateral Agent and it (or its Affiliate) has been replaced as an Issuing Bank and released from all
obligations in respect thereof. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent, which appointment shall, provided that no Default has
occurred and is continuing, be subject to the consent of the Borrower, such consent not to be unreasonably withheld or delayed. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the retiring Agent's giving of notice of resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lender Parties, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States or of any State thereof and having a
combined capital and surplus of at least $250,000,000 and which appointment shall, provided that no Default has occurred and is continuing, be subject to the consent of the Borrower, such consent not
to be unreasonably withheld or delayed. Upon the acceptance of any appointment as an Agent hereunder by a successor Agent, and, in the case of a successor Collateral Agent, upon the execution and
filing or recording of such financing statements, or amendments thereto, and such amendments or supplements to the Mortgages, and such other instruments or notices, as may be necessary or desirable,
or as the Required Lenders may request, in order to continue the perfection of the Liens granted or purported to be granted by the Collateral Documents, such successor Agent
shall succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations
under the Loan Documents. If within 45 days after written notice is given of the retiring Agent's resignation or removal under this Section 8.06 no successor Agent shall have been
appointed and shall have accepted such appointment, then on such 45th day (i) the retiring Agent's resignation or removal shall become effective, (ii) the retiring Agent shall thereupon
be discharged from its duties and obligations under the Loan Documents and (iii) the Required Lenders shall thereafter perform all duties of the retiring Agent under the Loan Documents until
such time, if any, as the Required Lenders appoint a successor Agent as provided above. After any retiring Agent's resignation or removal hereunder as an Agent shall have become effective, the
provisions of this Article VIII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an Agent under this Agreement. 

 
 

ARTICLE IX
  MISCELLANEOUS    
    

        SECTION
9.01.    Amendments, Etc.    (a) No amendment or waiver of any provision of this Agreement or the Notes or any
other Loan Document, nor consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given;  provided, however, that
no amendment, waiver or consent shall, unless in writing and signed by all of the Lenders, do any of the following at any time:
(i) waive any of the conditions specified in Section 3.01 or, in the case of the Initial Extension of Credit, Section 3.02, (ii) change the number of Lenders or the
percentage of (x) the Commitments, (y) the aggregate unpaid principal amount of the Advances or (z) the aggregate Available Amount of outstanding Letters of Credit that, in each
case, shall be required for the Lenders or any of them to take any action hereunder, (iii) release the Borrower with respect to the Obligations or reduce or limit the obligations of any
Guarantor under Article VII or release such Guarantor or otherwise limit such Guarantor's liability with respect to the Guaranteed Obligations, (iv) release any individual Manufactured
Home Community comprising a Borrowing Base Asset or all or substantially all of the Collateral, in each case in any transaction or series of related 

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transactions,
or permit the creation, incurrence, assumption or existence of any Lien on any individual Borrowing Base Asset or all or substantially all of the Collateral, in each case in any
transaction or series of related transactions, to secure any Obligations other than Obligations owing to the Secured Parties under the Loan Documents, (v) amend this Section 9.01,
(vi) increase the Commitments of the Lenders or subject the Lenders to any additional obligations, (vii) reduce the principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, (viii) postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder or amend Section 2.06,
(ix) limit the liability of any Loan Party under any of the Loan Documents, or (x) amend, waive or permit any departure from the provisions of Section 5.04 or the defined terms
used in or related to such Section; provided further that no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Bank or
each Issuing Bank, as the case may be, in addition to the Lenders required above to take such action, affect the rights or obligations of the Swing Line Bank or of the Issuing Banks, as the case may
be, under this Agreement; and provided further that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent or
the Collateral Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Administrative Agent or the Collateral Agent under this Agreement or the other
Loan Documents. 

        (b)   In
the event that any Lender (a "Non-Consenting Lender") shall refuse to consent to a waiver or amendment to,
or a departure from, the provisions of this Agreement of the type described in clause (x) of Section 9.01(a) that has been consented to by the Required Lenders, then the Borrower shall
have the right, upon written demand to such Non-Consenting Lender and the Administrative Agent given within 30 days after the first date on which such consent was solicited in
writing from the Lenders by the Administrative Agent (a "Consent Request Date"), to cause such Non-Consenting Lender to assign its rights
and obligations under this Agreement (including, without limitation, its Commitment or Commitments, the Advances owing to it and the Note or Notes held by it) to an Eligible Assignee designated by the
Borrower and approved by the Administrative Agent (such approval not to be unreasonably withheld) (a "Replacement Lender"),  provided that
(i) as of such Consent Request Date, no Event of Default shall have occurred and be continuing, and (ii) as of the date of
the Borrower's written demand to replace such Non-Consenting Lender, no Default or Event of Default shall have occurred and be continuing other than a Default or Event of Default that
resulted solely from the subject matter of the waiver or amendment for which such consent was being solicited from the Lenders by the Administrative Agent. The Replacement Lender shall purchase such
interests of the Non-Consenting Lender and shall assume the rights and obligations of the Non-Consenting Lender under this Agreement upon execution by the Replacement Lender of
an Assignment and Acceptance delivered pursuant to Section 9.07. Any Lender that becomes a Non-Consenting Lender agrees that, upon receipt of notice from the Borrower given in
accordance with this Section 9.01(b) and Section 9.07, it shall execute and deliver an Assignment and Acceptance with a Replacement Lender as contemplated by this Section. 

        SECTION
9.02.    Notices, Etc.    (a) All notices and other communications provided for hereunder shall be
either (x) in writing (including telecopier or telegraphic communication) and mailed, telecopied, telegraphed or delivered, (y) as and to the extent set forth in Section 9.02(b)
and in the proviso to this Section 9.02(a), in an electronic medium and delivered as set forth in Section 9.02(b) or (z) as and to the extent expressly permitted in this
Agreement, transmitted by e-mail, provided that such e-mail shall in all cases include an attachment (in PDF format or similar
format) containing a legible signature of the person providing such notice, if to the Borrower, at its address at 600 Grant Street, Suite 900, Denver, Colorado 80203, Attention: John G. Sprengle or,
if applicable, at johns@arc-hs.com (and in the case of transmission by e-mail, with a copy by e-mail to Scott L. Gesell, at scottg@arc-hs.com and a copy
by U.S. mail to the attention of John G. Sprengle and Scott L. Gesell at 600 Grant Street, Suite 900, Denver, Colorado 80203); if to any Initial Lender, at its Domestic Lending Office or, if
applicable, at the e-mail address specified opposite its name on Schedule I hereto (and in the case of a transmission by e-mail, with a copy by U.S. mail to its Domestic
Lending Office); if to any other Lender Party, at its Domestic Lending Office or, if applicable, at the e-mail address specified in the Assignment and Acceptance pursuant to which it
became a Lender Party (and in the case of a transmission by e-mail, with a copy by U.S. mail to its Domestic Lending Office); if to the Initial 

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Issuing
Bank, at its address at Two Penns Way, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department, or, if applicable, at dawnmarie.conover@citigroup.com (and in the case of a
transmission by e-mail, with a copy by U.S. mail to Two Penns Way, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department); and if to the Administrative Agent or the
Collateral Agent, at its address at Two Penns Way, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department, or, if applicable, at dawnmarie.conover@citigroup.com (and in the case of a
transmission by e-mail, with a copy by U.S. mail to Two Penns Way, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department) or, as to the Borrower or any Agent, at such
other address as shall be designated by such party in a written notice to the other parties and, as to each other party, at such other address as shall be designated by such party in a written notice
to the Borrower and the Administrative Agent. All such notices and communications shall, when mailed, telecopied, telegraphed or e-mailed, be effective when deposited in the mails,
telecopied, delivered to the telegraph company or confirmed by e-mail, respectively, except that notices and communications to the Administrative Agent pursuant to Article II, III
or VIII shall not be effective until received by the Administrative Agent. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or the Notes
or of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of an original executed counterpart thereof. 

        (b)   So
long as CNAI is the Administrative Agent, materials required to be delivered pursuant to Section 5.03(a), (b), (c) and (g) shall be delivered to
the Administrative Agent in an electronic medium in a format acceptable to the Administrative Agent and the Lender Parties by e-mail at oploanswebadmin@citigroup.com. The Borrower agrees
that the Administrative Agent may make such materials, as well as any other written information, documents, instruments and other material relating to the Borrower, any Loan Party, any of their
Subsidiaries or any other materials or matters relating to this Agreement, the Notes or any of the transactions contemplated hereby (collectively, the
"Communications") available to the Lender Parties by posting such notices on Intralinks or a substantially similar electronic transmission system (the
"Platform"). The Borrower acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that
there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided "as is" and "as available" and (iii) neither the Administrative Agent nor any
of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the
Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of
third party rights or freedom from viruses or other code defects, is made by the Administrative Agent or any of its Affiliates in connection with the Platform. 

        (c)   Each
Lender Party agrees that notice to it (as provided in the next sentence) (a "Notice") specifying that any
Communications have been posted to the Platform shall constitute effective delivery of such information, documents or other materials to such Lender Party for purposes of this Agreement,  provided that
if requested by any Lender Party, the Administrative Agent shall deliver a copy of the Communications to such Lender Party by
e-mail or telecopier. Each Lender Party agrees (i) to notify the Administrative Agent in writing of such Lender Party's e-mail address to which a Notice may be sent by
electronic transmission (including by electronic communication) on or before the date such Lender Party becomes a party to this Agreement (and from time to time thereafter to ensure that the
Administrative Agent has on record an effective e-mail address for such Lender Party) and (ii) that any Notice may be sent to such e-mail address. 

        SECTION
9.03.    No Waiver; Remedies.    No failure on the part of any Lender Party or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. 

        SECTION
9.04.    Costs and Expenses.    (a) Each Loan Party agrees jointly and severally to pay on demand
(i) all reasonable out-of-pocket costs and expenses of each Agent in connection with the preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence, collateral review, syndication, transportation, 

75

 

computer,
duplication, appraisal, audit, insurance, consultant, search, filing and recording fees and expenses, (B) the reasonable fees and expenses of counsel for such Agent with respect
thereto (including, without limitation, with respect to reviewing and advising on matters required to be completed by the Loan Parties on a post-closing basis), with respect to advising
such Agent as to its rights and responsibilities, or the perfection, protection or preservation of rights or interests, under the Loan Documents, with respect to negotiations with any Loan Party or
with other creditors of any Loan Party or any of its Subsidiaries arising out of any Default or any events or circumstances that may give rise to a Default and with respect to presenting claims in or
otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors' rights generally and any proceeding ancillary thereto and (C) the reasonable
fees and expenses of counsel for such Agent with respect to the preparation, execution, delivery and review of any documents and instruments at any time delivered pursuant to Section 5.01(j))
and (ii) all reasonable out-of-pocket costs and expenses of each Agent and each Lender Party in connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of the Loan Documents, whether in any action, suit or litigation, or any bankruptcy, insolvency or other similar proceeding affecting creditors' rights generally (including,
without limitation, the reasonable fees and expenses of counsel for such Agent and each Lender Party with respect thereto). 

        (b)   Each
Loan Party agrees to indemnify, defend and save and hold harmless each Indemnified Party from and against, and shall pay on demand, any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith)
(i) the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit, the Loan Documents or any of the transactions contemplated thereby or (ii) the
actual or alleged presence of Hazardous Materials on any property of any Loan Party or any of its Subsidiaries or any Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from
such Indemnified Party's gross negligence or willful misconduct. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 9.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, shareholders or creditors or an Indemnified Party, whether or not
any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated by the Loan Documents are consummated. Each Loan Party also agrees not to assert any claim against
any Agent, any Lender Party or any of their Affiliates, or any of their respective officers, directors, employees, agents and advisors, on any theory of liability, for special, indirect, consequential
or punitive damages arising out of or otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit, the Loan Documents or any of the
transactions contemplated by the Loan Documents. 

        (c)   If
any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by the Borrower to or for the account of a Lender Party other than on the last day
of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or 2.10(d), acceleration of the maturity of the Notes pursuant to
Section 6.01 or for any other reason, or if the Borrower fails to make any payment or prepayment of an Advance for which a notice of prepayment has been given or that is otherwise required to
be made, whether pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrower shall, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party any amounts required to compensate such Lender Party for any additional losses, costs or expenses that it may reasonably incur as a result of
such payment or Conversion or such failure to pay or prepay, as the case may be, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender Party to fund or maintain such Advance. 

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        (d)   If
any Loan Party fails to pay when due any costs, expenses or other amounts payable by it under any Loan Document, including, without limitation, fees and expenses of
counsel and indemnities, such amount may be paid on behalf of such Loan Party by any Agent or any Lender Party, in its sole discretion. 

        (e)   Without
prejudice to the survival of any other agreement of any Loan Party hereunder or under any other Loan Document, the agreements and obligations of the Borrower and
the other Loan Parties contained in Sections 2.10 and 2.12, Section 7.06 and this Section 9.04 shall survive the payment in full of principal, interest and all other amounts payable
hereunder and under any of the other Loan Documents. 

        SECTION
9.05.    Right of Set-off.    Upon (a) the occurrence and during the continuance of any
Event of Default and (b) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Administrative Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01, each Agent and each Lender Party and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and otherwise apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by
such Agent, such Lender Party or such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the Obligations of the Borrower or such Loan Party
now or hereafter existing under the Loan Documents, irrespective of whether such Agent or such Lender Party shall have made any demand under this Agreement or such Note or Notes and although such
obligations may be unmatured. Each Agent and each Lender Party agrees promptly to notify the Borrower or such Loan Party after any such set-off and application;  provided, however, that the failure to
give such notice shall not affect the validity of such set-off and application. The rights of each
Agent and each Lender Party and their respective Affiliates under this Section 9.05 are in addition to other rights and remedies (including, without limitation, other rights of
set-off) that such Agent, such Lender Party and their respective Affiliates may have. 

        SECTION
9.06.    Binding Effect.    This Agreement shall become effective when it shall have been executed by the
Borrower, each Guarantor named on the signature pages hereto and each Agent and the Administrative Agent shall have been notified by each Initial Lender and each Initial Issuing Bank that such Initial
Lender or such Initial Issuing Bank, as the case may be, has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Guarantors named on the signature pages
hereto and each Agent and each Lender Party and their respective successors and assigns, except that neither the Borrower nor any other Loan Party shall have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lender Parties. 

        SECTION
9.07.    Assignments and Participations.    (a) Each Lender may and, if demanded by the Borrower in
accordance with Section 9.01(b) upon at least five Business Days' notice to such Lender and the Administrative Agent, will assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment or Commitments, the Advances owing to it and the Note or Notes held by it);  provided, however, that (i) each such assignment shall be of a uniform, and not a varying, percentage of all rights and obligations under and in
respect of one or more of the Facilities, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender, an Affiliate of any Lender or a Fund
Affiliate of any Lender or an assignment of all of a Lender's rights and obligations under this Agreement, the aggregate amount of the Commitments being assigned to such Eligible Assignee pursuant to
such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $5,000,000 under each Facility or an integral multiple of
$1,000,000 in excess thereof (or such lesser amount as shall be approved by the Administrative Agent and, so long as no Default shall have occurred and be continuing at the time of effectiveness of
such assignment, the Borrower), (iii) each such assignment shall be to an Eligible Assignee, (iv) each such assignment made as a result of a demand by the Borrower pursuant to
Section 9.01(b) shall be arranged by the Borrower after consultation with the Administrative Agent, shall be made to an Eligible Assignee approved by the Administrative Agent (such approval not
to be unreasonably withheld) and shall be an assignment of all rights and obligations of the assigning Lender 

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under
this Agreement, (v) no such assignments shall be permitted without the consent of the Administrative Agent until the Administrative Agent shall have notified the Lender Parties that
syndication of the Commitments hereunder has been completed and (vi) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording
in the Register, an Assignment and Acceptance, together with any Note or Notes subject to such assignment and, except if such assignment is being made by a Lender to an Affiliate or Fund Affiliate of
such Lender, a processing and recordation fee of $3,500; provided, however, that for each such assignment made as a result of a demand by the Borrower
pursuant to Section 9.01(b), the Borrower shall pay to the Administrative Agent the applicable processing and recordation fee. 

        (b)   Upon
such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Acceptance, (i) the assignee
thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a
Lender or Issuing Bank, as the case may be, hereunder and (ii) the Lender or Issuing Bank assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights (other than its rights under Sections 2.10, 2.12, 7.06, 8.05 and 9.04 to the extent any claim thereunder relates to an event arising
prior to such assignment) and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the remaining portion of an assigning Lender's or
Issuing Bank's rights and obligations under this Agreement, such Lender or Issuing Bank shall cease to be a party hereto). 

        (c)   By
executing and delivering an Assignment and Acceptance, each Lender Party assignor thereunder and each assignee thereunder confirm to and agree with each other and the
other parties thereto and hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; (ii) such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party
or the performance or observance by any Loan Party of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Administrative Agent, such
assigning Lender Party or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Loan Documents as are delegated to the Administrative Agent by the terms hereof and thereof, together with such powers and discretion
as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required
to be performed by it as a Lender or Issuing Bank, as the case may be. 

        (d)   The
Administrative Agent shall maintain at its address referred to in Section 9.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lender Parties and the Commitment under each Facility of, and principal amount of the Advances owing under each Facility to, each Lender
Party from time to time (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lender Parties may treat each Person whose name is recorded in the Register as a Lender Party hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or the Administrative Agent or any Lender Party at any reasonable time and from time to time upon reasonable prior notice. 

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        (e)   Upon
its receipt of an Assignment and Acceptance executed by an assigning Lender Party and an assignee, together with any Note or Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit D hereto, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower and each other Agent. In the case of any assignment by a Lender, within
five Business Days after its receipt of such notice, the Borrower, at its own expense, shall, if requested by the applicable Lender, execute and deliver to the Administrative Agent in exchange for the
surrendered Note or Notes a new Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it under each Facility pursuant to such Assignment and Acceptance and, if
any assigning Lender has retained a Commitment hereunder under such Facility, a new Note to the order of such assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new
Note or Notes, if any, shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A hereto. 

        (f)    Each
Issuing Bank may assign to one or more Eligible Assignees all or a portion of its rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) except in the case of an assignment to a Person that immediately prior to such assignment was
an Issuing Bank or an assignment of all of an Issuing Bank's rights and obligations under this Agreement, the amount of the Letter of Credit Commitment of the assigning Issuing Bank being assigned
pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $10,000,000 and shall be in an integral
multiple of $1,000,000 in excess thereof, (ii) each such assignment shall be to an Eligible Assignee and (iii) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with a processing and recordation fee of $3,500,  provided that such fee shall not be
payable if the assigning Issuing Bank is making such assignment simultaneously with the assignment in its capacity
as a Lender of all or a portion of its Revolving Credit Commitment to the same Eligible Assignee. 

        (g)   Each
Lender Party may sell participations to one or more Persons (other than any Loan Party or any of its Affiliates) in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it and the Note or Notes (if any) held by it);  provided, however, that
(i) such Lender Party's obligations under this Agreement (including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender Party shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender Party shall remain the holder of
any such Note for all purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the other Lender Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party's rights and obligations under this Agreement, (v) no participant under any such participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan Party therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation or postpone any date fixed for any payment of principal of, or interest on, the Notes
or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or release all or substantially all of the Collateral and (vi) if, at the time of such
sale, such Lender Party was entitled to payments under Section 2.12(a) in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term
Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect
to such participant on such date, provided that such participant complies with the requirements of Section 2.12(e). 

        (h)   Any
Lender Party may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 9.07, disclose to the
assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender 

79

 

Party
by or on behalf of the Borrower; provided, however, that, prior to any such disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any Confidential Information received by it from such Lender Party. 

        (i)    Notwithstanding
any other provision set forth in this Agreement, any Lender Party may at any time create a security interest in all or any portion of its rights under
this Agreement (including, without limitation, the Advances owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System. 

        SECTION
9.08.    Execution in Counterparts.    This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of an original executed counterpart of this Agreement. 

        SECTION
9.09.    No Liability of the Issuing Banks.    The Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit. Neither any Issuing Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use that may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank against
presentation of documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or
(d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that the Borrower shall have a claim against such Issuing Bank, and such Issuing
Bank shall be liable to the Borrower, to the extent of any direct, but not consequential, damages suffered by the Borrower that the Borrower proves were caused by (i) such Issuing Bank's
willful misconduct or gross negligence as determined in a final, non-appealable judgment by a court of competent jurisdiction in determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (ii) such Issuing Bank's willful failure to make lawful payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, such Issuing Bank may accept documents that appear on
their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary. 

        SECTION
9.10.    Confidentiality.    Neither the Administrative Agent nor any Lender Party shall disclose any
Confidential Information to any Person without the consent of the Borrower, other than (a) to such Administrative Agent's or such Lender Party's Affiliates and their officers, directors,
employees, agents
and advisors and to actual or prospective Eligible Assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process,
(c) as requested or required by any state, Federal or foreign authority or examiner regulating such Lender Party and (d) to any rating agency when required by it, provided that, prior to
any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Confidential Information relating to the Loan Parties received by it from such Lender Party. 

80

   
        SECTION 9.11.    Release of Collateral.    Upon the sale, lease, transfer or other disposition of any item of
Collateral of any Loan Party (including, without limitation, as a result of the sale, in accordance with the terms of the Loan Documents, of the Loan Party that owns such Collateral) in accordance
with the terms of the Loan Documents, the Collateral Agent will, at the Borrower's expense, execute and deliver to such Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest granted under the Collateral Document in accordance with the terms of the Loan Documents. 

        SECTION
9.12.    Patriot Act Notification.    Each Lender and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Loan Parties that pursuant to the requirements of the USA Patriot Act (Title III of Pub.L. 107-56 (signed into law October 26, 2001)) (the
"Patriot Act"), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address
of such Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act. The Parent Guarantor
and the Borrower shall, and shall cause each of their Subsidiaries to, provide, to the extent commercially reasonable, such information and take such actions as are reasonably requested by the
Administrative Agent or any Lenders in order to assist the Administrative Agent and the Lenders in maintaining compliance with the Patriot Act. 

        SECTION
9.13.    Jurisdiction, Etc.    (a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court
or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Loan Documents in the courts of any jurisdiction. 

        (b)   Each
of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such
court. 

        SECTION
9.14.    Governing Law.    This Agreement and the Notes shall be governed by, and construed in accordance
with, the laws of the State of New York. 

        SECTION 9.15.    WAIVER OF JURY
TRIAL.    EACH OF THE BORROWER, EACH OTHER LOAN PARTY, THE ADMINISTRATIVE AGENT AND THE LENDER PARTIES IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE
ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

[Balance of page intentionally left blank]

81

        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 above written. 

BORROWER:

	 	 	AFFORDABLE RESIDENTIAL COMMUNITIES LP
	

 	
 	

By:	
 	

AFFORDABLE RESIDENTIAL COMMUNITIES INC., its general partner
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

 	
 	

 	
 	

 

GUARANTORS:

	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

AFFORDABLE RESIDENTIAL COMMUNITIES INC.
	

 	

 	

 	

 	

By	

 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

ARC BROKERAGE, L.L.C.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

ARC DEALERSHIP, INC.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President and Secretary
	

 	
 	

ARC HOUSING GP LLC
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

ARCHC LLC
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

ARC HOUSING LLC
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	 	 	 	 	 	 	 

	

 	
 	

ARC HOUSINGTX LP

By: ARC HOUSING GP LLC, its general partner
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

ARC III, L.L.C.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

ARC INSURANCE SERVICES, INC.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

ARC INSURANCE SERVICES, L.L.C.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

ARC MANAGEMENT SERVICES, INC.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

ARC PROPERTY MANAGEMENT, L.L.C.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Executive Vice President and Secretary
	

 	
 	

ARC REAL ESTATE HOLDINGS, LLC
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President and Secretary
	

 	
 	

ARC REAL ESTATE SERVICES, L.L.C.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Secretary
	 	 	 	 	 	 	 

	

 	
 	

ARC REAL ESTATE, LLC
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President and Secretary
	

 	
 	

ARC TRS, INC.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President and Secretary
	

 	
 	

ARCHOMESMART, L.L.C.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President and Secretary
	

 	
 	

ARCMEZ3, L.L.C.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President and Secretary
	

 	
 	

ARCMS, INC.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President and Secretary
	

 	
 	

ENSPIRE FINANCE LLC
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT D. JACKSON      
 Name: Scott D. Jackson

Title: Chief Executive Officer
	

 	
 	

ENSPIRE HOLDINGS LLC
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President and Secretary
	

 	
 	

ENSPIRE INSURANCE LLC
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President and Secretary
	 	 	 	 	 	 	 

	

 	
 	

WINDSTAR AVIATION CORP.
	

 	
 	

 	
 	

By	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President and Secretary
	

 	
 	

 	
 	

 	
 	

 

ADMINISTRATIVE AGENT, COLLATERAL AGENT, INITIAL ISSUING BANK, SWING LINE BANK AND INITIAL LENDER:

	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

CITICORP NORTH AMERICA, INC.
	

 	

 	

 	

 	

By	

 	

/s/  DAVID BOUTON      
 Name: David Bouton

Title: Vice President
	

 	
 	

 	
 	

 	
 	

 

INITIAL LENDERS:

	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

MERRILL LYNCH CAPITAL CORPORATION
	

 	

 	

 	

 	

By	

 	

/s/  STEPHANIE VALLILLO      
 Name: Stephanie Vallillo

Title: Vice President
	

 	
 	

 	
 	

 	
 	

 

	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

BANK ONE, NA
	

 	

 	

 	

 	

By	

 	

/s/  ANGELA L. KLEIMAN      
 Name: Angela L. Kleiman

Title: Director
	

 	
 	

 	
 	

 	
 	

 

	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

CREDIT SUISSE FIRST BOSTON, ACTING THROUGH ITS CAYMAN ISLANDS BRANCH
	

 	

 	

 	

 	

By	

 	

/s/  KARL M. STUDER      
 Name: Karl M. Studer

Title: Director
	

 	

 	

 	

 	

By	

 	

/s/  CASSANDRA DROOGAN      
 Name: Cassandra Droogan

Title: Associate
	

 	
 	

 	
 	

 	
 	

 

	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

MORGAN STANLEY MORTGAGE CAPITAL INC.
	

 	

 	

 	

 	

By	

 	

/s/  STEVEN STERN      
 Name: Steven Stern

Title: Vice President
	

 	
 	

 	
 	

 	
 	

 

	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

UBS LOAN FINANCE LLC
	

 	

 	

 	

 	

By	

 	

/s/  JUAN ZUNIGA      
 Name: Juan Zuniga

Title: Associate Director
	

 	

 	

 	

 	

By	

 	

/s/  JOSELIN FERNANDES      
 Name: Joselin Fernandes

Title: Associate Director
	

 	
 	

 	
 	

 	
 	

 

	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

WACHOVIA BANK, NATIONAL ASSOCIATION
	

 	

 	

 	

 	

By	

 	

/s/  DAVID HOAGLAND      
 Name: David Hoagland

Title: Vice President
	

 	
 	

 	
 	

 	
 	

 

	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

KEYBANK NATIONAL ASSOCIATION
	

 	

 	

 	

 	

By	

 	

/s/  CHERYL F. VAN KLOMPENBERG      
 Name: Cheryl F. Van Klompenberg

Title: Assistant Vice President
	

 	
 	

 	
 	

 	
 	

 

 
 

SCHEDULE I    
    
    COMMITMENTS AND APPLICABLE LENDING OFFICES    
    

	Name of Initial

Lender/ Initial

Issuing Bank
 
	 	Revolving Credit

Commitment
	 	Letter of Credit

Commitment
	 	Swing Line

Commitment
	 	Domestic Lending Office
	 	Eurodollar Lending Office

	

Citicorp North America, Inc.	
 	
$	

29,761,904	
 	
$	

5,000,000	
 	
$	

1,000,000	
 	

2 Penns Way, Suite 200

New Castle, DE 19720

Attn: Dawnmarie Conover

Tel: 302-894-6047

Fax: 302-994-0849

E-mail: Dawnmarie. conover@citigroup.com	
 	

2 Penns Way, Suite 200

New Castle, DE 9720

Attn: Dawnmarie Conover

Tel: 302-894-6047

Fax: 302-994-0849

E-mail: Dawnmarie. conover@citigroup.com
	

Merrill Lynch Capital Corporation	
 	
$	

29,761,904	
 	
 	

—	
 	
 	

—	
 	

4 World Financial

Centers, 16th Floor

New York, NY 10080

Attn: Eve Lam

Tel: 212-449-6187

Fax: 212-738-1719

E-mail: Eve_Lam @ml.com	
 	

4 World Financial

Centers, 16th Floor

New York, NY 10080

Attn: Eve Lam

Tel: 212-449-6187

Fax: 212-738-1719

E-mail: Eve_Lam @ml.com
	

Bank One, NA	
 	
$	

15,000,000	
 	
 	

—	
 	
 	

—	
 	

One Bank One Plaza,

Suite IL1-0315

Chicago, IL 60670

Attn: Jose Rodriguez

Tel: 312-325-7071

Fax: 312-325-7101

E-mail: jose_l_rodriguez

@bankone.com	
 	

One Bank One Plaza,

Suite IL1-0315

Chicago, IL 60670

Attn: Jose Rodriguez

Tel: 312-325-7071

Fax: 312-325-7101

E-mail: jose_l_rodriguez

@bankone.com
	

Credit Suisse First Boston, acting through its Cayman Islands Branch	
 	
$	

10,119,048	
 	
 	

—	
 	
 	

—	
 	

One Madison Avenue

New York, NY10010

Attn: Ed Markowski

Tel: 212-538-3380

Fax: 212-538-6851

E-mail: edwards.markowski

@csfb.com	
 	

One Madison Avenue

New York, NY10010

Attn: Ed Markowski

Tel: 212-538-3380

Fax: 212-538-6851

E-mail: edwards.markowski

@csfb.com
	

Morgan Stanley Mortgage Capital Inc.	
 	
$	

10,119,048	
 	
 	

—	
 	
 	

—	
 	

1633 Broadway, 25th Floor

New York, NY 10019

Attn: Kevin Hyland

Tel: 212-537-1799

Fax: 212-507-4950

E-mail: kevin.hyland

@morganstanley.com	
 	

1633 Broadway, 25th Floor

New York, NY 10019

Attn: Kevin Hyland

Tel: 212-537-1799

Fax: 212-507-4950

E-mail: kevin.hyland

@morganstanley.com
	

UBS Loan Finance LLC	
 	
$	

10,119,048	
 	
 	

—	
 	
 	

—	
 	

677 Washington Blvd., 6th Floor

Stamford, CT 06901

Attn: Deborah Porter

Tel: 203-719-6391

Fax: 203-719-4176

E-mail: deborah.porter@ubs.com	
 	

677 Washington Blvd., 6th Floor

Stamford, CT 06901

Attn: Deborah Porter

Tel: 203-719-6391

Fax: 203-719-4176

E-mail: deborah.porter@ubs.com
	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	

Wachovia Bank, National Association	
 	
$	

10,119,048	
 	
 	

—	
 	
 	

—	
 	

201 S. College St., CP9, NC1183

Charlotte, NC 28288

Attn: Shharon Gibson

Tel: 704-715-760

Fax: 704-715-0094

E-mail: sharon.gibson1

@wachovia.com	
 	

201 S. College St., CP9, NC1183

Charlotte, NC 28288

Attn: Sharon Gibson

Tel: 704-715-7608

Fax: 704-715-0094

E-mail: sharon.gibson1

@wachovia.com
	

KeyBank National Association	
 	
$	

10,000,000	
 	
 	

—	
 	
 	

—	
 	

127 Public Square, 8th Fl.

Cleveland, OH 44114

Attn: Audrey Pishnery

Tel: 216-689-5756

Fax: 216-689-4721

E-mail: audrey_pishnery

@keybank.com	
 	

127 Public Square, 8th Fl.

Cleveland, OH 44114

Attn: Audrey Pishnery

Tel: 216-689-5756

Fax: 216-689-4721

E-mail: audrey_pishnery

@keybank.com
	 	
Total	
 	
$	

125,000,000	
 	
$	

5,000,000	
 	
$	

1,000,000	
 	

 	
 	

 

QuickLinks

$125,000,000 CREDIT AGREEMENT Dated as of February 18, 2004 among AFFORDABLE RESIDENTIAL COMMUNITIES LP, as Borrower, AFFORDABLE RESIDENTIAL COMMUNITIES INC., as Parent Guarantor, THE SUBSIDIARY GUARANTORS NAMED
HEREIN, as Subsidiary Guarantors, THE INITIAL LENDERS, INITIAL ISSUING BANK AND SWING LINE BANK NAMED HEREIN, as Initial Lenders, Initial Issuing Bank and Swing Line Bank CITICORP NORTH AMERICA, INC., as Administrative Agent and as Collateral Agent,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Syndication Agent, BANK ONE, NA, as Documentation Agent, and CITIGROUP GLOBAL MARKETS INC. and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Joint Lead Arrangers and Joint Book
Running Managers

TABLE OF CONTENTS

CREDIT AGREEMENT

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

ARTICLE III CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT

ARTICLE IV REPRESENTATIONS AND WARRANTIES

ARTICLE V COVENANTS OF THE LOAN PARTIES

ARTICLE VI EVENTS OF DEFAULT

ARTICLE VII GUARANTY

ARTICLE VIII THE AGENTS

ARTICLE IX MISCELLANEOUS

SCHEDULE I COMMITMENTS AND APPLICABLE LENDING OFFICESQuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.33  

EXECUTION VERSION  

 
 

MASTER REPURCHASE AGREEMENT    
    
    Between:    
    
    Merrill Lynch Mortgage Capital Inc., as Buyer    
    
    and

    
    Enspire Finance, LLC, as Seller    
    
    Dated as of February 18, 2004    

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	SECTION 1.	 	APPLICABILITY	 	1
	SECTION 2.	 	DEFINITIONS	 	1
	SECTION 3.	 	INITIATION; TERMINATION	 	13
	SECTION 4.	 	MARGIN AMOUNT MAINTENANCE	 	17
	SECTION 5.	 	INCOME PAYMENTS	 	18
	SECTION 6.	 	REQUIREMENTS OF LAW	 	19
	SECTION 7.	 	TAXES.	 	19
	SECTION 8.	 	SECURITY INTEREST	 	22
	SECTION 9.	 	PAYMENT, TRANSFER AND CUSTODY	 	23
	SECTION 10.	 	HYPOTHECATION OR PLEDGE OF PURCHASED MH LOAN	 	23
	SECTION 11.	 	REPRESENTATIONS	 	24
	SECTION 12.	 	COVENANTS	 	27
	SECTION 13.	 	EVENTS OF DEFAULT	 	33
	SECTION 14.	 	REMEDIES	 	35
	SECTION 15.	 	INDEMNIFICATION AND EXPENSES; RECOURSE	 	37
	SECTION 16.	 	SERVICING	 	38
	SECTION 17.	 	SINGLE AGREEMENT	 	38
	SECTION 18.	 	SET-OFF	 	39
	SECTION 19.	 	NOTICES AND OTHER COMMUNICATIONS	 	39
	SECTION 20.	 	ENTIRE AGREEMENT; SEVERABILITY	 	39
	SECTION 21.	 	NON-ASSIGNABILITY	 	40
	SECTION 22.	 	TERMINABILITY	 	41
	SECTION 23.	 	GOVERNING LAW	 	41
	SECTION 24.	 	SUBMISSION TO JURISDICTION; WAIVERS	 	41
	SECTION 25.	 	NO WAIVERS, ETC.	 	42
	SECTION 26.	 	NETTING	 	42
	SECTION 27.	 	DUE DILIGENCE	 	42
	SECTION 28.	 	NON-UTILIZATION FEE	 	43
	SECTION 29.	 	COMMITMENT FEE	 	43
	SECTION 30.	 	BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT	 	43
	SECTION 31.	 	MISCELLANEOUS	 	44
	SECTION 32.	 	CONFIDENTIALITY	 	45
	SECTION 33.	 	INTENT	 	45
	SECTION 34.	 	DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS	 	46
	SECTION 35.	 	CONFLICTS	 	46
	SECTION 36.	 	AUTHORIZATIONS	 	46
	SECTION 37.	 	BUYER REPRESENTATIONS	 	46

i

 
 
 

EXHIBITS    
    

	SCHEDULE 1	 	Representations and Warranties Re: MH Loans
	

SCHEDULE 2	
 	

Existing Indebtedness
	

EXHIBIT I	
 	

Form of Confirmation Letter
	

EXHIBIT II	
 	

Form of Opinion Letter
	

EXHIBIT III	
 	

UCC Filing Jurisdictions
	

EXHIBIT IV	
 	

Form of Account Agreement
	

EXHIBIT V	
 	

Loan Schedule Fields
	

EXHIBIT VI	
 	

Loan File Documents
	

EXHIBIT VII	
 	

Underwriting Guidelines
	

EXHIBIT VIII	
 	

Seller's Officer's Certificate
	

EXHIBIT IX	
 	

Form of Servicer Notice
	

EXHIBIT X	
 	

Responsible Officers
	

EXHIBIT XI	
 	

Form of Section 7 Certificate

ii

 
 

MASTER REPURCHASE AGREEMENT    
    

        This is a MASTER REPURCHASE AGREEMENT, dated as of February 18, 2004, between ENSPIRE FINANCE, LLC, a Delaware limited liability company (the
"Seller") and MERRILL LYNCH MORTGAGE CAPITAL INC., a New York corporation (the "Buyer"). 

SECTION 1. APPLICABILITY  

        From time to time the parties hereto shall enter into transactions in which the respective Seller agrees to transfer to Buyer MH Loans (as hereinafter defined)
against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to the Seller such MH Loans at a date certain as described herein, against the transfer of funds by the
Seller. Each such transaction shall be referred to herein as a "Transaction" and shall be governed by this Repurchase Agreement, unless otherwise agreed
in writing. 

SECTION 2. DEFINITIONS  

        As used herein, the following terms shall have the following meanings (all terms defined in this Section 2 or in other provisions of this Repurchase
Agreement in the singular to have the same meanings when used in the plural and vice versa) 

        "1934 Act" shall mean the Securities and Exchange Act of 1934, as amended from time to time. 

        "Acceptable SPV" shall mean a Person (established by Seller or any Guarantor) which issues Structured Securities Debt. 

        "Accepted Servicing Practices" shall mean, with respect to any MH Loan, those servicing practices of prudent lending institutions which
service loans of the same type as such MH Loan in the jurisdiction where the related Property is located. 

        "Account Agreement" shall mean a collection account control agreement between the Seller, the Buyer, and a federally insured depository
institution acceptable to Buyer in its sole discretion, substantially in the form of Exhibit IV attached hereto. 

        "Additional Purchased MH Loans" shall mean Eligible MH Loans or cash provided by the Seller to Buyer or its designee pursuant to
Section 4 of this Repurchase Agreement. 

        "Affiliate" shall mean with respect to any Person, any "affiliate" of such Person, as such term is defined in the Bankruptcy Code. 

        "Affiliate Guarantor" shall mean ARC Dealership Inc., a Colorado corporation. 

        "Affiliate Guaranty" shall mean that certain Affiliate Guaranty of the Affiliate Guarantor, dated as of the date hereof, pursuant to which
the Affiliate Guarantor fully and unconditionally guarantees the obligations of the Seller hereunder, as the same may be amended, supplemented or otherwise modified from time to time. 

        "Asset Value" shall mean with respect to each Eligible MH Loan, the applicable Purchase Price Percentage for the related Purchased MH Loan
multiplied by the lesser of (a) the Market Value of such MH Loan and (b) the outstanding principal balance of such MH Loan. 

        "Bailee Letter" shall have the meaning assigned to such term in the Custodial Agreement. 

        "Bankruptcy Code" shall mean the United States Bankruptcy Code of 1978, as amended from time to time. 

        "Business Day" shall mean a day other than (i) a Saturday or Sunday, (ii) any day on which banking institutions are
authorized or required by law, executive order or governmental decree to be closed in the State of New York or (iii) any day on which the New York Stock Exchange is closed. 

        "Buyer" shall mean Merrill Lynch Mortgage Capital Inc., its successors in interest, assigns and participants. 

        "Capital Lease Obligations" shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the 

 

extent
such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Repurchase Agreement, the amount of
such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. 

        "Cash Equivalents" shall mean (a) securities with maturities of 90 days or less from the date of acquisition issued or fully
guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of Buyer or of any commercial bank having capital and surplus in excess of $100,000,000, (c) repurchase obligations of Buyer or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a term of not more than seven days with respect to securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody's and in either case
maturing within 90 days after the day of acquisition, (e) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody's, (f) securities with maturities of
90 days or less from the date of acquisition backed by standby letters of credit issued by Buyer or any commercial bank satisfying the requirements of clause (b) of this definition or
(g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition. 

        "Change in Control" shall mean: 

        (A)  any
transaction or event as a result of which the Parent Guarantor ceases to own, directly or indirectly 100% of the stock of the Seller; 

        (B)  any
transaction or event as a result of which the Parent Guarantor ceases to own, directly or indirectly 100% of the stock of the Affiliate Guarantor; 

        (C)  any
transaction or event as a result of which the REIT ceases to own, directly or indirectly at least 75% of the stock of the Parent Guarantor; 

        (D)  the
sale, transfer, or other disposition of all or substantially all of the Seller's or any Guarantor's assets (excluding any such action taken in connection with any
securitization transaction); or 

        (E)  the
consummation of a merger or consolidation of Seller or any Guarantor with or into another entity or any other corporate reorganization, if more than 51% of the
combined voting power of the continuing or surviving entity's stock outstanding immediately after such merger, consolidation or such other reorganization is owned by persons who were not direct or
indirect stockholders of the Seller or any Guarantor immediately prior to such merger, consolidation or other reorganization. 

        "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. 

        "Collection Account" shall mean the account number 193343785 established with Bank One, NA subject to an Account Agreement, into which all
Income shall be deposited on account of the Purchased MH Loans on and after the occurrence of a Default or an Event of Default. 

        "Commitment Fee" shall mean (i) as of the closing, the product of (x) 1.00% per annum and (y) the Maximum Purchase
Price; (ii) as of the first anniversary of the date hereof, the product of (x) 0.75% per annum and (y) the Maximum Purchase Price; (iii) as of the second anniversary of the
date hereof, the product of (x) 0.50% per annum and (y) the Maximum Purchase Price; or (iv) as of the third anniversary of the date hereof, the product of (x) 0.25% per
annum and (y) the Maximum Purchase Price. 

        "Confidential Terms" shall have the meaning specified in Section 32 hereof. 

        "Confirmation" shall mean a Confirmation Letter in the form of Exhibit I hereto. 

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        "Credit Agreement" shall mean that certain Credit Agreement dated as of February 18, 2004, among the Parent Guarantor, the REIT,
the subsidiary guarantors thereto, lender parties thereto and Citicorp North America, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bank One, NA and Citigroup Global
Markets Inc. 

        "Custodial Agreement" shall mean that certain Custodial Agreement dated as of the date hereof, among Seller, Buyer and Custodian as the
same may be amended from time to time. 

        "Custodian" shall mean U.S. Bank National Association, or any successor thereto under the Custodial Agreement. 

        "Debt-to-Income Ratio" shall mean the ratio of the required Monthly Payments under all debt of the Obligor to the
monthly income of the Obligor. 

        "Default" shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default. 

        "Defaulting Party" shall have the meaning specified in Section 26(b) hereof. 

        "Delinquent" shall mean, any Eligible MH Loan as to which any Monthly Payment, or part thereof, remains unpaid for more than
30 days from the original Due Date for such Monthly Payment. 

        "Delinquent MH Loan" shall mean a MH Loan that is more than 29 days Delinquent but less than 60 days Delinquent. 

        "Disbursement Agent" shall mean U.S. Bank National Association, its successors or assigns. 

        "Disbursement Agreement" shall mean that certain Disbursement Agreement by and among the Disbursement Agent, the Buyer, the Seller and the
Servicer, as the same may be amended from time to time. 

        "Dollars" and "$" shall mean lawful money of the United States of America. 

        "Due Date" shall mean the day of the month on which the Monthly Payment is due on an MH Loan, exclusive of any days of grace. 

        "Due Diligence Review" shall mean the performance by Buyer of any or all of the reviews permitted under Section 27 hereof with
respect to any or all of the MH Loans, as desired by the Buyer from time to time. 

        "Effective Date" shall mean the date upon which the conditions precedent set forth in Section 3(a) shall have been satisfied. 

        "Eligible MH Loan" shall mean an MH Loan which complies with the representations and warranties set forth on  Schedule 1 to this Repurchase Agreement or any other MH
Loan that may be subsequently added to this Repurchase Agreement by the mutual written
agreement of Buyer and Seller. 

        "ERISA" shall, with respect to any Person, mean the Employee Retirement Income Security Act of 1974, as amended from time to time and any
successor thereto, and the regulations promulgated and rulings issued thereunder. 

        "ERISA Affiliate" shall, with respect to any Person, mean any Person which is a member of any group of organizations (i) described
in Section 414(b) or (c) of the Code of which such Person is a member, or (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which such Person is a member. 

        "Event of Default" shall have the meaning specified in Section 13.01 hereof. 

        "Event of Insolvency" shall mean, for any Person: 

        (a)   that
such Person shall discontinue or abandon operation of its business; or 

3

 

        (b)   that
such Person shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or 

        (c)   a
proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of such Person in an involuntary
case under any applicable bankruptcy, insolvency, liquidation, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or for the winding-up or liquidation of its affairs and such
event described in this clause (c) shall continue for sixty (60) days without having been dismissed or discharged; or 

        (d)   the
commencement by such Person of a voluntary case under any applicable bankruptcy, insolvency or other similar Law now or hereafter in effect, or such Person's consent
to the entry of an order for relief in an involuntary case under any such Law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or any general assignment for the benefit of creditors; or 

        (e)   that
such Person shall become insolvent as that term is defined under the Bankruptcy Code and related bankruptcy law; or 

        (f)    if
such Person is a corporation, such Person, or any of their Subsidiaries, shall take any corporate action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the actions set forth in the preceding clause (a), (b), (c), (d) or (e). 

        "Event of Termination" shall, with respect to the Seller, mean (i) with respect to any Plan, a reportable event, as defined in
Section 4043 of ERISA, as to which the PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such
event, or (ii) the withdrawal of the Seller or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of
ERISA, or (iii) the failure by the Seller or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to
any Plan, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Code or Section 302(e) of ERISA, or
(iv) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by the Seller or any ERISA Affiliate thereof to terminate any Plan, or
(v) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of tax-exempt status of
the trust of which such Plan is a part if the Seller or any ERISA Affiliate thereof fails to timely provide security to the Plan in accordance with the provisions of said Sections, or (vi) the
institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (vii) the receipt by the Seller or
any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (vi) has been taken by the PBGC with respect to such Multiemployer
Plan, or (viii) any event or circumstance exists which may reasonably be expected to constitute grounds for the Seller or any ERISA Affiliate thereof to incur liability under Title IV of ERISA
or under Sections 412(c)(11) or 412(n) of the Code with respect to any Plan. 

        "Excluded Taxes" shall have the meaning provided in Section 7(b) hereof. 

        "Exit Fee" shall have the meaning provided in Section 3(e) hereof. 

        "Expenses" shall mean all present and future expenses incurred by or on behalf of the Buyer in connection with this Repurchase Agreement
or any of the other Repurchase Documents and any amendment, supplement or other modification or waiver related hereto or thereto, whether incurred heretofore or hereafter, which expenses shall include
the cost of title, lien, judgment and other record searches; attorneys' fees; and costs of preparing and recording any UCC financing statements or other filings necessary to perfect the security
interest created hereby. 

4

 

        "Fidelity Insurance" shall mean insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance
and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Seller's regulators. 

        "Financial Statements" shall mean the consolidated financial statements of the Seller or any Guarantor prepared in accordance with GAAP
for the year or other period then ended. Such financial statements will be audited, in the case of annual statements, by PricewaterhouseCoopers or such other independent certified public accountants
approved by the Buyer (which approval shall not be unreasonably withheld). 

        "First Payment Default" shall mean, with respect to an MH Loan, the failure of the Obligor to make the first Monthly Payment due under the
MH Loan on or before its scheduled Due Date. 

        "Fitch" shall mean Fitch Ratings, Inc., or any successor thereto. 

        "GAAP" shall mean generally accepted accounting principles in the United States of America, applied on a consistent basis and applied to
both classification of items and amounts, and shall include, without limitation, the official interpretations thereof by the Financial Accounting Standards Board, its predecessors and successors. 

        "Governmental Authority" shall mean the government of any nation or of the United States of America or of any state, county, municipality
or other political subdivision thereof or any governmental body, agency, authority, department or commission (including, without limitation, any taxing authority) or any instrumentality or officer of
any of the foregoing (including, without limitation, any court or tribunal) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any
corporation, partnership or other entity directly or indirectly owned by or controlled by the foregoing. 

        "Guarantee" shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other
Person or in any manner providing for the payment of any
Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, or to take-or-pay or otherwise); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good
faith. The terms "Guarantee" and "Guaranteed" used as verbs shall have correlative meanings. 

        "Guarantor" shall mean each of the Parent Guarantor and the Affiliate Guarantor. 

        "High Cost Loan" shall mean an MH Loan classified as (a) a "high cost" loan under the Home Ownership and Equity Protection Act of
1994 or (b) a "high cost," "threshold," "covered," "predatory" or similar loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology
under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees). 

        "Income" shall mean, with respect to any Purchased MH Loan at any time, any principal thereof then payable and all interest, dividends or
other distributions payable thereon. 

        "Indebtedness" shall mean, with respect to any Person, (a) obligations created, issued or incurred by such Person for borrowed
money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such
Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed
money) arising, and accrued expenses incurred, in the ordinary course of business, so long as such trade accounts payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been
assumed by such Person; 

5

 

(d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of
such Person; (e) Capital Lease Obligations of such Person; (f) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements;
(g) Indebtedness of others Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; and
(i) Indebtedness of general partnerships of which such Person is a general partner. 

        "Interest Rate Protection Agreement" shall mean, with respect to any or all of the Purchased MH Loans, any short sale of a US Treasury
Security, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement
or Takeout Commitment, or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific
contingencies, entered into by a Seller and an Affiliate of the Buyer, and acceptable to the Buyer. 

        "IPO" shall mean the successful completion of an initial public offering of the shares of common stock of the REIT to raise a minimum of
$400,000,000. 

        "Late Payment Fee" shall mean the excess of the Price Differential paid as a result of its calculation at the Post-Default
Rate over the Price Differential as would have been calculated at the Pricing Rate. 

        "Law" shall mean, any law, treaty, rule or regulation or determination of an arbitrator or court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. 

        "LIBOR Period" shall mean, with respect to each Payment Date, the period from and including the immediately preceding Payment Date (or,
with respect to the first LIBOR Period for each Transaction, from and including the related Purchase Date) to but excluding such Payment Date, unless otherwise agreed to by the Buyer and the Seller
and set forth in the related Confirmation. 

        "LIBOR Rate" shall mean, with respect to each day during the applicable LIBOR Period, the rate per annum equal to the one month British
Bankers Association Rate as reported on the display designated as "BBAM" "Page DG8 4a" on Bloomberg (or such other display as may replace "BBAM" "Page DG8 4a on Bloomberg), as of 8:00 a.m., New
York City time, on the date two Business Days prior to the commencement of such LIBOR Period, and if such rate shall not be so quoted, or if the related LIBOR Period shall be less than one month, the
rate per annum at which the Buyer or its Affiliate is offered dollar deposits at or about 8:00 a.m., New York City time, on the date two Business Days prior to the commencement of the such
LIBOR Period, by prime banks in the interbank eurodollar market where the eurodollar and foreign currency exchange operations in respect of its Transactions are then being conducted for delivery on
such day for a period of one month or such other period as agreed upon in writing by the Buyer and the Seller and in an amount comparable to the amount of the Transactions outstanding on such day. 

        "Lien" shall mean any lien, claim, charge, restriction, pledge, security interest, mortgage, deed of trust or other encumbrance. 

        "Lien Certificate" shall mean, with respect to any Manufactured Home, if applicable, an original certificate of title, certificate of lien
or other notification issued by the Registrar of Titles of the applicable state to a secured party which indicates that the Lien of the secured party on the Manufactured Home is recorded on the
original certificate of title. 

        "Loan" shall have the meaning specified in the Loan and Security Agreement. 

6

   
        "Loan and Security Agreement" shall mean that certain Master Loan and Security Agreement, between the Affiliate Guarantor and the Buyer in
form and substance acceptable to Buyer in its sole discretion. 

        "Loan Documents" shall mean, with respect to an MH Loan, the documents comprising the Loan File for that MH Loan. 

        "Loan File" shall mean, with respect to an MH Loan, the documents and instruments relating to such MH Loan and set forth in  Exhibit VI hereto. 

        "Loan Schedule" shall mean with respect to any Transaction as of any date, a Loan Schedule in the form of a computer tape or other
electronic medium generated by the Seller and delivered to Buyer and the Custodian, which provides information (including, without limitation, the information set forth on  Exhibit V attached
hereto) relating to the Purchased MH Loans in a format acceptable to the Buyer. 

        "Loan Schedule and Exception Report" shall have the meaning set forth in the applicable Custodial Agreement. 

        "Loan-to-Value Ratio" or "LTV" shall mean a fraction, the
numerator of which is the principal balance of the MH Loan (amount financed) and the denominator of which is the value of the related manufactured home (determined either through an appraisal or by
reference to NADA Mobile/Manufactured Housing Appraisal Guide published by National Appraisal Guides, Inc., or any successor publication similarly recognized by the trade and approved by
Buyer). 

        "Manufactured Home" shall mean a unit of new, pre-owned or used manufactured housing consisting of a
pre-fabricated manufactured home unit, or a mobile home, including all accessions thereto, securing the indebtedness of the Obligor under the related MH Loan, but in no event treated as
real estate under applicable state law. 

        "Margin Call" shall have the meaning specified in Section 4. 

        "Margin Deadlines" shall have the meaning specified in Section 4. 

        "Margin Deficit" shall have the meaning specified in Section 4. 

        "Market Value" shall mean, as of any date with respect to any Purchased MH Loan, the price at which such Purchased MH Loan could readily
be sold as determined by the Buyer in its commercially reasonable discretion based on Buyer's good faith business judgment. In the event that the Seller disagrees with the Market Value, Seller shall
indicate to Buyer its disagreement and reasons therefor in writing. Notwithstanding the foregoing, the Seller shall be required to satisfy any Margin Call as required pursuant to Section 4
during the resolution of any dispute pursuant to this definition. If, after the Buyer and the Seller have made a good-faith effort to agree on the Market Value, Seller still disagrees with
Buyer's determination of Market Value, Seller may, at its sole cost, comply with the following dispute resolution procedures. The Seller shall request a rating review from a Rating Agency of the
applicable Purchased MH Loans (the "Contested MH Loans") and the overcollateralization levels required for the receipt of an "A+" rating (such review, a
"Rating Review"). The asset value shall be determined by subtracting from the outstanding principal balance of the Contested MH Loans the
overcollateralization levels required pursuant to the Rating Review, and such result shall be the "Rating Review Asset Value". In order to determine the
"Rating Review Market Value", the Rating Review Asset Value shall be multiplied by the number that results from (A) one divided by (B) the weighted average Purchase Price Percentage
applicable to the MH Loans. The Seller shall request bids for the Contested MH Loans from at least two dealers approved and identified in writing by the Buyer from time to time as experienced in
pricing assets substantially similar to the MH Loans (the "Dealers"). For any bid to be eligible for use in calculating the Market Value (each, an
"Eligible Bid"), it (i) must be received within five (5) Business Days following Buyer's receipt of Seller's notice of a dispute, and
(ii) must be a bid at which the Seller provides evidence that there is a buyer ready to purchase MH Loans comparable to the Contested MH Loans in comparable amounts at such price (provided,
that in obtaining such bid, the Seller shall not be required to commit to actually deliver and sell such comparable MH Loan to such buyer). The Buyer shall then calculate the mean of the two Eligible
Bids 

7

 

received
and the Buyer's own determination of Market Value (the "Bid Average") In the event that fewer than two Eligible Bids are received, the Buyer's
Market Value determination shall be deemed the Bid Average. The Buyer shall, without limiting Buyer's rights under Section 4, then utilize the higher of the Rating Review Market Value and the
Bid Average as the Market Value. 

        With
respect to the calculations above, Market Value in each case may be reduced to reflect any additional reduction as a result of the application of clauses (a) through
(k) below. Without limiting the generality of the foregoing, the Seller acknowledges that the Market Value of a Purchased MH Loan may be reduced to zero by Buyer if: 

        (a)   such
Purchased MH Loan ceases to be an Eligible MH Loan; 

        (b)   the
Purchased MH Loan has been released from the possession of the Custodian under the Custodial Agreement (other than to a Takeout Investor pursuant to a Bailee Letter)
for a period in excess of 10 calendar days; 

        (c)   such
Purchased MH Loan is a Non-Performing MH Loan; 

        (d)   such
Purchased MH Loan when added to all other Purchased MH Loans causes the average outstanding principal balance of all Purchased MH Loans to be greater than $25,000; 

        (e)   a
First Payment Default occurs with respect to such Purchased MH Loan; 

        (f)    the
Buyer has determined in its commercially reasonable discretion that the Purchased MH Loan is not eligible for whole loan sale in a transaction consistent with the
prevailing secondary market with respect to substantially similar MH Loans; 

        (g)   such
Purchased MH Loan contains a breach of a representation or warranty made by the Seller in this Repurchase Agreement or the Custodial Agreement; 

        (h)   the
Manufactured Home securing such Purchased MH Loan is not located in a manufactured housing community owned and managed by the Parent Guarantor or a Subsidiary
thereof; 

        (i)    when
the Purchase Price for such Purchased MH Loan is added to other Purchased MH Loans, the aggregate Purchase Price for Purchased MH Loans secured by Manufactured
Houses in the same state exceeds 20% of the aggregate outstanding Purchase Price of all Purchased MH Loans; 

        (j)    when
the Purchase Price for such Purchased MH Loan is added to other Purchased MH Loans, the aggregate Purchase Price of all Delinquent MH Loans that are Purchased MH
Loans exceeds (i) prior to the date of the IPO, $2,000,000 and (ii) on or after the date of the IPO, $10,000,000; or 

        (k)   such
Purchased MH Loan is no longer serviced by the Servicer. 

        "Material Adverse Effect" shall mean a material adverse change in, or a material adverse effect upon, (a) the (i) current or
future operations, business or properties or (ii) condition (financial or otherwise), in each case, of Seller or any Guarantor; (b) the ability of Seller or any Guarantor to perform its
obligations under any of the Repurchase Documents to which it is a party, or (c) the validity or enforceability of any of the Repurchase Documents, (d) the rights and remedies of the
Buyer or any Affiliate under any of the Repurchase Documents, (e) the ability of the Seller or any Guarantor to make payment of any amounts payable under the Repurchase Documents, or
(f) the Market Value of the Purchased MH Loans. 

        "Maximum Purchase Price" shall mean (i) prior to the date of the IPO $45,000,000 and (ii) on or after the date of the IPO
$225,000,000. 

        "MH Contract" shall mean the installment loan agreement or retail installment sales contract by an Obligor evidencing indebtedness in
connection with the financing of a Manufactured Home. 

        "MH Loan" shall mean MH Paper which complies with the representations and warranties set forth on  Schedule 1 to this Repurchase Agreement, which in no event shall
include any loan which (a) is subject to Section 226.32 of
Regulation Z or any similar state law (relating to high interest rate credit/lending transactions), (b) includes any single premium credit life or accident and health insurance 

8

 

or
disability insurance, or (c) contains any term or condition, or involves any loan origination practice, that has been defined as "predatory", "covered" or "threshold" under applicable
federal, state or local law, or which has been expressly categorized as an "unfair" or "deceptive" term, condition, or practice in any applicable federal, state or local law dealing with "predatory"
or "high cost" lending (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for loans
having high interest rates, points and/or fees). MH Loans are made under MH Contracts or MH Notes. 

        "MH Loan Interest Rate" shall mean the annual rate of interest borne on an MH Note as set forth on the face thereof and/or as set forth in
the related MH Contract. 

        "MH Loan Transfer Agreement" shall mean the sale agreement under which a Qualified Originator transfers Eligible MH Loans to Seller. 

        "MH Note" shall mean a note or other evidence of indebtedness of an Obligor secured by a Manufactured Home. 

        "MH Paper" shall mean a non-securitized whole loan, which shall be a loan secured by a perfected first priority Lien on a
Manufactured Home. 

        "Monthly Payment" shall mean the scheduled monthly payment of principal and interest on an MH Loan. 

        "Moody's" shall mean Moody's Investors Service, Inc. or any successors thereto. 

        "More Favorable Period" shall have the meaning specified in Section 4. 

        "Multiemployer Plan" shall mean, with respect to any Person, a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA which
is or was at any time during the current year or the immediately preceding five years contributed to by such Person or any ERISA Affiliate thereof on behalf of its employees and which is covered by
Title IV of ERISA. 

        "Net Income" shall mean, for any Person for any period, the net income of such Person for such period as determined in accordance with
GAAP. 

        "Nondefaulting Party" shall have the meaning specified in Section 26(b) hereof. 

        "Non-Excluded Taxes" shall have the meaning set forth in Section 7(a) hereof. 

        "Non-Exempt Buyer" shall have the meaning set forth in Section 7(h) hereof. 

        "Non-Performing MH Loan" shall mean (i) any MH Loan for which any payment of principal or interest is more than fifty
nine (59) days past due, (ii) any MH Loan with respect to which the related Obligor is in bankruptcy or (iii) any MH Loan with respect to which the related Property is in
foreclosure. 

        "Non-Utilization Fee" shall mean, for each calendar quarter, an amount equal to the product of (x) 0.10% per annum and
(y) the excess if any of (I) the Maximum Purchase Price over (II) the average daily Purchase Price of the Purchased MH Loans during such calendar quarter. 

        "Non-Utilization Threshold" shall mean (i) prior to the date of the IPO, $20,000,000 and (ii) on or after the
date of the IPO $100,000,000. 

        "Obligations" shall mean (a) any amounts due and payable by the Seller to Buyer in connection with a Transaction hereunder,
together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar proceeding) and all other fees or expenses
which are payable hereunder or under any of the Repurchase Documents; (b) for so long as the amounts and obligations referenced in clauses (a) and (c) of this definition are
outstanding, all other obligations or amounts due and payable by the Seller to the Buyer or an Affiliate of Buyer under any other contract or agreement; and (c) all obligations or amounts due
and payable by the Affiliate Guarantor to the Buyer under the Loan and Security Agreement. 

        "Obligor" shall mean the obligor on a MH Note or MH Contract. 

9

 

        "Other Taxes" shall have the meaning set forth in Section 7(c) hereof. 

        "Parent Guarantor" shall mean Affordable Residential Communities LP, a Delaware limited partnership. 

        "Parent Guaranty" shall mean that certain Parent Guaranty of the Parent Guarantor, dated as of the date hereof, pursuant to which the
Parent Guarantor fully and unconditionally guarantees the obligations of the Seller hereunder and the obligations of the Affiliate Guarantor under the Loan and Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time. 

        "Payment Date" shall mean the tenth (10th) day of each month, or if such date is not a Business Day, the Business Day
immediately preceding the last day of the month. 

        "PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. 

        "Periodic Advance Repurchase Payment" shall have the meaning specified in Section 5(a). 

        "Person" shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company,
trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof). 

        "Plan" shall mean, with respect to any Person, any employee benefit or similar plan that is or was at any time during the current year or
immediately preceding five years established or maintained by such Person or any ERISA Affiliate thereof and that is covered by Title IV of ERISA, other than a Multiemployer Plan. 

        "Post-Default Rate" shall mean a rate equal to the sum of (a) the Pricing Rate plus (b) two percent (2.00%). 

        "Prepaid MH Loan" shall have the meaning provided in Section 3(e) hereof. 

        "Price Differential" shall mean, with respect to any Transaction hereunder as of any date, the aggregate amount obtained by daily
application of the Pricing Rate (or, during the continuation of an Event of Default, by daily application of the Post-Default Rate) for such Transaction to the Purchase Price for such
Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the
Repurchase Date (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction). 

        "Pricing Rate" shall mean a rate per annum equal to the sum of (a) the LIBOR Rate plus (b) the Pricing Spread. 

        "Pricing Spread" shall mean: 

        (a)   with
respect to Transactions the subject of which are MH Loans (other than Delinquent MH Loans), 3.00%; or 

        (b)   with
respect to Transactions the subject of which are MH Loans which are Delinquent MH Loans, 4.00%. 

        "Prime Rate" shall mean the prime rate announced to be in effect from time to time, as published as the average rate in The Wall Street
Journal. 

        "Property" shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible
or intangible. 

        "Purchase Date" shall mean the date on which Purchased MH Loans are transferred by Seller to the Buyer or its designee. 

        "Purchased MH Loan Report" shall mean a report, delivered with each Transaction Request, on the last day of each month (or if such date is
not a Business Day, the next preceding Business Day), or upon the request of the Buyer, including a Loan Schedule in the form of Exhibit V
hereto, setting forth 

10

 

information
with respect to the Purchased MH Loans (and MH Loans proposed to be the subject of a Transaction on the related Purchase Date, if applicable). 

        "Purchased MH Loans" shall mean the MH Loans sold by the Seller to Buyer in a Transaction, and any Additional Purchased MH Loans as
evidenced by a Confirmation and a Trust Receipt. 

        "Purchase Price" shall mean, 

        (a)   on
the Purchase Date, the price at which each Purchased MH Loan is transferred by Seller to Buyer which shall equal the applicable Purchase Price Percentage multiplied
by the lesser of (i) the Market Value of such MH Loan on the Purchase Date and (ii) the outstanding principal balance of the MH Loan; and 

        (b)   thereafter,
except where Buyer and Seller agree otherwise, such Purchase Price decreased by the amount of any cash, Income and Periodic Advance Repurchase Payments
actually received by Buyer pursuant to Section 5 or credited to the Repurchase Price under Section 4(d) hereof. 

        "Purchase Price Percentage" shall mean: 

        (a)   with
respect to each MH Loan (other than a Delinquent MH Loan), 75%; and 

        (b)   with
respect to each MH Loan which is a Delinquent MH Loan 60%. 

        "Qualified Insurer" shall mean an insurance company duly authorized and licensed where required by law to transact insurance business. 

        "Qualified Originator" shall mean Vanderbilt Mortgage and Financing, Inc., or another originator of MH Loans approved by Buyer in
writing. 

        "Rating Agency" shall mean any of S&P, Moody's or Fitch. 

        "Records" shall mean all instruments, agreements and other books, records, and reports and data generated by other media for the storage
of information maintained by Seller or any other person or entity with respect to a Purchased MH Loan. Records shall include any mortgages, the Loan Files, the credit files related to the Purchased MH
Loan and any other instruments necessary to document or service an MH Loan. 

        "Register" shall have the meaning set forth in Section 21 hereof. 

        "Registrar of Titles" shall mean, with respect to any state, the governmental agency or body responsible for the registration of, and the
issuance of certificates of title relating to, motor vehicles, Manufactured Homes and liens thereon. 

        "REIT" shall mean Affordable Residential Communities Inc. 

        "Regulations T, U and X" shall mean Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as
the same may be modified and supplemented and in effect from time to time. 

        "REIT Distribution Requirement" shall mean distributions reasonably necessary for the REIT to maintain its REIT Status and not be subject
to corporate level tax based on income or to excise tax under Section 4981 of the Code. 

        "REIT Status" shall mean with respect to any Person, such Person's status as a real estate investment trust, as defined in
Section 856(a) of the Code, that satisfies the conditions and limitations set forth in Section 856(b) and 856(c) of the Code. 

        "Reportable Event" shall mean any of the events set forth in Section 4043(b) of ERISA, other than those events as to which the
thirty day notice period is waived under subsections .21, .22, .24, .26, .27 or .28 of PBGC Reg. § 4043. 

        "Repurchase Agreement" shall mean this Master Repurchase Agreement between Buyer and the Seller, dated as of the date hereof as the same
may be further amended, supplemented or otherwise modified in accordance with the terms hereof. 

11

 

        "Repurchase Assets" shall have the meaning provided in Section 8 hereof. 

        "Repurchase Date" shall mean the date on which the Seller is to repurchase the Purchased MH Loans subject to a Transaction from Buyer as
specified in the related Confirmation, or if not so specified on a date requested pursuant to Section 3(d) or on the Termination Date, including any date determined by application of the
provisions of Sections 3 or 14. 

        "Repurchase Documents" shall mean this Repurchase Agreement, the Custodial Agreement, a Servicer Notice, if any, the Account Agreement,
the Parent Guaranty and the Affiliate Guaranty. 

        "Repurchase Price" shall mean the price at which Purchased MH Loans are to be transferred from Buyer or its designee to the Seller upon
termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such
determination reduced as set forth in Section 5(d). 

        "Repurchased MH Loan" shall have the meaning provided in Section 3(e) hereof. 

        "Requirement of Law" shall mean as to any Person, the certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of its Property is subject. 

        "Responsible Officer" shall mean an officer of the Seller listed on Exhibit X
hereto, as such Exhibit X may be amended from time to time. 

        "Reset Date" shall mean the last day of the related LIBOR Period. 

        "Revolving Credit Facility Obligations" shall mean the obligations incurred under the Credit Agreement, as amended from time to time. 

        "S&P" shall mean Standard & Poor's Ratings Services, or any successor thereto. 

        "SEC" shall mean the Securities and Exchange Commission. 

        "Section 4402" shall mean Section 4402 of Title 12 of the United States Code. 

        "Section 7 Certificate" shall mean a certificate substantially in the form of  Exhibit XI hereto. 

        "Seller" shall mean Enspire Finance, LLC, or any successor in interest thereto. 

        "Servicer" shall mean Vanderbilt Mortgage and Finance, Inc. or any successor or permitted assigns. 

        "Servicer Notice" shall mean the notice acknowledged by the Servicer substantially in the form of  Exhibit IX hereto. 

        "Servicing Agreement" shall mean a servicing agreement entered into between the Seller and the Servicer, as the same may be amended from
time to time. 

        "Significant Deficit" shall have the meaning specified in Section 4. 

        "Single-Employer Plan" shall mean a single-employer plan as defined in Section 4001(a)(15) of ERISA which is subject to the
provisions of Title IV of ERISA. 

        "SIPA" shall mean the Securities Investor Protection Act of 1970. 

        "Structured Securities Debt" shall mean any Indebtedness incurred by an Acceptable SPV, provided that (i) such Indebtedness is
non-recourse to any shareholder or equity owner of such Acceptable SPV, (ii) such Indebtedness is publicly issued Indebtedness of the Acceptable SPV and (iii) such
Indebtedness is rated by at least one of the Rating Agencies. 

        "Subsidiary" shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the time 

12

 

securities
or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. 

        "Takeout Commitment" shall mean a commitment of Seller to sell one or more MH Loans to a Takeout Investor, and the corresponding Takeout
Investor's commitment back to Seller to effectuate the foregoing. 

        "Takeout Investor" shall mean any institution which has made a Takeout Commitment and has been approved by Buyer. 

        "Tangible Net Worth" shall mean, for any Person as of a particular date, 

        (a)   all
amounts which would be included under capital on a balance sheet of such Person at such date, determined in accordance with GAAP, less 

        (b)   (i) amounts
owing to such Person from Affiliates, or from officers, employees, shareholders or other Persons similarly affiliated with such Person,
(ii) intangible assets and (iii) deferred tax charge. 

        "Taxes" shall have the meaning set forth in Section 7(a) hereof. 

        "Termination Date" shall mean February 18, 2008. 

        "Termination Event" shall have the meaning set forth in Section 13.02 hereof. 

        "Test Period" shall mean any period of three (3) consecutive months. 

        "Transaction" shall have the meaning specified in Section 1. 

        "Transaction Request" shall mean a request from the Seller to Buyer to enter into a Transaction. 

        "Transferee" shall have the meaning set forth in Section 7(h) hereof. 

        "Trust Receipt" shall have the meaning set forth in the Custodial Agreement. 

        "Underlying Asset" shall mean a Manufactured Home with respect to an MH Contract. 

        "Underwriting Analysis" shall mean the demographic and financial analysis and assessment of prospects or other comparable analysis
prepared by the Seller or Parent Guarantor pertaining to those communities in which Manufactured Homes are located, the MH Paper with respect to which is subject to this Repurchase Agreement and such
other information requested by Buyer, all in a form and substance acceptable to Buyer. 

        "Underwriting Guidelines" shall mean the underwriting guidelines of the Parent Guarantor, attached hereto as  Exhibit VII. 

        "Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York. 

SECTION 3. INITIATION; TERMINATION  

        (a)    Conditions Precedent to Initial Transaction.    Buyer's obligation to enter into the initial Transaction
hereunder is subject to the satisfaction, prior to or concurrently with the making of such Transaction, of the condition precedent that Buyer shall have received from the Seller any fees and expenses
payable hereunder, and all of the following documents, each of which shall be satisfactory to Buyer and its counsel in form and substance: 

          (i)  The
following Repurchase Documents delivered to the Buyer: 

        (A)    Repurchase Agreement.    This Repurchase Agreement, duly executed by the parties thereto; 

        (B)    Custodial Agreement.    The Custodial Agreement, duly executed by the parties thereto; 

13

 

        (C)    Disbursement Agreement.    The Disbursement Agreement, duly executed by the parties thereto; 

        (D)    Collection Account Control Agreement.    An Account Agreement, duly executed by the parties thereto in form and
substance acceptable to the Buyer; 

        (E)    Parent Guaranty.    The Parent Guaranty, duly executed by the parties thereto; 

        (F)    Affiliate Guaranty.    The Affiliate Guaranty, duly executed by the parties thereto; and 

        (G)    Servicing Agreement.    A Servicing Agreement, duly executed by the parties thereto. 

        (ii)    Opinions of Counsel.    

        (A)  An
opinion or opinions of outside counsel to the Seller and the Guarantors, substantially in the form of  Exhibit II, provided, that paragraph 5 thereof may be given by in-house counsel to the
Seller and the Guarantors; and 

        (B)  An
opinion of Delaware counsel opining as to matters of the Seller with respect to Delaware law. 

        (iii)    Seller Organizational Documents.    A certificate of corporate existence of the Seller delivered to Buyer
prior to the Effective Date (or if unavailable, as soon as available thereafter) and certified copies of the charter and by-laws (or equivalent documents) of the Seller and of all
corporate or other authority for the Seller with respect to the execution, delivery and performance of the Repurchase Documents and each other document to be delivered by the Seller from time to time
in connection herewith. 

        (iv)    Guarantors' Organizational Documents.    A certificate of corporate existence of each Guarantor delivered to
Buyer prior to the Effective Date (or if unavailable, as soon as available thereafter) and certified copies of the charter and by-laws (or equivalent documents) of each Guarantor and of
all corporate or other authority for each Guarantor with respect to the execution, delivery and performance of the Repurchase Documents and each other document to be delivered by each Guarantor from
time to time in connection herewith. 

        (v)    Security Interest.    Evidence that all other actions reasonably necessary or, in the opinion of Buyer,
reasonably desirable to perfect and protect Buyer's interest in the Purchased MH Loans and other Repurchase Assets have been taken, including, without limitation, UCC searches and duly authorized and
filed Uniform Commercial Code financing statements on Form UCC-1. 

        (vi)    Underwriting Guidelines.    A true and correct copy of the Underwriting Guidelines certified by an officer of
the Seller. 

        (vii)    Insurance.    Evidence that Seller has added Buyer as an additional insured under the Seller's Fidelity
Insurance. 

        (viii)    Other Documents.    Such other documents as Buyer may reasonably request, in form and substance reasonably
acceptable to Buyer. 

        (b)    Conditions Precedent to all Transactions.    Upon satisfaction of the conditions set forth in the
Section 3(b), the Buyer shall enter into a Transaction with Seller. Buyer's obligation to enter into each Transaction (including the initial Transaction) is subject to the satisfaction of the
following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect thereto to the intended use thereof: 

          (i)  Buyer
shall have executed and delivered a Confirmation in accordance with the procedures set forth in Section 3(c); 

         (ii)  No
Termination Event, Default or Event of Default shall have occurred and be continuing under the Repurchase Documents; 

14

 

        (iii)  Both
immediately prior to the Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by the Seller
in Section 11 hereof, shall be true,
correct and complete on and as of such Purchase Date for such Transaction in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of such specific date); 

        (iv)  After
giving effect to the requested Transaction, the aggregate outstanding Purchase Price for all Purchased MH Loans subject to then outstanding Transactions under
this Repurchase Agreement shall not exceed the Maximum Purchase Price; 

         (v)  After
giving effect to the requested Transaction, the Asset Value of all Purchased MH Loans exceeds the aggregate Repurchase Price for such Transactions; 

        (vi)  On
or prior to 12:00 Noon (New York Time) one (1) day prior to the related Purchase Date, the Seller shall have delivered to the Buyer (a) a Transaction
Request, and (b) a Purchased MH Loan Report, which report shall be posted on Intralinks or a substantially similar electronic transmission system protected by a password; 

       (vii)  The
Seller shall have delivered to the Custodian the Loan File with respect to each Purchased MH Loan and the Custodian shall have issued a Trust Receipt with respect
to each such Purchased MH Loan to the Buyer; 

      (viii)  The
Buyer shall have received all fees and expenses of counsel to the Buyer as contemplated by Sections 15(b) and 27 which amounts, at the Buyer's option, may be
withheld from the proceeds remitted by Buyer to the Seller pursuant to any Transaction hereunder; 

        (ix)  None
of the following shall have occurred and/or be continuing: 

        (A)  an
event or events shall have occurred in the good faith determination of the Buyer resulting in the effective absence of a "repo market" or comparable "lending market"
for financing debt obligations secured by securities or mortgage loans; or 

        (B)  the
senior debt obligations or short-term debt obligations of Merrill Lynch & Co., Inc. shall be rated below the four highest generic grades
(without regard to any pluses and minuses reflecting gradations within such generic grades) by any Rating Agency; 

         (x)  Either
the Underwriting Guidelines delivered pursuant to this Repurchase Agreement remain in effect unmodified, or any amendment or modification of such Underwriting
Guidelines has been provided to, and approved by, Buyer; or 

        (xi)  Each
Transaction Request delivered by the Seller hereunder shall constitute a certification by the Seller that all the conditions set forth in this Section 3(b)
(other than clause (ix) hereof) have been satisfied (both as of the date of such notice or request and as of the date of such purchase). 

15

   
        (c)    Initiation; Confirmation.    

          (i)  The
Seller shall deliver a Transaction Request to the Buyer on or prior to 12:00 Noon on the date one (1) Business Day prior to entering into any Transaction.
Such Transaction Request shall include a Loan Schedule with respect to the MH Loans to be sold in such requested Transaction. Buyer shall confirm the terms of each Transaction by issuing a written
confirmation to the Seller promptly after the parties enter into such Transaction in the form of Exhibit I attached hereto (a
"Confirmation"). Such Confirmation shall set forth (A) the Purchase Date, (B) the Purchase Price, (C) the Repurchase Date,
(D) the Pricing Rate applicable to the Transaction, (E) the applicable Purchase Price Percentages, (F) LIBOR Period and (G) additional terms or conditions not inconsistent
with this Repurchase Agreement. 

         (ii)  The
LIBOR Period for each Transaction shall be one month, unless agreed to in writing by the Buyer. 

        (iii)  Each
Confirmation, together with this Repurchase Agreement, shall absent manifest error be conclusive evidence of the terms of the Transaction(s) covered thereby
unless objected to in writing by the Seller or unless a corrected Confirmation is sent by Buyer, in either case no more than three (3) Business Days after the date the Confirmation was received
by the Seller. An objection sent by Seller must state specifically that writing which is an objection, must specify the provision(s) being objected to by the Seller, must set forth such provision(s)
in the manner that the Seller believes they should be stated, and must be received by Buyer no more than three (3) Business Days after the Confirmation was received by the Seller. 

        (iv)  Subject
to the terms and conditions of this Repurchase Agreement, during such period the Seller may sell, repurchase and resell Eligible MH Loans hereunder. 

         (v)  In
no event shall a Transaction be entered into when the Repurchase Date for such Transaction would be later than the Termination Date. 

        (vi)  No
later than 2:00 p.m., New York City time, three (3) Business Days prior to the requested Purchase Date, the Seller shall deliver to the Custodian the
Loan File pertaining to each Eligible MH Loan to be purchased by the Buyer. 

       (vii)  Subject
to the provisions of this Section 3, the Purchase Price will then be made available to the Seller by the Buyer transferring, via wire transfer, in the
aggregate amount of such Purchase Price in funds immediately available. 

        (d)    Repurchase.    

          (i)  The
Seller may repurchase Purchased MH Loans without penalty or premium, subject to the last sentence of this Section 3(d)(i) and subject further to
Section 3(e) below, on any date. The Repurchase Price payable for the repurchase of any such Purchased MH Loan shall be reduced as provided in Section 5(d). If the Seller intends to make
such a repurchase, the Seller shall give one (1) Business Day's prior written notice thereof to the Buyer, designating the Purchased MH Loans to be repurchased. If such notice is given, the
amount specified in such notice shall be due and payable on the date specified therein, and, on receipt, such amount shall be applied to the Repurchase Price for the designated Purchased MH Loans. If
any Purchased MH Loan is repurchased on any date other than the Reset Date for such Transaction, the Seller shall pay to the Buyer any amount required to compensate such Buyer for any additional
losses, costs or expenses which it may reasonably incur as a result of such repurchase, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by the Buyer to fund or maintain such Transaction. 

         (ii)  On
the Repurchase Date, termination of the Transaction will be effected by reassignment to the Seller or its designee of the Purchased MH Loans (and any Income in
respect thereof 

16

 

received
by Buyer not previously credited or transferred to, or applied to the obligations of, the Seller pursuant to Section 5) against the simultaneous transfer of the Repurchase Price to an
account of Buyer. Upon receipt of the Repurchase Price, Buyer shall execute all documents and take all actions reasonably necessary to transfer title to the Purchased MH Loans in Seller's name and
assign all of Buyer's rights thereunder to Seller. The Seller is obligated to obtain the Loan Files from Buyer or its designee at the Seller's expense on the Repurchase Date. 

        (e)    Exit Fee.    

        The
Seller agrees to pay to the Buyer an exit fee equal to 0.100% (the "Exit Fee") of the Purchase Price of each MH Loan purchased by the
Buyer hereunder as of the date on which such MH Loan is repurchased by the Seller (each such MH Loan, a "Repurchased MH Loan"), each such payment to be
made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Buyer at the account set forth in Section 9(a) hereof if the related Repurchased
MH Loan (i) is placed in a transaction resulting in the issuance of securities backed in whole or in part by such Repurchased MH Loan and the Buyer or its Affiliate does not act as the lead
underwriter or
placement agent with respect to such transaction; or (ii) is sold in a whole loan transaction and the Buyer or its Affiliate is not the purchaser with respect to such transaction. 

SECTION 4. MARGIN AMOUNT MAINTENANCE  

        (a)   The
Buyer shall determine the Market Value of the Purchased MH Loans on a weekly basis, or at such intervals as determined by the Buyer in its sole discretion. 

        (b)   If
at any time the aggregate Asset Value of all related Purchased MH Loans subject to all Transactions is less than the aggregate Repurchase Price for all such
Transactions (a "Margin Deficit"), then Buyer may by notice to Seller (as such notice is more particularly set forth below, a
"Margin Call"), require Seller to transfer to Buyer or its designee cash or Eligible MH Loans approved by the Buyer in its sole discretion
("Additional Purchased MH Loans") so that the aggregate Asset Value of the Purchased MH Loans, including any such cash or Additional Purchased MH Loans,
will thereupon equal or exceed the aggregate Repurchase Price for all Transactions. If Buyer delivers a Margin Call to the Seller on or prior to 5:00 p.m. (New York City time) on any Business
Day, then the Seller shall transfer cash or Additional Purchased MH Loans to Buyer no later than 5 p.m. (New York City time) on the next Business Day. In the event the Buyer delivers a Margin
Call to Seller after 5:00 p.m. (New York City time) on any Business Day, the Seller shall be required to transfer cash or Additional Purchased MH Loans no later than 5:00 p.m. (New York
City time) on the second succeeding Business Day (the foregoing time requirements for satisfaction of a Margin Call are referred to as the "Margin
Deadlines"). Notwithstanding the foregoing, in the event that the applicable Margin Deficit is greater than Five Million Dollars ($5,000,000) (such Margin Deficit, a
"Significant Deficit"), the Margin Deadline set forth above shall apply with respect to Five Million Dollars ($5,000,000) and the balance of the Margin
Deficit (i.e., the amount thereof in excess of Five Million Dollars ($5,000,000)) shall be satisfied by no later than 5:00 pm (New York City time) on the third Business Day following the date of the
Margin Call; provided that no Event of Default has occurred and is continuing and provided further that the Seller shall demonstrate to Buyer's
satisfaction that Seller has (A) an unsecured line of credit of at least $100,000,000 and (B) no event or circumstance has occurred thereunder which would, by the terms of the applicable
agreement, prohibit Seller from borrowing or drawing money thereunder. The Seller agrees that should Seller incur secured Indebtedness pursuant to an agreement which by its terms provides for a margin
deficit or other borrowing or collateral deficiency in excess of Five Million Dollars ($5,000,0000) to be satisfied within a shorter time period than set forth in the preceding sentence (such period,
a "More Favorable Period"), the terms of this Repurchase Agreement shall be deemed automatically amended to provide that any Significant Deficit must be
satisfied within the More Favorable Period contained in such agreement. The Seller further agrees to execute and deliver an amendment to this Repurchase Agreement evidencing such provisions, provided
that the execution 

17

 

of
such amendment shall not be a precondition to the effectiveness of such amendment, but shall merely be for the convenience of the parties hereto. 

        (c)   Buyer's
election, in its sole and absolute discretion, not to make a Margin Call at any time there is a Margin Deficit shall not in any way limit or impair its right to
make a Margin Call at any time a Margin Deficit exists. 

        (d)   Any
cash transferred to the Buyer pursuant to Section 4(b) above shall be credited to the Repurchase Price of the related Transactions. 

SECTION 5. INCOME PAYMENTS  

        (a)   Notwithstanding
that Buyer and the Seller intend that the Transactions hereunder be sales to Buyer of the Purchased MH Loans, Seller shall pay to Buyer the accreted
value of the Price Differential (less any amount of such Price Differential previously paid by the Seller to Buyer) plus the amount of any unpaid Margin Deficit (each such payment, a
"Periodic Advance Repurchase Payment") on each Payment Date. No later than 5:00 p.m. (New York City time) one (1) Business Day prior to
each Payment Date, the Buyer shall give Seller written or electronic notice of the amount of the Periodic Advance Repurchase Payment allocated to the Price Differential due on such Payment Date,  provided,
however, failure of the Buyer to give such notice shall not relieve the Seller of its obligation to pay the Periodic Advance Repurchase
Payment. Notwithstanding the preceding sentence, if Seller fails to make all or part of the Periodic Advance Repurchase Payment by 5:00 p.m. (New York time) on any Payment Date, the Pricing
Rate shall be equal to the Post-Default Rate until the Periodic Advance Repurchase Payment is received in full by Buyer. 

        (b)   The
Seller shall hold for the benefit of, and in trust for, Buyer all Income, including without limitation all Income received by or on behalf of the Seller with respect
to such Purchased MH Loans. All Income shall be held in trust for Buyer, shall constitute the property of Buyer and shall not be commingled with other property of the Seller, any Affiliate of the
Seller except as expressly permitted above. On each Payment Date, the Seller shall remit to the Buyer such portion of the Income as is necessary to satisfy the following obligations in the following
order of priority: 

          (i)  first,
to the payment of all costs and fees payable by the Seller pursuant to this Repurchase Agreement; 

         (ii)  second,
any accrued and unpaid Price Differential; and 

        (iii)  third,
without limiting the rights of Buyer under Section 4 of this Repurchase Agreement, in the amount of any unpaid Margin Deficit. 

        (iv)  After
the occurrence of a Default or an Event of Default, the Seller shall deposit such Income in a deposit account (the title of which shall indicate that the funds
therein are being held in trust for Buyer) (the "Collection Account") with a financial institution acceptable to Buyer and subject to the Account
Agreement. All such Income shall be held in trust for Buyer, shall constitute the property of Buyer and shall not be commingled with other property of the Seller or any Affiliate of the Seller except
as expressly permitted above. Funds deposited in the Collection Account during any month shall be held therein, in trust for the Buyer, until the next Payment Date. 

        (c)   Notwithstanding
the preceding provisions, if an Event of Default has occurred and is continuing, all funds in the Collection Account shall be withdrawn and applied as
determined by the Buyer to satisfy the outstanding Obligations owed by the Seller to the Buyer. 

        (d)   Buyer
shall offset against the Repurchase Price of each such Transaction all Income and Periodic Advance Repurchase Payments actually received by Buyer pursuant to
Section 5(a), excluding 

18

 

any
Late Payment Fees paid pursuant to any Periodic Advance Repurchase Payments made at the Post-Default Rate pursuant to Section 5(a). 

SECTION 6. REQUIREMENTS OF LAW  

        (a)   If
any Requirement of Law (other than with respect to any amendment made to the Buyer's certificate of incorporation and by-laws or other organizational or
governing documents) or any change in the interpretation or application thereof or compliance by the Buyer with any request or directive (whether or not having the force of law) from any central bank
or other Governmental Authority made subsequent to the date hereof: 

          (i)  shall
subject the Buyer to any tax of any kind whatsoever with respect to this Repurchase Agreement or any Transaction (excluding net income taxes branch profits taxes,
franchise taxes or similar taxes imposed on the Buyer by the Governmental Authority under the laws of which the Buyer is organized or maintains a lending office, unless such Taxes are imposed as a
result of such Buyer having executed, delivered or performed its obligations or received a payment under, or enforced, this Repurchase Agreement) or change the basis of taxation of payments to the
Buyer in respect thereof; 

         (ii)  shall
impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or
for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of the Buyer which is not otherwise included in the determination of the LIBOR Rate
hereunder; 

        (iii)  shall
impose on the Buyer any other condition; 

and
the result of any of the foregoing is to increase the cost to the Buyer, by an amount which the Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any
amount due or owing hereunder in respect thereof, then, in any such case, the Seller shall promptly pay the Buyer such additional amount or amounts as calculated by the Buyer in good faith as will
compensate the Buyer for such increased cost or reduced amount receivable. 

        (b)   If
the Buyer shall have determined that the adoption of or any change in any Requirement of Law (other than with respect to any amendment made to the Buyer's certificate
of incorporation and by-laws or other organizational or governing documents) regarding capital adequacy or in the interpretation or application thereof or compliance by the Buyer or any
corporation controlling the Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof
shall have the effect of reducing the rate of return on the Buyer's or such corporation's capital as a consequence of its obligations hereunder to a level below that which the Buyer or such
corporation could have achieved but for such adoption, change or compliance (taking into consideration the Buyer's or such corporation's policies with respect to capital adequacy) by an amount deemed
by the Buyer to be material, then from time to time, the Seller shall promptly pay to the Buyer such additional amount or amounts as will compensate the Buyer for such reduction. 

        (c)   If
the Buyer becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly notify the Seller of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this Section submitted by the Buyer to the Seller shall be conclusive in the absence of manifest error. 

SECTION 7. TAXES.  

        (a)   Any
and all payments by the Seller under or in respect of this Repurchase Agreement shall be made free and clear of, and without deduction or withholding for or on
account of, any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities (including 

19

 

penalties,
interest and additions to tax) with respect thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority
(collectively, "Taxes"), unless required by law. If the Seller shall be required under any applicable Requirement of Law to deduct or withhold any Taxes
from or in respect of any sum payable under or in respect of this Repurchase Agreement to the Buyer, (i) the Seller shall make all such deductions and withholdings in respect of Taxes,
(ii) the Seller shall pay the full amount deducted or withheld in respect of Taxes to the relevant taxation authority or other Governmental Authority in accordance with the applicable
Requirement of Law, and (iii) the sum payable by the Seller shall be increased as may be necessary so that after the Seller has made all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under this Section 7) such Buyer receives an amount equal to the sum it would have received had no such deductions or
withholdings been made in respect of Non-Excluded Taxes. For purposes of this Repurchase Agreement, the term "Non-Excluded
Taxes" are Taxes other than, in the case of the Buyer, Taxes that are imposed as a result of any present or former connection between the Buyer and the relevant taxing
jurisdiction, unless such Taxes are imposed solely as a result of such Buyer having executed, delivered or performed its obligations or received payments under, or enforced, this Repurchase Agreement
(in which case such Taxes will be treated as Non-Excluded Taxes). 

        (b)   If
on the date of the assignment pursuant to which a Buyer assignee becomes a party to this Repurchase Agreement, the Buyer assignor was entitled to payments under this
Section 7, then, to such extent (and only to such extent), the term "Non-Excluded Taxes" shall include (in addition to Taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) such Taxes, if any, applicable with respect to such Buyer assignee on such date. Any additional Taxes in respect of a Buyer that result solely and directly from a change
in the principal office of such Buyer shall be treated as any Taxes other than Non-Excluded Taxes ("Excluded Taxes") unless (A) any
such additional Taxes are imposed as a result of a change in the applicable Requirement of Law, or in the interpretation or application thereof, occurring after the date of such change or
(B) such change is made pursuant to the terms of Section 7(j) or otherwise as a result of a request therefor by the Seller. 

        (c)   In
addition, the Seller hereby agrees to pay any present or future stamp, recording, documentary, excise, property or similar taxes, charges or levies that arise from
any payment made under or in respect of this Repurchase Agreement or from the execution, delivery or registration of, any performance under, or otherwise with respect to, this Repurchase Agreement
(collectively, "Other Taxes"). 

        (d)   The
Seller hereby agrees to indemnify the Buyer, and to hold it harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and the full amount
of Taxes of any kind imposed by any jurisdiction on amounts payable to Buyer under this Section 7, imposed on or paid by the Buyer, and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto. The indemnity by the Seller provided for in this Section 7(d) shall apply and be made whether or not the
Non-Excluded Taxes or Other Taxes for which indemnification hereunder is sought have been correctly or legally asserted. Amounts payable by the Seller under the indemnity set forth in this
Section 7(d) shall be paid within 30 days from the date on which the Buyer makes written demand therefor. 

        (e)   As
soon as practicable after the date of any payment of Taxes or Other Taxes by the Seller to the relevant Governmental Authority, the Seller will deliver to the Buyer
the original or a certified copy of the receipt issued by such Governmental Authority evidencing payment thereof. 

        (f)    Without
prejudice to the survival of any other agreement of the Seller hereunder, the agreements and obligations of the Seller contained in this Section 7 shall
survive the termination of this Repurchase Agreement. Nothing contained in this Section 7 shall require the Buyer to make available any of its tax returns or any other information that it deems
to be confidential or proprietary. 

20

 

        (g)   Each
party to this Repurchase Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local income and franchise taxes, to treat the
Transaction as indebtedness of the Seller that is secured by the Purchased MH Loans and the Purchased MH Loans as owned by the Seller for federal income tax purposes in the absence of a Default by the
Seller. All parties to this Repurchase Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by law. 

        (h)   Any
Buyer, including any participant, assignee, or successor (each such participant, assignee, or successor, a
"Transferee"), that either (i) is not incorporated under the laws of the United States, any State thereof, or the District of Columbia or
(ii) whose name does not include Incorporated," "Inc.," "Corporation," "Corp.," "P.C.," "insurance company," or "assurance company" (a "Non-Exempt
Buyer") shall deliver or cause to be delivered to the Seller the following properly completed and duly executed documents: 

        (1)   a
complete and executed (x) U.S. Internal Revenue Form W-8BEN with Part II completed in which the Buyer claims the benefits of a tax
treaty with the United States providing for a reduced or zero rate of withholding (or any successor forms thereto), including all appropriate attachments or (y) a U.S. Internal Revenue Service
Form W-8ECI (or any successor form thereto); or 

        (2)   in
the case of an individual, (x) a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and a
certificate substantially in the form of Exhibit XI (a "Section 7 Certificate") or (y) a complete and executed Internal Revenue
Service Form W-9 (or any successor forms thereto); or 

        (3)   in
the case of a Non-Exempt Buyer that is organized under the laws of the United States, any State thereof, or the District of Columbia, (x) a
complete and executed Internal Revenue Service Form W-9 (or any successor forms thereto), including all appropriate attachments or (y) if such Non-Exempt Buyer is
disregarded for federal income tax purposes, the documents that would be required by clause (1), (2), (3), (4) or (5) with respect to its beneficial owner if such beneficial owner
were the Buyer; or 

        (4)   in
the case of a Non-Exempt Buyer that (i) is not organized under the laws of the United States, any State thereof, or the District of Columbia and
(ii) is treated as a corporation for U.S. federal income tax purposes, a complete and executed U.S. Internal Revenue Service Form W-8BEN claiming a zero rate of withholding
(or any successor forms thereto) and a Section 7 Certificate; or 

        (5)   in
the case of a Non-Exempt Buyer that (A) is treated as a partnership or other non-corporate entity, or is disregarded for U.S. federal
income tax purposes and (B) is not organized under the laws of the United States, any State thereof, or the District of Columbia, (x)(i) a complete and executed Internal Revenue Service
Form W-8IMY (including all required documents and attachments) and (ii) a Section 7 Certificate, and (y) without duplication, with respect to each of its
beneficial owners and the beneficial owners of such beneficial owners looking through chains of owners to individuals or entities that are treated as corporations for U.S. federal income tax purposes
(all such owners, "beneficial owners"), the documents that would be required by clause (1), (2), (3), (4) or this clause (5) with respect to each such beneficial owner if such
beneficial owner were the Buyer, provided, however, that no such documents will be required with respect to a beneficial owner to the extent the actual Buyer is determined to be in compliance with the
requirements for certification on behalf of its beneficial owner as may be provided in applicable U.S. Treasury regulations, or the requirements of this clause (5) are otherwise determined to
be unnecessary, all such determinations under this clause (5) to be made in the sole discretion of the Seller. 

21

 

        If
the forms referred to above in this Section 7(h) that are provided by a Buyer at the time such Buyer first becomes a party to this Repurchase Agreement indicate a United States
interest withholding tax rate in excess of zero, withholding tax at such rate shall be treated as Taxes other than Excluded Taxes and shall not qualify as Non-Excluded Taxes unless and
until such Buyer provides the appropriate form certifying that a lesser rate applies, whereupon withholding tax at such lesser rate shall be considered Excluded Taxes solely for the periods governed
by such form. 

        (i)    For
any period with respect to which any Buyer has failed to provide Seller with the appropriate form, certificate or other document described in subsection
(h) of this Section 7 (other than (i) if such failure is due to a change in any law, or in the interpretation or application thereof, occurring after the date on which a form,
certificate or other document originally was required to be provided, (ii) if such form, certificate or other document otherwise is not required under subsection (h) of this
Section 7 or (iii) if it is legally inadvisable or otherwise commercially disadvantageous for such Buyer to deliver such form, certificate or other document), such Buyer shall not be
entitled to payment or indemnification under subsection (a) or (c) of this Section 7 with respect to Non-Excluded Taxes by reason of such failure; provided, however,
that should a Buyer become subject to Non-Excluded Taxes because of its failure to deliver a form, certificate or other document required hereunder, Seller shall take such steps, at the
sole expense of the Buyer, as such Buyer shall reasonably request to assist such Buyer in recovering such Non-Excluded Taxes. 

        (j)    Each
Buyer hereby agrees that, upon the occurrence of any circumstances entitling such Buyer to additional amounts pursuant to this Section 7, such Buyer shall
use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions), at the sole expense of the Seller, to designate a different applicable lending office if the making
of such a change would avoid the need for, or materially reduce the amount of, any such additional amounts that may thereafter accrue and would not be, in the sole judgment of such Buyer, legally
inadvisable or commercially or otherwise disadvantageous to such Buyer in any respect. 

SECTION 8. SECURITY INTEREST  

        Although the parties intend that all Transactions hereunder be sales and purchases (other than for accounting and tax purposes) and not loans, in the event any
such Transactions are deemed to be loans, the Seller hereby pledges to Buyer as security for the performance by the Seller of its Obligations and hereby grants, assigns and pledges to Buyer a fully
perfected first priority security interest in the Purchased MH Loans, the Records, and all Seller's rights under the Servicing Agreement related to the Purchased MH Loans, (which, without limitation,
includes the loans listed on the Loan Schedule and Appendix I to the Confirmation and that is delivered to the Buyer as of each Purchase Date and all promissory notes or chattel paper
evidencing such loans) any Property relating to any Purchased MH Loan, any Takeout Commitments relating to any Purchased MH Loan, Seller's rights under all insurance policies and insurance proceeds
relating to any Purchased MH Loan, including but not limited to any payments or proceeds under any related primary insurance or hazard insurance, any Income relating to any Purchased MH Loan, the
Collection Account, Seller's rights under any Interest Rate Protection Agreement relating to any Purchased MH Loan, Seller's rights under any MH Loan Transfer Agreement relating to any Purchased MH
Loan and any other contract rights, accounts (including any interest of the Seller in escrow accounts) payments, rights to payment (including payments of interest or finance charges) and general
intangibles to the extent that the forgoing relates to any Purchased MH Loan and any other assets relating to the Purchased MH Loans or any interest in the Purchased MH Loans, any chattel paper owned
by Seller arising now or in the future with respect to a sale of a Manufactured Home by the Affiliate Guarantor (excluding any chattel paper arising from the sale of a Manufactured Home in respect of
which (i) the related Loan has been repaid, (ii) the Buyer has released its Lien under the Loan and Security Agreement or (iii) the Buyer did not advance a Loan against the
Manufactured Home under the related Loan and Security 

22

 

Agreement),
all collateral of the Seller under any other secured debt facility between Seller or Seller's Affiliates on the one hand and the Buyer or the Buyer's Affiliates on the other (excluding any
credit facility in which a non-Affiliate of Buyer is also a creditor) and any proceeds (including the related securitization proceeds) and distributions and any other property, rights,
title or interests as are specified on a Trust Receipt and Loan Schedule and Exception Report with respect to any of the foregoing, in all instances, whether now owned or hereafter acquired, now
existing or hereafter created, and wherever located (collectively, the "Repurchase Assets"). Notwithstanding the foregoing, the Buyer shall be solely
responsible for obtaining any agreements or consents from any of Buyer's Affiliates in connection with the grant of security interest set forth herein. 

        The
Seller hereby authorizes the Buyer to file such financing statement or statements relating to the Repurchase Assets as the Buyer in any filing jurisdiction and filing office which,
at its option, it may deem appropriate. Such financing statement may describe the collateral in the same manner indicated in this Section 8 or in any other manner as Buyer may deem advisable,
including using overbroad collateral descriptions or Uniform Commercial Code categories. The Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this
Section 8. Upon termination of this Repurchase Agreement and payment by the Seller of the Repurchase Price and all other amounts due hereunder to the Buyer of all Obligations and the
performance of all obligations under the Repurchase Documents the Buyer shall release its security interest in any remaining Repurchase Assets. 

SECTION 9. PAYMENT, TRANSFER AND CUSTODY  

        (a)   Unless
otherwise mutually agreed in writing, all transfers of funds to be made by the Seller hereunder shall be made in Dollars, in immediately available funds, without
deduction, set-off or counterclaim, to the Buyer at the following account maintained by the Buyer: MLMCI, Account No. 00812914, for the account of MLMCI Matchbook, Bankers Trust,
N.Y., ABA# 021 001 033, not later than 5:00 p.m. New York City time, on the date on which such payment shall become due (and each such payment made after such time shall be deemed to have been
made on the next succeeding Business Day). The Seller acknowledges that it has no rights of withdrawal from the foregoing account. 

        (b)   On
the Purchase Date for each Transaction, ownership of the Purchased MH Loans shall be transferred to the Buyer or its designee against the simultaneous transfer of the
Purchase Price pursuant to the Disbursement Agreement or to the following account of the Seller (or as otherwise directed by the Seller): Account No. 193343777, for the account of Bank One, NA,
ABA No. 102001017, Attn: Darren Parmenter. With respect to the Purchased MH Loans being sold by a Seller on a Purchase Date, the Seller hereby sells, transfers, conveys and assigns to Buyer or
its designee without recourse, but subject to the terms of this Repurchase Agreement, all the right, title and interest of the Seller in and to the Purchased MH Loans together with all right, title
and interest in and to the proceeds of any related Repurchase Assets. 

        (c)   In
connection with such sale, transfer, conveyance and assignment, on or prior to each Purchase Date, the Seller shall deliver or cause to be delivered and released to
Buyer or its designee the Loan File for the related Purchased MH Loans. 

SECTION 10. HYPOTHECATION OR PLEDGE OF PURCHASED MH LOAN  

        Title to all Purchased MH Loans and Repurchase Assets shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased MH Loans. Nothing in
this Repurchase Agreement shall preclude the Buyer from engaging in repurchase transactions with the Purchased MH Loans or otherwise pledging, repledging, transferring, hypothecating, or
rehypothecating the Purchased MH Loans; provided, that no such transaction shall relieve Buyer of its obligations to transfer Purchased MH Loans to the Seller pursuant to Section 3(d) hereof.
Nothing contained in this Repurchase 

23

 

Agreement
shall obligate the Buyer to segregate any Purchased MH Loans delivered to the Buyer by the Seller. 

SECTION 11. REPRESENTATIONS  

        (1)   The
Seller represents and warrants to the Buyer that as of the Purchase Date for any Purchased MH Loans by the Buyer from the Seller and as of the date of this
Repurchase Agreement and any Transaction hereunder: 

        (a)    Acting as Principal.    The Seller will engage in such Transactions as principal (or, if agreed in writing in
advance of any Transaction by the other party hereto, as agent for a disclosed principal). 

        (b)    No Broker.    The Seller has not dealt with any broker, investment banker, agent, or other person, except for
the Buyer, who may be entitled to any commission or compensation in connection with the sale of Purchased MH Loans pursuant to this Repurchase Agreement, other than the brokers engaged in the sale of
Manufactured Homes, payment of which fees is the sole responsibility of the Seller. 

        (c)    Financial Statements.    The Seller has heretofore furnished to the Buyer a copy of the Parent Guarantor's
(a) consolidated balance sheet and the consolidated balance sheets of Parent Guarantor's consolidated Subsidiaries for the fiscal year ended December 31, 2002 and the related
consolidated statements of income and retained earnings and of cash flows for the Parent Guarantor and its consolidated Subsidiaries for such fiscal year, setting forth in each case in comparative
form the figures for the previous year, with the opinion thereon of Pricewaterhousecoopers, LLC and (b) consolidated balance sheet and the consolidated balance sheets of Parent Guarantor's
consolidated Subsidiaries for
the quarterly fiscal period(s) of the Parent Guarantor ended March 31, 2003, June 30, 2003 and September 30, 2003 and the related consolidated statements of income and retained
earnings and of cash flows for the Parent Guarantor and its consolidated Subsidiaries for such quarterly fiscal period(s), setting forth in each case in comparative form the figures for the previous
year. All such financial statements are complete and correct and fairly present, in all material respects, the consolidated financial condition of the Parent Guarantor and its Subsidiaries and the
consolidated results of their operations as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis. Since December 31, 2002, there has been no
material adverse change in the consolidated business, operations or financial condition of the Parent Guarantor and its consolidated Subsidiaries taken as a whole from that set forth in said financial
statements nor is the Parent Guarantor aware of any state of facts which (without notice or the lapse of time) would or could result in any such material adverse change. The Parent Guarantor does not
have, on the date of the statements delivered pursuant to this section (the "Statement Date"), any liabilities, direct or indirect, fixed or contingent,
matured or unmatured, known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said
balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments of the Parent Guarantor except as
heretofore disclosed to the Buyer in writing. 

        (d)    Organization, Etc.    

          (i)  The
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. The Seller (a) has all
requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be
conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect; (b) is qualified to do business and
is in good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely
(either individually or 

24

 

in
the aggregate) to have a Material Adverse Effect; and (c) has full power and authority to execute, deliver and perform its obligations under the Repurchase Documents. 

         (ii)  The
Parent Guarantor is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware and the Affiliate Guarantor
is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado. Each Guarantor (a) has all requisite corporate or other power, and has all
governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect; (b) is qualified to do business and is in good standing in all other jurisdictions in
which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely (either individually or in the aggregate) to have
a Material Adverse Effect; and (c) has full power and authority to execute, deliver and perform its obligations under the Repurchase Documents. 

        (e)    Authorization, Compliance, Etc.    The execution and delivery of, and the performance by the Seller and each
Guarantor of their respective obligations under, the Repurchase Documents to which they are a party (a) are within the Seller's and each Guarantor's powers, (b) have been duly authorized
by all requisite action, (c) do not violate any provision of applicable law, rule or regulation, or any order, writ, injunction or decree of any court or other Governmental Authority, or its
organizational documents, (d) do not violate any indenture, agreement, document or instrument to which the Seller, each Guarantor or any of their respective Subsidiaries is a party, or by which
any of them or any of their properties, any of the Repurchase Assets is bound or to which any of them is subject and (e) are not in conflict with, do not result in a breach of, or constitute
(with due notice or lapse of time or both) a default under, or except as may be provided by any Repurchase Document, result in the creation or imposition of any Lien upon any of the property or assets
of the Seller, any Guarantor or any of their respective Subsidiaries pursuant to, any such indenture, agreement, document or instrument. The Seller and each Guarantor are not required to obtain any
consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority in connection with or as a condition to the consummation of the Transactions
contemplated herein and the execution, delivery or performance of the Repurchase Documents to which they are a party. 

        (f)    Litigation.    There are no actions, suits, arbitrations, investigations (including, without limitation, any of
the foregoing which are pending or threatened) or other legal or arbitrable proceedings affecting the Parent Guarantor or any of its Subsidiaries or affecting any of the Repurchase Assets or any of
the other properties of the Parent Guarantor before any Governmental Authority which (i) questions or challenges the validity or enforceability of the Repurchase Documents or any action to be
taken in connection with the transactions contemplated hereby, (ii) makes a claim or claims in an aggregate amount greater than $10,000,000, (iii) individually or in the aggregate, if
adversely determined, would have a Material Adverse Effect, or (iv) requires filing with the SEC in accordance with its regulations, or if so required, such filing has been made. 

        (g)    Purchased MH Loans.    

          (i)  The
Seller has not assigned, pledged, or otherwise conveyed or encumbered any Purchased MH Loan to any other Person, and immediately prior to the sale of such MH Loan
to the Buyer, the Seller was the sole owner of such Purchased MH Loan and had good and marketable title thereto, free and clear of all Liens, in each case except for Liens to be released
simultaneously with the sale to the Buyer hereunder. 

         (ii)  The
provisions of this Repurchase Agreement are effective to either constitute a sale of Repurchase Assets to the Buyer or to create in favor of the Buyer a valid
security interest in all right, title and interest of the Seller in, to and under the Repurchase Assets. 

25

 

        (h)    Chief Executive Office/Jurisdiction of Organization.    On the Effective Date, the Seller's chief executive
office is, and has been, located at 600 Grant Street, Suite 900, Denver, CO 80203. The Seller's jurisdiction of organization is Delaware. 

        (i)    Location of Books and Records.    The location where the Seller keeps its books and records, including all
computer tapes and records related to the Repurchase Assets is its chief executive office. 

        (j)    Filing and Payment of Taxes.    The Seller, each Guarantor and their respective Subsidiaries have filed on a
timely basis all U.S. federal, state and local income tax returns, franchise tax returns and other material information returns, reports and any other information statements or schedules that are
required to be filed by or in respect of them and have paid all material taxes due pursuant to such returns, reports or other information statements or schedules or pursuant to any assessment received
by them, except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided.
The charges, accruals and reserves on the books of the Seller, each Guarantor and their respective Subsidiaries in respect of taxes and other governmental charges are, in the opinion of the Seller and
each Guarantor, adequate. 

        (k)    Enforceability.    This Repurchase Agreement and all of the other Repurchase Documents executed and delivered
by the Seller and each Guarantor in connection herewith are legal, valid and binding obligations of the Seller and each Guarantor and are enforceable against the Seller and each Guarantor in
accordance with their terms except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors rights generally and (ii) general principles of equity. 

        (l)    Ability to Perform.    The Seller does not believe, nor does it have any reason or cause to believe, that it
cannot perform each and every covenant contained in the Repurchase Documents to which it is a party on its part to be performed 

        (m)    Material Adverse Effect.    Since December 31, 2002, there has been no development or event nor, to the
Seller's knowledge, any prospective development or event, which has had or could reasonably be expected to have a Material Adverse Effect. 

        (n)    No Default.    No Default or Event of Default has occurred and is continuing. 

        (o)    Underwriting Guidelines.    The Underwriting Guidelines provided to Buyer are the true and correct Underwriting
Guidelines of the Seller. 

        (p)    Adverse Selection.    The Seller has not selected the Purchased MH Loans with the intent of adversely affecting
Buyer's interests. 

        (q)    Tangible Net Worth.    The Tangible Net Worth of the Seller is not less than (i) $1,000,000, on the
initial Purchase Date; (ii) $3,000,000, on August 1, 2004 through September 30, 2004; and (iii) $5,000,000, on and after October 1, 2004. 

        (r)    Indebtedness.    The Seller does not have any Indebtedness as of the date hereof, except as disclosed on  Schedule 2 to
this Repurchase Agreement. 

        (s)    Accurate and Complete Disclosure.    The information, reports, financial statements, exhibits and schedules
furnished in writing by or on behalf of the Seller and each Guarantor to the Buyer in connection with the negotiation, preparation or delivery of this Repurchase Agreement and the other Repurchase
Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, when taken as a whole, in light of the circumstances under which they were made, not misleading. All written information furnished after the date
hereof by or on behalf of the Seller and each Guarantor to the Buyer in connection with this Repurchase Agreement and the other Repurchase Documents and the transactions contemplated hereby and
thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified.
To the best knowledge of the Seller and each Guarantor, there is no fact known to the Seller nor any Guarantor that could reasonably be expected to have a Material Adverse Effect that has not been
disclosed herein, in the other Repurchase Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to the Buyer for use in connection with the
transactions contemplated hereby or thereby. 

26

   
        (t)    Margin Regulations.    The use of all funds acquired by the Seller under this Repurchase Agreement will not
conflict with or contravene any of Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or
otherwise modified. 

        (u)    Investment Company.    Neither the Seller, any Guarantor nor any of their respective Subsidiaries are an
"investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended. 

        (v)    Solvency.    As of the date hereof and immediately after giving effect to each Transaction, the fair value of
the assets of the Seller is greater than the fair value of the liabilities (including, without limitation, contingent liabilities if and to the extent required to be recorded as a liability on the
financial statements of the Seller in accordance with GAAP) of the Seller and the Seller is solvent and, after giving effect to the transactions contemplated by this Repurchase Agreement and the other
Repurchase Documents, will not be rendered insolvent or left with an unreasonably small amount of capital with which to conduct its business and perform its obligations. The Seller does not intend to
incur, nor does it believe that it has incurred, debts beyond its ability to pay such debts as they mature. The Seller is not contemplating the commencement of an insolvency, bankruptcy, liquidation,
or consolidation proceeding or the appointment of a receiver, liquidator, conservator, trustee, or similar official in respect of itself or any of its property. 

        (w)    ERISA.    Neither the Seller, any Guarantor, any Subsidiary nor any ERISA Affiliate thereof sponsors,
maintains, contributes to or is required to contribute to any Plan or Multiemployer Plan nor has the Seller, any Guarantor, any Subsidiary nor any ERISA Affiliate thereof sponsored, maintained,
contributed to or been required to contribute to any Plan or Multiemployer Plan within the past six (6) years. 

        (x)    Loan Schedule.    The information set forth in the related Loan Schedule and all other information or data
furnished by, or on behalf of, Seller to Buyer is complete, true and correct in all material respects, and Seller acknowledges that Buyer has not verified the accuracy of such information or data. 

        (y)    No Reliance.    The Seller has made its own independent decisions to enter into the Repurchase Documents and
each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and
accountants) as it has deemed necessary. Seller is not relying upon any advice from Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of
such Transactions. 

        (z)    Plan Assets.    Neither the Seller nor any Guarantor is an employee benefit plan as defined in Section 3
of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, and the Purchased MH Loans are not "plan assets" within the meaning of 29 CFR
§2510.3-101 in the Seller's or any Guarantor's hands. 

SECTION 12. COVENANTS  

        On and as of the date of this Repurchase Agreement and each Purchase Date and until this Repurchase Agreement is no longer in force with respect to any
Transaction, the Seller covenants as follows: 

        (a)    Preservation of Existence; Compliance with Law.    The Seller shall: 

          (i)  Preserve
and maintain its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business; 

         (ii)  Comply
in all material respects with the requirements of all applicable laws, rules, regulations and orders, whether now in effect or hereafter enacted or promulgated
by any applicable Governmental Authority (including, without limitation, all environmental laws); 

27

 

        (iii)  Maintain
all material licenses, permits or other approvals necessary for the Seller to conduct its business and to perform its obligations under the Repurchase
Documents, and shall conduct its business in accordance with applicable law; 

        (iv)  Keep
adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied; and 

         (v)  Permit
representatives of the Buyer, upon reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case, no prior notice shall be
required), during normal business hours, to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all
to the extent reasonably requested by the Buyer, subject to the provisions set forth in Section 27 hereof. 

        (b)    Taxes, Etc.    

          (i)  The
Seller shall pay and discharge or cause to be paid and discharged, when due, or adequately reserve for the payment of, all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income and profits or upon any of its property, real, personal or mixed (including without limitation, the Repurchase Assets) or upon any
part thereof, as well as any other lawful claims which, if unpaid, might become a Lien upon such properties or any part thereof, except for any such taxes as are appropriately contested in good faith
by appropriate proceedings diligently conducted and with respect to which adequate reserves are provided. 

         (ii)  The
Seller shall file on a timely basis all U.S. federal, state and local income tax returns, franchise tax returns and other material information returns, reports and
any other information statements or schedules required to be filed by or in respect of it and pay all material taxes due pursuant to such returns, reports and other information statements or schedules
or pursuant to any assessment received by it. 

        (c)    Notice of Proceedings or Adverse Change.    The Seller shall give notice to the Buyer immediately after a
Responsible Officer of the Seller has any knowledge of: 

          (i)  the
occurrence of any Default or Event of Default or Termination Event; 

         (ii)  any
(a) default or event of default under any Indebtedness of the Seller or any Guarantor or (b) litigation, investigation, regulatory action or
proceeding that is pending or threatened by or against the Seller or any Guarantor in any federal or state court or before any Governmental Authority which, if not cured or if adversely determined,
would reasonably be expected to have a Material Adverse Effect or constitute a Default or Event of Default, and (c) any Material Adverse Effect; 

        (iii)  any
litigation or proceeding that is pending or threatened against (a) the Seller or any Guarantor in which the amount involved exceeds $5,000,000 and is not
covered by insurance, in which injunctive or similar relief is sought, or which, would reasonably be expected to have a Material Adverse Effect and (b) any litigation or proceeding that is
pending or threatened in connection with any of the Repurchase Assets, which, if adversely determined, would reasonably be expected to have a Material Adverse Effect; 

        (iv)  and,
as soon as reasonably possible, notice of any of the following events: 

        (A)  a
material change in the insurance coverage of the Seller or any Guarantor, with a copy of evidence of same attached; 

        (B)  any
material change in accounting policies or financial reporting practices of the Seller or any Guarantor; 

        (C)  promptly
upon receipt of notice or knowledge of any Lien or security interest (other than security interests created hereby or under any other Repurchase Document) on,
or claim asserted against, any of the Repurchase Assets; and 

        (D)  any
other event, circumstance or condition that has resulted, or is reasonably likely to result, in a Material Adverse Effect. 

28

 

        (d)    Financial Reporting.    The Seller shall maintain a system of accounting established and administered in
accordance with GAAP, and furnish to the Buyer: 

          (i)  Within
ninety (90) days after the close of each fiscal year, Financial Statements, including a statement of income and changes in shareholders' equity of the
REIT for such year, and the related balance sheet as at the end of such year, all in reasonable detail and accompanied by an opinion of an accounting firm as to said financial statements; 

         (ii)  Within
forty-five (45) days after the close of each of the REIT's first three fiscal quarters in each fiscal year unaudited balance sheets and income
statements, for the period from the beginning of such fiscal quarter to the end of such fiscal quarter, subject, however, to year end adjustments; 

        (iii)  Within
thirty (30) days after the end of each calendar month, the unaudited balance sheets of the Seller as at the end of such period and the related unaudited
consolidated balance sheet and statements of income for the Seller for such period and the portion of the fiscal year through the end of such period, subject, however, to year end adjustments; 

        (iv)  Simultaneously
with the furnishing of each of the Financial Statements to be delivered pursuant to subsection (ii) above, or monthly upon Buyer's request, a
certificate in the form of Exhibit VIII hereto and certified by an executive officer of the Seller; 

         (v)  Notice
of the availability of any of Seller's and the REIT's material SEC filings (other than any of Seller's and the REIT's 10 Ks and 10 Qs) within three
(3) Business Days of such filings becoming publicly available; and 

        (vi)  Promptly,
from time to time, such other information regarding the business affairs, operations and financial condition of the Seller as the Buyer may reasonably
request. 

        (e)    Visitation and Inspection Rights.    Subject to the provisions of Section 27, the Seller shall permit
the Buyer to inspect, and to discuss with the Seller's officers, agents and auditors, the affairs, finances, and accounts of the Seller, the Repurchase Assets, and the Seller's books and records, and
to make abstracts or reproductions thereof and to duplicate, reduce to hard copy or otherwise use any and all computer or electronically stored information or data, in each case, (i) during
normal business hours, (ii) upon reasonable notice (provided, that upon the occurrence of an Event of Default, no notice shall be required), and (iii) at the expense of the Seller to
discuss with its officers, its affairs, finances, and accounts. 

        (f)    Reimbursement of Expenses.    On the date of execution of this Repurchase Agreement, the Seller shall reimburse
the Buyer for all reasonable out-of-pocket expenses incurred by the Buyer on or prior to such date. From and after such date, the Seller shall promptly reimburse the Buyer for
all reasonable out-of-pocket expenses as the same are incurred by the Buyer and within thirty (30) days of the receipt of invoices therefor. 

        (g)    Further Assurances.    The Seller shall execute and deliver to the Buyer all further documents, financing
statements, agreements and instruments, and take all further action that may be required under applicable law, or that the Buyer may reasonably request, in order to effectuate the transactions
contemplated by this Repurchase Agreement and the Repurchase Documents or, without limiting any of the foregoing, to grant, preserve, protect and perfect the validity and first-priority of the
security interests created or intended to be created hereby. The Seller shall do all things necessary to preserve the Repurchase Assets so that they remain subject to a first priority perfected
security interest hereunder. Without limiting the foregoing, the Seller will comply with all rules, regulations, and other laws of any Governmental Authority and cause the Repurchase Assets to comply
with all applicable rules, regulations and other laws. The Seller will not allow any default for which the Seller is responsible to occur under any Repurchase Assets or any Repurchase Document and the
Seller shall fully perform or cause to be performed when due all of its obligations under any Repurchase Assets or the Repurchase Documents. 

        (h)    True and Correct Information.    All information, reports, exhibits, schedules, financial statements or
certificates of Seller, each Guarantor or any of their respective Affiliates thereof or any 

29

 

of
their officers furnished to Buyer hereunder and during Buyer's diligence of the Seller and each Guarantor are and will be true and complete in all material respects and do not omit to disclose any
material facts necessary to make the statements therein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements of the Seller or any
Guarantor delivered by the Seller to the Buyer pursuant to this Repurchase Agreement shall be prepared in accordance with GAAP, or if applicable, to SEC filings, the appropriate SEC accounting
requirements. 

        (i)    ERISA Events.    

          (i)  Promptly
upon becoming aware of the occurrence of any Event of Termination which together with all other Events of Termination occurring within the prior
12 months involve a payment of money by or a potential aggregate liability of the Seller or any ERISA Affiliate thereof or any combination of such entities in excess of $10,000,000 the Seller
shall give the Buyer a written notice specifying the nature thereof, what action the Seller or any ERISA Affiliate thereof has taken and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto; 

         (ii)  Promptly
upon receipt thereof, the Seller shall furnish to the Buyer copies of (i) all notices received by the Seller or any ERISA Affiliate thereof of the
PBGC's intent to terminate any Plan or to have a trustee appointed to administer any Plan; (ii) all notices received by the Seller or any ERISA Affiliate thereof from the sponsor of a
Multiemployer Plan pursuant to Section 4202 of ERISA involving a withdrawal liability in excess of $10,000,000; and (iii) all funding waiver requests filed by the Seller or any ERISA
Affiliate thereof with the Internal Revenue Service with respect to any Plan, the accrued benefits of which exceed the present value of the plan assets as of the date the waiver request is filed by
more than $10,000,000, and all communications received by the Seller or any ERISA Affiliate thereof from the Internal Revenue Service with respect to any such funding waiver request. 

        (j)    Financial Condition Covenants.    

        (i)    Maintenance of Tangible Net Worth.    (A) Seller shall maintain a Tangible Net Worth of not less than
(i) $1,000,000, on the initial Purchase Date; (ii) $3,000,000, on August 1, 2004 through September 30, 2004; and (iii) $5,000,000, on and after October 1,
2004; and (B) Seller shall maintain a Tangible Net Worth at the end of any calendar quarter of not less than 80% of its Tangible Net Worth at the beginning of the preceding calendar quarter.
For example, Seller shall maintain a Tangible Net Worth on June 30 of not less than 80% of its Tangible Net Worth on January 1st. 

        (ii)    Maintenance of Ratio of Indebtedness to Tangible Net Worth.    The Seller shall maintain the ratio of
Indebtedness to Tangible Net Worth no greater than 4:1. For purposes of this clause (ii) only, Indebtedness shall not include Indebtedness of others Guaranteed by the Seller. 

        (iii)    Maintenance of Liquidity.    The Seller shall ensure that, as of the end of each calendar month, it has Cash
Equivalents in an amount not less than $1,000,000. 

        (k)    Hedging.    If requested by the Buyer in writing, the Seller shall have entered into Interest Rate Protection
Agreements, in an amount in accordance with the Buyer's written request, with Buyer or any Affiliate, having terms with respect to protection against fluctuations in interest rates reasonably
acceptable to the Buyer. 

        (l)    No Adverse Selection.    The Seller shall not select Eligible MH Loans to be sold to Buyer as Purchased MH
Loans using any type of adverse selection or other selection criteria which is intended to adversely affect the Buyer. 

        (m)    Loan Schedule.    On the Friday of each calendar week (or if such date is not a Business Day, the next Business
Day), or with such greater frequency as requested by Buyer, the Seller shall provide to Buyer, electronically, in a format mutually acceptable to Buyer, a Loan Schedule as outlined in  Exhibit V.
The Seller shall not cause the Purchased MH Loans to be serviced by any servicer other than a servicer expressly approved in writing
by Buyer, which approval shall be deemed granted by Buyer with respect to the Servicer with the execution of this Repurchase Agreement. 

30

 

        (n)    Insurance.    The Seller shall continue to maintain Fidelity Insurance in an aggregate amount at least equal to
$3,000,000. The Seller shall maintain a fidelity bond in respect of its officers, employees and agents, with respect to any claims made in connection with all or any portion of the Repurchase Assets.
The Seller shall notify the Buyer of any material change in the terms of any such fidelity bond or insurance policy. 

        (o)    Books and Records.    The Seller shall, to the extent practicable, maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate records evidencing the Repurchase Assets in the event of the destruction of the originals thereof), and keep and maintain or
obtain, as and when required, all documents, books, records and other information reasonably necessary or advisable for the collection of all Repurchase Assets. 

        (p)    Security Interest.    The Seller shall do all things necessary to be done by it to preserve the Repurchase
Assets so that they remains subject to a first priority perfected security interest hereunder. Without limiting the foregoing, the Seller will comply with all rules, regulations and other laws of any
Governmental Authority and cause the Repurchase Assets to comply with all applicable rules, regulations and other laws. The Seller will not allow any default for which the Seller is responsible to
occur under any Repurchase Assets or any Repurchase Documents and the Seller shall fully perform or cause to be performed when due all of its obligations under any Repurchase Assets or the Repurchase
Documents. 

        (q)    Illegal Activities.    The Seller shall not engage in any conduct or activity that could subject its assets to
forfeiture or seizure. 

        (r)    Material Change in Business.    The Seller and each Guarantor shall not make any material change in the nature
of its business as carried on at the date hereof. 

        (s)    Limitation on Dividends and Distributions.    The Seller shall not make any payment on account of, or set apart
assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of the Seller, whether now or hereafter outstanding, or
make any other distribution in respect of any of the foregoing or to any shareholder or equity owner of the Seller, either directly or indirectly, whether in cash or property or in obligations of the
Seller or any of the Seller's consolidated Subsidiaries at any time following the occurrence and during the continuation of an Event of Default, except that, following the occurrence and during the
continuation of an Event of Default, the Seller may make distributions in cash or other property but only to the extent of the REIT's distributable share of the Seller's net taxable income and gain
(as determined for federal income tax purposes) with respect to such taxable year, and only to the extent reasonably necessary for the REIT to satisfy its REIT Distribution Requirement with respect to
such taxable year. 

        (t)    Disposition of Assets; Liens.    The Seller shall not create, incur, assume or suffer to exist any mortgage,
pledge, Lien, charge or other encumbrance of any nature whatsoever on any of the Repurchase Assets, whether real, personal or mixed, now or hereafter owned, other than the Liens created in connection
with the transactions contemplated by this Repurchase Agreement; nor shall the Seller cause any of the Purchased MH Loans to be sold, pledged, assigned or transferred, provided, however this
clause (t) will cease to be effective upon any Repurchase of MH Loans by Seller from Buyer in respect of MH Loans so repurchased. 

        (u)    Transactions with Affiliates.    The Seller shall not enter into any transaction, including, without
limitation, the purchase, sale, lease or exchange of property or assets or the rendering or accepting of any service with any Affiliate, unless such transaction is (a) not otherwise prohibited
in this Repurchase Agreement, (b) in the ordinary course of the Seller's business and (c) upon fair and reasonable terms no less favorable to the Seller, as the case may be, than it
would obtain in a comparable arm's length transaction with a Person which is not an Affiliate. 

        (v)    ERISA Matters.    

          (i)  The
Seller shall not permit any event or condition which is described in any of clauses (i) through (vii) of the definition of "Event of Termination" to occur or
exist with respect to any Plan 

31

 

or
Multiemployer Plan if such event or condition, together with all other events or conditions described in the definition of Event of Termination occurring within the prior 12 months, involves
the payment of money by or an incurrence of liability of the Seller or any ERISA Affiliate thereof, or any combination of such entities in an amount in excess of $2,500,000. 

         (ii)  The
Seller shall not be an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code
and (b) the Seller shall not use "plan assets" within the meaning of 29 CFR §2510.3-101 to engage in this Repurchase Agreement or the Transactions hereunder. 

        (w)    Consolidations, Mergers and Sales of Assets.    The Seller shall not (i) consolidate or merge with or
into any other Person or (ii) sell, lease or otherwise transfer all or substantially all of its assets to any other Person; provided that the
Seller may merge or consolidate with another Person if the Seller is the Person surviving such merger. 

        (x)    Loan Reports.    The Seller will furnish to Buyer monthly electronic MH Loan performance data, including,
without limitation, delinquency reports, pool analytic reports and static pool reports (i.e., delinquency, foreclosure and net charge-off
reports) and monthly stratification reports summarizing the characteristics of the MH Loans, as per the data requirements outlined in Exhibit V
hereof. 

        (y)    Guarantees.    The Seller shall not create, incur, assume or suffer to exist any Guarantees, other than
(i) the Revolving Credit Facility Obligations not in excess of $125,000,000; (ii) to the extent reflected in the Seller's financial statements or notes thereto and (iii) to the
extent the aggregate Guarantees of the Seller (other than those incurred pursuant to clause (i) above) do not exceed $5,000,000. 

        (z)    Underwriting Guidelines.    Without the prior written consent of Buyer, the Underwriting Guidelines shall not
be materially amended or modified. In the event that the Underwriting Guidelines are materially amended or modified, the Seller shall notify the Buyer in writing or via e-mail of such
material amendment or modification and the Buyer must notify the Seller in writing or via e-mail that it accepts or rejects such material amendment or modification. Without limiting the
foregoing, in the event that any amendment or modification is made to the Underwriting Guidelines, the Seller shall promptly deliver to Buyer a complete copy of the amended or modified Underwriting
Guidelines. 

        (aa)    Underwriting Analysis.    The Seller will furnish to Buyer, upon Buyer's request, within five
(5) Business Days following such request, the Parent Guarantor's Underwriting Analysis. 

        (bb)    Chief Executive Office; Jurisdiction of Organization.    Seller shall not move its chief executive office from
the address referred to in Section 11(h) or change its jurisdiction of organization referred to in Section 11(h) unless it shall have provided Buyer thirty (30) days' prior
written notice of such change. 

        (cc)    Origination.    As soon as is reasonably practical, but in no event later than eighteen (18) months
from the date hereof, the Seller will become licensed to originate MH Loans in each state where they acquire MH Paper. 

32

   SECTION 13. EVENTS OF DEFAULT  

        Section 13.01    Events of Default.    If any of the following events (each an "Event
of Default") occur, the Seller and Buyer shall have the rights set forth in Section 14 hereof, as applicable: 

        (a)   the
Seller or any Guarantor shall default in the payment of (i) any amount payable by it hereunder or under any other Repurchase Document, (ii) Expenses,
in the case of this clause (ii) within five (5) Business Days after the same becomes due and payable, or (iii) any other Obligations, when the same shall become due and payable,
whether at the due date thereof, or by acceleration or otherwise; or 

        (b)   the
failure of the Seller to observe or perform its obligations pursuant to Section 12(x) hereof and such failure to observe or perform shall continue
unremedied for a period of three (3) Business Days; or 

        (c)   the
failure of the Seller to perform, comply with or observe any term, covenant or agreement applicable to the Seller contained in Sections 12(a)(i), (h), (j), (r), (s),
(t), (u), (v), (w), (y), (z), or (aa); or 

        (d)   any
representation, warranty or certification made herein or in any other Repurchase Document by the Seller or any Guarantor or any certificate furnished to the Buyer
pursuant to the provisions hereof or thereof or any information with respect to the Purchased MH Loans furnished in writing by on behalf of the Seller or any Guarantor shall prove to have been untrue
or misleading in any material respect as of the time made or furnished (other than the representations and warranties set forth in Schedule 1, which shall be considered solely for the purpose
of determining the Market Value of the Purchased MH Loans; unless (i) the Seller or any Guarantor shall have made any such representations and warranties with actual knowledge that they were
materially false or misleading at the time made; or (ii) any such representations and warranties have been determined in good faith by the Buyer in its sole discretion to be materially false or
misleading on a regular basis); or 

        (e)   the
Seller or any Guarantor shall fail to observe or perform any other covenant or agreement contained in this Repurchase Agreement (and not identified in
clause (b) of Section 13.01) or any other Repurchase Document, and if such default shall be capable of being remedied, and such failure to observe or perform shall continue unremedied
for a period of ten (10) Business Days; or 

        (f)    a
judgment or judgments for the payment of money in excess of $10,000,000 in the aggregate shall be rendered against the Parent Guarantor or any of its Affiliates by one
or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of
execution thereof shall not be procured, within thirty (30) days from the date of entry thereof, and the Parent Guarantor or any such Affiliate shall not, within said period of thirty
(30) days, or such longer period during which execution of the same shall have been stayed or bonded, appeal therefrom and cause the execution thereof to be stayed during such appeal; provided,
however, that any such judgment or judgments shall not give rise to an Event of Default under this Section 13(f) if and so long as (A) the amount of such judgment or order which remains
unsatisfied is covered by a valid and binding policy of insurance between the Parent Guarantor or Affiliate in respect of such judgment or judgments and the insurer covering full payment of such
unsatisfied amount and (B) such insurer, which shall be rated at least "A" by A.M. Best Company, has been notified, and has not disputed the claim made for payment, of the amount of such
judgment or judgments; or 

        (g)   any
"event of default" or any other default which permits a demand for, or requires, the early repayment of obligations due by the Seller, any Guarantor or their
respective Affiliates under (i) the Loan and Security Agreement; (ii) any agreement (after the expiration of any applicable grace period under any such agreement) relating to any
Indebtedness (other than any Structured Securities Debt) of 

33

 

the
Seller, any Guarantor or any respective Affiliate, as applicable, to which the Buyer or any Affiliate is a party (excluding from this clause (ii) any Indebtedness in which a
non-Affiliate of the Buyer is also a lender); or (iii) any agreement (after the expiration of any applicable grace period under any such agreement) relating to any Indebtedness of
the Seller, any Guarantor or any respective Affiliate (other than any Structured Securities Debt), for $15,000,000 or more in the aggregate; or 

        (h)   either
the Parent Guaranty or the Affiliate Guaranty shall cease to be, or any Guarantor shall assert that the Parent Guaranty or the Affiliate Guaranty, as applicable,
is not, in full force and effect or any Guarantor shall fail to comply with any of their respective obligations thereunder; or 

        (i)    a
material breach or material default by any Guarantor of any of the representations, warranties or covenants or obligations set forth in the Parent Guaranty or the
Affiliate Guaranty, as applicable, or any other Repurchase Document to which it is a party and the time period, if any, for curing such default after notice thereof shall have lapsed; or 

        (j)    an
Event of Insolvency shall have occurred with respect to the Seller or any Guarantor; or 

        (k)   for
any reason, this Repurchase Agreement at any time shall not be in full force and effect in all material respects or shall not be enforceable in all material respects
in accordance with its terms, or any Lien granted pursuant thereto shall fail to be perfected and of first priority, or any Person (other than Buyer) shall contest the validity, enforceability,
perfection or priority of any Lien granted pursuant thereto, or any party thereto (other than Buyer) shall seek to disaffirm, terminate, limit or reduce its obligations hereunder; or 

        (l)    a
Material Adverse Effect of the Seller or any Guarantor shall occur, in each case as determined by Buyer in its sole good faith discretion, or any other condition shall
exist which, in Buyer's sole good faith discretion, constitutes a material impairment of the Seller's or any Guarantor's ability to perform its obligations under this Repurchase Agreement or any other
Repurchase Document; or 

        (m)  (i) any
Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan of
Seller or any Guarantor, (ii) any material "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien
in favor of the PBGC or a Plan shall arise on the assets of the Seller, any Guarantor or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan of Seller or any Guarantor, which Reportable Event or commencement of proceedings
or appointment of a trustee is, in the reasonable opinion of the Buyer, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Plan of Seller or any
Guarantor shall terminate for purposes of Title IV of ERISA, (v) the Seller, any Guarantor or any Commonly Controlled Entity shall, or in the reasonable opinion of the Buyer is likely to, incur
any liability in connection with a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to a Plan
of Seller or any Guarantor; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or 

        (n)   Any
Guarantor's or Seller's audited annual financial statements or the notes thereto or other opinions or conclusions stated therein shall be qualified or limited by
reference to the status of any Guarantor or Seller as a "going concern" or a reference of similar import; or 

        (o)   Servicer
is no longer Seller's sole vendor for the underwriting, closing and servicing of its MH Loans unless otherwise consented to in writing by Buyer. 

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        Section 13.02    Termination Event.    (a) If the following event (a
"Termination Event") occurs, the Buyer shall have the rights set forth in Section 13.02(b): 

          (i)  the
senior debt obligations or short-term debt obligations of Merrill Lynch & Co., Inc. shall be rated below the four highest generic grades
(without regard to any pluses and minuses reflecting gradations within such generic grades) by any nationally recognized statistical rating organization. 

         (ii)  A
Change in Control shall have occurred. 

        (b)   Upon
the occurrence of a Termination Event, the Buyer shall have the right, in its sole discretion, to immediately terminate the Buyer's obligation to enter into any
additional Transactions. The Seller shall repurchase any Purchased MH Loans subject to a Transaction hereunder within ninety (90) days following receipt of a request therefor from Buyer
following the occurrence of a Termination Event. 

SECTION 14. REMEDIES  

        The Buyer will exercise all of the following remedies in accordance with this Repurchase Agreement and applicable law, including without limitation, any
applicable standards of care: 

        (a)   If
an Event of Default occurs, the following rights and remedies are available to the Buyer; provided, that an Event of Default shall be deemed to be continuing unless
expressly waived by the Buyer in writing. 

          (i)  At
the option of the Buyer, exercised by notice to the Seller via e-mail (which option shall be deemed to have been exercised, even if no notice is given,
immediately upon the occurrence of an Event of Insolvency of the Seller or any Guarantor), the Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed to occur
immediately. The Buyer shall (except upon the occurrence of an Event of Insolvency of the Seller or any Guarantor) give notice to the Seller of the exercise of such option as promptly as practicable. 

         (ii)  If
the Buyer exercises or is deemed to have exercised the option referred to in subsection (a)(i) of this Section, 

        (A)  the
Seller's obligations in such Transactions to repurchase all Purchased MH Loans, at the Repurchase Price therefor on the Repurchase Date determined in accordance with
subsection (a)(i) of this Section, (1) shall thereupon become immediately due and payable; (2) all Income paid after such exercise or deemed exercise shall be retained by the
Buyer and applied to the aggregate unpaid Repurchase Price and any other amounts owed by the Seller hereunder; and (3) any remaining amounts shall be remitted to the Seller; 

        (B)  to
the extent permitted by applicable law, the Repurchase Price with respect to each such Transaction shall be increased by the aggregate amount obtained by daily
application of, on a 360 day per year basis for the actual number of days during the period from and including the date of the exercise or deemed exercise of such option to but excluding the
date of payment of the Repurchase Price as so increased, (x) the Post-Default Rate in effect following an Event of Default to (y) the Repurchase Price for such Transaction as
of the Repurchase Date as determined pursuant to subsection (a)(i) of this Section (decreased as of any day by (i) any amounts actually in the possession of Buyer pursuant to
clause (C) of this subsection, and (ii) any proceeds from the sale of Purchased MH Loans applied to the Repurchase Price pursuant to subsection (a)(iv) of this Section; and 

        (C)  all
Income actually received by the Buyer pursuant to Section 5 (excluding any Late Payment Fees accrued to but excluding the Repurchase Date paid pursuant to
Section 5(a)) shall be applied to the aggregate unpaid Repurchase Price owed by the Seller. 

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        (iii)  Upon
the occurrence and continuance of one or more Events of Default, the Buyer shall have the right to obtain physical possession of all files of the Seller relating
to the Purchased MH Loans and the Repurchase Assets and all documents relating to the Purchased MH Loans which are then or may thereafter come in to the possession of the Seller or any third party
acting for the Seller and the Seller shall deliver to the Buyer such assignments as the Buyer shall request. The Buyer shall be entitled to specific performance of all agreements of the Seller
contained in the Repurchase Documents. The Buyer shall return any such files and materials if and to the extent an Event of Default no longer exists (but subject to Section 14(a)) causing
Seller to take physical possession of the same files. 

        (iv)  At
any time on the Business Day following notice to the Seller (which notice may be the notice given under subsection (a)(i) of this Section), in the event the
Seller has not repurchased all Purchased MH Loans, the Buyer may (A) immediately sell, without demand or further notice of any kind, at a public or private sale and at such price or prices as
the Buyer may deem satisfactory any or all Purchased MH Loans and the Repurchase Assets subject to a such Transactions hereunder and apply the proceeds thereof to the aggregate unpaid Repurchase
Prices and any other amounts owing by the Seller hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased MH Loans, to give the Seller credit for
such Purchased MH Loans and the Repurchase Assets in an amount equal to the Market Value of the Purchased MH Loans against the aggregate unpaid Repurchase Price and any other amounts owing by the
Seller hereunder. The proceeds of any disposition of Purchased MH Loans and the Repurchase Assets shall be applied first to the reasonable
costs and expenses incurred by the Buyer in connection with the Seller's default; second to costs of cover and/or related hedging transactions; third to the Repurchase Price; fourth to any other
outstanding obligation of the Seller to the Buyer or its Affiliates; and fifth, any remaining amounts to the Seller. 

         (v)  The
Seller shall be liable to Buyer for (i) the amount of all reasonable legal or other expenses (including, without limitation, all costs and expenses of Buyer
in connection with the enforcement of this Repurchase Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally, further including, without limitation, the reasonable fees and expenses of counsel (including the costs of internal counsel of Buyer) incurred in
connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and
entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from
the occurrence of an Event of Default in respect of a Transaction. 

        (vi)  The
Buyer shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law. 

        (b)   Buyer
may exercise one or more of the remedies available to Buyer immediately upon the occurrence and continuance of an Event of Default and at any time thereafter
without notice to the Seller. All rights and remedies arising under this Repurchase Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies
which Buyer may have. 

        (c)   Buyer
may enforce its rights and remedies hereunder without prior judicial process or hearing, and the Seller hereby expressly waives any defenses the Seller might
otherwise have to require Buyer to enforce its rights by judicial process. The Seller also waives any defense (other than a defense of payment or performance) the Seller might otherwise have arising
from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. The Seller recognizes that nonjudicial remedies are
consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm's length. 

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        (d)   To
the extent permitted by applicable law, the Seller shall be liable to the Buyer for interest on any amounts owing by the Seller hereunder, from the date the Seller
becomes liable for such amounts hereunder until such amounts are (i) paid in full by the Seller or (ii) satisfied in full by the exercise of the Buyer's rights hereunder. Interest on any
sum payable by the Seller to the Buyer under this paragraph 14(d) shall be at a rate equal to the Post-Default Rate. 

SECTION 15. INDEMNIFICATION AND EXPENSES; RECOURSE  

        (a)   The
Seller agrees to hold the Buyer, and its Affiliates and their officers, directors, employees, agents and advisors (each an "Indemnified
Party") harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred
by or asserted against such Indemnified Party, excluding for purposes of this Section 15(a) such costs resulting from Taxes or Other Taxes as to which Section 7 shall govern
(collectively, "Costs"), relating to or arising out of this Repurchase Agreement, any other Repurchase Document or any transaction contemplated hereby
or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Repurchase Agreement, any other Repurchase Document or any transaction contemplated
hereby or thereby, provided, however, that the Seller shall not be liable for such Costs to the extent resulting from the Indemnified Party's gross negligence or willful misconduct. Without limiting
the generality of the foregoing, the Seller agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with respect to all Purchased MH Loans relating to
or arising out of any taxes incurred or assessed in connection with the ownership of the Purchased MH Loans, provided, however, that the Seller shall not be liable for such Costs to the extent
resulting from the Indemnified Party's gross negligence or willful misconduct. In any suit, proceeding or action brought by an Indemnified Party in connection with any Purchased MH Loan for any sum
owing thereunder, or to enforce any provisions of any Purchased MH Loan, the Seller will save, indemnify and hold such Indemnified Party harmless from and against all expense, loss or damage suffered
by reason of any defense, set-off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by the Seller of any
obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from the Seller provided,
however, that the Seller shall not be liable for any such expense, loss or damage to the extent resulting from the Indemnified Party's gross negligence or willful misconduct. The Seller also agrees to
reimburse an Indemnified Party as and when billed by such Indemnified Party for all the Indemnified Party's costs and expenses incurred in connection with the enforcement or the preservation of the
Buyer's rights under this Repurchase Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, including without limitation the reasonable fees and disbursements of
its counsel, provided, however, that the Seller shall not be liable for such Costs to the extent resulting from the Indemnified Party's gross negligence or willful misconduct. 

        (b)   The
Seller agrees to pay within thirty (30) calendar days when billed by the Buyer all of the out-of-pocket costs and expenses incurred by
the Buyer in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Repurchase Agreement, any other Repurchase Document or any other
documents prepared in connection herewith or therewith regardless of whether all such documents are executed by the Buyer or Seller. The Seller agrees to pay thirty (30) calendar days when
billed by the Buyer all of the reasonable out-of-pocket costs and expenses incurred in connection with the consummation and administration of the transactions contemplated
hereby and thereby including without limitation filing fees and all the reasonable fees, disbursements and expenses of counsel to the Buyer which amount shall be deducted from the Purchase Price paid
for the first Transaction hereunder. Subject to the limitations set forth in Section 27 hereof, the Seller agrees to pay the Buyer all the reasonable out of pocket due diligence, inspection,
testing and review costs and expenses incurred by the Buyer with respect to Purchased MH Loans submitted by the Seller for purchase under this Repurchase Agreement, including, but not 

37

 

limited
to, those out of pocket costs and expenses incurred by the Buyer pursuant to Sections 15(b) and 27 hereof. 

        (c)   The
obligations of the Seller from time to time to pay the Repurchase Price, the Periodic Advance Repurchase Payments, and all other amounts due under this Repurchase
Agreement shall be full recourse obligations of the Seller. 

SECTION 16. SERVICING  

        (a)   The
Sellers, on Buyer's behalf, shall contract with Servicer to, or if a Seller is the Servicer, such Seller shall, service the MH Loans consistent with the degree of
skill and care that such Seller customarily requires with respect to similar MH Loans owned or managed by it and in accordance with Accepted Servicing Practices. The Servicer shall (i) comply
with all applicable Federal, State and local laws and regulations, (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities hereunder and
(iii) not impair the rights of Buyer in any Purchased MH Loans or any payment thereunder. Buyer may terminate the servicing of any Purchased MH Loan with the then existing servicer in
accordance with Section 16(e) hereof. 

        (b)   The
Seller shall cause the Servicer to hold or cause to be held all escrow funds collected with respect to any Purchased MH Loans and shall apply the same for the
purposes for which such funds were collected. 

        (c)   The
Seller shall cause the Servicer to deposit all collections received by the Seller on account of the Purchased MH Loans in the Collection Account no less than once
per week. 

        (d)   The
Sellers shall provide promptly to Buyer (i) a Servicer Notice addressed to and agreed to by the Servicer of the related Purchased MH Loans, advising such
Servicer of such matters as Buyer may reasonably request, including, without limitation, recognition by the Servicer of Buyer's interest in such Purchased MH Loans and the Servicer's agreement that
upon receipt of notice of an Event of Default from Buyer, it will follow the instructions of Buyer with respect to the Purchased MH Loans and any related Income with respect thereto. 

        (e)   Upon
the occurrence and continuance of a Default or Event of Default hereunder or a material default under the Servicing Agreement, Buyer shall have the right to
immediately terminate the Servicer's right to service the Purchased MH Loans without payment of any penalty or termination fee. The Seller shall cooperate in transferring the servicing of the
Purchased MH Loans to a successor servicer appointed by Buyer in its sole discretion. 

        (f)    If
the Seller should discover that, for any reason whatsoever, any entity responsible to the Seller by contract for managing or servicing any such Purchased MH Loan has
failed to perform fully the Seller's obligations under the Repurchase Documents or any of the obligations of such entities with respect to the Purchased MH Loans in any material respect, the Seller
shall promptly notify Buyer. 

SECTION 17. SINGLE AGREEMENT  

        Buyer and the Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact
that, all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of Buyer
and the Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by
it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing
to them in respect of any other Transaction hereunder; (iii) that payments, deliveries, and other transfers made by either of them in respect of any Transaction shall be deemed to have been
made in consideration of payments, deliveries, and other transfers in respect of 

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any
other Transactions hereunder, and the obligations to make any such payments, deliveries, and other transfers may be applied against each other and netted and (iv) to promptly provide notice
to the other after any such set off or application. 

SECTION 18. SET-OFF  

        (a)   In
addition to any rights and remedies of the Buyer hereunder and by law, the Buyer shall have the right upon the occurrence and during the continuance of an Event of
Default, without prior notice to the Seller, any such notice being expressly waived by the Seller to the extent permitted by applicable law, upon any amount becoming due and payable by the Seller
hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any
time held or owing by the Buyer or any Affiliate thereof to or for the credit or the account of the Seller, any Guarantor or any respective Affiliate thereof. The Buyer agrees promptly to notify the
Seller after any such set-off and application made by the Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application. 

        (b)   Following
an Event of Insolvency of the Buyer and a material breach by Buyer of its obligations under this Repurchase Agreement, without prior notice to the Buyer, any
such notice being expressly waived by the Buyer to the extent permitted by applicable law, upon any amount becoming due and payable by the Buyer hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Seller to or for the
credit or the account of the Buyer. The Seller agrees promptly to notify the Buyer after any such set-off and application made by the Seller; provided that the failure to give such notice
shall not affect the validity of such set-off and application. 

SECTION 19. NOTICES AND OTHER COMMUNICATIONS  

        Except as otherwise expressly permitted by this Repurchase Agreement, all notices, requests and other communications provided for herein (including without
limitation any modifications of, or waivers, requests or consents under, this Repurchase Agreement) and materials required to be delivered pursuant to Section 12(d) shall be given or made in an
electronic medium in a format acceptable to Buyer by e-mail and delivered to the intended recipient at the "E-mail Address for Notices" specified below its name on the
signature pages hereof or thereof); or, as to any party, at such other e-mail address as shall be designated by such party in an e-mail notice to each other party. Except as
otherwise provided in this Repurchase Agreement and except for notices given under Section 3 (which shall be effective only on receipt), all such communications shall be deemed to have been
duly given when affirmatively confirmed by the Buyer in an e-mail notice to the Seller. The Seller acknowledges that the distribution of
material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution. 

SECTION 20. ENTIRE AGREEMENT; SEVERABILITY  

        This Repurchase Agreement, together with the Repurchase Documents, constitute the entire understanding between Buyer and the Seller with respect to the subject
matter they cover and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased MH Loans. By acceptance of
this Repurchase Agreement, Buyer and Seller acknowledge that they have not made, and are not relying upon, any statements, representations, promises or undertakings not contained in this Repurchase
Agreement. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability
of any such other provision or agreement. 

39

   SECTION 21. NON-ASSIGNABILITY  

        The rights and obligations of the parties under this Repurchase Agreement and under any Transaction shall not be assigned by the Seller without the prior written
consent of Buyer. Subject to the foregoing, this Repurchase Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and
assigns. Nothing in this Repurchase Agreement express or implied, shall give to any Person, other than the parties to this Repurchase Agreement and their successors hereunder, any benefit of any legal
or equitable right, power, remedy or claim under this Repurchase Agreement. Prior to the occurrence of an Event of Default, Buyer may from time to time assign all or a portion of its rights and
obligations under this Repurchase Agreement and the Repurchase Documents to (i) an Affiliate of the Buyer without the prior consent of the Seller provided, that such Affiliate (a) is
100% owned by the Buyer and (b) has shareholder equity of at least $50,000,000; or (ii) another Person with the prior consent of Seller, which consent shall not be unreasonably withheld
or delayed. Upon such assignment, (a) such assignee shall be a party hereto and to each Repurchase Document to the extent of the percentage or portion set forth in the assignment and
acceptance, and shall succeed to the applicable rights and obligations of Buyer hereunder, and (b) Buyer shall, to the extent that such rights and obligations have been so assigned by it be
released from its obligations hereunder and under the Repurchase Documents. After the occurrence and continuance of an Event of Default, Buyer may assign all or a portion of its rights and obligations
under this Repurchase Agreement and the Repurchase Documents to any Person without the prior consent of Seller. Unless otherwise stated in the assignment and acceptance, the Seller shall continue to
take directions solely from Buyer unless otherwise notified by Buyer in writing. Buyer may distribute to any prospective assignee any document or other information delivered to Buyer by Seller. 

        Subject
to acceptance and recording thereof pursuant to the following paragraph of this Section, from and after the effective date specified in each assignment and acceptance the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such assignment and acceptance, have the rights and obligations of Buyer under this Repurchase Agreement. Any
assignment or transfer by Buyer of rights or obligations under this Repurchase Agreement that does not comply with this Section 21 shall be treated for purposes of this Repurchase Agreement as
a sale by such Buyer of a participation in such rights and obligations in accordance with the following paragraph of this Section. 

        The
Seller shall maintain a register (the "Register") on which it will record the Buyer's rights hereunder, and each assignment and
acceptance and participation; provided, however, that the Seller shall not be required to record any transfer on the Register of which it has not received notice, or does not have knowledge. The
Register shall include the names and addresses of Buyers (including all assignees, successors and participants). Failure to make any such recordation, or any error in such recordation shall not affect
the Seller's obligations in respect of such rights. If Buyer sells a participation in its rights hereunder, it shall provide Seller, or maintain as agent of Seller, the
information described in this paragraph and permit Seller to review such information as reasonably needed for Seller to comply with its obligations under this Repurchase Agreement or under any
applicable law or governmental regulation or procedure. 

        The
Buyer may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Repurchase Agreement; provided, however, that (i) the
Buyer's obligations under this Repurchase Agreement shall remain unchanged, (ii) the Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations;
and (iii) the Seller shall continue to deal solely and directly with the Buyer in connection with the Buyer's rights and obligations under this Repurchase Agreement and the other Repurchase
Documents. Notwithstanding the terms of Section 7, each participant of the Buyer shall be entitled to the additional compensation and other rights and protections afforded the Buyer under
Section 7 to the same extent as the Buyer would have been entitled to receive them with respect to the participation sold to such participant. 

40

 

        The
Buyer may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 21, disclose to the assignee or participant or
proposed assignee or participant, as the case may be, any information relating to the Seller or any of its Subsidiaries or to any aspect of the Transactions that has been furnished to the Buyer by or
on behalf of the Seller or any of its Subsidiaries; provided that such assignee or participant agrees to hold such information subject to the confidentiality provisions of this Repurchase Agreement. 

        The
Buyer may at any time create a security interest in all or any portion of its rights under this Repurchase Agreement in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the assigning Buyer from
its obligations hereunder. 

        In
the event that the Buyer assigns all or a portion of its rights and obligations under this Repurchase Agreement, the parties hereto hereby agree to negotiate in good faith and use
commercially reasonable efforts to enter into prior to such transfer an amendment to this Repurchase Agreement to add agency provisions similar to those included in repurchase agreements for similar
syndicated repurchase facilities. 

SECTION 22. TERMINABILITY  

        Each representation and warranty made or deemed to be made by entering into a Transaction, herein or pursuant hereto shall survive the making of such
representation and warranty, and the Buyer shall
not be deemed to have waived any Default that may arise because any such representation or warranty shall have proved to be false or misleading, notwithstanding that the Buyer may have had notice or
knowledge or reason to believe that such representation or warranty was false or misleading at the time the Transaction was made. Notwithstanding any such termination or the occurrence of an Event of
Default, all of the representations and warranties and covenants hereunder shall continue and survive. The obligations of the Seller under Section 15 hereof shall survive the termination of
this Repurchase Agreement. 

SECTION 23. GOVERNING LAW  

        THIS REPURCHASE AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

SECTION 24. SUBMISSION TO JURISDICTION; WAIVERS  

        BUYER, AND SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY:

          (i)  SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS REPURCHASE AGREEMENT AND THE OTHER REPURCHASE DOCUMENTS,
OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;  

          (ii)  CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;  

41

 

        (iii)  AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR
FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE BUYER SHALL HAVE BEEN NOTIFIED; AND  

        (iv)  AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER
JURISDICTION.  

          (v)  THE BUYER, THE SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT
OF OR RELATING TO THIS REPURCHASE AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  

 SECTION 25. NO WAIVERS, ETC.  

        No failure on the part of the Buyer to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any
Repurchase Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Repurchase Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. An Event of Default shall be deemed to be
continuing unless expressly waived by the Buyer in writing. 

SECTION 26. NETTING  

        If the Buyer and the Seller are "financial institutions" as now or hereinafter defined in Section 4402 of Title 12 of the United States Code
("Section 4402") and any rules or regulations promulgated thereunder, 

        (a)   All
amounts to be paid or advanced by one party to or on behalf of the other under this Repurchase Agreement or any Transaction hereunder shall be deemed to be "payment
obligations" and all amounts to be received by or on behalf of one party from the other under this Repurchase Agreement or any Transaction hereunder shall be deemed to be "payment entitlements" within
the meaning of Section 4402, and this Repurchase Agreement shall be deemed to be a "netting contract" as defined in Section 4402. 

        (b)   The
payment obligations and the payment entitlements of the parties hereto pursuant to this Repurchase Agreement and any Transaction hereunder shall be netted as
follows. In the event that either party (the "Defaulting Party") shall fail to honor any payment obligation under this Repurchase Agreement or any
Transaction hereunder, the other party (the "Nondefaulting Party") shall be entitled to reduce the amount of any payment to be made by the Nondefaulting
Party to the Defaulting Party by the amount of the payment obligation that the Defaulting Party failed to honor. 

SECTION 27. DUE DILIGENCE  

        The Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the MH Loans and the Seller, for purposes of
verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and the Seller agrees that upon reasonable prior notice unless an Event of Default shall have
occurred, in which case no notice is required, to the Seller, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts
of, the Loan Files and any and all documents, records, agreements, instruments or information relating to such MH Loans in the possession or under the 

42

 

control
of the Seller and/or the Custodian. The Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Loan
Files and the MH Loans. Without limiting the generality of the foregoing, the Seller acknowledges that Buyer may purchase MH Loans from the Seller based solely upon the information provided by the
Seller to Buyer in the Purchased MH Loan Schedule and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or
complete due diligence review on some or all of the MH Loans purchased in a Transaction, including, without limitation, ordering broker's price opinions, new credit reports and new appraisals on the
related mortgaged properties and otherwise re-generating the information used to originate such MH Loan. Buyer may underwrite such MH Loans itself or engage a mutually agreed upon third
party underwriter to perform such underwriting. The Seller agrees to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing
Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such MH Loans in the possession, or under the control, of the
Seller. The Seller further agrees that the Seller shall pay all out-of-pocket costs and expenses incurred by Buyer in connection with Buyer's activities pursuant to this
Section 27 ("Due Diligence Costs"); provided, that such Due Diligence Costs shall not exceed $50,000 per calendar year unless a Default or Event
of Default shall have occurred, in which event Buyer shall have the right to perform due diligence, at the sole expense of Seller without regard to the dollar limitation set forth herein. 

SECTION 28. NON-UTILIZATION FEE  

        In the event that the sum of (i) the average daily Purchase Price for all Purchased MH Loans under this Repurchase Agreement and (ii) the aggregate
outstanding Loans (as defined in the Loan and Security Agreement) under the Loan and Security Agreement, during such calendar quarter, is less than the applicable Non-Utilization
Threshold, no later than the Payment Date following the end of such calendar quarter, Seller shall pay in immediately available funds to Buyer the Non-Utilization Fee. Such payment shall
be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at an account designated by Buyer. 

SECTION 29. COMMITMENT FEE  

        The Sellers shall pay to Buyer in immediately available funds, due and owing on the date hereof (and upon each anniversary of the closing, if this agreement has
not been terminated), the Commitment Fee. Such payment shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at such account
designated by Buyer. 

        In
the event that an event set forth in Section 3(b)(ix) occurs, the Buyer shall refund to the Seller an amount equal to the most recently paid Commitment Fee prorated for
the number of days remaining prior to the next anniversary date of this Repurchase Agreement. 

SECTION 30. BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT  

        (a)   The
Seller hereby irrevocably constitutes and appoints the Buyer and any officer or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and stead of the Seller and in the name of the Seller or in its own name, from time to time in the
Buyer's discretion, for the purpose of carrying out the terms of this Repurchase Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be
reasonably necessary or desirable to accomplish the purposes of this Repurchase Agreement, and, without limiting the generality of the foregoing, the Seller hereby gives 

43

 

the
Buyer the power and right, on behalf of the Seller, without assent by, but with notice to, the Seller, if an Event of Default shall have occurred and be continuing, to do the following: 

          (i)  in
the name of the Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due with respect to any other Repurchase Assets and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate
by the Buyer for the purpose of collecting any and all such moneys due with respect to any other Repurchase Assets whenever payable; 

         (ii)  to
pay or discharge taxes and Liens levied or placed on or threatened against the Repurchase Assets; 

        (iii)  (A)
to direct any party liable for any payment under any Repurchase Assets to make payment of any and all moneys due or to become due thereunder directly to the Buyer
or as the Buyer shall direct; (B) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of
or arising out of any Repurchase Assets; (C) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Repurchase Assets; (D) to
commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Repurchase Assets or any proceeds thereof and to enforce any other
right in respect of any Repurchase Assets; (E) to defend any suit, action or proceeding brought against the Seller with respect to any Repurchase Assets; (F) to settle, compromise or
adjust any suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as the Buyer may deem appropriate; and
(G) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Repurchase Assets as fully and completely as though the Buyer were the absolute owner
thereof for all purposes, and to do, at the Buyer's option and the Seller's expense, at any time, and from time to time, all acts and things which the Buyer deems necessary to protect, preserve or
realize upon the Repurchase Assets and the Buyer's Liens thereon and to effect the intent of this Repurchase Agreement, all as fully and effectively as the Seller might do. 

        (b)   The
Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and
shall be irrevocable. 

        (c)   The
Seller also authorizes the Buyer, if an Event of Default shall have occurred, from time to time, to execute, in connection with any sale provided for in
Section 14 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Repurchase Assets. 

        (d)   The
powers conferred on the Buyer hereunder are solely to protect the Buyer's interests in the Repurchase Assets and shall not impose any duty upon it to exercise any
such powers. The Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or
agents shall be responsible to the Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct. 

SECTION 31. MISCELLANEOUS  

        (a)    Counterparts.    This Repurchase Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any of the parties hereto may execute this Repurchase Agreement by signing any such counterpart. 

        (b)    Captions.    The captions and headings appearing herein are for included solely for convenience of reference
and are not intended to affect the interpretation of any provision of this Repurchase Agreement. 

44

 

        (c)    Acknowledgment.    The Seller hereby acknowledges that: 

          (i)  it
has been advised by counsel in the negotiation, execution and delivery of this Repurchase Agreement and the other Repurchase Documents; 

         (ii)  the
Buyer has no fiduciary relationship to the Seller; and 

        (iii)  no
joint venture exists between the Buyer and the Seller. 

SECTION 32. CONFIDENTIALITY  

        The Buyer and the Seller hereby acknowledge and agree that all written or computer-readable information provided by one party to any other regarding the terms set
forth in any of the Repurchase Documents or the Transactions contemplated thereby (the "Confidential Terms") shall be kept confidential and shall not be
divulged to any party without the prior written consent of such other party except to the extent that (i) it is necessary to do so in working with legal counsel, auditors, taxing authorities or
other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws, including securities laws, and subject to any public company disclosure requirements,
(ii) any of the Confidential Terms are in the public domain other than due to a breach of this covenant, or (iii) in the event of an Event of Default the Buyer determines such
information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased MH Loans or otherwise to enforce or exercise the Buyer's rights hereunder. The
provisions set forth in this Section 32 shall survive the termination of this Repurchase Agreement. Notwithstanding the foregoing or anything to the contrary contained herein or in any other
Repurchase Document, all Persons may disclose to any and all Persons, without limitation of any kind, the U.S. federal, state and local tax treatment of the Transactions, any fact that may be relevant
to understanding the U.S. federal, state
and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such U.S. federal, state and local tax treatment; provided that Seller
may not disclose the name of or identifying information with respect to Buyer or Agent or any pricing terms (including, without limitation, the Pricing Rate, Purchase Price Percentage and Purchase
Price) or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the U.S. federal, state and local tax treatment of the Transactions
to the taxpayer and that may be relevant to understanding such tax treatment and is not relevant to understanding the U.S. federal, state and local tax treatment of the Transactions, without the prior
written consent of the Buyer. 

SECTION 33. INTENT  

        (a)   The
parties recognize that each Transaction is a "repurchase agreement" as that term is defined in Section 101 of Title 11 of the United States Code, as amended
(except insofar as the type of MH Loans subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a "securities contract" as that term is defined in
Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). 

        (b)   It
is understood that either party's right to liquidate MH Loans delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to
Paragraph 11 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended. 

        (c)   The
parties agree and acknowledge that if a party hereto is an "insured depository institution," as such term is defined in the Federal Deposit Insurance Act, as amended
("FDIA"), then each Transaction hereunder is a "qualified financial contract," as that term is defined in FDIA and any rules, orders or policy
statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). 

45

 

        (d)   It
is understood that this Repurchase Agreement constitutes a "netting contract" as defined in and subject to Title IV of the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA") and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a "covered
contractual payment entitlement" or "covered contractual payment obligation", respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a "financial
institution" as that term is defined in FDICIA). 

SECTION 34. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS  

        The parties acknowledge that they have been advised that: 

        (a)   in
the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission
("SEC") under Section 15 of the 1934 Act, the Securities Investor Protection Corporation has taken the position that the provisions of the
Securities Investor Protection Act of 1970 ("SIPA") do not protect the other party with respect to any Transaction hereunder; 

        (b)   in
the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under
Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and 

        (c)   in
the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a
deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable. 

SECTION 35. CONFLICTS  

        In the event of any conflict between the terms of this Repurchase Agreement, any other Repurchase Document and any Confirmation, the documents shall control in
the following order of priority: first, the terms of the Confirmation shall prevail, then the terms of this Repurchase Agreement shall prevail, and then
the terms of the Repurchase Documents shall prevail. 

SECTION 36. AUTHORIZATIONS  

        Any of the persons whose signatures and titles appear on Exhibit X are authorized, acting singly, to act
for Seller or Buyer, as the case may be, under this Repurchase Agreement. 

SECTION 37. BUYER REPRESENTATIONS  

        The Buyer represents and warrants to the Seller that: 

        (a)   the
Buyer (i) is a corporation, validly existing and in good standing under the laws of New York, (ii) has full power and authority to execute, deliver and
perform its obligations under the Repurchase Documents. 

        (b)   The
execution and delivery of, and the performance by the Buyer of its obligations under the Repurchase Documents to which it is a party (i) have been duly
authorized by all requisite action; and (ii) do not violate any provision of applicable law or its organizational documents. 

        (c)   This
Repurchase Agreement and all of the other Repurchase Documents executed and delivered by the Buyer in connection herewith are legal, valid and binding obligations
of the Buyer and are enforceable against the Buyer in accordance with their terms except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors rights generally and (ii) general principles of equity. 

[THIS
SPACE INTENTIONALLY LEFT BLANK] 

46

        IN WITNESS WHEREOF, the parties have entered into this Repurchase Agreement as of the date set forth above. 

	 	 	BUYER:
	

 	
 	
MERRILL LYNCH MORTGAGE CAPITAL INC.
	

 	
 	

By:	
 	

/s/  JAMES B. CASON      
 Name: James B. Cason

Title: Vice President
	

 	
 	
E-mail Address for Notices:
	 	 	 	 	4 World Financial Center

10th Floor

New York New York 10080

jcason@exchange.ml.com

Attention: James B. Cason

Telecopier No.: (212) 449-3673

Telephone No.: (212) 449-1219
	

 	
 	
With a copy to:
	 	 	 	 	4 World Financial Center

10th Floor

New York New York 10080

jwinchester@exchange.ml.com

Attention: John Winchester

Telecopier No.: (212) 449-5182

Telephone No.: (212) 449-6710
	

 	
 	
SELLER:
	

 	
 	
ENSPIRE FINANCE, LLC
	

 	
 	

By:	
 	

/s/ SCOTT L. GESELL
 Name: Scott L. Gesell

Title: Vice President
	

 	
 	
E-mail Address for Notices:
	 	 	 	 	Peter K. Pak

ARC

Peter.Pak@arc-hs.com

600 Grant Street, Suite 900

Denver, CO 80203

Telecopier No.: (303) 294-9946

Telephone No: (303) 383-7572
	

 	
 	
With a Copy to:
	 	 	 	 	Scott L. Gesell

Executive Vice President and General

Counsel Scottg@arc-hs.com

600 Grant Street, Suite 900

Denver, CO 80203

Telecopier No.: (303) 294-0085

Telephone No: (303) 383-7506

 
 

SCHEDULE 1    
    

 
 

REPRESENTATIONS AND WARRANTIES RE: MH LOANS    
    

        The Seller represents and warrants to the Buyer, with respect to each MH Loan, that as of the Purchase Date for the purchase of any Purchased MH Loan, that is an
MH Loan, by the Buyer from the Seller and as of the date of this Repurchase Agreement and any Transaction hereunder and at all times while the Repurchase Documents and any Transaction hereunder is in
full force and effect. For purposes of this Schedule 1 and the representations and warranties set forth herein, a breach of a representation or
warranty shall be deemed to have been cured with respect to an MH Loan if and when the Seller has taken or caused to be taken action such that the event, circumstance or condition that gave rise to
such breach no longer adversely affects such MH Loan. With respect to those representations and warranties which are made to the best of the Seller's knowledge, if it is discovered by the Seller or
the Buyer that the substance of such representation and warranty is inaccurate, notwithstanding the Seller's lack of knowledge with respect to the substance of such representation and warranty, such
inaccuracy shall be deemed a breach of the applicable representation and warranty. 

        (a)    Title to MH Loans.    The Seller has good title to and is the sole owner of record and holder of the MH Loan
and the indebtedness evidenced thereby. The MH Loan is not assigned or pledged, and the Seller has good, indefeasible and marketable title thereto, and has full right to transfer and sell the MH Loans
to the Buyer free and clear of any encumbrance, equity interest, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each MH Loan pursuant to this Repurchase Agreement, and following the sale of each MH Loan, the Buyer will own such MH Loan
free and clear of any encumbrance, equity interest, participation interest, lien, pledge, charge, claim or security interest. The Seller has not sold, assigned or pledged the MH Loans to any person
other than the Buyer. 

        (b)    Delivery of Loan Documents.    The Loan File and any other documents required to be delivered for the MH Loan
by the Seller under this Repurchase Agreement or the Custodial Agreement have been delivered to the Custodian. The Seller or the Servicer is in possession of a complete, true and accurate Loan File,
except for such documents the originals of which have been delivered to the Custodian. 

        (c)    Accuracy of the Loan Schedule.    The MH Loan is as described in the related Loan Schedule delivered by Seller
to Buyer, and the information contained in the Loan Schedule is true and correct in all material respects as of the related Purchase Date. 

        (d)    Payments.    No MH Loan is more than 59 days Delinquent. 

        (e)    No Outstanding Charges.    All outstanding taxes, governmental assessments, insurance premiums, water, sewer
and municipal charges, leasehold payments or ground rents previously due and owing had been paid. All taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been paid. The Seller has not advanced funds, or induced or solicited or knowingly received any advance of funds by a party other
than the Obligor, directly or indirectly, for the payment of principal or interest required under the MH Loan. 

        (f)    Original Terms Unmodified.    The terms of the MH Note, the MH Loan and the MH Contract have not been impaired,
waived, altered or modified in any respect, except by a written instrument identified in the Loan File and which has been recorded, if necessary to protect the interests of the Buyer. The terms of any
such waiver, alteration or modification has been approved by the title insurer, if any, to the extent required by the policy, if any, and its terms are reflected on the Loan Schedule. All costs, fees
and expenses incurred in making, closing and perfecting the loan and/or security interest, as applicable, of the Loans have been paid. No Obligor has been released, in whole or in part, except in
connection with an assumption agreement approved by the 

 

title
insurer, if any, to the extent required by the policy, if any, and which assumption agreement is part of the Loan File. 

        (g)    Absence of Defenses.    The MH Loan, MH Note and the MH Contract, are not subject to any right of rescission,
set-off, counterclaim, or defense (including the defense of usury), based on the invalidity or unenforceability of the MH Loan, MH Note, and/or MH Contract, or on any conduct of Seller or
any of its officers, employees, representatives, Affiliates or assignors in origination or servicing the MH Loan, nor will the operations of any of the terms of the MH Loan, the MH Note, or the MH
Contract, or the exercise of any right thereunder, render the MH Loan, the MH Note, or the MH Contract, unenforceable, in whole or in part, or subject to any right of rescission, set-off,
counterclaim, or defense with respect thereto. No such right of rescission, set-off, counterclaim or defense has been asserted to the Seller or has been asserted to any other person, and
no Obligor was a debtor in any state or federal bankruptcy or insolvency proceeding at the time the MH Loan was originated and the Seller has not received notice that any
Obligor is a debtor in any such proceeding. The making of the MH Loan did not violate any existing court order and was in compliance with any statutes, rules and regulations. 

        (h)    Hazard Insurance.    Pursuant to the terms of: (i) the MH Loan, the MH Contract, the MH Note, the
related Manufactured Home is insured by a Qualified Insurer against loss by fire and such other risks as are usually insured against in the broad form of extended coverage hazard insurance available
from time to time. All such insurance policies (collectively, the "hazard insurance policy") meet the requirements of the current guidelines of the
Federal Insurance Administration, and conform to Accepted Servicing Practices, and are a standard policy of insurance for the locale where the related Manufactured Home is located. The amount of the
insurance is at least in the amount of the full insurable value of the related Manufactured Home on a replacement cost basis or the unpaid balance of the MH Loan, whichever is less. The hazard
insurance policy names (and will name) the Obligor as the insured and contains a standard mortgagee loss payable clause in favor of Seller (or Seller's servicer) and its successors and assigns. The MH
Note and/or the MH Contract obligates the Obligor thereunder to maintain the hazard insurance policy at the Obligor's cost and expense, and on the Obligor's failure to do so, authorizes the holder of
the MH Note and/or the MH Contract to obtain and maintain such insurance at such Obligor's cost and expense, and to seek reimbursement therefor from the Obligor. The hazard insurance policy is the
valid and binding obligation of the insurer. The hazard insurance policy is in full force and effect, and will be in full force and effect and inure to the benefit of Buyer upon the consummation of
the transactions contemplated by this Repurchase Agreement. The Seller has not engaged in, nor have any originator or any subservicer engaged in, any act or omission which would impair the coverage of
any such policy, the benefits of the endorsements provided for therein, or the validity and binding effect of either. In connection with the issuance of the hazard insurance policy, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other person or entity. No such unlawful items have
been received, retained or realized by Seller. 

        (i)    Compliance with Applicable Laws.    Any and all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, real estate closing procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Loan have
been complied with, and such compliance is not affected by the holding of the MH Loans by the Custodian, on the Buyer's behalf, or the Buyer's ownership of the MH Loans, and the Seller shall maintain
in its possession available for the Buyer's inspection, and shall deliver to the Buyer upon demand, evidence of compliance with all such requirements. The consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations. 

2

 

        (j)    No Satisfaction of MH Loan, MH Note or MH Contract.    Neither the MH Loan, the MH Note nor the MH Contract has
been satisfied, canceled, subordinated or rescinded, in whole or in part, and the related Manufactured Home has not been released from the related lien, in whole or in part, nor has any instrument
been executed that would effect any such release, cancellation, subordination or rescission. The Seller has not waived the performance by the Obligor of any action, if the Obligor's failure to perform
such action would cause the MH Loan to be in default, nor has the Seller waived any default resulting from any action or inaction by the Obligor. 

        (k)    Location and Type of Property.    Each of the Manufactured Homes is located in the United States. Each
Manufactured Home, securing MH Paper, is located in a manufactured housing community owned and managed by the Parent Guarantor or a Subsidiary thereof. No portion of the Manufactured Home is used for
commercial purposes. 

        (l)    Valid Lien.    

        (A)  The
MH Paper creates a valid, subsisting, enforceable and perfected first lien on the Manufactured Home securing such MH Paper. 

        (B)  If
any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the MH Loan established and created a valid, subsisting,
enforceable and perfected first lien and first priority security interest on the property described therein, and Seller has full right to sell and assign the same to Buyer. The Property was not, as of
the date of origination of the MH Loans, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien, subordinate to the lien of the MH Paper. 

        (m)    Validity of Loan Documents.    The MH Note and/or MH Contract, and every other agreement, if any, executed and
delivered by the Obligor in connection with the MH Loan, are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All prepayment
charges with respect to the MH Loans are legal, valid and enforceable subject to applicable state law. All parties to the MH Note, the MH Loan and the MH Contract, and each other such related
agreement had legal capacity to enter into the MH Loan and to execute and deliver the MH Note, the MH Loan and the MH Contract, and each other such related agreement, and the MH Note, the MH Loan and
the MH Contract and each other such related agreement have been duly and properly executed by the respective Obligors. Seller has reviewed all of the documents constituting the Loan File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. The documents, instruments and agreements submitted for MH Loan underwriting were not
falsified by any party and contain no untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the information and statements therein not
misleading. No fraud was committed by any party in connection with the origination, modification or amendment of the MH Loan. 

        (n)    Full Disbursement of Proceeds.    The MH Loan has been closed and the proceeds of the MH Loan have been fully
disbursed and there is no requirement for future advances thereunder, and any and all requirements as to completion of any on-site or off-site improvement have been complied
with. All costs, fees and expenses incurred in making or closing the MH Loan and the filing of Uniform Commercial Code financing statements were paid, and the Obligor is not entitled to any refund of
any amounts paid or due under the MH Note or the MH Contract. 

        (o)    Doing Business.    All parties which have had any interest (other than interests created by this transaction)
in the MH Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state where the related 

3

 

Manufactured
Home is located, except where failure to comply with such licensing requirements will not adversely affect Buyer's interest in the MH Loan, all parties were (2)(a) organized under the
laws of such a state, or (b) qualified to do business in such state, or (c) federal savings and loan associations, savings banks, or national banks having principal offices in such
state, or (d) not doing business in such state, and (3) all parties had capacity to execute the MH Loans. 

        (p)    No Defaults.    Other than delinquencies of less than 59 days, there is no default, breach, violation or
event of acceleration existing under the MH Loan, the MH Note or the MH Contract, or related documents and no event which, with the passage of time or with notice and the expiration of any applicable
grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither the Seller nor its predecessors have waived any default, breach, violation or event of
acceleration. 

        (q)    No Mechanics' Liens.    There are no mechanics' or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the related Manufactured Home which are or may be liens prior to, or equal or coordinate
with, the lien of the related MH Loan, MH Note or MH Contract. 

        (r)    Payment Terms.    The related MH Note or MH Contract is payable in equal monthly or bi-monthly
installments (other than the last payment) of principal and interest; and (ii) the MH Loan Interest Rate is fixed and the related MH Note or MH Contract is payable in equal monthly installments
of principal and interest. Any interest required to be paid pursuant to state and local law has been or will be properly paid and credited. 

        (s)    Customary Provisions.    Each MH Contract contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization against the benefits of the security provided thereby, including by repossession. 

        (t)    Occupancy of the Property.    All inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Manufactured Home and with respect to the use and occupancy of the same, including, but not limited to, certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate authorities unless the failure of the originator to obtain said inspections, licenses and certificates would not affect the value of the
Manufactured Home or affect the enforceability of the MH Loan, the MH Note or the MH Contract. If so indicated on the
related Loan Schedule, at the time of origination of the MH Loans, the obligor was the primary resident of the related Manufactured Home. 

        (u)    No Additional Collateral.    The MH Note and/or the MH Contract is not and has not been secured by any
collateral except the security interest of any applicable security agreement or chattel mortgage referred to in the "Valid Lien" representation above. 

        (v)    Due on Sale.    Each MH Contract, together with any such documents as may be required under applicable law,
contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Loan in the event that the Manufactured Home is sold or transferred without the prior
written consent of the mortgagee thereunder, at the option of the mortgagee. 

        (w)    No Buydown Provisions; No Graduated Payments or Contingent Interests.    The MH Loan does not contain
provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by Seller, the Obligor or anyone on behalf of the Obligor, or paid by
any source other than the Obligor, nor does it contain any other similar provisions currently in effect which may constitute a "buydown" provision. The MH Loan is not a graduated payment mortgage and
the MH Loan does not have a shared appreciation or other contingent interest feature. 

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        (x)    Collection Practices.    The origination, servicing and collection practices used by the Servicer and any prior
servicers with respect to the MH Loans have been in accordance with Accepted Servicing Practices and are in all respects in compliance with all applicable laws and regulations. 

        (y)    Soldier's and Sailor's Relief Act.    The related Obligor has not notified the Seller and the Seller has no
knowledge of any relief requested or allowed to the Obligor under the Soldier's and Sailor's Civil Relief Act of 1940 or any comparable state or local law. 

        (z)    Selection.    The MH Loans were not intentionally selected for inclusion under this Repurchase Agreement from
among the Seller's loan portfolio on any basis which would have an adverse effect on the interests of Buyer. 

        (aa)    Predatory Lending Regulations; High Cost Loans.    No MH Loan is a High Cost Loan. 

        (bb)    Origination.    Each MH Loan was originated by a Qualified Originator. Each of the MH Loans was underwritten
in accordance with the Underwriting Guidelines. Each MH Loan was originated in accordance with Section 3(a)(41)(A)(ii) of the Securities Exchange Act of 1934 by the Qualified Originator
in accordance with the requirements of the Secretary of Housing and Urban Development as set forth in 24 CFR § 201.27 or by a savings and loan association, a savings bank, a commercial
bank, a credit union, an insurance company, or similar institution which is supervised and examined by a Federal or State authority, and was purchased by the Seller in the regular course of its
business. The MH Note, MH Contract and all other documents contained in the Loan Files are on forms acceptable in the secondary market. The Seller has not made any representations to the Obligor that
are inconsistent with the instruments used. The related Manufactured Home is a "manufactured home" within the meaning of 42 United States Code, Section 5402(6). At the origination of each
Manufactured Home Contract, the Qualified Originator was approved for insurance by the Secretary of HUD pursuant to Section 2 of the National Housing Act. 

        (cc)    Genuineness of Signatures.    Each of the documents in the Loan File is genuine and contains genuine
signatures. Each document that the Buyer requires to be an original document is an original document. All certified copies of original documents are true copies and meet the applicable requirements
and specifications of this Repurchase Agreement and any other written requirements that Buyer has reasonably made of the Seller. 

        (dd)    Regarding the Obligor.    The Obligor is one or more natural persons. 

        (ee)    Single Premium Credit Life Insurance.    None of the proceeds of any MH Loan were used to finance
single-premium credit insurance policies. 

        (ff)    Documents Delivered for Recordation.    The Seller shall have delivered to the Custodian the recorded original
of any document required to be in the Loan File for which a certified copy has been delivered to the Custodian because the original document has been delivered to the applicable public recording
office for recording within 150 days of its submission for recordation. 

        (gg)    Lawful Assignment.    Neither the MH Contract nor the MH Note were originated in or are not subject to the
laws of any jurisdiction whose laws would make the transfer of the MH Contract or the MH Note pursuant to this Repurchase Agreement unlawful or render the MH Contract or MH Note unenforceable. 

        (hh)    One Original.    There is only one original executed MH Contract or MH Note, which MH Contract or MH Note will
be delivered to the Custodian on or before the related Purchase Date. 

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        (ii)    Not Real Estate.    With respect to each MH Contract, the related Manufactured Home is not considered or
classified as part of the real estate on which it is located under the laws of the jurisdiction in which it is located. 

        (jj)    Notation of Security Interest.    With respect to each MH Contract, if the related Manufactured Home is
located in a state in which notation of a security interest on the title document is required or permitted to perfect such security interest, the title document shows, or if a new or replacement title
document with respect to such Manufactured Home is being applied for such title document will be issued within 150 days and will show, the Qualified Originator as the holder of a first priority
security interest in such Manufactured Home; if the related Manufactured Home is located in a state in which the filing of a financing statement under the Uniform Commercial Code is required to
perfect a security interest in manufactured housing, such filings or recordings have been duly made and show the Qualified Originator as secured party and Seller as assignee. 

        (kk)    Acceptable Investment.    The Seller has no knowledge of any circumstances or conditions with respect to the
MH Contract, the MH Note, the Obligor or the Obligor's credit standing that can reasonably be expected to cause private institutional investors to regard the MH Loan as an unacceptable investment,
cause the MH Loan to become delinquent, or adversely affect the value or marketability of the MH Loan. 

        (ll)    No Denial of Insurance.    The Seller has caused or will cause to be performed any and all acts required to
preserve the rights and remedies of the Buyer in any insurance policies applicable to the MH Loans including, without limitation, any necessary notifications of insurers, assignments of policies or
interests therein, and establishments of coinsured, joint loss payee and mortgagee rights in favor of the Buyer. No action, inaction, or event has occurred and no state of fact exists or has existed
that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable pool insurance policy, special hazard insurance policy, or bankruptcy bond, irrespective
of the cause of such failure of coverage. 

        (mm)    Origination.    No error, omission, misrepresentation, negligence, fraud or similar occurrence with respect to
an MH Loan has taken place on the part of any person including without limitation the Obligor, any appraiser, any builder or developer, or any other party involved in the origination of the MH Loan
or, in the application of any insurance in relation to such MH Loan; no predatory or deceptive lending practices, including, without limitation, the extension of credit without regard to the ability
of the Obligor to repay and the extension of credit which has no apparent benefit to the Obligor, were employed in the origination of the MH Loan. 

        (nn)    Georgia Fair Lending Act.    There is no MH Loan that was originated on or after October 1, 2002 and
before March 7, 2003 which is secured by property located in the State of Georgia. There is no MH Loan that was originated on or after March 7, 2003 that is a "high cost home loan" as
defined under the Georgia Fair Lending Act. 

        (oo)    New York State Banking Law.    There is no MH Loan that (a) is secured by property located in the State
of New York; (b) had an original principal balance of $300,000 or less, and (c) has an application date on or after April 1, 2003, the terms of which loan equal or exceed either
the annual percentage rate or the points and fees threshold for "high-cost home loans," as defined in Section 6-L of the New York State Banking Law. 

        (pp)    Fair Credit Reporting Act.    The Servicer, and any prior servicer, has in its capacity as servicer, for each
Loan, fully furnished, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Seller (three of the credit repositories), on a monthly basis. 

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        (qq)    HUD Compliant.    Each Manufactured Home securing an MH Contract, complied at the time of origination by the
Seller with all HUD Code specifications. 

        (rr)    Retail Installment Sales Contract.    With respect to each MH Contract, such Contract creates a "purchase
money security interest" (as defined in the Uniform Commercial Code) in favor of the Seller in the Manufactured Home covered thereby as security for payment of the outstanding principal balance of
such retail installment sales contract. 

        (ss)    Kickout Loans.    The MH Loan has not been rejected from, or previously financed under, any other
securitization or financing vehicle of the Seller or its affiliates. 

        (tt)    Origination Date.    The origination date is no earlier than thirty (30) days prior to the related
Purchase Date. 

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QuickLinks

MASTER REPURCHASE AGREEMENT Between: Merrill Lynch Mortgage Capital Inc., as Buyer and Enspire Finance, LLC, as Seller Dated as of February 18, 2004

TABLE OF CONTENTS

EXHIBITS

MASTER REPURCHASE AGREEMENT

SCHEDULE 1

REPRESENTATIONS AND WARRANTIES RE: MH LOANS

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