Document:

a1041notepurchaseagreeme

                                                            EXECUTION VERSION                             GREEN BRICK PARTNERS, INC.                                      $37,500,000                          3.35% Senior Notes due August 26, 2027                                    ______________                              NOTE PURCHASE AGREEMENT                                 ______________                                 Dated August 26, 2020    52410969

 

                              TABLE OF CONTENTS  SECTION                            HEADING                              PAGE  SECTION 1.        AUTHORIZATION OF NOTES ..........................................................................1  SECTION 2.        SALE AND PURCHASE OF NOTES ...................................................................1  SECTION 3.        CLOSING .......................................................................................................1  SECTION 4.        CONDITIONS TO CLOSING..............................................................................2     Section 4.1.     Representations and Warranties .............................................................2     Section 4.2.     Performance; No Default .......................................................................2     Section 4.3.     Compliance Certificates .........................................................................2     Section 4.4.     Opinions of Counsel ..............................................................................3     Section 4.5.     Purchase Permitted By Applicable Law, Etc. ........................................3     Section 4.6.     Sale of Other Notes ................................................................................3     Section 4.7.     Payment of Special Counsel Fees ..........................................................3     Section 4.8.     Private Placement Number ....................................................................3     Section 4.9.     Changes in Corporate Structure .............................................................3     Section 4.10.    Funding Instructions ..............................................................................4     Section 4.11.    Proceedings and Documents ..................................................................4     Section 4.12.    Certain Documents.................................................................................4  SECTION 5.        REPRESENTATIONS AND WARRANTIES OF THE COMPANY .............................5     Section 5.1.     Organization; Power and Authority .......................................................5     Section 5.2.     Authorization, Etc. .................................................................................5     Section 5.3.     Disclosure ..............................................................................................5     Section 5.4.     Organization and Ownership of Shares of Subsidiaries;                       Affiliates ................................................................................................6     Section 5.5.     Financial Statements; Material Liabilities .............................................6     Section 5.6.     Compliance with Laws, Other Instruments, Etc. ...................................6     Section 5.7.     Governmental Authorizations, Etc.........................................................7     Section 5.8.     Litigation; Observance of Agreements, Statutes and                       Orders .....................................................................................................7     Section 5.9.     Taxes ......................................................................................................7     Section 5.10.    Title to Property; Leases ........................................................................8     Section 5.11.    Licenses, Permits, Etc. ...........................................................................8     Section 5.12.    Compliance with Employee Benefit Plans ............................................8     Section 5.13.    Private Offering by the Company ..........................................................9     Section 5.14.    Use of Proceeds; Margin Regulations....................................................9     Section 5.15.    Existing Indebtedness; Future Liens ....................................................10     Section 5.16.    Foreign Assets Control Regulations, Etc. ............................................10   52410969                              -i- 

 

    Section 5.17.    Status under Certain Statutes ...............................................................11     Section 5.18.    Environmental Matters.........................................................................11     Section 5.19.    Insurance ..............................................................................................12  SECTION 6.        REPRESENTATIONS OF THE PURCHASERS ....................................................12     Section 6.1.     Purchase for Investment .......................................................................12     Section 6.2.     Source of Funds ...................................................................................12  SECTION 7.        INFORMATION AS TO COMPANY ..................................................................14     Section 7.1.     Financial and Business Information .....................................................14     Section 7.2.     Officer’s Certificate .............................................................................17     Section 7.3.     Visitation ..............................................................................................18     Section 7.4.     Electronic Delivery ..............................................................................18  SECTION 8.        PAYMENT AND PREPAYMENT OF THE NOTES ..............................................19     Section 8.1.     Maturity................................................................................................19     Section 8.2.     Optional Prepayments with Make-Whole Amount..............................19     Section 8.3.     Allocation of Partial Prepayments .......................................................20     Section 8.4.     Maturity; Surrender, Etc. .....................................................................20     Section 8.5.     Purchase of Notes ................................................................................20     Section 8.6.     Make-Whole Amount ..........................................................................20     Section 8.7.     Payments Due on Non-Business Days .................................................22     Section 8.8.     Change of Control Prepayment Offer ..................................................22  SECTION 9.        AFFIRMATIVE COVENANTS. ........................................................................23     Section 9.1.     Compliance with Laws ........................................................................23     Section 9.2.     Insurance ..............................................................................................23     Section 9.3.     Maintenance of Properties ...................................................................23     Section 9.4.     Payment of Taxes and Claims..............................................................24     Section 9.5.     Corporate Existence, Etc. .....................................................................24     Section 9.6.     Books and Records ..............................................................................24     Section 9.7.     Subsidiary Guarantors ..........................................................................24     Section 9.8.     Use of Proceeds....................................................................................26     Section 9.9.     Information Required by Rule 144A ...................................................26     Section 9.10.    Covenant to Secure Notes Equally ......................................................26     Section 9.11.    Notes and Subsidiary Guaranties to Rank Pari Passu ..........................26  SECTION 10.       NEGATIVE COVENANTS. .............................................................................27     Section 10.1.    Financial Covenants .............................................................................27     Section 10.2.    Liens .....................................................................................................28     Section 10.3     Subsidiary Indebtedness.......................................................................28     Section 10.4.    Limitation on Fundamental Changes; Asset Sales...............................29     Section 10.5.    Permitted Investments ..........................................................................30     Section 10.6     Burdensome Agreements .....................................................................31   52410969                             -ii- 

 

    Section 10.7.    Prepayment of Indebtedness ................................................................32     Section 10.8.    Transactions with Affiliates .................................................................32     Section 10.9.    Restricted Payments .............................................................................32     Section 10.10.   Line of Business ...................................................................................33     Section 10.11.   Economic Sanctions, Etc .....................................................................33     Section 10.12.   Most Favored Lender ...........................................................................33     Section 10.13.   Amendments to Organizational Documents ........................................33  SECTION 11.       EVENTS OF DEFAULT ..................................................................................34  SECTION 12.       REMEDIES ON DEFAULT, ETC ......................................................................37     Section 12.1.    Acceleration .........................................................................................37     Section 12.2.    Other Remedies ....................................................................................37     Section 12.3.    Rescission ............................................................................................37     Section 12.4.    No Waivers or Election of Remedies, Expenses, Etc ..........................38  SECTION 13.       REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES ...............................38     Section 13.1.    Registration of Notes ...........................................................................38     Section 13.2.    Transfer and Exchange of Notes ..........................................................38     Section 13.3.    Replacement of Notes ..........................................................................39  SECTION 14.       PAYMENTS ON NOTES .................................................................................39     Section 14.1.    Place of Payment..................................................................................39     Section 14.2.    Payment by Wire Transfer ...................................................................39     Section 14.3.    FATCA Information ............................................................................40  SECTION 15.       EXPENSES, ETC ...........................................................................................40     Section 15.1.    Transaction Expenses...........................................................................40     Section 15.2.    Certain Taxes .......................................................................................41     Section 15.3.    Survival ................................................................................................41  SECTION 16.       SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE                    AGREEMENT ...............................................................................................41  SECTION 17.       AMENDMENT AND WAIVER ........................................................................42     Section 17.1.    Requirements .......................................................................................42     Section 17.2.    Solicitation of Holders of Notes ..........................................................42     Section 17.3.    Binding Effect, Etc...............................................................................43     Section 17.4.    Notes Held by Company, Etc...............................................................43  SECTION 18.       NOTICES ......................................................................................................43  SECTION 19.       REPRODUCTION OF DOCUMENTS .................................................................44   52410969                             -iii- 

 

SECTION 20.       CONFIDENTIAL INFORMATION.....................................................................44  SECTION 21.       SUBSTITUTION OF PURCHASER ....................................................................46  SECTION 22.       MISCELLANEOUS ........................................................................................46     Section 22.1.    Successors and Assigns........................................................................46     Section 22.2.    Accounting Terms ................................................................................46     Section 22.3.    Severability ..........................................................................................47     Section 22.4.    Construction, Etc..................................................................................47     Section 22.5.    Counterparts .........................................................................................47     Section 22.6.    Governing Law ....................................................................................48     Section 22.7.    Jurisdiction and Process; Waiver of Jury Trial ....................................48   52410969                             -iv- 

 

SCHEDULE A  —           Defined Terms   SCHEDULE 1        —     Form of 3.35% Senior Note due August 26, 2027   SCHEDULE 4.4(a)   —     Form of Opinion of Special Counsel for the Company   SCHEDULE 5.3  —         Disclosure Materials   SCHEDULE 5.4  —         Subsidiaries of the Company and Ownership of Subsidiary Stock   SCHEDULE 5.5  —         Financial Statements   SCHEDULE 5.15  —        Existing Indebtedness   SCHEDULE 10.3  —        Existing Permitted Subsidiary Indebtedness   SCHEDULE 10.5  —        Existing Investments   PURCHASER SCHEDULE —   Information Relating to Purchasers   52410969                             -v- 

 

                       GREEN BRICK PARTNERS, INC.                            2805 Dallas Parkway, Suite 400                                 Plano, TX  75093                         3.35% Senior Notes due August 26, 2027                                                                   August 26, 2020   TO EACH OF THE PURCHASERS LISTED IN       THE PURCHASER SCHEDULE HERETO:   Ladies and Gentlemen:         Green Brick Partners, Inc., a Delaware corporation (the “Company”), agrees with each  of the Purchasers as follows:   SECTION 1.    AUTHORIZATION OF NOTES.         The  Company  will  authorize  the  issue  and  sale  of  $37,500,000  aggregate  principal  amount  of  its  3.35%  Senior  Notes  due  August  26,  2027  (the “Notes”).   The  Notes  shall  be  substantially in the form set out in Schedule 1.  Certain capitalized and other terms used in this  Agreement  are  defined  in  Schedule  A  and,  for  purposes  of  this  Agreement,  the  rules  of  construction set forth in Section 22.4 shall govern.   SECTION 2.    SALE AND PURCHASE OF NOTES .         Subject to the terms and conditions of this Agreement, the Company will issue and sell to  each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for  in  Section 3,  Notes  in  the  principal  amount  specified  opposite  such  Purchaser’s  name  in  the  Purchaser  Schedule  at  the  purchase  price  of  100%  of  the  principal  amount  thereof.   The  Purchasers’ obligations  hereunder are several  and not  joint  obligations  and  no  Purchaser shall  have any liability to any Person for the performance or non-performance of any obligation by  any other Purchaser hereunder.   SECTION 3.    CLOSING.         The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the  offices of  Baker Botts  L.L.P., 2001 Ross Avenue, Dallas, Texas 75201, at 10:00 a.m., Dallas,  Texas  time,  at  a  closing  (the “Closing”)  on  August  26,  2020  or  on  such  other  Business  Day  thereafter  on  or  prior  to  August  28,  2020  as  may  be  agreed  upon  by  the  Company  and  the  Purchasers.   At  the  Closing,  the  Company  will  deliver  to  each  Purchaser  the  Notes  to  be  purchased by such Purchaser in the form of a single Note (or such greater number of Notes in  denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing  and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such  Purchaser  to  the  Company  or  its  order  of  immediately  available  funds  in  the  amount  of  the    52410969

 

purchase price therefor by wire transfer of immediately available funds  for the account of the  Company to the following account:        Account Name: Inwood National Bank        ABA/Routing Number: 111001040        Account Number: 3302661        Account Name: Green Brick Partners, Inc – Master         If  at  the  Closing,  the  Company  shall  fail  to  tender  such  Notes  to  any  Purchaser  as  provided above in this Section 3, or any of the conditions specified in Section 4 shall not have  been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of  all further obligations under this Agreement, without thereby waiving any rights such Purchaser  may  have  by  reason  of  such  failure  by  the  Company  to  tender  such  Notes  or  any  of  the  conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction.   SECTION 4.    CONDITIONS TO CLOSING.         Each  Purchaser’s  obligation  to  purchase  and  pay  for  the  Notes  to  be  sold  to  such  Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or  at the Closing, of the following conditions:       Section 4.1.  Representations and Warranties.  The representations and warranties of  the Company in this Agreement and of each Note Party in each other Note Document to which it  is a party shall be correct when made and at the Closing.       Section 4.2.  Performance;  No  Default. Each  Note  Party  shall  have  performed  and  complied with all agreements and conditions contained in each Note Document to which it is a  party required to be performed or complied with by it prior to or at the Closing.  Before and after  giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as  contemplated  by  Section  5.14),  no  Default  or  Event  of  Default  shall  have  occurred  and  be  continuing.   Neither  the  Company  nor  any  Subsidiary  shall  have  entered  into  any  transaction  since December 31, 2019 that would have been prohibited by Sections 10.2 through 10.12 had  such Sections applied since such date.  Since December 31, 2019, there has been no change in  the  financial  condition,  operations,  business  or  properties  of  the  Company  or  any  of  its  Subsidiaries,  except  changes  that,  individually  or  in  the  aggregate,  could  not  reasonably  be  expected to have a Material Adverse Effect.         Section 4.3.  Compliance Certificates.        (a)  Officer’s  Certificate.   The  Company  shall  have  delivered  to  such  Purchaser  an  Officer’s  Certificate,  dated  the  date  of  the  Closing,  certifying  that  the  conditions  specified  in  Sections 4.1, 4.2 and 4.9 have been fulfilled.        (b)  Secretary’s Certificate.  Each Note Party shall have delivered to such Purchaser a  certificate of its Secretary or Assistant Secretary or other applicable Responsible Officer, dated  the date of the Closing, (x) certifying as to (i) the resolutions attached thereto and other corporate    52410969                             -2- 

 

proceedings relating to the authorization, execution and delivery of the Notes (with respect to the  Company),  this  Agreement  (with  respect  to  the  Company)  and  each  other  Note  Document  to  which it is a party, (ii) its organizational documents as then in effect, certified (with respect to  the  incorporation  or  formation  document)  as  of  a  recent  date  by  the  applicable  Governmental  Authority in its jurisdiction of organization, (iii) the names and true signatures of the officers or  managers, as applicable, of such Note Party authorized to sign each Note Document to which it  is  or  is  to  be  a  party  and  the  other  documents  to  be  delivered  hereunder,  and  (y)  attaching  a  recent  good  standing  certificate  (or  equivalent)  for  such  Note  Party  from  the  applicable  Governmental Authority in its jurisdiction of organization.         Section 4.4.  Opinions  of  Counsel.   Such  Purchaser  shall  have  received  opinions  in  form  and  substance  satisfactory  to  such  Purchaser,  dated  the  date  of  the  Closing  (a) from  Greenberg  Traurig,  LLP,  counsel  for  the  Note  Parties,  covering  the  matters  set  forth  in  Schedule 4.4(a) and covering such other matters incident to the transactions contemplated hereby  as such Purchaser or its counsel may reasonably request (and the Company hereby instructs its  counsel  to  deliver  such  opinion  to  the  Purchasers),  and  (b) from  Baker  Botts  L.L.P.,  the  Purchasers’ special counsel in connection with such transactions, covering such matters incident  to such transactions as such Purchaser may reasonably request.       Section 4.5.  Purchase Permitted By Applicable Law, Etc.  On the date of the Closing  such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each  jurisdiction  to  which  such  Purchaser  is  subject,  without  recourse  to  provisions  (such  as  section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance  companies without restriction as to the character of the particular investment, (b) not violate any  applicable law or regulation (including Regulation T, U or X of the Board of Governors of the  Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under  or pursuant to any applicable law or regulation, which law or regulation was not in effect on the  date  hereof.   If  requested  by  such  Purchaser,  such  Purchaser  shall  have  received  an  Officer’s  Certificate  certifying  as  to  such  matters  of  fact  as  such  Purchaser  may  reasonably  specify  to  enable such Purchaser to determine whether such purchase is so permitted.       Section 4.6.  Sale of Other Notes.  Contemporaneously with the Closing, the Company  shall  sell  to  each  other  Purchaser  and  each  other  Purchaser  shall  purchase  the  Notes  to  be  purchased by it at the Closing as specified in the Purchaser Schedule.       Section 4.7.  Payment  of  Special  Counsel  Fees.   Without  limiting  Section 15.1,  the  Company shall have paid on or before the Closing the fees, charges  and disbursements of the  Purchasers’ special  counsel referred to  in  Section 4.4  to the extent reflected  in a statement  of  such counsel rendered to the Company at least one Business Day prior to the Closing.       Section 4.8.  Private  Placement  Number.   A  Private  Placement  Number  issued  by  Standard  &  Poor’s  CUSIP  Service  Bureau  (in  cooperation  with  the  SVO)  shall  have  been  obtained for the Notes.       Section 4.9.  Changes in Corporate Structure.  No Note Party shall have changed its  jurisdiction  of  incorporation  or  organization,  as  applicable,  or  been  a  party  to  any  merger  or    52410969                             -3- 

 

consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at  any time following the date of the most recent financial statements referred to in Schedule 5.5.        Section 4.10.  Funding Instructions.  At least three Business Days prior to the date of the  Closing, each Purchaser shall have received written instructions signed by a Responsible Officer  on letterhead of the Company confirming the information specified in Section 3 including (i) the  name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the  account name and number into which the purchase price for the Notes is to be deposited.      Section 4.11.  Proceedings  and  Documents.   All  corporate  and  other  proceedings  in  connection  with  the  transactions  contemplated  by  this  Agreement  and  all  documents  and  instruments incident to such transactions shall be satisfactory to such Purchaser and its special  counsel,  and  such  Purchaser  and  its  special  counsel  shall  have  received  all  such  counterpart  originals or certified or other copies of such documents as such Purchaser or such special counsel  may reasonably request.      Section 4.12.  Certain Documents.  Such Purchaser shall have received the following:         (a)     this  Agreement,  duly  executed  and  delivered  by  each  Purchaser  and  the     Company;         (b)     the  original  Note(s)  to  be  purchased  by  such  Purchaser  at  the  Closing,  duly     executed and delivered by the Company;         (c)     a  Subsidiary  Guaranty,  duly  executed  and  delivered  by  each  Subsidiary     required to be a Subsidiary Guarantor pursuant to Section 9.7;         (d)     all subordination agreements with respect to any Indebtedness (i) subordinated     to  the  Senior  Unsecured  Credit  Facility  or  (ii)  required  to  become  Subordinated  Debt     pursuant to Section 10.3(c), in each case duly executed and delivered by the parties thereto     and causing such Indebtedness to become Subordinated Debt;         (e)     certificates  of  insurance  satisfactory  to  such  Purchaser  in  all  respects     evidencing the existence of all insurance required to be maintained by the Note Parties and     all other terms of the Note Documents;         (f)     a certificate of a Senior Financial Officer of the Company certifying on behalf     of  the  Note  Parties  that  the  Company,  individually,  is  Solvent  and  the  Company  and  its     Subsidiaries, on a Consolidated basis, are Solvent; and         (g)     a fully executed copy of each Principal Credit Facility, all documents executed     and  delivered  in  connection  therewith  that  evidence  or  create  a  guarantee  or  Lien  and  the     most recent borrowing base certificate delivered thereunder.    52410969                             -4- 

 

SECTION 5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.         The Company represents and warrants to each Purchaser that:       Section 5.1.  Organization; Power  and Authority.   Each  Note Party is  a corporation,  limited liability company or limited partnership, as applicable, duly organized, validly existing  and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a  foreign  corporation,  limited  liability  company  or  limited  partnership,  as  applicable,  and  is  in  good standing in each jurisdiction in which such qualification is required by law, other than those  jurisdictions as to which the failure to be so qualified or in good standing could not, individually  or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each Note Party  has the organizational power and authority to own or hold under lease the properties it purports  to  own  or  hold  under  lease,  to  transact  the  business  it  transacts  and  proposes  to  transact,  to  execute and deliver each Note Document to which it is a party, and to perform the provisions of  such Note Documents.       Section 5.2.  Authorization, Etc.  Each Note Document has been duly authorized by all  necessary organizational action on the part of each Note Party party thereto, and this Agreement  (with respect to the Company) constitutes, and upon execution and delivery thereof each other  Note Document to which such Note Party is a party will constitute, a legal, valid and binding  obligation of such Note Party enforceable against such Note Party in accordance with its terms,  except  as  such  enforceability  may  be  limited  by  (i)  applicable  bankruptcy,  insolvency,  reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights  generally  and  (ii)  general  principles  of  equity  (regardless  of  whether  such  enforceability  is  considered in a proceeding in equity or at law).       Section 5.3.  Disclosure.   The  Company’s  Form  10-K  for  the  fiscal  year  ended  December 31, 2019, the Company’s Forms 10-Q for the fiscal quarters ended March 31, 2020  and June 30, 2020 and the Company’s Current Reports on Form 8-K filed since January 1, 2020  in  each  case  filed  with  the  SEC  (collectively,  the “Recent  Filings”),  fairly  describe,  in  all  material respects, the general nature of the business and principal properties of the Company and  its Subsidiaries.  This Agreement, the Recent Filings, the financial statements listed in Schedule  5.5 and the documents, certificates or other writings delivered to the Purchasers by or on behalf  of  the  Company  prior  to  August  11,  2020  in  connection  with  the  transactions  contemplated  hereby and identified in Schedule 5.3 (this Agreement, the Recent Filings and such documents,  certificates  or  other  writings  and  such  financial  statements  delivered  to  each  Purchaser  being  referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any  untrue  statement  of  a  material  fact  or  omit  to  state  any  material  fact  necessary  to  make  the  statements  therein  not  misleading  in  light  of  the  circumstances  under  which  they  were  made.   Except as disclosed in the Disclosure Documents, since December 31, 2019, there has been no  change in the financial condition, operations, business, properties or prospects of the Company  or any Subsidiary except changes that could not, individually or in the aggregate, reasonably be  expected to have a Material Adverse Effect.  There is no fact known to the Company that could  reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in  the Disclosure Documents.    52410969                             -5- 

 

    Section 5.4.  Organization  and  Ownership  of  Shares  of  Subsidiaries;  Affiliates.   (a) Schedule 5.4  contains  (except  as  noted  therein)  complete  and  correct  lists  of  (i)  the  Company’s  Subsidiaries  (including  any  joint  venture  that  is  a  Subsidiary  of  the  Company),  showing,  as  to  each  Subsidiary,  the  name  thereof,  the  jurisdiction  of  its  organization,  the  percentage of shares of each class of its Capital Stock outstanding owned by the Company and  each  other  Subsidiary,  whether  such  Subsidiary  is  a  Significant  Subsidiary  and  whether  such  Subsidiary is a Subsidiary Guarantor, (ii) the Company’s joint ventures and Affiliates, other than  Subsidiaries, and (iii) the Company’s directors and senior officers.        (b)  All of the outstanding shares of Capital Stock of each Subsidiary shown in Schedule  5.4 as being owned by the Company and its Subsidiaries have been validly issued, are owned by  the  Company  or  another  Subsidiary  free  and  clear  of  any  Lien  that  is  prohibited  by  this  Agreement  and,  to  the  extent  that  such  Subsidiary  is  a  corporation,  are  fully  paid  and  non- assessable.        (c)  Each  Subsidiary  is  a  corporation  or  other  legal  entity  duly  organized,  validly  existing  and,  where  applicable,  in  good  standing  under  the  laws  of  its  jurisdiction  of  organization,  and  is  duly  qualified  as  a  foreign  corporation  or  other  legal  entity  and,  where  applicable, is in good standing in each jurisdiction in which such qualification is required by law,  other than those jurisdictions as to which the failure to be so qualified or in good standing could  not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.   Each such Subsidiary has the corporate or other power and authority to own or hold under lease  the properties it purports to own or hold under lease and to transact the business it transacts and  proposes to transact.        (d)  No  Subsidiary  is  subject  to  any  legal,  regulatory,  contractual  or  other  restriction  (other  than  the  agreements  listed  on  Schedule  5.4  and  customary  limitations  imposed  by  corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of  profits  or  make  any  other  similar  distributions  of  profits  to  the  Company  or  any  of  its  Subsidiaries that owns outstanding shares of Capital Stock of such Subsidiary.         Section 5.5.  Financial Statements; Material Liabilities.  The Company has delivered  to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed  on Schedule 5.5.  All of such financial statements (including in each case the related schedules  and  notes)  fairly  present  in  all  material  respects  the  consolidated  financial  position  of  the  Company  and  its  Subsidiaries  as  of  the  respective  dates  specified  in  such  Schedule  and  the  consolidated results of their operations and cash flows for the respective periods so specified and  have  been  prepared  in  accordance  with  GAAP  consistently  applied  throughout  the  periods  involved  except  as  set  forth  in  the  notes  thereto  (subject,  in  the  case  of  any  interim  financial  statements, to normal  year-end adjustments).   The Company and its Subsidiaries do not have  any Material liabilities that are not disclosed in the Disclosure Documents.       Section 5.6.  Compliance with Laws, Other Instruments, Etc.  The execution, delivery  and  performance  by  each  Note  Party  of  each  Note  Document  to  which  it  is  a  party  will  not  (i) contravene, result in any breach of, or constitute a default under, or result in the creation of  any  Lien  in  respect  of  any  property  of  the  Company  or  any  Subsidiary  under,  any  indenture,    52410969                             -6- 

 

mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter, regulations  or by-laws, shareholders agreement or any other Material agreement or instrument to which the  Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their  respective Material properties may be bound or affected, (ii) conflict with or result in a breach of  any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court,  arbitrator  or  Governmental  Authority  applicable  to  the  Company  or  any  Subsidiary  or  (iii) violate  any  provision  of  any  statute  or  other  rule  or  regulation  of  any  Governmental  Authority applicable to the Company or any Subsidiary.        Section 5.7.  Governmental  Authorizations,  Etc.   No  consent,  approval  or  authorization  of,  or  registration,  filing  or  declaration  with,  any  Governmental  Authority  is  required  in  connection  with  the  execution,  delivery  or  performance  by  any  Note  Party  of  any  Note Document to which it is a party, except for the filing of a Current Report on Form 8-K with  the SEC.       Section 5.8.  Litigation; Observance of Agreements, Statutes and Orders.  (a) There  are  no  actions,  suits,  investigations  or  proceedings  pending  or,  to  the  best  knowledge  of  the  Company, threatened against or affecting the Company or any Subsidiary or any property of the  Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any  Governmental Authority that could, individually or in the aggregate, reasonably be expected to  have a Material Adverse Effect.        (b)  Neither the Company nor any Subsidiary is (i) in default under any agreement or  instrument to which it is a party or by which it is bound, (ii) in violation of any order, judgment,  decree or ruling of any court, any arbitrator of any kind or any Governmental Authority or (iii) in  violation  of  any  applicable  law,  ordinance,  rule  or  regulation  of  any  Governmental  Authority  (including Environmental Laws, the USA PATRIOT Act or any of the other laws and regulations  that are referred to in Section 5.16), in each case which default or violation could, individually or  in the aggregate, reasonably be expected to have a Material Adverse Effect.       Section 5.9.  Taxes.  The Company and its Subsidiaries have filed all tax returns that are  required  to  have  been  filed  in  any  jurisdiction,  and  have  paid  all  taxes  shown  to  be  due  and  payable on such returns and all other taxes and assessments levied upon them or their properties,  assets,  income  or  franchises,  to  the  extent  such  taxes  and  assessments  have  become  due  and  payable and before they have become delinquent, except for any taxes and assessments (i) the  amount of which, individually or in the aggregate, is not Material or (ii) the amount, applicability  or validity of which is currently being contested in good faith by appropriate proceedings and  with  respect  to  which  the  Company  or  a  Subsidiary,  as  the  case  may  be,  has  established  appropriate  reserves  with  respect  thereto  in  accordance  with  GAAP  on  the  books  of  the  Company  or  applicable  Subsidiary.   The  Company  knows  of  no  basis  for  any  other  tax  or  assessment  that  could,  individually  or  in  the  aggregate,  reasonably  be  expected  to  have  a  Material Adverse Effect.  The charges, accruals and reserves on the books of the Company and  its Subsidiaries in respect of U.S. federal, state or other taxes for all fiscal periods are adequate.   The  U.S.  federal  income  tax  liabilities  of  the Company  and  its  Subsidiaries  have  been  finally  determined (whether by reason of completed audits or the statute of limitations having run) for  all fiscal years up to and including the fiscal year ended 2011.   52410969                             -7- 

 

   Section 5.10.  Title to Property; Leases.  The Company and its Subsidiaries have good  and sufficient title to their respective properties that individually or in the aggregate are Material,  including  all  such  properties  reflected  in  the  most  recent  audited  balance  sheet  referred  to  in  Section 5.5 or purported to have been acquired by the Company or any Subsidiary after such date  (except as sold or otherwise disposed of in the ordinary course of business), in each case free and  clear of Liens prohibited by this Agreement.  All leases that individually or in the aggregate are  Material are valid and subsisting and are in full force and effect in all material respects.       Section 5.11.  Licenses,  Permits,  Etc.   (a) The  Company  and  its  Subsidiaries  own  or  possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software,  service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate  are Material, without known conflict with the rights of others.        (b)  To the best knowledge of the Company, no product or service of the Company or  any  of  its  Subsidiaries  infringes  in  any  material  respect  any  license,  permit,  franchise,  authorization,  patent,  copyright,  proprietary  software,  service  mark,  trademark,  trade  name  or  other right owned by any other Person.        (c)  To the best knowledge of the Company, there is no Material violation by any Person  of  any  right  of  the  Company  or  any  of  its  Subsidiaries  with  respect  to  any  license,  permit,  franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade  name or other right owned or used by the Company or any Subsidiary.      Section 5.12.  Compliance with Employee Benefit Plans.  (a)  The Company and each  ERISA  Affiliate  have  operated  and  administered  each  Plan  in  compliance  with  all  applicable  laws  except  for  such  instances  of  noncompliance  as  have  not  resulted  in  and  could  not,  individually  or  in  the  aggregate,  reasonably  be  expected  to  result  in  a  Material  Adverse  Effect.  Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title  I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit  plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or  exists  that  could,  individually  or  in  the  aggregate,  reasonably  be  expected  to  result  in  the  incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of  any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in  either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such  penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by  the granting of a security interest in connection with the amendment of a Plan, other than such  liabilities or Liens as would not be individually or in the aggregate Material.        (b)  The present value of the aggregate benefit liabilities under each of the Plans (other  than Multiemployer  Plans), determined  as  of the end of such  Plan’s  most  recently  ended plan  year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most  recent actuarial valuation report, did not exceed the aggregate current value of the assets of such  Plan allocable to such benefit liabilities by more than $0 in the case of any single Plan and by  more  than  $0  in  the  aggregate  for  all  Plans.   The  term “benefit  liabilities”  has  the  meaning  specified in section 4001 of ERISA and the terms “current value” and “present value” have  the meaning specified in section 3 of ERISA.    52410969                             -8- 

 

     (c)  The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and  are  not  subject  to  contingent  withdrawal  liabilities)  under  section 4201  or  4204  of  ERISA  in  respect of Multiemployer Plans that individually or in the aggregate are Material.        (d)  The expected postretirement benefit obligation (determined as of the last day of the  Company’s most recently ended fiscal year in accordance with Financial Accounting Standards  Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable  to  continuation  coverage  mandated  by  section  4980B  of  the  Code)  of  the  Company  and  its  Subsidiaries is not Material.        (e)  The execution and delivery of the Note Documents and the issuance and sale of the  Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406  of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)- (D) of the Code.  The representation by the Company to each Purchaser in the first sentence of  this  Section 5.12(e)  is  made  in reliance  upon  and  subject  to the accuracy  of  such  Purchaser’s  representation in Section 6.2 as to the sources of the funds to be used to pay the purchase price of  the Notes to be purchased by such Purchaser.        (f)  The Company and its Subsidiaries do not have any Non-U.S. Plans.      Section 5.13.  Private Offering by the Company.  Other than the offering of the Existing  Notes pursuant to the Existing Note Purchase Agreement in accordance with Section 5.13 of the  Existing  Note  Purchase  Agreement,  neither  the  Company  nor  anyone  acting  on  its  behalf  has  offered the Notes or any similar Securities for sale to, or solicited any offer to buy the Notes or  any similar Securities from, or otherwise approached or negotiated in respect thereof with, any  Person other than the Purchasers, each of which has been offered the Notes at a private sale for  investment.  Neither the Company nor anyone acting on its behalf has taken, or will take, any  action that  would  subject  the  issuance  or sale of  the Notes  to  the  registration requirements  of  section 5 of the Securities Act or to the registration requirements of any Securities or blue sky  laws of any applicable jurisdiction.      Section 5.14.  Use  of  Proceeds;  Margin  Regulations.   The  Company  will  apply  the  proceeds of the sale of the Notes to repay a portion of the amounts outstanding under the Senior  Secured Credit Facility and the Senior Unsecured Credit Facility, to pay fees  and expenses in  connection  with  this  Agreement  and  for  general  corporate  purposes.   No  part  of  the  proceeds  from  the  sale  of  the  Notes  hereunder  will  be  used,  directly  or  indirectly,  for  the  purpose  of  buying  or  carrying  any  margin  stock  within  the  meaning  of  Regulation U  of  the  Board  of  Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying  or trading in any Securities under such circumstances as to involve the Company in a violation of  Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of  Regulation T of said Board (12 CFR 220).  No value of the consolidated assets of the Company  and its Subsidiaries is  attributed to margin stock and the Company does not have any  present  intention  to  acquire  margin  stock.   As  used  in  this  Section,  the  terms “margin  stock”  and  “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation  U.    52410969                             -9- 

 

   Section 5.15.  Existing  Indebtedness;  Future  Liens.    (a) Except  as  described  therein,  Schedule  5.15  sets  forth  a  complete  and  correct  list  of  all  outstanding  Indebtedness  of  the  Company  and  its  Subsidiaries,  other  than  intercompany  Indebtedness,  as  of  June  30,  2020  (including  descriptions  of  the  obligors  and  obligees,  principal  amounts  outstanding,  any  collateral  therefor  and  any  Guaranty  thereof),  since  which  date  there  has  been  no  Material  change in the amounts,  interest rates, sinking funds, installment payments or maturities of the  Indebtedness of the Company or its Subsidiaries.  Neither the Company nor any Subsidiary is in  default and no waiver of default is currently in effect, in the payment of any principal or interest  on any Indebtedness of the Company or such Subsidiary and no event or condition exists with  respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with  notice  or  the  lapse  of  time,  or  both,  would  permit)  one  or  more  Persons  to  cause  such  Indebtedness  to  become  due  and  payable  before  its  stated  maturity  or  before  its  regularly  scheduled dates of payment.        (b)  Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has  agreed  or  consented  to  cause  or  permit  any  of  its  property,  whether  now  owned  or  hereafter  acquired, to be subject to a  Lien that secures  Indebtedness or to  cause or permit in the  future  (upon the happening of a contingency or otherwise) any of its property, whether now owned or  hereafter acquired, to be subject to a Lien that secures Indebtedness.        (c)  Neither the Company nor any Subsidiary is a party to, or otherwise subject to any  provision  contained  in,  any  instrument  evidencing  Indebtedness  of  the  Company  or  such  Subsidiary, any agreement relating thereto or any other agreement (including its charter or any  other organizational document) which limits the amount of, or otherwise imposes restrictions on  the incurring of, Indebtedness of the Company, except as disclosed in Schedule 5.15.      Section 5.16.  Foreign Assets  Control Regulations, Etc.  (a) Neither the Company nor  any Controlled Entity (i) is a Blocked Person, (ii) has been notified that its name appears or may  in  the  future  appear  on  a  State  Sanctions  List  or  (iii)  is  a  target  of  sanctions  that  have  been  imposed by the United Nations or the European Union.        (b)  Neither  the  Company  nor  any  Controlled  Entity  (i)  has  violated,  been  found  in  violation of, or been charged or convicted under, any applicable U.S. Economic Sanctions Laws,  Anti-Money Laundering Laws or Anti-Corruption Laws or (ii) to the Company’s knowledge, is  under investigation by any Governmental Authority for possible violation of any U.S. Economic  Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws.        (c)  No part of the proceeds from the sale of the Notes hereunder:             (i)     constitutes  or  will  constitute  funds  obtained  on  behalf  of  any  Blocked        Person or will otherwise be used by the Company or any Controlled Entity, directly or        indirectly, (A) in connection with any investment in, or any transactions or dealings with,        any  Blocked  Person,  (B)  for  any  purpose  that  would  cause  any  Purchaser  to  be  in        violation of any U.S. Economic Sanctions Laws or (C) otherwise in violation of any U.S.        Economic Sanctions Laws;    52410969                             -10- 

 

          (ii)    will be used, directly or indirectly, in violation of, or cause any Purchaser        to be in violation of, any applicable Anti-Money Laundering Laws; or             (iii)   will  be  used,  directly  or  indirectly,  for  the  purpose  of  making  any        improper  payments,  including  bribes,  to  any  Governmental  Official  or  commercial        counterparty  in  order  to  obtain,  retain  or  direct  business  or  obtain  any  improper        advantage, in each case which would be in violation of, or cause any Purchaser to be in        violation of, any applicable Anti-Corruption Laws.        (d)  The Company has established procedures and controls which it reasonably believes  are adequate (and otherwise comply with applicable law) to ensure that the Company and each  Controlled  Entity  is  and  will  continue  to be in  compliance with  all  applicable U.S.  Economic  Sanctions Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.      Section 5.17.  Status under Certain Statutes.  Neither the Company nor any Subsidiary  is subject to regulation under the Investment Company Act of 1940, the Public Utility Holding  Company Act of 2005, the ICC Termination Act of 1995, or the Federal Power Act.      Section 5.18.  Environmental Matters.  (a) Neither the Company nor any Subsidiary has  knowledge  of  any  claim  or  has  received  any  notice  of  any  claim  and  no proceeding has  been  instituted  asserting  any  claim  against  the  Company  or  any  of  its  Subsidiaries  or  any  of  their  respective real properties or other assets now or formerly owned, leased or operated by any of  them, alleging any damage to the environment or violation of any Environmental Laws, except,  in each case, such as could not reasonably be expected to result in a Material Adverse Effect.         (b)  Neither the Company nor any Subsidiary has knowledge of any facts which would  give rise to any claim, public or private, of violation of Environmental Laws or damage to the  environment  emanating  from,  occurring  on  or  in  any  way  related  to  real  properties  now  or  formerly owned, leased or operated by any of them or to other assets or their use, except, in each  case, such as could not, individually or in the aggregate, reasonably be expected to result in a  Material Adverse Effect.        (c)  Neither  the  Company  nor  any  Subsidiary  has  stored  any  Hazardous  Materials  on  real properties now or formerly owned, leased or operated by any of them in a manner which is  contrary to any Environmental Law that could, individually or in the aggregate, reasonably be  expected to result in a Material Adverse Effect.        (d)  Neither the Company nor any Subsidiary has disposed of any Hazardous Materials  in  a  manner  which  is  contrary  to  any  Environmental  Law  that  could,  individually  or  in  the  aggregate, reasonably be expected to result in a Material Adverse Effect.        (e)  All buildings on all real properties now owned, leased or operated by the Company  or any Subsidiary are in compliance with applicable Environmental Laws, except where failure  to  comply  could  not,  individually  or  in  the  aggregate,  reasonably  be  expected  to  result  in  a  Material Adverse Effect.    52410969                             -11- 

 

   Section 5.19.  Insurance.  The Company and its Subsidiaries maintain with insurers with  an  AM  Best  rating  of  not  less  than  A  XIII,  (a)  insurance  with  respect  to  their  respective  properties and businesses against such casualties and contingencies, of such types, on such terms  and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves  are  maintained  with  respect  thereto)  as  is  customary  in  the  case  of  entities  of  established  reputations engaged in the same or a similar business and similarly situated, (b) adequate public  liability insurance against tort claims that may be incurred by any Note Party, and (c) such other  insurance as may be required by law, except, in the case of clauses (b) and (c), where the failure  to do so could not reasonably be expected to result in a Material Adverse Effect.   SECTION 6.    REPRESENTATIONS OF THE PURCHASERS.       Section 6.1.  Purchase  for  Investment.   Each  Purchaser  severally  represents  that  it  is  purchasing the Notes for its own account or for  one or more separate accounts maintained by  such Purchaser or for the account of one or more pension or trust funds and not with a view to  the distribution thereof, provided that the disposition of such Purchaser’s or their property shall  at  all  times  be  within  such  Purchaser’s  or  their  control.   Each  Purchaser  understands  that  the  Notes  have  not  been  registered  under  the  Securities  Act  and  may  be  resold  only  if  registered  pursuant to the provisions of the Securities Act or if an exemption from registration is available,  except under circumstances where neither such registration nor such an exemption is required by  law, and that the Company is not required to register the Notes.       Section 6.2.  Source of Funds.  Each Purchaser severally represents that at least one of  the following statements is an accurate representation as to each source of funds (a “Source”) to  be  used  by  such  Purchaser  to  pay  the  purchase  price  of  the  Notes  to  be  purchased  by  such  Purchaser hereunder:               (a)  the  Source  is  an  “insurance  company  general  account”  (as  the  term  is        defined  in  the  United  States  Department  of  Labor’s  Prohibited  Transaction  Exemption        (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual        statement  for  life  insurance  companies  approved  by  the  NAIC  (the “NAIC  Annual        Statement”)) for the general account contract(s) held by or on behalf of any employee        benefit  plan  together  with  the  amount  of  the  reserves  and  liabilities  for  the  general        account contract(s) held by or on behalf of any other employee benefit plans maintained        by  the  same  employer  (or  affiliate  thereof  as  defined  in  PTE  95-60)  or  by  the  same        employee organization in the general account do not exceed 10% of the total reserves and        liabilities of the general account (exclusive of separate account liabilities) plus surplus as        set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or               (b)  the  Source  is  a  separate  account  that  is  maintained  solely  in  connection        with such Purchaser’s fixed contractual obligations under which the amounts payable, or        credited, to any employee benefit plan (or its related trust) that has any interest in such        separate  account  (or  to  any  participant  or  beneficiary  of  such  plan  (including  any        annuitant)) are not affected in any manner by the investment performance of the separate        account; or    52410969                             -12- 

 

            (c)  the  Source  is  either  (i)  an  insurance  company  pooled  separate  account,        within  the  meaning  of  PTE  90-1  or  (ii)  a  bank  collective  investment  fund,  within  the        meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in        writing pursuant to this clause (c), no employee benefit plan or group of plans maintained        by the same employer or employee organization beneficially owns more than 10% of all        assets allocated to such pooled separate account or collective investment fund; or               (d)  the Source constitutes assets of an “investment fund” (within the meaning        of  Part  VI  of  PTE  84-14  (the “QPAM  Exemption”))  managed  by  a  “qualified        professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM        Exemption), no employee benefit plan’s assets that are managed by the QPAM in such        investment  fund,  when  combined  with  the  assets  of  all  other  employee  benefit  plans        established or maintained by the same employer or by an affiliate (within the meaning of        Part  VI(c)(1)  of  the  QPAM  Exemption)  of  such  employer  or  by  the  same  employee        organization and managed by such QPAM, represent more than 20% of the total client        assets  managed  by  such  QPAM,  the  conditions  of  Part  I(c)  and  (g)  of  the  QPAM        Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the        QPAM maintains an ownership interest in the Company that would cause the QPAM and        the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption        and  (i)  the  identity  of  such  QPAM  and  (ii)  the  names  of  any  employee  benefit  plans        whose  assets  in  the  investment  fund,  when  combined  with  the  assets  of  all  other        employee benefit plans established or maintained by the same employer or by an affiliate        (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by        the same employee organization, represent 10% or more of the assets of such investment        fund, have been disclosed to the Company in writing pursuant to this clause (d);or               (e)  the  Source  constitutes  assets  of  a  “plan(s)”  (within  the  meaning  of  Part        IV(h)  of  PTE  96-23  (the “INHAM  Exemption”))  managed  by  an  “in-house  asset        manager” or “INHAM” (within the meaning of Part  IV(a) of the INHAM Exemption),        the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the        INHAM nor a person controlling or controlled by the INHAM (applying the definition of        “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the        Company  and  (i)  the  identity  of  such  INHAM  and  (ii)  the  name(s)  of  the  employee        benefit plan(s) whose assets constitute the Source have been disclosed to the Company in        writing pursuant to this clause (e); or                (f)  the Source is a governmental plan; or               (g)  the Source is one or more employee benefit plans, or a separate account or        trust  fund  comprised  of  one  or  more  employee  benefit  plans,  each  of  which  has  been        identified to the Company in writing pursuant to this clause (g); or               (h)  the  Source  does  not  include  assets  of  any  employee  benefit  plan,  other        than a plan exempt from the coverage of ERISA.    52410969                             -13- 

 

As  used  in  this  Section 6.2,  the  terms “employee  benefit  plan,” “governmental  plan,”  and  “separate account” shall have the respective meanings assigned to such terms in section 3 of  ERISA.   SECTION 7.    INFORMATION AS TO COMPANY      Section 7.1.  Financial and Business Information.  The Company shall deliver to each  Purchaser and each holder of a Note that is an Institutional Investor:               (a)   Quarterly Statements — within 45 days (or such shorter period as is the        earlier of (x) 15 days greater than the period applicable to the filing of the Company’s        Quarterly Report on Form 10-Q (the “Form 10-Q”) with the SEC regardless of whether        the Company is subject to the filing requirements thereof and (y) the date by which such        financial statements are required to be delivered under any Material Credit Facility or the        date on which such corresponding financial statements are delivered under any Material        Credit Facility if such delivery occurs earlier than such required delivery date) after the        end of each quarterly fiscal period in each fiscal year of the Company (other than the last        quarterly fiscal period of each such fiscal year), duplicate copies of,                      (i)  a consolidated balance sheet of the Company and its Subsidiaries              as at the end of such quarter, and                     (ii)  consolidated statements of income, changes in shareholders’ equity              and cash flows of the Company and its Subsidiaries, for such quarter and (in the              case of the second and third quarters) for the portion of the fiscal year ending with              such quarter,         setting forth in each case in comparative form the figures for the corresponding periods in        the  previous  fiscal  year,  all  in  reasonable  detail,  prepared  in  accordance  with  GAAP        applicable to quarterly financial statements generally, and certified by a Senior Financial        Officer  as  fairly  presenting,  in  all  material  respects,  the  financial  position  of  the        companies  being  reported  on  and  their  results  of  operations  and cash  flows,  subject  to        changes resulting from year-end adjustments;               (b)   Annual  Statements  —  within  90  days  (or  such  shorter  period  as  is  the        earlier of (x) 15 days greater than the period applicable to the filing of the Company’s        Annual Report on Form 10-K (the “Form 10-K”) with the SEC regardless of whether the        Company  is  subject  to  the  filing  requirements  thereof  and  (y)  the  date  by  which  such        financial statements are required to be delivered under any Material Credit Facility or the        date on which such corresponding financial statements are delivered under any Material        Credit Facility if such delivery occurs earlier than such required delivery date) after the        end of each fiscal year of the Company, duplicate copies of                      (i)  a consolidated balance sheet of the Company and its Subsidiaries              as at the end of such year,     52410969                             -14- 

 

                  (ii)  consolidated statements of income, changes in shareholders’ equity              and cash flows of the Company and its Subsidiaries for such year, and                      (iii)  a consolidating schedule of the balance sheets of the Company and              its Subsidiaries as at the end of such year,         setting forth in each case in comparative form the figures for the previous fiscal year, all        in reasonable detail, prepared in accordance with GAAP, and accompanied by (A) with        respect to such consolidated financial statements (clause (i) and (ii) above), an opinion        thereon  (without  a  “going  concern”  or  similar  explanatory  paragraph,  qualification  or        exception and without any qualification or exception as to the scope of the audit on which        such opinion is based) of independent public accountants of recognized national standing,        which  opinion  shall  state  that  such  financial  statements  present  fairly,  in  all  material        respects, the financial position of the companies being reported upon and their results of        operations and cash flows and have been prepared in conformity with GAAP, and that the        examination of such accountants in connection with such financial statements has been        made  in  accordance  with  generally  accepted  auditing  standards,  and  that  such  audit        provides a reasonable basis for such opinion in the circumstances, and (B) a letter signed        by  that  firm  of  independent  public  accountants  to  the  effect  that,  during  the  course  of        their  examination,  nothing  came  to  their  attention  that  caused  them  to  believe  that  the        Company was in default of its covenants set forth in Section 10.1 hereof;               (c)   SEC and Other Reports — promptly upon their becoming available, one        copy of (i) each financial statement, report, notice, proxy statement or similar document        sent  by  the  Company  or  any  Subsidiary  (x) to  its  creditors  under  any  Material  Credit        Facility  (excluding  information  sent  to  such  creditors  in  the  ordinary  course  of        administration of a credit facility, such as information relating to pricing and borrowing        availability,  but  including,  without  limitation,  borrowing  base  certificates)  or  (y)  to  its        public  Securities  holders  generally,  and  (ii) each  regular  or  periodic  report,  each        registration statement (without exhibits except as expressly requested by such Purchaser        or holder), and each prospectus and all amendments thereto filed by the Company or any        Subsidiary  with the  SEC and of  all  press  releases  and other statements  made available        generally by the Company or any Subsidiary to the public concerning developments that        are Material;                (d)   Notice of Default or Event of Default — promptly, and in any event within        five days after a Responsible Officer becoming aware of the existence of any Default or        Event of Default or that any Person has given any notice or taken any action with respect        to a claimed default hereunder or that any Person has given any notice or taken any action        with respect to a claimed default of the type referred to in Section 11(f), a written notice        specifying  the  nature  and  period  of  existence  thereof  and  what  action  the  Company  is        taking or proposes to take with respect thereto;               (e)   Employee Benefits Matters — promptly, and in any event within ten days        after  a  Responsible  Officer  becoming  aware  of  any  of  the  following,  a  written  notice    52410969                             -15- 

 

      setting  forth  the  nature  thereof  and  the  action,  if  any,  that  the  Company  or  an  ERISA        Affiliate proposes to take with respect thereto:                      (i)  with  respect  to  any  Plan,  any  reportable  event,  as  defined  in              section 4043(c) of ERISA and the regulations thereunder, for which notice thereof              has not been waived pursuant to such regulations as in effect on the date hereof;                     (ii)  the taking by the PBGC of steps to institute, or the threatening by              the PBGC of the institution of, proceedings under section 4042 of ERISA for the              termination  of,  or  the  appointment  of  a  trustee  to  administer,  any  Plan,  or  the              receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer              Plan  that  such  action  has  been  taken  by  the  PBGC  with  respect  to  such              Multiemployer Plan;                      (iii)  any  event,  transaction  or  condition  that  could  result  in  the              incurrence of  any  liability  by  the Company  or  any  ERISA Affiliate  pursuant  to              Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating              to employee benefit plans, or in the imposition of any Lien on any of the rights,              properties or assets of the Company or any ERISA Affiliate pursuant to Title I or              IV of ERISA or such penalty or excise tax provisions, if such liability  or Lien,              taken  together  with  any  other  such  liabilities  or  Liens  then  existing,  could              reasonably be expected to have a Material Adverse Effect; or                     (iv)  receipt of notice of the imposition of a Material financial penalty              (which for this purpose shall mean any tax, penalty or other liability, whether by              way of indemnity or otherwise) with respect to one or more Non-U.S. Plans;                (f)  Notices  from  Governmental  Authority  —  promptly,  and  in  any  event        within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary        from any Governmental  Authority  relating to any  order,  ruling,  statute  or  other  law  or        regulation that could reasonably be expected to have a Material Adverse Effect;                (g)   Resignation or Replacement of Auditors — within 10 days following the        date on which the Company’s auditors resign or the Company elects to change auditors,        as  the  case  may  be,  notification  thereof,  together  with  such  further  information  as  the        Required Holders may request; and               (h)   Material  Adverse  Effect —  promptly  upon  the  occurrence  of  any  event        that could  reasonably be  expected to lead  to or result  in a Material  Adverse  Effect  (as        defined in the Senior Unsecured Credit Facility) or an Event of Default, a written notice        describing such event.                (i)  Projections — within 90 days after the beginning of each fiscal year of the        Company, projections, in reasonable detail and in form and substance satisfactory to the        Required  Holders,  on  a  quarterly  basis,  of  the  earnings,  cash  flow  and  covenant    52410969                             -16- 

 

      calculations  (with  assumptions  for  all  of  the  foregoing)  of  the  Company  and  its        Subsidiaries for that fiscal year;                (j)  Requested  Information  —  with  reasonable  promptness,  such  other  data        and information relating to the business, operations, affairs, financial condition, assets or        properties  of  the  Company  or  any  of  its  Subsidiaries  (including  actual  copies  of  the        Company’s  Form 10-Q  and  Form 10-K)  or  relating  to  the  ability  of  the  Company  to        perform  its  obligations  hereunder  and  under  the  Notes  as  from  time  to  time  may  be        reasonably requested by any such Purchaser or holder of a Note.       Section 7.2.  Officer’s  Certificate.   Each  set  of  financial  statements  delivered  to  a  Purchaser or holder of a Note pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied  by a certificate of a Senior Financial Officer in form and substance reasonably satisfactory to the  Purchasers or holders:               (a)   Covenant Compliance — setting forth the information from such financial        statements  and all  other information,  in  each case that  is  required  in order to  establish        whether the Company was in compliance with the requirements of Section 10 during the        quarterly  or  annual  period  covered  by  the  financial  statements  then  being  furnished        (including  with respect  to  each such provision  that  involves  mathematical  calculations,        the  information  from  such  financial  statements  that  is  required  to  perform  such        calculations)  and  detailed  calculations  of  the  maximum  or  minimum  amount,  ratio  or        percentage,  as  the  case  may  be,  permissible  under  the  terms  of  such  Section,  and  the        calculation  of  the  amount,  ratio  or  percentage  then  in  existence.   In  the  event  that  the        Company or any Subsidiary has made an election to measure any financial liability using        fair value (which election is being disregarded for purposes of determining compliance        with  this  Agreement  pursuant  to  Section  22.2)  as  to  the  period  covered  by  any  such        financial  statement,  such  Senior  Financial  Officer’s  certificate  as  to  such  period  shall        include a reconciliation from GAAP with respect to such election;               (b)   Event  of  Default  —  certifying  that  such  Senior  Financial  Officer  has        reviewed the relevant terms hereof and has made, or caused to be made, under his or her        supervision,  a  review  of  the  transactions  and  conditions  of  the  Company  and  its        Subsidiaries  from  the  beginning  of  the  quarterly  or  annual  period  covered  by  the        statements then being furnished to the date of the certificate and that such review shall        not  have  disclosed  the  existence  during  such  period  of  any  condition  or  event  that        constitutes a Default or an Event of Default or, if any such condition or event existed or        exists (including any such event or condition resulting from the failure of the Company or        any Subsidiary to comply with any Environmental Law), specifying the nature and period        of existence thereof and what action the Company shall have taken or proposes to take        with respect thereto; and               (c)   Subsidiaries– (x) setting forth (i) a list of all Subsidiaries that are required        to be Subsidiary Guarantors, (ii) a list of all Subsidiaries that are Significant Subsidiaries,        (iii)  a  list  of  all  Subsidiaries  that  are  Side-by-Side  Subsidiaries  and  (iv)  a  list  of  all        Subsidiaries  that  are  Carried  Interest  Subsidiaries,  including  the  percentage  of  Capital    52410969                             -17- 

 

      Stock  of  each  Carried  Interest  Subsidiary  owned  by  the  Note  Parties  and  the  Wholly-       Owned  Subsidiaries  of the  Note  Parties,  and  (y) certifying that each Subsidiary  that  is        required to be a Subsidiary Guarantor pursuant to Section 9.7 is a Subsidiary Guarantor,        in each case, as of the date of such certificate of Senior Financial Officer.       Section 7.3.  Visitation.   The  Company  shall  permit  the  representatives  of  each  Purchaser and each holder of a Note that is an Institutional Investor:               (a)   No Default — if no Default or Event of Default then exists, at the expense        of such Purchaser or such holder and upon reasonable prior notice to the Company, to        visit the principal executive office of the Company, to discuss the affairs, finances and        accounts of the Company and its Subsidiaries with the Company’s officers, and (with the        consent  of  the  Company,  which  consent  will  not  be  unreasonably  withheld)  its        independent public accountants, and  (with the consent of the Company, which consent        will  not  be  unreasonably  withheld)  to  visit  the  other  offices  and  properties  of  the        Company  and  each  Subsidiary,  all  at  such  reasonable  times  and  as  often  as  may  be        reasonably requested in writing; and               (b)   Default — if a Default or Event of Default then exists, at the expense of        the Company to visit and inspect any of the offices or properties of the Company or any        Subsidiary, to examine all their respective books of account, records, reports and other        papers,  to  make  copies  and  extracts  therefrom,  and  to  discuss  their  respective  affairs,        finances and accounts with their respective officers and independent public accountants        (and  by  this  provision  the  Company  authorizes  said  accountants  to  discuss  the  affairs,        finances and accounts of the Company and its Subsidiaries), all at such times and as often        as may be requested.       Section 7.4.  Electronic  Delivery.   Financial  statements,  opinions  and  certifications  of  independent  certified  public  accountants,  other  information  and  Officer’s  Certificates  that  are  required to be delivered by the Company pursuant to Sections 7.1(a), (b) or (c) and Section 7.2  shall  be  deemed  to  have  been  delivered  if  the  Company  satisfies  any  of  the  following  requirements with respect thereto:               (a)  such financial statements satisfying the requirements of Section 7.1(a) or (b)        and related Officer’s Certificate satisfying the requirements of Section 7.2 and any other        information required under Section 7.1(c) are delivered to each Purchaser or holder of a        Note by e-mail at the e-mail address set forth in such Purchaser’s or holder’s Purchaser        Schedule  or  as  communicated  from  time  to  time  in  a  separate  writing  delivered  to  the        Company;              (b)  the  Company  shall  have  timely  filed  such  Form  10–Q  or  Form  10–K,        satisfying the requirements of Section 7.1(a) or Section 7.1(b), as the case may be, with        the SEC on EDGAR and shall have made such form and the related Officer’s Certificate        satisfying  the  requirements  of  Section  7.2  available  on  its  home  page  on  the  internet,        which is located at https://greenbrickpartners.com as of the date of this Agreement;     52410969                             -18- 

 

           (c)  such  financial  statements  satisfying  the  requirements  of  Section  7.1(a)  or        Section 7.1(b) and related Officer’s Certificate(s) satisfying the requirements of Section        7.2 and any other information required under Section 7.1(c) are timely posted by or on        behalf  of  the  Company  on  IntraLinks  or  on  any  other  similar  website  to  which  each        holder of Notes has free access; or               (d)  the Company shall have timely filed any of the items referred to in Section        7.1(c) with the SEC on EDGAR and shall have made such items available on its home        page on the internet or on IntraLinks or on any other similar website to which each holder        of Notes has free access;   provided however, that in no case shall access to such financial statements, other information and  Officer’s Certificates be conditioned upon any waiver or other agreement or consent (other than  confidentiality provisions consistent with Section 20 of this Agreement); provided further, that in  the case of any of clauses (b), (c) or (d), the Company shall have given each holder of a Note  prior written notice, which may be by e-mail or in accordance with Section 18, of such posting or  filing  in  connection  with  each  delivery, provided  further,  that  upon  request  of  any  holder  to  receive  paper  copies  of  such  forms,  financial  statements,  other  information  and  Officer’s  Certificates or to receive them by e-mail, the Company will promptly e-mail them or deliver such  paper copies, as the case may be, to such holder.   SECTION 8.       PAYMENT AND PREPAYMENT OF THE NOTES.       Section 8.1.  Maturity.  As provided therein, the entire unpaid principal balance of each  Note shall be due and payable on the Maturity Date thereof.       Section 8.2.  Optional Prepayments with Make-Whole Amount.  The Company may,  at its option, upon notice as provided below, prepay at any time all, or from time to time any part  of,  the  Notes,  in  an  amount  not  less  than  $1,000,000  (or  an  integral  multiple  of  $100,000  in  excess thereof) of the aggregate principal amount of the Notes then outstanding in the case of a  partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount  determined for the prepayment date with respect to such principal amount.  The Company will  give each holder of Notes written notice of each optional prepayment under this Section 8.2 not  less than 10 days and not more than 60 days prior to the date fixed for such prepayment unless  the  Company  and  the  Required  Holders  agree  to  another  time  period  pursuant  to  Section  17.   Each such notice shall specify such date (which shall be a Business Day), the aggregate principal  amount of the Notes to be prepaid on such date, the principal amount of each Note held by such  holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on  the  prepayment  date  with  respect  to  such  principal  amount  being  prepaid,  and  shall  be  accompanied  by  a  certificate  of  a  Senior  Financial  Officer  as  to  the  estimated  Make-Whole  Amount due in connection with such prepayment (calculated as if the date of such notice were  the date of the prepayment), setting forth the details of such computation.  Two Business Days  prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a  Senior  Financial  Officer  specifying  the  calculation  of  such  Make-Whole  Amount  as  of  the  specified prepayment date.    52410969                             -19- 

 

    Section 8.3.  Allocation of Partial Prepayments.  In the case of each partial prepayment  of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be  allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to  the respective unpaid principal amounts thereof not theretofore called for prepayment.       Section 8.4.  Maturity;  Surrender,  Etc.  In  the  case  of  each  prepayment  of  Notes  pursuant  to  this  Section  8,  the  principal  amount  of  each  Note  to  be  prepaid  shall  mature  and  become due and payable on the date fixed for such prepayment, together with interest on such  principal amount accrued to such date and the applicable Make-Whole Amount.  From and after  such date, unless the Company shall fail to pay such principal amount when so due and payable,  together with the interest and the applicable Make-Whole Amount, as aforesaid, interest on such  principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to  the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any  prepaid principal amount of any Note.       Section 8.5.  Purchase  of  Notes.   The  Company  will  not  and  will  not  permit  any  Affiliate  to  purchase,  redeem,  prepay  or  otherwise  acquire,  directly  or  indirectly,  any  of  the  outstanding Notes except upon the payment or prepayment of the Notes in accordance with this  Agreement and the Notes.  The Company will promptly cancel all Notes acquired by it or any  Affiliate pursuant to any payment or prepayment of Notes pursuant to this Agreement and no  Notes may be issued in substitution or exchange for any such Notes.       Section 8.6.  Make-Whole Amount.         The term “Make-Whole Amount” means, with respect to any Note, an amount equal to  the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect  to the Called Principal of such Note over the amount of such Called Principal, provided that the  Make-Whole Amount may in no event be less than zero.  For the purposes of determining the  Make-Whole  Amount,  the  following  terms  have  the  following  meanings:  “Called  Principal” means,  with  respect  to  any  Note,  the  principal  of  such  Note  that  is  to  be  prepaid  pursuant  to  Section 8.2  or  has  become  or  is  declared  to  be  immediately  due  and  payable  pursuant  to  Section 12.1, as the context requires.         “Discounted Value” means, with respect to the Called Principal of any Note, the amount  obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal  from  their  respective  scheduled  due  dates  to  the  Settlement  Date  with  respect  to  such  Called  Principal, in accordance with accepted financial practice and at a discount factor (applied on the  same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment  Yield with respect to such Called Principal.         “Reinvestment Yield” means, with respect to the Called Principal of any Note, the sum  of (a) 0.50% plus (b) the yield to maturity implied by the “Ask Yield(s)” reported as of 10:00  a.m.  (New  York  City  time)  on  the  second  Business  Day  preceding  the  Settlement  Date  with  respect to such Called Principal, on the display designated as “Page PX1” (or such other display  as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively  traded  on-the-run  U.S.  Treasury  securities  (“Reported”)  having  a  maturity  equal  to  the    52410969                             -20- 

 

Remaining Average  Life of such Called Principal as of such Settlement Date.  If there are no  such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life,  then  such  implied  yield  to  maturity  will  be  determined  by  (i) converting  U.S.  Treasury  bill  quotations  to  bond  equivalent  yields  in  accordance  with  accepted  financial  practice  and  (ii) interpolating  linearly  between  the  “Ask  Yields”  Reported  for  the  applicable  most  recently  issued actively traded on-the-run U.S. Treasury securities with the maturities (1) closest to and  greater  than  such  Remaining  Average  Life  and  (2) closest  to  and  less  than  such  Remaining  Average  Life.   The  Reinvestment  Yield  shall  be  rounded  to  the  number  of  decimal  places  as  appears in the interest rate of the applicable Note.           If  such  yields  are  not  Reported  or  the  yields  Reported  as  of  such  time  are  not  ascertainable  (including  by  way  of  interpolation),  then “Reinvestment  Yield”  means,  with  respect to the Called Principal of any Note, the sum of (x) 0.50% plus (y) the yield to maturity  implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such  yields have been so reported as of the second Business Day preceding the Settlement Date with  respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable  successor  publication)  for  the  U.S.  Treasury  constant  maturity  having  a  term  equal  to  the  Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such  U.S.  Treasury  constant  maturity  having  a  term  equal  to  such  Remaining  Average  Life,  such  implied  yield  to  maturity  will  be  determined  by  interpolating  linearly  between  (1)  the  U.S.  Treasury constant maturity so reported with the term closest to and greater than such Remaining  Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and  less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number  of decimal places as appears in the interest rate of the applicable Note.         “Remaining Average Life” means, with respect to any Called Principal, the number of  years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by  multiplying (a) the principal component of each Remaining Scheduled Payment with respect to  such  Called  Principal  by  (b) the  number  of  years,  computed  on  the  basis  of  a  360-day  year  comprised  of  twelve  30-day  months  and  calculated  to  two  decimal  places,  that  will  elapse  between the Settlement Date with respect to such Called Principal and the scheduled due date of  such Remaining Scheduled Payment.         “Remaining Scheduled Payments” means, with respect to the Called Principal of any  Note,  all  payments  of  such  Called  Principal  and  interest  thereon  that  would  be  due  after  the  Settlement  Date  with  respect  to  such  Called  Principal  if  no  payment  of  such  Called  Principal  were made prior to its scheduled due date, provided that if such Settlement Date is not a date on  which  interest  payments  are  due  to  be  made  under  the  Notes,  then  the  amount  of  the  next  succeeding scheduled interest payment will be reduced by the amount of interest accrued to such  Settlement  Date  and  required  to  be  paid  on  such  Settlement  Date  pursuant  to  Section 8.2  or  Section 12.1.         “Settlement Date” means, with respect to the Called Principal of any Note, the date on  which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared  to be immediately due and payable pursuant to Section 12.1, as the context requires.    52410969                             -21- 

 

    Section 8.7.  Payments Due on Non-Business Days.  Anything in this Agreement or the  Notes  to  the  contrary  notwithstanding,  (x)  except  as  set  forth  in  clause  (y),  any  payment  of  interest on any Note that is due on a date that is not a Business Day shall be made on the next  succeeding Business Day without including the additional days elapsed in the computation of the  interest payable on such next succeeding Business Day; and (y) any payment of principal of or  Make-Whole Amount on any Note (including principal due on the Maturity Date of such Note)  that is due on a date that is not a Business Day shall be made on the next succeeding Business  Day and shall include the additional days elapsed in the computation of interest payable on such  next succeeding Business Day.       Section 8.8.  Change of Control Prepayment Offer.       (a)  Notice  of  Change  of  Control  or  Control  Event.  The  Company  will,  within  10  Business Days after any Responsible Officer has knowledge of the occurrence of any Change of  Control or Control Event, give written notice of such Change of Control or Control Event to each  holder of Notes.  In the case that a Change of Control has occurred, such notice shall contain and  constitute an offer to prepay Notes as described in subparagraph (b) of this Section 8.8 and shall  be accompanied by the certificate described in subparagraph (e) of this Section 8.8.        (b)  Offer to Prepay Notes.  The offer to prepay Notes contemplated by subparagraph (a)  of this Section 8.8 shall be an offer to prepay, in accordance with and subject to this Section 8.8,  all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of  any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such  beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”) that is  not less than 10 Business Days and not more than 30 days  after the date of such offer (if the  Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date  shall be the 30th day after the date of such offer).        (c)  Acceptance;  Rejection.   A  holder  of  Notes  may  accept  the  offer  to  prepay  made  pursuant  to  this  Section 8.8  by  causing  a  notice  of  such  acceptance  to  be  delivered  to  the  Company at least five Business Days prior to the Proposed Prepayment Date. If the offer is so  accepted by any holder of Notes, the Company at least three Business Days prior to the Proposed  Prepayment Date shall give written notice to each holder of Notes that has not so accepted the  offer, in which notice the Company shall (i) state the aggregate outstanding principal amount of  Notes in respect of which the offer has been accepted and (ii) renew the offer and extend the time  for acceptance by stating that any holder of Notes may yet accept the offer, whether theretofore  rejected or not, by causing a notice of such acceptance to be delivered to the Company at least  five  Business  Days  prior  to  the  Proposed  Prepayment  Date,  in  which  case  the  Proposed  Prepayment Date shall be extended to the extent necessary to account for the renewed offer.  A  failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.8  shall be deemed to constitute a rejection of such offer by such holder.        (d)  Prepayment.   Prepayment  of  the  Notes  to  be  prepaid  pursuant  to  this  Section 8.8  shall  be  at  100%  of  the  principal  amount  of  such  Notes  at  par  (without  any  Make-Whole  Amount) together with interest accrued thereon to the prepayment date selected by the Company.   The prepayment shall be made on the Proposed Prepayment Date.    52410969                             -22- 

 

     (e)  Officer’s  Certificate.  Each  offer  to  prepay the  Notes  pursuant  to this  Section 8.8  shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company  and  dated  the  date  of  such  offer,  specifying:  (i) the  Proposed  Prepayment  Date;  (ii) that  such  offer is made pursuant to this Section 8.8; (iii) the principal amount of each Note offered to be  prepaid; (iv) the interest that would be due on each Note offered to be prepaid, accrued to the  Proposed Prepayment Date; and (v) in reasonable detail, the nature and  date of the Change of  Control or Control Event.   Section 9.  Affirmative Covenants.         From the date of this Agreement until the Closing and thereafter, so long as any of the  Notes are outstanding, the Company covenants that:       Section 9.1.  Compliance  with  Laws.   Without  limiting  Section 10.11,  the  Company  will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental  rules or regulations to which each of them is subject (including ERISA, Environmental Laws, the  USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16) and  will  obtain  and  maintain  in  effect  all  licenses,  certificates,  permits,  franchises  and  other  governmental authorizations necessary to the ownership of their respective properties or to the  conduct of their respective businesses, in each case to the extent necessary to ensure that non- compliance with such laws, ordinances or governmental rules or regulations or failures to obtain  or  maintain  in  effect  such  licenses,  certificates,  permits,  franchises  and  other  governmental  authorizations  could  not,  individually  or  in  the  aggregate,  reasonably  be  expected  to  have  a  Material Adverse Effect.       Section 9.2.  Insurance.  The Company will, and will cause each of its Subsidiaries to,  maintain, with insurers with an AM Best rating of not less than A XIII, (a) insurance with respect  to their respective properties and businesses against such casualties and contingencies, of such  types,  on  such  terms  and  in  such  amounts  (including  deductibles,  co-insurance  and  self- insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of  entities  of  established  reputations  engaged  in  the  same  or  a  similar  business  and  similarly  situated, (b) adequate public liability insurance against tort claims that may be incurred by any  Note Party, and (c) such other insurance as may be required by law, except, in the case of clauses  (b) and (c), where the failure to do so could not reasonably be expected to result in a Material  Adverse Effect.       Section 9.3.  Maintenance of Properties.  The Company will, and will cause each of its  Subsidiaries  to,  maintain  and  keep,  or  cause  to  be  maintained  and  kept,  their  respective  properties in good repair, working order and condition (other than ordinary wear and tear), so  that  the  business  carried  on  in  connection  therewith  may  be  properly  conducted  at  all  times,  provided  that  this  Section  9.3  shall  not  prevent  the  Company  or  any  Subsidiary  from  discontinuing the operation and the maintenance of any of its properties if such discontinuance is  desirable in the conduct of its business and the Company has concluded that such discontinuance  could not, individually or in the aggregate, reasonably be expected to have a Material Adverse  Effect.    52410969                             -23- 

 

    Section 9.4.  Payment of Taxes and Claims.  The Company will, and will cause each of  its  Subsidiaries  to,  file  all  tax  returns  required  to  be  filed  in  any  jurisdiction  and  to  pay  and  discharge all taxes shown to be due and payable on such returns and all other taxes, assessments,  governmental charges, or levies imposed on them or any of their properties, assets, income or  franchises, to the extent the same have become due and payable and before they have become  delinquent  and  all  claims  for  which  sums  have  become  due  and  payable  that  have  or  might  become a Lien on properties or assets of the Company or any Subsidiary, provided that neither  the Company  nor  any  Subsidiary  need pay  any  such  tax,  assessment,  charge, levy or claim if  (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary  on a timely basis in good faith and in appropriate proceedings, and the Company or Subsidiary  has established appropriate reserves with respect thereto in accordance with GAAP on the books  of the Company or applicable Subsidiary or (ii) the nonpayment of all such taxes, assessments,  charges, levies and claims could not, individually or in the aggregate, reasonably be expected to  have a Material Adverse Effect.        Section 9.5.  Corporate Existence, Etc.  Subject to Section 10.4, the Company will at  all times preserve and keep its corporate existence in full force and effect.  Subject to Section  10.4, the Company will at all times preserve and keep in full force and effect the organizational  existence  of  each  of  its  Subsidiaries  (unless  merged  into  the  Company  or  a  Wholly-Owned  Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good  faith judgment of the Company, the termination of or failure to preserve and keep in full force  and effect such corporate existence, right or franchise could not, individually or in the aggregate,  have a Material Adverse Effect.        Section 9.6.  Books  and  Records.   The  Company  will,  and  will  cause  each  of  its  Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all  applicable requirements of any Governmental Authority having legal or regulatory jurisdiction  over the Company or such Subsidiary, as the case may be.  The Company will, and will cause  each  of  its  Subsidiaries  to,  keep  books,  records  and  accounts  which,  in  reasonable  detail,  accurately reflect all transactions and dispositions of assets.  The Company and its Subsidiaries  have devised a system of internal accounting controls sufficient to provide reasonable assurances  that  their  respective  books,  records,  and  accounts  accurately  reflect  all  transactions  and  dispositions of assets and the Company will, and will cause each of its Subsidiaries to, continue  to maintain such system.       Section 9.7.  Subsidiary  Guarantors.   (a)  The  Company  will  cause  (x)  each  Significant Subsidiary (unless federal or state regulatory requirements prohibit such Significant  Subsidiary from becoming a Subsidiary Guarantor), concurrently with or prior to the delivery of  the  financial  statements  set  forth  in  Section  7.1(a)  or  (b)  under  which  such  Subsidiary  is  identified pursuant to Section 7.2(c) as a Significant Subsidiary, and (y) each other Subsidiary  that guarantees or otherwise becomes liable at any time, whether as a borrower or an additional  or  co-borrower  or  otherwise,  for  or  in  respect  of  any  Indebtedness  under  any  Material  Credit  Facility to concurrently therewith:       (i)   enter into an agreement in form and substance satisfactory to the Required Holders  providing for the guaranty by such Subsidiary, on a joint and several basis with all other such    52410969                             -24- 

 

Subsidiaries, of (x) the prompt payment in full when due of all amounts payable by the Company  pursuant to the Notes  (whether  for principal, interest, Make-Whole Amount or otherwise) and  this Agreement, including all indemnities, fees and expenses payable by the Company thereunder  and (y) the prompt, full and faithful performance, observance and discharge by the Company of  each and every covenant, agreement, undertaking and provision required pursuant to the Notes or  this Agreement to be performed, observed or discharged by it (a “Subsidiary Guaranty”); and        (ii)   deliver the following to each holder of a Note:             (A)     an executed counterpart of such Subsidiary Guaranty;             (B)     a certificate signed by an authorized responsible officer of such Subsidiary            containing representations and warranties on behalf of such Subsidiary to the same            effect, mutatis mutandis, as those contained in Sections 5.1, 5.2, 5.6, 5.7, 5.16, 5.17            and  5.18  of  this  Agreement  (but  with  respect  to  such  Subsidiary  and  such            Subsidiary Guaranty rather than the Company);             (C)     all documents as may be reasonably requested by the Required Holders to            evidence  the  due  organization,  continuing  existence  and,  where  applicable,  good            standing of such Subsidiary and the due authorization by all requisite action on the            part of such Subsidiary of the execution and delivery of such Subsidiary Guaranty            and the performance by such Subsidiary of its obligations thereunder; and             (D)     an  opinion  of  counsel  reasonably  satisfactory  to  the  Required  Holders            covering such matters relating to such Subsidiary and such Subsidiary Guaranty as            the Required Holders may reasonably request.         (b)   At the election of the Company and by written notice to each holder of Notes, any  Subsidiary Guarantor that has provided a Subsidiary Guaranty under clause (x) of subparagraph  (a)  of  this  Section  9.7 may  be  discharged  from  all  of  its  obligations  and  liabilities  under  its  Subsidiary Guaranty and shall be automatically released from its obligations thereunder without  the need for the execution or delivery of any other document by the holders; provided, that (i)  such  Subsidiary  Guarantor  is  not  an  Unencumbered  Assets  Subsidiary  and  the  Company  provides  each  holder  a  certificate  of  a  Senior  Financial  Officer  certifying  compliance  with  Section  10.1(e)  and  (f)  on  a  pro  forma  basis  after  giving  effect  to  such  release  and  all  other  releases of Subsidiary Guarantors pursuant to this clause (b) and Section 9.7(c) since the delivery  of  the  most  recent  financial  statements  pursuant  to  Section  7.1(a)  or  (b),  (ii)  such  Subsidiary  Guarantor  has  ceased  to  be  a  Subsidiary  pursuant  to  a  transaction  permitted  pursuant  to  this  Agreement, (iii) at the time of, and after giving effect to, such release and discharge, no Default  or  Event  of  Default  shall  be  existing,  (iv)  no  amount  is  then  due  and  payable  under  such  Subsidiary  Guaranty,  and  (v)  each  holder  shall  have  received  a  certificate  of  a  Responsible  Officer certifying as to the matters set forth in clauses (i) through (iv).            (c)   At the election of the Company and by written notice to each holder of Notes, any  Subsidiary Guarantor that has provided a Subsidiary Guaranty under clause (y) of subparagraph  (a)  of  this  Section  9.7 may  be  discharged  from  all  of  its  obligations  and  liabilities  under  its    52410969                             -25- 

 

Subsidiary Guaranty and shall be automatically released from its obligations thereunder without  the need for the execution or delivery of any other document by the holders, provided that (i)  such  Subsidiary  Guarantor  is  not  an  Unencumbered  Assets  Subsidiary  and  the  Company  provides  each  holder  a  certificate  of  a  Senior  Financial  Officer  certifying  compliance  with  Section  10.1(e)  and  (f)  on  a  pro  forma  basis  after  giving  effect  to  such  release  and  all  other  releases of Subsidiary Guarantors pursuant to this clause (c) and Section 9.7(b) since the delivery  of the most recent financial statements pursuant to Section 7.1(a) or (b), (ii) if such Subsidiary  Guarantor is a guarantor or is otherwise liable for or in respect of any Material Credit Facility,  then  such  Subsidiary  Guarantor  has  been  released  and  discharged  (or  will  be  released  and  discharged  concurrently  with  the  release  of  such  Subsidiary  Guarantor  under  its  Subsidiary  Guaranty) under such Material Credit Facility, (iii) at the time of, and after giving effect to, such  release and discharge, no Default or Event of Default shall be existing, (iv) no amount is then  due  and  payable  under  such  Subsidiary  Guaranty,  (v)  if  in  connection  with  such  Subsidiary  Guarantor  being  released  and  discharged  under  any  Material  Credit  Facility,  any  fee  or  other  form of consideration is given to any holder of Indebtedness under such Material Credit Facility  for  such  release,  the  holders  of  the  Notes  shall  receive  equivalent  consideration  substantially  concurrently  therewith  and  (vi)  each  holder  shall  have  received  a  certificate  of  a  Responsible  Officer certifying as to the matters set forth in clauses (i) through (v).  In the event of any such  release,  for  purposes  of  Section 10.3,  all  Indebtedness  of  such  Subsidiary  shall  be  deemed  to  have been incurred concurrently with such release.       Section 9.8.  Use of Proceeds.  The Company will use the proceeds of the Notes for the  purposes described in the first sentence of Section 5.14.        Section 9.9.  Information  Required  by  Rule  144A.   The  Company  will,  upon  the  request of any holder, provide such holder, and any Qualified Institutional Buyer designated by  such holder, such financial and other information as such holder may reasonably determine to be  necessary in order to permit compliance with the information requirements of Rule 144A under  the Securities Act in connection with the resale of Notes, except at such times as the Company is  subject to the reporting requirements of section 13 or 15(d) of the Exchange Act.       Section 9.10.  Covenant  to  Secure  Notes  Equally.   The  Company  will,  if  it  or  any  Subsidiary  shall  create  or  assume  any  Lien  upon  any  of  its  property  or  assets  to  secure  any  Material Credit Facility (other than the Senior Secured Credit Facility), whether now owned or  hereafter acquired, make or cause to be made effective provision whereby the Notes and each  Subsidiary  Guaranty  will  be  secured  by  such  Lien  equally  and  ratably  with  any  and  all  other  Indebtedness  thereby  secured  so  long  as  any  such  other  Indebtedness  is  so  secured.   Notwithstanding  the  foregoing,  neither  the  Company  nor  any  Subsidiary  may  grant,  suffer  to  exist or permit any Lien on any of its rights, properties or assets unless such Lien is permitted  pursuant to Section 10.2.       Section 9.11.  Notes  and  Subsidiary Guaranties  to  Rank  Pari  Passu.   The  Notes  and  the  Subsidiary  Guaranties  and  all  other  obligations  hereunder  or  thereunder  are  and  will  be  maintained  at  all  times  as  direct  obligations  of  the  Company  and  the  Subsidiary  Guarantors,  ranking at least pari passu in right of payment with each Material Credit Facility and at least pari  passu in right of security (other than with respect to the Senior Secured Credit Facility to the    52410969                             -26- 

 

extent  the  Liens  securing  the  Senior  Secured  Credit  Facility  constitute  Permitted  Liens)  with  each Material Credit Facility.   If the Company fails to comply with any provision of this Section 9 on or after the date of this  Agreement and prior to the Closing, then, among other things, any of the Purchasers may elect  not to purchase the Notes on the date of the Closing.   SECTION 10.   NEGATIVE COVENANTS.         From the date of this Agreement until the Closing and thereafter, so long as any of the  Notes are outstanding, the Company covenants that:      Section 10.1.  Financial Covenants.                (a)  Maximum Debt to Net Worth Ratio.  The Company shall not permit, as of  the last day of each fiscal quarter of the Company, commencing with the fiscal quarter ending  September 30, 2020, the Debt to Net Worth Ratio to exceed 1.00:1.00.              (b)  Minimum Interest Coverage Ratio.  The Company shall maintain, as of the  last  day  of  each  fiscal  quarter  of  the  Company,  commencing  with  the  fiscal  quarter  ending  September 30, 2020, an Interest Coverage Ratio greater than 2.00:1.00.  The Company shall not,  and  shall  not  permit,  the  financial  covenant  contained  in  Section  6.01(b)  (or  any  successor  Section) of the Senior Unsecured Credit Facility and/or the defined terms referenced therein to  be amended or otherwise modified in  any manner that is different than the financial covenant  contained in this Section 10.1(b) and the defined terms referenced herein without providing the  holders  with  at  least  20  Business  Days  prior  written  notice  of  the  Company’s  proposed  amendments  or modifications  to  such  financial  covenant and/or  definitions.   Unless  otherwise  notified in writing by the Required Holders, upon the effectiveness of any such amendment or  modification,  this  Section  10.1(b)  and  the  related  definitions  shall  be  deemed  automatically  amended to include such amendment or modification without any further action on the part of  the  Company  or  any  of  the  holders; provided,  that  in  no  event  shall  such  an  amendment  be  deemed  automatically  incorporated  into  this  Agreement  if  the  effect  (including  pursuant  to  changes to defined terms) is to permit the Company to maintain an Interest Coverage Ratio of  less than 1.50:1.00.               (c)  Minimum Consolidated Tangible Net Worth.  The Company shall maintain,  as  of  the  last  day  of  each  fiscal  quarter  of  the  Company,  commencing  with  the  fiscal  quarter  ending September 30, 2020, Consolidated Tangible Net Worth of at least (i) $320,000,000 plus (ii) the sum of (A) 50% of the cumulative Consolidated Net Income, if positive, of the Company  and  its  Subsidiaries  from  and  after  October  1,  2018,  plus  (B)  50%  of  the  net  cash  proceeds  received by the Company from any equity offerings of the Company completed after October 1,  2018.              (d)  Maximum Debt to Capital Percentage. The Company  shall not permit the  incurrence  of  any  Indebtedness  constituting  Consolidated  Debt  of  the  Company  or  any    52410969                             -27- 

 

Subsidiary if, at the time of such incurrence, after giving pro forma effect to such Indebtedness,  the Debt to Capital Percentage would exceed 40%.               (e)  Minimum  Unencumbered  Assets  Ratio.  The  Company  shall  not  permit  at  any time the Unencumbered Assets Ratio to be less than 1.50:1.00.               (f)  Minimum Note Party Unencumbered Assets Ratio. The Company shall not  permit at any time the Note Party Unencumbered Assets Ratio to be less than 1.10:1.00.       Section 10.2.  Liens.  The Company will not, nor will it permit any of its Subsidiaries to,  grant  or  suffer  or  permit  to  exist  any  Liens,  other  than  Permitted  Liens,  on  any  of  its  rights,  properties or assets.      Section 10.3.  Subsidiary  Indebtedness.   The  Company  will  not  permit  any  Subsidiary  (other  than  a  Subsidiary  that  is  a  Note  Party)  to  create,  incur,  assume  or  permit  to  exist  any  Indebtedness, except:              (a)  Indebtedness  under  the  Senior  Secured  Credit  Facility  in  an  aggregate  principal amount not to exceed $75,000,000;              (b)  Indebtedness existing on the date hereof and set forth on Schedule 10.3, and  any  extensions,  renewals  and  refinancings  of  any  such  Indebtedness  that  do  not  increase  the  outstanding principal amount thereof except by an amount no greater than accrued and unpaid  interest  with  respect  to  such  Indebtedness  and  any  reasonable  fees,  premium  and  expenses  relating to such extension, renewal or refinancing;              (c)  Indebtedness  owed  to  the  Company  or  any  Subsidiary; provided  that  (i)  such  Indebtedness  shall  not  have  been  transferred  or  assigned  to  any  Person  other  than  the  Company  or  any  Subsidiary  and  (ii)  if  such  Indebtedness  is  owed  from  a  Note  Party  to  a  Subsidiary that is not a Note Party, such Indebtedness shall be Subordinated Debt;              (d)  guarantees by any Subsidiary of Indebtedness of the Company or any other  Subsidiary; provided, that in the case of any such guarantee of Indebtedness of the Company or  any Note Party, such Subsidiary shall have become a Note Party hereunder;              (e)  Indebtedness of any Person existing at the time such Person becomes a Note  Party or Subsidiary or is merged with or into the Company or any of its Subsidiaries, provided  that  such  Indebtedness  was  in  existence  prior  to  the  date  of  such  acquisition,  merger  or  consolidation,  and  was  not  incurred  in  anticipation  thereof,  and  any  extensions,  renewals  and  refinancings thereof that do not increase the outstanding principal amount thereof except by an  amount  no  greater  than  accrued  and  unpaid  interest  with  respect  to  such  obligations  and  any  reasonable  fees,  premium  and  expenses  relating  to  such  extension,  renewal  or  refinancing; provided, that the aggregate principal amount of outstanding Indebtedness incurred pursuant to  this Section 10.3(e), together with the aggregate principal amount of outstanding  Indebtedness  incurred pursuant to Section 10.3(i), shall not at any time exceed $35,000,000.    52410969                             -28- 

 

            (f)  Non-Recourse Indebtedness which does not exceed fifty percent (50%) of  the fair market value of the Real Estate Inventory which secures such Indebtedness; provided,  that the aggregate principal amount of outstanding Non-Recourse Indebtedness incurred pursuant  to this Section 10.3(f), shall not at any time exceed fifteen percent (15%) of Stockholders Equity  (as set forth on the financial statements most recently delivered pursuant to Section 7.1(a) or (b));              (g)  Swap  Obligations  arising  in  the  ordinary  course  of  business  and  not  for  speculative purposes;              (h)  Capitalized Lease Obligations incurred in the ordinary course of business;  and               (i)  Indebtedness  of  a  Subsidiary,  if  (i)  the  Subsidiary  (x)  was  acquired  or  became  a  Subsidiary  after  December  15,  2015  or  (y)  was  formed  December  15,  2015  for  the  purpose  of  acquiring  assets  and  (ii)  the  proceeds  of  such  Indebtedness  are  used  by  such  Subsidiary to finance the construction of Real Estate Inventory; provided, that (A) the aggregate  principal  amount  of  Indebtedness  incurred  by  any  such  Subsidiary  pursuant  to  this  Section  10.3(i) shall not exceed the Consolidated Tangible Net Worth of such Subsidiary at the time of  incurrence  of  such  Indebtedness  and  (B)  the  aggregate  principal  amount  of  outstanding  Indebtedness  incurred  pursuant  to  this  Section  10.3(i),  together  with  the  aggregate  principal  amount of outstanding Indebtedness incurred pursuant to Section 10.3(e), shall not at any time  exceed $35,000,000.      Section 10.4.  Limitation  on  Fundamental  Changes;  Asset  Sales.   (a)  The  Company  will not, nor will it permit any of its Subsidiaries to, do any of the following:               (i)  sell, assign, lease or otherwise dispose of (whether in one transaction or in a  series of transactions) all or any portion of the assets (whether now owned or hereafter acquired)  of the Company and the Subsidiaries except for (A) the sale of inventory in the ordinary course  of business and (B) any other disposition, sale, or assignment of property; provided, that (I) no  Default  or  Event  of Default exists  at the  time of such  disposition, sale  or assignment, (II) the  Company  or  the  applicable  Subsidiary  receives  fair  market  value  for  such  disposition,  sale  or  assignment and (III) the fair market value of all such dispositions, sales or transfers pursuant to  this clause (B) in any fiscal quarter does not exceed 15% of Consolidated Tangible Net Worth  (determined as of the last day of the most recent fiscal quarter for which financial statements are  available);              (ii)  merge into or consolidate with any other Person or permit any other Person  to merge into or consolidate with it, except, to the extent no Default or Event of Default then  exists, (A) any Person may merge with the Company; provided, that the Company shall be the  continuing or surviving person and (B) any Person (other than the Company) may merge with a  Subsidiary; provided, that such Subsidiary shall be the continuing or surviving Person, and if a  Note Party is involved in the transaction, a Note Party is the continuing or surviving Person, or  the continuing or surviving Person becomes a Subsidiary and, if a Note Party is involved in the  transaction,  a  Note  Party,  upon  such  merger  hereunder,  and,  in  each  case,  the  transaction  represents an acquisition permitted under Section 10.4(b);    52410969                             -29- 

 

           (iii)  dissolve, liquidate or wind up its business by operation of law or otherwise;               (iv)  distribute  to  the  stockholders  of  the  Company  any  Capital  Stock  of  any  Subsidiary that is a Subsidiary Guarantor; or              (v)  consummate a Division as the Dividing Person;    provided, however, that, to the extent no Default or Event of Default then exists, any Subsidiary  or  any  other  Person  may  merge  into  or  consolidate  with,  may  consummate  a  Division  as  the  Dividing Person or may dissolve and liquidate into a Note Party and any Subsidiary that is not a  Note  Party  may  merge  into  or  consolidate  with,  may  consummate  a  Division  as  the  Dividing  Person or may dissolve and liquidate into another Subsidiary that is not a Note Party, if (and only  if), (1) in the case of a merger or consolidation involving a Note Party other than the Company,  the surviving Person is, or upon such merger or consolidation becomes, a Note Party, (2) in the  case of a merger or consolidation involving the Company, the Company is the surviving Person,  (3)  if  any  Subsidiary  that  is  an  LLC  consummates  a  Division  as  the  Dividing  Person,  immediately  upon  the  consummation  of  the  Division,  the  assets  of  the  applicable  Dividing  Person are held by one or more Subsidiaries at such time or, with respect to assets not so held by  one or more Subsidiaries, such Division, in the aggregate, would otherwise result in a disposition  permitted by Section 10.4(a)(i); provided, that notwithstanding anything to the contrary in this  Agreement, any Subsidiary which is a Division Successor resulting from a Division of assets of a  Significant Subsidiary may not be deemed to cease to be a Significant Subsidiary at the time of  or in connection with the applicable Division, (4) the character of the business of the Company  and the Subsidiaries on a consolidated basis will not be materially changed by such occurrence,  and (5) such occurrence shall not constitute or give rise to (a) an Event of Default or (b) default  (beyond all applicable grace and cure periods) in respect of any of the covenants contained in  any agreement to which the Company or any such Subsidiary is a party or by which its property  may be bound if such default would have a Material Adverse Effect.              (b)  The Company will not, nor will it permit any of its Subsidiaries to, acquire  another  Person  unless  (i)  the  primary  business  of  such  Person  is  engaging  in  homebuilding,  multi-family, land acquisition or land development businesses and businesses that are reasonably  related thereto or reasonable extensions thereof, (ii) the majority of shareholders (or other equity  interest holders), the board of directors or other governing body of such Person approves such  acquisition and (iii) no Default or Event of Default exists or would result from such acquisition.      Section 10.5.  Permitted  Investments.   The  Company  will  not,  nor  will  it  permit  any  Subsidiary to, make any Investment or otherwise acquire any interest in any Person, except:              (a)  Investments in or loans or advances to (i) the Company, (ii) in any wholly  owned Subsidiary Guarantor, and (iii) so long as no Default or Event of Default exists or would  result  therefrom,  any  Subsidiary  (or,  unless  prohibited  by  Section  10.4(b),  an  entity  that  will  become a Subsidiary as a result of such Investment);              (b)  Investments in Cash Equivalents and Permitted Investments;    52410969                             -30- 

 

           (c)  receivables owing to the Company or any Subsidiary if created or acquired  in the ordinary course of business;              (d)  lease, utility and other similar deposits in the ordinary course of business;              (e)  Investments  made  by  the  Company  for  consideration  consisting  only  of  Capital Stock of the Company;               (f)  guarantees of performance obligations in the ordinary course of business;              (g)  Investments  outstanding  on  the  date  of  Closing,  as  set  forth  on  Schedule  10.5;              (h)  Investments permitted by Section 10.4(b);               (i)  Investments  in  mortgages,  receivables,  other  securities  or  ownership  interests,  loans  or  advances  made  in  connection  with  a  strategy  to  acquire  land  or  other  homebuilding assets through foreclosure or other exercise of remedies;                   (j)     Investments  in  securities  of  trade creditors  or  customers  received  pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency  of such trade creditors or customers;              (k)  Investments  or  securities  received  in  settlement  of  debts  owing  to  the  Company or any Subsidiary in the ordinary course of business;               (l)  loans to employees, agents, customers or suppliers in the ordinary course of  business not to exceed $5,000,000 in the aggregate at any time outstanding;               (m)  so long as no Default or Event of Default exists or would result therefrom,  Investments, other than those permitted by subsections (a) through (l) above, in Persons that are  in  the  business  of  homebuilding,  multi-family,  land  acquisition,  land  development,  mortgage  origination,  mortgage  banking,  loan  servicing,  providing  title,  or  in  businesses  that  are  reasonably related thereto or reasonable extensions thereof not to exceed in the aggregate amount  outstanding 15% of Consolidated Tangible Net Worth at any time; and              (n)  so long as no Default or Event of Default exists or would result therefrom,  other Investments in the aggregate amount not to exceed $20,000,000 at any time outstanding.       Section 10.6.  Burdensome  Agreements.   The  Company  will  not  enter  into  any  Contractual Obligation that limits the ability (a) of any Subsidiary to make Restricted Payments  to the Company or any Subsidiary Guarantor or to otherwise transfer property to the Company or  any Subsidiary Guarantor, (b) of any Subsidiary to guarantee the Indebtedness of the Company  or  (c)  of  the  Company  or  any  Subsidiary  to  create,  incur,  assume  or  suffer  to  exist  Liens  on  property of such Person to secure its obligations under the Note Documents to which it is a party;  provided, however, that the foregoing shall not apply to (i) restrictions imposed by law or this    52410969                             -31- 

 

Agreement, (ii) customary restrictions and conditions contained in agreements relating to a sale  of  a  Subsidiary  or  all  or  substantially  all  of  its  assets  pending  such  sale,  provided  such  restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted  hereunder, (iii) customary provisions in leases, partnership agreements, limited liability company  organizational  governance  documents,  joint  venture  agreements  and  other  similar  agreements  entered  into  in  the  ordinary  course  of  business  that  restrict  the  transfer  or  encumbrance  of  leasehold  interests  or  ownership  interests  in  such  partnership,  limited  liability  company,  joint  venture  or  similar  Person,  (iv)  with  respect  to  clause  (c),  customary  provisions  in  leases  restricting  the  assignment  thereof,  (v)  customary  restrictions  contained  in  the  definitive  documents  for  secured  Indebtedness  permitted  pursuant  to  this  Agreement  so  long  as  such  restrictions apply only to the Subsidiaries that are party to such agreement and the assets that are  collateral  for  such  Indebtedness  and  (vi)  customary  restrictions  contained  in  the  definitive  documents for Indebtedness permitted pursuant to this Agreement so long as such restrictions are  not more restrictive than those contained in the Note Documents.      Section 10.7.  Prepayment of Indebtedness.  If a Default has occurred and is continuing  or an acceleration of the indebtedness under this Agreement has occurred, the Company will not  voluntarily  prepay,  or  permit  any  Subsidiary  Guarantor  voluntarily  to  prepay,  the  principal  amount, in whole or in part, of any Indebtedness other than (a) indebtedness owed to each holder  hereunder,  (b)  Indebtedness  that  ranks  pari  passu  with  the  indebtedness  incurred  under  this  Agreement which is or becomes due and owing whether by reason of acceleration or otherwise  and  (c)  Indebtedness  that  is  exchanged  for,  or  converted  into,  Capital  Stock  (or  securities  to  acquire Capital Stock) of any Note Party.      Section 10.8.  Transactions  with  Affiliates.   The  Company  will  not  enter  into  any  transaction (including, without limitation, the purchase or sale of any property or service) with,  or  make  any  payment  or  transfer  to,  any  Affiliate  (or  permit  any  Subsidiary  to  do  any  of  the  foregoing),  except  (a)  in  the  ordinary  course  of  business  and  upon  fair  and  reasonable  terms  which  in  the  aggregate,  are  no  less  favorable   to  the  Company,  such  Note  Party  or  such  Subsidiary than the Company, such Note Party or such Subsidiary would obtain in a comparable  arms’-length  transaction,  (b)  transactions  between  or  among  the  Note  Parties  or  between  or  among  the  Note  Parties  and  Wholly-Owned  Subsidiaries  of  such  Note  Parties,  (c)  salary,  bonuses,  equity  compensation  and  other  compensation  arrangements  and  indemnification  arrangements with directors or executive officers consistent with past practices or as approved by  the Company’s Compensation Committee or Board of Directors, (d) Investments permitted under  Section 10.5, and (e) Restricted Payments permitted under Section 10.9.      Section 10.9.  Restricted  Payments.   The  Company  will  not,  nor  will  it  permit  any  Subsidiary to, declare or make, or agree to declare or make, directly or indirectly, any Restricted  Payment,  or  incur  any  obligation  (contingent  or  otherwise)  to  do  so; provided,  that  (a)  any  Subsidiary  may  declare  and  make  Restricted  Payments  ratably  to  its  equity  holders,  (b)  the  Company or any Subsidiary may make Restricted Payments to any holder of its Capital Stock in  the form of additional  shares  of  Capital Stock  of the  same class and  (c) the Company  or  any  Subsidiary may make other Restricted Payments so long as (i) no Default or Event of Default  shall have occurred and be continuing or would result therefrom and (ii) the Debt to Net Worth    52410969                             -32- 

 

Ratio,  both  before  and  after  giving  effect  to  such  Restricted  Payment,  would  not  exceed  0.75:1.00.     Section 10.10.  Line  of  Business.   The  Company  will  not  and  will  not  permit  any  Subsidiary to engage in any business if, as a result, the general nature of the business in which  the  Company  and  its  Subsidiaries,  taken  as  a  whole,  would  then  be  engaged  would  be  substantially  changed  from  the  general  nature  of  the  business  in  which  the  Company  and  its  Subsidiaries, taken as a whole, are engaged on the date of this Agreement as described in the  Recent Filings.     Section 10.11.  Economic Sanctions, Etc.  The Company will not, and will not permit any  Controlled Entity to (a) become (including by virtue of being owned or controlled by a Blocked  Person), own or control a Blocked Person or (b) directly or indirectly have any investment in or  engage in any dealing or transaction (including any investment, dealing or transaction involving  the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would  cause  any  holder  or  any  affiliate  of  such  holder  to  be  in  violation  of,  or  subject  to  sanctions  under, any law or regulation applicable to such Purchaser or holder, or (ii) is prohibited by or  subject to sanctions under any U.S. Economic Sanctions Laws.         Section 10.12. Most Favored Lender.  The Company will not, and will not permit any  Subsidiary  to,  enter  into,  assume  or  otherwise  be  bound  or  obligated  (including,  without  limitation,  by  amendment  or  modification)  under  any  Material  Credit  Facility,  or  under  any  agreement  creating  or  evidencing  Indebtedness  in  excess  of  $15,000,000  (the  Material  Credit  Facilities  and  any  such  other  agreement  each  being  an  “MFL  Agreement”),  in  either  case  containing one or more Additional Covenants (other than those in the Principal Credit Facilities  on the date hereof) or Additional Defaults (other than those in the Principal Credit Facilities on  the date hereof), unless prior written consent to such MFL Agreement shall have been obtained  pursuant to Section 17.1; provided, that in the event the Company or any Subsidiary shall enter  into,  assume  or  otherwise  become  bound  by  or  obligated  under  any  such  MFL  Agreement  without  the  prior  written  consent  of  the  Required  Holders,  the  terms  of  this  Agreement  shall,  without any further action on the part of the Company or any of the holders of Notes, be deemed  to be amended automatically to include each Additional Covenant and each Additional Default  contained in such MFL Agreement.  The Company further covenants to promptly execute and  deliver at its expense (including the fees and expenses of counsel for the holders of Notes) an  amendment  to  this  Agreement  in  form  and  substance  satisfactory  to  the  Required  Holders  evidencing  the  amendment  of  this  Agreement  to  include  such  Additional  Covenants  and  Additional Defaults, provided that the execution and delivery of such amendment shall not be a  precondition to the effectiveness of such amendment as provided for in this Section 10.12, but  shall merely be for the convenience of the parties hereto.         Section 10.13. Amendments  to  Organizational  Documents.   The  Company  will  not,  and  will  not  permit  any  Subsidiary  to,  (x)  amend,  modify  or  otherwise  change  any  of  its  Organizational Documents, except (a) if the Organizational Documents, as so amended, modified  or otherwise changed, are consistent in form and substance with past practices of the Company  and its Subsidiaries and with Organizational Documents of other Subsidiaries as of the date of  this Agreement, (b) in connection with a transaction permitted under Section 10.4 or (c) if such    52410969                             -33- 

 

amendment,  modification  or  other  change  is  not  Materially  adverse  to  the  interests  of  the  Purchasers and holders, or (y) change the general nature of the secured intercompany loans used  on the date of this Agreement to fund Carried Interest Subsidiaries (it being understood that this  clause  shall  not  prohibit  the  conversion  of  Carried  Interest  Subsidiaries  to  Side-by-Side  Subsidiaries).    If  the  Company  fails  to  comply  with  any  provisions  of  this  Section  10  before  or  after  giving  effect to the issuance of the Notes on a pro forma basis, then, among other things, any of the  Purchasers may elect not to purchase the Notes on the date of the Closing.   SECTION 11.   EVENTS OF DEFAULT.         An “Event of Default” shall exist if any of the following conditions or events shall occur  and be continuing:               (a)  the  Company  defaults  in  the  payment  of  any  principal  or  the  applicable        Make-Whole Amount on any Note when the same becomes due and payable, whether at        maturity or at a date fixed for prepayment or by declaration or otherwise; or               (b)  any Note Party defaults in the payment of any interest or other amount due        under any Note Document for more than five Business Days after the same becomes due        and payable; or               (c)  the Company defaults in the performance of or compliance with any term        contained in Sections 7.1(d), 7.1(h) 7.3(b), 9.5, 9.6, 9.8, 9.10, 9.11 or Section 10; or               (d)  any  Note  Party  defaults  in  the  performance  of  or  compliance  with any        term contained in any Note Document (other than those referred to in Sections 11(a), (b)        and  (c))  and  such  default  is  not  remedied  within  30  days  after  the  earlier  of  (i) a        Responsible  Officer  obtaining  actual  knowledge  of  such  default  and  (ii) the  Company        receiving  written  notice  of  such  default  from  any  holder  of  a  Note  (any  such  written        notice  to  be  identified  as  a  “notice  of  default”  and  to  refer  specifically  to  this        Section 11(d)); or               (e)  any  representation  or  warranty  made  in  writing  by  or  on  behalf  of  any        Note  Party  or  by  any  officer  of  any  Note  Party  in  any  Note  Document  or  any  writing        furnished in connection with the transactions contemplated hereby proves to have been        false or incorrect in any material respect on the date as of which made; or                (f)  (i) the Company, any other Note Party, any other Significant Subsidiary or        any other Unencumbered Assets Subsidiary is in default (as principal or as guarantor or        other surety) in the payment of any principal of or premium or make-whole amount or        interest on any Indebtedness (other than Non-Recourse Indebtedness) that is outstanding        in an aggregate principal amount of at least $15,000,000 (or its equivalent in the relevant        currency  of  payment)  beyond  any  period  of  grace  provided  with  respect  thereto,  or        (ii) the  Company,  any  other  Note  Party,  any  other  Significant  Subsidiary  or  any  other    52410969                             -34- 

 

      Unencumbered Assets Subsidiary is in default in the performance of or compliance with        any  term  of  any  evidence  of  any  Indebtedness  in  an  aggregate  outstanding  principal        amount of at least $15,000,000 (or its equivalent in the relevant currency of payment) or        of  any  mortgage,  indenture  or  other  agreement  relating  thereto  or  any  other  condition        exists, and as a consequence of such default or condition such Indebtedness has become,        or has been declared (or one or more Persons are entitled to declare such Indebtedness to        be), due and payable before its stated maturity or before its regularly scheduled dates of        payment,  or  (iii) as  a  consequence  of  the  occurrence  or  continuation  of  any  event  or        condition  (other  than  the  passage  of  time  or  the  right  of  the  holder  of  Indebtedness  to        convert such Indebtedness into equity interests), (x) the Company, any other Note Party,        any  other  Significant  Subsidiary  or  any  other  Unencumbered  Assets  Subsidiary  has        become obligated to purchase or repay Indebtedness before its regular maturity or before        its regularly scheduled dates of payment in an aggregate outstanding principal amount of        at least $15,000,000 (or its equivalent in the relevant currency of payment), or (y) one or        more  Persons  have  the  right  to  require  the  Company,  any  other  Note  Party,  any  other        Significant Subsidiary or any other Unencumbered Assets Subsidiary so to purchase or        repay such Indebtedness; or               (g)  the Company,  any  other Note Party, any other  Significant Subsidiary  or        any  other  Unencumbered  Assets  Subsidiary  (i) is  generally  not  paying,  or  admits  in        writing its inability to pay, its debts as they become due, (ii) files, or consents by answer        or  otherwise  to  the  filing  against  it  of,  a  petition  for  relief  or  reorganization  or        arrangement or any other petition in bankruptcy, for liquidation or to take advantage of        any  bankruptcy,  insolvency,  reorganization,  moratorium  or  other  similar  law  of  any        jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the        appointment  of  a  custodian,  receiver,  trustee  or  other  officer  with  similar  powers  with        respect to it or with respect to any substantial part of its property, (v) is adjudicated as        insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the        foregoing; or               (h)  a court or other Governmental Authority of competent jurisdiction enters        an order appointing, without consent by the Company, any other Note Party, any other        Significant  Subsidiary  or  any  other  Unencumbered  Assets  Subsidiary,  a  custodian,        receiver, trustee or other officer with similar powers with respect to it or with respect to        any  substantial  part  of  its  property,  or  constituting  an  order  for  relief  or  approving  a        petition for relief or reorganization or any other petition in bankruptcy or for liquidation        or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering        the  dissolution,  winding-up  or  liquidation  of  the  Company,  any  other  Note  Party,  any        other Significant Subsidiary or any other Unencumbered Assets Subsidiary, or any such        petition shall be filed against the Company, any other Note Party, any other Significant        Subsidiary or any other Unencumbered Assets Subsidiary and such petition shall not be        dismissed within 60 days; or                (i)  any event occurs with respect to the Company, any other Note Party, any        other Significant Subsidiary or any other Unencumbered Assets Subsidiary which under        the laws of any jurisdiction is analogous to any of the events described in Section 11(g)    52410969                             -35- 

 

      or Section 11(h), provided that the applicable grace period, if any, which shall apply shall        be the one applicable to the relevant proceeding which most closely corresponds to the        proceeding described in Section 11(g) or Section 11(h); or                (j)  one  or  more  final  judgments  or  orders  for  the  payment  of  money        aggregating  in  excess  of  $15,000,000  (or  its  equivalent  in  the  relevant  currency  of        payment),  including  any  such  final  order  enforcing  a  binding  arbitration  decision,  are        rendered  against  one  or  more  of  the  Company,  any  other  Note  Party,  any  other        Significant  Subsidiary  and  any  other  Unencumbered  Assets  Subsidiary  and  which        judgments  are  not,  within  30  days  after  entry  thereof,  bonded,  discharged  or  stayed        pending appeal, or are not discharged within 30 days after the expiration of such stay; or               (k)  if  (i) any  Plan  shall  fail  to  satisfy  the  minimum  funding  standards  of        ERISA  or  the Code for any  plan  year or part  thereof or a waiver of  such  standards  or        extension of any amortization period is sought or granted under section 412 of the Code,        (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to        be  filed  with  the  PBGC  or  the  PBGC  shall  have  instituted  proceedings  under  ERISA        section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall        have notified the Company or any ERISA Affiliate that a Plan may become a subject of        any such proceedings, (iii) there is any “amount of unfunded benefit liabilities” (within        the meaning of section 4001(a)(18) of ERISA) under one or more Plans, determined in        accordance with Title IV of ERISA, (iv) the aggregate present value of accrued benefit        liabilities  under  all  funded  Non-U.S.  Plans  exceeds  the  aggregate  current  value  of  the        assets  of  such  Non-U.S.  Plans  allocable  to  such  liabilities,  (v) the  Company  or  any        ERISA  Affiliate  shall  have  incurred  or  is  reasonably  expected  to  incur  any  liability        pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code        relating to employee benefit plans, (vi) the Company or any ERISA Affiliate withdraws        from  any  Multiemployer  Plan,  (vii) the  Company  or  any  Subsidiary  establishes  or        amends  any  employee  welfare  benefit  plan  that  provides  post-employment  welfare        benefits in a manner that would increase the liability of the Company or any Subsidiary        thereunder, (viii) the Company or any Subsidiary fails to administer or maintain a Non-       U.S. Plan in compliance with the requirements of any and all applicable laws, statutes,        rules,  regulations  or  court  orders  or  any  Non-U.S.  Plan  is  involuntarily  terminated  or        wound up, or (ix) the Company or any Subsidiary becomes subject to the imposition of a        financial penalty (which for this purpose shall mean any tax, penalty or other liability,        whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans;        and  any  such  event  or  events  described  in  clauses  (i)  through  (ix)  above,  either        individually  or  together  with  any  other  such  event  or  events,  could  reasonably  be        expected  to  have  a  Material  Adverse  Effect.   As  used  in  this  Section  11(k),  the  terms        “employee  benefit  plan”  and “employee  welfare  benefit  plan”  shall  have  the        respective meanings assigned to such terms in section 3 of ERISA; or                (l)  any  Note  Document  shall  cease  to  be  in  full  force  and  effect,  any  Note        Party or any Person acting on behalf of any Note Party shall contest in any manner the        validity, binding nature or enforceability of any Note Document, or the obligations of any    52410969                             -36- 

 

      Note  Party  under  any  Note  Document  are  not  or  cease  to  be  legal,  valid,  binding  and        enforceable in accordance with the terms of such Note Document.   SECTION 12.   REMEDIES ON DEFAULT, ETC.      Section 12.1.  Acceleration.   (a)   If  an  Event  of  Default  with  respect  to  the  Company  described in Section 11(g), (h) or (i) (other than an Event of Default described in clause (i) of  Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause  encompasses  clause  (i)  of  Section 11(g))  has  occurred,  all  the  Notes  then  outstanding  shall  automatically become immediately due and payable.        (b)  If any other Event of Default has occurred and is continuing, the Required Holders  may at any time at its or their option, by notice or notices to the Company, declare all the Notes  then outstanding to be immediately due and payable.        (c)  If  any  Event  of  Default  described  in  Section 11(a)  or  (b)  has  occurred  and  is  continuing,  any  holder  or  holders  of  Notes  at  the  time  outstanding  affected  by  such  Event  of  Default may at any time, at its or their option, by notice or notices to the Company, declare all  the Notes held by it or them to be immediately due and payable.         Upon  any  Notes  becoming  due  and  payable  under  this  Section 12.1,  whether  automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal  amount of such Notes, plus (x) all accrued and unpaid interest thereon (including interest accrued  thereon  at  the  Default  Rate)  and  (y)  the  Make-Whole  Amount  determined  in  respect  of  such  principal  amount,  shall  all  be  immediately  due  and  payable,  in  each  and  every  case  without  presentment, demand, protest or further notice, all of which are hereby waived.  The Company  acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain  its investment in the Notes free from repayment by the Company (except as herein specifically  provided for) and that the provision for payment of a Make-Whole Amount by the Company in  the  event  that  the  Notes  are  prepaid  or  are  accelerated  as  a  result  of  an  Event  of  Default,  is  intended to provide compensation for the deprivation of such right under such circumstances.      Section 12.2.  Other Remedies.  If any Default or Event of Default has occurred and is  continuing,  and  irrespective  of  whether  any  Notes  have  become  or  have  been  declared  immediately due and payable under Section 12.1, the holder of any Note at the time outstanding  may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or  other appropriate proceeding, whether for the specific performance of any agreement contained  herein or in any Note or Subsidiary Guaranty, or for an injunction against a violation of any of  the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by  law or otherwise.      Section 12.3.  Rescission.   At  any  time  after  any  Notes  have  been  declared  due  and  payable  pursuant  to  Section  12.1(b)  or  (c),  the  Required  Holders,  by  written  notice  to  the  Company, may rescind and annul any such declaration and its consequences if (a) the Company  has  paid  all  overdue  interest  on  the  Notes,  all  principal  of  and  the  applicable  Make-Whole  Amount  on  any  Notes  that  are  due  and  payable  and  are  unpaid  other  than  by  reason  of  such    52410969                             -37- 

 

declaration, and all interest on such overdue principal and the applicable Make-Whole Amount  and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the  Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which  have become due solely by  reason of such declaration, (c) all Events of Default and Defaults,  other than non-payment of amounts that have become due solely by reason of such declaration,  have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has  been entered for the payment of any monies due pursuant hereto or to the Notes.  No rescission  and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default  or Default or impair any right consequent thereon.      Section 12.4.  No  Waivers  or  Election  of  Remedies,  Expenses,  Etc.   No  course  of  dealing  and no  delay on  the  part  of  any  holder  of  any  Note  in exercising  any  right, power  or  remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or  remedies.  No right, power or remedy conferred by this Agreement, any Subsidiary Guaranty or  any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred  to  herein  or  therein  or  now  or  hereafter  available  at  law,  in  equity,  by  statute  or  otherwise.   Without limiting the obligations of the Company under Section 15, the Company will pay to the  holder of each Note on demand such further amount as shall be sufficient to cover all costs and  expenses  of  such  holder  incurred  in  any  enforcement  or  collection  under  this  Section  12,  including reasonable attorneys’ fees, expenses and disbursements.   SECTION 13.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.      Section 13.1.  Registration of Notes.  The Company shall keep at its principal executive  office a register for the registration and registration of transfers of Notes.  The name and address  of each  holder of  one  or  more Notes,  each transfer thereof and the  name and address of each  transferee of one or more Notes shall be registered in such register.  If any holder of one or more  Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes  shall  also  be  registered  in  such  register  as  an  owner  and  holder  thereof  and  (b)  at  any  such  beneficial  owner’s  option,  either  such  beneficial  owner  or  its  nominee  may  execute  any  amendment,  waiver  or  consent  pursuant  to  this  Agreement.   Prior  to  due  presentment  for  registration of transfer, the Person in whose name any Note shall be registered shall be deemed  and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be  affected by any notice or knowledge to the contrary.  The Company shall give to any holder of a  Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy  of the names and addresses of all registered holders of Notes.      Section 13.2.  Transfer  and  Exchange  of  Notes.   Upon  surrender  of  any  Note  to  the  Company  at  the  address  and  to  the  attention  of  the  designated  officer  (all  as  specified  in  Section 18(iii)),  for  registration  of  transfer  or  exchange  (and  in  the  case  of  a  surrender  for  registration  of  transfer  accompanied  by  a  written  instrument  of  transfer  duly  executed  by  the  registered  holder  of  such  Note  or  such  holder’s  attorney  duly  authorized  in  writing  and  accompanied by the relevant name, address and other information for notices of each transferee  of such Note or part thereof), within 10 Business Days thereafter, the Company shall execute and  deliver,  at  the  Company’s  expense  (except  as  provided  below),  one  or  more  new  Notes  (as  requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to    52410969                             -38- 

 

the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to  such Person  as  such  holder may request  and shall  be  substantially  in the form of Schedule 1.   Each such new Note shall be dated and bear interest from the date to which interest shall have  been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall  have been paid thereon.  The Company may require payment of a sum sufficient to cover any  stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall  not be transferred in denominations of less than $100,000, provided that if necessary to enable  the  registration  of  transfer  by  a  holder  of  its  entire  holding  of  Notes,  one  Note  may  be  in  a  denomination of less than $100,000.  Any transferee, by its acceptance of a Note registered in its  name (or the name of its nominee), shall be deemed to have made the representation set forth in  Section 6.2.      Section 13.3.  Replacement of Notes.  Upon receipt by the Company at the address and to  the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably  satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any  Note  (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional  Investor of such ownership and such loss, theft, destruction or mutilation), and               (a)  in  the  case  of  loss,  theft  or  destruction,  of  indemnity  reasonably        satisfactory  to  it  (provided  that  if  the  holder  of  such  Note  is,  or  is  a  nominee  for,  an        original  Purchaser  or  another  holder  of  a  Note  with  a  minimum  net  worth  of  at  least        $25,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement        of indemnity shall be deemed to be satisfactory), or               (b)  in the case of mutilation, upon surrender and cancellation thereof,   within 10 Business Days thereafter, the Company at its own expense shall execute and deliver, in  lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have  been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen,  destroyed or mutilated Note if no interest shall have been paid thereon.   SECTION 14.   PAYMENTS ON NOTES.      Section 14.1.  Place  of  Payment.   Subject  to  Section  14.2,  payments  of  principal,  the  applicable Make-Whole Amount and interest becoming due and payable on the Notes shall be  made  in  New York, New  York at  the principal  office of U.S.  Bank in  such jurisdiction.  The  Company may at any time, by notice to each holder of a Note, change the place of payment of  the Notes so long as such place of payment shall be either the principal office of the Company in  such jurisdiction or the principal office of a bank or trust company in such jurisdiction.      Section 14.2.  Payment by Wire Transfer.  So long as any Purchaser or its nominee shall  be the holder of  any Note,  and  notwithstanding  anything contained  in Section 14.1  or  in such  Note to the contrary, the Company will pay all sums becoming due on such Note for principal,  the applicable Make-Whole Amount, interest and all other amounts becoming due hereunder by  the method and at the address specified for such purpose below such Purchaser’s name in the  Purchaser Schedule, or by such other method or at such other address as such Purchaser shall    52410969                             -39- 

 

have  from  time  to  time  specified  to  the  Company  in  writing  for  such  purpose,  without  the  presentation or surrender of such Note or the making of any notation thereon, except that upon  written request of the Company made concurrently with or reasonably promptly after payment or  prepayment  in  full  of  any  Note,  such  Purchaser  shall  surrender  such  Note  for  cancellation,  reasonably promptly after any such request, to the Company at its principal executive office or at  the place of payment most recently designated by the Company pursuant to Section 14.1.  Prior  to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser  will, at its election, either endorse thereon the amount of principal paid thereon and the last date  to which interest has been paid thereon or surrender such Note to the Company in exchange for a  new  Note  or  Notes  pursuant  to  Section  13.2.   The  Company  will  afford  the  benefits  of  this  Section  14.2  to  any  Institutional  Investor  that  is  the  direct  or  indirect  transferee  of  any  Note  purchased by a Purchaser under this Agreement and that has made the same agreement relating  to such Note as the Purchasers have made in this Section 14.2.      Section 14.3.  FATCA Information.  By acceptance of any Note, the holder of such Note  agrees  that  such  holder  will  with  reasonable  promptness  duly  complete  and  deliver  to  the  Company, or to such other Person as may be reasonably requested by the Company, from time to  time (a) in the case of any such holder that is a United States Person, such holder’s United States  tax  identification  number  or  other  forms  reasonably  requested  by  the  Company  necessary  to  establish such holder’s status as a United States Person under FATCA and as may otherwise be  necessary for the Company to comply with its obligations under FATCA and (b) in the case of  any such holder that is not a United States Person, such documentation prescribed by applicable  law  (including  as  prescribed  by  section  1471(b)(3)(C)(i)  of  the  Code)  and  such  additional  documentation  as  may  be  necessary  for  the  Company  to  comply  with  its  obligations  under  FATCA  and  to determine that  such  holder  has  complied  with such holder’s  obligations  under  FATCA  or  to  determine  the  amount  (if  any)  to  deduct  and  withhold  from  any  such  payment  made  to  such  holder.   Nothing  in  this  Section  14.3  shall  require  any  holder  to  provide  information that is confidential or proprietary to such holder unless the Company is required to  obtain  such  information  under  FATCA  and,  in  such  event,  the  Company  shall  treat  any  such  information it receives as confidential.   SECTION 15.   EXPENSES, ETC.      Section 15.1.  Transaction  Expenses.   Whether  or  not  the  transactions  contemplated  hereby are consummated, each Note Party will pay all costs and expenses (including reasonable  attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local or  other counsel) incurred  by the Purchasers and each other holder of a Note in connection with  such  transactions  and  in  connection  with  any  amendments,  waivers  or  consents  under  or  in  respect  of  any  Note  Document  (whether  or  not  such  amendment,  waiver  or  consent  becomes  effective),  including:  (a)  the  costs  and  expenses  incurred  in  enforcing  or  defending  (or  determining whether or how to enforce or defend) any rights under any Note Document or in  responding to  any subpoena or  other legal  process  or  informal  investigative demand issued  in  connection with any Note Document, or by reason of being a holder of any Note, (b) the costs  and expenses, including financial advisors’ fees, incurred in connection with the insolvency or  bankruptcy  of  the  Company  or  any  Subsidiary  or  in  connection  with  any  work-out  or  restructuring  of  the  transactions  contemplated  the  Note  Documents  and  (c)  the  costs  and    52410969                             -40- 

 

expenses  incurred  in  connection  with  the  initial  filing  of  this  Agreement  and  all  related  documents and financial information with the SVO provided, that such costs and expenses under  this clause (c) shall not exceed $5,000.  If required by the NAIC, the Company shall obtain and  maintain at its own cost and expense a Legal Entity Identifier (LEI).           Each Note Party will pay, and will save each Purchaser and each other holder of a Note  harmless  from,  (i)  all  claims  in  respect  of  any  fees,  costs  or  expenses,  if  any,  of  brokers  and  finders (other than those, if any, retained by a Purchaser or other holder in connection with its  purchase  of  the  Notes),  (ii)  any  and  all  wire  transfer  fees  that  any  bank  or  other  financial  institution deducts from any payment under such Note to such holder or otherwise charges to a  holder  of  a  Note  with respect to  a  payment  under such  Note  and  (iii) any judgment,  liability,  claim, order, decree, fine, penalty, cost, fee, expense (including reasonable attorneys’ fees and  expenses) or obligation  resulting from the consummation  of  the  transactions  contemplated the  Note Documents, including the use of the proceeds of the Notes by the Company.      Section 15.2.  Certain  Taxes.   The  Company  agrees  to  pay  all  stamp,  documentary  or  similar taxes or fees which may be payable in respect of the execution and delivery or the  enforcement of each Note Document (other than the Notes) or the execution and delivery (but  not the transfer) or the enforcement of any of the Notes in the United States or any other  jurisdiction where the Company or any other Note Party has assets or of any amendment of, or  waiver or consent under or with respect to, any Note Document, and to pay any value added tax  due and payable in respect of reimbursement of costs and expenses by the Company pursuant to  this Section 15, and will save each holder of a Note to the extent permitted by applicable law  harmless against any loss or liability resulting from nonpayment or delay in payment of any such  tax or fee required to be paid by Note Parties.      Section 15.3.  Survival.   The  obligations  of  the  Note  Parties  under  this  Section  15  will  survive  the  payment  or  transfer  of  any  Note,  the  enforcement,  amendment  or  waiver  of  any  provision  of  any  Note  Document,  and  the  termination  of  this  Agreement  or  any  other  Note  Document.   SECTION 16.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.         All  representations  and  warranties  contained  herein  shall  survive  the  execution  and  delivery of this Agreement, the Notes and the other Note Documents, the purchase or transfer by  any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and  may be relied upon by any subsequent holder of a Note, regardless of any investigation made at  any  time  by  or  on  behalf  of  such  Purchaser  or  any  other  holder  of  a  Note.   All  statements  contained  in  any  certificate  or  other  instrument  delivered  by  or  on  behalf  of  the  Company  pursuant  to  this  Agreement  or  any  other  Note  Document  shall  be  deemed  representations  and  warranties of the Note Parties under the Note Documents.  Subject to the preceding sentence, the  Note Documents embody the entire agreement and understanding between each Purchaser and  the Note Parties and supersede all prior agreements and understandings  relating to the subject  matter hereof.    52410969                             -41- 

 

SECTION 17.   AMENDMENT AND WAIVER.     Section 17.1.  Requirements.  This Agreement, the Notes and the other Note Documents  may be amended, and the observance of any term hereof or of the Notes may be waived (either  retroactively or prospectively),  only with  the  written  consent  of  the Note  Parties  party thereto  and the Required Holders, except that:        (a)  no amendment or  waiver of  any  of Sections  1,  2, 3,  4,  5, 6  or  21 hereof, or  any  defined term (as it is used therein), will be effective as to any Purchaser unless consented to by  such Purchaser in writing;        (b)   no amendment or waiver may, without the written consent of each Purchaser and  the holder of each Note at the time outstanding, (i) subject to Section 12 relating to acceleration  or rescission, change the amount or time of any prepayment or payment of principal of, or reduce  the rate or change the time of payment or method of computation of (x) interest on the Notes or  (y) the Make-Whole Amount, (ii) change the percentage of the principal amount of the Notes the  holders  of  which  are  required  to  consent  to  any  amendment  or  waiver,  or  (iii)  amend  any  of  Sections 8 (except as set forth in the second sentence of Section 8.2 and Section 17.1(c)), 11(a),  11(b), 12, 17 or 20; and        (c)  Section 8.5 may be amended or waived to permit offers to purchase made by the  Company  or  an Affiliate pro rata to  the  holders of all  Notes  at  the time  outstanding  upon the  same terms and conditions only with the written consent of the Company and the Super-Majority  Holders.      Section 17.2.  Solicitation of Holders of Notes.        (a)  Solicitation.  The Company will provide each Purchaser and each holder of a Note  with  sufficient  information,  sufficiently  far  in  advance  of  the  date  a  decision  is  required,  to  enable such Purchaser and such holder to make an informed and considered decision with respect  to any proposed amendment, waiver or consent in respect of any of the provisions hereof or any  other Note Document.  The Company will deliver executed or true and correct copies of each  amendment, waiver or consent effected pursuant to this Section 17 or any other Note Document  to each Purchaser and each holder of a Note promptly following the date on which it is executed  and delivered by, or receives the consent or approval of, the requisite Purchasers or holders of  Notes.        (b)  Payment.  The Company will not directly or indirectly pay or cause to be paid any  remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant  any  security  or  provide  other  credit  support,  to  any  Purchaser  or  holder  of  a  Note  as  consideration for or as an inducement to the entering into by such Purchaser or holder of any  waiver or amendment of any of the terms and provisions hereof or of any other Note Document  unless such remuneration is concurrently paid, or security is concurrently granted or other credit  support concurrently provided, on the same terms, ratably to each Purchaser and each holder of a  Note even if such Purchaser or holder did not consent to such waiver or amendment.    52410969                             -42- 

 

     (c)  Consent in Contemplation of Transfer.  Any consent given pursuant to this Section  17  or  any  other  Note  Document  by  a  holder  of  a  Note  that  has  transferred  or  has  agreed  to  transfer its Note to (i) the Company, (ii) any Subsidiary or any other Affiliate or (iii) any other  Person in connection with, or in anticipation of, such other Person acquiring, making a tender  offer for or merging with the Company and/or any of its Affiliates (either pursuant to a waiver  under  Section  17.1(c)  or  subsequent  to  Section  8.5  having  been  amended  pursuant  to  Section  17.1(c)), in each case in connection with such consent, shall be void and of no force or effect  except  solely  as  to  such  holder,  and  any  amendments  effected  or  waivers  granted  or  to  be  effected or granted that would not have been or would not be so effected or granted but for such  consent  (and  the  consents  of  all  other  holders  of  Notes  that  were  acquired  under  the  same  or  similar conditions) shall be void and of no force or effect except solely as to such holder.      Section 17.3.  Binding Effect, Etc.  Any amendment or waiver consented to as provided  in this Section 17 or any other Note Document applies equally to all Purchasers and holders of  Notes  and is  binding  upon  them and upon  each  future holder of any Note  and upon  the  Note  Parties  without  regard  to  whether  such  Note  has  been  marked  to  indicate  such  amendment  or  waiver.   No  such  amendment  or  waiver  will  extend  to  or  affect  any  obligation,  covenant,  agreement,  Default  or  Event  of  Default  not  expressly  amended  or  waived  or  impair  any  right  consequent thereon.  No course of dealing between any Note Party and any Purchaser or holder  of a Note and no delay in exercising any rights hereunder or under any other Note Document  shall operate as a waiver of any rights of any Purchaser or holder of such Note.      Section 17.4.  Notes  Held  by  Company,  Etc.   Solely  for  the  purpose  of  determining  whether the holders of the requisite percentage of the aggregate principal amount of Notes then  outstanding approved or consented to any amendment, waiver or consent to be given under any  Note Document, or have directed the taking of any action provided under any Note Document to  be taken upon the direction of the holders of a specified percentage of the aggregate principal  amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of  its Affiliates shall be deemed not to be outstanding.   SECTION 18.   NOTICES.         Except to the extent otherwise provided in Section 7.4, all notices and communications  provided for hereunder shall be in writing and sent (a) by email if the sender on the same day  sends  a  confirming  copy  of  such  notice  by  an  internationally  recognized  overnight  delivery  service  (charges  prepaid),  or  (b)  by  registered  or  certified  mail  with  return  receipt  requested  (postage  prepaid),  or  (c)  by  an  internationally  recognized  overnight  delivery  service  (charges  prepaid).  Any such notice must be sent:                (i)  if to  any  Purchaser  or  its  nominee, to  such  Purchaser  or  nominee at  the        address specified for such communications in the Purchaser Schedule, or  at such other        address as such Purchaser or nominee shall have specified to the Company in writing,               (ii)  if to any other holder of any Note, to such holder at such address as such        other holder shall have specified to the Company in writing, or    52410969                             -43- 

 

            (iii)  if  to  any  Note  Party,  to  the  Company  at  its  address  set  forth  at  the        beginning  hereof  to  the  attention  of  Rick  Costello,  or  at  such  other  address  as  the        Company shall have specified to the holder of each Note in writing.   Notices under this Section 18 will be deemed given only when actually received.   SECTION 19.   REPRODUCTION OF DOCUMENTS.         This Agreement, all other Note Documents and all documents relating thereto, including  (a) consents, waivers and modifications that may hereafter be executed, (b) documents received  by  any  Purchaser  at  the  Closing  (except  the  Notes  themselves),  and  (c)  financial  statements,  certificates  and  other  information  previously  or  hereafter  furnished  to  any  Purchaser,  may  be  reproduced  by  such  Purchaser  by  any  photographic,  photostatic,  electronic,  digital,  or  other  similar  process  and  such  Purchaser  may  destroy  any  original  document  so  reproduced.   The  Company  agrees  and  stipulates  that,  to  the  extent  permitted  by  applicable  law,  any  such  reproduction shall be admissible in evidence as the original itself in any judicial or administrative  proceeding (whether or not the original is in existence and whether or not such reproduction was  made  by  such  Purchaser  in  the  regular  course  of  business)  and  any  enlargement,  facsimile  or  further reproduction of such reproduction shall likewise be admissible in evidence.  This Section  19 shall not prohibit the Company, the Purchaser or any other holder of Notes from contesting  any such reproduction to the same extent that it could contest the original, or from introducing  evidence to demonstrate the inaccuracy of any such reproduction.   SECTION 20.   CONFIDENTIAL INFORMATION.         For  the  purposes  of  this  Section  20, “Confidential  Information”  means  information  delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with  the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in  nature and that was clearly marked or labeled or otherwise adequately identified when received  by  such  Purchaser  as  being  confidential  information  of  the  Company  or  such  Subsidiary,  provided,  however,  that  Purchaser  acknowledges  that  any  financial  or  other  information  regarding current or future business, results of operations or financial condition that has not been  publicly  released  shall  be  deemed  to  be  Confidential  Information  and  material  non-public  information, provided, further, that such term does not include information that (a) was publicly  known  or  otherwise  known  to  such  Purchaser  prior  to  the  time  of  such  disclosure,  (b)  subsequently  becomes  publicly  known  through  no  act  or  omission  by  such  Purchaser  or  any  Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other  than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements  delivered  to  such  Purchaser  under  Section  7.1  that  are  otherwise  publicly  available.   Each  Purchaser will maintain the confidentiality of such Confidential Information in accordance with  procedures adopted by such Purchaser in good faith to protect confidential information of third  parties  delivered  to  such  Purchaser,  provided  that  such  Purchaser  may  deliver  or  disclose  Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and  affiliates (to the extent such disclosure reasonably relates to the administration of the investment  represented by its Notes), (ii) its auditors, financial advisors and other professional advisors who  agree  to  hold  confidential  the  Confidential  Information  substantially  in  accordance  with  this    52410969                             -44- 

 

Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or  offers to sell such Note or any part thereof or any participation therein (if such Person has agreed  in writing prior to its receipt of such Confidential Information to be bound by this Section 20),  (v) any Person from which it offers to purchase any Security of the Company (if such Person has  agreed in writing prior to its receipt of such Confidential Information to be bound by this Section  20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii)  the NAIC or the SVO or, in each case, any similar organization, or any  nationally  recognized  rating agency that requires access to information about such Purchaser’s investment portfolio, or  (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w)  to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in  response to any subpoena or other legal process, (y) in connection with any litigation to which  such Purchaser  is  a party  or  (z) if  an Event  of  Default has  occurred  and  is  continuing,  to  the  extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or  appropriate  in  the  enforcement  or  for  the  protection  of  the  rights  and  remedies  under  such  Purchaser’s Notes, this Agreement, any Subsidiary Guaranty or any other Note Document.  Each  holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and  to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On  reasonable request by the Company in connection with the delivery to any holder of a Note of  information required to be delivered to such holder under this Agreement or requested by such  holder (other than a holder that is a party to this Agreement or its nominee), such holder will  enter into an agreement with the Company embodying this Section 20.         Notwithstanding the foregoing, each Purchaser acknowledges that the Company currently  has a class of securities registered under Section 12 of the Exchange Act or is required to file  reports  under  Section  15(d)  of  the  Exchange  Act  and  as  such,  is  the  subject  of  restrictions  generally imposed by the United States securities laws, including those imposed by Section 10(b)  of  the  Exchange  Act  and  Rule  10b-5  promulgated  thereunder,  on  the  purchase  or  sale  of  securities by any person who has received material, non-public information from the issuer of  such  securities  and  on  the  communication  of  such  information  to  any  other  person  when  it  is  reasonably  foreseeable  that  such  other  person  is  likely  to  purchase  or  sell  such  securities  in  reliance upon such information.  Each Purchaser acknowledges that any Controlled Affiliate with  access  to  Confidential  Information  is  subject  to  applicable  securities  laws  that  could  restrict  trading  in  any  securities  of  the  Company  (whether  on  their  own  behalf  or  by,  through  or  in  concert with any other person) on the basis of, or while in possession of, any material non-public  information about the Company.         In  the  event  that  as  a  condition  to  receiving  access  to  information  relating  to  the  Company or its Subsidiaries in connection with the transactions contemplated by or otherwise  pursuant  to  this  Agreement,  any  Purchaser  or  holder  of  a  Note  is  required  to  agree  to  a  confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual  workspace  or  otherwise)  which  is  different  from  this  Section  20,  this  Section  20  shall  not  be  amended thereby and, as between such Purchaser or such holder and the Company, this Section  20 shall supersede any such other confidentiality undertaking.         Notwithstanding  the  foregoing,  the  Company  agrees  that  PGIM,  Inc.  or  any  Affiliate  thereof may (i) refer to its role in originating the purchase of the Notes from the Company, as    52410969                             -45- 

 

well as the identity of the Note Parties and the aggregate principal amount and issue date of the  Notes,  on  its  internet  site  or  in  marketing  materials,  press  releases,  published  “tombstone”  announcements or any other print or electronic medium and (ii) display the corporate logo of the  Company in conjunction with any such reference.   SECTION 21.   SUBSTITUTION OF PURCHASER.         Each  Purchaser  shall  have  the  right  to  substitute  any  one  of  its  Affiliates  or  another  Purchaser  or  any  one  of  such  other  Purchaser’s  Affiliates  (a “Substitute  Purchaser”)  as  the  purchaser  of  the  Notes  that  it  has  agreed  to  purchase  hereunder,  by  written  notice  to  the  Company, which notice shall be signed by both such Purchaser and such Substitute Purchaser,  shall  contain  such  Substitute  Purchaser’s  agreement  to  be  bound  by  this  Agreement  and  shall  contain  a  confirmation  by  such  Substitute  Purchaser  of  the  accuracy  with  respect  to  it  of  the  representations  set  forth  in  Section  6.   Upon  receipt  of  such  notice,  any  reference  to  such  Purchaser  in  this  Agreement  (other  than  in  this  Section  21),  shall  be  deemed  to  refer  to  such  Substitute  Purchaser  in  lieu  of  such  original  Purchaser.   In  the  event  that  such  Substitute  Purchaser  is  so  substituted  as  a  Purchaser  hereunder  and  such  Substitute  Purchaser  thereafter  transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon  receipt by the Company of notice of such transfer, any reference to such Substitute Purchaser as  a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to  refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original  Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.   SECTION 22.   MISCELLANEOUS.      Section 22.1.  Successors and Assigns.  All covenants and other agreements contained in  this Agreement and all other Note Documents by or on behalf of any of the parties hereto bind  and  inure  to  the  benefit  of  their  respective  successors  and  assigns  (including  any  subsequent  holder of a Note) whether so expressed or not, except that, subject to Section 10.4, no Note Party  may  assign  or  otherwise  transfer  any  of  its  rights  or  obligations  under  any  Note  Document  without  the  prior  written  consent  of  each  holder.   Nothing  in  this  Agreement,  expressed  or  implied,  shall be construed to  confer upon  any  Person  (other than the  parties  hereto  and  their  respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim  under or by reason of this Agreement.      Section 22.2.  Accounting  Terms.   All  accounting  terms  used  herein  which  are  not  expressly defined in this Agreement have the meanings respectively given to them in accordance  with  GAAP.   Except  as  otherwise  specifically  provided  herein,  (i) all  computations  made  pursuant  to  this  Agreement  shall  be  made  in  accordance  with  GAAP,  and  (ii) all  financial  statements  shall  be  prepared  in  accordance  with  GAAP.   For  purposes  of  determining  compliance  with  this  Agreement  (including  Section  9,  Section  10  and  the  definition  of  “Indebtedness”), any election by the Company to measure any financial liability using fair value  (as  permitted  by  Financial  Accounting  Standards  Board  Accounting  Standards  Codification  Topic  No.  825-10-25  – Fair  Value  Option,  International  Accounting  Standard  39  – Financial  Instruments:  Recognition  and  Measurement  or  any  similar  accounting  standard)  shall  be  disregarded and such determination shall be made as if such election had not been made.    52410969                             -46- 

 

   Section 22.3.  Severability.   Any  provision  of  this  Agreement  that  is  prohibited  or  unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such  prohibition  or  unenforceability  without  invalidating  the  remaining  provisions  hereof,  and  any  such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law)  not invalidate or render unenforceable such provision in any other jurisdiction.      Section 22.4.  Construction,  Etc.   Each  covenant  contained  herein  shall  be  construed  (absent express provision to the contrary) as being independent of each other covenant contained  herein,  so  that  compliance  with  any  one  covenant  shall  not  (absent  such  an  express  contrary  provision)  be  deemed  to  excuse  compliance  with  any  other  covenant.   Where  any  provision  herein refers to action to be taken by any Person, or which such Person is prohibited from taking,  such  provision  shall  be  applicable  whether  such  action  is  taken  directly  or  indirectly  by  such  Person.         Defined  terms  herein  shall  apply  equally  to  the  singular  and  plural  forms  of  the  terms  defined.   Whenever  the  context  may  require,  any  pronoun  shall  include  the  corresponding  masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be  deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to  have the same meaning and effect as the word “shall.”  Unless the context requires otherwise  (a) any definition of or reference to any agreement, instrument or other document herein shall be  construed  as  referring  to  such  agreement,  instrument  or  other  document  as  from  time  to  time  amended, supplemented or otherwise modified (subject to any restrictions on such amendments,  supplements or modifications set forth herein) and, for purposes of the Notes, shall also include  any such notes issued in substitution therefor pursuant to Section 13, (b) subject to Section 22.1,  any reference herein to any Person shall be construed to include such Person’s successors and  assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be  construed  to refer to  this  Agreement  in its  entirety  and  not to  any particular provision  hereof,  (d) all references herein to Sections and Schedules shall be construed to refer to Sections of, and  Schedules to, this Agreement, and (e) any reference to any law or regulation herein shall, unless  otherwise specified, refer to such law or regulation as amended, modified or supplemented from  time to time.      Section 22.5.  Counterparts.   This  Agreement  may  be  executed  in  any  number  of  counterparts,  each of  which  shall be  an  original  but all  of  which together  shall  constitute one  instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than  all, but together signed by all, of the parties hereto.  Delivery of this Agreement may be made by  telecopy  or  electronic transmission of a duly  executed counterpart copy hereof; provided, that  any such delivery by electronic transmission shall be effective only if transmitted in .pdf format,  .tif format or other format in which the text is not readily modifiable by any recipient thereof.   The  words  “execution,”  “signed,”  “signature,”  and  words  of  like  import  shall  be  deemed  to  include electronic signatures, which shall be of the same legal effect, validity and enforceability  as  a  manually  executed  signature  to  the  extent  and  as  provided  for  in  any  applicable  law;  provided,  that  the  Company  shall  endeavor  to  deliver  to  the  Purchasers  manually  executed  original signature pages to this Agreement and each Note as soon as practicable on or after the  date hereof.    52410969                             -47- 

 

   Section 22.6.  Governing Law.  This Agreement and each other Note Document shall be  construed and enforced in accordance with, and the rights of the parties shall be governed by, the  law of the State of New York excluding choice-of-law principles of the law of such State that  would permit the application of the laws of a jurisdiction other than such State.      Section 22.7.  Jurisdiction  and  Process;  Waiver  of  Jury  Trial.  (a) The  Company  irrevocably  submits  to  the  non-exclusive  jurisdiction  of  any  New  York  State  or  federal  court  sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding  arising  out  of  or  relating  to  this  Agreement,  the  Notes  or  any  other  Note  Document.   To  the  fullest extent permitted by applicable law, the  Company irrevocably  waives  and agrees  not  to  assert,  by  way  of  motion,  as  a  defense  or  otherwise,  any  claim  that  it  is  not  subject  to  the  jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the  venue of any such suit, action or proceeding brought in any such court and any claim that any  such suit, action or proceeding brought in any such court has been brought in an inconvenient  forum.        (b)  The Company agrees, to the fullest extent permitted by applicable law, that a final  judgment in any suit, action or proceeding of the nature referred to in Section 22.7(a) brought in  any such court shall be conclusive and binding upon it subject to rights of appeal, as the case  may be, and may be enforced in the courts of the United States of America or the State of New  York (or any other courts to the jurisdiction of which it or any of its assets is or may be subject)  by a suit upon such judgment.        (c)  The Company  consents  to process  being  served  by or on  behalf of  any  holder  of  Notes in any suit, action or proceeding of the nature referred to in Section 22.7(a) by mailing a  copy thereof by registered, certified, priority or express mail (or any substantially similar form of  mail),  postage  prepaid,  return  receipt  or  delivery  confirmation  requested,  to  it  at  its  address  specified  in  Section 18  or  at  such  other  address  of  which  such  holder  shall  then  have  been  notified pursuant to said Section.  The Company agrees that such service upon receipt (i) shall be  deemed  in  every  respect  effective  service  of  process  upon  it  in  any  such  suit,  action  or  proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to  be  valid  personal  service  upon  and  personal  delivery  to  it.   Notices  hereunder  shall  be  conclusively  presumed  received  as  evidenced  by  a  delivery  receipt  furnished  by  the  United  States Postal Service or any reputable commercial delivery service.        (d)  Nothing in this Section 22.7 shall affect the right of any holder of a Note to serve  process in any manner permitted by law, or limit any right that the holders of any of the Notes  may have to bring proceedings against the Company in the courts of any appropriate jurisdiction  or  to  enforce  in  any  lawful  manner  a  judgment  obtained  in  one  jurisdiction  in  any  other  jurisdiction.        (e)  THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR  WITH  RESPECT  TO  THIS AGREEMENT,  THE NOTES,  ANY  OTHER NOTE DOCUMENT  OR  ANY  OTHER  DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.     52410969                             -48- 

 

                                *    *    *    *    *    52410969                             -49- 

 

 

This Agreement is hereby  accepted and agreed to as   of the date hereof.   PRUDENTIAL UNIVERSAL REINSURANCE COMPANY  By: PGIM, Inc., as investment manager   By:___________________________________           Vice President   THE PRUDENTIAL INSURANCE COMPANY OF AMERICA  By:___________________________________           Second Vice President     52410969                             -51- 

 

                                DEFINED TERMS        As used herein, the following terms have the respective meanings set forth below or set  forth in the Section hereof following such term:         “Additional  Covenants” means  any  affirmative  or  negative  covenant  (including  any  financial  covenant)  or  similar  restriction  applicable  to  the  Company  or  any  Subsidiary  (regardless  of  whether such provision  is  labeled  or otherwise  characterized  as  a covenant) the  subject matter of which either (a) is similar to that of any covenant in Section 9 or 10 of this  Agreement,  or  related  definitions  in  Schedule  A  of  this  Agreement,  but  contains  one  or  more  percentages,  amounts  or  formulas  that  is  more  restrictive  than  those  set  forth  herein  or  more  beneficial to the holder or holders of the Indebtedness created or evidenced by the document in  which such covenant or similar restriction is contained (and such covenant or similar restriction  shall  be deemed  an  Additional  Covenant  only  to  the extent  that it  is  more restrictive  or  more  beneficial) or (b) is different from the subject matter of any covenant in Section 9 or 10 of this  Agreement, or related definitions in Schedule A of this Agreement.         “Additional  Defaults” means  any  provision  contained  in  any  document  or  instrument  creating or evidencing Indebtedness of the Company or any Subsidiary which permits the holder  or holders of Indebtedness to accelerate (with the passage of time or giving of notice or both) the  maturity  thereof  or  otherwise  requires  the  Company  or  any  Subsidiary  to  purchase  such  Indebtedness prior to the stated maturity thereof and which either (a) is similar to any Default or  Event of Default contained in Section 11 of this Agreement, or related definitions in Schedule A  of  this  Agreement,  but  contains  one  or  more  percentages,  amounts  or  formulas  that  is  more  restrictive or has a shorter grace period than those set forth herein or is more beneficial to the  holders of such other Indebtedness (and such provision shall be deemed an Additional Default  only to the extent that it is more restrictive, has a shorter grace period or is more beneficial) or  (b) is different from the subject matter of any Default or Event of Default contained in Section  11 of this Agreement, or related definitions in Schedule A of this Agreement.         “Affiliate” means, at any time, and with respect to any Person, any other Person that at  such time directly or indirectly through one or more intermediaries Controls, or is Controlled by,  or  is  under  common  Control  with,  such  first  Person,  and,  with  respect  to  the  Company,  shall  include any Person beneficially owning or holding, directly or indirectly, 10% or more of any  class of voting or equity interests of the Company or any Subsidiary or any Person of which the  Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,  10% or more of any class of voting or equity interests (a “Ten Percent Holder”), but shall not  include  any  Person  whose  Affiliate  status  arises  solely  from  the  fact  that  such  Person  is  Controlled  by  a  Ten  Percent  Holder  of  the  Company.   Unless  the  context  otherwise  clearly  requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.         “Agreement” means this Note Purchase Agreement, including all Schedules attached to  this Agreement.    52410969                                      SCHEDULE A                                (TO NOTE PURCHASE AGREEMENT)

 

      “Anti-Corruption  Laws”  means  any  law  or  regulation  in  a  U.S.  or  any  non-U.S.  jurisdiction regarding bribery or any other corrupt activity, including the U.S. Foreign Corrupt  Practices Act and the U.K. Bribery Act 2010.         “Anti-Money Laundering Laws” means any law or regulation in a U.S. or any non-U.S.  jurisdiction  regarding  money  laundering,  drug  trafficking,  terrorist-related  activities  or  other  money laundering predicate crimes, including the Currency and Foreign Transactions Reporting  Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act.         “Blocked  Person”  means  (a)  a  Person  whose  name  appears  on  the  list  of  Specially  Designated  Nationals  and  Blocked  Persons  published  by  OFAC,  (b)  a  Person,  entity,  organization, country or regime that is blocked or a target of sanctions that have been imposed  under  U.S.  Economic  Sanctions  Laws  or  (c)  a  Person  that  is  an  agent,  department  or  instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of,  directly or indirectly, any Person, entity, organization, country or regime described in clause (a)  or (b).         “Book Value” means, with respect to any asset, the net book value thereof as included in  the  Company’s  most  recent  Consolidated  financial  statements  delivered  pursuant  to  Section  7.1(a) or (b).        “Business  Day”  means  (a)  for  the  purposes  of  Section  8.6  only,  any  day  other  than  a  Saturday,  a  Sunday  or  a  day  on  which  commercial  banks  in  New  York  City  are  required  or  authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any  day other than a Saturday, a Sunday or a day on which commercial banks in New York, New  York or Dallas, Texas are required or authorized to be closed.         “Called Principal” is defined in Section 8.6.        “Capital Lease” means, at any time, a lease of property with respect to which the lessee  is required concurrently to recognize the acquisition of an asset and the incurrence of a liability  in accordance with GAAP.         “Capital  Stock” means  any  and  all  shares,  interests,  rights  to  purchase,  warrants,  options, participations or other equivalents of or interests in (however designated) equity of any  Person,  including  any  preferred  stock,  but  excluding  any  debt  securities  convertible  into  such  equity.        “Capitalized Lease Obligations” means any obligations under a Capital Lease.         “Carried  Interest  Subsidiary”  means  any  Subsidiary  (a)  that  is  not  a  Wholly-Owned  Subsidiary, (b) that has outstanding loans owed to one or more Note Parties, (c) that has pledged  substantially all of its assets to one or more Note Parties to secure the loans set forth in clause (b)  above  and  (d)  in  which  the  equity  holders  (other  than  the  Company  or  a  Wholly-Owned  Subsidiary) do not have a capital account, excluding undistributed earnings, commensurate with  their equity interests.       52410969                             A-2

 

      “Cash  Equivalents”  means  (a)  short-term  obligations  of,  or  fully  guaranteed  by,  the  United States, (b) commercial paper rated A-1 or better by S&P or P-1 or better by Moody’s, (c)  demand  deposit  accounts  maintained  in  the  ordinary  course  of  business,  (d)  short  term  certificates of deposit and time deposits, which mature within ninety (90) days from the date of  issuance and which are maintained with a domestic commercial bank having capital and surplus  in  excess  of  $100,000,000,  or  are  fully  insured  by  the  FDIC,  and  (e)  money  market  funds  substantially all the assets of which are described in the preceding clauses.         “Change  of  Control” means  (a)  the  acquisition  of  ownership,  directly  or  indirectly,  beneficially or of record, by any Person or group (within the meaning of the Exchange Act and  the rules of the  SEC  thereunder  as  in  effect  on  the date  hereof) of Capital  Stock representing  more than 50% of the aggregate ordinary voting power represented by the issued and outstanding  Capital Stock of the Company or (b) the occupation of a majority of the seats (other than vacant  seats) on the board of directors of the Company by Persons who were neither (i) nominated by  the board of directors of the Company nor (ii) appointed by a vote of a majority of the directors  so nominated.        “Closing” is defined in Section 3.         “Code” means  the  Internal  Revenue  Code  of  1986  and  the  rules  and  regulations  promulgated thereunder from time to time.         “Company” is defined in the first paragraph of this Agreement.         “Completed  Unit” means  a  Unit  as  to  which  either  (or  both)  of  the  following  has  occurred:   (a)  a  notice  of  completion  has  been  filed  or  recorded  in  the  appropriate  real  estate  records or (b) all necessary construction has been completed in order to obtain a certificate of  occupancy  (whether  or  not  such  certificate  of  occupancy  has  actually  been  obtained),  or  if  a  notice of completion or certificate of occupancy is not required to be provided to, or issued by,  the applicable jurisdiction, respectively, the Unit is otherwise ready for occupancy in accordance  with applicable law.         “Confidential Information” is defined in Section 20.         “Consolidated” refers to the consolidation of accounts in accordance with GAAP.         “Consolidated Debt” means, at any date, without duplication (a) all funded debt of the  Company and its Subsidiaries determined on a Consolidated basis; plus (b) funded debt of joint  ventures that are Subsidiaries to the extent there is recourse to the Company or any Subsidiary;  plus  (c)  the  sum  of  all  reimbursement  obligations  with  respect  to  drawn  letters  of  credit  (excluding any portion of the actual or potential reimbursement obligations that are secured by  cash collateral permitted hereunder) and, without duplication, the maximum amount available to  be drawn under all undrawn Financial Letters of Credit (excluding any portion of the actual or  potential reimbursement obligations that are secured by cash collateral permitted hereunder), in  each case issued for the account of, or guaranteed by, the Company or any of its Subsidiaries  plus  (d)  all  guarantees  of  the  Company  or  its  Subsidiaries  of  funded  debt  of  third  parties;    52410969                             A-3

 

provided, however, except as provided above in this definition with respect to Financial Letters  of Credit, in the case of any Contingent Obligation under clause (c) above, only amounts due and  payable at the time of determination will be included in the calculation of Consolidated Debt;  and plus (e) all Swap Obligations of the Company and its Subsidiaries (measured at the Swap  Termination  Value);  and  plus  (f)  all  Capitalized  Lease  Obligations  of  the  Company  and  its  Subsidiaries;  excluding,  in  each  case,  Indebtedness  of  the  Company  to  a  Subsidiary  or  of  a  Subsidiary to the Company or another Subsidiary, but, for the avoidance of doubt, Consolidated  Debt will not include Capitalized Lease Obligations or liabilities relating to real estate not owned  as determined under GAAP.         “Consolidated EBITDA” means, for any period, (a) the Consolidated Net Income, plus cash distributions received by the Company from any Subsidiaries not otherwise included in the  determination of such Consolidated Net Income plus (b) to the extent deducted from revenues in  determining  Consolidated  Net  Income:   (i)  Consolidated  Interest  Expense,  (ii)  expense  for  income  taxes  paid  or  accrued,  (iii)  depreciation,  (iv)  amortization,  (v)  non-cash  (including  impairment)  charges,  (vi)  extraordinary  losses,  and  (vii)  loss  on  early  extinguishment  of  indebtedness, minus (c) to the extent added to revenues in determining Consolidated Net Income,  non cash gains and extraordinary gains (including for the avoidance of doubt, gains relating to  the  release  of  any  tax  valuation  asset  reserves  and  gains  on  early  extinguishment  of  indebtedness).         “Consolidated  Interest  Expense” means,  for  any  period,  the  consolidated  interest  expense and capitalized interest and other charges amortized to cost of sales of the Company and  its Subsidiaries for such period, determined on a Consolidated basis.        “Consolidated Interest Incurred” means, for any period, the aggregate amount (without  duplication  and  determined  in  each  case  in  accordance  with  GAAP)  of  interest  (excluding  interest of the Company to  any Subsidiary  or of  any  Subsidiary to  the  Company  or  any other  Subsidiary)  incurred,  whether  such  interest  was  expensed  or  capitalized,  paid,  accrued  or  scheduled to be paid or accrued during such period by the Company and its Subsidiaries during  such  period,  including  (a)  the  interest  portion  of  all  deferred  payment  obligations,  and  (b)  all  commissions, discounts, and other fees and charges (excluding premiums) owed with respect to  bankers’ acceptances and letter of credit financings (including, without limitation, letter of credit  fees) and Swap Obligations, in each case to the extent attributable to such period.  For purposes  of  this  definition,  interest  on  Capital  Leases  shall  be  deemed  to  accrue  at  an  interest  rate  reasonably determined by the Company to be the rate of interest implicit in such Capital Leases  in accordance with GAAP.         “Consolidated Net Income” means, for any period, the net income (or loss) attributable  to the Company for such period, determined on a Consolidated basis (for the avoidance of doubt,  after deducting net income attributable to noncontrolling interests).         “Consolidated  Net  Tangible  Assets” means,  with  respect  to  the  Company  on  a  Consolidated basis at any date of determination, the aggregate amount of total assets included in  the Company’s  most recently  delivered balance  sheet pursuant to  Section  7.1(a) or (b), minus Intangible Assets reflected on such balance sheet.   52410969                             A-4

 

      “Consolidated Tangible Net Worth” means, at any date, the Consolidated stockholders  equity  (excluding  stockholders  equity  attributable  to  noncontrolling  interests),  less  Intangible  Assets, of the Company on a Consolidated basis (after noncontrolling interests), all determined  as of such date.        “Consolidated Total Capital” means, as of any date, the sum of (a) Consolidated Debt  plus (b) Consolidated Tangible Net Worth.         “Construction in Progress” means Finished Lots (a) for which a final subdivision map  has  been  recorded  and  (b)  upon  which  construction  has  commenced,  as  evidenced  by  the  commencement of excavation for foundations, but has not been completed.         “Contingent Obligation” means, any agreement, undertaking or arrangement by which  such  Person  assumes,  guarantees,  endorses,  contingently  agrees  to  purchase  or  provide  a  Guaranty or funds for the payment of, or otherwise becomes or is contingently liable upon, the  monetary  obligation  or  monetary  liability  of  any  other  Person,  or  agrees  to  maintain  the  net  worth or working capital or other financial condition of any other Person, or otherwise assures  any creditor of such other Person against loss, including, without limitation, any comfort letter,  operating agreement, take-or-pay contract, “put” agreement or other similar arrangement.         “Contractual Obligation” means, any provision of any security issued by such Person  or of any agreement, instrument or other undertaking to which such Person is a party or by which  it or any of its property is bound.         “Control” means the possession, directly or indirectly, of the power to direct or cause the  direction of the management and policies of a Person, whether through the ownership of voting  securities, by contract or otherwise; and the terms “Controlled” and “Controlling” shall have  meanings correlative to the foregoing.        “Control Event” means:              (a)   the execution  by  the  Company or  any  of  its  Affiliates  of any  agreement  with  respect  to  any  proposed  transaction  or  event  or  series  of  transactions  or  events  which,  individually or in the aggregate, may reasonably be expected to result in a Change of Control,               (b)   the execution of any written agreement which, when fully performed by  the parties thereto, would result in a Change of Control, or               (c)   the  making  of  any  written  offer  by  any  person  (as  such  term  is  used  in  section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the date of the Closing) or  related persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act  as  in  effect on the date  of  the Closing)  to the holders  of  the  common stock of the Company,  which offer, if accepted by the requisite number of holders, would result in a Change of Control.    52410969                             A-5

 

      “Controlled Entity” means (a) any of the Subsidiaries of the Company and any of their  or the Company’s respective Controlled Affiliates and (b) if the Company has a parent company,  such parent company and its Controlled Affiliates.         “Debt to Capital Percentage” means the average percentage, based on the last day of  the  immediately  preceding  three  fiscal  quarters  of  the  Company  set  forth  in  the  financial  statements most recently delivered pursuant to Section 7.1(a) or (b) (after giving pro forma effect  to  all  Indebtedness of the Company  and  its  Subsidiaries  incurred  and  repaid  since  the  date  of  such financial statements), of (a) Consolidated Debt to (b) Consolidated Total Capital.         “Debt to Net Worth Ratio” means the ratio, as of any date, of (a) Consolidated Debt to  (b) Consolidated Tangible Net Worth.        “Default” means an event or condition the occurrence or existence of which would, with  the lapse of time or the giving of notice or both, become an Event of Default.         “Default  Rate”  means  that  rate  of  interest  per  annum  that  is  the  greater  of  (a) 2.00%  above the rate of interest stated in clause (a) of the first paragraph of the Notes or (b) 2.00% over  the rate of interest publicly announced by The Bank of New York in New York, New York as its  “base” or “prime” rate.         “Disclosure Documents” is defined in Section 5.3.         “Discounted Value” is defined in Section 8.6.        “Dividing Person” has the meaning assigned to it in the meaning of “Division”.         “Division” means the division of the assets, liabilities and/or obligations of a Person (the  “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or  similar arrangement), which may or may not include the Dividing Person and pursuant to which  the Dividing Person may or may not survive.         “Division Successor” means any Person that, upon the consummation of a Division of a  Dividing Person, holds all or any portion of the assets, liabilities and/or obligations previously  held  by  such  Dividing  Person  immediately  prior  to  the  consummation  of  such  Division.  A  Dividing  Person  which  retains  any  of  its  assets,  liabilities  and/or  obligations  after  a  Division  shall be deemed a Division Successor upon the occurrence of such Division.         “EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System  or any successor SEC electronic filing system for such purposes.         “Entitled  Land” means  land  where  all  requisite  zoning  requirements  and  land  use  requirements have been satisfied, and all requisite approvals have been obtained (on a final and  unconditional basis) from all applicable Governmental Authorities (other than approvals which  are  simply  ministerial  and  non-discretionary  in  nature),  in  order  to  develop  the  land  as  a  residential housing project and construct Units thereon.   52410969                             A-6

 

      “Environmental  Laws”  means  any  and  all  federal,  state,  local,  and  foreign  statutes,  laws,  regulations,  ordinances,  rules,  judgments,  orders,  decrees,  permits,  concessions,  grants,  franchises,  licenses,  agreements  or  governmental  restrictions  relating  to  pollution  and  the  protection  of  the  environment  or  the  release  of  any  materials  into  the  environment,  including  those related to Hazardous Materials.         “ERISA” means the Employee Retirement  Income Security Act of 1974 and the rules  and regulations promulgated thereunder from time to time in effect.          “ERISA  Affiliate”  means  any  trade  or  business  (whether  or  not  incorporated)  that  is  treated as a single employer together with the Company under section 414 of the Code.         “Event of Default” is defined in Section 11.         “Exchange  Act”  means  the  Securities  Exchange  Act  of  1934  and  the  rules  and  regulations promulgated thereunder from time to time in effect.         “Existing Note Purchase Agreement” means the Note Purchase Agreement dated as of  August 8, 2019, by and among the Company and the purchasers party thereto, pursuant to which  the Company issued its 4.00% Senior Notes due August 8, 2026, in the initial aggregate principal  amount of $75,000,000 (such notes, including any replacement thereof pursuant to the Existing  Note Purchase Agreement, the “Existing Notes”).         “Existing Notes” is defined in the definition of “Existing Note Purchase Agreement”.         “FATCA”  means  (a)  sections  1471  through  1474  of  the  Code,  as  of  the  date  of  this  Agreement  (or  any  amended  or  successor  version  that  is  substantively  comparable  and  not  materially  more  onerous  to  comply  with),  together  with  any  current  or  future  regulations  or  official  interpretations  thereof,  (b)  any  treaty,  law  or  regulation  of  any  other  jurisdiction,  or  relating to an intergovernmental agreement between the United States of America and any other  jurisdiction, which (in either case) facilitates the implementation of the foregoing clause (a), and  (c) any agreements entered into pursuant to section 1471(b)(1) of the Code.        “Financial Letter of Credit” means a letter of credit that is not a Performance Letter of  Credit.         “Finished Lots” means lots of Entitled Land as to which (a) a final subdivision map has  been recorded; (b) all major off-site construction and infrastructure has been completed to local  governmental  requirements; (c) utilities have been installed to local  government requirements;  and (d) building permits may be pulled and construction commenced without the satisfaction of  any further material conditions.        “Form 10-K” is defined in Section 7.1(b).         “Form 10-Q” is defined in Section 7.1(a).    52410969                             A-7

 

      “GAAP” means  (a)  generally  accepted  accounting  principles  as  in effect from time  to  time in the United States of America and (b) for purposes of Section 9.6, with respect to any  Subsidiary,  generally  accepted  accounting  principles  (including  International  Financial  Reporting  Standards,  as  applicable)  as  in  effect  from  time  to  time  in  the  jurisdiction  of  organization of such Subsidiary; provided, that if any change in generally accepted accounting  principles from those applied in preparing the audited financial statements referred to in Section  7.1(a) or (b) affects the calculation of any financial covenant contained herein, (i) the Company  and the holders hereby agree to endeavor to make such amendments hereto to the effect that each  such financial covenant is not more or less restrictive than such covenant as in effect on the date  hereof  using  generally  accepted  accounting  principles  consistent  with  those  reflected  in  such  financial statements, and (ii) pending the effectiveness of such amendment, the Company shall  not be in Default hereunder if, solely as a result of such change in generally accepted accounting  principles, the Company is not in compliance with any  financial covenant contained herein so  long as the Company provides to the holders financial statements and other documents required  under this Agreement or as reasonably requested hereunder setting forth a reconciliation between  calculations  of  such  financial  covenant  made  before  and  after  giving  effect  to  such  change  in  GAAP; provided, further,  that  for  purposes  of determining if a lease  is  a Capital  Lease  or an  operating lease, such determination shall be based on GAAP as in effect on December 31, 2018,  notwithstanding  any  modification  or  interpretative  change  thereto  after  such  date  (including  without giving effect to any treatment of leases under Accounting Standards Codification 842 (or  any other Accounting Standards Codification or Financial Accounting Standard having a similar  result or effect)).         “Governmental Authority” means               (a)  the government of                      (i)  the  United  States  of  America  or  any  state  or  other  political              subdivision thereof, or                     (ii)  any  other  jurisdiction  in  which  the  Company  or  any  Subsidiary              conducts  all  or  any  part  of  its  business,  or  which  asserts  jurisdiction  over  any              properties of the Company or any Subsidiary, or               (b)  any  entity  exercising  executive,  legislative,  judicial,  regulatory  or        administrative functions of, or pertaining to, any such government.         “Governmental  Official” means  any  governmental  official  or  employee,  employee  of  any government-owned or government-controlled entity, political party, any official of a political  party, candidate for political office, official of any public international organization or anyone  else acting in an official capacity.         “Guaranty” means, with respect to any Person, any obligation (except the endorsement  in  the  ordinary  course  of  business of negotiable  instruments  for  deposit or  collection) of  such  Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of    52410969                             A-8

 

any other Person  in  any manner,  whether directly  or  indirectly,  including obligations  incurred  through an agreement, contingent or otherwise, by such Person:               (a)  to  purchase  such indebtedness  or  obligation  or  any  property constituting        security therefor;               (b)  to  advance  or  supply  funds  (i) for  the  purchase  or  payment  of  such        indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet        condition or any income statement condition of any other Person or otherwise to advance        or make available funds for the purchase or payment of such indebtedness or obligation;               (c)  to lease properties or to purchase properties or services primarily for the        purpose of  assuring  the  owner of such indebtedness  or obligation  of the  ability  of  any        other Person to make payment of the indebtedness or obligation; or               (d)  otherwise to assure the owner of such indebtedness or obligation against        loss in respect thereof.   In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the  indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be  direct obligations of such obligor.         “Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or other  substances that might pose a hazard to health and safety, the removal of which may be required  or  the  generation,  manufacture,  refining,  production,  processing,  treatment,  storage,  handling,  transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which  is or shall be restricted, prohibited or penalized by any applicable law, including asbestos, urea  formaldehyde  foam  insulation,  polychlorinated biphenyls,  petroleum,  petroleum  products,  lead  based paint, radon gas or similar restricted, prohibited or penalized substances.         “holder”  means,  with  respect  to  any  Note,  the  Person  in  whose  name  such  Note  is  registered  in  the  register  maintained  by  the  Company  pursuant  to  Section 13.1, provided,  however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18  and any related definitions in this Schedule A, “holder” shall mean the beneficial owner of such  Note whose name and address appears in such register.         “Indebtedness” of any Person at any date, means,  without duplication, all liabilities and  obligations,  contingent  or  otherwise,  of  such  Person,  (a)  in  respect  of  borrowed  money,  (b)  evidenced  by  bonds,  notes,  debentures  or  similar  instruments,  (c)  representing  the  balance  deferred and unpaid of the purchase price of any property or services, except those incurred in  the  ordinary  course  of  its  business  that  would  constitute  ordinarily  a  trade  payable  to  trade  creditors,  (d)  evidenced by  bankers’ acceptances,  (e) consisting of obligations,  whether or not  assumed, secured by Liens or payable out of the proceeds or production from property now or  hereafter owned or acquired by such Person, except Liens described in any of clauses (b), (c),  (d),  (e),  (g)  or  (k)  of  the  definition  of  “Permitted  Liens”,  so  long  as  the  obligations  secured  thereby  are  not  more  than  sixty  (60)  days  delinquent,  (f)  consisting  of  Capitalized  Lease    52410969                             A-9

 

Obligations (including any Capital Leases entered into as a part of a sale/leaseback transaction),  (g) consisting of liabilities and obligations under any receivable sales transactions, (h) consisting  of a Financial Letter of Credit or a reimbursement obligation of such Person with respect thereto,  (i) consisting of Swap Obligations (measured at the Swap Termination Value), (j) consisting of  Off-Balance Sheet Liabilities or (k) consisting of Contingent Obligations.           “INHAM Exemption” is defined in Section 6.2(e).        “Institutional Investor”  means  (a)  any  Purchaser  of  a  Note,  (b) any  holder  of  a  Note  holding  (together  with  one  or  more  of  its  affiliates)  more  than  5%  of  the  aggregate  principal  amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association  or  other  financial  institution,  any  pension  plan,  any  investment  company,  any  insurance  company, any broker or dealer, or any other similar financial institution or entity, regardless of  legal form, and (d) any Related Fund of any holder of any Note.         “Intangible  Assets” means  assets  that  are  considered  to  be  intangible  assets  under  GAAP,  including  customer  lists,  goodwill,  copyrights,  trade  names,  trademarks,  patents,  franchises,  licenses,  unamortized  deferred  charges  and  unamortized  debt  discount,  it  being  understood that deferred tax assets are not intangible assets.         “Interest  Coverage  Ratio”  means  the  ratio  of  (a)  Consolidated  EBITDA  to  (b)  the  aggregate amount of Consolidated Interest Incurred, calculated in each case for the most recent  four consecutive fiscal quarters ended on the last day of the most recent fiscal quarter for which  financial statements have been delivered pursuant to Section 7.1(a) or (b).           “Investment” means  (a)  the  purchase  or  other  acquisition  of  capital  stock  or  other  securities  of  another  Person,  (b)  a  loan,  advance,  extension  of  credit  (by  way  of  guaranty  or  otherwise) or capital contribution to another Person or (c) the purchase or other acquisition of  assets of another Person that constitute a business unit.  For purposes hereof, the amount of any  Investment outstanding at any time shall be the original cost of such Investment reduced by any  dividend, distribution, interest payment, return of capital, repayment or other amount received in  cash by the Company or any Subsidiary in respect of such Investment.         “Land Under Development” means Entitled Land upon which a final subdivision map  has been recorded and upon which construction of improvements has commenced and is being  diligently pursued but has not be completed.         “Lien”  means  any  mortgage, deed  of  trust, pledge,  hypothecation,  assignment,  deposit  arrangement, charge, encumbrance, lien (statutory or other), preference, priority or other security  agreement  or  similar  preferential  arrangement  of  any  kind  or  nature  whatsoever  (including  without  limitation  any  conditional  sale  or  other  title  retention  agreement,  any  financing  lease  having substantially the same economic effect as any of the foregoing, and the authorized filing  by or against a Person of any financing statement as debtor under the Uniform Commercial Code  or  comparable  law  of  any  jurisdiction).   For  the  avoidance  of  doubt,  a  restriction,  covenant,  easement, right of way, or similar encumbrance affecting any interest in real property owned by  any Note Party and which does not secure an obligation to pay money is not a Lien.    52410969                             A-10

 

      “Make-Whole Amount” is defined in Section 8.6.         “Material”  means  material  in  relation  to  the  business,  operations,  affairs,  financial  condition, assets, properties, or prospects of the Company and its Subsidiaries taken as a whole.         “Material  Adverse  Effect”  means  a  material  adverse  effect  on  (a)  the  business,  operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries,  taken as a whole; (b) the ability of the Note Parties, taken as a whole, to perform their payment  or  other  material  obligations  under  any  Note  Document;  or  (c)  the  legality,  validity,  binding  effect or enforceability against the Company or any other Note Party of any material obligations  of the Company or any other Note Party under any Note Document to which it is a party or the  rights and remedies of any holder thereunder.         “Material Credit Facility” means, as to the Company and its Subsidiaries,        (a)   each Principal Credit  Facility, including  any renewals, extensions, amendments,  supplements, restatements, replacements or refinancing thereof;          (b)   the  Existing  Note  Purchase  Agreement,  including  any  renewals,  extensions,  amendments, supplements, restatements, replacements or refinancing thereof; and         (c)   any other agreement(s) creating or evidencing indebtedness for borrowed money  entered into on or after the date of Closing by the Company or any Subsidiary, or in respect of  which the Company or any Subsidiary is an obligor or otherwise provides a guarantee or other  credit support (“Credit Facility”), in a principal amount outstanding or available for borrowing  equal to or greater than $25,000,000 (or the equivalent of such amount in the relevant currency  of payment, determined as of the date of the closing of such facility based on the exchange rate  of  such  other  currency);  and  if  no  Credit  Facility  or  Credit  Facilities  equal  or  exceed  such  amounts, then the largest Credit Facility shall be deemed to be a Material Credit Facility.         “Maturity Date” is defined in the first paragraph of each Note.         “Model Unit” means a Completed Unit to be used as a model home in connection with  the sale of Units in a residential housing project.        “Moody’s” means  Moody’s  Investors  Service,  Inc. and any successor  thereto  that  is  a  nationally recognized rating agency.         “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is  defined in section 4001(a)(3) of ERISA).         “NAIC” means the National Association of Insurance Commissioners.         “NAIC Annual Statement” is defined in Section 6.2(a).   52410969                             A-11

 

      “Non-Recourse  Indebtedness”  means  Indebtedness  of  the  Company  or  any  of  its  Subsidiaries for which its liability is limited to the Real Estate Inventory upon which it grants a  Lien to the holder of such Indebtedness as security for such Indebtedness (including, in the case  of  Indebtedness  of  a  Subsidiary  that  holds  title  to  Real  Estate  Inventory,  liability  of  that  Subsidiary and liabilities secured by a pledge of the equity interests of such Subsidiary (if such  Real Estate Inventory constitutes all or substantially all the assets of such Subsidiary)).         “Non-U.S. Plan” means any plan, fund or other similar program that (a) is established or  maintained outside the United States of America by the Company or any Subsidiary primarily for  the benefit of employees of the Company or one or more Subsidiaries residing outside the United  States of America, which plan, fund or other similar program provides, or results in, retirement  income,  a  deferral  of  income  in  contemplation  of  retirement  or  payments  to  be  made  upon  termination of employment, and (b) is not subject to ERISA or the Code.         “Note Documents” means this Agreement, the Notes, the Subsidiary Guaranties, and all  documents,  instruments  and  agreements  executed  and  delivered  by  the  Company  or  any  Subsidiary  from  time  to  time  in  connection  with  any  of  the  foregoing,  together  with  any  agreements evidencing any amendment, waiver, supplement or other modification to any of the  foregoing.         “Note Obligations” means all advances to, and debts, liabilities and obligations of, the  Note Parties arising under any Note Document or otherwise, whether direct or indirect (including  those acquired by assumption), absolute or contingent, due or to become due, now existing or  hereafter  arising  and  including  interest,  Make-Whole  Amounts  and  fees  that  accrue  after  the  commencement by or against any Note Party or any Affiliate thereof of any proceeding under  any bankruptcy or insolvency naming such Person as the debtor in such proceeding, regardless of  whether such interest and fees are allowed claims in such proceeding.        “Note  Parties”  means  the  Company  and  each  Subsidiary  that  is  a  party  to  a  Note  Document.        “Note  Party  Unencumbered  Assets”  means,  as  of  any  date  of  determination,  the  Unencumbered Assets (other than assets included pursuant to clause (a) thereof, without giving  effect to clauses (i) through (iv) thereof, and replacing all percentages therein with 100%) of the  Note Parties as of such date.         “Note Party Unencumbered Assets Ratio” means the ratio, as of any date, of (a) Note  Party  Unencumbered  Assets  to  (b)  Consolidated  Debt  that  is  not  secured  by  any  Lien  on  the  assets of any Note Party.        “Notes” is defined in Section 1.         “OFAC” means the Office of Foreign Assets Control of the United States Department of  the Treasury.    52410969                             A-12

 

      “OFAC  Sanctions  Program”  means  any  economic  or  trade  sanction  that  OFAC  is  responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found  at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.         “Off-Balance Sheet Liabilities” means (a) any repurchase obligation or liability of such  Person or any of its Subsidiaries with respect to accounts or notes receivable sold by such Person  or any of its Subsidiaries, (b) any liability of such Person or any of its Subsidiaries under any  financing lease, any Synthetic Lease or any other similar lease transaction, or (c) any obligations  of such Person or any of its Subsidiaries arising with respect to any other transaction which is the  functional  equivalent  of  or  takes  the  place  of  borrowing  and  which  has  an  actual  or  implied  interest component but which does not constitute a liability on the Consolidated balance sheets of  such Person and its Subsidiaries.         “Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other  officer of the Company whose responsibilities extend to the subject matter of such certificate.         “Organizational  Documents”  with  respect  to  any  Person,  its  charter,  certificate  or  articles of incorporation, continuation or amalgamation, bylaws, articles of organization, limited  liability  agreement,  operating  agreement,  members  agreement,  shareholders  agreement,  partnership  agreement,  management  agreement,  certificate  of  partnership,  certificate  of  formation, memorandum or articles of association, voting trust agreement, or similar agreement  or instrument governing the formation or operation of such Person.        “PBGC”  means  the  Pension  Benefit  Guaranty  Corporation  referred  to  and  defined  in  ERISA.         “Performance  Letter  of  Credit”  means  any  letter  of  credit  issued  (a)  on  behalf  of  a  Person in favor of a Governmental Authority, including, without limitation, any utility, water, or  sewer authority, or other similar entity, for the purpose of assuring such Governmental Authority  that such Person or an Affiliate of such Person will properly and timely complete work it has  agreed to perform for the benefit of such Governmental Authority; (b) in lieu of cash deposits to  obtain a license,  in  place of  a utility  deposit, or  for  land  option contracts;  (c) in  lieu  of  other  contract performance, to secure performance warranties payable upon breach, and to secure the  performance  of  labor  and  materials,  including,  without  limitation,  construction,  bid,  and  performance  bonds;  or  (d)  to  secure  refund  or  advance  payments  on  contractual  obligations  where default of a performance-related contract has occurred.         “Permitted  Investments”  means  (a)  readily  marketable,  direct,  full  faith  and  credit  obligations  of  the  United  States,  or  obligations  guaranteed  by  the  full  faith  and  credit  of  the  United States, maturing within not more than eighteen (18) months from the date of acquisition;  (b) short term certificates of deposit and time deposits that mature within eighteen (18) months  from the date of issuance and which are maintained with a domestic commercial bank having  capital  and  surplus  in  excess  of  $100,000,000  or  which  are  fully  insured  by  the  FDIC;  (c)  commercial paper or master notes maturing in 365 days or less from the date of issuance rated  either “P-1” by Moody’s or “A” by S&P; (d) debt instruments of a domestic issuer that mature in  one  (1)  year  or  less  and  which  are  rated  “A”  or  better  by  Moody’s  or  S&P  on  the  date  of    52410969                             A-13

 

acquisition of such investment; (e) demand deposit accounts that are maintained in the ordinary  course of business; (f) short term tax exempt securities including municipal notes, commercial  paper, auction rate floaters and floating rate notes rated either “P-1” by  Moody’s or “A-1” by  S&P and which mature in one (1) year or less; (g) marketable direct obligations issued by any  state  of  the  United  States  or  any  political  subdivision  of  any  such  state  or  any  public  instrumentality thereof maturing within not more than one (1) year from the date of acquisition  thereof and, at the time of acquisition, having one (1) of the two (2) highest ratings obtainable  from any two of S&P, Moody’s or Fitch, Inc.; (h) investment grade bonds, other than domestic  corporate bonds issued by the Company or any of its Affiliates, maturing no more than seven (7)  years after the date of acquisition thereof and, at the time of acquisition, having a rating of at  least A or the equivalent  from  any two  (2)  of  S&P, Moody’s or  Fitch,  Inc.; and (i) shares of  money market, mutual, or similar funds which invest primarily in securities of the type described  in clauses (a) through (h) above.         “Permitted Liens” means         (a)   Liens  existing  on  the  date  of  this  Agreement  and  described  on  Schedule  5.15,  other than Liens securing the Senior Secured Credit Facility;         (b)   Liens  imposed  by Governmental Authorities  for taxes  not  yet  due or subject  to  penalty  or  which  are  being  contested  in  good  faith  and  by  appropriate  proceedings,  if  the  Company or Subsidiary has established appropriate reserves with respect thereto in accordance  with GAAP on the books of the Company or applicable Subsidiary;         (c)   statutory  liens  of  carriers,  warehousemen,  mechanics,  materialmen,  landlords,  repairmen  or  other  like  Liens  arising  by  operation  of  law  in  the  ordinary  course  of  business,  provided that (i) the underlying obligations are not overdue for a period of not more than 60 days  or  (ii)  such  Liens  are  being  contested  in  good  faith  and  by  appropriate  proceedings  and  the  Company or Subsidiary has established appropriate reserves with respect thereto in accordance  with GAAP on the books of the Company or applicable Subsidiary;          (d)  Liens  securing  the  performance  of  bids,  trade  contracts  (other  than  borrowed  money),  leases,  statutory  obligations,  surety  and  appeal  bonds,  performance  bonds  and  other  obligations of a like nature incurred in the ordinary course of business;         (e)   easements, rights-of-way, zoning restrictions, assessment district or similar Liens  in  connection  with  municipal  financing  or  community  development  bonds,  and  similar  restrictions, encumbrances or title defects which, singly or in the aggregate, do not in any case  materially detract from the value of the real estate subject thereto (as such real estate is used by  the Company or any of its Subsidiaries) or interfere with the ordinary conduct of the business of  the Company or any of its Subsidiaries;         (f)   Liens  arising  by  operation  of  law  in  connection  with  judgments,  only  to  the  extent, for an amount and for a period not resulting in an Event of Default hereunder with respect  thereto;    52410969                             A-14

 

      (g)   pledges  or deposits  made  in the ordinary  course  of  business in connection  with  workers’ compensation, unemployment insurance and other types of social security legislation  and deposits securing liability to insurance carriers under insurance arrangements;         (h)   Liens securing Indebtedness of a Person existing at the time such Person becomes  a  Note  Party  or  Subsidiary  as  a  result  of  the  acquisition  of  the  equity  of  such  Person,  or  the  merger of such Person with or into the Company or any of its Subsidiaries, and Liens on assets  or properties at the time of acquisition thereof; provided, that (i) such Liens were in existence  prior to the date of such acquisition, merger or consolidation, were not incurred in anticipation  thereof and do not extend to any other assets and (ii) such Liens secure Indebtedness incurred by  such Subsidiary pursuant to Section 10.3(e);         (i)   Liens securing Non-Recourse Indebtedness of the Company and its Subsidiaries  incurred pursuant to Section 10.3(f);         (j)   Liens  securing  Indebtedness  incurred  to  refinance  any  Indebtedness  that  was  previously so secured by a Lien and permitted hereunder pursuant to clause (a), (h) or (r) of this  definition  (which  refinancing  Indebtedness  may  exceed  the  amount  refinanced,  provided  such  refinancing  Indebtedness  is  otherwise  permitted  under  this  Agreement)  upon  terms  and  conditions substantially similar to the terms of the Lien securing such refinanced Indebtedness  immediately  prior  to  it  having  been  so  refinanced,  so  long  as  such  Liens  do  not  extend  to  additional assets or property than the Liens being replaced in connection with such refinancing;         (k)   Liens securing Swap Obligations arising in the ordinary course of business of the  Company or any of its Subsidiaries and not for speculative purposes;         (l)   Liens arising from vexatious, frivolous or meritless claims, suits, action or filings,  or other similar bad faith actions, taken by a Person not an Affiliate of the Company; provided, that (i) the Company or a Subsidiary, as applicable, is disputing such Lien in good faith and by  appropriate proceedings and (ii) appropriate reserves have been established with respect thereto  in accordance with GAAP on the books of the Company or applicable Subsidiary;         (m)   Liens securing obligations (contingent or otherwise) of the Company or any of its  Subsidiaries arising in connection with letters of credit or letter of credit facilities not exceeding  $15,000,000 at any time;         (n)   Liens  on  leases  of  Model  Units  and  rights  of  tenants  under  leases  and  rental  agreements covering real property entered into in the ordinary course of business of the Person  owning the real property;         (o)   Liens securing Capitalized Lease Obligations incurred in the ordinary  course of  business and the Indebtedness of which is permitted hereunder;         (p)   Liens incurred in the ordinary course of business in connection with the purchase  or shipping of goods or assets (or the related assets and proceeds thereof), which Liens are in  favor of the seller or shipper of such goods or assets and only attached to such goods or assets;    52410969                             A-15

 

      (q)   Liens in favor of collecting banks having a right of setoff, revocation, refund or  chargeback  with  respect  to  money  or  instruments  on  deposits  with  or  in  possession  of  such  banks, other than relating to Indebtedness;          (r)   Liens on assets of a Subsidiary, if the Subsidiary (x) was acquired or became a  Subsidiary after December 15, 2015 or (y) was formed after December 15, 2015 for the purpose  of  acquiring  assets,  which  Liens  secure  Indebtedness  incurred  by  such  Subsidiary  pursuant  to  Section 10.3(i);         (s)   Liens  existing  on  assets  on  the  date  hereof  securing  the  Senior  Secured  Indebtedness  and  any  Senior  Secured  Replacement  Assets  securing  the  Senior  Secured  Indebtedness; provided,  that  no  such  Lien  shall  be  granted  upon  any  Senior  Secured  Replacement Assets unless (i) the Company or Subsidiary is not in default or is within the ten  (10) day cure period for any Event of Default arising from the Borrowing Base Debt (as defined  in  the  Senior  Secured  Credit  Facility  on  the  date  hereof)  exceeding  the  Borrowing  Base  (as  defined in the Senior Secured Credit Facility on the date hereof) and (ii) the aggregate amount of  Senior Secured Replacement Assets against which a Lien will be granted within the ten (10) day  cure  period  is  sufficient  to  cause  the  Borrowing  Base  to  exceed  the  Borrowing  Base  Debt;  provided, further that the aggregate amount of Indebtedness secured pursuant to this clause (s)  does not exceed at any time $75,000,000;          (t)  Liens  securing  the  Senior  Unsecured  Credit  Facility  so  long  as  (i)  the  Company  secures the Notes hereunder on a pari passu basis pursuant to Section 9.10 and (ii) such Liens  are subject to an intercreditor agreement satisfactory to the holders; and         (u)  Liens  securing  the  Existing  Notes  so  long  as  (i)  the  Company  secures  the  Notes  hereunder on a pari passu basis pursuant to Section 9.10 and (ii) such Liens are subject to an  intercreditor agreement satisfactory to the holders.          “Person”  means  an  individual,  partnership,  corporation,  limited  liability  company,  association, trust, unincorporated organization, business entity or Governmental Authority.         “Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject  to  Title  I  of  ERISA  that  is  or,  within  the  preceding  five  years,  has  been  established  or  maintained, or to which contributions are or, within the preceding five years, have been made or  required  to  be  made,  by  the  Company  or  any  ERISA  Affiliate  or  with  respect  to  which  the  Company or any ERISA Affiliate may have any liability.         “Principal Credit Facilities” means, collectively, the Senior Secured Credit Facility and  the Senior Unsecured Credit Facility.        “property”  or “properties”  means,  unless  otherwise  specifically  limited,  real  or  personal property of any kind, tangible or intangible, choate or inchoate.         “Proposed Prepayment Date” is defined in Section 8.8.    52410969                             A-16

 

      “PTE” is defined in Section 6.2(a).         “Purchaser”  or “Purchasers”  means  each  of  the  purchasers  that  has  executed  and  delivered this Agreement to the Company and such Purchaser’s successors and assigns (so long  as any such assignment complies with Section 13.2), provided, however, that any Purchaser of a  Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such  Note as the result of a transfer thereof pursuant to Section 13.2 shall cease to be included within  the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.         “Purchaser  Schedule”  means  the  Purchaser  Schedule  to  this  Agreement  listing  the  Purchasers of the Notes and including their notice and payment information.        “QPAM Exemption” is defined in Section 6.2(d).         “Qualified  Institutional  Buyer”  means  any  Person  who  is  a  “qualified  institutional  buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.         “Raw Land – Entitled” means land not under development which is Entitled Land.         “Raw  Land  –  Unentitled” means  land  not  under  development  which  is  not  Entitled  Land but which the Company in its reasonable commercial judgment believes it will be able to  develop as residential property for its own use and not to be held speculatively.         “Real Estate Inventory” means Construction in Progress, Completed Units (including  Sold Units, Model Units and Speculative Units), Finished Lots, Land Under Development, Raw  Land – Entitled and Raw Land – Unentitled.         “Recent Filings” is defined in Section 5.3.        “Reinvestment Yield” is defined in Section 8.6.        “Related Fund” means, with respect to any holder of any Note, any fund or entity that  (a) invests in Securities or bank loans, and (b) is advised or managed by such holder, the same  investment advisor as such holder or by an affiliate of such holder or such investment advisor.         “Remaining Average Life” is defined in Section 8.6.        “Remaining Scheduled Payments” is defined in Section 8.6.        “Reported” is defined in Section 8.6.        “Required Holders” means at any time (a) prior to the Closing, the Purchasers and (b)  on or after the Closing, the holders of at least a majority in principal amount of the Notes at the  time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).    52410969                             A-17

 

      “Responsible Officer” means any Senior Financial Officer and any other officer of the  Company with responsibility for the administration of the relevant portion of this Agreement.         “Restricted  Payments” means,  with  respect  to  any  Person,  any  dividend  (other  than  dividends payable solely in the form of common stock of the Person making such dividend) on,  or any payment on account of, including any sinking or other analogous fund for, the purchase,  redemption, defeasance, retirement or other acquisition of, any Capital Stock of any Person or  any of its Subsidiaries, or any other distribution in respect thereof, either directly or indirectly,  whether in cash or property or in obligations of such Person or any of its Subsidiaries.         “S&P” means S&P Global Ratings, a division of S&P Global, Inc., and any successor  thereto that is a nationally recognized rating agency.        “SEC” means the Securities and Exchange Commission of the United States of America.         “Securities”  or “Security”  shall  have  the  meaning  specified  in  section 2(1)  of  the  Securities Act.          “Securities  Act”  means  the  Securities  Act  of  1933  and  the  rules  and  regulations  promulgated thereunder from time to time in effect.         “Senior  Financial  Officer”  means  the  chief  financial  officer,  principal  accounting  officer, treasurer, assistant treasurer or comptroller of the Company.         “Senior Secured Credit Facility” means the Loan Agreement dated July 30, 2015 (as  amended by the First Amendment, dated as of May 3, 2016, the Second Amendment, dated as of  March 22, 2017, the Third Amendment, dated as of July 6, 2017, the Fourth Amendment, dated  as of July 25, 2017, the Fifth Amendment dated as of August 25, 2017, the Sixth Amendment,  dated as of October 27, 2017, and the Fourth Modification of Promissory Note, dated as of May  22,  2020),  by  and  among  the  Company,  each  Subsidiary  party  thereto  and  Inwood  National  Bank, a national banking association, as lender, and any borrowing base facility that refinances  in its entirety such Loan Agreement (and successive replacements thereof); provided, that (a) the  Indebtedness thereunder does not at any time exceed $75,000,000 and (b) the proceeds from such  Loan  Agreement  and  any  refinancing  thereof  are  not  applied  to  repay  any  unsecured  Indebtedness under a Material Credit Facility that is owed to a lender (or Affiliate thereof) under  such  unsecured  Material  Credit  Facility  that  is  also  a  lender  (or  Affiliate  thereof)  under  the  Senior Secured Credit Facility.         “Senior Secured Indebtedness” means all Indebtedness incurred by the Company and  any Subsidiary under the Senior Secured Credit Facility.         “Senior  Secured  Replacement  Assets”  means  assets  securing  the  Senior  Secured  Indebtedness  in  replacement  of  assets  sold  or  otherwise  disposed  of  by  the  Company  or  a  Subsidiary, which sold or otherwise disposed of assets were previously securing Senior Secured  Indebtedness; provided, that a Senior Financial Officer of the Company shall have determined in  good faith that such Senior Secured Replacement Assets, in the aggregate, have a substantially    52410969                             A-18

 

comparable  value  to  the  sold  or  otherwise  disposed  of  assets  that  were  previously  securing  Senior Secured Indebtedness.         “Senior Unsecured Credit Facility” means the Credit Agreement dated as of December  15,  2015,  (as  amended  by  the  First  Amendment,  dated  as  of  August  31,  2016,  the  Second  Amendment, dated  as  of December  1,  2016, the  Third Amendment,  dated  as  of  September  1,  2017, the Fourth Amendment, dated as of December 1, 2017, the Fifth Amendment dated as of  November 2, 2018, and the Sixth Amendment dated as of December 17, 2019, as in effect prior  to the effectiveness of this Agreement, the “Credit Agreement”), by and among the Company,  the lenders from time to time party thereto, and Flagstar Bank, FSB, as administrative agent.          “Settlement Date” is defined in Section 8.6.        “Side-by-Side Subsidiary” is a Subsidiary that is (a) not a Wholly-Owned Subsidiary,  (b)  not  a  Carried  Interest  Subsidiary  and  (c)  in  which  a  Person  other  than  the  Company  or  a  Wholly-Owned  Subsidiary  has  a  capital  account  (excluding  undistributed  earnings)  in  such  Subsidiary commensurate with its equity interest.        “Significant  Subsidiary” means  any  Wholly-Owned  Subsidiary  of  the  Company  that,  together  with  such  Subsidiary’s  Subsidiaries  on  a  Consolidated  basis  based  on  the  financial  statements most recently delivered pursuant to Section 7.1(a) or (b), either (or both) (a) generates  more than 5% of Consolidated Net Income for the four fiscal quarter period most recently ended  and reflected in such financial statements, prior to deducting income taxes paid or accrued from  the revenues used in determining such Consolidated Net Income, or (b) owns assets or properties  (other  than  intercompany  receivables)  that  constitutes  more  than  5%  of  Consolidated  Net  Tangible Assets.        “Sold” means, with respect to any item of Real Estate Inventory, that (a) a third party  purchase contract has been executed for such item of Real Estate Inventory; (b) the third party  purchaser for such item of Real Estate Inventory has made a cash deposit for such item; and (c)  such third party purchaser’s obligation to purchase such item of Real Estate Inventory pursuant  to  such  third  party  purchase  contract  is  not  subject  to  any  contingencies  other  than  the  contingency  that  it  shall  have  obtained  mortgage  financing  or  that  it  shall  have  sold  other  identified property.         “Solvent”,  when  used  with  respect  to  any  Person,  means  that,  as  of  any  date  of  determination, (a) the aggregate fair market value of such Person’s assets exceeds its liabilities  (whether contingent, subordinated, unmatured, unliquidated or otherwise), (b) such person has  not incurred debts beyond such Person’s  ability to pay such debts as they  mature (taking into  account all reasonably anticipated financing and refinancing proceeds), and (c) such Person does  not  have  unreasonably  small  capital  to  conduct  such  Person’s  businesses.   In  computing  the  amount of contingent or unliquidated liabilities at any time, such liabilities will be computed as  the amount which, in light of all the facts and circumstances existing at such time, represent the  amount that can be reasonably be expected to become an actual or matured liability discounted to  present value at rates believed to be reasonable by such Person.    52410969                             A-19

 

      “Source” is defined in Section 6.2.         “Speculative Unit” means any Completed Unit that is neither a Sold Unit nor a Model  Unit.         “State Sanctions List” means a list that is adopted by any state Governmental Authority  within  the  United  States  of  America  pertaining  to  Persons  that  engage  in  investment  or  other  commercial activities in Iran or any other country that is a target of economic sanctions imposed  under U.S. Economic Sanctions Laws.        “Subordinated Debt” means any Indebtedness of the Company or any other Note Party  that is subordinated to the Note Obligations at all times (including in respect of any amendment  or modification thereto) on terms reasonably satisfactory to the Required Holders.         “Subsidiary”  means,  as  to  any  Person,  (a)  any  corporation,  limited  liability  company,  association or other business entity (other than a partnership), of which (i) more than (50%) of  the total voting power of the equity interests entitled (without regard to the occurrence of any  contingency) to vote in the election of the board of directors or other governing body thereof are  at the time owned or controlled, directly or indirectly, by such Person or one or more of the other  Subsidiaries of that Person (or a combination thereof), or (ii) the management and operations are  otherwise  controlled,  directly  or  indirectly,  by  such  Person  or  one  or  more  of  the  other  Subsidiaries of such Person (or a combination thereof), and, in each case whose financial results  are  Consolidated  with  the  results  of  such  Person  and  (b)  any  partnership  (i)  the  sole  general  partner or the  managing general partner of which is such Person or a Subsidiary of such Person  or (ii) the only general partners of which are such Person or one or more Subsidiaries of such  Person (or any combination hereof).  Unless the context otherwise clearly requires, any reference  to a “Subsidiary” is a reference to a Subsidiary of the Company.         “Subsidiary  Guarantor”  means  each  Subsidiary  that  has  executed  and  delivered  a  Subsidiary Guaranty.         “Subsidiary Guaranty” is defined in Section 9.7(a).         “Substitute Purchaser” is defined in Section 21.         “Super-Majority Holders” means at any time (a) prior to the Closing, the Purchasers  and (b) on or after the Closing, the holders of at least 66-2/3% in principal amount of the Notes  at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).         “SVO” means the Securities Valuation Office of the NAIC.         “Swap  Contract”  means  (a) any  and  all  interest  rate  swap  transactions,  basis  swap  transactions,  basis  swaps,  credit  derivative  transactions,  forward  rate  transactions,  commodity  swaps,  commodity  options,  forward  commodity  contracts,  equity  or  equity  index  swaps  or  options,  bond  or  bond  price  or  bond  index  swaps  or  options  or  forward  foreign  exchange  transactions,  cap  transactions,  floor  transactions,  currency  options,  spot  contracts  or  any  other    52410969                             A-20

 

similar  transactions  or  any  of  the  foregoing  (including  any  options  to  enter  into  any  of  the  foregoing), and (b) any and all transactions of any kind, and the related confirmations, which are  subject to the terms and conditions of, or governed by, any form of master agreement published  by  the  International  Swaps  and  Derivatives  Association,  Inc.  or  any  International  Foreign  Exchange Master Agreement.         “Swap Obligations” of a Person means any and all obligations of such Person, whether  absolute  or  contingent  and  howsoever  and  whensoever  created,  arising  evidenced  or  acquired  (including all renewals, extensions and modifications thereof and substitutions therefor), under  any Swap Contract.         “Swap Termination Value” means, in respect of any one or more Swap Contracts, after  taking into account the effect of any legally enforceable netting agreement relating to such Swap  Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and  termination value(s) determined in accordance therewith, such termination value(s), and (b) for  any date prior  to the date  referenced in  clause  (a), the  amounts(s) determined  as  the  mark-to- market values(s) for such Swap Contracts, as determined based upon one or more mid-market or  other readily available quotations provided by any recognized dealer in such Swap Contracts.         “Synthetic  Lease”  means,  at  any  time,  any  lease  (including  leases  that  may  be  terminated by the lessee at any time) of any property (a) that is accounted for as an operating  lease  under  GAAP  and  (b) in  respect  of  which  the  lessee  retains  or  obtains  ownership  of  the  property so leased for U.S. federal income tax purposes, other than any such lease under which  such Person is the lessor.         “Unencumbered Assets” means, as of any date, an amount equal to the sum (without  duplication) of the following assets of the Note Parties and each of the Company’s Consolidated  Subsidiaries (but only to the extent such Subsidiary does not have any Indebtedness (including,  without limitation, Non-Recourse Indebtedness) owing to a Person that is not the Company or an  Affiliate of the Company), in all cases only to the extent (x) that such assets are not subject to (i)  any  Liens  securing  Non-Recourse  Indebtedness,  Senior  Secured  Indebtedness  or  Indebtedness  incurred pursuant to Section 10.3(i) or (ii) any other Lien that is not a Permitted Lien, and (y)  with respect to any Subsidiary that is not either (i) a Subsidiary Guarantor or a Wholly-Owned  Subsidiary of a Subsidiary Guarantor or (ii) a Carried Interest Subsidiary (limited, in the case of  this subclause (ii), to 20% of Consolidated Net Tangible Assets, with any amount in excess of  such 20% being limited to the Company’s ownership percentage), the amount will be limited to  the  Company’s  ownership  percentage,  directly  or  indirectly,  in  the  Capital  Stock  of  such  Subsidiary:         (a)   100% of Unrestricted Cash to the extent it exceeds $15,000,000; plus        (b)   subject to the limitations set forth below, 85% of the Book Value of Model Units;  plus        (c)   85% of the Book Value of Construction in Progress; plus   52410969                             A-21

 

      (d)   85% of the Book Value of Sold Completed Units; plus        (e)   subject  to  the  limitations  set  forth  below  and  in  Section  6.01(d)  of  the  Senior  Unsecured  Credit  Facility  (as  in  effect  on  the  date  hereof),  85%  of  the  Book  Value  of  Speculative Units; plus        (f)   65% of the Book Value of Finished Lots; plus        (g)   subject to the limitations set forth below, 65% of the Book Value of Land Under  Development; plus        (h)   subject  to  the  limitations  set  forth  below,  50%  of  the  Book  Value  of  Entitled  Land.         Notwithstanding the foregoing:         (i)   the percentage under clause (e) shall decrease to (A) 65% for any Unit that has  been a Speculative Unit for 180 days or more, but less than 360 days and (B) 25% for any Unit  that has been a Speculative Unit for 360 days or more;          (ii)  the percentage under clause (b) shall decrease to 0% for any Unit that has been a  Model Unit for 180 days or more following the sale of the last production Unit in the applicable  project relating to such Model Unit;          (iii)  the Unencumbered Assets shall not include any Book Value of Entitled Land to  the  extent  that  the  inclusion  thereof  would  cause  Entitled  Land  to  exceed  25%  of  the  total  amount of Unencumbered Assets; and         (iv)  the  Unencumbered  Assets  shall  not  include  any  Book  Value  of  Land  Under  Development or Entitled Land to the extent that the inclusion thereof would cause Land Under  Development and Entitled Land to exceed 50% of the total amount of Unencumbered Assets.         “Unencumbered  Assets  Ratio” means  the  ratio,  as  of any  date, of  (a)  Unencumbered  Assets to (b) Consolidated Debt that is not secured by any Lien on the assets of the Company or  any Subsidiary.        “Unencumbered Assets Subsidiary” means any Subsidiary whose assets are included in  the  most  recent  calculation  of  Unencumbered  Assets  for  purposes  of,  and  whose  assets  were  necessary for, the Company’s compliance with Section 10.1 on such calculation date.        “Unit” means a single family residential housing unit available for sale.         “United States Person” has the meaning set forth in Section 7701(a)(30) of the Code.         “Unsold”  means,  with  respect  to  any  item  of  Real  Estate  Inventory,  that  such  item  of  Real Estate Inventory is not Sold.    52410969                             A-22

 

      “Unrestricted  Cash”  means  cash  and  Cash  Equivalents  of  the  Company  and  its  Subsidiaries  that  are  free  and  clear  of  all  Liens  and  not  subject  to  any  restrictions  on  the  use  thereof to pay Indebtedness and other obligations of the applicable Note Party.          “USA  PATRIOT  Act”  means  United  States  Public  Law  107-56,  Uniting  and  Strengthening  America  by  Providing  Appropriate  Tools  Required  to  Intercept  and  Obstruct  Terrorism  (USA  PATRIOT  ACT)  Act  of  2001  and  the  rules  and  regulations  promulgated  thereunder from time to time in effect.         “U.S.  Economic  Sanctions  Laws”  means  those  laws,  executive  orders,  enabling  legislation  or  regulations  administered  and  enforced  by  the  United  States  pursuant  to  which  economic sanctions have been imposed on any Person, entity, organization, country or regime,  including the Trading with the Enemy Act, the International Emergency Economic Powers Act,  the  Iran  Sanctions  Act,  the  Sudan  Accountability  and  Divestment  Act  and  any  other  OFAC  Sanctions Program.         “Wholly-Owned  Subsidiary”  means,  at  any  time,  any  Subsidiary  all  of  the  equity  interests (except directors’ qualifying shares) and voting interests of which are owned by any one  or more of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.    52410969                             A-23

 

                               [FORM OF NOTE]                             GREEN BRICK PARTNERS, INC.                        3.35% SENIOR NOTE DUE AUGUST 26, 2027   No. [_____]                                                             [Date]  $[_______]                                                    PPN 392709 A@0          FOR VALUE RECEIVED,  the  undersigned,  Green  Brick  Partners,  Inc.  (herein  called  the  “Company”),  a  corporation  organized  and  existing  under  the  laws  of  the  State  of  Delaware,  hereby  promises  to  pay  to  [____________],  or  registered  assigns,  the  principal  sum  of  [_____________________]  DOLLARS  (or  so  much  thereof  as  shall  not  have  been  prepaid)  on  August 26, 2027 (the “Maturity Date”), with interest (computed on the basis of a 360-day year  of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 3.35% per annum from  the date hereof, payable quarterly, on the 26th day of August,  November, February and May in  each year, commencing with the August, November, February or May next succeeding the date  hereof, and on the Maturity Date, until the principal hereof shall have become due and payable,  and (b) to the extent permitted by law, upon and during the continuance of an Event of Default,  on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per  annum from time to time equal to the greater of (i) 5.35% or (ii) 2.00% over the rate of interest  publicly announced by The Bank of New York from time to time in New York, New York as its  “base” or “prime” rate, payable quarterly as aforesaid (or, at the option of the registered holder  hereof, on demand).         Payments of principal of, interest on and any Make-Whole Amount with respect to this  Note are to be made in lawful money of the United States of America at the principal office of  U.S. Bank in New York, New York, or at such other place as the Company shall have designated  by written notice to the holder of this Note as provided in the Note Purchase Agreement referred  to below.         This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant  to the Note Purchase Agreement, dated August 26, 2020 (as amended, restated, supplemented or  otherwise modified from time to time, the “Note Purchase Agreement”), between the Company  and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder  of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality  provisions  set  forth  in  Section 20  of  the  Note  Purchase  Agreement  and  (ii) made  the  representation  set  forth  in  Section 6.2  of  the  Note  Purchase  Agreement.   Unless  otherwise  indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such  terms in the Note Purchase Agreement.         This Note is a registered Note and, as provided in the Note Purchase Agreement, upon  surrender of this Note for registration of transfer accompanied by a written instrument of transfer  52410969                                       SCHEDULE 1                                 (TO NOTE PURCHASE AGREEMENT)

 

duly  executed,  by  the  registered  holder  hereof  or  such  holder’s  attorney  duly  authorized  in  writing, a new Note for a like principal amount will be issued to, and registered in the name of,  the transferee.  Prior to due presentment for registration of transfer, the Company may treat the  Person in whose name this Note is registered as the owner hereof for the purpose of receiving  payment and for all other purposes, and the Company will not be affected by any notice to the  contrary.         This  Note  is  also  subject  to  prepayment,  in  whole  or  from  time  to  time in  part,  at  the  times and on the terms specified in the Note Purchase Agreement, but not otherwise.           If  an  Event  of  Default  occurs  and  is  continuing,  the  principal  of  this  Note  may  be  declared  or  otherwise  become  due  and  payable  in  the  manner,  at  the  price  (including  any  applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.         This  Note  shall  be  construed  and  enforced  in  accordance  with,  and  the  rights  of  the  Company and the holder of this Note shall be governed by, the law of the State of New York  excluding choice-of-law principles of the law of such State that would permit the application of  the laws of a jurisdiction other than such State.                                          GREEN BRICK PARTNERS, INC.                                          By  ____________________________________                                            [Name]                                            [Title]    52410969                             -2- 

 

                      FORM OF OPINION OF SPECIAL COUNSEL                               FOR THE COMPANY  The  following  opinions  are  to  be  provided  by  special  counsel  for  the  Company,  subject  to  customary assumptions, limitations and qualifications.  All capitalized terms used herein without  definition shall have the meanings ascribed thereto in the Note Purchase Agreement.         1.    Each  of  the  Company  and  the  Delaware  Guarantor  is  a  corporation  or  limited  liability company, as applicable, validly existing under the laws of the State of Delaware and the  status  of  each  of  the  Company  and  the  Delaware  Guarantor  in  good  standing.   Each  Texas  Guarantor is a limited liability company validly existing under the laws of the State of Texas and  each Texas Guarantor’s status is active.  Each Georgia Guarantor is a limited liability company  validly existing under the laws of the State of Georgia and each Georgia Guarantor’s status is  active.  Each of the Company and the Guarantors has the corporate or limited liability company,  as  applicable,  power  to  carry  on  their  respective  businesses  as  currently  conducted.   The  Company has the corporate power to execute and deliver each Note Document to which it is a  party  and  perform  its  obligations  thereunder.  Each of  the Guarantors has  the limited liability  company power to execute and deliver and perform its obligations.         2.    Each  of  the  Note  Documents  to  which  the  company  is  a  party  has  been  duly  authorized by all requisite corporate action on the part of the Company and duly executed and  delivered  by  authorized  officers  of  the  Company,  and  are  valid  obligations  of  the  Company,  legally binding upon and enforceable against the Company in accordance with their respective  terms,  except  as  such  enforceability  may  be  limited  by  (a)  bankruptcy,  insolvency,  reorganization or other similar laws affecting the enforcement of creditors’ rights generally and  (b)  general  principles  of  equity  (regardless  of  whether  such  enforceability  is  considered  in  a  proceeding in equity or at law).         3.    Each  Note  Document  has  been  duly  authorized  by  all  requisite  limited  liability  company action on the part of each Guarantor party thereto and duly executed and delivered by  authorized  officers  of  each  such  Guarantor,  and  is  a  valid  obligation  of  each  such  Guarantor,  legally binding upon and enforceable against such Guarantor in accordance with its terms, except  as  such  enforceability  may  be  limited  by  (a)  bankruptcy,  insolvency,  reorganization  or  other  similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of  equity (regardless of whether such  enforceability is considered in a proceeding in equity or at  law).         4.    It is not necessary in connection with the offering, issuance, sale and delivery of  the  Notes  purchased  by  the  Note  Purchasers  at  the  Closing,  under  the  circumstances  contemplated by the Note Purchase Agreement, to register the Notes under the Securities Act or  to  qualify  an  indenture  in  respect  of  the  Notes  under  the  Trust  Indenture  Act  of  1939,  as  amended.    52410969                                     SCHEDULE 4.4(A)                                 (TO NOTE PURCHASE AGREEMENT)

 

      5.    The execution and delivery by each of the Note Parties of the Note Documents to  which it  is  a party,  the  offering,  issuance and sale of the Notes  and performance by the  Note  Parties of their respective obligations under the Note Documents, does not require any consent,  approval  or  authorization  of,  or  registration,  filing  or  declaration  with,  any  Governmental  Authority by any Note Party, other than the filing of a Current Report on Form 8-K pursuant to  the  Securities  Exchange  Act  of  1934,  as  amended  and  the  rules  and  regulations  promulgated  thereunder.         6.    The execution and delivery by each of the Note Parties of the Note Documents to  which it  is  a party,  the  offering,  issuance and sale of the Notes  and performance by the  Note  Parties  of  their  respective  obligations  under  the  Note  Documents,  (1)  do  not  conflict  with,  or  result in a breach of the terms, conditions or provisions of, or constitute a default under, or result  in any violation of any of the Organizational Documents, (2) do not result in the creation of any  Lien upon any of the properties or assets of the Company or the Guarantors, (3) do not violate  any applicable provision of existing law, rule or regulation of the State of New York, the State of  Delaware, the State of Texas or the State of Georgia or any United States federal law, rule or  regulation applicable to the Note Parties, in each case to the extent covered by this opinion letter,  (4) do not contravene, result in any breach of, or constitute a default under, any Material Credit  Facility  and  (5)  to  our  knowledge,  do  not  conflict  with,  or  result  in  a  breach  of  the  terms,  conditions  or  provisions  of  any  order,  judgment  or  decree  to  which  the  Company  and  any  Guarantor is a party or otherwise subject.         7.    The issuance of the Notes by the Company and the application of the proceeds  thereof,  under  the  circumstances  contemplated  by  and  in  compliance  with  the  terms  and  conditions of the Note Purchase Agreement will not violate or result in a violation of Regulation  T, U or X of the Board of Governors of the United States Federal Reserve System, 12 CFR, Part  220, Part 221 and Part 224, respectively.         8.    None of the Company or any Guarantor is required to register as an “investment  company” within the meaning of the Investment Company Act of 1940, as amended, as now in  effect.         9.    To our knowledge, there are no actions, suits or proceedings pending against or  affecting the Company or any Guarantor or any property of the Company or any Guarantor in  any  court  or  before  any  arbitrator  of  any  kind  or  before  or  by  any  Governmental  Authority,  except  actions,  suits  or  proceedings  which  (a)  individually  do  not  in  any  manner  draw  into  question the validity of the Note Documents and (b) in the aggregate, if adversely determined,  could not be reasonably expected to have a Material Adverse Effect.    52410969                             -2- 

 

                              SCHEDULE 5.3                            DISCLOSURE MATERIALS   1. Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the     Securities and Exchange Commission on March 6, 2020  2. Definitive Proxy Statements on Schedule 14A, filed with the Securities and Exchange     Commission on April 29, 2020 and June 9, 2020  3. Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30,     2020, as filed with the Securities and Exchange Commission on May 11, 2020 and     August 4, 2020  4. Current Reports on Form 8-K, filed with the Securities and Exchange Commission, on     March 3, 2020, April 9, 2020, May 11, 2020, June 26, 2020 and August 4, 2020                                    SCHEDULE 5.3                              (TO NOTE PURCHASE AGREEMENT) 

 

            SCHEDULE 5.4   SUBSIDIARIES OF THE COMPANY AND  OWNERSHIP OF SUBSIDIARY STOCK              SEE ATTACHED                 SCHEDULE 5.4           (TO NOTE PURCHASE AGREEMENT) 

 

                                                      Schedule 5.4(a)(i)                                                     Company Subsidiaries                                                                                                                                                                State of                                    Ownership      Guarantor      Status     Significant             Entity             Organization              Owner                Interest                                Subsidiary                                                                                100%                            Wholly                     Green Brick Title, LLC          Texas        Green Brick Partners, Inc.    Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     GRBKMP, LLC                     Texas        JBGL Ownership, LLC           Membership        Yes         Owned         No                                                                                Interest                                                Prime                            51%                                                                                                    Lending Ventures              Membership                                       Green Brick Mortgage,                        Management, LLC                 Interest         No        Investment     No                                  Delaware   LLC                                                                           49%                                                GRBKMP, LLC                   Membership                                                                                Interest                                                                                 51%                                                                                                    First Continental Mortgage,                                                                              Membership                                                                                    Ltd.                                                                                 Interest         No        Investment     Yes   BHome Mortgage, LLC             Texas                                                                                 49%                                                GRBKMP, LLC                   Membership                                                                                Interest                                                                                100%                            Wholly                     GRBK Edgewood, LLC              Texas        Green Brick Partners, Inc.    Membership        Yes         Owned         Yes                                                                                Interest                                                                                100%                            Wholly                     GRBK Frisco, LLC                Texas        Green Brick Partners, Inc.    Membership        Yes         Owned         Yes                                                                                Interest                                                                                100%                            Wholly                     JBGL Chateau, LLC               Texas        Green Brick Partners, Inc.    Membership        Yes         Owned         No                                                                                Interest                                                                                100%                            Wholly                     JBGL Exchange, LLC              Texas        Green Brick Partners, Inc.    Membership        Yes         Owned         Yes                                                                                Interest                                                                                100%                            Wholly                     JBGL Hawthorne, LLC             Texas        Green Brick Partners, Inc.    Membership        Yes         Owned         No                                                                                Interest                                                                                100%                            Wholly                     JBGL Mustang, LLC               Texas        Green Brick Partners, Inc.    Membership        Yes         Owned         Yes                                                                                Interest                                                                                100%                            Wholly                     JBGL Builder Finance,                                   Texas        Green Brick Partners, Inc.    Membership        Yes         Owned         Yes   LLC                                                                                Interest                                                                                 80%                                                                                                    JBGL Builder Finance, LLC     Membership                    Side by                                                                                         Interest         No          Side         No   GRBK Academy, LLC               Georgia                                                                                 20%                                                The Remiclay Trust            Membership                                                                                Interest                                                                                100%                            Wholly                     GRBK Church Street, LLC         Georgia      JBGL Builder Finance, LLC     Membership        Yes         Owned         No                                                                                Interest                                                                                100%                            Wholly                     GRBK Devore, LLC                Georgia      JBGL Builder Finance, LLC     Membership        Yes         Owned         No                                                                                Interest                                                                                100%                            Wholly                     GRBK GC, LLC                    Georgia      JBGL Builder Finance, LLC     Membership        Yes         Owned         No                                                                                Interest                                                                                100%                            Wholly                     GRBK Haynes, LLC                Georgia      JBGL Builder Finance, LLC     Membership        Yes         Owned         No                                                                                Interest    ACTIVE 52102560v3 

 

                                                                                                                                                                State of                                    Ownership      Guarantor      Status     Significant             Entity             Organization              Owner                Interest                                Subsidiary                                                                                100%                            Wholly                     GRBK North Point, LLC           Georgia      JBGL Builder Finance, LLC     Membership        Yes         Owned         No                                                                                Interest                                                                                100%                            Wholly                     GRBK Stringer, LLC              Georgia      JBGL Builder Finance, LLC     Membership        Yes         Owned         No                                                                                Interest                                                                                 50%                                                                                                    JBGL Builder Finance, LLC     Membership                    Side by            GRBK Suwanee Station,                                                        Interest         No          Side         No                                   Georgia   LLC                                                                           50%                                                               MCWP, LLC                     Membership                                                                               Interest0                                                                                100%                            Wholly                     JBGL Atlanta                                   Georgia      JBGL Builder Finance, LLC     Membership        Yes         Owned         Yes   Development, LLC                                                                                Interest                                                                                100%                            Wholly                     JBGL Atlanta Development                                   Georgia      JBGL Builder Finance, LLC     Membership        Yes         Owned         No   2014, LLC                                                                                Interest                                                                                 50%                                                                                                    JBGL Builder Finance, LLC     Membership                    Side by                                                                                         Interest         No          Side         No   JBGL Land Fund, LLC             Georgia                                                                                 50%                                                MCWP, LLC                     Membership                                                                                Interest                                                                                100%                            Wholly                     Johns Creek 206, LLC            Georgia      JBGL Builder Finance, LLC     Membership        Yes         Owned         Yes                                                                                Interest                                                                                100%                            Wholly                     JBGL Ownership, LLC            Delaware      JBGL Builder Finance, LLC     Membership        Yes         Owned         Yes                                                                                Interest                                                                                100%            Yes Wholly Yes   GRBK DFW Acquisitions,                                   Texas        Green Brick Partners, Inc.    Membership                    Owned   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Homes DFW,                                                         Membership        Yes         Owned         Yes                                   Texas        GRBK DFW Acquisitions   LLC                                                                          Interest                                                                                                                                                                   100%                            Wholly                     CB JENI 2020, LLC               Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     CB JENI Acquisitions,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Apples Crossing,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Berkshire Place,                                   Texas        CB JENI Homes DFW, LLC        Membership        Yes         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI - Brick Row                                   Texas        CB JENI Homes DFW, LLC        Membership        Yes         Owned         No   Townhomes, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI - Chase Oaks                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Village II, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Frisco Springs,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest   ACTIVE 52102560v3 

 

                                                                                                                                                                State of                                    Ownership      Guarantor      Status     Significant             Entity             Organization              Owner                Interest                                Subsidiary                                                                                100%                            Wholly                     CB JENI - Hemingway                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Court, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Homes Grand                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Park, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Homes Heritage                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Creekside, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Homes Raiford                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Crossing, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Homes Sloan                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Creek, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Hometown, LLC           Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     CB JENI Iron Horse, LLC         Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     CB JENI - Lake Vista                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Coppell, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Los Rios, LLC           Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     CB JENI Majestic Gardens,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Management,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI McKinney Ranch,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Meridian at                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Southgate, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Montgomery                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Ridge, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Mustang Park,                                   Texas        CB JENI Homes DFW, LLC        Membership        Yes         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Parker Ranch,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Pecan Park, LLC         Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     CB JENI Pecan Square,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Ridge View                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Villas, LLC                                                                                Interest    ACTIVE 52102560v3 

 

                                                                                                                                                                State of                                    Ownership      Guarantor      Status     Significant             Entity             Organization              Owner                Interest                                Subsidiary                                                                                100%                            Wholly                     CB JENI Riverset, LLC           Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     CB JENI - Settlement at                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Craig Ranch, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Southgate, LLC          Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     CB JENI Stacy Crossing,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Stonegate, LLC          Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     CB JENI Sunset Place,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Terraces at Las                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Colinas, LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Trophy Club,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Twin Creeks,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     CB JENI Viridian, LLC           Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     CB JENI Vista Del Lago,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     Paragon Property                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Management Group, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes, LLC             Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes - Alto                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Vista Irving, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Apples                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Crossing, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Cottonwood Crossing, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Cypress                                   Texas        CB JENI Homes DFW, LLC        Membership        Yes         Owned         No   Meadows, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Edgewood, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Essex                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Park, LLC                                                                                Interest    ACTIVE 52102560v3 

 

                                                                                                                                                                State of                                    Ownership      Guarantor      Status     Significant             Entity             Organization              Owner                Interest                                Subsidiary                                                                                100%                            Wholly                     Normandy Homes Frisco                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Spings, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Grand                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Park, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Lake                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Vista Coppell, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes                                   Texas        CB JENI Homes DFW, LLC        Membership        Yes         Owned         No   Lakeside, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Legends                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   at Twin Creeks, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Liberty                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Hills, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Mustang                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Park, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Parker                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Ranch, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Pecan                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Creek, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Shaddock Estates, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Southaven, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Southgate, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Spicewood, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Twin                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Creeks, LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Viridian,                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                     Normandy Homes Watters                                   Texas        CB JENI Homes DFW, LLC        Membership         No         Owned         No   Branch, LLC                                                                                Interest                                                                                 90%                                                                                        Green Brick Partners, Inc.    Membership                                                                                                                    Interest         No         Side by       No   CLH20, LLC                      Texas                                                                                 10%                         Side                                                Trevor Brickman               Membership                                                                                Interest                                                                                 100%                            Side by                    Centre Living Homes, LLC        Texas        CLH20, LLC                    Membership         No          Side         No                                                                                Interest    ACTIVE 52102560v3 

 

                                                                                                                                                                State of                                    Ownership      Guarantor      Status     Significant             Entity             Organization              Owner                Interest                                Subsidiary                                                                                100%                            Side by                    Centre Living Caddo, LLC        Texas        Centre Living Homes, LLC      Membership         No          Side         No                                                                                Interest                                                                                100%                            Side by                    Centre Living CityLine,                                   Texas        Centre Living Homes, LLC      Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                            Side by                    Centre Living                                   Texas        Centre Living Homes, LLC      Membership         No          Side         No   Condominiums, LLC                                                                                Interest                                                                                100%                            Side by                    Centre Living                                   Texas        Centre Living Homes, LLC      Membership         No          Side         No   Condominiums II, LLC                                                                                Interest                                                                                100%                            Side by                    Centre Living Ft Worth,                                   Texas        Centre Living Homes, LLC      Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                            Side by                    Centre Living Live Oak,                                   Texas        Centre Living Homes, LLC      Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                            Side by                    Centre Living Swiss, LLC        Texas        Centre Living Homes, LLC      Membership         No          Side         No                                                                                Interest                                                                                100%                            Side by                    Centre Living West Dallas,                                   Texas        Centre Living Homes, LLC      Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                            Wholly                     Southgate Homes DFW,                                   Texas SGHDAL LLC                           Membership         No         Owned          No   LLC                                                                                Interest                                                                                100%                            Wholly                     Southgate Homes - Angel                      Southgate Homes DFW,                                   Texas                                      Membership         No         Owned         No   Field West, LLC                              LLC                                                                                Interest                                                                                100%                            Wholly                     Southgate Homes - Austin                     Southgate Homes DFW,                                   Texas                                      Membership         No         Owned         No   Waters, LLC                                  LLC                                                                                Interest                                                                                100%                            Wholly                     Southgate Homes -                            Southgate Homes DFW,                                   Texas                                      Membership         No         Owned         No   Brockdale, LLC                               LLC                                                                                Interest                                                                                100%                            Wholly                     Southgate Homes - Canals                     Southgate Homes DFW,                                   Texas                                      Membership         No         Owned         No   at Grand Park, LLC                           LLC                                                                                Interest                                                                                100%                            Wholly                                                                  Southgate Homes DFW,   Southgate Edgewood, LLC         Texas                                      Membership         No         Owned         No                                                LLC                                                                                Interest                                                                                100%                            Wholly                     Southgate Homes - Garilen,                   Southgate Homes DFW,                                   Texas                                      Membership         No         Owned         No   LLC                                          LLC                                                                                Interest                                                                                100%                            Wholly                     Southgate Homes - Stoney                     Southgate Homes DFW,                                   Texas                                      Membership         No         Owned         No   Creek, LLC                                   LLC                                                                                Interest                                                                                100%                            Wholly                     Southgate Homes -                            Southgate Homes DFW,                                   Texas                                      Membership         No         Owned         No   Suburban Living, LLC                         LLC                                                                                Interest                                                                                100%                            Wholly                     Southgate Homes - Twin                       Southgate Homes DFW,                                   Texas                                      Membership         No         Owned         No   Creeks, LLC                                  LLC                                                                                Interest                                                                                100%                            Wholly                     Southgate Homes -                            Southgate Homes DFW,                                   Texas                                      Membership         No         Owned         No   Windsong, LLC                                LLC                                                                                Interest    ACTIVE 52102560v3 

 

                                                                                                                                                                State of                                    Ownership      Guarantor      Status     Significant             Entity             Organization              Owner                Interest                                Subsidiary                                                                                100%                            Wholly                                                                  Southgate Homes DFW,   Southgate Ranch, LLC            Texas                                      Membership         No         Owned         No                                                LLC                                                                                Interest                                                                                100%                         Wholly            SGHDAL, LLC                     Texas        Green Brick Partners, Inc.    Membership        Yes         Owned         Yes                                                                                Interest                                                                                100%                            Wholly                     Trophy Signature Homes,                                   Texas        Green Brick Partners, Inc.    Membership        Yes         Owned         No   LLC                                                                                Interest                                                                                100%                            Wholly                                                                  Trophy Signature Homes,   TSHH, LLC                       Texas                                      Membership        Yes         Owned         No                                                LLC                                                                                Interest                                                                                100%                            Wholly                                                                  Trophy Signature Homes,   TSHWS, LLC                      Texas                                      Membership        Yes         Owned         No                                                LLC                                                                                Interest                                                                                100%            Yes Wholly No                                                Trophy Signature Homes,   TSHHOU, LLC                     Texas                                      Membership                    Owned                                                LLC                                                                                Interest                                                                                 50%                                                                                                    JBGL Ownership, LLC           Membership                    Carried            The Providence Group of                                                      Interest        Yes         Interest      Yes                                   Georgia   Georgia, LLC                                                                  50%                                                TPG Investment Trust          Membership                                                                                Interest                                                                                 50%                                                                                                    JBGL Ownership, LLC           Membership                    Carried                                                                                         Interest        Yes         Interest      Yes   EJB River Holdings              Georgia                                                                                  50%                                                                East Jones Bridge, LLC        Membership                                                                                Interest                                                                                100%                            Carried                    Pratt Stacks, LLC               Georgia      TPG Homes 2017, LLC           Membership         No         Interest      No                                                                                Interest                                                                                 51%                                                                                                    Dogwood Title & Abstract                                                                              Membership                                                                                    Company   Providence Group Title,                                                      Interest         No        Investment     No                                   Georgia   LLC                                                                           49%                                                The Providence Group of                                                                              Membership                                                Georgia, LLC                                                                                Interest                                                                                 80%                                                                                                    The Providence Group of                                                                              Membership                    Side by                                                         Georgia, LLC   Providence Luxury Homes,                                                     Interest         No          Side         No                                   Georgia   LLC                                                                           20%                                                Henderson & Adams Fine                                                                              Membership                                                Homebuilding, LLC                                                                                Interest                                                                                100%                            Carried                    The Providence Group &                       The Providence Group of                                   Georgia                                    Membership         No         Interest      No   Associates, LLC                              Georgia, LLC                                                                                Interest   The Providence Group of                                                      100%                            Carried                                                                 The Providence Group of   Georgia Custom Homes,           Georgia                                    Membership        Yes         Interest      Yes                                                Georgia, LLC   LLC                                                                          Interest                                                                                100%                            Carried                    The Providence Group                         The Providence Group of                                   Georgia                                    Membership         No         Interest      No   Realty, LLC                                  Georgia, LLC                                                                                Interest                                                                                100%                            Carried                                                                 The Providence Group of   TPG Development, LLC            Georgia                                    Membership         No         Interest      No                                                Georgia, LLC                                                                                Interest    ACTIVE 52102560v3 

 

                                                                                                                                                                State of                                    Ownership      Guarantor      Status     Significant             Entity             Organization              Owner                Interest                                Subsidiary                                                                                100%                            Carried                    TPG Glendale Rowes,                                   Georgia      TPG Homes 2017, LLC           Membership         No         Interest      No   L.L.C.                                                                                Interest                                                                                100%                            Carried                                                                 The Providence Group of   TPG Haynes, LLC                 Georgia                                    Membership         No         Interest      No                                                Georgia, LLC                                                                                Interest                                                                                100%                            Carried                                                                 The Providence Group of   TPG Homes 2017, LLC             Georgia                                    Membership         No         Interest      No                                                Georgia, LLC                                                                                Interest                                                                                100%                            Carried                    TPG Homes at Bellmoore,                      The Providence Group of                                   Georgia                                    Membership         No         Interest      No   LLC                                          Georgia, LLC                                                                                Interest                                                                                100%                            Carried                    TPG Homes at Three                           The Providence Group of                                   Georgia                                    Membership         No         Interest      No   Bridges, LLC                                 Georgia, LLC                                                                                Interest                                                                                100%                            Carried                    TPG Homes at Whitfield                       The Providence Group of                                   Georgia                                    Membership         No         Interest      No   Parc, LLC                                    Georgia, LLC                                                                                Interest                                                                                100%                            Carried                    TPG Homes FS, LLC               Georgia      TPG Homes 2017, LLC           Membership         No         Interest      No                                                                                Interest                                                                                100%                            Carried                                                                 The Providence Group of   TPG Homes, LLC                  Georgia                                    Membership        Yes         Interest      Yes                                                Georgia, LLC                                                                                Interest                                                                                100%                            Carried                    TPG Maxwell, LLC                Georgia      TPG Homes 2017, LLC           Membership         No         Interest      No                                                                                Interest                                                                                100%                            Carried                    TPG Property Holdings,                       The Providence Group of                                   Georgia                                    Membership         No         Interest      No   LLC                                          Georgia, LLC                                                                                Interest                                                                                 80%                                                                                                    JBGL Ownership, LLC           Membership                    Side by                                                                                         Interest         No          Side         No   GRBK GHO Homes, LLC             Texas                                                                                 20%                                                GHO Capital Holdings, LLC     Membership                                                                                Interest                                                                                100%                             Side by                   GRBK GHO 4 Lakes, LLC           Florida      GRBK GHO Homes, LLC           Membership         No          Side         No                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Arabella                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   Reserve, LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Bent Pine,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Berkley                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   Square, LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Central Vero,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Eagle Trace,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO High Pointe,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest    ACTIVE 52102560v3 

 

                                                                                                                                                                State of                                    Ownership      Guarantor      Status     Significant             Entity             Organization              Owner                Interest                                Subsidiary                                                                                100%                             Side by                   GRBK GHO Huntington,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Lake                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   Sapphire, LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Lily's Cay,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Lucaya                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   Pointe, LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Meadowood,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO North Beach,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Properties,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Segovia                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   Lakes, LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Serenoa, LLC           Florida      GRBK GHO Homes, LLC           Membership         No          Side         No                                                                                Interest                                                                                100%                             Side by                   GRBK GHO St. Lucie,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Summer                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   Lake, LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Three Oaks,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Timberlake,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Orchid Cove,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Venezia                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   Estates, LLC                                                                                Interest                                                                                100%                             Side by                   GRBK GHO Brevard, LLC           Florida      GRBK GHO Homes, LLC           Membership         No          Side         No                                                                                Interest                                                                                100%                             Side by                   GRBK GHO 7, LLC                 Florida      GRBK GHO Homes, LLC           Membership         No          Side         No                                                                                Interest                                                                                100%                             Side by                   GRBK GHO 8, LLC                 Florida      GRBK GHO Homes, LLC           Membership         No          Side         No                                                                                Interest                                                                                100%                             Side by                   GRBK GHO 9, LLC                 Florida      GRBK GHO Homes, LLC           Membership         No          Side         No                                                                                Interest    ACTIVE 52102560v3 

 

                                                                                                                                                                State of                                    Ownership      Guarantor      Status     Significant             Entity             Organization              Owner                Interest                                Subsidiary                                                                                100%                             Side by                   GRBK GHO 10, LLC                Florida      GRBK GHO Homes, LLC           Membership         No          Side         No                                                                                Interest                                                                                100%                             Side by                   The GHO Homes Agency,                                   Florida      GRBK GHO Homes, LLC           Membership         No          Side         No   LLC                                                                                Interest                                                                                49.9%                                                                                                   JBGL Ownership, LLC           Membership                                                                                                                    Interest         No        Investment     No   GB Challenger, LLC              Texas                                                                                50.1%                                                GTG Holdings, LLC             Membership                                                                                Interest         ACTIVE 52102560v3 

 

                                        Schedule 5.4(a)(ii)                                                 Joint Ventures       1. Joint Ownership and Development Agreement, dated as of July 26, 2019, by and between GRBK        Edgewood LLC and Meritage Homes of Texas, LLC      Non-Subsidiary Affiliates        1. Greenlight Capital, Inc.     2. David Einhorn     3. GB Challenger, LLC     4. Green Brick Mortgage, LLC     5. Providence Group Title, LLC     6. EJB River Holdings, LLC     7. BHOME Mortgage, LLC       ACTIVE 52102560v3 

 

                                          Schedule 5.4(a)(iii)                                                                               Company’s Directors and Officers                                                                  David Einhorn      Director               James R. Brickman  Director/Chief Executive Officer               Elizabeth K. Blake  Director               Harry Brandler Director               John R. Farris     Director               Kathleen Olsen     Director               Richard S. Press   Director                               Richard A. Costello  Chief Financial Officer               Jed Dolson         President of the Texas Region of the Company               Laura McPherson Chief Accounting Officer            ACTIVE 52102560v3 

 

                              SCHEDULE 5.5                            FINANCIAL STATEMENTS  1. Consolidated Financial Statements of the Green Brick Partners, Inc and its Subsidiaries     as of and for the year ended December 31, 2019, as filed with the Securities and     Exchange Commission on March 6, 2020  2. Consolidated Financial Statements of the Green Brick Partners, Inc and its Subsidiaries     as of and for the quarter ended March 31, 2020, as filed with the Securities and Exchange     Commission on May 11, 2020  3. Consolidated Financial Statements of the Green Brick Partners, Inc and its Subsidiaries     as of and for the three and six months ended June 30, 2020, as filed with the Securities     and Exchange Commission on August 4, 2020                                    SCHEDULE 5.5                              (TO NOTE PURCHASE AGREEMENT) 

 

                                SCHEDULE 5.15              EXISTING INDEBTEDNESS OF THE COMPANY AND ITS SUBSIDIARIES   1. Borrowings on lines of credit outstanding as of June 30, 2020 (in thousands):                                                                June 30, 2020        Senior Secured Credit Facility                        $          15,000       Senior Unsecured Credit Facility                      $         130,000      Senior Secured Credit Facility – Credit Agreement, dated as of July 30, 2015 (as amended by     the First Amendment, dated as of May 3, 2016, the Second Amendment, dated as of March     22, 2017, the Third Amendment, dated as of July 6, 2017, the Fourth Amendment, dated as     of July 25, 2017, the Fifth Amendment dated as of August 25, 2017, the Sixth Amendment,     dated as of October 27, 2017 and the Fourth Modification of Promissory Note, dated as of     May  22,  2020),  by  and  among  Green  Brick  Partners,  Inc.  as  borrower,  Inwood  National     Bank,  a  National  Banking  Association  (“Lender”),  and  JBGL  Hawthorne,  LLC     (“Hawthorne”), JBGL Frisco, LLC (“Frisco”), JBGL Edgewood, LLC (“Edgewood”), JBGL     Mustang,  LLC  (“Mustang”),  JBGL  Exchange,  LLC  (“Exchange”),  JBGL  Chateau,  LLC     (“Chateau”), and Johns Creek 206,  LLC (“Johns Creek”, which, together with Hawthorne,     Frisco,  Edgewood,  Mustang,  Exchange  and  Chateau  may  be  collectively  referred  to  as     “Grantors”  or  individually  as  a  “Grantor”),  and  JBGL  Builder  Finance,  LLC  (“JBGL     Builder” which, collectively with Grantors may be collectively referred to as “Guarantors”).         Line of Credit - $35.0 million         Borrowing Base – Borrowing base equals to the sum of 50% of the total value of land        and 65% of the total value of lots owned by certain of the Company’s subsidiaries, each        as determined by an independent appraiser, with the value of land being restricted from        being more than 65% of the borrowing base.          Guarantors – JBGL Hawthorne, LLC, JBGL Frisco, LLC, JBGL Edgewood, LLC, JBGL        Mustang, LLC, JBGL Exchange, LLC, JBGL Chateau, LLC, Johns Creek 206, LLC, and        JBGL Builder Finance, LLC         Collateral – Amounts outstanding under the Credit Facility are secured by mortgages on        real property and security interests in certain personal property that is owned by certain of        the Company’s subsidiaries.         Maturity Date – May 1, 2022.          Interest Rate – Prime Rate less 0.25%. Notwithstanding the foregoing, the interest may        not, at any time, be less than 4% per annum or more than the lesser amount of 18%                                      SCHEDULE 5.15                                 (TO NOTE PURCHASE AGREEMENT) 

 

   As of June 30, 2020, the interest rate on outstanding borrowing was 4.00% per annum.   Senior Unsecured Credit Facility – Credit Agreement, dated as of December 15, 2015, (as  amended  by  the  First  Amendment,  dated  as  of  August  31,  2016,  the  Second  Amendment,  dated  as  of  December  1,  2016,  the  Third  Amendment,  dated  as  of  September  1,  2017  the  Fourth  Amendment,  dated  as  of  December  1,  2017,  the  Fifth  Amendment,  dated  as  of  November  2,  2018,  and  the  Sixth  Amendment,  dated  as  of  December  17,  2019)  by  and  among Green Brick Partners, Inc., as borrower, the Lenders party hereto, and Flagstar Bank,  FSB (“Flagstar”), as administrative agent.       Line of Credit Commitments – $215.0 Million      Line of Credit Accordion Amount - $275.0 Million      Borrowing  Base  –  The  borrowing  base  limitation  is  equal  to  the  sum  of:  100%  of     unrestricted  cash  in  excess  of  $15.0  million;  85%  of  the  book  value  of  model  homes,     construction in progress homes, completed sold and speculative homes (subject to certain     limitations on the age and number of speculative homes and model homes); 65% of the     book value of finished lots and land under development; and 50% of the book value of     entitled land (subject to certain limitations on the value of entitled land and land under     development as a percentage of the borrowing base).      Guarantors – JBGL Ownership LLC, Builder Finance LLC JBGL Exchange LLC, JBGL     Mustang  LLC,  GRBK  Frisco  LLC,  GRBK  Edgewood  LLC,  Johns  Creek  206,  LLC,     JBGL Atlanta Development, LLC, CB JENI Homes DFW LLC, The Providence Group     of  Georgia,  L.L.C.,  The  Providence  Group  of  Georgia  Custom  Homes,  L.L.C.,  TPG     Homes, L.L.C., JBGL Chateau, LLC, JBGL Hawthorne, LLC, CB JENI Berkshire Place     LLC, CB JENI – Brick Row Townhomes, LLC, CB JENI Mustang Park LLC, Normandy     Homes  Cypress  Meadows,  LLC,  Normandy  Homes  Lakeside,  LLC,  JBGL  Atlanta     Development 2014, LLC, GRBK GC, LLC, GRBK Stringer, LLC, GRBK Devore, LLC,     GRBKMP,  LLC,  GRBK  Church  Street,  LLC,  GRBK  Haynes,  LLC,  Trophy  Signature     Homes, LLC, TSHH, LLC, TSHWS, LLC and SGHDAL LLC.      Maturity Date – December 14, 2021 for $30.0 million of commitments and December 14,     2022 for $185.0 million of commitments      Interest Rate – Either: (a) in the case of base rate advances, the highest of (i) Citibank’s     base rate, (ii) the federal funds rate plus 0.5%, and (iii) the one-month LIBOR plus 1.0%,     in  each  case  plus  1.5%;  or  (b)  in  the  case  of  Eurodollar  rate  advances,  the  reserve     adjusted LIBOR plus 2.5%.  As of June 30, 2020, the interest rates ranged from 2.67% to     2.68% per annum. 

 

2. Outstanding Notes as of June 30, 2020 (in thousands):                                                                June 30, 2020        Senior Unsecured Notes                                $          75,000        Note Purchase Agreement – Note Purchase Agreement, dated as of August 8, 2019, by        and among Green Brick Partners, Inc., as issuer, and the purchasers party thereto.        Issue Amount - $75.0 million         Guarantors – JBGL Ownership LLC, JBGL Builder Finance LLC, JBGL Exchange LLC,        JBGL  Mustang  LLC,  GRBK  Frisco  LLC,  GRBK  Edgewood  LLC,  Johns  Creek  206,        LLC, JBGL Atlanta Development,  LLC, CB JENI Homes DFW LLC,  The Providence        Group  of  Georgia,  L.L.C.,  The  Providence  Group  of  Georgia  Custom  Homes,  L.L.C.,        TPG Homes, L.L.C., JBGL Chateau, LLC, JBGL Hawthorne, LLC, CB JENI Berkshire        Place  LLC,  CB  JENI  –  Brick  Row  Townhomes,  LLC,  CB  JENI  Mustang  Park  LLC,        Normandy  Homes  Cypress  Meadows,  LLC,  Normandy  Homes  Lakeside,  LLC,  JBGL        Atlanta  Development  2014,  LLC,  GRBK  GC,  LLC,  GRBK  Stringer,  LLC,  GRBK        Devore,  LLC,  GRBKMP,  LLC,  GRBK  Church  Street,  LLC,  GRBK  Haynes,  LLC,        Trophy Signature Homes, LLC, TSHH, LLC, TSHWS, LLC and SGHDAL LLC.         Collateral – N/A.  Unsecured.         Maturity Date – August 8, 2026.          Interest Rate – 4.00%.   3. Paycheck Protection Program Letter Agreement and related promissory note, dated as of     April 8, 2020, by and between The Providence Group of Georgia, L.L.C. and Inwood     National Bank in the amount of $2,146,100.   4. Non-recourse acquisition promissory note, dated as of March 12, 2020, made by GRBK GC,     LLC in favor of Grant Circle Partners, LLC in the amount of $2.0 million. 

 

                                SCHEDULE 10.3                        Existing Permitted Subsidiary Indebtedness   Non-recourse acquisition promissory note, dated as of March 12, 2020, made by GRBK GC,  LLC in favor of Grant Circle Partners, LLC in the amount of $2.0 million.                                      SCHEDULE 10.3                                 (TO NOTE PURCHASE AGREEMENT) 

 

                          SCHEDULE 10.5                           Existing Investments   Equity Investments in the following entities (excluding Subsidiaries):   1.    GB Challenger, LLC  2.    Green Brick Mortgage, LLC  3.    Providence Group Title, LLC  4.    EJB River Holdings, LLC  5.    BHome Mortgage, LLC                                SCHEDULE 10.5                           (TO NOTE PURCHASE AGREEMENT) 

 

                                GREEN BRICK PARTNERS, INC.                                       PURCHASER SCHEDULE                                                                     Aggregate                                                                     Principal                                                                  Amount of Notes          Note                                                                  to be Purchased     Denomination(s)                                                                       (USD)               (USD)      PRUDENTIAL UNIVERSAL REINSURANCE COMPANY                      3,000,000.00        3,000,000.00   (1) All payments on account of Notes held by such purchaser shall be      made by wire transfer of immediately available funds for credit to:       Beneficiary Name:       U.S. Bank as Paying Agent for                              Prudential        Beneficiary Address:    214 N. Tryon St 26th Floor Charlotte,                              NC  28201       Primary Bank Name:      U.S. Bank as Paying Agent for                              Prudential        Primary ABA Number:     091000022       Account Name:           Paying Agent DDA - Green Brick                              Partners, Inc.       Account Number:         104791306624       FFC:                    280177-700   (2) Address for all communications and notices:       Prudential Universal Reinsurance Company      c/o Prudential Private Capital      2200 Ross Ave.      Suite 4300W      Dallas, TX 75201        Attention:  Managing Director, Corporate Finance      cc:  Vice President and Corporate Counsel       and for all notices relating solely to scheduled principal and                                           PURCHASER SCHEDULE                                      (TO NOTE PURCHASE AGREEMENT)

 

    interest payments and written confirmations of wire transfers to:       Prudential Universal Reinsurance Company      c/o PGIM, Inc.      Prudential Tower      655 Broad Street      14th Floor - South Tower      Newark, NJ 07102       Attention:  PIM Private Accounting Processing Team      Email: Pim.Private.Accounting.Processing.Team@prudential.com   (3) Address for Delivery of Notes:       (a)   Send physical security by nationwide overnight delivery            service to:             PGIM, Inc.            655 Broad Street            14th Floor - South Tower            Newark, NJ 07102             Attention:  Trade Management Manager       (b)   Send copy by email to:             Jaya McClure            Jaya.Mcclure@prudential.com            (214) 720-6207             and             Private.Disbursements@Prudential.com  (4) Tax Identification No.: 90-1009745   (5) External audit confirmations of loan balances for transactions      closed by PPC should be sent to the address(es) outlined below.       Via e-mail (preferred):     PPCauditconfirms@prudential.com      By U.S. Mail:     PGIM Private Placement Operations      655 Broad Street, 14th Floor South      Mail Stop # NJ 08-14-75                                           PURCHASER SCHEDULE                                      (TO NOTE PURCHASE AGREEMENT)

 

Newark, New Jersey 07102-5096  Attn:  PPC Audit Confirmation Coordinator   For any questions or assistance with audit confirmations, please  contact our centralized audit confirmation telephone number,  (973) 367-7561.                                        PURCHASER SCHEDULE                                  (TO NOTE PURCHASE AGREEMENT)

 

                                                                   Aggregate                                                                     Principal                                                                  Amount of Notes          Note                                                                  to be Purchased     Denomination(s)                                                                       (USD)               (USD)      THE PRUDENTIAL INSURANCE COMPANY OF                           34,500,000.00      19,500,000.00      AMERICA                                                                          15,000,000.00  (1) All payments on account of Notes held by such purchaser shall be      made by wire transfer of immediately available funds for credit to:       Beneficiary Name:       U.S. Bank as Paying Agent for                              Prudential        Beneficiary Address:    214 N. Tryon St 26th Floor Charlotte,                              NC  28201       Primary Bank Name:      U.S. Bank as Paying Agent for                              Prudential        Primary ABA Number:     091000022       Account Name:           Paying Agent DDA - Green Brick                              Partners, Inc.       Account Number:         104791306624       FFC:                    280177-700   (2) Address for all communications and notices:       The Prudential Insurance Company of America      c/o Prudential Private Capital      2200 Ross Ave.      Suite 4300W      Dallas, TX 75201        Attention:  Managing Director, Corporate Finance      cc:  Vice President and Corporate Counsel       and for all notices relating solely to scheduled principal and      interest payments and written confirmations of wire transfers to:                                            PURCHASER SCHEDULE                                      (TO NOTE PURCHASE AGREEMENT)

 

    The Prudential Insurance Company of America      c/o PGIM, Inc.      Prudential Tower      655 Broad Street      14th Floor - South Tower      Newark, NJ 07102       Attention:  PIM Private Accounting Processing Team      Email: Pim.Private.Accounting.Processing.Team@prudential.com   (3) Address for Delivery of Notes:       (a)   Send physical security by nationwide overnight delivery            service to:             PGIM, Inc.            655 Broad Street            14th Floor - South Tower            Newark, NJ 07102             Attention:  Trade Management Manager       (b)   Send copy by email to:             Jaya McClure            Jaya.Mcclure@prudential.com            (214) 720-6207             and             Private.Disbursements@Prudential.com  (4) Tax Identification No.: 22-1211670   (5) External audit confirmations of loan balances for transactions      closed by PPC should be sent to the address(es) outlined below.       Via e-mail (preferred):     PPCauditconfirms@prudential.com      By U.S. Mail:     PGIM Private Placement Operations      655 Broad Street, 14th Floor South      Mail Stop # NJ 08-14-75      Newark, New Jersey 07102-5096      Attn:  PPC Audit Confirmation Coordinator                                           PURCHASER SCHEDULE                                      (TO NOTE PURCHASE AGREEMENT)

 

For any questions or assistance with audit confirmations, please  contact our centralized audit confirmation telephone number,  (973) 367-7561.                                        PURCHASER SCHEDULE                                  (TO NOTE PURCHASE AGREEMENT)a1042subsidiaryguarantya

                                                              Execution Version                               GUARANTY AGREEMENT                              Dated as of August 26, 2020                                         of                         THE GUARANTORS PARTY HERETO                               FROM TIME TO TIME    52486223 

 

                            TABLE OF CONTENTS   SECTION      HEADING                                                    PAGE   SECTION 1.   GUARANTY. ...................................................................................................... 1  SECTION 2.   OBLIGATIONS ABSOLUTE. ............................................................................ 3  SECTION 3.   WAIVER. ............................................................................................................. 4  SECTION 4.   OBLIGATIONS UNIMPAIRED. ........................................................................ 4  SECTION 5.   SUBROGATION AND SUBORDINATION. ..................................................... 5  SECTION 6.   REINSTATEMENT OF GUARANTY. .............................................................. 6  SECTION 7.   RANK OF GUARANTY. .................................................................................... 7  SECTION 8.   MAINTENANCE OF EXISTENCE. ................................................................... 7  SECTION 9.   REPRESENTATIONS AND WARRANTIES OF EACH GUARANTOR. ....... 7    Section 9.1. Organization; Power and Authority. ....................................................................... 7    Section 9.2. Authorization, Etc. .................................................................................................. 7    Section 9.3. Governmental Authorizations, Etc. ........................................................................ 7    Section 9.4. Information Regarding the Company. .................................................................... 8    Section 9.5. Compliance With Laws, Other Instruments, Etc. ................................................... 8  SECTION 10  COVENANTS ...................................................................................................... 8  SECTION 11.  TERM OF GUARANTY AGREEMENT............................................................ 8  SECTION 12.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE               AGREEMENT. .................................................................................................... 8  SECTION 13.  AMENDMENT AND WAIVER. ........................................................................ 9    Section 13.1. Requirements. ....................................................................................................... 9    Section 13.2. Solicitation of Holders of Notes. .......................................................................... 9    Section 13.3. Binding Effect. ...................................................................................................... 9    Section 13.4. Notes Held by Company, Etc. ............................................................................ 10  SECTION 14.  NOTICES. .......................................................................................................... 10  SECTION 15.  MISCELLANEOUS. .......................................................................................... 10    Section 15.1. Successors and Assigns; Joinder. ........................................................................ 10    Section 15.2. Severability. ........................................................................................................ 10    Section 15.3. Construction. ....................................................................................................... 11    Section 15.4. Further Assurances. ............................................................................................ 11    Section 15.5. Governing Law. .................................................................................................. 11    52486223                             - i -

 

  Section 15.6. Counterparts. ....................................................................................................... 11    Section 15.7. Jurisdiction and Process; Waiver of Jury Trial. .................................................. 11    Section 15.8. Reproduction of Documents. .............................................................................. 12     Exhibit A    --   Form of Guaranty Joinder    52486223                             - ii -

 

                          GUARANTY AGREEMENT         THIS  GUARANTY  AGREEMENT,  dated  as  of  August  26,  2020  (this  “Guaranty  Agreement”), is made by each of the undersigned (each a “Guarantor” and, together with each  of  the  signatories  hereto  and  any  other  entities  from  time  to  time  parties  hereto  pursuant  to  Section 15.1 hereof, the “Guarantors”), in favor of the Purchasers (as defined below) and the  other holders from time to time of the Notes (as defined below).  The Purchasers and such other  holders are herein collectively called the “holders” and individually a “holder.”                           PRELIMINARY STATEMENTS:         I.    GREEN BRICK PARTNERS, INC., a Delaware corporation (the “Company”), is  entering  into  a  Note  Purchase  Agreement  dated  the  date  hereof  (as  amended,  restated,  supplemented or otherwise modified from time to time, the “Note Agreement”), with the other  Persons  listed  on  the  signature  pages  thereto  (the  “Purchasers”)  simultaneously  with  the  delivery of this Guaranty Agreement.  Capitalized terms used herein have the meanings specified  in the Note Agreement unless otherwise defined herein.         II.   The Company has authorized the issue and sale, pursuant to the Note Agreement,  of 3.35% Senior Notes due August 26, 2027 in the aggregate principal amount of $37,500,000  (as amended, restated, supplemented or otherwise modified from time to time, together with any  notes issued in substitution therefor, the “Notes”).           III.  It  is  a  condition  to  the  agreement  of  each  applicable  Purchaser  to  purchase  the  Notes that this Guaranty Agreement shall have been executed and delivered by the Guarantors  and shall be in full force and effect.         IV.   Each  Guarantor  will  receive  direct  and  indirect  benefits  from  the  financing  arrangements  contemplated  by  the  Note  Agreement.   The  board  of  directors  (or  similar  governing body) of each Guarantor has determined that the incurrence of such obligations is in  the best interests of such Guarantor.         NOW  THEREFORE,  in  order  to  induce,  and  in  consideration  of,  the  execution  and  delivery  of  the  Note  Agreement  and  the  purchase  of  the  Notes  in  accordance  with  the  Note  Agreement,  each Guarantor hereby  covenants  and  agrees  with,  and  represents  and  warrants  to  each of the holders as follows:         SECTION 1.  GUARANTY.         Each  Guarantor  hereby  irrevocably,  unconditionally  and  jointly  and  severally  with  the  other  Guarantors  guarantees  to  each  holder,  the  due  and  punctual  payment  in  full  of  (a)  the  principal  of,  the  applicable  Make-Whole  Amount  in  respect  of,  and  interest  on  (including,  without limitation, any Make-Whole Amount due and payable after, and interest accruing after,  the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization  or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in  such  proceeding),  and  any  other  amounts  due  under,  the  Notes  when  and  as  the  same  shall  become due and payable (whether at stated maturity or by required or optional prepayment or by  acceleration  or  otherwise),  (b)  any  other  sums  which  may  become  due  under  the  terms  and    52486223                             - 1 -

 

provisions of the Notes, the Note Agreement, the other Note Documents or any other instrument  referred  to  therein,  and  (c)  the  due  and  punctual  performance  of  all  covenants,  agreements,  liabilities,  and  other  obligations  of  the  Company  or  any  other  Guarantor  under  any  Note  Documents  or  any  other  document  or  instrument  referred  to  therein  (all  such  obligations  described  in  clauses  (a)  through  (c)  above  are  herein  called  the  “Guaranteed  Obligations”).   The  guaranty  in  the  preceding  sentence  is  an  absolute,  present  and  continuing  guaranty  of  payment and performance and not of collectability and is in no way conditional or contingent  upon any attempt to collect from the Company or any other guarantor of the Notes (including,  without  limitation,  any  other  Guarantor  hereunder)  or  upon  any  other  action,  occurrence  or  circumstance  whatsoever.   In  the  event  that  the  Company  shall  fail  so  to  pay  any  of  such  Guaranteed Obligations, each Guarantor agrees to pay the same when due to the holders entitled  thereto,  without  demand,  presentment,  protest  or  notice  of  any  kind,  in  lawful  money  of  the  United States of America, pursuant to the requirements for payment specified in the Notes, the  Note  Agreement,  or  the  other  Note  Documents.   Each  default  in  payment  of  any  of  the  Guaranteed Obligations shall give rise to a separate cause of action hereunder and separate suits  may be brought hereunder as each cause of action arises.  Each Guarantor agrees that the Notes  may (but need not) make reference to this Guaranty Agreement.         Each Guarantor agrees to pay and to indemnify and save each holder harmless from and  against any damage, loss, cost or expense (including attorneys’ fees and expenses) which such  holder may incur or be subject to as a consequence, direct or indirect, of (x) any breach by such  Guarantor,  by  any  other  Guarantor  or  by  the  Company  of  any  warranty,  covenant,  term  or  condition  in, or the occurrence of any  default under,  this  Guaranty Agreement, the Notes,  the  Note Agreement, the other Note Documents or any other instrument referred to therein, together  with all expenses resulting from the compromise or defense of any claims or liabilities arising as  a result of any such breach or default, (y) any legal action commenced to challenge the validity  or  enforceability  of  this  Guaranty  Agreement,  the  Notes,  the  Note  Agreement,  the  other  Note  Documents  or  any  other  instrument  referred  to  therein  and  (z)  enforcing  or  defending  (or  determining whether or how to enforce or defend) the provisions of this Guaranty Agreement.         Each  Guarantor  hereby  acknowledges  and  agrees  that  such  Guarantor’s  liability  hereunder  is  joint  and  several  with  the  other  Guarantors  and  any  other  Person(s)  who  may  guarantee  the  obligations  and  Indebtedness  under  and  in  respect  of  the  Notes,  the  Note  Agreement, or the other Note Documents.         Notwithstanding  the  foregoing  provisions  or  any  other  provision  of  this  Guaranty  Agreement, the Purchasers, the holders (by their acceptance of this Guaranty Agreement, and on  behalf of themselves and their successors and assigns) and each Guarantor hereby agrees that if  at any time the Guaranteed Obligations exceed the Maximum Guaranteed Amount determined as  of such time with regard to such Guarantor, then this Guaranty Agreement shall be automatically  amended  to  reduce  the  Guaranteed  Obligations  to  the  Maximum  Guaranteed  Amount.   Such  amendment  shall  not  require  the  written  consent  of  any  Guarantor  or  any  holder  and  shall  be  deemed  to  have  been  automatically  consented  to  by  each  Guarantor  and  each  holder.   Each  Guarantor  agrees  that  the  Guaranteed  Obligations  may  at  any  time  exceed  the  Maximum  Guaranteed  Amount  without  affecting  or  impairing  the  obligation  of  such  Guarantor.   “Maximum  Guaranteed  Amount”  means  as  of  the  date  of  determination  with  respect  to  a  Guarantor, the lesser of (a) the amount of the Guaranteed Obligations outstanding on such date    52486223                             - 2 -

 

and  (b)  the  maximum  amount  that  would  not  render  such  Guarantor’s  liability  under  this  Guaranty Agreement subject to  avoidance  under Section  548 of the United States  Bankruptcy  Code (or any successor provision) or any comparable provision of applicable state law.         SECTION 2.  OBLIGATIONS ABSOLUTE.         The obligations of each Guarantor hereunder shall be primary, absolute, irrevocable and  unconditional, irrespective of the validity or enforceability of the Notes, the Note Agreement, the  other  Note Documents  or  any  other  instrument referred to  therein,  shall  not  be  subject  to any  counterclaim,  setoff,  deduction  or  defense  based  upon  any  claim  such  Guarantor  may  have  against the Company or any holder or otherwise, and shall remain in full force and effect until  the payment in full in cash of all of the Guaranteed Obligations (subject to reinstatement as set  forth  in  Section  6),  without  regard  to,  and  shall  not  be  released,  discharged  or  in  any  way  affected by, any circumstance or condition whatsoever (whether or not such Guarantor shall have  any  knowledge  or  notice  thereof),  including,  without  limitation:  (a)  any  amendment  to,  modification of, supplement to or restatement of the Notes, the Note Agreement, the other Note  Documents  or  any  other  instrument referred to  therein (it  being  agreed that  the  obligations  of  each  Guarantor  hereunder  shall  apply  to  the  Notes,  the  Note  Agreement,  the  other  Note  Documents or any such other instrument as so amended, modified, supplemented or restated) or  any assignment or transfer of any thereof or of any interest therein, or any furnishing, acceptance  or  release  of  any  security  for  the  Notes  or  the  addition,  substitution  or  release  of  any  other  Guarantor or any other  entity  or  other  Person  primarily or secondarily liable in  respect of the  Guaranteed  Obligations;  (b)  any  waiver,  consent,  extension,  indulgence  or  other  action  or  inaction under or in respect of the Notes, the Note Agreement, the other Note Documents or any  other instrument referred to therein; (c) any bankruptcy, insolvency, arrangement, reorganization,  readjustment, composition, liquidation or similar proceeding with respect to the Company or its  property; (d) any merger, amalgamation or consolidation of any Guarantor or of the Company  into  or  with  any  other  Person  or  any  sale,  lease  or  transfer  of  any  or  all  of  the  assets  of  any  Guarantor or of the Company to any Person; (e) any failure on the part of the Company for any  reason to comply with or perform any of the terms of any other agreement with any Guarantor;  (f)  any failure  on the part  of  any  holder to  obtain, maintain,  register  or  otherwise perfect  any  security; (g) the absence of any attempt by any holder to collect the Guaranteed Obligations or  any portion thereof from the Company, any other Guarantor, any other guarantor of all or any  portion of the Guaranteed Obligations or any other Person or other action to enforce the same,  (h) any action taken by any holder that is authorized by this Guaranty, (i) reserved, (j) reserved,  (k) any mortgage, indenture, lease, contract, or other agreement (including without limitation any  agreement with members or stockholders or other equity interest holders of such Guarantor, as  applicable),  instrument  or  undertaking  to  which  any  Guarantor  or  the  Company  is  a  party  or  which purports to be binding on or affect any such Person or its assets, or (l) any other event or  circumstance  which  might  otherwise  constitute  a  legal  or  equitable  discharge  or  defense  of  a  guarantor  (whether  or  not  similar  to  the  foregoing),  and  in  any  event  however  material  or  prejudicial  it  may  be  to  any  Guarantor  or  to  any  subrogation,  contribution  or  reimbursement  rights  any  Guarantor  may  otherwise  have.   Each  Guarantor  covenants  that  its  obligations  hereunder  shall not  be  discharged  except  by indefeasible  payment in  full in  cash  of  all of the  Guaranteed Obligations and all other obligations hereunder.    52486223                             - 3 -

 

      SECTION 3.  WAIVER.         Each Guarantor unconditionally waives to the fullest extent permitted by law, (a) notice  of acceptance hereof, of any action taken or omitted in reliance hereon and of any default by the  Company in the payment of any amounts due under the Notes, the Note Agreement, the other  Note Documents or any other instrument referred to therein, and of any of the matters referred to  in Section 2 hereof, (b) all notices which may be required by statute, rule of law or otherwise to  preserve any of the rights of any holder against such Guarantor, including, without limitation,  presentment to or demand for payment from the Company or any Guarantor with respect to any  Note,  notice  to  the  Company  or  to  any  Guarantor  of  default  or  protest  for  nonpayment  or  dishonor and the filing of claims with a court in the event of the bankruptcy of the Company, (c)  any  right  to  require  any  holder  to  enforce,  assert  or  exercise  any  right,  power  or  remedy  including, without limitation, any right, power or remedy conferred in the Note Agreement, the  other Note Documents or the Notes, (d) any requirement for diligence on the part of any holder,  (e) any defense arising by reason of (i) the incapacity, lack of authority or any disability or other  defense of the Company, including, without limitation, any defense based on or arising out of the  lack  of  validity  or  the  unenforceability  of  the  Guaranteed  Obligations  or  any  agreement  or  instrument relating thereto, or (ii) the cessation of the liability of the Company from any cause  (other than a defense of payment, unless the payment on which such defense is based was or is  subsequently  invalidated,  declared  to  be  fraudulent  or  preferential,  otherwise  avoided  and/or  required to be repaid to the Company or any Guarantor, as the case may be, or the estate of any  such party, a trustee, receiver or any other Person under any bankruptcy law, state or federal law,  common law or equitable cause, in which case there shall be no defense of payment with respect  to such payment),  (f) any defense based upon any statute or rule of law which provides that the  obligation of a surety must be neither larger in amount nor in other respects more burdensome  than that  of  the principal, (g) any defense  based  upon  any  holder’s  errors  or omissions  in  the  administration of the Guaranteed Obligations (h) any defenses or benefits that may be derived  from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which  may conflict with the terms of this Guaranty, and (i) any other act or omission or thing or delay  in doing any other act or thing which might in any manner or to any extent vary the risk of such  Guarantor  or otherwise  operate as  a discharge of such Guarantor or in  any manner  lessen the  obligations of such Guarantor hereunder.         Each Guarantor agrees that no holder shall be under any obligation to marshal any assets  in favor of any Guarantor or against or in payment of any or all of the Guaranteed Obligations.         SECTION 4.  OBLIGATIONS UNIMPAIRED.         Each Guarantor authorizes the holders, without notice or demand to such Guarantor or  any other Guarantor and without affecting its obligations hereunder, from time to time:  (a) to  renew, compromise, extend, accelerate or otherwise change the time for payment of, all or any  part  of  the  Notes,  the  Note  Agreement,  the  other  Note  Documents  or  any  other  instrument  referred to therein; (b) to change any of the representations, covenants, events of default or any  other  terms  or  conditions  of  or  pertaining  to  the  Notes,  the  Note  Agreement,  the  other  Note  Documents or any other instrument referred to therein, including, without limitation, decreases  or  increases  in  amounts  of  principal,  rates  of  interest,  the  Make-Whole  Amount  or  any  other  obligation; (c) to take and hold security for the payment of the Notes, the Note Agreement, the    52486223                             - 4 -

 

other Note Documents or any other instrument referred to therein, for the performance of this  Guaranty  Agreement  or  otherwise  for  the  Indebtedness  guaranteed  hereby  and  to  exchange,  enforce, waive, subordinate and release any such security; (d) to apply any such security and to  direct the order or manner of sale thereof as the holders in their sole discretion may determine;  (e) to obtain additional or substitute endorsers or guarantors or release any other Guarantor or  any  other  Person  or  entity  primarily  or  secondarily  liable   in  respect  of  the  Guaranteed  Obligations;  (f)  to  exercise  or  refrain  from  exercising  any  rights  against  the  Company,  any  Guarantor or any other Person; (g) assign this Guaranty in part or in whole in connection with  any assignment of the Guaranteed Obligations or any portion thereof, and (g) to apply any sums,  by whomsoever paid or however realized, to the payment of the Guaranteed Obligations and all  other obligations owed hereunder.  The holders shall have no obligation to proceed against any  additional or substitute endorsers or guarantors or to pursue or exhaust any security provided by  the Company, such Guarantor or any other Guarantor or any other Person or to pursue any other  remedy available to the holders.         If  an  event  permitting  the  acceleration  of  the  maturity  of  the  principal  amount  of  any  Notes shall exist and such acceleration shall at such time be prevented or the right of any holder  to receive any payment on account of the Guaranteed Obligations shall at such time be delayed  or  otherwise  affected  by  reason  of  the  pendency  against  the  Company,  any  Guarantor  or  any  other guarantors of a case or proceeding under a bankruptcy or insolvency law, such Guarantor  agrees that, for purposes of this Guaranty Agreement and its obligations hereunder, the maturity  of such principal amount shall be deemed to have been accelerated with the same effect as if the  holder thereof had accelerated the same in accordance with the terms of the Note Agreement, and  such Guarantor shall forthwith pay such accelerated Guaranteed Obligations.         SECTION 5.  SUBROGATION AND SUBORDINATION.         (a)  Each Guarantor will not exercise any rights which it may have acquired by way of  subrogation under this Guaranty Agreement, by any payment made hereunder or otherwise, or  accept  any  payment  on  account  of  such  subrogation  rights,  or  any  rights  of  reimbursement,  contribution or indemnity or any rights or recourse to any security for the Notes or this Guaranty  Agreement  unless  and  until  all  of  the  Guaranteed  Obligations  shall  have  been  performed  and  indefeasibly paid in full in cash.         (b)  Each  Guarantor  hereby  subordinates  the  payment  of  all  Indebtedness  and  other  obligations of the Company or any other guarantor of the Guaranteed Obligations owing to such  Guarantor, whether now existing or hereafter arising, including, without limitation, all rights and  claims  described  in  clause  (a)  of  this  Section  5,  to  the  payment  in  full  in  cash  of  all  of  the  Guaranteed  Obligations.   If  the  Required  Holders  so  request,  any  such  Indebtedness  or  other  obligations  shall  be  enforced  and  performance  received  by  such  Guarantor  as  trustee  for  the  equal and ratable benefit of the holders of Notes and the holders of all other Indebtedness and  other obligations permitted pursuant to the Note Agreement of the Company guaranteed by such  Guarantor  on  a  pari  passu  basis  with  the  Guaranteed  Obligations  solely  to  the  extent  that  the  agreement  by  which  such  Guarantor  has  guaranteed  such  other  Indebtedness  and  obligations  expressly  provides  that  if  such  Guarantor  is  required  to  turn  over  any  similar  payment  to  the  lenders or representative of such other  Indebtedness or obligations, such payment will also be  held by the lenders or such representative for the equal and ratable benefit of the holders of the    52486223                             - 5 -

 

Notes (“Pari Passu Indebtedness”) (and the holders of Notes together with the holders of the  Pari Passu Indebtedness, the “Beneficiaries”) and the proceeds thereof shall be paid over to the  Beneficiaries  promptly,  in  the  form  received  (together  with  any  necessary  endorsements)  for  application  to  the  Guaranteed  Obligations  and  the  Pari  Passu  Indebtedness,  ratably,  in  accordance  with  the  respective  amounts  of  such  Guaranteed  Obligations  and  Pari  Passu  Indebtedness (whether matured or unmatured) at the time held by such Beneficiaries, but without  reducing  or  affecting  in  any  manner  the  liability  of  any  Guarantor  under  this  Guaranty  Agreement.         (c)  If  any  amount  or  other  payment  is  made  to  or  accepted  by  any  Guarantor  in  violation  of  any  of  the  preceding  clauses  (a)  and  (b)  of  this  Section  5,  such  amount  shall  be  deemed to have been paid to such Guarantor for the benefit of, and shall be held in trust for the  benefit  of, the  Beneficiaries  and shall  be  paid  over to  the  Beneficiaries  promptly, in  the  form  received  (together  with  any  necessary  endorsements)  for  application  to  the  Guaranteed  Obligations and the Pari Passu Indebtedness, ratably, in accordance with the respective amounts  of such Guaranteed Obligations and Pari Passu Indebtedness (whether matured or unmatured) at  the time held by such Beneficiaries, but without reducing or affecting in any manner the liability  of any Guarantor under this Guaranty Agreement.         (d)  Each Guarantor acknowledges that it will receive direct and indirect benefits from  the  financing  arrangements  contemplated  by  the  Note  Agreement  and  that  its  agreements  set  forth  in  this  Guaranty  Agreement  (including  this  Section  5)  are  knowingly  made  in  contemplation of such benefits.         (e)  Each Guarantor hereby agrees that, to the extent that a Guarantor shall have paid  an amount  hereunder  to  any holder  that  is  greater than  the net  value  of  the  benefits  received,  directly or indirectly, by such paying Guarantor as a result of the issuance and sale of the Notes  (such net value as to any Guarantor, its “Proportionate Share”), such paying Guarantor shall,  subject to Section 5(a) and 5(b), be entitled to contribution from any Guarantor that has not paid  its Proportionate Share of the Guaranteed Obligations.  Any amount payable as a contribution  under this Section 5(e) shall be determined as of the date on which the related payment is made  by  such  Guarantor  seeking  contribution  and  each  Guarantor  acknowledges  that  the  right  to  contribution hereunder shall constitute an asset of such Guarantor to which such contribution is  owed.  Notwithstanding the foregoing, the provisions of this Section 5(e) shall in no respect limit  the obligations and liabilities of any Guarantor to the holders of the Notes hereunder or under the  Notes,  the  Note  Agreement,  the  other  Note  Documents  or  any  other  document,  instrument  or  agreement  executed  in  connection  therewith,  and  each  Guarantor  shall  remain  jointly  and  severally liable for the full payment and performance of the Guaranteed Obligations.         SECTION 6.  REINSTATEMENT OF GUARANTY.        This Guaranty Agreement shall continue to be effective, or be reinstated, as the case may  be, if and to the extent at any time payment, in whole or in part, of any of the sums due to any  holder on account of the Guaranteed Obligations is rescinded or must otherwise be restored or  returned by a holder upon the insolvency, bankruptcy, dissolution, liquidation or reorganization  of the Company or any other guarantors, or upon or as a result of the appointment of a custodian,  receiver, trustee or other officer with similar powers with respect to the Company or any other    52486223                             - 6 -

 

guarantors or any part of its or their property, or otherwise, all as though such payments had not  been made.         SECTION 7.  RANK OF GUARANTY.         All payment obligations of each Guarantor under this Guaranty Agreement in respect of  the  Notes  and  this  Guaranty  Agreement  shall  be  maintained  (i)  at  a  rank  pari  passu  with  all  payment obligations of such Guarantor under this Guaranty Agreement and the Notes guaranteed  thereby without any preference among themselves and (ii) not less than pari passu in respect of  all other Indebtedness (actual or contingent) of such Guarantor.         SECTION 8.  MAINTENANCE OF EXISTENCE.         So  long  as  any  of  the  Notes  are  outstanding,  each  Guarantor  agrees  that,  unless  the  Required Holders otherwise consent in writing, subject to Section 10.4 of the Note Agreement,  each Guarantor will at all times preserve and keep in full force and effect its existence.         SECTION 9.  REPRESENTATIONS        AND    WARRANTIES        OF    EACH        GUARANTOR.         Each Guarantor represents and warrants to each holder as follows:         Section 9.1.  Organization;  Power  and  Authority.   Such  Guarantor  is  a  corporation,  limited partnership or limited liability company, as applicable, duly organized, validly existing  and in good standing under the laws of the jurisdiction of its organization, and such Guarantor is  duly  qualified  as  a  foreign  corporation,  limited  partnership  or  limited  liability  company,  as  applicable, and is in good standing in each jurisdiction in which such qualification is required by  law, other than those jurisdictions as to which the failure to be so qualified or in good standing  could not, individually or in the aggregate, reasonably be expected to have a Material Adverse  Effect.   Such  Guarantor  has  all  requisite  corporate,  limited  partnership  or  limited  liability  company, as applicable, power and authority to own or hold under lease the properties it purports  to  own  or  hold  under  lease,  to  transact  the  business  it  transacts  and  proposes  to  transact,  to  execute  and  deliver  this  Guaranty  Agreement  and  the  other  Note  Documents  to  which  it  is  a  party and to perform the provisions hereof and thereof.         Section 9.2.  Authorization,  Etc.   The  execution,  delivery  and  performance  by  such  Guarantor of each Note Document to which it is a party are within such Guarantor’s corporate,  limited liability company or partnership, as applicable, power and have been duly authorized by  all necessary corporate, limited liability or partnership, as applicable action on the part of such  Guarantor.  This Guaranty Agreement and each other Note Document to which such Guarantor is  a  party  constitute  a  legal,  valid  and  binding  obligation  of  such  Guarantor  enforceable  against  such Guarantor in accordance with their respective terms, except as such enforceability may be  limited  by  (a)  applicable  bankruptcy,  insolvency,  reorganization,  moratorium  or  other  similar  laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity  (regardless of whether such enforceability is considered in a proceeding in equity or at law).         Section 9.3.  Governmental Authorizations, Etc.  No consent, approval or authorization  of,  or  registration,  filing  or  declaration  with,  any  Governmental  Authority  is  required  in    52486223                             - 7 -

 

connection  with  the  execution,  delivery  or  performance  by  such  Guarantor  of  this  Guaranty  Agreement or any other Note Document to which it is a party.         Section 9.4.  Information Regarding the Company.  Such Guarantor now has and will  continue  to  have  independent  means  of  obtaining  information  concerning  the  operations,  financial  condition  and  business  of  the  Company.   No  holder  shall  have  any  duty  or  responsibility  to  provide  such  Guarantor  with  any  credit  or  other  information  concerning  the  affairs, financial condition or business of the Company which may come into possession of the  holders.  Such Guarantor has executed and delivered this Guaranty Agreement without reliance  upon any representation by the holders including, without limitation, with respect to (a) the due  execution,  validity,  effectiveness  or  enforceability  of  any  instrument,  document  or  agreement  evidencing  or  relating  to  any  of  the  Guaranteed  Obligations  or  any  loan  or  other  financial  accommodation made or granted to the Company, (b) the validity, genuineness, enforceability,  existence, value or sufficiency of any property securing any of the Guaranteed Obligations or the  creation,  perfection  or  priority  of  any  lien  or  security  interest  in  such  property  or  (c)  the  existence, number, financial condition or creditworthiness of other guarantors or sureties, if any,  with respect to any of the Guaranteed Obligations.         Section 9.5.  Compliance With Laws, Other Instruments, Etc.  The execution, delivery  and performance by each Guarantor of this Guaranty Agreement and the other Note Documents  to which it is a party will not (a) contravene, result in any breach of, or constitute a default under,  or result in the creation of any Lien in respect of any property of such Guarantor or any of its  Subsidiaries under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement,  lease, organizational documents, or any other agreement or instrument to which such Guarantor  or any of its Subsidiaries is bound or by which such Guarantor or any of its Subsidiaries or any  of their respective properties may be bound or affected, (b) conflict with or result in a breach of  any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court,  arbitrator or Governmental Authority applicable to such Guarantor or any of its Subsidiaries or  (c) violate any provision of any statute or other rule or regulation of any Governmental Authority  applicable to such Guarantor or any of its Subsidiaries.           SECTION 10.       RESERVED.         SECTION 11.       TERM OF GUARANTY AGREEMENT.        This  Guaranty  Agreement  and  all  guarantees,  covenants  and  agreements  of  the  Guarantors contained herein shall continue in full force and effect and shall not be discharged  until such time as all of the Guaranteed Obligations and all other obligations hereunder shall be  indefeasibly paid in full in cash, and shall be subject to reinstatement pursuant to Section 6.         SECTION 12.       SURVIVAL OF REPRESENTATIONS AND WARRANTIES;        ENTIRE AGREEMENT.        All  representations  and  warranties  contained  herein  shall  survive  the  execution  and  delivery  of  this  Guaranty  Agreement  and  may  be  relied  upon  by  any  subsequent  holder,  regardless of any investigation made at any time by or on behalf of any Purchaser or any other  holder.  All statements contained in any certificate or other instrument delivered by or on behalf    52486223                             - 8 -

 

of  a  Guarantor  pursuant  to  this  Guaranty  Agreement  shall  be  deemed  representations  and  warranties of such Guarantor under this Guaranty Agreement.  Subject to the preceding sentence,  this Guaranty Agreement embodies the entire agreement and understanding between each holder  and  the  Guarantors  and  supersedes  all  prior  agreements  and  understandings  relating  to  the  subject matter hereof.         SECTION 13.       AMENDMENT AND WAIVER.         Section 13.1.  Requirements.  Except as otherwise provided in the fourth paragraph of  Section  1  of  this  Guaranty  Agreement,  this  Guaranty  Agreement  may  be  amended,  and  the  observance of any term hereof may be waived (either retroactively or prospectively), with (and  only with) the written consent of each Guarantor and the Required Holders, except that, other  than as provided in Section 17.1(a) of the Note Agreement, no amendment or waiver (a) of any  of the first three paragraphs of Section 1 or any of the provisions of Sections 2, 3, 4, 5, 6, 7, 11 or  13 hereof, or any defined term (as it is used therein), or (b) which results in the limitation of the  liability  of any  Guarantor  hereunder  (except to  the  extent  provided in  the fourth paragraph  of  Section 1 of this Guaranty Agreement) will be effective as to any holder unless consented to by  such holder in writing.         Section 13.2.  Solicitation of Holders of Notes.         (a)   Solicitation.  Each Guarantor will provide each holder of any Notes (irrespective  of the amount of Notes then owned by it) with reasonably sufficient information, reasonably far  in  advance  of  the  date  a decision  is  required, to  enable such  holder  to  make  an  informed  and  considered decision  with respect to any proposed amendment, waiver or consent in respect of  any of the provisions hereof.  Each Guarantor will deliver executed or true and correct copies of  each amendment, waiver or consent effected pursuant to the provisions of this Section 13.2 to  each holder promptly following the date on which it is executed and delivered by, or receives the  consent or approval of, the requisite holders of Notes.         (b)   Payment.  The Guarantors will not directly or indirectly pay or cause to be paid  any remuneration, whether by way of supplemental or  additional interest, fee or otherwise, or  grant  any security  or  provide other credit  support,  to  any  holder  as  consideration  for  or as  an  inducement to the entering into by any holder of any waiver or amendment of any of the terms  and provisions hereof unless such remuneration is concurrently paid, or security is concurrently  granted or other credit support concurrently provided, on the same terms, ratably to each holder  even if such holder did not consent to such waiver or amendment.         Section 13.3.  Binding Effect.   Any amendment  or  waiver  consented to  as  provided  in  this  Section  13  applies  equally  to  all  holders  and  is  binding  upon  them  and  upon  each  future  holder and upon each Guarantor without regard to whether any Note has been marked to indicate  such  amendment  or  waiver.   No  such  amendment  or  waiver  will  extend  to  or  affect  any  obligation,  covenant  or  agreement  not  expressly  amended  or  waived  or  impair  any  right  consequent thereon.  No course of dealing between the Guarantors and the holder nor any delay  in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of  any holder.  As used herein, the term “this Guaranty Agreement” and references thereto shall    52486223                             - 9 -

 

mean this Guaranty Agreement as it may be amended, modified, supplemented or restated from  time to time.         Section 13.4.  Notes  Held  by  Company,  Etc.   Solely  for  the  purpose  of  determining  whether the holders of the requisite percentage of the aggregate principal amount of Notes then  outstanding approved or consented to any amendment, waiver or consent to be given under this  Guaranty Agreement, or have directed the taking of any action provided herein to be taken upon  the direction of the holders of a specified percentage of the aggregate principal amount of Notes  then outstanding, Notes directly or indirectly owned by any Guarantor, the Company or any of  their respective Affiliates shall be deemed not to be outstanding.         Section 13.5.  Release.   At  the  request  and  sole  expense  of  the  Company,  a  Guarantor  shall  be  released  from  its  obligations  hereunder  in  accordance  with  Section  9.7  of  the  Note  Agreement; provided, that the Company shall have delivered to holders of Notes, at least five  Business Days (or such lesser period permitted in writing by the Required Holders) prior to the  date of the proposed release, a written request for such release identifying the relevant Guarantor  and referencing Section 9.7 of the Note Agreement, together with any necessary certificates or  other documentation required pursuant to Section 9.7 of the Note Agreement.         SECTION 14.       NOTICES.         All  notices  and  communications  provided  for  hereunder  shall  be  in  writing  and  sent  (a) by  facsimile  if  the  sender  on  the  same  day  sends  a  confirming  copy  of  such  notice  by  a  recognized  overnight  delivery  service  (charges  prepaid),  or  (b)  by  registered  or  certified  mail  with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service  (with charges prepaid).  Any such notice must be sent:         (a)   if  to  any  Guarantor,  to  such  Guarantor  at  c/o  Green  Brick  Partners,  Inc.,  2805  Dallas Parkway, Suite 400, Plano, TX 75093, to the attention of Chief Financial Officer, or such  other address as such Guarantor shall have specified to the holders in writing, or         (b)   if  to  any  holder,  to  such  holder  at  the  addresses  specified  for  such  communications  set  forth  in  the  Purchaser  Schedule  to  the  Note  Agreement,  or  such  other  address as such holder shall have specified to the Guarantors in writing.         SECTION 15.       MISCELLANEOUS.         Section 15.1.  Successors  and  Assigns;  Joinder.   All  covenants  and  other  agreements  contained in this Guaranty Agreement by or on behalf of any of the parties hereto bind and inure  to the benefit of their respective successors and assigns whether so expressed or not.  It is agreed  and  understood  that  any  Person  may  become  a  Guarantor  hereunder  by  executing  a  Guaranty  Joinder  substantially  in  the  form  of  Exhibit  A  attached  hereto  and  delivering  the  same  to  the  holders.  Any such Person shall thereafter be a “Guarantor” for all purposes under this Guaranty  Agreement.         Section 15.2.  Severability.  Any provision of this Guaranty Agreement that is prohibited  or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of  such prohibition  or unenforceability without  invalidating the remaining provisions  hereof,  and    52486223                            - 10 -

 

any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by  law), not invalidate or render unenforceable such provision in any other jurisdiction.         Section 15.3.  Construction.  Each covenant contained herein shall be construed (absent  express provision to the contrary) as being independent of each other covenant contained herein,  so that compliance with any one covenant shall not (absent such express contrary provision) be  deemed to excuse compliance with any other covenant.  Whether any provision herein refers to  action to be taken by any Person, or which such Person is prohibited from taking, such provision  shall  be  applicable  whether  such  action  is  taken  directly  or  indirectly  by  such  Person.   The  section  and  subsection  headings  in  this  Guaranty  Agreement  are  for  convenience  of  reference  only and shall neither be deemed to be a part of this Guaranty Agreement nor modify, define,  expand  or  limit  any  of  the  terms  or  provisions  hereof.   All  references  herein  to  numbered  sections,  unless  otherwise  indicated,  are  to  sections  of  this  Guaranty  Agreement.   Words  and  definitions in the singular shall be read and construed as though in the plural and vice versa, and  words in the masculine, neuter or feminine gender shall be read and construed as though in either  of the other genders where the context so requires.         Section 15.4.  Further Assurances.  At any time or from time to time upon the request of  the  Required  Holders,  each  Guarantor,  and  any  of  its  Subsidiaries,  shall  promptly  execute,  acknowledge  and  deliver  all  such  further  documents  and  do  such  other  acts  as  the  Required  Holders  may  reasonably  request  in  order  to  effect  fully  the  purposes  of  the  other  Note  Documents and this Guaranty Agreement.         Section 15.5.  Governing  Law.   This  Guaranty  Agreement  shall  be  construed  and  enforced in accordance with, and the rights of the parties shall be governed by, the law of the  State of New York, excluding choice-of-law principles of the law of such State that would permit  the application of the laws of a jurisdiction other than such State.         Section 15.6.  Counterparts.  This Guaranty Agreement may be executed in any number  of counterparts, each of which shall be an original but all of which together shall constitute one  instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than  all, but together signed by all, of the parties hereto         Section 15.7.  Jurisdiction and Process; Waiver of Jury Trial.         (a)  Each Guarantor irrevocably submits to the non-exclusive jurisdiction of any New  York State or federal court sitting in the Borough of Manhattan, The City of New York, over any  suit, action or proceeding arising out of or relating to this Guaranty Agreement.  To the fullest  extent permitted by applicable law, each Guarantor irrevocably waives and agrees not to assert,  by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of  any such court, any objection that it may now or hereafter have to the laying of the venue of any  such suit, action or proceeding brought in any such court and any claim that any such suit, action  or proceeding brought in any such court has been brought in an inconvenient forum.         (b)  Each Guarantor consents to process being served by or on behalf of any holder of  a Note in any suit, action or proceeding of the nature referred to in Section 15.7(a) by mailing a  copy thereof by registered or certified mail (or any substantially similar form of mail), postage    52486223                            - 11 -

 

prepaid,  return  receipt  requested,  to  it  at  its  address  specified  in  Section  14  or  at  such  other  address  of  which  such  holder  shall  then  have  been  notified  pursuant  to  Section  14.   Each  Guarantor  agrees  that such service  upon receipt (i) shall  be  deemed in  every  respect  effective  service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent  permitted by applicable law, be taken and held to be valid personal service upon and personal  delivery  to  it.   Notices  hereunder  shall  be  conclusively  presumed  received  as  evidenced  by  a  delivery  receipt  furnished  by  the  United  States  Postal  Service  or  any  reputable  commercial  delivery service.         (c)  Nothing in this Section 15.7 shall affect the right of any holder to serve process in  any manner permitted by law, or limit any right that the holders may have to bring proceedings  against any Guarantor in the courts of any appropriate jurisdiction or to enforce in any lawful  manner a judgment obtained in one jurisdiction in any other jurisdiction.         (d)  THE GUARANTORS AND EACH HOLDER OF ANY NOTES HEREBY (BY  ITS  ACCEPTANCE  OF  THE  BENEFITS  HEREOF)  WAIVE  TRIAL  BY  JURY  IN  ANY  ACTION  BROUGHT  ON  OR  WITH  RESPECT  TO  THIS  GUARANTY  AGREEMENT  OR  ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH.         Section 15.8.  Reproduction of Documents; Execution.  This Guaranty Agreement may  be reproduced by any holder by any photographic, photostatic, electronic, digital, or other similar  process  and  such  holder  may  destroy  any  original  document  so  reproduced.   Each  Guarantor  agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall  be  admissible  in  evidence  as  the  original  itself  in  any  judicial  or  administrative  proceeding  (whether or not the original is in existence and whether or not such reproduction was made by  such  holder  in  the  regular  course  of  business)  and  any  enlargement,  facsimile  or  further  reproduction of such reproduction shall likewise be admissible in evidence.  This Section 15.8  shall  not  prohibit  any  Guarantor  or  any  other  holder  of  any  Notes  from  contesting  any  such  reproduction to the same extent that it could contest the original, or from introducing evidence to  demonstrate the inaccuracy of any such reproduction.  A facsimile or electronic transmission of  the  counterpart  of  this  agreement  shall  be  as  effective  as  delivery  of  a  manually  executed  counterpart hereof and shall be admissible into evidence for all purposes.                 [Remainder of Page Intentionally Blank; Signature Pages Follow]    52486223                            - 12 -

 

 

 

 

 

 

 

                                                                    EXHIBIT A                               GUARANTY JOINDER   THIS  GUARANTY  JOINDER  (this  “Guaranty  Joinder”),  dated  as  of  [_______________,  20__] is made by [_______________], a [_______________] (the “Additional Guarantor”), in  favor  of  the  holders  from  time  to  time  of  the  Notes  issued  pursuant  to  the  Note  Agreement  described below.                           PRELIMINARY STATEMENTS:   I.    GREEN  BRICK  PARTNERS,  INC.,  a  Delaware  corporation  (the  “Company”),  has  issued  and  sold,  pursuant  to  the  Note  Purchase  Agreement  dated  as  of  August  26,  2020  (as  amended,  restated  supplemented  or  otherwise  modified  from  time  to  time,  the  “Note  Agreement”), its 3.35% Senior Notes due August 26, 2027, in the aggregate principal amount of  $37,500,000  (as  amended,  restated,  supplemented  or  otherwise  modified  from  time  to  time,  together with any notes issued in substitution therefor, the “Notes”).     II.   The  Company  is  required  pursuant  to  the  Note  Agreement  to  cause  the  Additional  Guarantor to deliver this Guaranty Joinder in order to cause the Additional Guarantor to become  a Guarantor under the Guaranty Agreement dated as of August 26, 2020 (as the same may be  amended,  restated,  supplemented  or  otherwise  modified  from  time  to  time,  the  “Guaranty  Agreement”), executed by certain Subsidiaries of the Company (together with each entity that  from time to time becomes a party thereto by executing a Guaranty Joinder pursuant to Section  15.1 thereof, collectively, the “Guarantors”) in favor of each holder from time to time of any of  the Notes.   III.  The  Additional  Guarantor  has  received  and  will  receive  substantial  direct  and  indirect  benefits from the Company’s compliance with the terms and conditions of the Note Agreement,  the other Note Documents and the Notes issued thereunder.   IV.   Capitalized terms used and not otherwise defined herein have the definitions set forth in  the Note Agreement.   NOW THEREFORE, in consideration of the funds advanced to the Company by the Purchasers  under  the  Note  Agreement  and  to  enable  the  Company  to  comply  with  the  terms  of  the  Note  Agreement, the Additional Guarantor hereby covenants, represents and warrants to the holders as  follows:   The Additional Guarantor hereby becomes a Guarantor (as defined in the Guaranty Agreement)  for  all  purposes  of  the  Guaranty  Agreement.   Without  limiting  the  foregoing,  the  Additional  Guarantor  hereby  (a)  jointly  and  severally  with  the  other  Guarantors  under  the  Guaranty  Agreement, guarantees to the holders, from time to time, of the Notes the prompt payment in full  when  due  (whether  at  stated  maturity,  by  acceleration  or  otherwise)  and  the  full  and  prompt  performance  and  observance  of  all  Guaranteed  Obligations  (as  defined  in  Section  1  of  the  Guaranty Agreement) in the same manner and to the same extent as is provided in the Guaranty  Agreement, (b) accepts and agrees to perform and observe all of the covenants set forth therein,  (c) waives the rights set forth in Section 3 of the Guaranty Agreement, (d) agrees to perform and                                       A - 1

 

observe  the  covenants  contained  in  Section  8  of  the  Guaranty  Agreement,  (e)  makes  the  representations and warranties set forth in Section 9 of the Guaranty Agreement and (f) waives  the rights, submits to jurisdiction, and waives service of process as described in Section 15.7 of  the Guaranty Agreement.   Notice of acceptance of this Guaranty Joinder and of the Guaranty Agreement, as supplemented  hereby, is hereby waived by the Additional Guarantor.   The address for notices and other communications to be delivered to the Additional Guarantor  pursuant to Section 14 of the Guaranty Agreement is set forth below.   This Guaranty Joinder shall be construed and enforced in accordance with, and the rights of the  parties  shall  be  governed  by,  the  law  of  the  State  of  New  York,  excluding  choice-of-law  principles of the law of such State that would permit the application of the laws of a jurisdiction  other than such State.   IN WITNESS WHEREOF, the Additional Guarantor has caused this Guaranty Joinder to be duly  executed and delivered as of the date and year first above written.                                            [NAME OF GUARANTOR]                                            By:  _________________________                                                 Name:                                                 Title:                                            Notice Address for such Guarantor[s]                                            ______________________________                                           ______________________________                                           ______________________________                                        A - 2

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