Document:

Security Agreement

EXHIBIT 10.5 
 
SECURITY AGREEMENT 
 
SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time in accordance
herewith and including all attachments, exhibits and schedules hereto, the “Agreement”), dated as of April 16, 2003, made by VERTEL CORPORATION, a California corporation (the “Grantor”), in favor of North Sound
Legacy Fund LLC (f/k/a DMG Legacy Fund LLC), North Sound Legacy Institutional Fund LLC (f/k/a DMG Legacy Institutional Fund LLC), North Sound Legacy International Ltd. (f/k/a DMG Legacy International Ltd.) and SDS Merchant Fund, L.P. (collectively,
the “Secured Parties”). 
 
WHEREAS, the Grantor has issued separate secured promissory notes to each of the Secured Parties (the “Notes”) in the aggregate principal amount of $210,000; and 
 
WHEREAS, it is a condition precedent to the Grantor’s
making the loan evidenced by the Notes to the Secured Parties that the Grantor execute and deliver to the Secured Parties a security agreement providing for the grant to the Secured Parties of a continuing security interest in all personal property
and assets of the Grantor, all in substantially the form hereof to secure all Obligations (hereinafter defined); 
 
NOW, THEREFORE, the parties agree as follows: 
 
ARTICLE I. Definitions 
 
Section 1.1. Definition of Terms Used Herein. All capitalized terms used herein and not defined herein have the respective
meanings provided therefor in the Notes. All terms defined in the Uniform Commercial Code (hereinafter defined) as in effect from time to time and used herein and not otherwise defined herein (whether or not such terms are capitalized) have the same
definitions herein as specified therein. 
 
Section
1.2. Definition of Certain Terms Used Herein. As used herein, the following terms have the following meanings: 
 
“Collateral” means all accounts receivable of the Grantor and all personal and fixture property of every kind and
nature, including, without limitation, all furniture, fixtures, equipment, raw materials, inventory, or other goods, accounts, contract rights, rights to the payment of money, insurance refund claims and all other insurance claims and proceeds, tort
claims, chattel paper, documents, instruments, securities and other investment property, deposit accounts, rights to proceeds of letters of credit and all general intangibles including, without limitation, all tax refund claims, license fees,
patents, patent licenses, patent applications, trademarks, trademark licenses, trademark applications, trade names, copyrights, copyright licenses, copyright applications, rights to sue and recover for past infringement of patents, trademarks and
copyrights, computer programs, computer software, engineering drawings, service marks, customer lists, goodwill, and all licenses, permits, agreements of any kind or nature pursuant to which the Grantor possesses, uses or has authority to possess or
use property (whether tangible or intangible) of others or others possess, use or have authority to possess or use property (whether tangible or intangible) of the Grantor, and all recorded data of any kind or nature, regardless of the medium of
recording including, without limitation, all books and 

records, software, writings, plans, specifications and schematics; and all proceeds and products of each of the foregoing. 
 
“Default” means any event or
circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured, waived, or otherwise remedied during such time) constitute an Event of Default. 
 
“Event of Default” has the meaning specified in the Notes. 
 
“Indemnitees” has the meaning
specified in Section 7.5(b). 
 
“Lien” means: (i) any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute, or contract,
and including a security interest, charge, claim, or lien arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement, agreement, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes; (ii) to the extent not included under clause (i), any reservation, exception, encroachment, easement, right-of-way, covenant, condition, restriction, lease or other title exception or encumbrance
affecting property; and (iii) any contingent or other agreement to provide any of the foregoing. 
 
“Notes” has the meaning assigned to such term in the first recital of this Agreement. 
 
“Obligations” means all indebtedness, liabilities, obligations, covenants and duties of the Grantor to the Secured
Parties of every kind, nature and description, direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, now existing of hereafter arising under or in
connection with the Notes or this Agreement. 
 
“Registered Organization” means an entity formed by filing a registration document with a United States Governmental Authority, such as a corporation, limited partnership or limited liability company.

 
“Security Interest” has
the meaning specified in Section 2.1 of this Agreement. 
 
“Uniform Commercial Code” means the Uniform Commercial Code from time to time in effect in the State of New York. 
 
ARTICLE II. Security Interest 
 
Section 2.1. Security Interest. As security for the payment and performance, in full of the Obligations, and any extensions,
renewals, modifications or refinancings of the Obligations, the Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and transfers to the Secured Parties, and hereby grants to the Secured Parties, their
successors and assigns, a security interest in, all of such Grantor’s right, title and interest in, to and under the Collateral (the “Security Interest”). 
 

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Section 2.2.
No Assumption of Liability. The Security Interest is granted as security only and shall not subject the Secured Parties to, or in any way alter or modify, any obligation or liability of the Grantor with respect to or arising out of the
Collateral. 
 
ARTICLE III. Representations
and Warranties 
 
The Grantor represents
and warrants to the Secured Parties that: 
 
Section 3.1. Title and Authority. The Grantor has good and valid rights in and title to the Collateral with respect to which it has purported to grant a security interest hereunder and has full power and authority to
grant to the Secured Parties the Security Interest and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval which has
been obtained. 
 
Section 3.2. Filings;
Actions to Achieve Perfection. The Grantor has authorized the Secured Parties to file Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations
containing a description of the Collateral in each United States governmental, municipal or other office specified in Schedule A, which are all the filings, recordings and registrations that are necessary to publish notice of and protect the
validity of and to establish a legal, valid and perfected security interest in favor of the Secured Parties in respect of all Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable
law with respect to the filing of continuation statements or with respect to the filing of amendments or new filings to reflect the change of the Grantor’s name, location, identity or corporate structure. The Grantor’s name is listed in
the preamble of this Agreement identically to how it appears on its certificate of incorporation or other organizational documents. 
 
Section 3.3. Validity and Priority of Security Interest. The Security Interest constitutes (a) a legal and valid security
interest in all the Collateral securing the payment and performance of the Obligations, (b) subject only to the filings described in Section 3.2 above and other previously perfected security interests in the Collateral listed on Schedule 3.3
to this Agreement (“Existing Liens”), a perfected security interest in all Collateral in which a security interest may be perfected by filing, recording or registration in the United States pursuant to the Uniform Commercial Code or
other applicable law in the United States (or any political subdivision thereof) and its territories and possessions or any other country, state or nation (or any political subdivision thereof). The Security Interest is and shall be subordinate to
any other Existing Lien on any of the Collateral except as set forth in the Intercreditor Agreement by and among the Secured Parties and SDS Merchant Fund, L.P. 
 
Section 3.4. Absence of Other Liens. The Grantor’s Collateral is owned by the Grantor free
and clear of any Lien other than Existing Liens. Without limiting the foregoing and except as set forth on Schedule 3.3 to this Agreement, the Grantor has not filed or consented to any filing described in Schedule A in favor of any
Person other than the Secured Parties, nor permitted the granting or assignment of a security interest or permitted perfection of any security 
 

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interest in the Collateral in favor of any Person other than the Secured Parties. The Grantor’s having possession of all instruments and
cash constituting Collateral from time to time and the filing of financing statements in the offices referred to in Schedule A hereto results in the perfection of such security interest. Such security interest is, or in the case of Collateral
in which the Grantor obtain rights after the date hereof, will be, a perfected, first priority security interest. Such notices, filings and all other action necessary or desirable to perfect and protect such security interest have been duly taken.

 
Section 3.5. Valid and Binding
Obligation. This Agreement constitutes the legal, valid and binding obligation of the Grantor, enforceable against the Grantor in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to
the extent the indemnification provisions contained in this Agreement may be limited by applicable federal or state securities laws. 
 
ARTICLE IV. Covenants 
 
Section 4.1. Change of Name; Location of Collateral; Place of Business, State of Formation or Organization. 
 
(a) The Grantor shall notify the Secured
Parties in writing promptly of any change (i) in its corporate name or in any trade name used to identify it in the conduct of its business or in the ownership of its properties, (ii) in the location of its chief executive office, its principal
place of business, any office in which it maintains books or records relating to Collateral owned by it (including the establishment of any such new office or facility), (iii) in its identity or corporate structure such that a filed filing made
under the Uniform Commercial Code becomes misleading or (iv) in its Federal Taxpayer Identification Number. In extension of the foregoing, the Grantor shall not effect or permit any change referred to in the preceding sentence unless all filings
have been made under the Uniform Commercial Code or otherwise that are required in order for the Secured Parties to continue at all times following such change to have a valid, legal and perfected first priority security interest in all the
Collateral. 
 
(b) Without
limiting Section 4.1(a), without the prior written consent of the Secured Parties in each instance, the Grantor shall not change its (i) principal residence, if it is an individual, (ii) place of business, if it has only one place of business and is
not a Registered Organization, (iii) principal place of business, if it has more than one place of business and is not a Registered Organization, or (iv) state of incorporation, formation or organization, if it is a Registered Organization.

 
Section 4.2. Records. The Grantor
shall maintain, at its own cost and expense, such complete and accurate records with respect to the Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that
are the same as or similar to those in which the Grantor is engaged, but in any event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Collateral, and, at such time or times as the
Secured Parties may reasonably request, promptly to prepare and deliver to the Secured Parties a duly certified schedule or 
 

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schedules in form and detail satisfactory to the Secured Parties showing the identity, amount and location of any and all Collateral.

 
Section 4.3. Periodic Certification;
Notice of Changes. In the event there should at any time be any change in the information represented and warranted herein or in the documents and instruments executed and delivered in connection herewith, the Grantor shall immediately
notify the Secured Parties in writing of such change (this notice requirement shall be in extension of and shall not limit or relieve the Grantor of any other covenants hereunder). 
 
Section 4.4. Protection of Security. The Grantor shall, at its own cost and expense, take any
and all actions necessary to defend title to the Collateral against all persons and to defend the Security Interest of the Secured Parties in the Collateral and the priority thereof against any Lien. 
 
Section 4.5. Inspection and Verification. The
Secured Parties and such persons as the Secured Parties may reasonably designate shall have the right to inspect the Collateral, all records related thereto (and to make extracts and copies from such records) and the premises upon which any of the
Collateral is located, to discuss the Grantor’s affairs with the officers of the Grantor and its independent accountants and to verify under reasonable procedures the validity, amount, quality, quantity, value, condition and status of, or any
other matter relating to, the Collateral, including, in the case of collateral in the possession of any third Person, by contacting any account debtor or third Person possessing such Collateral for the purpose of making such a verification.
Out-of-pocket expenses in connection with any inspections by representatives of the Secured Parties shall be (a) the obligations of the Grantor with respect to any inspection after the Secured Parties’ demand payment of the Notes or (b) the
obligation of the Secured Parties in any other case. 
 
Section 4.6. Taxes; Encumbrances. At their option, the Secured Parties may discharge, Liens other than Existing Liens at any time levied or placed on the Collateral and may pay for the maintenance and preservation of
the Collateral to the extent the Grantor fails to do so and the Grantor shall reimburse the Secured Parties on demand for any payment made or any expense incurred by the Secured Parties pursuant to the foregoing authorization; provided, however,
that nothing in this Section shall be interpreted as excusing the Grantor from the performance of, or imposing any obligation on the Secured Parties to cure or perform, any covenants or other obligation of the Grantor with respect to any Lien or
maintenance or preservation of Collateral as set forth herein. 
 
Section 4.7. Use and Disposition of Collateral. The Grantor shall not make or permit to be made an assignment, pledge or hypothecation of any Collateral or shall grant any other Lien in respect of the Collateral except
for the sale of the Grantor’s products and license of its software in the ordinary course of business without the prior written consent of the Secured Parties. The Grantor shall not make or permit to be made any transfer of any Collateral and
the Grantor shall remain at all times in possession of the Collateral owned by it, other than with respect to Existing Liens and other liens approved by the Secured Parties and except for the sale of the Grantor’s products and license of its
software in the ordinary course of business. 
 
Section 4.8. Insurance/Notice of Loss. Within a reasonable period of time following the date of this Agreement, Grantor, at its own expense, shall maintain or cause to be maintained 
 

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insurance covering physical loss or damage to the Collateral. In extension of the foregoing and without limitation, such insurance shall be
payable to the Secured Parties as loss payee under a “standard” loss payee clause, and the Secured Parties shall be listed as an “additional insured” on Grantor’s general liability insurance. Such insurance shall not be
terminated, cancelled or not renewed for any reason, including non-payment of insurance premiums, unless the insurer shall have provided the Secured Parties at least 30 days prior written notice. Grantor irrevocably makes, constitutes and appoints
the Secured Parties (and all officers, employees or agents designated by the Secured Parties) as its true and lawful agent and attorney-in-fact for the purpose, at any time following the Secured Parties’ demand for payment of the Notes, of
making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto. In the event that Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Secured
Parties may, without waiving or releasing any obligation or liability of Grantor hereunder, in their sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Secured
Parties deem advisable. All sums disbursed by the Secured Parties in connection and in accordance with this Section, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable upon demand,
by Grantor to the Secured Parties and shall be additional Obligations secured hereby. Grantor shall promptly notify the Secured Parties if any material portion of the Collateral owned or held by Grantor is damaged or destroyed. The proceeds of any
casualty insurance in respect of any casualty loss of any of the Collateral shall (i) so long as the Secured Parties have not demanded payment of the Notes, be disbursed to Grantor for direct application by Grantor solely to the repair or
replacement of Grantor’s property so damaged or destroyed, and (ii) in all other circumstances, be held by the Secured Parties as cash collateral for the Obligations. The Secured Parties may, at their sole option, disburse from time to time all
or any part of such proceeds so held as cash collateral, upon such terms and conditions as the Secured Parties may reasonably prescribe, for direct application by the Secured Parties solely to the repair or replacement of Grantor’s property so
damaged or destroyed, or Grantor may apply all or any part of such proceeds to the Obligations. 
 
Section 4.9. Legend. Grantor shall legend, in form and manner satisfactory to the Secured Parties, its accounts and its books, records and documents evidencing or pertaining thereto with
an appropriate reference to the fact that such accounts have been assigned to the Secured Parties and that the Secured Parties have a security interest therein. 
 
ARTICLE V. Further Assurances; Power of Attorney 
 
Section 5.1. Further Assurances. Grantor shall,
at its own expense, execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Secured Parties may from time to time reasonably request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of
any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount payable under or in connection with any of the Collateral shall be or 
 

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become evidenced by any promissory note or other instrument, such note or instrument shall be immediately pledged and delivered to the
Secured Parties, duly endorsed in a manner satisfactory to the Secured Parties. 
 
Section 5.2. Power of Attorney. 
 
(a) Grantor hereby irrevocably (as a power coupled with an interest) constitutes and appoints the Secured Parties (and all officers, employees or agents designated by the Secured Parties), its
attorney-in-fact with full power of substitution, for the benefit of the Secured Parties, 
 
(i) to take all appropriate action and to execute all documents and instruments that may be necessary or desirable to
accomplish the purposes of this Agreement, and without limiting the generality of the foregoing, Grantor hereby grants the power to file one or more financing statements (including fixture filings), continuation statements, filings with the United
States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security
Interest granted by Grantor, without the signature of Grantor, and naming Grantor as debtor and the Secured Parties as secured party; and 
 
(ii) upon the occurrence and during the continuance of an Event of Default (i) to receive, endorse, assign and/or deliver
any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (ii) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any
of the Collateral; (iii) to sign the name of Grantor on any invoice or bill of lading relating to any of the Collateral; (iv) to send verifications of accounts to any account debtor or any other Person liable for an account; (v) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (vi) to settle,
compromise, compound, adjust or defend any actions, suits or proceeding relating to all or any of the Collateral; and (vii) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the
Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Secured Parties were the absolute owner of the Collateral for all purposes; provided, however, that
nothing herein contained shall be construed as requiring or obligating the Secured Parties to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Secured Parties, or to present or file any claim
or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby, and no action taken or omitted to be taken by the Secured Parties with respect
to the Collateral or any part thereof shall give rise to any defense, counterclaim or offset in favor of Grantor or to any claim or action against the Secured Parties. 
 
(b) The provisions of this Article shall in no event relieve Grantor of any of its obligations hereunder with
respect to the Collateral or any part thereof or impose any obligation on the Secured Parties to proceed in any particular manner with respect to the Collateral or any 
 

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part thereof, or in any way limit the exercise by the Secured Parties of any other or further right which it may have on the date of this
Agreement or hereafter, whether hereunder, by law or otherwise. 
 
ARTICLE VI. Remedies 
 
Section 6.1. Remedies upon Default. 
 
(a) Upon the occurrence and during the continuance of an Event of Default, Grantor agrees to deliver each item of its Collateral to the Secured Parties on demand, and it is agreed that the Secured
Parties shall have the right to take any of or all the following actions at the same or different times (but at all times subject to any Existing Liens): with or without legal process and with or without prior notice or demand for performance, to
take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located for the purpose of taking possession of or removing the Collateral, exercise Grantor’s right to bill and receive
payment for completed work and, generally, to exercise any and all rights afforded to a secured party under the Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, Grantor agrees that the Secured
Parties shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral, at public or private sale or at any broker’s board or on any securities exchange, for
cash, upon credit or for future delivery as the Secured Parties shall deem appropriate. The Secured Parties shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to persons who
will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Secured Parties shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of Grantor, and Grantor hereby waives (to the
extent permitted by law) all rights of redemption, stay and appraisal which Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. 
 
(b) The Secured Parties shall give Grantor
ten (10) days’ written notice (which Grantor agrees is reasonable notice within the meaning of Section 9-504(3) of the Uniform Commercial Code) of the Secured Parties’ intention to make any sale of Collateral. Such notice, in the case of a
public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or
portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Secured Parties may fix and state in the notice (if
any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Secured Parties may (in their sole and absolute discretion) determine. The Secured Parties shall
not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Secured Parties may, without 
 

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notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold
may be retained by the Secured Parties until the sale price is paid by the purchaser or purchasers thereof, but the Secured Parties shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to this Section, the Secured Parties may bid for or purchase,
free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then due and payable to the Secured Parties from Grantor as a credit against the purchase price, and the Secured Parties may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to Grantor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Secured Parties shall be free
to carry out such sale pursuant to such agreement and Grantor shall not be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Secured Parties shall have entered into such an
agreement all Obligations have been paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Secured Parties may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. 
 
Section 6.2. Application of Proceeds. The Secured Parties shall apply the proceeds of any
collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows: 
 
(a) FIRST, to the payment of all costs and expenses incurred by the Secured Parties in connection with such collection or sale or otherwise in connection with this Agreement or any of the Obligations,
including all court costs and the fees and expenses of its agents and legal counsel, and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder and under the Notes; 
 
(b) SECOND, to the payment in full of the Obligations; and

 
(c) THIRD, to Grantor, its successors or
assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may otherwise direct. 
 
Subject to the foregoing, the Secured Parties shall have absolute discretion as to the time of application of such proceeds, moneys or
balances in accordance with this Agreement. Upon any sale of the Collateral by the Secured Parties (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of any such proceeds, moneys or balances by the
Secured Parties or of the officer making the sale shall be a sufficient discharge to the 
 

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purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Secured Parties or such officer or be answerable in any way for the misapplication thereof. 
 
Section 6.3. Grant of License to Use Intellectual Property. For the purpose of enabling the Secured Parties to exercise
rights and remedies under this Article at such time as the Secured Parties shall be lawfully entitled to exercise such rights and remedies, Grantor hereby grants to the Secured Parties an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to Grantor) to use, license or sub-license any of the Collateral consisting of intellectual property now owned or hereafter acquired by Grantor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Secured Parties may be
exercised, at the option of the Secured Parties, only following the Secured Parties’ demand for payment of the Notes. 
 
ARTICLE VII. Miscellaneous 
 
Section 7.1. Notices. All communications and notices hereunder to the Grantor and to the Secured Parties shall (except as
otherwise expressly permitted herein) be in writing and delivered to the Grantor or the Secured Parties, as the case may be, as provided in the Notes. 
 
Section 7.2. Security Interest Absolute. All rights of the Secured Parties hereunder, the Security Interest and all
obligations of Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Notes or any agreement with respect to any of the Obligations or any other agreement or instrument relating to any
of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Notes or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a discharge of, Grantor in respect of the Obligations or this Agreement. 
 
Section 7.3. Survival of Agreement. All covenants, agreements, representations and warranties made by Grantor herein and in
the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the Secured Parties and shall survive the making of the loan and the execution and delivery
to the Secured Parties of the Notes, regardless of any investigation made by the Secured Parties or on their behalf; and shall continue in full force and effect until this Agreement shall terminate. 
 
Section 7.4. Binding Effect; Several Agreement;
Successors and Assigns. This Agreement shall become effective as to Grantor when a counterpart hereof executed on behalf of Grantor shall have been delivered to the Secured Parties and a counterpart hereof shall have been executed on behalf
of the Secured Parties, and thereafter shall be binding upon Grantor and the Secured Parties and their respective successors and assigns, and shall inure to the benefit of Grantor, the Secured Parties and their respective successors and assigns,
except that Grantor 
 

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shall not have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly contemplated by this Agreement or the Notes. 
 
Section 7.5. Secured Parties’ Fees and Expense; Indemnification. 
 
(a) Grantor agrees to pay upon demand to the
Secured Parties the amount of any and all reasonable expenses, including all reasonable fees, disbursements and other charges of its counsel and of any experts or agents, which the Secured Parties may incur in connection with (i) the administration
of this Agreement (including the customary fees and charges of the Secured Parties for any audits conducted by them or on their behalf with respect to the accounts inventory), (ii) the custody or preservation of, or the sale of, collection from or
other realization upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the rights of the Secured Parties hereunder or (iv) the failure of Grantor to perform or observe any of the provisions hereof. 
 
(b) Grantor agrees to indemnify the Secured
Parties and the agent, contractors and employees of the Secured Parties (collectively, the “Indemnitees”) against, and hold each of them harmless from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable fees, disbursements and other charges of counsel, incurred by or asserted against any of them arising out of, in any way connected with, or as a result of, the execution, delivery, or performance of this Agreement or any
agreement or instrument contemplated hereby or any claim, litigation, investigation or proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee. 
 
(c) Any such
amounts payable as provided hereunder shall be additional Obligations secured hereby. The provisions of this Section shall remain operative and in full force and effect regardless of the termination of this Agreement or the Notes, the consummation
of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or the Notes, or any investigation made by or on behalf of the Secured Parties. All
amounts due under this Section shall be payable on written demand therefor. 
 
Section 7.6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. 
 
Section 7.7. Waivers; Amendment. 
 
(a) No failure or delay of the Secured Parties in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or power. The 
 

11 

rights and remedies of the Secured Parties hereunder and under the Notes are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provisions of this Agreement or the Notes or consent to any departure by Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on Grantor in any case shall entitle Grantor to any other or further notice or demand in similar or other circumstances.

 
(b) Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or agreements, in writing entered into by the Secured Parties and Grantor. 
 
Section 7.8. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE NOTES. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE NOTES, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 
 
Section 7.9. Severability. In the event any one or more of the provisions contained in this Agreement should be held
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. 
 
Section 7.10. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an
original but all of which when taken together shall constitute but one contract. Each party shall be entitled to rely on a facsimile signature of any other party hereunder as if it were an original. 
 
Section 7.11. Jurisdiction; Consent to Service of
Process. 
 
(a) Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New York State or, to the 
 

12 

extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Secured Parties may otherwise have to bring any action or
proceeding relating to this Agreement or the Notes against Grantor or its properties in the courts of any jurisdiction. 
 
(b) Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the Notes in any New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 
 
(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section
7.1. Nothing in this Agreement will affect the right of any party to this Agreement to process in any other manner permitted by law. 
 
Section 7.12. Termination. This Agreement and the Security Interest shall terminate when all the Obligations have been paid
in full, at which time the Secured Parties shall execute and deliver to Grantor, at Grantor’s expense, all Uniform Commercial Code termination statements and similar documents which Grantor shall reasonably request to evidence such termination.
Any execution and delivery of termination statements or documents pursuant to this Section shall be without recourse to or warranty by the Secured Parties. 
 
Section 7.13. Prejudgment Remedy Waiver. Grantor acknowledges that this Agreement and the Notes evidence a commercial
transaction and that it could, under certain circumstances have the right, to notice of and hearing on the right of the Secured Parties to obtain a prejudgment remedy, such as attachment, garnishment and/or replevin, upon commencing any litigation
against Grantor. Notwithstanding, Grantor hereby waives all rights to notice, judicial hearing or prior court order to which it might otherwise have the right under any state or federal statute or constitution in connection with the obtaining by the
Secured Parties of any prejudgment remedy by reason of this Agreement, the Notes or by reason of the Obligations or any renewals or extensions of the same. Grantor also waives any and all objection which it might otherwise assert, now or in the
future, to the exercise or use by the Secured Parties of any right of setoff, repossession or self help as may presently exist under statute or common law. 
 
[Signature page follows] 
 

13 

 
IN WITNESS
WHEREOF, the parties have duly executed this Security Agreement as of the day and year first written above. 
 

	 VERTEL CORPORATION

	
	 By:
	 	     /s/    MARC E.
MAASSEN        

	 Name:
	 	 Marc E. Maassen

	 Title:
	 	 President/CEO
  

	 NORTH SOUND LEGACY FUND LLC

	
	 By:
	 	     /s/    ANDREW
WILDER        

	 Name:
	 	 Andrew Wilder  

	 Title:
	 	 Chief Financial Officer
  

	 NORTH SOUND LEGACY INSTITUTIONAL FUND LLC

	
	 By:
	 	     /s/    ANDREW
WILDER        

	 Name:
	 	 Andrew Wilder  

	 Title:
	 	 Chief Financial Officer
  

	 NORTH SOUND LEGACY INTERNATIONAL LTD.

	
	 By:
	 	     /s/    ANDREW
WILDER        

	 Name:
	 	 Andrew Wilder  

	 Title:
	 	 Chief Financial Officer
  

	 SDS MERCHANT FUND, L.P.

	
	 By:
	 	     /s/    SCOTT E.
DERBY        

	 Name:
	 	 Scott E. Derby

	 Title:
	 	 General Counsel
  

 
SCHEDULE A

 
Places of Business; Chief Executive
Office; Filing Locations 
 
State of Incorporation: 
California 
 
Chief Executive Office: 
21300 Victory Boulevard 
Suite 700 
Woodland Hills, California 91367 
 
Filing Locations: 
Secretary of State of the State of California 
 

15 

 
SCHEDULE 3.3

Existing Liens 
 

	 Secured Party

	  	 Filing Date

	  	 Expiration Date

	  	 Filing Number

	    	 Status

	 Canon Financial Services, Inc.
 200 Commerce Square Blvd.
 Burlington, NJ 08016
	  	 1/31/2000
	  	 1/31/2005
	  	 0003460347
	    	 Active

	
	 SDS Merchant Fund, LP
 53 Forest Avenue
 Old Greenwich, CT 06870
	  	 7/3/2002
	  	 7/3/2007
	  	 0218660475
	    	 Active

	
	 SDS Merchant Fund, LP
 53 Forest Avenue
 Old Greenwich, CT 06870
	  	 7/3/2002
	  	 7/3/2007
	  	 0218660476
	    	 Active

	
	 North Sound Legacy Fund LLC
 (f/k/a DMG Legacy Fund LLC)
 53 Forest Avenue, Suite 202
 Old Greenwich, CT
06870
	  	 3/27/2003
	  	 9/26/2003
	  	 0308760285
	    	 Active

	
	 North Sound Legacy Institutional
 Fund LLC (f/k/a DMG Legacy
 Institutional Fund LLC)
 53 Forest Avenue, Suite
202
 Old Greenwich, CT 06870
	  	 3/27/2003
	  	 9/26/2003
	  	 0308760285
	    	 Active

	
	 North Sound Legacy International
 Ltd. (f/k/a DMG Legacy
 International Ltd.)
 53 Forest Avenue, Suite 202
Old
 Greenwich, CT 06870
	  	 3/27/2003
	  	 9/26/2003
	  	 0308760285
	    	 Active

 

16<PAGE>
                                                                    EXHIBIT 10.1

================================================================================

                             DISTRIBUTION AGREEMENT

                                      AMONG

                               CENTEX CORPORATION,

                              CAVCO INDUSTRIES, LLC

                                       AND

                             CAVCO INDUSTRIES, INC.

                                   DATED AS OF

                               ________ ___, 2003

================================================================================

<PAGE>

                                TABLE OF CONTENTS
<Table>
<Caption>
                                                                                                    PAGE

<S>                                                                                                 <C>
ARTICLE I. DEFINITIONS.................................................................................2
         SECTION  1.1. Certain Definitions.............................................................2
         SECTION  1.2. Other Defined Terms.............................................................6

ARTICLE II. PRELIMINARY TRANSACTIONS...................................................................7
         SECTION  2.1. Regulatory Filings and Related Actions..........................................7
         SECTION  2.2. Nasdaq National Market Application..............................................8
         SECTION  2.3. Business Separation.............................................................8
         SECTION  2.4. Internal Distributions..........................................................9
         SECTION  2.5. Resignations....................................................................9
         SECTION  2.6. Ancillary Agreements...........................................................10
         SECTION  2.7. Restated Cavco Charter and Restated Cavco Bylaws...............................10

ARTICLE III. THE DISTRIBUTION.........................................................................10
         SECTION  3.1. Record Date and Distribution Date..............................................10
         SECTION  3.2. Distribution Agent.............................................................10
         SECTION  3.3. Delivery of Certificates.......................................................10
         SECTION  3.4. The Distribution...............................................................10
         SECTION  3.5. Fractional Shares..............................................................11

ARTICLE IV. ACCESS TO INFORMATION.....................................................................11
         SECTION  4.1. Provision of Corporate Records.................................................11
         SECTION  4.2. Access to Information..........................................................11
         SECTION  4.3. Litigation Cooperation.........................................................12
         SECTION  4.4. Reimbursement..................................................................12
         SECTION  4.5. Treatment of Records...........................................................12
         SECTION  4.6. Confidentiality................................................................13

ARTICLE V. CERTAIN OTHER AGREEMENTS...................................................................13
         SECTION  5.1. Intercompany Accounts..........................................................13
         SECTION  5.2. Further Assurances and Consents................................................13

ARTICLE VI. INDEMNIFICATION AND OTHER MATTERS.........................................................14
         SECTION  6.1. Assumed Liabilities, Exculpation and Indemnification by Cavco..................14
         SECTION  6.2. Exculpation and Indemnification by Centex......................................15
         SECTION  6.3. Specific Indemnification Issues................................................15
         SECTION  6.4. Notice and Payment of Claims...................................................16
         SECTION  6.5. Defense of Third-Party Claims..................................................16
</Table>

                                        i
<PAGE>

<Table>
<S>                                                                                                  <C>
ARTICLE VII...........................................................................................17
         SECTION  7.1. Conditions.....................................................................17

ARTICLE VIII. DISPUTE RESOLUTION......................................................................19
         SECTION  8.1. Application....................................................................19
         SECTION  8.2. Initial Discussions............................................................19
         SECTION  8.3. Appeal to Higher Management....................................................19
         SECTION  8.4. Mediation......................................................................19
         SECTION  8.5. Arbitration....................................................................20

ARTICLE IX. MISCELLANEOUS.............................................................................21
         SECTION  9.1. Notices........................................................................21
         SECTION  9.2. Interpretation.................................................................21
         SECTION  9.3. Amendments; No Waivers.........................................................22
         SECTION  9.4. Successors and Assigns.........................................................22
         SECTION  9.5. Governing Law..................................................................22
         SECTION  9.6. Counterparts; Effectiveness....................................................23
         SECTION  9.7. Entire Agreement...............................................................23
         SECTION  9.8. Severability...................................................................23
         SECTION  9.9. Termination....................................................................23
         SECTION  9.10. Survival......................................................................23
         SECTION  9.11. Expenses......................................................................23
</Table>

EXHIBITS

Exhibit A      --     Form of Administrative Services Agreement
Exhibit B      --     Form of Agreement to Assign Trademark Rights and Limited
                      Consent to Use Centex Trademarks
Exhibit C      --     Form of Tax Sharing Agreement

                                       ii
<PAGE>

                             DISTRIBUTION AGREEMENT

         This DISTRIBUTION AGREEMENT, dated as of ______ __, 2003 (this
"Agreement") is entered into by and among CENTEX CORPORATION, a Nevada
corporation ("Centex"), CAVCO INDUSTRIES, LLC, a Delaware limited liability
company ("Cavco LLC"), and CAVCO INDUSTRIES, INC., a Delaware corporation
("Cavco" and, together with Cavco LLC, the "Cavco Parties");

                                   WITNESSETH:

         WHEREAS, the Board of Directors of Centex has determined that it is in
the best interests of Centex and its shareholders to separate the businesses
currently conducted by Cavco LLC from the other businesses conducted by Centex
and its Subsidiaries (as hereinafter defined);

         WHEREAS, in furtherance of the foregoing, Centex intends to cause (i)
certain intellectual property held in the name of Centex to be transferred to
Cavco and (ii) Cavco LLC to be merged with and into Cavco;

         WHEREAS, upon the consummation of the transactions described above and
subject to the fulfillment of the conditions set forth herein, Centex intends to
effect the distribution (the "Distribution") of all of the outstanding shares of
common stock, par value $.01 per share, of Cavco (the "Cavco Common Stock") on a
pro rata basis to the holders of shares of common stock, par value $.25 per
share, of Centex (the "Centex Common Stock") as of the Record Date (as
hereinafter defined);

         WHEREAS, Centex and Cavco intend for the Distribution to qualify as a
tax-free transaction under the Internal Revenue Code of 1986, as amended (the
"Code");

         WHEREAS, Centex and Cavco desire to set forth herein certain terms and
provisions governing the principal transactions to be effected in connection
with the Distribution; and

         WHEREAS, Centex and Cavco propose to enter into the Ancillary
Agreements (as hereinafter defined) in order to set forth certain terms and
provisions governing the relationship between the parties in connection with and
after the Distribution;

                                      -1-
<PAGE>

         NOW, THEREFORE, in consideration of the premises, the terms and
conditions set forth herein, the mutual benefits to be gained from the
performance thereof, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                   ARTICLE I.

                                   DEFINITIONS

         SECTION 1.1. Certain Definitions. The following terms, as used herein,
have the following meanings:

         "AAA Holdings" means AAA Holdings, Inc., a Delaware corporation and an
indirect wholly owned Subsidiary of Centex.

         "AAA Sub" means a Delaware limited liability company to be formed as a
wholly owned Subsidiary of AAA.

         "Action" means any suit, action, arbitration, inquiry, investigation or
other proceeding of any nature (whether criminal, civil, legislative,
administrative, regulatory, prosecutorial or otherwise) by or before any
arbitrator or Governmental Entity or similar Person or body.

         "Administrative Services Agreement" means the Administrative Services
Agreement to be entered into on or before the Distribution Date between Cavco
and Centex Service Company, which shall be substantially in the form of Exhibit
A hereto, with such changes therein as Cavco and Centex Service Company shall
mutually agree.

         "Affiliate" has the meaning assigned to such term in Rule 12b-2 of the
Exchange Act; provided, however, that Centex and Cavco shall not be deemed to be
Affiliates of each other for purposes of this Agreement.

         "Ancillary Agreements" means all agreements, certificates, deeds,
instruments, assignments and other written arrangements (other than this
Agreement) entered into between Centex and Cavco in connection with the
transactions contemplated hereby, including the Administrative Services
Agreement, the Intellectual Property Agreement and the Tax Sharing Agreement.

         "Business Day" means any day other than a Saturday, Sunday or one on
which banks are authorized or required by law to close in New York, New York.

         "Cavco Business" means the businesses of manufacturing and selling
manufactured homes, park model homes and commercial structures as conducted by

                                      -2-
<PAGE>

Cavco LLC and its Subsidiaries prior to the Merger and as the same is to be
conducted by Cavco and its Subsidiaries after the Merger.

         "Cavco Group" means (i) prior to the Merger Date, Cavco LLC and its
Subsidiaries and their respective successors and (ii) after the Merger Date,
Cavco and its Subsidiaries and their respective successors, but in each case
excludes Centex and its Subsidiaries.

         "Cavco Group Liabilities" means the following Liabilities (including
Liabilities arising out of any litigation): (a) the Liabilities arising from or
related to the ownership, operation or conduct of the Cavco Business or the use,
possession or enjoyment of the assets used in connection therewith at any time
prior to or on the Distribution Date, (b) all other Liabilities of the Cavco
Group expressly contemplated by the Transaction Agreements as Liabilities of or
to be assumed by Cavco or any member of the Cavco Group and (c) all other
Liabilities that would be reflected as liabilities or obligations on a balance
sheet dated as of the Distribution Date relating solely to the Cavco Business.
Notwithstanding the foregoing, (i) Liabilities arising from or relating to the
Transferred Intellectual Property shall be deemed "Cavco Group Liabilities" and
(ii) Liabilities arising from or relating to the Excluded Plants shall not be
deemed "Cavco Group Liabilities."

         "Centex Business" means the businesses of home building, investment
real estate, financial services, construction products and construction services
and all other businesses conducted by the Centex Group.

         "Centex Group" means Centex and its Subsidiaries and their respective
successors, but excludes any members of the Cavco Group.

         "Centex Group Liabilities" means all Liabilities of Centex or any other
member of the Centex Group (including Liabilities arising out of any
litigation), except for the Cavco Group Liabilities.

         "Centex Service Company" means Centex Service Company, a Nevada
corporation and an indirect wholly owned Subsidiary of Centex.

         "Commission" means the Securities and Exchange Commission.

         "Contract" means any agreement, lease, license, contract, treaty, note,
mortgage, indenture, franchise, permit, concession, arrangement or other
obligation.

         "CREC" means Centex Real Estate Corporation, a Nevada corporation and
an indirect wholly owned Subsidiary of Centex.

                                      -3-
<PAGE>

         "Damages" means, with respect to any Person, any and all damages
(including punitive and consequential damages if not otherwise expressly
excluded), losses, Liabilities, fines, costs and expenses incurred or suffered
by such Person (including all expenses of investigation, all reasonable
attorneys' and expert witnesses' fees and all other out-of-pocket expenses
incurred in connection with any Action or threatened Action).

         "Distribution Agent" means Mellon Investor Services L.L.C.

         "Distribution Date" means the date and time as of which the
Distribution shall be effected, which shall be determined by, or under the
authority of, the Board of Directors of Centex.

         "Distribution Ratio" means .05 shares of Cavco Common Stock for each
share of Centex Common Stock outstanding as of the Record Date.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

         "Excluded Plants" means (i) the manufacturing plant previously owned by
Cavco LLC located in Seguin, Texas and (ii) the manufacturing facility
previously leased by Cavco LLC located in Belen, New Mexico, which in each case
have been transferred and distributed to a wholly owned indirect Subsidiary of
Centex.

         "Finally Determined" means, with respect to any Action, threatened
Action or other matter, that the outcome or resolution of that Action,
threatened Action or other matter either (i) has been decided through binding
arbitration or by a Governmental Entity of competent jurisdiction by judgment,
order, award or other ruling or (ii) has been settled or voluntarily dismissed
by the parties pursuant to the dispute resolution procedure set forth in Article
VIII or otherwise and, in the case of each of clauses (i) and (ii), the
claimants' rights to maintain that Action, threatened Action or other matter
have been finally adjudicated, waived, released, discharged, barred or
extinguished or the judgment, order, ruling, award, settlement or dismissal
(whether mandatory or voluntary, but if voluntary the dismissal must be final,
binding and with prejudice as to all claims specifically pleaded in that Action,
threatened Action or other matter) resolving the same is subject to no further
appeal, vacatur proceeding or discretionary review.

         "Form 10" means the registration statement on Form 10 filed by Cavco
with the Commission in order to effect the registration of Cavco Common Stock
pursuant to Section 12(g) of the Exchange Act, as the same may be supplemented
and amended from time to time.

                                      -4-
<PAGE>

         "Governmental Entity" means any federal, state, local or foreign
government or any court, tribunal, administrative agency or commission or other
governmental or regulatory authority or agency, domestic, foreign or
supranational.

         "Group" means the Cavco Group or the Centex Group, as the context
requires.

         "Information Statement" means the information statement to be mailed to
each holder of record of Centex Common Stock as of the Record Date in connection
with the Distribution.

         "Intellectual Property Agreement" means the Agreement to Assign
Trademark Rights and Limited Consent to Use Centex Trademarks to be entered into
on or before the Distribution Date between Centex and Cavco, which shall be
substantially in the form of Exhibit B hereto, with such changes thereto as
Centex and Cavco shall mutually agree.

         "International" means Centex International, Inc., a Nevada corporation
and a direct wholly owned Subsidiary of Centex.

         "IRS" means the Internal Revenue Service.

         "Law" means any applicable federal, state, local or foreign law,
statute, ordinance, directive, rule, regulation, judgment, order, injunction,
decree, arbitration award, agency requirement, license or permit of any
Governmental Entity.

         "Liability" or "Liabilities" means any and all claims, debts,
liabilities, assessments, costs, deficiencies, charges, demands, fines,
penalties, damages, losses, disgorgements and obligations of any kind, character
or description (whether absolute, contingent, matured, not matured, liquidated,
unliquidated, accrued, known, unknown, direct, indirect, derivative or
otherwise) whenever arising, including all costs, interest and expenses relating
thereto (including all expenses of investigation, all reasonable attorneys' and
expert witnesses' fees and all other out-of-pocket expenses in connection with
any Action or threatened Action) and expressly including any of the foregoing
arising from the negligence or other misconduct of an Indemnified Party.

         "Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity or other entity of any kind or
nature.

         "Record Date" means the close of business on the date determined by the
Board of Directors of Centex (or by a committee of such Board of Directors or
any other Person acting under authority duly delegated to that committee or
Person by the Board of Directors of Centex or a committee of such Board of
Directors) as the record

                                      -5-
<PAGE>

date for determining the holders of record of Centex Common Stock entitled to
receive the Distribution.

         "Restated Cavco Bylaws" means the restated Bylaws of Cavco, which shall
be in such form as the Board of Directors of Cavco reasonably determines with
the approval of Centex.

         "Restated Cavco Charter" means the restated Certificate of
Incorporation of Cavco, which shall be in such form as the Board of Directors of
Cavco reasonably determines with the approval of Centex.

         "Subsidiary" means, with respect to any Person, (i) any corporation of
which at least a majority of the securities or other ownership interests having
by their terms ordinary voting power to elect a majority of the board of
directors are directly or indirectly owned or controlled by such Person and its
Subsidiaries, (ii) any partnership of which such Person or one of its
Subsidiaries is a general partner or as to which such Person and its
Subsidiaries are entitled to receive at least a majority of the assets upon the
liquidation thereof or (iii) any limited liability company of which such Person
or one of its Subsidiaries is a manager (or is entitled as a member to exercise
management rights over the conduct of the business of such limited liability
company) or as to which such Person and its Subsidiaries are entitled to receive
at least a majority of the assets upon the liquidation thereof.

         "Tax Returns" has the meaning set forth in the Tax Sharing Agreement.

         "Tax Sharing Agreement" means the Tax Sharing Agreement to be entered
into on or before the Distribution Date between Centex and its Affiliates and
Cavco, which shall be substantially in the form attached as Exhibit C hereto,
with such changes thereto as Centex and Cavco shall mutually agree.

         "Taxes" has the meaning set forth in the Tax Sharing Agreement.

         "Transaction Agreements" means this Agreement and the Ancillary
Agreements.

         SECTION 1.2. Other Defined Terms. Each of the terms set forth below has
the meaning set forth in the provision set forth opposite such term:

<Table>
<Caption>
         TERM                                                               SECTION
         ----                                                               -------
<S>                                                                         <C>
         AAA                                                                Section 8.5(b)
         Agreement                                                          Preamble
         Cavco                                                              Preamble
         Cavco Common Stock                                                 Recitals
         Cavco Damages                                                      Section 6.1(b)
</Table>

                                      -6-
<PAGE>

<Table>
<Caption>
         TERM                                                               SECTION
         ----                                                               -------
<S>                                                                         <C>
         Cavco Indemnifiable Liabilities                                    Section 6.1(a)
         Cavco Indemnitees                                                  Section 6.2(a)
         Cavco Licenses                                                     Section 2.3(c)
         Cavco LLC                                                          Preamble
         Cavco Parties                                                      Preamble
         Centex                                                             Preamble
         Centex Common Stock                                                Recitals
         Centex Damages                                                     Section 6.1(b)
         Centex Indemnifiable Liabilities                                   Section 6.2(a)
         Centex Indemnitees                                                 Section 6.1(a)
         Code                                                               Recitals
         Corporate Records                                                  Section 4.1
         Distribution                                                       Recitals
         Indemnified Party                                                  Section 6.4(a)
         Indemnifying Party                                                 Section 6.4(a)
         Merger                                                             Section 2.3(b)
         Merger Date                                                        Section 2.3(a)
         Transferred Intellectual Property                                  Section 2.3(a)
</Table>

                                  ARTICLE II.

                            PRELIMINARY TRANSACTIONS

         SECTION 2.1. Regulatory Filings and Related Actions.

         (a) Centex and Cavco have prepared, and Cavco has filed with the
Commission, the Form 10, which includes the Information Statement as an exhibit
thereto. Each of Centex and Cavco shall use commercially reasonable efforts to
cause the Form 10 to become effective under the Exchange Act as promptly as
reasonably practicable after the date upon which it is filed with the
Commission.

         (b) Centex and Cavco have prepared the Information Statement. Centex
shall, if required by law, file the Information Statement with the Commission.
As promptly as practicable after the Form 10 has become effective, Centex shall
mail the Information Statement to the holders of record of Centex Common Stock
as of the Record Date.

         (c) Each of Centex and Cavco shall take all such actions as may be
necessary or appropriate under the securities or blue sky laws of states or
other jurisdictions within the United States in connection with the Distribution
and the other transactions contemplated hereby.

                                      -7-
<PAGE>

         SECTION 2.2. Nasdaq National Market Application. As promptly as
practicable after the date hereof, Centex and Cavco shall prepare, and Cavco
shall file with the National Association of Securities Dealers, Inc., an
application for the Cavco Common Stock to be admitted for quotation on the
Nasdaq National Market. Each of Centex and Cavco shall use commercially
reasonable efforts to cause such application to be approved so that the Cavco
Common Stock is admitted for quotation on the Nasdaq National Market prior to
the Distribution Date.

         SECTION 2.3. Business Separation.

         (a) Prior to the date and time at which the Merger is consummated (the
"Merger Date"), Centex shall grant, assign, contribute, convey, transfer and
deliver to Cavco all intellectual property rights that are identified in the
Intellectual Property Agreement as being transferred to Cavco (the "Transferred
Intellectual Property").

         (b) Prior to the Distribution Date, Centex shall cause Cavco LLC to be
merged with and into Cavco, with Cavco being the sole surviving entity in the
merger (the "Merger"). As a result of the Merger, (i) Cavco LLC shall cease to
exist, (ii) Cavco shall succeed to all of the properties, assets, rights and
entitlements of Cavco LLC and shall be subject to all of its Liabilities and
(iii) the total number of outstanding shares of Cavco Common Stock shall be
increased to equal the product of the Distribution Ratio and the number of
shares of Centex Common Stock outstanding on the Record Date.

         (c) Centex and the Cavco Parties shall use commercially reasonable
efforts to cooperate in transferring to Cavco all licenses, permits and
authorizations that relate to the Cavco Business (the "Cavco Licenses") but that
are held in the name of Centex or any other member of the Centex Group or any of
their respective employees, officers, directors, stockholders, agents or
otherwise (or, in the case of any Cavco Licenses that are held in the name of
Centex or any other member of the Centex Group or any of their respective
employees, officers, directors, stockholders, agents or otherwise that are not
transferable under applicable Law, obtaining new licenses, permits and
authorizations from the relevant Governmental Entities in the name of Cavco to
replace such Cavco Licenses). In the event any such transfer of the Cavco
Licenses (or the grant of any new licenses, permits and authorizations to
replace such Cavco Licenses) cannot be effected prior to the Distribution Date,
Centex shall, except as prohibited by applicable Law, allow Cavco to operate the
Cavco Business under such Cavco Licenses until such transfer can be effected (or
new licenses, permits and authorizations are granted by the relevant
Governmental Entities).

         (d) Centex and the Cavco Parties shall use commercially reasonable
efforts to have Centex and any other member of the Centex Group released, on or
prior to the Distribution Date or as soon as practicable thereafter, as a
guarantor in respect of any guarantees of any Cavco Group Liabilities.

                                      -8-
<PAGE>

         (e) It is the intention of the parties that all material transactions
contemplated by this Section 2.3 shall be consummated prior to or on the
Distribution Date; provided, however, that, to the extent that any such
transactions shall not have been consummated prior to or on the Distribution
Date, Centex and Cavco shall cooperate to effect such transactions as promptly
as practicable after Distribution Date. Nothing contained in this Agreement
shall be deemed to require the transfer of any properties, assets, rights or
entitlements, the assumption of any Liabilities or the release of guarantees
which, by their terms or by operation of Law, cannot be transferred, assumed or
released; provided, however, that Centex and the Cavco Parties shall cooperate
to seek to obtain any necessary consent or approval for any transfer, assumption
or release contemplated by this Section 2.3. In the event that any such
transfer, assumption or release has not been consummated as of the Distribution
Date, then, from and after the Distribution Date, the party who retains the
applicable asset or Liability or who is not able to obtain a release of the
applicable guarantee shall hold such asset in trust for the use and benefit of
the party entitled thereto (at the expense of the party entitled thereto), shall
retain such Liability for the account of the party by whom such Liability is to
be assumed or shall hold the other parties harmless against the guarantee to be
released, as the case may be, and take such other action as may be reasonably
requested by the party to whom such asset is to be transferred, from whom such
liability is to be assumed or for the benefit of whom such guarantee is to be
released, as the case may be, in order to place such party, insofar as is
reasonably possible, in the same position as would have existed had such asset
been transferred, such liability assumed or such guarantee released as
contemplated hereby. As and when any such asset becomes transferable, such
liability becomes assumable or such release is obtainable, the transfer,
assumption or release thereof shall be effected forthwith by the parties hereto.

         SECTION 2.4. Internal Distributions. Immediately after the Merger Date,
Centex shall cause (i) AAA Holdings to distribute all of the outstanding shares
of Cavco Common Stock to CREC, (ii) CREC to distribute all of the outstanding
shares of Cavco Common Stock to International and (iii) International to
distribute all of the outstanding shares of Cavco Common Stock to the
Corporation.

         SECTION 2.5. Resignations. Centex shall cause all of its directors,
officers and employees who will be officers or employees of the Centex Group
from and after the Distribution Date (as designated by Centex) to resign,
effective as of the Distribution Date, from all positions as directors, officers
or employees of Cavco or any its Subsidiaries; provided, however, that Mr.
Laurence E. Hirsch, who is an executive officer and Chairman of the Board of
Directors of Centex, shall not resign his position as a member of the Board of
Directors of Cavco. Cavco shall cause all of its directors, officers and
employees who will be officers and employees of Cavco or any of its Subsidiaries
after the Distribution Date (as jointly designated by Centex and Cavco) to
resign, effective as of the Distribution Date, from all positions as officers or
employees of Centex or any member of the Centex Group in which they serve.

                                      -9-
<PAGE>

         SECTION 2.6. Ancillary Agreements. Prior to or on the Distribution
Date, (i) Centex shall cause Centex Service Company to, and Cavco shall, enter
into the Administrative Services Agreement, (ii) Centex and Cavco shall enter
into the Intellectual Property Agreement and (iii) Centex, on behalf of itself
and its Affiliates, and Cavco shall enter into the Tax Sharing Agreement.

         SECTION 2.7. Restated Cavco Charter and Restated Cavco Bylaws. Prior to
or on the Distribution Date, (i) Cavco and Centex shall take such action as is
required to adopt the Restated Cavco Charter and (ii) Cavco shall take such
action as is required to adopt the Restated Cavco Bylaws.

                                  ARTICLE III.

                                THE DISTRIBUTION

         SECTION 3.1. Record Date and Distribution Date. Subject to the
fulfillment of the conditions set forth in Section 7.1, the Board of Directors
of Centex shall, in the manner provided for under applicable Law, declare the
Distribution and establish the Record Date and the Distribution Date and any
appropriate procedures in connection with the Distribution.

         SECTION 3.2. Distribution Agent. Prior to or on the Distribution Date,
Centex shall enter into an agreement with the Distribution Agent providing for,
among other things, the delivery to the holders of Centex Common Stock as of the
Record Date of certificates evidencing the shares of Cavco Common Stock included
in the Distribution.

         SECTION 3.3. Delivery of Certificates. Prior to the Distribution Date,
Centex shall deliver to the Distribution Agent, for the benefit of the holders
of Centex Common Stock as of the Record Date, a stock certificate or
certificates, representing all of the outstanding shares of Cavco Common Stock
to be owned by Centex as of the Distribution Date. After the Distribution Date,
Cavco shall, upon request of the Distribution Agent, provide to the Distribution
Agent any additional certificates representing shares of Cavco Common Stock that
the Distribution Agent shall require to effect the Distribution.

         SECTION 3.4. The Distribution. Subject to the terms and conditions
hereof, Centex shall instruct the Distribution Agent to distribute, on or as
soon as practicable after the Distribution Date, to each holder of record of
Centex Common Stock as of the Record Date a number of shares of Cavco Common
Stock equal to the result obtained by multiplying the Distribution Ratio by the
number of shares of Centex Common Stock held by such holder as of the Record
Date. Such distribution shall be effected by the mailing of stock certificates
to such holders or, if practicable, by book-entry transfer. All of the shares of
Cavco Common Stock issued in the Distribution shall have been duly authorized
and shall be fully paid and nonassessable.

                                      -10-
<PAGE>

         SECTION 3.5. Fractional Shares. Notwithstanding anything to the
contrary contained in this Article III, no fractional shares of Cavco Common
Stock shall be distributed in the Distribution. The parties shall direct the
Distribution Agent to determine the number of fractional shares of Cavco Common
Stock allocable to each holder of record of Centex Common Stock as of the Record
Date. After the Distribution Date, upon the determination by the Distribution
Agent of such number of fractional shares, the Distribution Agent, acting on
behalf of the holders thereof, shall sell such fractional shares for cash on the
open market at the then-prevailing market prices and shall disburse to each
holder entitled thereto, in lieu of any fractional share, without interest, that
holder's ratable share of the proceeds of that sale, after making appropriate
deductions of the amounts required, if any, to be withheld for United States
federal income tax purposes, and to repay expenses of the Distribution Agent in
connection with such sale.

                                  ARTICLE IV.

                              ACCESS TO INFORMATION

         SECTION 4.1. Provision of Corporate Records. Except as otherwise
specifically set forth in the Transaction Agreements, as soon as practicable
after the Distribution Date, each Group shall deliver to the other Group all
documents, Contracts, books, records and data (including minute books, stock
registers, stock certificates and documents of title) (collectively, "Corporate
Records") in its possession relating primarily to the other Group or its
business, assets and affairs; provided, however, that if any such documents,
Contracts, books, records or data relate to both Groups or their businesses,
assets and affairs, each such Group shall provide to the other Group true and
complete copies of such documents, Contracts, books, records or data. Data
stored in electronic form shall be provided in the format in which it existed at
the Distribution Date, except as otherwise specifically set forth in the
Transaction Agreements.

         SECTION 4.2. Access to Information. From and after the Distribution
Date, each Group shall afford to the other Group and its accountants, counsel
and other designated representatives reasonable access during normal business
hours to all personnel, documents, Contracts, books, records, computer data and
other data in such Group's possession relating to the other Group or the
business and affairs of such other Group (other than data and information
subject to an attorney-client or other privilege that is not specifically
subject to the provisions of this Article IV), insofar as such access is
reasonably required by such other Group for a reasonable and appropriate
purpose, including for audit, accounting, regulatory compliance and disclosure
and reporting purposes.

                                      -11-
<PAGE>

         SECTION 4.3. Litigation Cooperation. From and after the Distribution
Date:

         (a) Each Group shall use all reasonable efforts to make available to
the other Group and its accountants, counsel and other designated
representatives, upon written request, its current and former directors,
officers, employees and representatives as witnesses, and shall otherwise
cooperate with the other Group, to the extent reasonably required in connection
with any Action or threatened Action arising out of either Group's business and
operations in which the requesting party may from time to time be involved,
except for any action in which one Group is asserting a claim against or seeking
relief from the other Group and except to the extent that there is a conflict of
interest in the Action or threatened Action between the requesting Group and
itself.

         (b) Each Group shall promptly notify the other Group, upon its receipt
or the receipt by any of its members, of a request or requirement (by written
questions, interrogatories, requests for information or documents, subpoenas,
civil investigative demands or other similar processes) that relates to the
business and operations of the other Group that could reasonably be regarded as
calling for the inspection or production of any documents or other information
in its possession, custody or control. Each Group shall assert and maintain, or
cause its members to assert and maintain, any applicable claim to privilege,
immunity, confidentiality or protection in order to protect such documents and
other information from disclosure, and shall seek to condition any disclosure
that may be required on such protective terms as may be appropriate. No Group
may voluntarily waive, undermine or fail to take any action reasonably necessary
to preserve an applicable privilege without the prior written consent of the
affected party (or any affected Group member or Affiliates of any such party)
except, in the opinion of such party's counsel, as required by law.

         (c) Each Group shall enter into such joint defense agreements with the
other Group, in customary form, as Centex and Cavco shall determine are
necessary, appropriate or advisable.

         SECTION 4.4. Reimbursement. Except to the extent that any member of one
Group is obligated to indemnify any member of the other Group under Article VI
for such cost or expense, each Group providing information or witnesses to the
other Group, or otherwise incurring any expense in connection with cooperating,
under Sections 4.1, 4.2 or 4.3, shall be entitled to receive from the recipient
thereof, upon the presentation of reasonably detailed invoices therefor, payment
for all out-of-pocket costs and expenses that may reasonably be incurred in
providing such information, witnesses or cooperation.

         SECTION 4.5. Treatment of Records. Except as otherwise required by law
or agreed to in writing, upon compliance with the requirements set forth in
Section 4.1, each of Centex and Cavco shall, and shall cause the members of its
respective Group to, destroy or otherwise dispose of any photocopies or similar
reproductions of all Corporate Records provided to, or relating primarily to,
the other Group or its business, assets and affairs; provided, however, that
prior to any such destruction, the other party shall be provided the opportunity
to take possession of such records if it so desires. Any Corporate Records
received by any member of one Group after the Distribution Date and relating
primarily to the other Group or its business,

                                      -12-
<PAGE>

assets or affairs shall promptly be delivered to such other Group, and retained,
in accordance with the procedures set forth in Section 4.1 and this Section 4.5.
Notwithstanding the foregoing, there shall be no requirement for Centex or
Cavco, or any members of their respective Groups, to destroy or otherwise
dispose of any Corporate Records (or photocopies or similar reproductions
thereof) to the extent that such Corporate Records relate to its business,
assets and affairs.

         SECTION 4.6. Confidentiality. Except as may be more specifically
addressed in any Transaction Agreement, each party shall hold, and shall cause
its consultants and advisors to hold, in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of Law, all confidential or proprietary
information concerning the other party hereto furnished it by such other party
or its representatives pursuant to this Agreement (except to the extent that
such information can be shown to have been (i) previously known by the party to
which it was furnished, (ii) in the public domain through no fault of the party
to which it was furnished or (iii) independently developed by the receiving
party), and each party shall not release or disclose such information to any
other Person, except its auditors, attorneys, financial advisors, bankers and
other consultants and advisors who shall be advised of the provisions of this
Section 4.6.

                                   ARTICLE V.

                            CERTAIN OTHER AGREEMENTS

         SECTION 5.1. Intercompany Accounts. Except as otherwise specifically
set forth in any of the Transaction Agreements, all intercompany loan balances,
accounts receivable and accounts payable between any member of one Group and any
member of another Group in existence at the Distribution Date shall be settled
and paid in full, in cash or other immediately available funds, by the party or
parties owing such obligations as soon as practicable (but in no event more than
60 calendar days) after the Distribution Date. If, at any time after the
Distribution Date, either party receives payments belonging to the other party,
the recipient shall promptly account for and remit said payment to the other
party.

         SECTION 5.2. Further Assurances and Consents. In addition to the
actions specifically provided for elsewhere in the Transaction Agreements, each
of Centex and Cavco shall use its reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things, reasonably
necessary, proper or advisable under applicable Laws, regulations and agreements
or otherwise to consummate and make effective the transactions contemplated by
this Agreement, including using its

                                      -13-
<PAGE>

reasonable efforts to obtain any consents and approvals and to make any filings
and applications necessary or desirable in order to consummate the transactions
contemplated by this Agreement. Centex and Cavco agree to enter into and execute
such additional documents as may be reasonably necessary, proper or advisable to
effect the transactions contemplated by the Transaction Agreements.

                                  ARTICLE VI.

                        INDEMNIFICATION AND OTHER MATTERS

         SECTION 6.1. Assumed Liabilities, Exculpation and Indemnification by
Cavco.

         (a) From and after the Distribution Date, Cavco shall, without any
further responsibility or liability of, or recourse to, Centex or any Affiliate
of Centex or any of their respective directors, stockholders, officers,
employees, agents, consultants, representatives, successors, transferees or
assignees (collectively, the "Centex Indemnitees"), absolutely and irrevocably
assume and be solely liable and responsible for the Cavco Group Liabilities.
Neither Centex nor any of the Centex Indemnitees shall be liable to Cavco or any
Affiliate of Cavco or any of their respective directors, stockholders, officers,
employees, agents, consultants, customers, representatives, successors,
transferees or assignees for any reason whatsoever on account of (i) any Cavco
Group Liabilities or (ii) any Liabilities arising from the breach by Cavco of
any of its obligations under this Agreement; provided that Centex shall remain
liable to Cavco for any breach by Centex of any of its obligations under this
Agreement. The matters with respect to which Cavco assumes liability pursuant to
clauses (i) and (ii) above are referred to herein as the "Cavco Indemnifiable
Liabilities."

         (b) Cavco shall indemnify, save and hold harmless each of the Centex
Indemnitees from and against all (i) all Cavco Indemnifiable Liabilities and
(ii) except as otherwise provided in the Transaction Agreements, all Liabilities
that are or are alleged to be related to, arising from, or associated with the
ownership, operation or conduct of the Cavco Business or the use, possession or
enjoyment of the assets used in connection therewith at any time after the
Distribution Date (all of which are collectively called the "Centex Damages").
In addition, if Centex so elects in its sole discretion, Cavco shall defend any
or all of the Centex Indemnities in any Action in which any Centex Damages are
asserted against any Centex Indemnitees.

         (c) Centex Damages with respect to which, but only to the extent that,
any proceeds are received by Centex, or by any of its Affiliates, from any third
party insurance policy (and are non-reimbursable by Centex under any self
insurance policy), shall not be the subject of indemnification under this
Agreement.

                                      -14-
<PAGE>

         SECTION 6.2. Exculpation and Indemnification by Centex.

         (a) Centex shall, without any further responsibility or liability of,
or recourse to, Cavco or any Affiliate of Cavco or any of their respective
directors, stockholders, officers, employees, agents, consultants,
representatives, successors, transferees or assignees (collectively, the "Cavco
Indemnitees"), absolutely and irrevocably be solely liable and responsible for
the Centex Group Liabilities. Neither Cavco nor any of the other Cavco
Indemnitees shall be liable to Centex or any Affiliate of Centex or any of their
respective directors, stockholders, officers, employees, agents, consultants,
customers, representatives, successors, transferees or assignees for any reason
whatsoever on account of (i) any Centex Group Liabilities or (ii) any
Liabilities arising from the breach by Centex of any of its obligations under
this Agreement; provided that Cavco shall remain liable to Centex for any breach
by Cavco of any of its obligations under this Agreement. The matters with
respect to which Centex retains liability pursuant to clauses (i) and (ii) above
are referred to herein as the "Centex Indemnifiable Liabilities."

         (b) Centex shall indemnify, save and hold harmless each of the Cavco
Indemnitees from and against (i) all Centex Indemnifiable Liabilities and (ii)
except as otherwise provided in the Transaction Agreements, all Liabilities that
are or are alleged to be related to, arising from, or associated with the
ownership, operation or conduct of the Centex Businesses or the use, possession
or enjoyment of the assets used in connection therewith at any time after the
Distribution Date, other than the Cavco Indemnifiable Liabilities (all of which
are collectively called the "Cavco Damages"). In addition, if Cavco so elects in
its sole discretion, Centex shall defend any or all of the Cavco Indemnities in
any Action in which any Cavco Damages are asserted against any Cavco
Indemnitees.

         (c) Cavco Damages with respect to which, but only to the extent that,
any proceeds are received by, or on behalf of, Cavco or by any of its
Affiliates, from any third party insurance policy (and are non-reimbursable
under any self insurance policy), shall not be the subject of indemnification
under this Agreement.

         SECTION 6.3. Specific Indemnification Issues.

         (a) It is the express intention of the parties hereto that each party
to be indemnified pursuant to this Article VI shall be indemnified and held
harmless from and against all Damages as to which indemnity is provided for
hereunder, NOTWITHSTANDING THAT ANY SUCH DAMAGES ARISE OUT OF OR RESULT FROM THE
ORDINARY, STRICT, SOLE, OR CONTRIBUTORY NEGLIGENCE, OR THE STRICT LIABILITY (OR
OTHER LIABILITY WITHOUT FAULT) OF SUCH PARTY AND REGARDLESS OF WHETHER ANY OTHER
PARTY (INCLUDING ANOTHER PARTY TO THIS AGREEMENT) IS OR IS NOT ALSO NEGLIGENT OR
OTHERWISE LIABLE WITH RESPECT TO THE MATTER IN QUESTION.

                                      -15-
<PAGE>

         (b) It is acknowledged that after the Distribution Date the parties
will have negotiated business relationships, which relationships will be
described in the Contracts, agreements and other documents entered into in the
normal course of business. Such documents may include agreements by the parties
and their Affiliates and Subsidiaries to supply, after the Distribution Date,
materials, products and services and to lease facilities, tangible and
intangible property. Such business relationships shall not be subject to the
indemnity provisions hereof, unless the parties expressly agree to the contrary
in the agreements governing such relationships.

         (c) Except as otherwise provided herein, in the event an Action is
brought by a third party in which the liability as between Centex and Cavco is
Finally Determined to be joint or in which the entitlement to indemnification
hereunder is not determinable, the parties shall negotiate in good faith in an
effort to agree, as between Centex and Cavco, on the proper allocation of
liability or entitlement to indemnification, as well as the proper allocation of
the costs of any joint defense or settlement pursuant to Section 6.5, all in
accordance with the provisions of, and the principles set forth in, this
Agreement. In the absence of any such agreement, such allocation of liability or
entitlement to indemnification, and such allocation of costs, shall be subject
to ultimate resolution between Centex and Cavco pursuant to Article IX.

         SECTION 6.4. Notice and Payment of Claims.

         (a) If any party to this Agreement or a person entitled to
indemnification under this Agreement (an "Indemnified Party") determines that it
is or may be entitled to a defense or indemnification by Centex or Cavco, as the
case may be (the "Indemnifying Party"), under this Agreement, the Indemnified
Party shall deliver promptly to the Indemnifying Party a written notice and
demand for indemnification, specifying the basis for the claim for
indemnification, the nature of the claim, and, if known, the amount for which
the Indemnified Party reasonably believes it is entitled to be indemnified. The
Indemnifying Party shall have 30 days from receipt of such notice in which to:
(w) assume the defense of such litigation or claim; (x) pay the claim in
immediately available funds; (y) reserve its rights pending negotiations under
Section 6.5 or (z) object in accordance with Section 6.4(b). This 30-day period
may be extended by express agreement of the parties.

         (b) An Indemnifying Party may object to, or reserve its rights with
respect to, the claim for indemnification set forth in any notice delivered by
the Indemnified Party pursuant to Section 6.4(a) so long as it acts in good
faith and with a reasonable basis for its belief that it is not obligated to
indemnify the Indemnified Party.

         SECTION 6.5. Defense of Third-Party Claims.

         (a) If the Indemnified Party's claim for Indemnification is based,
under this Agreement, on an Action, judicial or otherwise, brought by a third
party, and the

                                      -16-
<PAGE>

Indemnifying Party does not object under Section 6.4(b), the Indemnifying Party
may, participate in the defense of such Action and may assume the defense of
such Action with counsel satisfactory to the Indemnified Party if (i) the
Indemnified Party agrees to assumption thereof by the Indemnifying Party or (ii)
the Indemnifying Party shall have confirmed in writing (without reservation or
qualification) its obligation to provide indemnification for the liability
asserted in such action. If the Indemnified Party shall reasonably conclude that
its interests in such Action are materially different from those of the
Indemnifying Party or that it may have defenses that are different from or in
addition to those available to the Indemnifying Party, the Indemnified Party may
use separate counsel to protect such interests and assert such defenses and
otherwise participate in the defense of such Action. If the Indemnifying Party
shall assume the defense with counsel satisfactory to the Indemnified Party, the
Indemnifying Party shall not be liable for any legal expenses (other than
investigation expenses) subsequently incurred by the Indemnified Party, unless
the Indemnified Party shall have employed separate counsel in accordance with
the preceding sentence.

         (b) The Indemnifying Party shall pay to the Indemnified Party in
immediately available funds the amounts for which the Indemnified Party is
entitled to be indemnified within 30 days after such third party claim is
Finally Determined (or within such longer period as agreed to by the parties).

         (c) In the event an Action is brought by a third party in which the
liability as between Centex and Cavco is alleged to be joint or in which the
entitlement to indemnification hereunder is not determinable or as to which
there has been a reservation of rights, the parties shall cooperate in a joint
defense. Such joint defense shall be under the general management and
supervision of the party which is expected to bear the greater share of the
liability; provided, however, that neither party shall settle or compromise any
such joint defense matter without the consent of the other. The costs of such
joint defense shall be borne as the parties may agree, or in the absence of such
agreement, such costs shall be borne by the party incurring such costs, subject
to ultimate resolution pursuant to Article IX hereof.

                                  ARTICLE VII.

                                   CONDITIONS

         SECTION 7.1. Conditions. The obligations of Centex and Cavco to
consummate the Distribution shall be subject to the fulfillment (or, if
permissible under applicable law, the waiver by Centex) of the following
conditions at or prior to the Distribution Date:

         (a) The Form 10 shall have become effective under the Exchange Act, and
no stop order with respect thereto shall be in effect;

                                      -17-
<PAGE>

         (b) The Information Statement shall have been mailed to the holders of
record of Centex Common Stock as of the Record Date;

         (c) The shares of Cavco Common Stock to be delivered in the
Distribution shall have been approved for quotation on the Nasdaq National
Market;

         (d) The transactions contemplated by Section 2.3 shall have been
consummated on terms satisfactory to Centex in its sole discretion;

         (e) Each of the Ancillary Agreements shall have been executed and
delivered by the Persons who are proposed to become parties thereto;

         (f) The Restated Cavco Charter and Restated Cavco Bylaws shall be in
effect;

         (g) all consents, approvals and authorizations of any Governmental
Entity required for the consummation of the Distribution and the other
transactions contemplated hereby and by the Ancillary Agreements shall have been
obtained and shall be in full force and effect, and such consents, approvals and
authorizations shall be in form and substance satisfactory to Centex in its sole
discretion;

         (h) no order, preliminary or permanent injunction or decree shall have
been issued by any court or agency of competent jurisdiction or any other
Governmental Entity and no other legal restraint or prohibition shall be in
effect that prevents or makes unlawful the Distribution;

         (i) the Centex Board of Directors shall have received an opinion from a
nationally recognized valuation firm, which opinion shall be in form and
substance satisfactory to Centex in its sole discretion, and Centex shall
otherwise be reasonably satisfied that, after giving effect to the Distribution,
(i) the present fair saleable value and the fair value of the assets of Centex
and Cavco will exceed their liabilities; (ii) Cavco and Centex will be able to
pay their debts as such debts mature during the normal course of business; (iii)
Cavco will not have unreasonably small capital for the business in which it is
and will be engaged; and (iv) the total assets of Centex will exceed its total
liabilities, plus the amount that would be needed, if Centex were dissolved at
the time of the distribution, to satisfy any preferential rights of stockholders
whose preferential rights are superior to those receiving the distribution; and

         (j) Centex shall have received a ruling from the IRS to the effect that
the Distribution will be a tax-free transaction for federal income tax purposes,
and such ruling shall be in form and substance satisfactory to Centex in its
sole discretion.

                                      -18-
<PAGE>

                                 ARTICLE VIII.

                               DISPUTE RESOLUTION

         SECTION 8.1. Application. Any dispute arising out of or relating to
this Agreement, including the breach or termination hereof, shall be resolved in
accordance with the procedures specified in this Article VIII, which shall be
the sole and exclusive procedure for the resolution of any such disputes;
provided, however, that a party may file a complaint to seek a preliminary
injunction or other provisional judicial relief, if in its sole judgment such
action is necessary. Despite such action the parties will continue to
participate in good faith in the procedures set forth in this Article VIII and
each party is required to continue to perform its obligations under this
Agreement pending final resolution of any dispute arising out of or relating to
this Agreement, unless to do so would be impossible or impracticable under the
circumstances. All negotiations between the parties pursuant to this Article
VIII are confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence. The requirements of
this Article VIII shall not be deemed a waiver of any right of termination under
this Agreement.

         SECTION 8.2. Initial Discussions. Any dispute shall be first discussed
by an appropriate senior executive officer of each of the parties or his or her
designee. Any party may initiate such discussions by giving the other party
written notice specifying in detail the nature of the dispute. Within 15
Business Days after delivery of the notice, the receiving party shall submit to
the other a written response, including a statement of such party's position and
a summary of arguments supporting such position. Within 10 Business Days (or
such other period as agreed upon by the parties) after receipt of such response,
the executives of both parties shall meet at a mutually acceptable time and
place, and thereafter as often as they reasonably deem necessary, to attempt to
resolve the dispute. All reasonable requests for information made by one party
to the other shall be honored.

         SECTION 8.3. Appeal to Higher Management. If, in spite of such
discussions, no mutually acceptable solution is reached within 30 Business Days
after the delivery of one party's written request to the other party to discuss
such dispute, any such dispute shall be referred to the Chief Legal Officer of
Centex and the Chief Executive Officer of Cavco.

         SECTION 8.4. Mediation. If the dispute is not resolved within 30
Business Days (or such other period as agreed upon by the parties) following the
submission of the dispute to senior management pursuant to Section 8.3, the
parties shall attempt to resolve the dispute employing non-binding mediation
under the then-current CPR Mediation Procedure. If within 10 Business Days (or
any other period agreed upon by the parties) after the commencement of such
mediation the dispute still has not been resolved, each of the parties may
commence arbitration proceedings pursuant to Section 8.5.

                                      -19-
<PAGE>

         SECTION 8.5. Arbitration. The parties hereto agree that all disputes,
controversies or claims that may arise out of the transactions contemplated by
this Agreement, or the breach, termination or invalidity thereof, shall be
submitted to, and determined by, binding arbitration in accordance with the
following procedures:

         (a) Either Centex or Cavco may submit a dispute, controversy or claim
to arbitration by giving the other party written notice to such effect, which
notice shall describe, in reasonable detail, the facts and legal grounds forming
the basis for the filing party's request for relief. The arbitration shall be
held before one neutral arbitrator in Dallas, Texas.

         (b) Within 30 days after the other party's receipt of such demand,
Centex and Cavco shall mutually determine who the arbitrator will be. If the
parties are unable to agree on the arbitrator within that time period, the
arbitrator shall be selected by the American Arbitration Association ("AAA"). In
any event, the arbitrator shall have a background in, and knowledge of,
transactions in the homebuilding or manufactured housing industries and shall
otherwise be an appropriate person based on the nature of the dispute. If a
person with experience in such matters is not available, the arbitrator shall be
chosen from the retired federal judges pool.

         (c) The arbitration shall be governed by the Commercial Arbitration
Rules of the AAA, except as otherwise expressly provided in this Section 8.5.
However, the arbitration shall be administered by any organization mutually
agreed to in writing by the parties. If the parties are unable to agree on the
organization to administer the arbitration, it shall be administered by the AAA.

         (d) Discovery shall be limited to the request for and production of
documents, depositions and interrogatories. Interrogatories shall be allowed
only as to the names, last known addresses and telephone numbers of all persons
having knowledge of facts relevant to the dispute and a brief description of
that person's knowledge and the names, addresses and telephone numbers of any
experts who may be called as an expert witness or who have been used for
consultation. All discovery shall be guided by the Federal Rules of Civil
Procedure. All issues concerning discovery upon which the parties cannot agree
shall be submitted to the arbitrator for determination.

         (e) In rendering an award, the arbitrator shall determine the rights
and obligations of the parties according to the substantive and procedural laws
of the State of Delaware.

         (f) The decision of, and award rendered by, the arbitrator shall be
determined no more than 30 days after the selection of the arbitrator and shall
be final and binding on the parties and shall not be subject to appeal. Judgment
on the award may be entered in and enforced by any court of competent
jurisdiction.

                                      -20-
<PAGE>

         (g) Each party shall bear its own costs and expenses (including filing
fees) with respect to the arbitration, including one-half of the fees and
expenses of the arbitrator.

                                  ARTICLE IX.

                                  MISCELLANEOUS

         SECTION 9.1. Notices. Any and all notices or other communications
required or permitted to be given under any of the provisions of this Agreement
shall be in writing and may be delivered by hand, by certified mail, return
receipt requested, postage prepaid, or by nationally recognized overnight
courier service, or by facsimile transmission addressed as follows:

                  If to Centex:

                  Centex Corporation
                  2728 North Harwood
                  Dallas, Texas 75201
                  Fax No.: (214) 981-6855
                  Attention: Chief Legal Officer

                  If to Cavco:

                  Cavco Industries, Inc.
                  1001 North Central Avenue
                  Suite 800
                  Phoenix, Arizona 85004
                  Fax No.: (602) 256-6189
                  Attention: Chief Executive Officer

         SECTION 9.2. Interpretation.

         (a) The article, section and paragraph headings contained herein are
for the purposes of convenience only and are not intended to define or limit the
contents of said articles, sections or paragraphs. Whenever the words "include,"
"includes" and "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation." Whenever a reference is made in this
Agreement to a "party" or "parties," such reference shall be to a party or
parties to this Agreement unless otherwise indicated. Whenever the context
requires, the use of any gender herein shall be deemed to be or include the
other genders and the use of the singular herein shall be deemed to include the
plural (and vice versa). The use of the words "hereof" and "herein" and words of
similar import shall refer to this entire Agreement and not to any

                                      -21-
<PAGE>

particular article, section, subsection, clause, paragraph or other subdivision
of this Agreement, unless the context otherwise requires.

         (b) Each party hereto stipulates and agrees that the rule of
construction to the effect that any ambiguities are to be or any be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement to favor any party against the other, and that no party, including any
drafting party, shall have the benefit of any legal presumption (including
"meaning of the authors") or the detriment of any burden of proof by reason of
any ambiguity or uncertain meaning contained in this Agreement.

         (c) If this Agreement contains any terms and provisions (including, but
not limited to, the provisions of Article VI) that govern or otherwise apply, or
could be construed to govern or otherwise apply, to the preparation or filing of
Tax Returns, the allocation of liability for Taxes or any other matter relating
to the obligations of the parties with respect to Taxes or any Action arising in
connection therewith, to the extent that any such terms and provisions are
inconsistent in any respect with the terms and provisions of the Tax Sharing
Agreement, the terms and conditions of the Tax Sharing Agreement shall control
and shall be deemed to supersede the terms and provisions hereof.

         SECTION 9.3. Amendments; No Waivers. Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by each party, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.

         SECTION 9.4. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Nothing contained in this Agreement
is intended to confer upon any Person other than the parties hereto and their
respective successors and permitted assigns, any benefit, right or remedies
under or by reason of this Agreement, except that the provisions of Article VI
shall inure to the benefit of the Centex Indemnitees and the Cavco Indemnitees.
Neither party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of the other
party hereto, which shall not be unreasonably withheld.

         SECTION 9.5. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Texas, without regard
to the conflict of laws rules thereof.

                                      -22-
<PAGE>

         SECTION 9.6. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart hereof signed by the other party hereto.

         SECTION 9.7. Entire Agreement. This Agreement and other Transaction
Agreements constitute the entire understanding of the parties with respect to
the subject matter hereof and thereof and supersede all prior agreements,
understandings and negotiations, both written and oral, between the parties with
respect to the subject matter hereof and thereof. No representation, inducement,
promise, understanding, condition or warranty not set forth in the Transaction
Documents has been made or relied upon by any party hereto.

         SECTION 9.8. Severability. If any one or more of the provisions
contained in this Agreement should be declared invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained in this Agreement shall not in any way be affected or
impaired thereby so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a declaration, the parties shall modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner so that the transactions contemplated hereby are consummated
as originally contemplated to the fullest extent possible.

         SECTION 9.9. Termination. Notwithstanding any provision in this
Agreement to the contrary, this Agreement may be terminated and the Distribution
amended, modified or abandoned at any time prior to the Distribution, without
penalty or liability, by and in the sole discretion of Centex and without the
approval of Cavco or of Centex's stockholders.

         SECTION 9.10. Survival. All covenants and agreements of the parties
contained in this Agreement shall survive the Distribution Date.

         SECTION 9.11. Expenses. Except as otherwise set forth in the
Transaction Agreements, all costs and expenses incurred prior to or on the
Distribution Date in connection with the preparation, execution and delivery of
the Transaction Agreements, the preparation of the Information Statement
(including any registration statement on Form 10 of which such Information
Statement may be a part) and the consummation of the Distribution and the other
transactions contemplated thereby shall be charged to and paid by AAA Holdings,
CREC, International, Centex and Cavco on a pro rata basis in proportion to the
net book value of their respective assets as of such date as Centex shall
determine.

                            [Signature page follows]

                                      -23-
<PAGE>

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

                             CENTEX CORPORATION

                             By:
                                -----------------------------------------------
                                Name:
                                     ------------------------------------------
                                Title:
                                      -----------------------------------------

                             CAVCO INDUSTRIES, LLC

                             By:
                                -----------------------------------------------
                                Name:
                                     ------------------------------------------
                                Title:
                                      -----------------------------------------

                             CAVCO INDUSTRIES, INC.

                             By:
                                -----------------------------------------------
                                Name:
                                     ------------------------------------------
                                Title:
                                      -----------------------------------------

                                      -24-

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