Document:

Unassociated Document

    EXHIBIT
      10-2(b)

    
 

    SECOND
      AMENDED AND RESTATED REVOLVING

    CREDIT
      AGREEMENT

    

    among

    

    CAL-MAINE
      FOODS, INC.,

    as
      Borrower

    

    COÖPERATIEVE
      CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.

    "RABOBANK
      NEDERLAND", New York Branch, as Administrative Agent

    

    

    

    

    

    and

    

    the
      banks
      and other lending institutions named herein

    

    6
      February 2002

    

    CONFORMED
      COPY

    

    [Incorporating
      First through Ninth Amendments]

    

    

    TABLE
      OF CONTENTS

     

    

      
        	
                ARTICLE
                  I.

              	
                AMOUNTS
                  AND TERMS OF THE ADVANCES

              	
                8

              
	 	 	 
	
                Section
                  1.01

              	
                The
                  Advances

              	
                8

              
	
                Section
                  1.02

              	
                Making
                  the Advances

              	
                8

              
	
                Section
                  1.03

              	
                Commitment
                  Fee

              	
                8

              
	
                Section
                  1.04

              	
                Reduction
                  or Termination of Revolving Credit Commitments

              	
                8

              
	
                Section
                  1.05

              	
                Interest.

              	
                9

              
	 	
                (a) 
Interest
                  Rate

              	
                9

              
	 	
                (b) 
Interest
                  Period

              	
                9

              
	
                Section
                  1.06

              	
                Increased
                  Costs

              	
                10

              
	
                Section
                  1.07

              	
                Evidence
                  of Debt

              	
                10

              
	
                Section
                  1.08

              	
                Use
                  of Proceeds

              	
                10

              
	
                Section
                  1.09

              	
                Letters
                  of Credit

              	
                11

              
	
                Section
                  1.10

              	
                Procedure
                  for Issuing Letters of Credit

              	
                11

              
	
                Section
                  1.11

              	
                Reimbursement

              	
                11

              
	
                Section
                  1.12

              	
                Letter
                  of Credit Fees

              	
                12

              
	 	 	 
	
                ARTICLE
                  II.

              	
                TERMS
                  OF PAYMENTS

              	
                12

              
	 	 	 
	
                Section
                  2.01

              	
                Repayment

              	
                12

              
	
                Section
                  2.02

              	
                Prepayments.

              	
                12

              
	 	
                (a) 
Mandatory

              	
                12

              
	 	
                (b) 
Optional

              	
                13

              
	
                Section
                  2.03

              	
                Payments
                  and Computations.

              	
                13

              
	
                Section
                  2.04

              	
                Pro
                  Rata Treatment

              	
                13

              
	
                Section
                  2.05

              	
                Sharing
                  of Payments, etc

              	
                14

              
	
                Section
                  2.06

              	
                Non-Receipt
                  of Funds by the Administrative Agent

              	
                14

              
	 	 	 
	
                ARTICLE
                  III.

              	
                CONDITIONS
                  PRECEDENT

              	
                14

              
	 	 	 
	
                Section
                  3.01

              	
                Conditions
                  Precedent to the Initial Advance

              	
                14

              
	
                Section
                  3.02

              	
                Conditions
                  Precedent to All Advances

              	
                16

              
	 	 	 
	
                ARTICLE
                  IV.

              	
                REPRESENTATIONS
                  AND WARRANTIES

              	
                16

              
	 	 	 
	
                Section
                  4.01

              	
                Representations
                  and Warranties of the Borrower

              	
                16

              
	 	 	 
	
                ARTICLE
                  V.

              	
                COVENANTS
                  OF THE BORROWER

              	
                18

              
	 	 	 
	
                Section
                  5.01

              	
                Affirmative
                  Covenants

              	
                18

              
	 	
                (a) 
Compliance
                  with Laws, etc

              	
                18

              
	 	
                (b) 
Payment
                  of Taxes, etc

              	
                18

              
	 	
                (c) 
Preservation
                  of Corporate Existence, etc

              	
                18

              
	 	
                (d) 
Keeping
                  of Books

              	
                18

              
	 	
                (e) 
Visitation
                  Rights

              	
                18

              
	 	
                (f) 
Maintenance
                  of Properties, etc

              	
                19

              
	 	
                (g) 
Maintenance
                  of Insurance

              	
                19

              
	 	
                (h) 
Working
                  Capital

              	
                19

              
	 	
                (i) 
Tangible
                  Net Worth

              	
                19

              
	 	
                (j) 
Total
                  Funded Debt to Total Capitalization

              	
                19

              
	 	
                (k) 
Cash
                  Flow Coverage Ratio

              	
                21

              
	 	
                (l) 
Reporting
                  Requirements

              	
                22

              
	 	
                (m) 
Post
                  Closing Items

              	
                23

              
	
                Section
                  5.02

              	
                Negative
                  Covenants

              	
                23

              
	 	
                (a) 
Guaranteed
                  Indebtedness

              	
                23

              
	 	
                (b) 
Dividends,
                  etc

              	
                23

              
	 	
                (c) 
Capital
                  Expenditures

              	
                23

              
	 	
                (d) 
Maintenance
                  of Ownership of Subsidiaries

              	
                23

              
	 	
                (e) 
Mergers,
                  etc

              	
                23

              
	 	
                (f) 
Sales,
                  etc. of Assets

              	
                24

              
	 	
                (g) 
Fiscal
                  Year

              	
                24

              
	 	
                (h) 
Investments
                  in Delta Egg

              	
                24

              
	 	
                (i) 
Investments
                  in Non-Guarantor Subsidiaries

              	
                24

              
	 	
                (j) 
Indebtedness
                  of Hillandale, LLC

              	
                25

              
	 	
                (k) 
Indebtedness
                  of American Egg Products LLC

              	
                25

              
	 	
                (l) 
Liens
                  of Hillandale, LLC

              	
                25

              
	 	
                (m) 
Liens
                  of American Egg Products LLC

              	
                26

              
	 	
                (n) 
Liens
                  of Borrower

              	
                26

              
	 	
                (o) 
Limitation
                  on Restrictions on Subsidiaries

              	
                26

              
	 	
                (p) 
Affiliate
                  Transactions

              	
                26

              
	 	 	 
	
                ARTICLE
                  VI.

              	
                EVENTS
                  OF DEFAULT

              	
                27

              
	 	 	 
	
                Section
                  6.01

              	
                Events
                  of Default

              	
                27

              
	
                Section
                  6.02

              	
                Remedies

              	
                28

              
	 	 	 
	
                ARTICLE
                  VII.

              	
                DEFINITIONS
                  AND ACCOUNTING TERMS

              	
                28

              
	 	 	 
	
                Section
                  7.01

              	
                Certain
                  Defined Terms

              	
                28

              
	
                Section
                  7.02

              	
                Terms

              	
                35

              
	 	 	 
	
                ARTICLE
                  VIII.

              	
                THE
                  ADMINISTRATIVE AGENT

              	
                35

              
	 	 	 
	
                Section
                  8.01

              	
                Appointment,
                  Powers and Immunities

              	
                35

              
	
                Section
                  8.02

              	
                Rights
                  of Administrative Agent as a Bank

              	
                36

              
	
                Section
                  8.03

              	
                Defaults

              	
                36

              
	
                Section
                  8.04

              	
                Indemnification

              	
                36

              
	
                Section
                  8.05

              	
                Independent
                  Credit Decisions

              	
                37

              
	
                Section
                  8.06

              	
                Several
                  Commitments

              	
                37

              
	
                Section
                  8.07

              	
                Successor
                  Administrative Agent

              	
                37

              
	
                Section
                  8.08

              	
                Administrative
                  Agent Fee

              	
                38

              
	 	 	 
	
                ARTICLE
                  IX.

              	
                MISCELLANEOUS

              	
                38

              
	 	 	 
	
                Section
                  9.01

              	
                Amendments,
                  etc

              	
                38

              
	
                Section
                  9.02

              	
                Notices,
                  etc

              	
                38

              
	
                Section
                  9.03

              	
                Waiver;
                  Remedies

              	
                38

              
	
                Section
                  9.04

              	
                Expenses
                  and Taxes.

              	
                38

              
	
                Section
                  9.05

              	
                Right
                  of Set-off

              	
                39

              
	
                Section
                  9.06

              	
                Severability
                  of Provisions

              	
                39

              
	
                Section
                  9.07

              	
                Binding
                  Effect; Governing Law

              	
                39

              
	
                Section
                  9.08

              	
                Consent
                  to Jurisdiction; Process Agent.

              	
                39

              
	
                Section
                  9.09

              	
                Security

              	
                40

              
	
                Section
                  9.10

              	
                Entire
                  Agreement; Amendment and Restatement; Ratification;
                  Release

              	
                40

              
	
                Section
                  9.11

              	
                Waiver

              	
                40

              

      

    

     

    
 

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    INDEX
      OF
      EXHIBITS AND SCHEDULES

    

    Exhibits:

    

    
      	
              Exhibit
                A

            	
              -

            	
              Form
                of Promissory Note

            
	 	 	 
	
              Exhibit
                B

            	
              -

            	
              Borrowing
                Base Certificate

            
	 	 	 
	
              Exhibit
                C

            	
              -

            	
              Compliance
                Certificate

            
	 	 	 
	
              Exhibit
                D

            	
              -

            	
              Franklin
                County Modification of Mortgage

            
	 	 	 
	
              Exhibit
                E

            	
              -

            	
              Hinds
                County First Modification of Mortgage

            
	 	 	 
	
              Exhibit
                B to
                Ninth Amendment

            	
              -

            	
              Borrower
                Pledge Agreement

            
	 	 	 
	
              Exhibit
                C to
                Ninth Amendment

            	
              -

            	
              Hillandale
                Security Agreement

            

    

    

    Schedules:

    

    
      	
              Schedule
                1

            	
              -

            	
              Amendments
                to Existing Credit Agreement

            
	 	 	 
	
              Schedule
                2

            	
              -

            	
              Mortgages

            
	 	 	 

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    SECOND
      AMENDED AND RESTATED

    REVOLVING
      CREDIT AGREEMENT

    

    Dated
      as
      of February 6, 2002

    

    This
      SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT among CAL-MAINE FOODS,
      INC. (the "Borrower"),
      each
      of the banks or other lending institutions which is or which may from time
      to
      time become a signatory hereto or any successor or assignee thereof
      (individually, a "Bank"
      and,
      collectively, the "Banks"),
      and
      COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND," NEW
      YORK BRANCH as administrative agent for itself and the other Banks (in such
      capacity, together with its successors in such capacity, the "Administrative
      Agent"
      and
      individually, herein "Rabobank").

     

    R
      E C I T
      A L S:

    

    A.  Borrower
      and Rabobank have entered into a Revolving Credit Agreement dated as of
      October 18, 1984, as amended by that certain Amendment dated as of
      September 29, 1985, that certain Amendment dated as of March 31, 1987,
      that certain Third Amendment to Revolving Credit Agreement dated as of
      December 31, 1987, that certain Amendment dated as of May 31, 1988,
      that certain Amendment and Waiver dated as of September 30, 1988, that
      certain Amendment dated December 31, 1988, that certain Amendment dated as
      of June 2, 1989, that certain Amendment dated as of June 30, 1989, and
      that certain Letter Amendment dated May 9, 1990 (the Revolving Credit
      Agreement, as the same has previously been amended, is hereinafter referred
      to
      as the "Original
      Revolving Credit Agreement").

     

    B.  The
      Original Revolving Credit Agreement was amended and restated as of May 29,
      1990 pursuant to that certain Amended and Restated Revolving Credit Agreement
      dated as of May 29, 1990 among Borrower, Rabobank and Barclays Bank PLC
      (New York) ("Barclays"
      and
      such Amended and Restated Revolving Credit Agreement, as the same has been
      amended by the documents described on Schedule 1,
      herein
      the "Existing
      Credit Agreement").
      Pursuant to the Existing Credit Agreement, Barclays was added as a Bank
      thereunder.

     

    C.  Borrower
      and Rabobank have entered into that certain Amended and Restated Term Loan
      Agreement dated as of May 29, 1990 (as the same may be amended, the "Term
      Loan Agreement") which amended and restated in its entirety that certain Term
      Loan Agreement dated as of May 15, 1986, between Borrower and Rabobank (as
      the same had previously been amended, herein referred to as the "Previous Term
      Loan Agreement").

     

    D.  Borrower
      and Rabobank have entered into that certain Reimbursement and Credit Agreement
      dated as of December 1, 1987 (as the same has been amended, herein referred
      to as the "Egg Facility Reimbursement Agreement"). The total amount available
      to
      be drawn under the letter of credit issued pursuant to the Egg Facility
      Reimbursement Agreement has been drawn, such letter of credit has been
      terminated and returned to Rabobank and Borrower has otherwise satisfied all
      of
      its liquidated obligations arising under the Egg Facility Reimbursement
      Agreement as a result of such draw (the "Egg
      LC
      Termination").

     

    E.  To
      secure
      certain of the obligations and indebtedness of Borrower to Rabobank under the
      Original Revolving Credit Agreement, the Previous Term Loan Agreement, the
      Egg
      Facility Reimbursement
      Agreement and the other documents executed in connection therewith, Borrower,
      Cal-Maine Farms, Inc., and Cal-Maine Egg Products, Inc. executed certain
      security agreements and mortgages (as amended but excluding the collateral
      documents executed in connection with the Egg Facility Reimbursement Agreement,
      such security agreements and mortgages herein called, the "Original
      Collateral Documents").

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    F.  To
      induce
      Rabobank to continue to extend credit to the Borrower, the Borrower granted
      to
      Rabobank security interests and liens in the real properties described on
Schedule 1
      to the
      Term Loan Agreement and the personal property relating thereto (the
      "New
      Properties").

     

    G.  To
      induce
      Barclays to enter into the Existing Credit Agreement, Borrower, Cal-Maine Farms,
      Inc., and Cal-Maine Egg Products, Inc. granted security interests and liens
      to
      Barclays in the New Properties, to the extent applicable, and in the properties
      covered by the Original Collateral Documents (herein for purposes of these
      Recitals the "Existing
      Properties"
      and
      together with the New Properties herein referred to for purposes of these
      Recitals as the "Properties").

     

    H.  Rabobank
      and Barclays entered into that certain Intercreditor Agreement dated
      May 29, 1990 (the "First
      Intercreditor Agreement")
      pursuant to which Rabobank and Barclays set forth therein their respective
      rights and priorities in and with respect to the Properties and appointed
      Rabobank as agent for itself and Barclays (in such capacity herein referred
      to
      as the "Agent")
      to act
      as agent with respect to the Properties as therein provided.

     

    I.  To
      facilitate the collateral arrangements contemplated by the Existing Credit
      Agreement, the Term Loan Agreement, the Egg Facility Reimbursement Agreement
      and
      the First Intercreditor Agreement, Rabobank has assigned all of its right,
      title, and interest in and to the Original Collateral Documents to the Agent
      pursuant to that certain Assignment Agreement dated May 29, 1990 (as the
      same may be amended, herein the "Assignment");
      provided
      that
      with respect to that certain Collateral Pledge Agreement dated October 17,
      1984 executed by Borrower, Cal-Maine Farms, Inc. and Cal-Maine Egg Products,
      Inc. for the benefit of Rabobank which is an Original Collateral Document,
      Rabobank, Borrower, Cal-Maine Farms, Inc. and Cal-Maine Egg Products, Inc.
      only
      amended the terms thereof to provide that both Rabobank and Barclays shall
      be
      pledgees thereunder pursuant to that certain Amendment to Collateral Pledge
      Agreement and Assignment of Interest dated the date hereof (such Collateral
      Pledge Agreement, as amended, herein the "Pledge
      Agreement"
      and
      together with the Collateral Chattel Mortgage Note pledged pursuant thereto
      and
      the Act of Collateral Chattel Mortgage on Inventory dated October 17, 1984
      executed by Borrower, Cal-Maine Farms, Inc. and Cal-Maine Egg Products, Inc.
      in
      connection therewith, herein collectively referred to as the "Louisiana
      Collateral Documents").

     

    J.  Barclays
      assigned all of its right, title, interest and obligations under the Loan
      Documents (as defined in the Existing Credit Agreement) to Trust Company Bank,
      a
      Georgia state banking corporation (now know as SunTrust Bank, Atlanta and herein
      "SunTrust")
      pursuant to that certain Assignment and Assumption Agreement dated
      October 1, 1991 between Barclays and SunTrust.

     

    K.  Borrower
      requested that Rabobank issue a letter of credit pursuant to the terms and
      provisions of that certain Reimbursement and Credit Agreement dated as of
      May 1, 1992 between the Borrower and Rabobank (as the same may be amended
      or otherwise modified herein the "Dairy
      Facility Reimbursement Agreement")
      in
      order to provide credit and liquidity support for $2,900,000.00 of Hinds County,
      Mississippi, Adjustable Rate Demand Industrial Revenue Bonds, Series 1992
      (Taxable), Cal-Maine Foods, Inc., Dairy Project.

     

    L.  Borrower
      executed and delivered that certain Term Loan Note dated November 5, 1993
      payable to the order of Rabobank in the original principal amount of $1,000,000
      (as the same may be amended or otherwise modified, therein the "New
      Term Note"
      and the
      New Term Note, collectively with the Dairy Facility Reimbursement Agreement,
      the
      Existing Credit Agreement, the Term Loan Agreement and the Egg Facility
      Reimbursement Agreement, herein the "Original
      Credit Agreements").

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    M.  Harris
      Trust and Savings Bank ("Harris")
      became
      a Bank under the Existing Credit Agreement pursuant to the Seventh Amendment
      to
      Loan Documents (including Modification to Mortgages and Deeds of Trust) dated
      April 30, 1996.

     

    N.  To
      secure
      certain of the obligations and indebtedness of Borrower, Cal-Maine Farms, Inc.,
      Cal-Maine Egg Products, Inc., Cal-Maine Partnership, Ltd. and CMF of Kansas-LLC
      to each of Rabobank, SunTrust, Harris and the Agent under the Original Credit
      Agreements and the other documents executed in connection therewith, the
      Borrower, Cal-Maine Farms, Inc., Cal-Maine Egg Products, Inc., Cal-Maine
      Partnership, Ltd. and CMF of Kansas-LLC executed the following
      documents:

     

    (a)  the
      Louisiana Collateral Documents;

     

    (b)  Amended
      and Restated Security Agreement dated May 29, 1990 executed by Borrower for
      the benefit of the Agent;

     

    (c)  Amended
      and Restated Security Agreement dated May 29, 1990 executed by Cal-Maine
      Farms, Inc. for the benefit of the Agent;

     

    (d)  Amended
      and Restated Security Agreement dated May 29, 1990 executed by Cal-Maine
      Egg Products, Inc. for the benefit of the Agent;

     

    (e)  Security
      Agreement dated June 1, 1995 executed by Cal-Maine Partnership, Ltd. for
      the benefit of the Agent;

     

    (f)  Security
      Agreement dated June 3, 1997 executed by CMF of Kansas-LLC for the benefit
      of the Agent (the documents described in the foregoing clauses (a) through
      (f) herein the "Existing Security Agreements");

     

    (g)  That
      certain Mortgage, Security Agreement and Financing Statement dated May 15,
      1986 executed by Borrower and Cal-Maine Farms, Inc. for the benefit of Rabobank
      and filed in real property records as reflected on Schedule 2
      hereto
      (such mortgage, as the same has been assigned to the Agent and otherwise
      modified, and as the same may be further amended or otherwise modified, herein
      the "Borrower
      Mortgage");

     

    (h)  That
      certain Mortgage, Security Agreement and Financing Statement dated May 15,
      1986 executed by Cal-Maine Farms, Inc. for the benefit of Rabobank and filed
      in
      the real property records as reflected on Schedule 2
      hereto
      (such mortgage, as the same has been assigned to the Agent and otherwise
      modified, and as the same may be further amended or otherwise modified, herein
      the "Cal-Maine
      Mortgage");

     

    (i)  Multiple
      copies of a Mortgage, Deed of Trust, Future Advance Deed of Trust, Security
      Agreement, Assignment of Rents and Financing Statement dated May 29, 1990
      executed by Borrower and Cal-Maine Farms, Inc. for the benefit of the Agent,
      covering certain properties located in New Mexico, Alabama, Kansas, Oklahoma,
      Texas, North Carolina, Texas and Arkansas and filed in the real property records
      as reflected on Schedule 2
      hereto
      (as the same have been and may hereafter be amended, the "New
      Mortgages");

     

    (j)  Deed
      of
      Trust, Security Agreement, Assignment of Rents and Financing Statement dated
      as
      of May 1, 1992 executed by the Borrower for the benefit of Rabobank in its
      capacity as a creditor under the Term Loan Agreement, the Dairy Facility
      Reimbursement Agreement and the Egg Facility Reimbursement Agreement and as
      a
      revolving bank under the Original Revolving Credit Agreement, filed for record
      in the Real Property Records of Hinds County, Mississippi in Book 244,
      Page 98 on May 20, 1992 (as the same have been and may hereafter be
      amended, the "Dairy
      Facility Deed of Trust");

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (k)  Assignment
      of Leasehold Interest dated May 1, 1992 executed by Borrower for the
      benefit of Rabobank as a creditor under the Dairy Facility Reimbursement
      Agreement, filed for record in the Real Property Records of Hinds County,
      Mississippi in Book 0397, Page 657 on May 20, 1992 (as the same
      have been and may hereafter be amended, the "Dairy
      Facility Assignment"
      and all
      of the documents listed in items (a) through (k) of this Recital N, as
      the same have been and may hereafter be amended, herein the "Existing
      Collateral Documents");

     

    (l)  Assignment
      of Leasehold Interests dated December 1, 1987 executed by Borrower for the
      benefit of Rabobank as a creditor under the Dairy Facility Reimbursement
      Agreement, filed for record in the Real Property Records of Hinds County,
      Mississippi, in Book 0354, Page 674 on December 22, 1987 (as the
      same have been and may hereafter be amended, the "Egg
      Facility Assignment"
      and as
      a result of the Egg LC Termination, the Egg Facility Assignment has been
      released).

     

    O.  To
      facilitate the collateral arrangements contemplated by the Existing Collateral
      Documents, Rabobank, SunTrust, Agent and Harris entered into that certain
      Amended and Restated Intercreditor Agreement dated April 14, 1995 which
      amended and restated the First Intercreditor Agreement in its entirety (the
      "Second
      Intercreditor Agreement").

     

    P.  The
      real
      properties located in Smith County, Texas, Morgan County, Alabama and Caldwell
      County, Texas which are covered by the New Mortgages filed in those
      jurisdictions (the "Released
      Properties")
      have
      been sold to a third party and the liens created by the New Mortgages on the
      Released Properties have been released.

     

    Q.  Cal-Maine
      Farms, Inc. transferred to Borrower all of its assets located in Kansas and
      New
      Mexico, including, without limitation, all of its interest in the real property
      described in the Mortgages identified as items 3(d) and 3(e) on
Schedule 2
      hereto.

     

    R.  Cal-Maine
      Farms, Inc. and Borrower have created Cal-Maine Partnership, Ltd. as a Texas
      limited partnership ("CM
      Partnership").
      In
      connection with the formation of CM Partnership, Borrower and Cal-Maine Farms,
      Inc. transferred all the assets each of them owns in Kentucky, Ohio and Texas
      to
      CM Partnership, including, without limitation, the real property described
      in
      the New Mortgages identified as items 3(g), (h) and (i) on Schedule 2
      hereto;
provided
      that the
      documentation effectuating the transfers in Kentucky and Ohio were not recorded
      in the applicable real property records. In return for the foregoing transfers
      to CM Partnership, Cal-Maine Farms, Inc. required a 99% limited partnership
      interest in CM Partnership and Borrower obtained a 1% general partnership
      interest in CM Partnership.

     

    S.  Borrower
      also transferred all its assets located in Alabama, Arkansas, North Carolina
      and
      South Carolina to Cal-Maine Farms, Inc., including, without limitation, all
      of
      its interest in the real property described in the Mortgages identified as
      items (1), (2), (3)(a), (b), (c) and (f) on Schedule 2
      hereto;
provided,
      that,
      the documentation effectuating the transfers in Alabama, Arkansas and North
      Carolina were not filed of record in the applicable real property
      records.

     

    T.  Metropolitan
      Life Insurance Company ("MetLife")
      and
      Borrower entered into that certain Loan Agreement dated March 19, 1992 (the
      "Existing
      MetLife Loan Agreement")
      and to
      secure the obligations, indebtedness and liabilities arising in connection
      with
      the Existing MetLife Loan Agreement, Borrower executed that certain Act of
      Collateral Mortgage and Security Agreement dated as of March 19, 1997 filed
      for record with the St. Helena Clerk of Court, St. Helena Parish, Louisiana
      in
      COB 195, Page 611 and MOB 143, Page 355 on March 20,
      1992 (as the same may have been modified, and collectively with the Act of
      Pledge of Collateral Mortgage Note executed in connection therewith, the
      "Existing
      MetLife Mortgage").

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    U.  Borrower
      and the Guarantors (as defined herein) requested that First South Production
      Credit Association and MetLife (together the "Noteholders")
      purchase notes issued by Borrower pursuant to that certain Note Purchase
      Agreement dated December 18, 1997 (as the same may be amended, restated or
      otherwise modified, herein the "Note
      Agreement").

     

    V.  The
      Noteholders purchased the amounts owed under the Existing MetLife Loan Agreement
      and the Term Loan Agreement (the "Existing
      Term Obligations").
      As a
      result, Rabobank and MetLife assigned to the Noteholders the Existing Term
      Obligations and all of their respective interests with respect to (i) the
      Existing MetLife Loan Agreement, the Term Loan Agreement, the notes issued
      pursuant thereto and the liens and security interests granted under the Existing
      Collateral Documents and the Existing MetLife Mortgage to the extent directly
      securing the Existing Term Obligations as contemplated by Recital W below
      and (ii) any guaranties securing the payment of the Existing Term
      Obligations. The Note Agreement and the notes issued pursuant thereto amended
      and restated the Existing MetLife Loan Agreement, the Term Loan Agreement and
      the notes issued pursuant thereto in their entity, but did not extinguish the
      Existing Term Obligations which continue outstanding under the terms of the
      Note
      Agreement and the notes issued pursuant thereto. The Note Agreement also
      governs, and the notes issued pursuant thereto also evidence, additional amounts
      advanced to Borrower thereunder, the proceeds of which are used by Borrower
      for
      general corporate purposes.

     

    W.  To
      induce
      the Noteholders to purchase the notes under the Note Agreement and in
      furtherance of the assignments to the Noteholders described in Recital V
      above, Borrower and the Guarantors provided security interests and liens in
      (or,
      with respect to the existing liens and security interests granted pursuant
      to
      the Existing Collateral Documents and the Existing MetLife Mortgage securing
      the
      Existing Term Obligations, continue such liens and security interests in),
      among
      other property, the following to secure the obligations, indebtedness and
      liability of Borrower and the Guarantors to the Noteholders under the Note
      Agreement and the documents executed in connection therewith on a pari
      passu
      basis
      with the obligations, indebtedness and liability of Borrower and the Guarantors
      to the Agent and the Banks:

     

    (a)  the
      personal property covered by the Existing Security Agreements;

     

    (b)  the
      property located in or near Edwards, Hinds County, Mississippi covered by the
      Egg Facility Assignment and the Dairy Facility Deed of Trust;

     

    (c)  the
      property located in or near Bethune, Kershaw County, South Carolina covered
      by
      the Borrower Mortgage and Cal-Maine Mortgage;

     

    (d)  the
      property located in or near Lincoln, Washington County, Arkansas, Adair County,
      Oklahoma and Albuquerque, Bernalillo County, New Mexico covered by the New
      Mortgages;

     

    (e)  the
      property located in or near Greensburg, St. Helena Parish, Louisiana covered
      by
      the Existing MetLife Mortgage; and

     

    (f)  certain
      additional properties located in or near Hammond, Tangipahoa Parish,
      Louisiana.

     

    X.  To
      accomplish the grants and continuations described in the foregoing
      Recital W, the following documents were executed and
      delivered:

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (a)  that
      certain Consolidated, Amended and Restated Security Agreement dated
      December 18, 1997 among Borrower, each Guarantor and the Agent (such
      security agreement, as the same may be amended or otherwise modified, the
      "Consolidated
      Security Agreement"),
      which
      amended and restated the Existing Security Agreements in their entirety but
      did
      not extinguish the liens and security interest granted pursuant thereto, which
      liens and security interests continue under the terms of the Consolidated
      Security Agreement;

     

    (b)  that
      certain Assignment of Liens dated December 18, 1997 executed by Rabobank in
      favor of the Agent assigning Rabobank's rights to the Dairy Facility Deed of
      Trust;

     

    (c)  that
      certain Notarial Act of Transfer, Endorsement and Assignment of Note, Related
      Rights, and Collateral and Security Documents dated December 18, 1997
      executed by MetLife in favor of the Agent assigning its rights to the Existing
      MetLife Mortgage to the Agent;

     

    (d)  Multiple
      copies of a Mortgage, Line of Credit Mortgage, Deed of Trust, Future Advance
      Deed of Trust, Security Agreement, Assignment of Rents and Financing Statement
      dated December 18, 1997 which (i) amended and restated in their
      entirety (but did not extinguish the liens and security interests granted
      pursuant to) the Existing MetLife Mortgage, Borrower Mortgage, the Cal-Maine
      Mortgage, the Dairy Facility Deed of Trust and the New Mortgages filed in
      Lincoln, Washington County, Arkansas and Albuquerque, Bernalillo County, New
      Mexico and the New Mortgage covering the property located in Adair County,
      Oklahoma and (ii) grant liens on the property located in or near Edwards,
      Hinds County, Mississippi covered by the Egg Facility Assignment and the
      additional properties located in or near Hammond, Tangipahoa Parish, Louisiana
      (as executed by the owner of the applicable property, as filed in the real
      property records of St. Helena Parish, Louisiana, Kersaw County, South Carolina,
      Hinds County Mississippi, Washington County, Arkansas, Adair County, Oklahoma,
      Tangipahoa Parish, Louisiana and Bernalillo County, New Mexico and as the same
      may hereafter be amended or otherwise modified, the "Shared
      Mortgages");
      and

     

    (e)  That
      certain Second Amended and Restated Intercreditor Agreement dated
      December 18, 1997 among Agent, the Banks and the Noteholders, which amended
      and restated the Second Intercreditor Agreement in its entirety (as consented
      and agreed to by the Borrower and the Guarantors and as the same may be amended
      or otherwise modified, the "Intercreditor
      Agreement").

     

    Y.  Cal-Maine
      Egg Products, Inc. ceased operations in May of 1998. On June 15, 1999,
      Cal-Maine Egg Products, Inc. was dissolved and its assets were transferred
      to
      Borrower.

     

    Z.  The
      real
      property located in Reno County, Kansas has been released pursuant to (i) a
      Release of Mortgage and Amendments Thereto dated May 18, 1998 and (ii) a Partial
      Release of Recorded Lien dated February 1999 and filed for record with the
      Reno
      County Register of Deeds, Book 327, Page 564 on February 25,
      1999.

     

    AA.  The
      real
      property located in Clay County, Alabama and Fayette County, Texas has been
      released pursuant to (i) a Total Release of Recorded Lien dated
      May 31, 2001 and filed for record with the Judge of Probate in Clay County,
      Alabama, Record R212, Page 58-59 on June 27, 2001 and (ii) a Total
      Release of Recorded Lien dated May 31, 2001 and filed for record with
      Fayette County, Texas County Clerk, Volume 1137, Page 301 on
      June 27, 2001, respectively.

     

    BB.  The
      Borrower and the Guarantors have advised the Administrative Agent and the Banks
      that Events of Default have occurred under subsections 6.01(c)
      and
6.01(d)
      of the
      Existing Credit Agreement as a result of the following (the events of default
      occurring as a result of the following, herein the "Existing
      Defaults"):
      (a), with respect to subsection 6.01(c),
      (i) the
      Borrower's failure to comply during the period from September 1, 2001 to
      December 1, 2001 with the requirement under subsection 5.01(j) of the
      Existing Credit Agreement that the ratio of Total Funded Debt to Total
      Capitalization must not exceed 70% at any time (the "Total
      Funded Debt to Total Capitalization Covenant"),
      and
      (ii) the Borrower's failure to comply with the prohibitions under subsection
      5.02(a) of the Existing Credit Agreement as a result of each Guarantor's
      guarantee of the Debt incurred by the Borrower pursuant to the Harris Term
      Agreement (the "Guaranteed
      Indebtedness Covenant"),
      and
      (b), with respect to subsection 6.01(d),
      the
      occurrence of events of default under the Note Agreement and the Dairy Facility
      Reimbursement Agreement occurring as a result of the cross default thereunder
      to
      the Existing Credit Agreement and as a result of the failure of the Borrower
      to
      comply with certain of the financial covenants thereunder as of and for certain
      periods beginning on September 2, 2001 and ending on the date
      hereof.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    CC.  SunTrust
      has assigned to each of Harris and First South Farm Credit, ACA ("First
      South")
      50% of
      its existing commitment under the Existing Credit Agreement and 50% of the
      advances it had made which were outstanding thereunder. As a result, SunTrust
      is
      no longer a party to the Existing Credit Agreement, Harris has increased its
      commitment under the Existing Credit Agreement to $10,000,000 and First South
      has become a Bank under the Existing Credit Agreement with a $5,000,000
      commitment.

     

    DD.  Borrower
      has entered into that certain Agreement to Form a Limited Liability Company,
      Transfer Assets Thereto, and Purchase Units of Membership Therein dated July
      28,
      2005 (the "Hillandale
      Agreement")
      with
      Hillandale Farms of Florida, Inc. and Hillandale Farms, Inc. (together the
      "Hillandale
      Companies")
      and
      Jack E. Hazen, Jack E. Hazen, Jr., Homer E. Hunnicut, Jr., Orland R. Bethel
      and
      Dorman W. Mizell. Pursuant to the Hillandale Agreement:

     

    1. A
      new
      Florida limited liability company has been formed by the Hillandale Companies
      named "Hillandale, LLC" (herein "New
      Co");

     

    2. Each
      of
      the Hillandale Companies have contributed certain assets and liabilities
      identified in the Hillandale Agreement to New Co in return for the issuance
      of
      membership interests in New Co (the "Contribution");

     

    3. The
      Borrower has acquired from the Hillandale Companies fifty one percent of the
      membership interest issued by New Co for cash (the "Initial
      Equity Acquisition")
      and
      has agreed pursuant to the Hillandale Agreement to acquire the remaining forty
      nine percent of the membership interest issued by New Co over a period of four
      years; and

     

    4. Prior
      to
      the Initial Equity Acquisition, the Borrower owned approximately forty four
      percent of American Egg Products LLC and the Hillandale Companies owned
      approximately twenty seven percent of American Egg Products LLC. As a result
      of
      the Initial Equity Acquisition, American Egg Products LLC has become a
      "Subsidiary" of the Borrower (the transaction described in clauses 1., 2.,
      3 and
      4., herein the "Hillandale
      Transactions").

     

    EE.  As
      of the
      date of this Amendment, the Borrower has repaid in full the amounts outstanding
      under the Harris Term Agreement.

     

    FF.  Borrower,
      Rabobank, Harris, and First South now wish to amend and restate the Existing
      Credit Agreement in its entirety as herein set forth and to waive the Existing
      Defaults.

     

    
      
        
        

      

      
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    Article
      I.

     

    Amounts
      and Terms of the Advances

     

    Section
      1.01  The
      Advances.
      Each
      Bank severally agrees, on the terms and conditions hereinafter set forth, to
      make advances (such advances and the advances outstanding under
      Section 1.01 of the Existing Credit Agreement on the date hereof (which are
      herein the "Existing
      Advances")
      are
      herein collectively referred to as the "Advances")
      to the
      Borrower from time to time during the period from the date hereof to and
      including the Termination Date (this and certain other capitalized terms are
      defined in Section 7.01),
      provided that (a) at any time the aggregate outstanding amount of the
      Advances and Credit Liabilities shall not exceed the lesser of (i) the
      Revolving Credit Commitments, as such amount may be reduced pursuant to
Section 1.04,
      or
      (ii) the Borrowing Base; and (b) at any time the aggregate outstanding
      amount of a Bank's Advances and its pro rata portion (determined based on the
      Revolving Credit Commitments) of the Credit Liabilities shall not exceed its
      Revolving Credit Commitment. Each Advance shall be in an amount not less than
      $500,000.00. Advances made by each Bank shall be made and maintained at such
      Bank's Applicable Lending Office. Within the limits of the Revolving Credit
      Commitments, the Borrower may borrow, prepay pursuant to Section 2.02
      and
      reborrow under this Section 1.01.

     

    Section
      1.02  Making
      the Advances.
      Each
      Advance shall be made on notice from the Borrower to the Administrative Agent,
      which notice shall: (i) be irrevocable, (ii) only be effective if received
      by
      the Administrative Agent not later than 11:00 A.M. (New York City time) on
      a Business Day (any notice received after such time shall be deemed to be
      received on the next Business Day); (iii) specify the date of the requested
      advance (which must be a Business Day on or after the effective date of the
      receipt of the notice) and the amount thereof; and (iv) select the Interest
      Period therefor pursuant to Section 1.05(b).
      The
      Administrative Agent shall promptly notify the Banks of the content of each
      such
      notice. Not later than 2:00 P.M. (New York City time) on the date of the
      requested Advance and upon fulfillment of the applicable conditions set forth
      in
      Article III, each Bank will make available the amount of the Advance to be
      made by it on such date to the Administrative Agent, at the Principal Office,
      in
      immediately available funds, for the account of the Borrower. The amount so
      received by the Administrative Agent shall, subject to the terms and conditions
      of this Agreement, be made available to the Borrower by no later than
      3:00 P.M. (New York City time): (a) by depositing the same, in
      immediately available funds, in an account of the Borrower (designated by the
      Borrower) maintained with the Administrative Agent at the Principal Office
      or
      (b) as the Borrower may otherwise direct.

     

    Section
      1.03  Commitment
      Fee.
      The
      Borrower agrees to pay to the Administrative Agent for the account of each
      Bank
      a commitment fee on the average daily unused portion of the Revolving Credit
      Commitments from the date hereof until the Termination Date, at a per annum
      rate
      equal to the Commitment Fee Rate, payable quarterly on the last day of each
      calendar quarter during the term of the Revolving Credit Commitments, commencing
      on March 31, 2002 and ending on the Termination Date. As used herein, the
      term "Commitment
      Fee Rate"
      means
      (a) 0.5% through and including December 31, 2004 and (b) with
      respect to any calendar quarter ending after December 31, 2004:
      (i) 0.50% if as of the end of such quarter the Usages for the quarter is
      less than 50%; and (ii) 0.25% if as of the end of the quarter the
      Usage for the quarter is more than or equal to 50%. The term "Usage"
      means a
      percentage determined as of the end of a calendar quarter by dividing
      (a) the average daily outstanding amount of the Advances and Credit
      Liabilities for such quarter by (b) the average daily amount the Revolving
      Credit Commitments for such quarter and multiplying the resulting quotient
      by
      100.

     

    Section
      1.04  Reduction
      or Termination of Revolving Credit Commitments.
      The
      Borrower shall have the right, upon at least five (5) Business Days notice
      to
      the Administrative Agent, to terminate in whole or reduce in part the unused
      portion of the Revolving Credit Commitments, provided
      that
      each partial reduction shall be in the amount of $500,000 or an integral
      multiple thereof, and provided further
      that the
      Borrower shall simultaneously prepay the amount by which the unpaid principal
      amount of the Advances exceeds the Revolving Credit Commitments (after giving
      effect to such notice) plus accrued and unpaid interest on the principal amount
      so prepaid together with all other amounts due pursuant to Section 9.04(b)
      as a
      result of such prepayment. Borrower may not terminate the Revolving Credit
      Commitments while Letters of Credit are outstanding and Borrower may not reduce
      the Revolving Credit Commitments below an amount equal to the aggregate unused
      portion of the stated amount of the Letters of Credit then outstanding. The
      Revolving Credit Commitments may not be reinstated after they have been
      terminated or reduced unless this Agreement is amended in accordance with the
      terms hereof to permit such reinstatement.

     

    
      
        
        

      

      
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    Section
      1.05  Interest.

     

    (a)  Interest
      Rate.
      The
      Borrower shall pay to the Administrative Agent for the account of each Bank
      interest on the unpaid principal amount of each Advance made by such Bank during
      each Interest Period for such Advance, payable quarterly on the last day of
      each
      calendar quarter and on the last day of such Interest Period at an interest
      rate
      equal to the Applicable Margin above the Term Federal Funds Rate; provided
      that
      such rate shall in no event be higher than the maximum interest rate permitted
      by law; and provided further
      that any
      amount of principal which is not paid when due (whether at stated maturity,
      by
      acceleration or otherwise) shall bear interest, from the date on which such
      amount is due until such amount is paid in full, at the Default Rate. No
      provision of this Agreement or the Notes shall require the payment or permit
      the
      collection of interest in excess of the maximum rate permitted by applicable
      law:

     

    (i)  If
      the
      amount of interest computed without giving effect to this provision of
Section 1.05(a)
      and
      payable on any interest payment date in respect of the preceding interest
      computation period would exceed the amount of interest computed in respect
      of
      such period at the maximum rate of interest from time to time permitted (after
      taking into account all consideration which constitutes interest) by laws
      applicable to a Bank (such maximum rate being the "Maximum
      Permissible Rate"),
      the
      amount of interest payable to such Bank on such date in respect of such period
      shall be computed at the Maximum Permissible Rate.

     

    (ii)  If
      at any
      time and from time to time (A) the amount of interest payable to a Bank on
      any interest payment date shall be computed at the Maximum Permissible Rate
      pursuant to the preceding clause (i) and (B) in respect of any subsequent
      interest computation period the amount of interest otherwise payable to such
      Bank would be less than the amount of interest payable to such Bank computed
      at
      the Maximum Permissible Rate, then the amount of interest payable to such Bank
      in respect of such subsequent interest computation period shall continue to
      be
      computed at the Maximum Permissible Rate until the amount of interest which
      would have been payable to such Bank if the total amount of interest had been
      computed without giving effect to this provision of Section 1.05(a).

     

    (b)  Interest
      Period.
      The
      period between the date of each Advance and the date of payment in full of
      such
      Advance shall be divided into successive periods the duration of which are
      determined as herein after described, each such period being an "Interest
      Period"
      for
      such Advance. The Interest Periods in effect for the advances outstanding under
      the Existing Credit Agreement on the effective date hereof shall terminate
      as of
      such date, new three (3) month Interest Periods shall begin as of such date,
      and
      to the extent any Bank incurs additional losses, costs, or expenses due to
      the
      termination of such Interest Periods Borrower agrees to compensate such Bank
      in
      accordance with Section
      9.04(b).
      The
      initial Interest Period for each Advance shall begin on the day of such Advance
      (or with respect to the Existing Advances on the date hereof) and each
      subsequent Interest Period for such Advance shall begin on the last day of
      the
      immediately preceding Interest Period for such Advance. Each Interest Period
      for
      each Advance shall end on the corresponding day in the first, second or third
      week thereafter or the numerically corresponding day in the first, third, sixth,
      ninth or twelfth calendar month thereafter (as Borrower may select) or on such
      other day as Borrower may request if the Banks can (in their sole discretion)
      make such an Interest Period available to the Borrower, except that each
      Interest Period measured in months which commences on the last Business Day
      of a
      calendar month (or on any day for which there is no numerically corresponding
      day in the appropriate subsequent calendar month) shall end on the last Business
      Day of the appropriate subsequent calendar month. Notwithstanding the foregoing:
      (a) any Interest Period which would otherwise extend beyond the Termination
      Date shall end on the Termination Date; and (b) if the Borrower fails to
      select the duration of any Interest Period, the duration of such Interest Period
      shall be three (3) months.

     

    
      
        
        

      

      
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    Section
      1.06  Increased
      Costs.
      If, on
      or after the date hereof, the introduction of or any change in or in the
      interpretation of any law or regulation or the compliance by any Bank with
      any
      guideline or request from any central bank or other governmental authority
      (whether or not having the force of law), shall impose, modify or deem
      applicable any reserve, special deposit or similar requirement against all
      or
      any assets held by, deposits or accounts with, or credit extended by or to,
      such
      Bank or impose on any Bank any other condition affecting the Advances, the
      Notes
      or such Bank's obligation to make Advances, or subject such Bank to, or cause
      the termination or reduction of a previously granted exemption with respect
      to,
      any tax, levy, impost, deduction, charge or withholding with respect to the
      Advances, the Notes or such Bank's obligation to make Advances or change the
      basis of taxation of payment to such Bank of the principal of or interest on
      the
      Advances or any other amounts under this Agreement (except for a change in
      the
      rate of tax on the overall net income of such Bank imposed by the jurisdiction
      in which any such Bank's principal executive office or the lending office is
      located), and the result of any of the foregoing events is to increase the
      cost
      to a Bank of agreeing to make or making, funding, or maintaining the Advances,
      or to reduce the amount of any sums received or receivable by any Bank under
      this Agreement or the Notes, then, the Borrower shall from time to time, upon
      demand by the applicable Bank, pay such additional amounts as will compensate
      such Bank for such increased cost or reduced amount. A certificate of such
      Bank,
      submitted to the Borrower and the Administrative Agent, setting forth the
      amounts of such increased cost or reduced amount and the additional amounts
      to
      be paid to such Bank under this Section shall be conclusive. After such Bank
      notifies the Borrower of any increased cost pursuant to this Section 1.06,
      the
      Borrower may upon at least five Business Days' written notice to such Bank
      (with
      a copy to the Administrative Agent) prepay in full or in part any Advance then
      outstanding and affected by such increased costs, provided
      the
      Borrower shall comply with the prepayment provisions of Section 2.02(b)
      and
      reimburse such Bank for all such increased costs incurred by such Bank and
      pay
      to all Banks any amounts due pursuant to Section 9.04(b).

     

    Section
      1.07  Evidence
      of Debt.
      The
      indebtedness of the Borrower to each Bank resulting from all Advances made
      from
      time to time by such Bank and interest thereon shall be evidenced by a
      promissory note of the Borrower, in substantially the form of Exhibit A
      hereto
      (each a "Note"
      and
      collectively the "Notes"),
      payable to the order of such Bank, in the principal amount of such Bank's
      Revolving Credit Commitment delivered to such Bank pursuant to Article III.

     

    Section
      1.08  Use
      of
      Proceeds.
      The
      proceeds of the Advances will be used solely for the purposes of:
      (a) financing the normal operations of the Borrower and its Subsidiaries as
      such operations exist as of the date hereof, (b) reimbursing the Banks for
      drawings under Letters of Credit and (c) financing the purchase by the
      Borrower of (i) fractional shares of its common stock in connection with a
      reverse stock split resulting from an amendment to its Amended and Restated
      Certificate of Incorporation, and (ii) the subsequent offer to purchase
      whole shares from unaffiliated shareholders; provided that such amendment is
      effective and the offers to make such purchases are made on or before
      December 31, 2003, and that on the effective dates of the respective
      purchases of such fractional shares and whole shares of common stock, the shares
      so purchased shall be cancelled and no longer outstanding. Any Advances received
      by the Borrower when the aggregate amount of the then outstanding Advances
      and
      Credit Liabilities exceeds the Parent Borrowing Base shall be utilized so that
      each Guarantor shall directly benefit from the amount of such excess Advances
      by
      an amount reasonably equivalent to the Borrowing Base valuation of such
      Guarantor's personal property Collateral.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    Section
      1.09  Letters
      of Credit.
      The
      Borrower may utilize the Revolving Credit Commitments by requesting that
      Rabobank issue, and Rabobank, subject to the terms and conditions of this
      Agreement, shall issue, one or more letters of credit for the account of the
      Borrower from time to time from the date hereof, to but excluding the
      Termination Date; provided,
      however,
      that
      after calculation of the participation interests of each Bank in such Letters
      of
      Credit in accordance with this Section
      1.09:

     

    (a)  The
      aggregate amount of outstanding Credit Liabilities shall not at any time exceed
      Three Million Dollars ($3,000,000); and 

     

    (b)  The
      aggregate amount of all Advances and Credit Liabilities outstanding hereunder
      shall never exceed the lesser of the Borrowing Base or the Revolving Credit
      Commitments. 

     

    At
      the
      time of issuance of each Letter of Credit, Rabobank shall be deemed, without
      further action by any party hereto, to have sold to each other Bank, and each
      other Bank shall be deemed, without further action by any party hereto, to
      have
      purchased from Rabobank, a participation in such Letter of Credit to the extent
      of their pro rata portion (determined based on the Revolving Credit Commitments)
      of such Letter of Credit and the related Credit Liabilities.

     

    Section
      1.10  Procedure
      for Issuing Letters of Credit.
      Rabobank shall issue a Letter of Credit no later than five (5) Business Days
      after (a) the Borrower delivers to the Administrative Agent written notice
      requesting the issuance of a Letter of Credit which shall describe the proposed
      terms of such Letter of Credit and the transactions proposed to be supported
      thereby and shall certify to the Banks that the representations and warranties
      contained in Article IV
      shall be
      true and correct and that no Event of Default nor any event that with the giving
      of notice or passage of time, or both, would be an Event of Default shall have
      occurred and shall be continuing and (b) Rabobank receives such other
      information and documentation as Rabobank may request. Rabobank at its option
      may accept telephonic requests for a Letter of Credit, provided
      that
      such acceptance shall not constitute a waiver of Rabobank's right to require
      delivery of written notice in connection with subsequent Letters of Credit.
      Upon
      receipt of such notice, the Administrative Agent shall notify each other Bank
      of
      the face amount and expiry date of such Letter of Credit of such Bank's pro
      rata
      portion (determined based on the Revolving Credit Commitments) of the amount
      of
      the proposed Letter of Credit. Each Letter of Credit shall have an expiration
      date on or prior to the Termination Date, shall be payable in United States
      dollars, must support a transaction that is entered into in the ordinary course
      of Borrower's or one of the Guarantor's business, must be satisfactory in form
      and substance to Rabobank and shall be issued pursuant to an Application for
      Letter of Credit and such other documentation and agreements as Rabobank may
      require. Notwithstanding anything in any Application for Letter of Credit or
      in
      any such other documentation and agreements to the contrary, each Letter of
      Credit and all such documentation and agreements shall be subject to the Uniform
      Customs and Practice for Documentary Credits of the International Chamber of
      Commerce Publication No. 500 and to the extent not inconsistent therewith
      the laws of the State of New York. In the event that there is any conflict
      between the provisions of the other Loan Documents and the provisions of any
      Application for Letter of Credit or any other documentation or agreements
      executed in connection with the issuance of any Letter of Credit, whether now
      or
      hereafter executed, the provision of the other Loan Documents shall govern
      and
      control. 

     

    Section
      1.11  Reimbursement.
      Upon
      receipt by Rabobank of any drawing under a Letter of Credit, Rabobank shall
      promptly notify the other Banks and the Borrower as to the payment date for
      such
      drawing and the amount to be paid as a result of the drawing. Notwithstanding
      anything contained in any Application for Letter of Credit to the contrary,
      the
      Borrower agrees to do one of the following not later than 11:00 A.M. (New
      York City time) on the payment date:

     

    
      
        
        

      

      
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    (a)  make
      available to the Administrative Agent the amount to be paid as a result of
      the
      drawing on the Letter of Credit at the Administrative Agent's Principal Office,
      in immediately available funds, or

     

    (b)  request
      an Advance pursuant to Section 1.02
      hereof
      to make the payment required by Section 1.11(a)
      hereof.

     

    If
      the
      Borrower has not provided the Administrative Agent as of the date and time
      specified above with immediately available funds in the amount to be paid as
      a
      result of the drawing on a Letter of Credit, or has not requested an Advance
      as
      provided above, each Bank shall make, and the Borrower shall accept, an Advance
      on the date of such drawing in the amount equal to such Bank's pro rata portion
      (determined based on the Revolving Credit Commitments) of the amount to be
      paid
      a result of the drawing under the Letter of Credit notwithstanding the fact that
      the Advances may cause the credit limit as set forth herein to be exceeded,
      or
      that the conditions set forth in Section 3.02
      have not
      been satisfied, but without impairing the obligations of the Borrower under
      Subsection 2.02(a);
      provided,
      however,
      that
      such Advances may be applied by the Banks directly to the amount to be paid
      as a
      result of the drawing under the Letter of Credit.

    

    Section
      1.12  Letter
      of Credit Fees.
      The
      Borrower agrees to pay the Administrative Agent, for the account of the Banks,
      in immediately available funds a fee for the issuance and maintenance of a
      Letter of Credit (each Bank to be entitled to its pro rata portion thereof
      determined based on the Revolving Credit Commitments) which shall be computed
      based on the average amount of the Credit Liabilities outstanding for the
      applicable Payment Period (hereinafter defined) at a rate equal to the
      Applicable Margin per annum, based on a 360 day year and the actual number
      of
      days to elapse, and shall be payable on the last day of each calendar quarter
      and on the Termination Date, commencing on the first such date after the
      issuance of the initial Letter of Credit. The term "Payment
      Period"
      as used
      in this Section 1.12
      means
      initially the period from and including the date that the initial Letter of
      Credit is issued to but excluding the date on which such initial quarterly
      fee
      is to be paid hereunder and thereafter means each period of time from and
      including the last day of the preceding calendar quarter to but excluding the
      date on which the quarterly fee in question is to be paid.

     

    Article
      II.

     

    Terms
      of Payments

     

    Section
      2.01  Repayment.
      The
      Borrower shall pay to the Administrative Agent at the Principal Office for
      the
      account of the Banks the aggregate unpaid principal amount of all Advances
      on
      the Termination Date in accordance with the terms of the Notes and this
      Agreement.

     

    Section
      2.02  Prepayments.

     

    (a)  Mandatory.
      If at
      any time the aggregate principal amount of Advances and Credit Liabilities
      at
      such time outstanding shall exceed the Borrowing Base at such time, the Borrower
      shall immediately pay to the Administrative Agent at the Principal Office,
      for
      the account of the Banks, the amount of the excess along with any amounts due
      under Section 9.04(b)
      as a
      result thereof. After all amounts outstanding under the Notes have been paid,
      or
      if no such amounts are outstanding, such prepayment shall be paid to the
      Administrative Agent to be held by the Administrative Agent for the benefit
      of
      itself and each Bank as additional collateral, pursuant to such documentation
      and agreements as the Banks may request, to secure or pay the Credit Liabilities
      outstanding, if any.

     

    
      
        
        

      

      
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    (b)  Optional.
      The
      Borrower may, upon at least one Business Day notice to the Administrative Agent,
      prepay any Advance on the last day of any Interest Period for such Advance
      in
      whole or in part with (i) accrued interest to the date of such prepayment
      on the amount so prepaid and (ii) all amounts due pursuant to Section 9.04(b)
      as a
      result of such prepayment, provided,
      that
      each such prepayment shall be in a principal amount not less than
      $500,000.

     

    Section
      2.03  Payments
      and Computations.

     

    (a)  The
      Borrower shall make each payment of principal, interest and other amounts due
      hereunder and under the Notes to the Administrative Agent at the Principal
      Office for the account of each Bank's Applicable Lending Office not later than
      12:00 Noon (New York City time) on the day when due in lawful money of the
      United States of America (each such payment made after such time on such due
      date to be deemed to have been made on the next succeeding Business Day). The
      Borrower shall, at the time of making each such payment, specify to the
      Administrative Agent the sums payable by the Borrower under this Agreement
      and
      the other Loan Documents to which such payment is to be applied (and in the
      event that the Borrower fails to so specify, or if an Event of Default has
      occurred and is continuing, the Administrative Agent may apply such payment
      to
      the Obligations in such order and manner as it may elect in its sole discretion,
      subject to Section 2.04
      hereof).
      Each payment received by the Administrative Agent under this Agreement or any
      other Loan Document for the account of a Bank shall be paid promptly to such
      Bank in immediately available funds, for the account of such Bank's Applicable
      Lending Office; provided,
      that if
      such payment is received by the Administrative Agent (i) on or before Noon
      (New
      York City time) then such payment shall be paid to such Bank by 3:00 p.m. (New
      York City time) on the day such payment is received by the Administrative Agent
      and (ii) after Noon (New York City time) then such payment shall be paid to
      such
      Bank on the Business Day following the day on which such payment was received
      by
      the Administrative Agent. The Applicable Lending Office for (i) Rabobank is
      at the office of Rabobank at 245 Park Avenue, 36th Floor,
      New York, New York 10167-0062, (ii) First South is at the office of First
      South at 713 South Pear Orchard Road, Suite 102, Ridgeland, Mississippi 39157
      and at P. O. Box 1770, Ridgeland, Mississippi 39158-1770, and
      (iii) Harris is at the office of Harris at 111 West Monroe Street,
      Chicago, Illinois 60603.

     

    (b)  All
      computations of interest and fees hereunder and under the Notes shall be made
      on
      the basis of a year of 360 days, in each case for the actual number of days
      (including the first day but excluding the last day) occurring in the period
      for
      which such interest or fees is payable. Each determination by the Administrative
      Agent of an interest rate hereunder shall be conclusive and binding for all
      purposes.

     

    (c)  Whenever
      any payment to be made hereunder or under the Notes shall be stated to be due,
      or whenever the last day of any Interest Period would otherwise occur, on a
      day
      other than a Business Day, such payment shall be made, and the last day of
      such
      Interest Period shall occur, on the next succeeding Business Day, and such
      extension of time shall in such case be included in the computation of payment
      of interest and fees, as the case may be.

     

    Section
      2.04  Pro
      Rata Treatment.
      Except
      to the extent otherwise provided herein or in the Intercreditor Agreement:
      (a) each Advance shall be made by the Banks under Section 1.01,
      each
      payment of commitment fee under Section 1.03
      and
      letter of credit fees under Section 1.12
      shall be
      made for the account of the Banks, and each termination or reduction of the
      Revolving Credit Commitments under Section 1.04
      shall be
      applied to the Revolving Credit Commitments of the Banks according to such
      Bank's pro rata portion thereof (calculated based on the Revolving Credit
      Commitments); and (b) each payment and prepayment of principal of or
      interest on Advances by the Borrower shall be made to the Administrative Agent
      for the account of the Banks according to each Bank's pro rata portion thereof
      calculated based on the principal amounts of the Advances then outstanding.
      Proceeds of Collateral and recoveries under the Amended Guaranty Agreement
      shall
      be shared as provided in the Intercreditor Agreement.

     

    
      
        
        

      

      
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    Section
      2.05  Sharing
      of Payments, etc.
      If a
      Bank shall obtain payment of any principal of or interest on any of the
      Obligations due to such Bank hereunder through the exercise of any right of
      set-off, banker's lien, counterclaim or similar right, or otherwise (other
      than
      from the Administrative Agent as herein provided), it shall promptly purchase
      from the other Banks participations in the Obligations held by the other Banks
      in such amounts, and make such adjustments from time to time as shall be
      equitable to the end that all the Banks shall hold their pro rata portion
      (calculated based on the Revolving Credit Commitments) in the unpaid principal
      and interest of the Obligations. To such end, all of the Banks shall make
      appropriate adjustments among themselves (by the resale of participations sold
      or otherwise) if all or any portion of such payment is thereafter rescinded
      or
      must otherwise be restored. The Borrower agrees, to the fullest extent it may
      effectively do so under applicable law, that any Bank so purchasing a
      participation in the Obligations by the other Banks may exercise all rights
      of
      set-off, banker's lien, counterclaim, or similar rights with respect to such
      participation as fully as if such Bank were a direct holder of Obligations
      to
      the Borrower in the amount of such participation. Nothing contained herein
      shall
      require any Bank to exercise any such right or shall affect the right of any
      Bank to exercise, and retain the benefits of exercising, any such right with
      respect to any other indebtedness or obligation of the Borrower.

     

    Section
      2.06  Non-Receipt
      of Funds by the Administrative Agent.
      Unless
      the Administrative Agent shall have been notified by a Bank or the Borrower
      (the
      "Payor")
      prior
      to the date on which such Bank is to make payment to the Administrative Agent
      of
      the proceeds of an Advance or draw under a letters of credit to be made by
      it
      hereunder or the Borrower is to make a payment to the Administrative Agent
      for
      the account of one or more of the Banks, as the case may be (such payment being
      herein called the "Required
      Payment"),
      which
      notice shall be effective upon receipt, that the Payor does not intend to make
      the Required Payment to the Administrative Agent, the Administrative Agent
      may
      assume that the Required Payment has been made and may, in reliance upon such
      assumption (but shall not be required to), make the amount thereof available
      to
      the intended recipient on such date and, if the Payor has not in fact made
      the
      Required Payment to the Administrative Agent, the recipient of such payment
      shall, on demand, pay to the Administrative Agent the amount made available
      to
      it together with interest thereon in respect of the period commencing on the
      date such amount was so made available by the Administrative Agent until the
      date the Administrative Agent recovers such amount at a rate per annum equal
      to,
      with respect to any Bank, the 30 day Term Federal Funds Rate and with respect
      to
      the Borrower, at the 30 day Term Federal Funds Rate plus 3.00% and (b) the
      Administrative Agent shall be entitled to offset against any and all sums to
      be
      paid to such recipient, the amount calculated in accordance with the foregoing
      clause (a).

     

    Article
      III.

     

    Conditions
      Precedent

     

    Section
      3.01  Conditions
      Precedent to the Initial Advance.
      The
      obligation of each Bank to make its initial Advance hereunder (excluding the
      Existing Advances) are subject to the condition precedent that the Banks shall
      have received on or before the date of such initial Advance the following,
      each
      dated such day, in form and substance satisfactory to the Banks:

     

    (a)  The
      Notes.

     

    (b)  A
      Modification of Mortgage, Deed of Trust, Future Advance Deed of Trust, Security
      Agreement, Assignment of Rents and Financing Statement dated as of the date
      hereof duly executed by the Borrower, Cal-Maine Farms, Inc., and Rabobank to
      be
      filed in Franklin County, North Carolina in the form attached hereto as
Exhibit D.

     

    
      
        
        

      

      
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    (c)  A
      Modification of Mortgage, Deed of Trust, Future Advance Deed of Trust, Security
      Agreement, Assignment of Rents and Financing Statement dated as of the date
      hereof duly executed by the Borrower and Rabobank to be filed in Hinds County,
      Mississippi in the form attached hereto as Exhibit E.

     

    (d)  Such
      other duly executed amendments to the Collateral Documents and endorsements
      to
      title insurance policies relating thereto as the Administrative Agent may
      request to ensure the continued validity thereof after giving effect to the
      extension of the Termination Date and other amendments contemplated
      hereby.

     

    (e)  Evidence
      that all other actions as may be necessary or, in the opinion of the
      Administrative Agent, desirable to perfect and protect the security interest
      and
      liens created by the Consolidated Security Agreement and Mortgages have been
      taken.

     

    (f)  An
      amendment to and waiver of the defaults arising under (i) the Dairy Facility
      Reimbursement Agreement, duly executed by the Borrower and Rabobank and (ii)
      the
      Harris Term Agreement, duly executed by the Borrower and Harris.

     

    (g)  Certified
      copies of (i) resolutions of the Board of Directors of each Loan Party
      evidencing approval of each Loan Document to which it is a party and the matters
      contemplated thereby, and (ii) all documents evidencing other necessary
      corporate action and governmental approvals, if any, with respect to each such
      Loan Document.

     

    (h)  A
      certificate of the Secretary or an Assistant Secretary of each Loan Party
      certifying the names and true signatures of the officers of such Loan Party
      authorized to sign each Loan Document to which it is a party and the other
      documents contemplated hereby or to be delivered by it hereunder. The Banks
      may
      conclusively rely on each such certificate until they shall receive a further
      certificate of the Secretary or an Assistant Secretary of the respective Loan
      Party canceling, amending or replacing the prior certificate.

     

    (i)  An
      amendment fee in the aggregate amount of $227,500 in consideration for each
      Bank's agreement to amend and restate the Existing Credit Agreement and waive
      the Existing Defaults (the Administrative Agent agreeing to pay each Bank its
      pro rata portion thereof, calculated based on the Revolving Credit
      Commitments).

     

    (j)  Evidence
      that the Required Holders (as defined in the Note Agreement) have

     

    (i)  waived
      the Borrower's defaults under subsections 7.1(a) and (e) of the Note Agreement
      in accordance with Section 9.1 of the Note Agreement; and

     

    (ii)  consented
      to the amendment to the definitions of the terms "Borrowing Base" and "Eligible
      Receivable" as amended by this Agreement (by execution of the consent attached
      hereto).

     

    (k)  Such
      documentation as the Administrative Agent may request to evidence the joinder
      of
      South Texas Applicators, Inc. and Southern Equipment Distributors, Inc. to
      the
      Amended Guaranty Agreement and the Consolidated Security Agreement, each as
      a
      guarantor and debtor, respectively, thereunder.

     

    (l)  A
      favorable opinion of counsel for the Borrower and the Guarantors, in form and
      substance acceptable to the Banks and addressing such matters as the Banks
      may
      reasonably request.

     

    
      
        
        

      

      
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    Section
      3.02  Conditions
      Precedent to All Advances.
      The
      obligation of each Bank to make any Advance (including the initial Advance)
      shall be subject to the further conditions precedent that, on the date of such
      Advance both immediately before and immediately after given effect
      thereto:

     

    (a)  The
      following statements shall be true and the acceptance by the Borrower of the
      proceeds of such Advance shall constitute a representation and warranty by
      each
      Loan Party (as to each Loan Document to which it is a party), that:

     

    (i)  The
      representations and warranties contained in Section 4.01
      of this
      Agreement and contained in each other Loan Document are correct on and as of
      the
      date of such Advance as though made on and as of such date;

     

    (ii)  No
      event
      has occurred and is continuing, or would result from such Advance, which
      constitutes an Event of Default or would constitute an Event of Default but
      for
      the requirement that notice be given or time elapse or both;

     

    (iii)  The
      aggregate principal amount of Advances and Credit Liabilities outstanding,
      after
      giving effect to such Advance, does not exceed the lesser of the Borrowing
      Base
      or the Revolving Credit Commitments;

     

    (b)  The
      Administrative Agent shall have received such other approvals, opinions or
      documents as it or any Bank may reasonably request.

     

    Article
      IV.

     

    Representations
      and Warranties

     

    Section
      4.01  Representations
      and Warranties of the Borrower.
      The
      Borrower represents and warrants to the Administrative Agent and the Banks
      as
      follows:

     

    (a)  The
      Borrower is a corporation duly incorporated, validly existing and in good
      standing under the laws of the state of Delaware and is duly qualified as a
      foreign corporation to do business and is in good standing in every jurisdiction
      where the nature of its business requires it to be so qualified.

     

    (b)  The
      execution, delivery and performance by the Borrower of each Loan Document to
      which it is or will be a party are within the Borrower's corporate powers,
      have
      been duly authorized by all necessary corporate action, do not contravene
      (i) the Borrower's charter or bylaws or (ii) any law or any
      contractual restriction binding on or affecting the Borrower, and do not result
      in or require the creation of any lien, security interest or other charge or
      encumbrance (other than pursuant hereto) upon or with respect to any of its
      properties.

     

    (c)  No
      authorization or approval or other action by, and no notice to or filing with,
      any governmental authority or regulatory body is required for the due execution,
      delivery and performance by the Borrower of any Loan Document to which it is
      or
      will be a party.

     

    (d)  This
      Agreement is and the Notes and each other Loan Document to which the Borrower
      is
      or will be a party when delivered hereunder will be, legal, valid and binding
      obligations of the Borrower enforceable against the Borrower in accordance
      with
      their respective terms.

     

    (e)  The
      consolidated balance sheet of the Borrower and its Subsidiaries on or about
      June 2, 2001, and the related consolidated and consolidating statements of
      income and retained earnings of the Borrower and its Subsidiaries for the Fiscal
      Year then ended, certified by independent public accountants, and the
      consolidated and consolidating balance sheet of the Borrower and its
      Subsidiaries on or about December 1, 2001, and the related consolidated and
      consolidating statements of income and retained earnings of the Borrower and
      its
      Subsidiaries for the six month period then ended, copies of each of which have
      been furnished to the Administrative Agent and the Banks, fairly present the
      financial condition of the Borrower and its Subsidiaries as at such date and
      the
      results of the operations of the Borrower and its Subsidiaries for the period
      ended on the dates reflected therein, all in accordance with generally accepted
      accounting principles consistently applied, and since June 2, 2001, there
      has been no material adverse change in such condition or operations other than
      as set forth in the December 1, 2001 reports provided to the Banks.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (f)  The
      Borrower and each Subsidiary have filed all tax returns (Federal, State and
      local) required to be filed and paid all taxes shown thereon to be due,
      including interest and penalties, or provided adequate reserves for payment
      thereof.

     

    (g)  There
      is
      no pending or threatened action or proceeding affecting the Borrower before
      any
      court, governmental agency or arbitrator, which may materially adversely affect
      the financial condition or operations of the Borrower or any of its
      Subsidiaries.

     

    (h)  The
      Guarantors are the only Subsidiaries of, and are wholly-owned by, the Borrower
      except: (i) CM Partnership whose 99% limited partnership interest is owned
      by Cal-Maine Farms, Inc. and whose 1% general partnership is owned by Borrower;
      (ii) CMF of Kansas whose is owned 99% by Borrower and 1% by Cal-Maine
      Farms, Inc.; (iii) as of October 13, 2005, Borrower owns 51% of
      Hillandale, LLC and Hillandale, LLC is not a Guarantor and (iv) as of
      October 13, 2005, Borrower owns approximately 71% of American Egg Products
      LLC and American Egg Products LLC is not a Guarantor.

     

    (i)  Following
      application of the proceeds of each Advance, not more than 25 percent of the
      value of the assets (either of the Borrower only or of the Borrower and its
      Subsidiaries on a consolidated basis) subject to the provisions of Sections 5.02(e)
      or
5.02(f)
      or
      subject to any restriction contained in any agreement or instrument, between
      the
      Borrower or any of its Subsidiaries and any Bank or any affiliate of any Bank
      relating to Debt and within the scope of Section 6.01(d),
      will be
      margin stock (within the meaning of Regulation U issued by the Board of
      Governors of the Federal Reserve System).

     

    (j)  The
      Fiscal Year for the Borrower and its Subsidiaries is the 52 or 53 week period,
      as the case may be, beginning on the date which is one day after the date of
      the
      preceding Fiscal Year end, and ending on the Saturday closest to
      May 31.

     

    (k)  As
      of
      October 13, 2005, neither Borrower nor any Pledgor maintains any commodity
      futures margin accounts.

     

    (l)  The
      present fair salable value of the Assets of the Borrower and each Pledgor is
      greater than the amount that will be required to pay its probable liability
      for
      its existing Debts as they become absolute and matured. For the purposes of
      this
      clause (l), "Assets" means any property of the party in question not exempt
      from liability for its Debts, and "Debts" means any legal liability, including
      the liability under the Loan Documents, whether matured or unmatured, liquidated
      or unliquidated, absolute, fixed or contingent. Neither the Borrower nor any
      Pledgor intends to, or believes that it will, incur Debts beyond its ability
      to
      pay as they mature.

     

    (m)  Neither
      the Borrower nor any Pledgor is "insolvent" (as defined in
      11 U.S.C. 101(32)). Neither the Borrower nor any Pledgor is engaged,
      nor does it intend to engage, in any business or transaction for which its
      property, excluding an amount equal to the Obligations, is an unreasonably
      small
      capital. Neither the Borrower nor any Pledgor intends through the transactions
      contemplated by the Loan Documents to hinder, delay, or defraud either present
      or future creditors.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (n)  Cal-Maine
      Farms, Inc. owns and will operate the pullet growing, egg production, and
      processing facility located near Edwards, Mississippi and the egg production
      and
      processing facility located near Greensburg, Louisiana (together the
      "New
      Locations").

     

    (o)  Upon
      the
      dissolution of Cal-Maine Egg Products, Inc., all assets of Cal-Maine Egg
      Products, Inc. were transferred to the Borrower. Borrower hereby acknowledges
      and agrees that such assets were transferred subject to the liens and security
      interests granted to the Agent which liens and security interests continue
      therein under the terms of the Consolidated Security Agreement. The assets
      of
      Cal-Maine Egg Products, Inc. transferred to Borrower are located at one or
      more
      of the Borrower's locations disclosed pursuant to the Consolidated Security
      Agreement.

     

    Article
      V.

     

    Covenants
      of the Borrower

     

    Section
      5.01  Affirmative
      Covenants.
      So long
      as the Obligations or any part thereof are outstanding or any Bank shall have
      any Revolving Credit Commitment hereunder, the Borrower will, unless the Banks
      shall otherwise consent in writing:

     

    (a)  Compliance
      with Laws, etc.
      Comply,
      and cause each of its Subsidiaries to comply, in all material respects with
      all
      applicable laws, rules, regulations and orders, such compliance to include,
      without limitation, paying before the same become delinquent all taxes,
      assessments and governmental charges imposed upon it or upon any of its property
      except to the extent contested in good faith.

     

    (b)  Payment
      of Taxes, etc.
      Pay and
      discharge, and cause each Subsidiary to pay and discharge, before the same
      shall
      become delinquent, (i) all taxes, assessments and governmental charges or
      levies imposed upon it or upon its property, and (ii) all lawful claims
      which, if unpaid, might by law become a lien upon its property; provided,
      however,
      that
      neither the Borrower nor any Subsidiary shall be required to pay or discharge
      any such tax, assessment, charge or claim which is being contested in good
      faith
      and by proper proceedings.

     

    (c)  Preservation
      of Corporate Existence, etc.
      Preserve and maintain, and except as permitted by Section 5.02(e),
      cause
      each Subsidiary to preserve and maintain, its corporate existence, rights
      (charter and statutory) and franchises.

     

    (d)  Keeping
      of Books.
      Keep,
      and cause each Subsidiary to keep, proper books of record and account, in which
      full and correct entries shall be made of all financial transactions and the
      assets and business of the Borrower and each Subsidiary in accordance with
      generally accepted accounting principles consistently applied.

     

    (e)  Visitation
      Rights.
      At any
      reasonable time and from time to time, permit the Administrative Agent and
      each
      Bank or any agents or representatives thereof, to examine and make copies of
      and
      abstracts from the records and books of account of, and visit the properties
      of,
      the Borrower and any of its Subsidiaries, and to discuss the affairs, finances
      and accounts of the Borrower and any of its Subsidiaries with any of their
      respective officers or directors.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (f)  Maintenance
      of Properties, etc.
      Maintain and preserve, and cause each Subsidiary to maintain and preserve,
      all
      of its properties which are used or useful in the conduct of its business in
      good working order and condition, ordinary wear and tear excepted.

     

    (g)  Maintenance
      of Insurance.
      Maintain, and cause each Subsidiary to maintain, insurance with responsible
      and
      reputable insurance companies or associations in such amounts and covering
      such
      risks as is usually carried by companies engaged in similar businesses in the
      same general areas in which the Borrower or such Subsidiary
      operates.

     

    (h)  Working
      Capital.
      Borrower will maintain a ratio of consolidated current assets to consolidated
      current liabilities (excluding current deferred income taxes) of the Borrower
      and its Subsidiaries of not less than 1.25 to 1. Consolidated current
      liabilities shall include the current portion of the indebtedness incurred
      pursuant to this Agreement, the Dairy Facility Reimbursement Agreement and
      the
      Note Agreement.

     

    (i)  Tangible
      Net Worth.
      Maintain an excess of consolidated total tangible assets over consolidated
      total
      liabilities of the Borrower and the Subsidiaries in an amount not less than
      the
      amount set forth below at all times during the applicable periods set forth
      below:

     

    (i)  from
      and
      including March 1, 2003 and through August 31, 2003, Fifty-Five
      Million Dollars ($55,000,000);

     

    (ii)  from
      and
      including September 1, 2003 and through February 27, 2004, Fifty-Three
      Million Dollars ($53,000,000); and

     

    (iii)  from
      and
      including February 28, 2004 and at all times thereafter, (A) Ninety Million
      Dollars ($90,000,000) plus
      (B)
      forty five percent (45%) of Borrower's cumulative net income determined on
      a
      consolidated basis in accordance with GAAP for each Fiscal Year to have
      completely elapsed as of the date of determination, commencing with the Fiscal
      Year ending May 28, 2005.

     

    (j)  Total
      Funded Debt to Total Capitalization.
      Not at
      any time permit the ratio of Total Funded Debt to Total Capitalization to
      exceed: (i) 70%, during the period beginning on March 2, 2003 and
      continuing through February 27, 2004 and (ii) 55%, during the
      period from and including February 28, 2004 and at all times
      thereafter. As used in this covenant the following terms have the following
      meanings:

     

    "Consolidated
      Tangible Net Worth"
      means,
      as of any date of determination, the sum of the capital stock (including
      nonredeemable preferred stock but subtracting treasury stock) and additional
      paid-in capital plus retained earnings (or minus accumulated deficit) of the
      Borrower and the Subsidiaries, on a consolidated basis determined in conformity
      with GAAP, minus
      intangible assets such as organization costs and franchise costs, intangible
      assets recorded in accordance with Financial Accounting Standards No. E7,
      deferred debits not relating to future tax benefits and all good will, trade
      names, trademarks, patents and other like intangibles.

     

    "Contingent
      Liabilities"
      means
      any agreement, undertaking or arrangement by which any Person
      (i) guarantees, endorses or otherwise becomes or is contingently liable
      upon (by direct or indirect agreement, contingent or otherwise, to provide
      funds
      for payment, to supply funds to, or otherwise to invest in, a debtor, or
      otherwise to assure a creditor against loss) the debt, obligation or other
      liability of any other Person (other than by endorsements of instruments in
      the
      course of collection), or (ii) guarantees the payment of dividends or other
      distributions upon the shares of any other Person, or (iii) undertakes or
      agrees (contingently or otherwise) (a) to purchase, repurchase, or
      otherwise acquire any Debt, obligation or liability or any security therefor,
      or
      (b) to provide funds for the payment or discharge thereof (whether in the
      form of loans, advances, stock purchases, capital contributions or otherwise),
      or (c) to make payment other than for values received, or (d) to
      maintain solvency, assets, level of income, or other financial condition. The
      amount of any Person's obligation under any Contingent Liability shall (subject
      to any limitation set forth therein) be deemed to be the outstanding principal
      amount of the debt, obligation or other liability guaranteed or supported
      thereby.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    "Debt"
      of any
      Person means: (i) all obligations of such Person for borrowed money and all
      obligations evidenced by bonds, debentures, notes, acceptances or other similar
      instruments; (ii) all obligations relative to the face amount of all
      letters of credit, if drawn, and banker's acceptances issued for the account
      of
      such Person; (iii) all obligations as lessee under leases which have been
      or should be, in accordance with GAAP, recorded as capitalized lease
      liabilities; (iv) all obligations of such Person to pay the deferred
      purchase price of property or services (other than accounts payable arising
      in
      the ordinary course of business payable on terms customary in the trade),
      (v) indebtedness secured by a Lien on property owned or being purchased by
      such Person whether or not such indebtedness shall have been assumed by such
      Person or is limited in recourse; (vi) all Contingent Liabilities of such
      Person in respect of any Debt of any Person, and (vii) any hedging
      obligations, if and to the extent such obligations must appear as a liability
      upon a balance sheet of such Person prepared in accordance with GAAP,
      consistently applied.

     

    "Funded
      Debt"
      of any
      Person means all Debt that matures more than one year from the date of
      determination or matures within one year from such date but is renewable or
      extendable, at the option of the debtor, to a date more than one year from
      such
      date or arises under a committed revolving credit or similar agreement that
      obligates the lender to extend credit during a period of more than one year
      from
      such date (in each case including amounts of Funded Debt required to be paid
      or
      prepaid within one year from the date of determination).

     

    "GAAP"
      means
      United States generally accepted accounting principles (including principles
      of
      consolidation), in effect from time to time.

     

    "Lien"
      means
      any security interest, whether or not filed, recorded or perfected under
      applicable law, mortgage, deed of trust, charge, pledge, hypothecation,
      collateral assignment, deposit arrangement, encumbrance, lien (statutory or
      other), conditional sales or other title retention agreement, any lease, whether
      or not filed, recorded or perfected under applicable law, and the filing of
      any
      financial statement under the Uniform Commercial Code or comparable law of
      any
      jurisdiction.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    "Person"
      means
      any individual, sole proprietorship, joint venture, partnership, limited
      liability company, association, unincorporated organization, joint-stock company
      or association, trust, corporation, entity, institution or government
      body.

     

    "Total
      Capitalization"
      means,
      as of any date of determination, the sum of (i) Consolidated Tangible Net
      Worth plus (ii) Total Funded Debt.

     

    "Total
      Funded Debt"
      means,
      as of any date of determination, the sum of all Funded Debt for the Borrower
      and
      the Subsidiaries on a consolidated basis.

     

    (k)  Cash
      Flow Coverage Ratio.
      As of
      the end of each Fiscal Quarter set forth in the table below, maintain a ratio
      of
      Operating Cash Flow to Fixed Charges of not less than the ratio set forth in
      the
      table below opposite the applicable Fiscal Quarter:

     

    
      	
              Fiscal
                Quarter ending on or about

            	
              Ratio

            
	
              December
                1, 2001

            	
              0.95
                to 1.00

            
	
              March
                2, 2002

            	
              0.78
                to 1.00

            
	
              June
                1, 2002

            	
              0.75
                to 1.00

            
	
              August 31,
                2002

            	
              0.85
                to 1.00

            
	
              November
                30, 2002

            	
              0.90
                to 1.00

            
	
              March
                1, 2003

            	
              1.15
                to 1.00

            
	
              May 31,
                2003 and
                each Fiscal Quarter ending thereafter

            	
              1.25
                to 1.00

            

    

    

    As
      used
      herein, the following terms shall have the following meanings:

     

    "Fixed
      Charges"
      means,
      as of any date of determination, the sum of the following for the Borrower
      and
      the Subsidiaries (calculated without duplication on a consolidated basis) for
      the completed four quarter period immediately proceeding the date of
      determination or with respect to clause (ii) below, as of the date of
      determination: (i) all cash interest paid or payable for such period;
      (ii) the current maturities of long term Debt as carried on the Borrower's
      consolidated balance sheet as of the date of determination (including payments
      made under capital leases); (iii) all cash dividends paid on the capital
      stock of Borrower for such period; and (iv) all cash paid for the repurchase
      of
      the capital stock of Borrower pursuant to Section
      5.02(b)(ii)
      for such
      period.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    "Operating
      Cash Flow"
      means,
      as of any date of determination, the sum of (A) plus (B), with

     

    (A) equal
      to
      the quotient obtained by dividing by 3 the sum of (i) the net income of
      Borrower and the Subsidiaries determined on a consolidated basis for the
      completed twelve quarter period immediately proceeding the date of determination
      plus
      (ii), to the extent deducted in determining net income, all cash franchise
      and income taxes paid or payable by Borrower and the Subsidiaries during the
      completed twelve quarter period immediately proceeding the date of determination
      and with

     

    (B) equal
      to
      the sum of, but without duplication and only in each case to the extent deducted
      in determining net income, (i) depreciation and amortization expenses for
      the completed four quarter period immediately preceding the date of
      determination; plus
      (ii) all cash interest paid or payable by Borrower and the Subsidiaries for
      the completed fourth quarter period immediately proceeding the date of
      determination.

     

    For
      purposes of this definition of Operating Cash Flow and the definition of the
      term "EBITDA"
      (which
      is set out in the definition of the term "Debt to EBITDA Ratio"), net income
      of
      Borrower and the Subsidiaries shall be calculated to exclude minority interests
      in Subsidiary earnings and the income of any Subsidiary to the extent the
      payment of such income in the form of a distribution or repayment of any Debt
      to
      the Borrower or a Subsidiary is not permitted, whether on account of any charter
      or by-law restriction, any agreement, instrument, deed or lease or any law,
      statute, judgment, decree or governmental order, rule or regulation applicable
      to such Subsidiary.

     

    (l)  Reporting
      Requirements.
      Furnish
      to each Bank: (i) as soon as possible and in any event within five days
      after the occurrence of each Event of Default or each event which, with the
      giving of notice or lapse of time, or both, would constitute an Event of
      Default, continuing on the date of such statement, a statement of the chief
      financial officer of the Borrower setting forth details of such Event of Default
      or event and the action which the Borrower proposes to take with respect
      thereto; (ii) as soon as available and in any event within 30 days after
      the end of each of the first eleven calendar months of each Fiscal Year of
      the
      Borrower, consolidated and consolidating balance sheets of the Borrower and
      its
      Subsidiaries as of the end of such month and consolidated statements of income
      and retained earnings of the Borrower and its Subsidiaries for the period
      commencing at the end of the previous Fiscal Year and ending with the end of
      such month, certified by the chief financial officer of the Borrower;
      (iii) as soon as available and in any event within 90 days after the end of
      each Fiscal Year of the Borrower, a copy of the annual report for such year
      for
      the Borrower and its Subsidiaries, including therein consolidated and
      consolidating balance sheets of the Borrower and its Subsidiaries as of the
      end
      of such Fiscal Year and consolidated and consolidating statements of income
      and
      retained earnings and of source and applications of funds of the Borrower and
      its Subsidiaries for such Fiscal Year certified in a manner acceptable to the
      Banks by independent public accountants acceptable to the Banks; (iv) each
      regular and other material report, registration, or prospectus filed by the
      Borrower with the Securities and Exchange Commission or any national securities
      exchange; (v) on or before the last Business Day of each calendar month, a
      Borrowing Base Certificate dated as of the last day of the next preceding
      calendar month; (vi) accompanying each financial statement delivered
      hereunder as of the end of any Fiscal Year or as of the end of any month that
      corresponds with the end of any quarter in any Fiscal Year, a properly completed
      and executed compliance certificate in substantially the form of Exhibit C
      hereto;
      and (vii) such other information respecting the business, properties,
      condition or operations, financial or otherwise, of the Borrower as any Bank
      may
      from time to time reasonably request.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (m)  Post
      Closing Items.
      The
      Borrower will deliver to each Bank, in form and substance satisfactory to the
      Banks, on or before March 22, 2002, evidence that the Required Holders (as
      defined in the Note Agreement) have amended the terms of the Note Agreement
      in a
      manner consistent with the Borrower's request and in a manner acceptable to
      the
      Banks. 

     

    Section
      5.02  Negative
      Covenants.
      So long
      as the Obligations or any part thereof are outstanding or any Bank shall have
      any Revolving Credit Commitment hereunder, the Borrower will not, without the
      written consent of the Banks:

     

    (a)  Guaranteed
      Indebtedness.
      Create,
      incur, assume or suffer to exist, or permit any Subsidiary to create, incur,
      assume or suffer to exist, any Contingent Liabilities in respect of any Debt
      of
      any other Person except: (i) pursuant to the Amended Guaranty Agreement;
      (ii) by reason of endorsement of negotiable instruments for deposit or
      collection or similar transactions in the ordinary course of business;
      (iii) for a guaranty executed by Borrower guaranteeing the Debt of Delta
      Egg Farm LLC, provided the liability under such guaranty does not exceed
      $10,800,000 in the aggregate at any time, (iv) for a guaranty executed by
      the Borrower guaranteeing the obligations for borrowed money of Hillandale,
      LLC,
      provided the liability under such guaranty does not exceed at any time the
      aggregate principal amount of $2,000,000 and (v) for the obligations of the
      Borrower as a guarantor or a co-borrower in respect of the Hillandale Term
      Loan.

     

    (b)  Dividends,
      etc.
      Declare
      or pay any dividends, purchase, or otherwise acquire for value any of its
      capital stock now or hereafter outstanding, or make any distribution of assets
      to its stockholders as such, or permit any of its Subsidiaries to purchase
      or
      otherwise acquire for value any stock of the Borrower; provided that the
      Borrower may:

     

    (i)  as
      long
      as no Event of Default nor any event that with the giving of notice or lapse
      of
      time or both would be an Event of Default exists or would result, declare and
      pay quarterly dividends on its common stock in an aggregate amount not to exceed
      $500,000 per calendar quarter; and

     

    (ii)  repurchase
      shares of its common stock as long as:
      (A) no Event of Default nor any event that with the giving of notice or
      lapse of time or both would be an Event of Default exists or would result and
      (B) the aggregate amount paid in any Fiscal Year to repurchase such shares
      shall not exceed $500,000.

     

    (c)  Capital
      Expenditures.
      Make,
      nor will it permit any Subsidiary to make, any expenditures for fixed or capital
      assets (but excluding, to the extent included, the expenditures for rolling
      stock and expenditures made to acquire the membership interest in Hillandale,
      LLC) which would cause the aggregate of all such expenditures made by the
      Borrower and its Subsidiaries in any period of four (4) consecutive Fiscal
      Quarters to exceed the consolidated depreciation of the Borrower and the
      Subsidiaries for such period.

     

    (d)  Maintenance
      of Ownership of Subsidiaries.
      Sell or
      otherwise dispose of any shares of capital stock or other ownership interests
      in
      any Subsidiary or permit any Subsidiary to issue, sell or otherwise dispose
      of
      any shares of capital stock or other ownership interests in any other
      Subsidiary, except to the Borrower or any Subsidiary.

     

    (e)  Mergers,
      etc.
      (A) The Borrower will not, and will not permit any Subsidiary, to merge
      with or into or consolidate with or into, or convey, transfer, lease or
      otherwise dispose of (whether in one transaction or in a series of transactions)
      all or substantially all of its assets (whether now owned or hereafter acquired)
      to, or acquire all or substantially all of the assets of or the securities
      or
      other ownership interest issued by any party, except that: (i) any
      Subsidiary may merge or consolidate with any Guarantor and any Subsidiary may
      transfer assets to any Guarantor; (ii) the Borrower or any Guarantor may
      acquire all or substantially all of the assets of or the securities or other
      ownership interests issued by any party engaged in the production and
      distribution of eggs; provided
      that
      upon or within thirty days of the acquisition of all the securities or other
      ownership interests issued by such a party or, if the Borrower establishes
      a
      Subsidiary to acquire all or substantially all the assets of such a party,
      within thirty days of such asset acquisition, the Borrower shall cause such
      party (in the case of the acquisition of ownership interests) or, if applicable,
      such new Subsidiary to execute and deliver a Subsidiary Joinder Agreement and
      such other documentation as the Administrative Agent may request to cause such
      Subsidiary to evidence, perfect, or otherwise implement the guaranty and pledge
      of collateral contemplated by the Amended Guaranty Agreement and Consolidated
      Security Agreement (except that neither Hillandale, LLC nor American Egg
      Products LLC shall be required to execute and deliver a Subsidiary Joinder
      Agreement or otherwise implement the guaranty and pledge of collateral
      contemplated by the Amended Guaranty Agreement and Consolidated Security
      Agreement under the terms of this proviso); and (iii) any Subsidiary may
      merge into or transfer assets to the Borrower; provided
      in each
      case that, immediately after giving effect thereto, no event shall occur and
      be
      continuing which constitutes an Event of Default or which with the giving of
      notice or lapse of time or both would constitute an Event of Default and the
      obligations arising under the Collateral Documents are complied with which
      relate to the creation and perfection of the liens and security interests in
      favor of the Agent in any Collateral and (B) the Borrower will not, and
      will not permit any Subsidiary to, engage in any line or lines of business
      activity other than the production and distribution of eggs and any other
      business in which they are engaged as of June 3, 1997.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (f)  Sales,
      etc.
      of
      Assets.
      Sell,
      lease, transfer or otherwise dispose of, or permit any Subsidiary to sell,
      lease, transfer or otherwise dispose of, any substantial part of its assets,
      including (without limitation) substantially all assets constituting the
      business of a division, branch or other unit operation, except in the ordinary
      course of its business or in connection with a transaction authorized by
subsection (e)
      of this
      Section.

     

    (g)  Fiscal
      Year.
      Change,
      or permit any Subsidiary to change, its Fiscal Year.

     

    (h)  Investments
      in Delta Egg.
      Make or
      permit to remain outstanding any advance, loan, extension of credit, or capital
      contribution to or investment in Delta Egg Farm LLC or any affiliate thereof,
      or
      purchase or own any equity interests, notes, debentures, or other securities
      issued by Delta Egg Farm LLC or any affiliate thereof (each of the foregoing,
      an
      "Investment"),
      except the Borrower's equity investment in Delta Egg Farm LLC as of
      November 30, 2001 and the Borrower's advances, loans, and extensions of
      credit to Delta Egg Farm LLC in an aggregate amount not to exceed $200,000
      at
      any time outstanding.

     

    (i)  Investments
      in Non-Guarantor Subsidiaries.
      Make or
      permit to remain outstanding any advance, loan, extension of credit, or capital
      contribution to or investment in Hillandale, LLC or American Egg Products
      LLC or any affiliate thereof, or purchase or own any equity interests, notes,
      debentures, or other securities issued by Hillandale, LLC or American Egg
      Products LLC (each of the foregoing, an "Investment"),
      except:

     

    (i)  the
      Borrower may acquire 100% of the membership interests in Hillandale, LLC
      pursuant to the terms of that certain Agreement to Form a Limited Liability
      Company, Transfer Assets Thereto, and Purchase Units of Membership Therein
      dated
      July 28, 2005 (the "Hillandale
      Agreement")
      among
      Borrower, Hillandale Farms of Florida, Inc. and Hillandale Farms, Inc. and
      Jack
      E. Hazen, Jack E. Hazen, Jr., Homer E. Hunnicut, Jr., Orland R. Bethel and
      Dorman W. Mizellas (as the same exists as of October 13, 2005 without
      giving effect to any amendment or other modification thereof after
      October 13, 2005 unless modified with the consent of the
      Banks);

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    (ii)  advances,
      loans and extensions of credit to Hillandale, LLC as long as: (A) no Event
      of Default exists or would result therefrom; (B) the aggregate outstanding
      principal amount of all such advances, loans and extensions of credit shall
      never exceed $10,000,000 at any time; and (C) Hillandale, LLC's obligations
      to repay such advances, loans and extensions of credit shall be evidenced by
      a
      promissory note in form and substance acceptable to the Administrative Agent
      which shall be delivered to the Agent, endorsed payable to the order of the
      Agent and pledged to the Agent (for the benefit of the Banks) to secure the
      Obligations; and

     

    (iii)  the
      Borrower may acquire and own the membership interests in American Egg Products
      LLC that it owns on October 13, 2005 after giving effect to the acquisition
      of 51% of the membership interests in Hillandale, LLC; and

     

    (iv)  advances,
      loans and extensions of credit to American Egg Products LLC as long as:
      (A) no Event of Default exists or would result therefrom; and (B) the
      aggregate outstanding principal amount of all such advances, loans and
      extensions of credit shall never exceed $2,000,000 at any time.

     

    (j)  Indebtedness
      of Hillandale, LLC.
      Permit
      Hillandale, LLC to create, incur, assume or suffer to exist, any Debt except:
      (i) Debt for borrowed money owed to the Borrower and incurred under the
      permissions of clause (ii) of paragraph (i) of Section 5.02;
      (ii) the obligations of Hillandale, LLC as a guarantor or co-borrower in
      respect of the Hillandale Term Loan; (iii) Debt for borrowed money or
      incurred under capital leases as long as the aggregate outstanding principal
      amount of the Debt incurred under the permissions of this clause (iii)
      shall never exceed $2,000,000; and (iv) the following Debt outstanding as
      of October 13, 2005:

     

    
      	
              Payee

            	
              Principal
                Amount

            
	
              Farm
                Credit

            	
              $3,000,524

            
	
              Columbia
                Grain

            	
              $2,000,000

            
	
              Mercantile

            	
              $688,802

            
	
              Jack
                Methvin

            	
              $100,000

            
	
              Jo
                Ward

            	
              $309,367

            

    

    

    (k)  Indebtedness
      of
      American Egg Products LLC.
      Permit
      American Egg Products LLC to create, incur, assume or suffer to exist, any
      Debt
      except: (i) Debt for borrowed money owed to the Borrower and incurred under
      the permissions of clause (iv) of paragraph (i) of Section 5.02;
      (ii) Debt owed to Ford Motor Credit Company in an amount equal to $6,000
      incurred to finance the purchase of an automobile; and (iii) other Debt for
      borrowed money or incurred under capital leases as long as the aggregate
      outstanding principal amount of the Debt incurred under the permissions of
      this
      clause (ii) shall never exceed $100,000.

     

    (l)  Liens
      of Hillandale, LLC.
      Permit
      Hillandale, LLC to incur, create, assume, or permit to exist any Lien upon
      any
      of its property, assets, or revenues, whether now owned or hereafter acquired,
      except: (i) Liens granted to the Administrative Agent to secure the
      Obligations; (ii) Liens on real estate and the improvements, equipment and
      fixtures located thereon and the other assets specifically related thereto
      securing the Hillandale Term Loan; (iii) Lien on equipment and other assets
      specifically related thereto securing the Debt permitted by clauses (iii)
      and (iv) of paragraph (j) of Section 5.02; (iv) Encumbrances
      consisting of minor easements, zoning restrictions, or other restrictions on
      the
      use of real property that do not (individually or in the aggregate) materially
      affect the value of the assets encumbered thereby or materially impair the
      ability of Parent or the Subsidiaries to use such assets in their respective
      businesses, and none of which is violated in any material respect by existing
      or
      proposed structures or land use; (v) Liens (other than Liens relating to
      environmental liabilities or ERISA) for taxes, assessments, or other
      governmental charges that are not delinquent or which are being contested in
      good faith and for which adequate reserves have been established;
      (vi) Liens of mechanics, materialmen, warehousemen, carriers, landlords, or
      other similar statutory Liens securing obligations that are not yet due and
      are
      incurred in the ordinary course of business or which are being contested in
      good
      faith and for which adequate reserves have been established; and
      (vii) Liens resulting from good faith deposits to secure payments of
      workmen's compensation or other social security programs or to secure the
      performance of tenders, statutory obligations, surety and appeal bonds, bids,
      and contracts (other than for payment of Debt).

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    (m)  Liens
      of American Egg Products LLC.
      Permit
      American Egg Products LLC to incur, create, assume, or permit to exist any
      Lien
      upon any of its property, assets, or revenues, whether now owned or hereafter
      acquired, except: (i) Liens on equipment and other assets specifically
      related thereto securing the Debt permitted by clauses (ii) and (iii) of
      paragraph (k) of Section 5.02; (ii) Encumbrances consisting of
      minor easements, zoning restrictions, or other restrictions on the use of real
      property that do not (individually or in the aggregate) materially affect the
      value of the assets encumbered thereby or materially impair the ability of
      Parent or the Subsidiaries to use such assets in their respective businesses,
      and none of which is violated in any material respect by existing or proposed
      structures or land use; (iii) Liens (other than Liens relating to
      environmental liabilities or ERISA) for taxes, assessments, or other
      governmental charges that are not delinquent or which are being contested in
      good faith and for which adequate reserves have been established;
      (iv) Liens of mechanics, materialmen, warehousemen, carriers, landlords, or
      other similar statutory Liens securing obligations that are not yet due and
      are
      incurred in the ordinary course of business or which are being contested in
      good
      faith and for which adequate reserves have been established; and (v) Liens
      resulting from good faith deposits to secure payments of workmen's compensation
      or other social security programs or to secure the performance of tenders,
      statutory obligations, surety and appeal bonds, bids, and contracts (other
      than
      for payment of Debt).

     

    (n)  Liens
      of Borrower.
      Incur,
      create, assume, or permit to exist any Lien upon any right, title or interest
      it
      has in or to the following assets: (i) any membership or other equity
      interest it owns in Hillandale, LLC or American Egg Products LLC,
      (ii) any loan, advance or other extensions of credit it has made to
      Hillandale, LLC or to American Egg Products LLC and (iii) the proceeds
      of the property described in the foregoing clauses (i) and (ii) and all
      other property rights and general intangibles relating to the property described
      in the foregoing clauses (i) and (ii).

     

    (o)  Limitation
      on Restrictions on Subsidiaries.
      Create
      or otherwise cause or suffer to exist or become effective, nor permit any
      Subsidiary to create or otherwise cause or suffer to exist or become effective,
      any consensual encumbrance or restriction of any kind on the ability of any
      Subsidiary to: (1) pay dividends or make any other distribution on any of
      such Subsidiary's equity interests owned by the Borrower or any Subsidiary;
      (2) pay any Debt owed to the Borrower or any other Subsidiary;
      (3) make loans or advances to the Borrower or any other Subsidiary; or
      (4) transfer any of its property or assets to the Borrower Parent or any
      other Subsidiary.

     

    (p)  Affiliate
      Transactions.
      Enter
      into any transaction (including, without limitation, the purchase, sale, or
      exchange of property or the rendering of any service) with any Affiliate
      (including any Non-Guarantor Subsidiary) of the Borrower or any Subsidiary
      and
      will not permit any Guarantor to enter into any such transaction with any such
      Affiliate, except, in each case in the ordinary course of and pursuant to the
      reasonable requirements of Borrower's or such Guarantor's business and upon
      fair
      and reasonable terms no less favorable to Borrower or such Guarantor than would
      be obtained in a comparable arms-length transaction with a Person not an
      Affiliate of Borrower or such Guarantor.

     

    Article
      VI.

     

    Events
      of Default

     

    Section
      6.01  Events
      of Default.
      Each of
      the following shall be deemed an "Event
      of Default":

     

    (a)  The
      Borrower shall fail to pay when due the Obligations or any part
      thereof.

     

    (b)  Any
      representation or warranty made or deemed made by any Loan Party (or any of
      its
      officers) under or in connection with any Loan Document shall prove to have
      been
      incorrect in any material respect when made or deemed made.

     

    (c)  Any
      Loan
      Party shall fail to perform or observe any other term, covenant or agreement
      contained in any Loan Document on its part to be performed or observed and
      any
      such failure shall remain unremedied for 30 days after its
      occurrence.

     

    (d)  The
      Borrower or any of its Subsidiaries shall fail to pay any Debt (excluding the
      Obligations) of the Borrower or any of its Subsidiaries (as the case may be),
      or
      any interest or premium thereon, when due (whether by scheduled maturity,
      required prepayment, acceleration, demand or otherwise) and such failure shall
      continue after the applicable grace period, if any, specified in the agreement
      or instrument relating to such Debt; or any other default under any agreement
      or
      instrument relating to any such Debt, or any other event, shall occur and shall
      continue after the applicable grace period, if any, specified in such agreement
      or instrument, if the effect of such default or event is to accelerate, or
      to
      permit the acceleration of, the maturity of such Debt; or any such Debt shall
      be
      declared to be due and payable, or required to be prepaid (other than by a
      regularly scheduled required prepayment), prior to the stated maturity thereof.
      The occurrence of an Event of Default under this clause (d) includes,
      without limitation, the occurrence of any event of default under the Note
      Agreement and the Dairy Facility Reimbursement Agreement.

     

    (e)  The
      Borrower or any of its Subsidiaries shall generally not pay its debts as such
      debts become due, or shall admit in writing its inability to pay its debts
      generally or shall make a general assignment for the benefit of creditors;
      or
      any proceeding shall be instituted by or against the Borrower or any of its
      Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
      liquidation, winding-up, reorganization, arrangement, adjustment, protection,
      relief, or composition of it or its debts under any law relating to bankruptcy,
      insolvency or reorganization or relief of debtors, or seeking the entry of
      an
      order for relief or the appointment of a receiver, trustee, or other similar
      official for it or for any substantial part of its property; or the Borrower
      or
      any of its Subsidiaries shall take any corporate action to authorize any of
      the
      actions set forth above in this clause (e).

     

    (f)  Any
      judgment or order for the payment of money in excess of $750,000 (the liability
      for which is not covered by insurance) shall be rendered against the Borrower
      or
      any of its Subsidiaries and either (i) enforcement proceedings shall have
      been commenced by any creditor upon such judgment or order or (ii) there
      shall be any period of 10 consecutive days during which a stay of enforcement
      of
      such judgment or order, by reason of a pending appeal or otherwise, shall not
      be
      in effect.

     

    (g)  Any
      Collateral Document shall for any reason cease to create a valid and perfected
      first priority security interest in or a first mortgage lien on (as the case
      may
      be) any of the Collateral purported to be covered thereby except as otherwise
      contemplated therein.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (h)  Any
      provision of any Loan Document shall, at any time after delivery thereof under
      Section 3.01,
      for any
      reason cease to be valid and binding on the Borrower or on any of its
      Subsidiaries (as the case may be), or shall be declared to be null and void,
      or
      the validity or enforceability thereof shall be contested by the Borrower or
      any
      of its Subsidiaries, or a proceeding shall be commenced by any governmental
      agency or authority having jurisdiction over the Borrower or any of its
      Subsidiaries seeking to establish the invalidity or unenforceability thereof
      and
      such proceeding shall remain undismissed or unstayed for a period of 60 days,
      or
      the Borrower or any of its Subsidiaries shall deny that it has any or further
      liability or obligation thereunder.

     

    (i)  The
      occurrence of any event of default under any Loan Document, including without
      limitation, any "Event of Default" as that term is defined in the Intercreditor
      Agreement.

     

    (j)  Notwithstanding
      the effects of any financial losses on the other covenants and provisions
      contained herein, the Borrower shall incur material financial losses in any
      of
      its operations other than its normal egg and egg processing
      operations.

     

    (k)  Fred
      Adams or his spouse or children shall cease to beneficially own and control,
      directly or indirectly, at least fifty-one percent (51%) of the rights to vote
      (without regard to the occurrence of any contingency and otherwise on a fully
      diluted basis) for the election of a majority of the members of the board of
      directors of the Borrower.

     

    (l)  The
      occurrence of an Event of Default under the Dairy Facility Reimbursement
      Agreement.

     

    Section
      6.02  Remedies.
      Upon
      the occurrence of an Event of Default, the Administrative Agent may (and if
      directed by the Banks, shall), but subject to the Intercreditor Agreement,
      by
      notice to the Borrower do any one or more of the following: (i) terminate
      the Revolving Credit Commitments without notice to the Borrower or its
      Subsidiaries, (ii) declare all outstanding principal of and accrued and
      unpaid interest on the Notes and all other amounts payable by the Borrower
      under
      this Agreement and the other Loan Documents to be forthwith due and payable,
      whereupon the Notes, all such interest and all such amounts shall become and
      be
      forthwith due and payable, without presentment, demand, protest, or further
      notice of any kind, all of which are hereby expressly waived by the Borrower,
      (iii) reduce any claim to judgment, (iv) take such steps as the Banks
      (or a Bank, as determined pursuant to the Intercreditor Agreement) may deem
      appropriate to foreclose or otherwise enforce any lien granted to Agent for
      the
      benefit of Banks in accordance with the terms of the Loan Documents (including
      the Intercreditor Agreement), and (v) exercise any and all rights and
      remedies afforded by law, by any of the Loan Documents, by equity or otherwise;
      provided,
      however,
      that in
      the event of an actual or deemed entry of an order for relief with respect
      to
      the Borrower or any of its Subsidiaries under the Federal Bankruptcy Code,
      the
      Notes, all interest thereon and all other Obligations shall automatically become
      and be due and payable, and the Revolving Credit Commitments shall automatically
      terminate, without presentment, demand, protest or any notice of any kind,
      all
      of which are hereby expressly waived by the Borrower.

     

    Article
      VII.

     

    Definitions
      and Accounting Terms

     

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

     

    "Administrative
      Agent"
      has the
      meaning set forth in the introduction hereto.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    "Advance"
      has the
      meaning set forth in Section 1.01.

     

    "Affiliate"
      means,
      as to any party, any other party: (a) that directly or indirectly, through
      one or more intermediaries, controls or is controlled by, or is under common
      control with, such party; (b) that directly or indirectly beneficially owns
      or holds five percent (5%) or more of any class of voting equity of such party;
      or (c) five percent (5%) or more of the voting equity of which is directly
      or indirectly beneficially owned or held by the party in question. The term
      "control" means the possession, directly or indirectly, of the power to direct
      or cause direction of the management and policies of a party, whether through
      the ownership of voting securities, by contract, or otherwise; provided,
      however,
      in no
      event shall Administrative Agent, Agent or any Bank be deemed an Affiliate
      of
      the Borrower or any Subsidiaries.

     

    "Agent"
      has the
      meaning set forth in the Recitals hereto.

     

    "Amended
      Guaranty Agreement"
      means
      that certain Consolidated, Amended and Restated Guaranty Agreement dated
      December 18, 1997 executed by Cal-Maine Farms, Inc., Cal-Maine Egg
      Products, Inc., CM Partnership and CMF of Kansas in favor of Agent,
      substantially in the format of Exhibit B to the Existing Credit Agreement,
      and all amendments, supplements and other modifications thereto, including
      all
      additions of new Subsidiaries thereunder pursuant to the execution and delivery
      of a Subsidiary Joinder Agreement.

     

    "Applicable
      Lending Office"
      means
      for each Bank, the office of such Bank (or of an affiliate of such Bank)
      designated after its name in Section 2.03(a)
      hereof
      or such other office of such Bank (or of an affiliate of such Bank) as such
      Bank
      may from time to time specify to the Borrower, and the Administrative Agent
      as
      the office by which its Advances are to be made and maintained.

     

    "Applicable
      Margin"
      means,
      for any day, the applicable percentage rate per annum set forth below under
      the
      caption "Margin" opposite the Debt to EBITDA Ratio in the table below which
      corresponds with the actual Debt to EBITDA Ratio as of the most recent
      determination date; provided
      that
      until the first date that the Applicable Margin is determined as set forth
      below
      in this definition, the "Applicable Margin" shall be 3.00% per
      annum:

     

    
      	
              Debt
                to EBITDA Ratio

            	
              Margin

            
	
              >
                3.00

            	
              3.00%

            
	
              >
                2.50 but < 3.00

            	
              2.50%

            
	
              >2.00
                but < 2.50

            	
              2.00%

            
	
              <
                2.00

            	
              1.50%

            

    

    

    For
      purposes of the foregoing, (i) the Debt to EBITDA Ratio shall be determined
      as of the end of each of Borrower's Fiscal Quarters based upon Borrower's
      consolidated financial statements delivered pursuant to Section 5.01(l)
      and the
      compliance certificate delivered in connection therewith under Section 5.01(l)(vi),
      beginning with the Fiscal Quarter ended February 26, 2005; and
      (ii) each change in the Applicable Margin resulting from a change in the
      Debt to EBITDA Ratio shall be effective commencing on and including the date
      of
      delivery to the Administrative Agent of such consolidated financial statements
      and compliance certificate indicating such change and ending on the date
      immediately preceding the effective date of such next change; provided
      that the
      Applicable Margin shall be deemed to equal 3.00%: (A) at any time that an
      Event of Default has occurred and is continuing or (B) at the option of the
      Administrative Agent or at the request of the Required Lenders, if the Borrower
      fails to deliver the consolidated financial statements and compliance
      certificate required to be delivered by it pursuant to Section 5.01(l),
      during
      the period from the expiration of the time for delivery thereof until such
      consolidated financial statements and compliance certificate are
      delivered.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    "Application
      for Letter of Credit"
      means
      any application for letter of credit or commercial credit pursuant to which
      Borrower requests Rabobank to issue a Letter of Credit.

     

    "Assignment"
      has the
      meaning set forth in the Recitals hereto.

     

    "Bank"
      has the
      meaning set forth in the Recitals hereto.

     

    "Barclays"
      has the
      meaning set forth in the Recitals hereto.

     

    "Borrower
      Pledge Agreement"
      means
      that certain Pledge Agreement dated as of October 13, 2005 between the
      Borrower and the Agent for the benefit of the Banks and all amendments,
      supplements and other modifications thereto.

     

    "Borrowing
      Base"
      on the
      date of any computation thereof means the sum of (i) 75% of the face amount
      of the Eligible Receivables, (ii) 50% of the lower of cost or market value
      of Eligible Poultry Inventory, (iii) 50% of the lower of cost or market
      value of Eligible Egg and Egg Product Inventory, (iv) 80% of the lower of
      cost or market value of Eligible Feed Inventory (excluding silage), (v) 75%
      of the market value of unhedged Eligible Livestock, (vi) 85% of the market
      value of hedged and forward priced Eligible Livestock and (vii) 100% of the
      value of the commodity futures margin account deposits in which the Agent has
      been assigned an interest by the Borrower or any of its
      Subsidiaries.

     

    "Borrowing
      Base Certificate"
      means a
      certificate setting forth the information and calculations necessary to
      determine the Borrowing Base, in substantially the form of Exhibit B,
      signed
      by the chief financial officer or the President of the Borrower and each of
      the
      Guarantors.

     

    "Business
      Day"
      means
      any day other than a Saturday, Sunday or a public or bank holiday or the
      equivalent for banks generally under the laws of the State of New York, the
      State of Mississippi or the State of Illinois.

     

    "CM
      Partnership"
      means
      Cal-Maine Partnership, Ltd., a Texas limited partnership.

     

    "CMF
      of
      Kansas"
      means
      CMF of Kansas-LLC, a Delaware limited liability company.

     

    "Collateral"
      means
      the "Revolving Collateral" as defined in the Intercreditor
      Agreement.

     

    "Collateral
      Documents"
      the
      "Revolving Security Documents" as defined in the Intercreditor
      Agreement.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    "Consolidated
      Security Agreement"
      has the
      meaning set forth in the Recitals hereto and is substantially in the format
      of
      Exhibit C to the Existing Credit Agreement.

     

    "Credit
      Liabilities"
      means,
      at any time, all fixed and contingent liabilities of the Banks under Letters
      of
      Credit.

     

    "Dairy
      Facility Reimbursement Agreement"
      has the
      meaning specified in the Recitals hereto.

     

    "Debt"
      has the
      meaning specified in Section 5.01(j).

     

    "Debt
      to EBITDA Ratio"
      means
      the ratio, calculated as of the last day of each Fiscal Quarter, of
      (i) Total Funded Debt (as defined in Section 5.01(j))
      outstanding as of such day to (ii) EBITDA, as defined below and as
      calculated for the twelve month period then ended. The term "EBITDA"
      means,
      for any period, the sum of (A) the net income of Borrower and the
      Subsidiaries determined on a consolidated basis for such period plus
      (B), to the extent deducted in determining net income, the sum of:
      (i) all cash franchise and income taxes paid or payable by Borrower and the
      Subsidiaries during such period; (ii) depreciation and amortization
      expenses for such period; plus
      (iii) all cash interest paid or payable by Borrower and the Subsidiaries
      for such period.

     

    "Default
      Rate"
      means a
      daily fluctuating interest rate which is equal to the lesser of (a) 4-1/2%
      per annum above the 30 day Term Federal Funds Rate or (b) the Maximum
      Permissible Rate. Each change in such daily fluctuating interest rate shall
      take
      effect simultaneously with the corresponding change in the Term Federal Funds
      Rate, as applicable, as determined by Rabobank in its sole discretion at
      12:00 Noon (New York City time).

     

    "Eligible
      Egg and Egg Product Inventory"
      means
      all eggs and egg products of Borrower and the other Pledgors including shell
      eggs (both processed and unprocessed), liquid, dried and frozen eggs, and all
      ingredients used in egg products, such as salt, sugar and syrup, and all packing
      and other supplies used in the production of eggs and processing of shell eggs,
      in which Agent has a perfected first priority security interest.

     

    "Eligible
      Feed Inventory"
      means
      all feed of Borrower and the other Pledgors, including shelled corn and other
      feed grains, soybean meal, feed additives and chemicals used in the manufacture
      of feed, and processed "finished" feed, in which Agent has a perfected first
      priority security interest. Eligible Feed Inventory shall not include any
      silage.

     

    "Eligible
      Livestock" means all grazing cattle on pasture and cattle of Borrower and
      the other Pledgors in a feedlot and all dairy cattle of Borrower and the other
      Pledgors of whatsoever age, in which Agent has a perfected first priority
      security interest.

     

    "Eligible
      Poultry Inventory"
      means
      all live poultry and chickens of Borrower and the other Pledgors, including
      broilers, pullets, layers, breeders and recycles, in which Administrative Agent
      has a perfected first priority security interest.

     

    "Eligible
      Receivable"
      means
      the indebtedness arising out of a sale of goods or the performance of services
      by the Borrower or another Pledgor to a third party in the ordinary course
      of
      business (i.e.,
      not
      including any non-trade accounts receivable or those accounts receivable that
      do
      not otherwise arise from goods sold or services performed in the ordinary course
      of business) in which Agent has a perfected first priority security interest,
      and may include the right to payment of any interest or finance charges and
      other obligations of such third party with respect thereto:

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    (i) which
      is
      required to be paid in full within 60 days of the original billing date
      therefor;

     

    (ii) as
      to
      which any payment, or part thereof, does not remain unpaid for more than 60
      days
      from the original due date for such payment and which would, in the ordinary
      course of business of the Borrower or a Pledgor, not be written off as
      uncollectible;

     

    (iii) which
      is
      an account receivable representing all or part of the sales price of goods
      or
      services;

     

    (iv) which
      is
      an "account" within the meaning of the UCC of the State of New
      York;

     

    (v) which
      is
      denominated and payable only in United States dollars in the United States;
      and

     

    (vi) which
      complies, on and after the 30th day following notice by any Bank to the Borrower
      of any other criteria or requirements, with such other criteria and requirements
      as any Bank shall have specified in such notice.

     

    "Existing
      Advances"
      has the
      meaning set forth in Section 1.01
      hereto.

     

    "Existing
      Credit Agreement"
      has the
      meaning set forth in the Recitals hereto.

     

    "Existing
      Collateral Documents"
      has the
      meaning set forth in the Recitals hereto.

     

    "Existing
      Properties"
      has the
      meaning set forth in the Recitals hereto.

     

    "First
      South"
      has the
      meaning set forth in the Recitals hereto.

     

    "Fiscal
      Quarters"
      means
      the four (4) periods falling in each Fiscal Year, each such period being
      thirteen (13) or fourteen (14) weeks in duration, as applicable, with the first
      such period in any Fiscal Year beginning on the first day of such Fiscal Year
      and the last such period in any Fiscal Year ending on the last Saturday closest
      to May 31.

     

    "Fiscal
      Year"
      means
      the 52 or 53 week period, as the case may be, beginning on the date which is
      one
      day after the date of the preceding Fiscal Year end, and ending on the Saturday
      closest to May 31.

     

    "Guarantors"
      means
      each of Cal-Maine Farms, Inc., a Delaware corporation, CM Partnership, CMF
      of
      Kansas, South Texas Applicators, Inc., Southern Equipment Distributors, Inc.,
      and each Subsidiary that hereafter executes and delivers a Subsidiary Joinder
      Agreement, and any reference to either or both Guarantors in any Loan Documents
      shall mean a reference to any or all of the Guarantors, as applicable. The
      term
      "Guarantor" shall not include Hillandale, LLC nor American Egg Products
      LLC.

     

    "Harris"
      means
      Harris Trust and Savings Bank.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    "Harris
      Term Agreement"
      means
      that certain Secured Term Credit Agreement dated as of January 27, 2000
      between the Borrower and Harris (as such agreement has been amended and as
      such
      agreement may be further amended or otherwise modified).

     

    "Hillandale
      Security Agreement"
      means
      that certain Security Agreement dated as of October 13, 2005 between
      Hillandale, LLC and the Agent for the benefit of the Banks and all amendments,
      supplements and other modifications thereto.

     

    "Hillandale
      Term Loan"
      means a
      term loan originally extended in 2005 in an original principal amount not to
      exceed $28,000,000 secured by real property owned by Hillandale, LLC and the
      improvements, fixtures and equipment located thereon and related thereto and
      certain other assets specifically related thereto, the proceeds of which were
      or
      are to be used to refinance the then existing Debt of
      Hillandale, LLC.

     

    "Intercreditor
      Agreement"
      means
      that Third Amended and Restated Intercreditor Agreement dated as of
      March 31, 2004 among Agent, the Banks and the Noteholders as consented and
      agreed to by the Borrower and the Guarantors and as the same may be amended
      or
      otherwise modified.

     

    "Interest
      Period"
      has the
      meaning set forth in Section 1.05(b).

     

    "Letters
      of Credit"
      means
      the letters of credit issued by Rabobank for the account of Borrower pursuant
      to
Article I
      hereof
      and the letter of credit issued under the terms of the Existing Credit Agreement
      and outstanding on the date hereof Number SB 14287 with an amount available
      to be drawn upon thereunder equal to $1,600,000. The term "Letter of Credit"
      shall not include and this agreement shall not govern any letter of credit
      issued by Rabobank for the account of Borrower in connection with any industrial
      revenue or industrial development bond financings and specifically such term
      shall not include the letter of credit issued pursuant to the Dairy Facility
      Reimbursement Agreement.

     

    "Lien"
      means
      any lien, mortgage, security interest, tax lien, financing statement, pledge,
      charge, hypothecation, assignment, preference, priority, or other encumbrance
      of
      any kind or nature whatsoever (including, without limitation, any conditional
      sale or title retention agreement), whether arising by contract, operation
      of
      law, or otherwise.

     

    "Loan
      Documents"
      means
      this Agreement (as it may be amended or otherwise modified from time to time),
      the Notes, the Amended Guaranty Agreement, the Consolidated Security Agreement,
      the Hillandale Security Agreement, the Borrower Pledge Agreement, the
      Intercreditor Agreement, and all other certificates and documents delivered
      by
      the Borrower or any of its Subsidiaries hereunder or under the terms of any
      of
      the foregoing documents.

     

    "Loan
      Party"
      means
      the Borrower and each of the Guarantors.

     

    "Louisiana
      Collateral Documents"
      has the
      meaning set forth in the Recitals hereto.

     

    "Maximum
      Permissible Rate"
      has the
      meaning set forth in Section 1.05(a).

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    "Mortgages"
      means
      the Shared Mortgages and the New Mortgages which constitute Separate Security
      Documents, as all such capitalized terms are defined in the Intercreditor
      Agreement.

     

    "New
      Properties"
      has the
      meaning set forth in the Recitals hereto.

     

    "Note"
      has the
      meaning set forth in Section 1.07.

     

    "Note
      Agreement"
      has the
      meaning set forth in the Recitals hereto.

     

    "Obligations"
      means
      all obligations, indebtedness, and liabilities of the Borrower to the
      Administrative Agent and the Banks, or any of them, arising pursuant to any
      of
      the Loan Documents, now existing or hereafter arising, whether direct, indirect,
      related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several,
      or joint and several, including, without limitation, the obligation of the
      Borrower to repay the Advances, interest on the Advances, the Credit
      Liabilities, and all fees, costs, and expenses (including attorneys' fees)
      provided for in the Loan Documents.

     

    "Original
      Revolving Credit Agreement"
      has the
      meaning set forth in the Recitals hereto.

     

    "Parent
      Borrowing Base"
      means
      the Borrowing Base valuation of the Borrower's personal property Collateral
      only.

     

    "Pledge
      Agreement"
      has the
      meaning set forth in the Recitals hereto.

     

    "Pledgors"
      means
      Borrower, the Guarantors and Hillandale, LLC.

     

    "Previous
      Term Loan Agreement"
      has the
      meaning set forth in the Recitals hereto.

     

    "Principal
      Office"
      means
      the principal office of the Administrative Agent, presently located at
      245 Park Avenue, 36th Floor,
      New York, New York 10167-0062.

     

    "Properties"
      has the
      meaning set forth in the Recitals hereto.

     

    "Rabobank"
      has the
      meaning set forth in the Introduction hereto.

     

    "Repayment
      Date"
      means
      the Termination Date.

     

    "Revolving
      Credit Commitment"
      means,
      as to each Bank, the obligation of such Bank to make the Advances to be made
      pursuant to Section 1.01
      in a
      principal amount not exceeding Twenty-Two Million Eight Hundred Fifty Seven
      Thousand One Hundred Forty Two and 86/100 Dollars ($22,857,142.86) with respect
      to Rabobank, a principal amount not exceeding Eleven Million Four Hundred Twenty
      Eight Thousand Five Hundred Seventy One and 43/100 Dollars ($11,428,571.43)
      with
      respect to Harris and a principal amount not exceeding Five Million Seven
      Hundred Fourteen Thousand Two Hundred Eighty Five and 71/100 Dollars
      ($5,714,285.71) respect to First South, as the same may be reduced or terminated
      pursuant to Section 1.04
      or
Section 6.02.

     

    "Subsidiary"
      means
      any corporation or other business entity (including, without limitation, a
      general partnership or limited partnership) of which more than 50% of the
      outstanding capital stock or other equity interest having ordinary voting power
      to elect a majority of the Board of Directors (or similar governing body) of
      such corporation or other business entity (irrespective of whether or not at
      the
      time capital stock of any other class or classes of such corporation or other
      equity interest shall or might have voting power upon the occurrence of any
      contingency) is at the time directly or indirectly owned by the Borrower, by
      the
      Borrower and one or more other Subsidiaries, or by one or more other
      Subsidiaries.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    "Subsidiary
      Joinder Agreement"
      means a
      Subsidiary Joinder Agreement in substantially the form of Exhibit A to the
      Amended Guaranty Agreement.

     

    "Term
      Federal Funds Rate"
      for any
      Interest Period for any Advance means an interest rate per annum equal at all
      times during such Interest Period to the rate of interest at which Rabobank,
      as
      a branch of a foreign bank, in its sole discretion, can acquire federal funds
      in
      the interbank term federal funds market in New York City or other funding
      sources available to Rabobank, through brokers of recognized standing at the
      time the Borrower specifies the Interest Period for such Advance, on the date
      of
      such Advance, for a period equal to such Interest Period for such Advance and,
      if applicable in the amount of such Advance.

     

    "Termination
      Date"
      means
      December 31, 2007 or the date of the earlier termination in whole of the
      Revolving Credit Commitment pursuant to Sections 1.04
      or
6.02.

     

    Section
      7.02  Terms.
      All
      accounting terms not specifically defined herein shall be construed in
      accordance with generally accepted accounting principles consistent with those
      applied in the preparation of the audited financial statements referred to
      in
Section 4.01(e),
      and all
      financial data submitted pursuant to this Agreement shall be prepared in
      accordance with such principles.

     

    Article
      VIII.

     

    The
      Administrative Agent

     

    Section
      8.01  Appointment,
      Powers and Immunities.
      Each
      Bank hereby irrevocably appoints and authorizes the Administrative Agent to
      act
      as its agent hereunder with such powers as are specifically delegated to the
      Administrative Agent by the terms of this Agreement, together with such other
      powers as are reasonably incidental thereto. Neither the Administrative Agent
      nor any of its affiliates, officers, directors, employees, attorneys, or agents
      shall be liable for any action taken or omitted to be taken by any of them
      hereunder or otherwise in connection with this Agreement or any of the other
      Loan Documents except for its or their own gross negligence or willful
      misconduct. Without limiting the generality of the preceding sentence, the
      Administrative Agent (i) may treat the payee of any Note as the holder
      thereof until the Administrative Agent receives written notice of the assignment
      or transfer thereof signed by such payee and in form satisfactory to the
      Administrative Agent; (ii) shall have no duties or responsibilities except
      those expressly set forth in this Agreement applicable to the Administrative
      Agent in such capacity, and shall not by reason of this Agreement or any other
      Loan Document be a trustee or fiduciary for any Bank; (iii) shall not be
      required to initiate any litigation or collection proceedings hereunder except
      to the extent requested by the Banks; (iv) shall not be responsible to the
      Banks for any recitals, statements, representations or warranties contained
      in
      this Agreement or any other Loan Document, or any certificate or other document
      referred to or provided for in, or received by any of them under, this Agreement
      or any other Loan Document, or for the value, validity, effectiveness,
      enforceability, or sufficiency of this Agreement or any other Loan Document
      or
      any other document referred to or provided for herein or therein or for any
      failure by any individual, corporation, business trust, association, company,
      partnership, joint venture, governmental authority, or other entity to perform
      any of its obligations hereunder; (v) may consult with legal counsel
      (including counsel for the Borrower), independent public accountants, and other
      experts selected by it and shall not be liable for any action taken or omitted
      to be taken in good faith by it in accordance with the advice of such counsel,
      accountants, or experts; and (vi) shall incur no liability under or in
      respect of any Loan Document by acting upon any notice, consent, certificate,
      or
      other instrument or writing believed by it to be genuine and signed or sent
      by
      the proper party or parties. As to any matters not expressly provided for by
      this Agreement, the Administrative Agent shall in all cases be fully protected
      in acting, or in refraining from acting hereunder in accordance with
      instructions signed by Banks, and such instructions of Banks and any action
      taken or failure to act pursuant thereto shall be binding on all of the Banks;
      provided,
      however,
      that
      the Administrative Agent shall not be required to take any action which exposes
      the Administrative Agent to personal liability or which is contrary to this
      Agreement or any other Loan Document or applicable law.

     

    
      
        
        

      

      
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    Section
      8.02  Rights
      of Administrative Agent as a Bank.
      With
      respect to its Revolving Credit Commitment, the Advances made by it, the Note
      issued to it and any Letter of Credit, Rabobank (and any successor acting as
      Administrative Agent) in its capacity as a Bank hereunder shall have the same
      rights and powers hereunder as any other Bank and may exercise the same as
      though it were not acting as the Administrative Agent, and the term "Bank"
      or
      "Banks" shall, unless the context otherwise indicates, include the
      Administrative Agent in its individual capacity. The Administrative Agent and
      its affiliates may (without having to account therefor to any Bank) accept
      deposits from, lend money to, act as trustee under indentures of, provide
      merchant banking services to, and generally engage in any kind of banking,
      trust, or other business with the Borrower or any of its Subsidiaries and any
      other Person who may do business with or own securities of the Borrower or
      any
      of its Subsidiaries, all as if it were not acting as the Administrative Agent
      and without any duty to account therefor to the Banks.

     

    Section
      8.03  Defaults.
      The
      Administrative Agent shall not be deemed to have knowledge or notice of the
      occurrence of an Event of Default (other than the non-payment of principal
      of or
      interest on the Advances or of any fees) unless the Administrative Agent has
      received notice from a Bank or the Borrower specifying such Event of Default
      and
      stating that such notice is a "Notice of Default". In the event that the
      Administrative Agent receives such a notice of the occurrence of an Event of
      Default, the Administrative Agent shall give prompt notice thereof to the Banks
      (and shall give each Bank prompt notice of each such non-payment). The
      Administrative Agent shall (subject to Section 8.01)
      take
      such action with respect to such Event of Default as shall be directed by the
      Banks, provided
      that
      unless and until the Administrative Agent shall have received such directions,
      the Administrative Agent may (but shall not be obligated to) take such action,
      or refrain from taking such action, with respect to such Event of Default as
      it
      shall seem advisable and in the best interest of the Banks.

     

    Section
      8.04  Indemnification.
      The
      Banks indemnify the Administrative Agent from and hold the Administrative Agent
      harmless against (to the extent not reimbursed under Section 9.04,
      but
      without limiting the obligations of the Borrower under Section 9.04),
      ratably in accordance with their respective Revolving Credit Commitments, any
      and all liabilities, obligations, losses, damages, penalties, actions,
      judgments, deficiencies, suits, costs, expenses (including attorneys' fees),
      and
      disbursements of any kind or nature whatsoever which may be imposed on, incurred
      by, or asserted against the Administrative Agent in any way relating to or
      arising out of any of the Loan Documents or any action taken or omitted to
      be
      taken by the Administrative Agent under or in respect of any of the Loan
      Documents; provided,
      further,
      that no
      Bank shall be liable for any portion of the foregoing to the extent caused
      by
      the Administrative Agent's gross negligence or willful misconduct. Without
      limitation of the foregoing, it is the express intention of the Banks that
      the
      Administrative Agent shall be indemnified hereunder from and held harmless
      against all of such liabilities, obligations, losses, damages, penalties,
      actions, judgments, deficiencies, suits, costs, expenses (including attorneys'
      fees), and disbursements of any kind or nature directly or indirectly arising
      out of or resulting from the sole or contributory negligence of the
      Administrative Agent. Without limiting any other provision of this Section,
      each
      Bank agrees to reimburse the Administrative Agent promptly upon demand for
      its
      pro rata share (calculated on the basis of the Revolving Credit Commitments)
      of
      any and all out-of-pocket expenses (including attorneys' fees) incurred by
      the
      Administrative Agent in connection with the preparation, execution, delivery,
      administration, modification, amendment or enforcement (whether through
      negotiations, legal proceedings, or otherwise) of, or legal advice in respect
      of
      rights or responsibilities under, the Loan Documents, to the extent that the
      Administrative Agent is not reimbursed for such expenses by the
      Borrower.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    Section
      8.05  Independent
      Credit Decisions.
      Each
      Bank agrees that it has independently and without reliance on the Administrative
      Agent or any other Bank, and based on such documents and information as it
      has
      deemed appropriate, made its own credit analysis of the Borrower and decision
      to
      enter into this Agreement and that it will, independently and without reliance
      upon the Administrative Agent or any other Bank, and based upon such documents
      and information as it shall deem appropriate at the time, continue to make
      its
      own analysis and decisions in taking or not taking action under this Agreement
      or any of the other Loan Documents. The Administrative Agent shall not be
      required to keep itself informed as to the performance or observance by the
      Borrower or any Loan Party of this Agreement or any other Loan Document or
      to
      inspect the properties or books of the Borrower or any Loan Party. Except for
      notices, reports and other documents and information expressly required to
      be
      furnished to the Banks by the Administrative Agent hereunder, the Administrative
      Agent shall not have any duty or responsibility to provide any Bank with any
      credit or other financial information concerning the affairs, financial
      condition or business of the Borrower or any Loan Party (or any of their
      affiliates) which may come into the possession of the Administrative Agent
      or
      any of its affiliates.

     

    Section
      8.06  Several
      Commitments.
      The
      Revolving Credit Commitments and other obligations of the Banks under this
      Agreement are several. The default by any Bank in making an Advance in
      accordance with its Revolving Credit Commitment shall not relieve the other
      Banks of their obligations under this Agreement. In the event of any default
      by
      any Bank in making any Advance, each non-defaulting Bank shall be obligated
      to
      make its Advance but shall not be obligated to advance the amount which the
      defaulting Bank was required to advance hereunder. In no event shall any Bank
      be
      required to advance an amount or amounts which would in the aggregate exceed
      such Bank's Revolving Credit Commitment. No Bank shall be responsible for any
      act or omission of any other Bank.

     

    Section
      8.07  Successor
      Administrative Agent.
      Subject
      to the appointment and acceptance of a successor Administrative Agent as
      provided below, the Administrative Agent may resign at any time by giving notice
      thereof to the Banks and the Borrower and the Administrative Agent may be
      removed if it fails to perform any of its obligations hereunder. Upon any such
      resignation or removal, the other Banks will have the right to appoint a
      successor Administrative Agent. If no successor Administrative Agent shall
      have
      been so appointed by the Banks and shall have accepted such appointment within
      thirty (30) days after the retiring Administrative Agent's giving of notice
      of
      resignation or the Banks' removal of the retiring Administrative Agent, then
      the
      retiring Administrative Agent may, on behalf of the Banks, appoint a successor
      Administrative Agent, which shall be a commercial bank organized under the
      laws
      of the United States of America or any State thereof and having combined capital
      and surplus of at least Five Hundred Million Dollars ($500,000,000). Upon the
      acceptance of its appointment as successor Administrative Agent, such successor
      Administrative Agent shall thereupon succeed to and become vested with all
      rights, powers, privileges, immunities, and duties of the resigning or removed
      Administrative Agent, and the resigning or removed Administrative Agent shall
      be
      discharged from its duties and obligations under this Agreement and the other
      Loan Documents. After any Administrative Agent's resignation or removal as
      Administrative Agent, the provisions of this Article VIII
      shall
      continue in effect for its benefit in respect of any actions taken or omitted
      to
      be taken by it while it was the Administrative Agent.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    Section
      8.08  Administrative
      Agent Fee.
      The
      Borrower agrees to pay to the Administrative Agent the administrative fee
      described in the fee letter dated as of the date hereof between the Borrower
      and
      the Administrative Agent.

     

    Article
      IX.

     

    Miscellaneous

     

    Section
      9.01  Amendments,
      etc.
      No
      amendment or waiver of any provision of this Agreement or the Notes, nor consent
      to any departure by the Borrower therefrom, shall in any event be effective
      unless the same shall be in writing and signed by the Banks and the
      Administrative Agent and then such waiver or consent shall be effective only
      in
      the specific instance and for the specific purpose for which given.

     

    Section
      9.02  Notices,
      etc.
      All
      notices and other communications provided for hereunder shall be in writing
      (including telegraphic and telecopy communications) and mailed or telegraphed
      or
      delivered, if to the Borrower, at its address at 3320 Woodrow Wilson Drive,
      Jackson, Mississippi 39209; Attention: Bobby J. Raines, Vice President and
      if to
      Rabobank or the Administrative Agent, at its address at 245 Park Avenue,
      New York, New York 10167; Attention: Corporate Services, with a copy to
      1201 West Peachtree Street, Atlanta, Georgia 30309-3400; Attention: Richard
      J. Beard; and if to First South Farm Credit, ACA at its address at 713
      South Pear Orchard Road, Suite 102, Ridgeland, Mississippi 39157 and at its
      address at P. O. Box 1770, Ridgeland, Mississippi 39158-1770;
      Attention: Andrew Mangialardi; and if to Harris, at its address at 111 West
      Monroe, Chicago, Illinois 60603; Attention: Agribusiness Division, or, as to
      each party, at such other address as shall be designated by such party in a
      written notice to the other party. All such notices and communications shall,
      when mailed or telegraphed, be effective when deposited in the mails or
      delivered to the telegraph company, respectively, addressed as aforesaid, except
      that notices to the Administrative Agent and/or the Banks, as applicable,
      pursuant to the provisions of Article II
      shall
      not be effective until received by such entity.

     

    Section
      9.03  Waiver;
      Remedies.
      No
      failure on the part of the Administrative Agent or any Bank to exercise, and
      no
      delay in exercising, any right under any Loan Document shall operate as a waiver
      thereof; nor shall any single or partial exercise of any right under any Loan
      Document preclude any other or further exercise thereof or the exercise of
      any
      other right. The remedies provided in the Loan Documents are cumulative and
      not
      exclusive of any remedies provided by law.

     

    Section
      9.04  Expenses
      and Taxes.

     

    (a)  The
      Borrower agrees to pay on demand all costs and expenses in connection with
      the
      preparation, execution, delivery, filing, recording and administration of the
      Loan Documents and the other documents to be delivered under the Loan Documents,
      including, without limitation, the reasonable fees and out-of-pocket expenses
      of
      counsel for the Banks, Agent, and the Administrative Agent and local counsel
      who
      may be retained by said counsel, with respect thereto and with respect to
      advising the Banks, Agent, and the Administrative Agent as to its rights and
      responsibilities under the Loan Documents, and all costs and expenses (including
      counsel fees and expenses) in connection with the administration and enforcement
      of the Loan Documents and the other documents to be delivered under the Loan
      Documents including, without limitation, all costs and expenses incurred by
      the
      Administrative Agent and any Bank in connection with any inspections of the
      Collateral and the Borrower's and Guarantors' other properties, books and
      records. In addition, the Borrower shall pay any and all stamp and other taxes
      and fees payable or determined to be payable in connection with the execution,
      delivery, filing and recording, of the Loan Documents and the other documents
      to
      be delivered under the Loan Documents, and agrees to save the Administrative
      Agent and the Banks harmless from and against any and all liabilities with
      respect to or resulting from any delay in paying or omission to pay such taxes
      and fees.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    (b)  If,
      as a
      result of a payment made by the Borrower due to acceleration of the maturity
      of
      the Advances and the Notes pursuant to Section 6.02,
      mandatory or voluntary prepayment or due to any other reason, any Bank receives
      payment of any principal amount of any Advance on a day other than the last
      day
      of the Interest Period for such Advance, the Borrower shall pay to such Bank
      on
      demand that amount, if any, required to compensate such Bank for additional
      losses, costs or expenses which it may accrue as a result of such payment (as
      determined in good faith in the sole discretion of such Bank), including,
      without limitation, an amount equal to the losses, if any, on the reinvestment
      of the amounts prepaid, which for purposes of this Agreement shall be deemed
      equal to the difference between the interest rate in effect hereunder on the
      amounts prepaid as of the date of such prepayment and the interest rate at
      which
      such Bank reinvests such amounts, multiplied by such amounts prepaid and a
      fraction, the numerator of which is the number of days (including the first
      day
      but excluding the last day) from the date of prepayment through the last day
      of
      the applicable Interest Period and the denominator of which is 360.

     

    Section
      9.05  Right
      of Set-off.
      Upon
      the occurrence and during the continuance of any Event of Default, each Bank
      is
      hereby authorized at any time and from time to time, to the fullest extent
      permitted by law, to set off and apply any and all deposits (general or special,
      time or demand, provisional or final) at any time held and other indebtedness
      at
      any time owing by such Bank to or for the credit or the account of the Borrower
      against any and all of the Obligations of the Borrower now or hereafter existing
      under any Loan Document, irrespective of whether or not the Administrative
      Agent
      or such Bank shall have made any demand under such Loan Document and although
      such Obligations may be unmatured or contingent. Each Bank agrees promptly
      to
      notify the Borrower (with a copy to the Administrative Agent) after any such
      set-off and application, provided
      that the
      failure to give such notice shall not affect the validity of such set-off and
      application. The rights and remedies of each Bank under this Section 9.05
      are in
      addition to other rights and remedies (including, without limitation, other
      rights of set-off) which such Bank may have.

     

    Section
      9.06  Severability
      of Provisions.
      Any
      provision of this Agreement or of any other Loan Document which is prohibited
      or
      unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
      to the extent of such prohibition or unenforceability without invalidating
      the
      remaining provisions hereof or thereof or affecting the validity or
      enforceability of such provision in any other jurisdiction.

     

    Section
      9.07  Binding
      Effect; Governing Law.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and assigns, except that the Borrower shall
      not
      have the right to assign its rights hereunder or any interest herein without
      the
      prior written consent of the Administrative Agent and all of the Banks. This
      Agreement and the Notes shall be governed by, and construed in accordance with,
      the laws of the State of New York.

     

    Section
      9.08  Consent
      to Jurisdiction; Process Agent.

     

    (a)  The
      Borrower hereby irrevocably submits to the jurisdiction of any New York State
      or
      Federal court sitting in New York City in any action or proceeding arising
      out
      of or relating to this Agreement or any other Loan Document, and the Borrower
      hereby irrevocably agrees that all claims in respect of such action or
      proceeding may be heard and determined in such New York State court or, to
      the
      extent permitted by law, in such Federal court. The Borrower hereby irrevocably
      waives, to the fullest extent it may effectively do so, the defense of an
      inconvenient forum to the maintenance of such action or proceeding. The Borrower
      hereby irrevocably appoints CT Corporation System (the "Process
      Agent"),
      with
      an office on the date hereof at 1633 Broadway, New York, New York 10019, as
      its agent to receive on behalf of the Borrower and its property service of
      copies of the summons and complaint and any other process which may be served
      in
      any such action or proceeding. Such service on the Process Agent may be made
      by
      mailing or delivering a copy of such process to the Borrower in care of the
      Process Agent, at the Process Agent's above address and the Borrower hereby
      irrevocably directs the Process Agent to accept such service on its behalf.
      As
      an alternative method of service, the Borrower also irrevocably consents to
      the
      service of any and all process in any such action or proceeding by any other
      method permitted by applicable law. The Borrower agrees that a final judgment
      in
      any such action or proceeding shall be conclusive and may be enforced in any
      other jurisdiction by suit on the judgment or in any other manner provided
      by
      law.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    (b)  Nothing
      in this Section shall affect the right of the Administrative Agent or the Banks
      to serve legal process in any other manner permitted by law or affect its right
      to bring any action or proceeding against the Borrower or its property in any
      other court.

     

    Section
      9.09  Security.
      The
      obligations of the Borrower under this Agreement are guaranteed by the Amended
      Guaranty Agreement and secured by the Consolidated Security
      Agreement.

     

    Section
      9.10  Entire
      Agreement; Amendment and Restatement; Ratification; Release.
      This
      Agreement amends and restates in its entirety the Existing Credit Agreement,
      which amended and restated in its entirety the Original Revolving Credit
      Agreement. The execution of this Agreement, the Notes, and the other Loan
      Documents executed in connection herewith does not extinguish the indebtedness
      outstanding in connection with the Existing Credit Agreement and the Original
      Revolving Credit Agreement nor does it constitute a novation with respect to
      such indebtedness. At all times during the period prior to the date hereof,
      all
      of the provisions of the Existing Credit Agreement are hereby ratified and
      confirmed and shall remain in full force and effect. Any reference in any Loan
      Document to the Existing Credit Agreement is hereby amended to be a reference
      to
      this Agreement. The Borrower, the Guarantors, the Administrative Agent,
      Rabobank, First South, and Harris ratify and confirm each of the Loan Documents
      entered into prior to the Closing Date (but excluding the Existing Credit
      Agreement) and agree that such Loan Documents continue to be legal, valid,
      binding and enforceable in accordance with their respective terms, except as
      modified hereby. This Agreement and the other Loan Documents referred to herein
      embody the final, entire agreement among the parties hereto and supersede any
      and all prior commitments, agreements (including the Existing Credit Agreement),
      representations and understandings, whether written or oral, relating to the
      subject matter hereof and may not be contradicted or varied by evidence of
      prior, contemporaneous or subsequent oral agreements or discussions of the
      parties hereto. THE BORROWER AND EACH GUARANTOR (BY ITS EXECUTION OF THIS
      AGREEMENT), REPRESENTS AND WARRANTS THAT AS OF THE DATE HEREOF THERE ARE NO
      CLAIMS OR OFFSETS AGAINST OR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER
      THE LOAN DOCUMENTS. TO INDUCE THE ADMINISTRATIVE AGENT AND THE BANKS TO ENTER
      INTO THIS AGREEMENT, EACH OF THE BORROWER AND THE GUARANTORS WAIVES ANY AND
      ALL
      CLAIMS, OFFSETS, DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING
      PRIOR TO THE DATE HEREOF AND HEREBY RELEASES THE ADMINISTRATIVE AGENT AND THE
      BANKS AND THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND ATTORNEYS
      (COLLECTIVELY THE "RELEASED
      PARTIES")
      FROM
      ANY AND ALL OBLIGATIONS, INDEBTEDNESS, LIABILITY, CLAIMS, RIGHTS, CAUSES OF
      ACTION OR DEMANDS WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED
      WHICH THE BORROWER OR THE GUARANTORS EVER HAD, NOW HAS, CLAIMS TO HAVE OR MAY
      HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TO THE DATE HEREOF AND FROM OR
      IN
      CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
      THEREBY. 

     

    Section
      9.11  Waiver. Subject to the satisfaction of the conditions
      precedent set forth in Article III, each of the Banks waives the
      Existing Defaults and agrees not to exercise any rights or remedies available
      as
      a result of the occurrence thereof. To induce the Administrative Agent and
      the
      Banks to agree to the foregoing waiver, the Borrower and the Guarantors agree
      that the waiver specifically described herein shall not constitute and shall
      not
      be deemed a waiver of any other event of default under any Loan Document or
      any
      other event that with the giving of notice or lapse of time or both would
      constitute such an event of default, whether arising as a result of the further
      violation of the Total Funded Debt to Total Capitalization Covenant, the
      Guaranteed Indebtedness Covenant, the Note Agreement, the Dairy Facility
      Reimbursement Agreement or otherwise, or a waiver of any rights or remedies
      arising as a result of such other events of default or other such events. The
      failure to comply with the Total Funded Debt to Total Capitalization Covenant
      or
      the Guaranteed Indebtedness Covenant at any time after the date hereof and
      the
      occurrence of an event of default under the Note Agreement or Dairy Facility
      Reimbursement Agreement, in each case, other than as described in the definition
      of Existing Defaults, shall constitute an event of default under this
      Agreement.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	 
	 	CAL-MAINE
              FOODS, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
              Name 
                B. J. Raines

              Title Vice
                President

            

    

     

     

      	 	 	 
	 	
              COÖPERATIEVE
                CENTRALE RAIFFEISEN-BOERENLEENBANK
                B.A.

              "RABOBANK
                NEDERLAND", NEW YORK
                BRANCH, as the Administrative Agent and
                a Bank

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
              Name

              Title 

            

    

    
      
        	
              	 
 	 
 
	 	By:  	 
	 	
                

              
	 	
                Name

                Title 

              

      

       

    

    

      	 	 	 
	 	FIRST
              SOUTH FARM CREDIT, ACA
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
              Name

              Title 

            

    

    

    
      	 	 	 
	 	HARRIS
              TRUST AND SAVINGS BANK
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
              Name

              Title 

            

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    GUARANTOR
      CONSENT

    

    Each
      Guarantor: (i) consents and agrees to this Second Amended and Restated
      Revolving Credit Agreement including without limitation, Section 9.10(a)
      and
9.11;
      (ii) agrees that the Amended Guaranty Agreement, Consolidated Security
      Agreement, and the Mortgages to which it is a party shall remain in full force
      and effect and shall continue to be the legal, valid, and binding obligation
      of
      such Guarantor enforceable against it in accordance with its terms; and
      (iii) agree and acknowledge that the obligations, indebtedness and
      liability secured or guaranteed by the Amended Guaranty Agreement, the
      Consolidated Security Agreement and the Mortgages to which it is a party include
      the "Obligations" as defined herein.

     

    GUARANTORS

     

    
      	 	 	 
	 	
              CAL-MAINE
                FARMS, INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
              Name 
                B. J. Raines

              Title 
                Vice President

            

      	 	 	 
	 	CAL-MAINE
              PARTNERSHIP, LTD.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
              Name 
                Cal-Maine Foods, Inc.

              Title 
                General Partner

            

    

    
      	 	By:  	 
	 	
              

            
	 	
              
                Name 
                  B. J. Raines

                Title 
                  Vice President

              

            

    

    

    
      	
            	 	 
	 	CMF
              OF
              KANSAS - LLC
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
              Name 
                Cal-Maine Foods, Inc.

              Title 
                Managing Member

            

      
        	 	By:  	 
	 	
                

              
	 	
                
                  Name 
                    B. J. Raines

                  Title 
                    Vice President

                

              

        	
              	 	 
	 	
                SOUTHERN
                  EQUIPMENT DISTRIBUTORS, INC.

              
	 
 	 
 	 
 
	 	By:  	 
	 	
                

              
	 	
                Name 

                Title 
                  

              

      

    

     

    
      	
            	 	 
	 	
              SOUTH
                TEXAS APPLICATORS, INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
              Name 

              Title 
                

            

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    CONSENT
      OF NOTEHOLDERS

    

    The
      undersigned Noteholders hereby consent to the amendment to the terms "Borrowing
      Base", "Eligible Accounts," and "Eligible Livestock" contemplated by this Second
      Amended and Restated Revolving Credit Agreement for purposes of permitting
      such
      amendment and restatement in light of the restriction on amendments thereto
      contained in Section 5.3
      of the
      Intercreditor Agreement.

     

    Executed
      as of the date first written above.

     

    
      	
            	 	 
	 	
              FIRST
                SOUTH FARM CREDIT ACA (formerly known as First South ACA, which was
                formerly known as First South Production Credit
                Association)

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
              Name 
                Andrew Mangialardi

              Title 
                Commercial Loan Officer

            

    

     

    
      	
            	 	 
	 	
              
                METROPOLITAN
                  LIFE INSURANCE COMPANY

              

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
              Name 
                

              Title 
                

            

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    INDEX
      OF
      EXHIBITS AND SCHEDULES

    

    Exhibits:

    

    
      	
              Exhibit A

            	
              -

            	
              Form
                of Promissory Note

            
	 	 	 
	
              Exhibit B

            	
              -

            	
              Borrowing
                Base Certificate

            
	 	 	 
	
              Exhibit C

            	
              -

            	
              Compliance
                Certificate

            
	 	 	 
	
              Exhibit D

            	
              -

            	
              Franklin
                County Modification of Mortgage

            
	 	 	 
	
              Exhibit E

            	
              -

            	
              Hinds
                County First Modification of Mortgage

            
	 	 	 
	
              Exhibit
                B to
                Ninth Amendment

            	
              -

            	
              Borrower
                Pledge Agreement

            
	 	 	 
	
              Exhibit
                C to
                Ninth Amendment

            	
              -

            	
              Hillandale
                Security Agreement

            

    

    

    Schedules:

    

    
      	
              Schedule 1

            	
              -

            	
              Amendments
                to Existing Credit Agreement

            
	 	 	 
	
              Schedule 2

            	
              -

            	
              Mortgages

            
	 	 	 

    

    

    

    
      
        
        

      

      
        44EXHIBIT
      10.44

    

    
      	 	
              PURCHASE
                AND SALE AGREEMENT, DATED
                FEBRUARY 23, 2007, AMONG GIN HOUSING PARTNERS I, L.L.C. AND THE PERSONS
                AND ENTITIES IDENTIFIED AS SELLERS ON THE SIGNATURE PAGES THERETO,
                PORTIONS OF WHICH HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
                TREATMENT. SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED WITH THE
                SEC.

            	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXECUTION
      COPY

     

    

     

    PURCHASE
      AND SALE AGREEMENT

     

    By
      and
      Among

     

    GIN
      HOUSING PARTNERS I, L.L.C.

     

    and

     

    THE
      PERSONS AND ENTITIES IDENTIFIED AS SELLERS ON THE SIGNATURE PAGES
      HERETO

     

    Dated
      February 23, 2007

     

    

     

    †
      indicates
      information omitted on the basis of a confidential treatment request pursuant
      to
      Rule 24b-2 of the Securities Exchange Act of 1934, which has been filed
      separately with the Securities and Exchange
      Commission.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

     

     

    
      	 	
               Page   

            
	 	 	 
	
              PURCHASE
                AND SALE AGREEMENT

            	
              1

            
	 	 
	
              R
                E
                C I T A L S

            	
              1

            
	 	 
	
              ARTICLE
                1. PURCHASE AND SALE OF INTERESTS; CLOSING

            	
              4

            
	 	 
	
              1.1

            	
              Agreement
                to Purchase and Sell

            	
              4

            
	
              1.2

            	
              Purchase
                Price, Allocation and Tax Treatment

            	
              5

            
	
              1.3

            	
              Earnest
                Money

            	
              5

            
	
              1.4

            	
              Accrued
                Fees; Proration Adjustment

            	
              5

            
	
              1.5

            	
              The
                † Adjustment

            	
              8

            
	
              1.6

            	
              Closing(s)

            	
              9

            
	
              1.7

            	
              Seller’s
                Closing Deliveries

            	
              10

            
	
              1.8

            	
              Purchaser’s
                Closing Deliveries

            	
              13

            
	 	 	 
	
              ARTICLE
                2. REPRESENTATIONS AND WARRANTIES OF EACH SELLER

            	
              14

            
	 	 
	
              2.1

            	
              Ownership
                of Purchased Interests and Personal Property

            	
              14

            
	
              2.2

            	
              All
                Interests of Seller

            	
              16

            
	
              2.3

            	
              Other
                Restrictions on Purchased Interests

            	
              16

            
	
              2.4

            	
              Organization;
                Authority

            	
              16

            
	
              2.5

            	
              Removal
                or Foreclosure on Interest

            	
              17

            
	
              2.6

            	
              Financial
                Statements

            	
              17

            
	
              2.7

            	
              Partnership
                Agreements; Fee Agreements and Seller Obligations

            	
              17

            
	
              2.8

            	
              Other
                Related Agreements

            	
              17

            
	
              2.9

            	
              Litigation

            	
              18

            
	
              2.10

            	
              Tax
                Matters

            	
              19

            
	
              2.11

            	
              Recent
                Conduct of Business

            	
              20

            
	
              2.12

            	
              Brokers
                and Finders

            	
              21

            
	
              2.13

            	
              Ethical
                Practices

            	
              21

            
	
              2.14

            	
              Labor
                and Employment Matters

            	
              21

            
	
              2.15

            	
              Full
                Disclosure

            	
              25

            
	
              2.16

            	
              OFAC

            	
              25

            
	
              2.17

            	
              Other
                Representations Regarding † Management Company

            	
              25

            
	
              2.18

            	
              Schedules

            	
              26

            
	
              2.19

            	
              Deemed
                Modification to Representations and Warranties

            	
              27

            
	 	 	 
	
              ARTICLE
                3. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH SELLER
                REGARDING † MANAGEMENT COMPANY, THE PROJECTS AND THE PROJECT
                PARTNERSHIPS

            	
              27

            
	 	 
	
              3.1

            	
              Project
                Partnerships; General Partner

            	
              27

            
	
              3.2

            	
              Organization;
                Authority; No Violation

            	
              28

            
	
              3.3

            	
              Limited
                Partnership Status

            	
              28

            
	
              3.4

            	
              Securities
                Registration

            	
              29

            
	
              3.5

            	
              Leases
                and Rent Rolls

            	
              29

            
	
              3.6

            	
              Brokerage
                Arrangements

            	
              29

            
	
              3.7

            	
              Service
                Contracts

            	
              29

            
	
              3.8

            	
              Sale
                Contracts

            	
              30

            
	
              3.9

            	
              No
                Sale or Refinancing Restrictions

            	
              30

            
	
              3.10

            	
              Licenses
                and Permits

            	
              30

            
	
              3.11

            	
              Title
                and Surveys; Ownership of Project Property; Real Estate
                Taxes

            	
              30

            

    

     

    
      
        
        

      

      
        -
          i
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              3.12

            	
              Access
                and Utilities

            	
              31

            
	
              3.13

            	
              Condemnation;
                Changes in Use

            	
              31

            
	
              3.14

            	
              Compliance
                With Laws

            	
              32

            
	
              3.15

            	
              Environmental
                Matters

            	
              32

            
	
              3.16

            	
              Physical
                Reports

            	
              32

            
	
              3.17

            	
              Soil
                Defects

            	
              32

            
	
              3.18

            	
              Insurance

            	
              32

            
	
              3.19

            	
              Projects
                Under Construction; Construction Contracts

            	
              33

            
	
              3.20

            	
              Insolvency
                Proceedings

            	
              34

            
	
              3.21

            	
              Unsatisfied
                Partner Obligations

            	
              34

            
	
              3.22

            	
              Operating
                Statements

            	
              34

            
	
              3.23

            	
              Accounting

            	
              35

            
	
              3.24

            	
              Other
                Agreements or Arrangements Affecting Credits

            	
              35

            
	
              3.25

            	
              Valid
                Tax Credits

            	
              35

            
	
              3.26

            	
              Project
                Operation Requirements; Tax Credits

            	
              35

            
	
              3.27

            	
              No
                Employees

            	
              35

            
	
              3.28

            	
              No
                Other Assets

            	
              35

            
	
              3.29

            	
              Management
                of Projects

            	
              35

            
	
              3.30

            	
              Tax
                Credit Shortfalls

            	
              35

            
	 	 	 
	
              ARTICLE
                4. REPRESENTATIONS AND WARRANTIES OF THE
                PURCHASER

            	
              36

            
	
               

            	 
	
              4.1

            	
              Organization;
                Authority

            	
              36

            
	
              4.2

            	
              No
                Violation

            	
              36

            
	
              4.3

            	
              Property
                Management

            	
              37

            
	
              4.4

            	
              Certain
                Notices to Seller

            	
              37

            
	
              4.5

            	
              OFAC

            	
              37

            
	 	 	 
	
              ARTICLE
                5. COVENANTS

            	
              37

            
	 	 
	
              5.1

            	
              Satisfaction
                of Conditions

            	
              37

            
	
              5.2

            	
              Conduct
                of Business

            	
              38

            
	
              5.3

            	
              Hart-Scott-Rodino
                Act

            	
              38

            
	
              5.4

            	
              Publicity;
                Confidentiality

            	
              38

            
	
              5.5

            	
              Notices

            	
              38

            
	
              5.6

            	
              Interim
                Financial Statements

            	
              40

            
	
              5.7

            	
              Correspondence
                and Reports

            	
              40

            
	
              5.8

            	
              Exclusivity

            	
              40

            
	
              5.9

            	
              Additional
                Covenants of Seller Regarding † Management Company, the Projects and the
                Project Partnerships

            	
              41

            
	
              5.10

            	
              Tax
                Matters

            	
              43

            
	
              5.11

            	
              Employee
                Benefits

            	
              43

            
	
              5.12

            	
              Employees

            	
              45

            
	
              5.13

            	
              Costs
                and Expenses

            	
              46

            
	
              5.14

            	
              Further
                Assurances

            	
              47

            
	
              5.15

            	
              Casualty

            	
              47

            
	
              5.16

            	
              Condemnation

            	
              48

            
	
              5.17

            	
              Purchaser
                Option to Restructure Transaction

            	
              48

            
	
               

            	 	 
	
              ARTICLE
                6. DUE DILIGENCE

            	
              48

            
	
               

            	 
	
              6.1

            	
              Purchaser’s
                Due Diligence; Access

            	
              49

            
	
              6.2

            	
              Due
                Diligence Termination Option and Project Removal Rights

            	
              49

            
	
              6.3

            	
              As-Is

            	
              54

            
	
              6.4

            	
              Required
                Consents

            	
              54

            
	
              6.5

            	
              Space
                Leases

            	
              55

            
	
              6.6

            	
              Personal
                Property Leases

            	
              56

            

    

     

    
      
        
        

      

      
        - ii
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              ARTICLE
                7. INDEMNIFICATION

            	
              57

            
	 	 
	
              7.1

            	
              Seller’s
                Indemnification

            	
              57

            
	
              7.2

            	
              The
                Purchaser’s Indemnification

            	
              58

            
	
              7.3

            	
              Indemnification
                Procedures

            	
              59

            
	
              7.4

            	
              Nature
                of Other Liabilities

            	
              62

            
	
              7.5

            	
              Certain
                Limitations

            	
              62

            
	
              7.6

            	
              Amount
                of Losses

            	
              63

            
	
              7.7

            	
              Subrogation

            	
              64

            
	
              7.8

            	
              Survival
                of Representations, Warranties and Indemnities

            	
              64

            
	
              7.9

            	
              Seller
                Obligations Not Assumed by Purchaser

            	
              65

            
	
               

            	 	 
	
              ARTICLE
                8. CONDITIONS TO CLOSING

            	
              65

            
	 	 
	
              8.1

            	
              Conditions
                to Obligations of Purchaser

            	
              65

            
	
              8.2

            	
              Conditions
                to Obligations of Seller

            	
              66

            
	
              8.3

            	
              Project
                Removals Due to Closing Conditions; Potential Bifurcated
                Closing

            	
              67

            
	
              8.4

            	
              Termination
                Prior to Closing

            	
              68

            
	
              8.5

            	
              Procedure
                and Effect of Termination

            	
              69

            
	
               

            	 	 
	
              ARTICLE
                9. MISCELLANEOUS PROVISIONS

            	
              70

            
	 	 
	
              9.1

            	
              Successors
                and Assigns

            	
              70

            
	
              9.2

            	
              Notices

            	
              71

            
	
              9.3

            	
              Entire
                Agreement

            	
              73

            
	
              9.4

            	
              Amendments
                and Waivers

            	
              73

            
	
              9.5

            	
              Severability

            	
              74

            
	
              9.6

            	
              Headings

            	
              74

            
	
              9.7

            	
              Terms

            	
              74

            
	
              9.8

            	
              Governing
                Law; Jurisdiction and Venue

            	
              74

            
	
              9.9

            	
              Schedules
                and Exhibits

            	
              74

            
	
              9.10

            	
              No
                Third Party Beneficiaries

            	
              74

            
	
              9.11

            	
              Expenses

            	
              75

            
	
              9.12

            	
              Construction

            	
              75

            
	
              9.13

            	
              Mutual
                Drafting

            	
              75

            
	
              9.14

            	
              Prevailing
                Party

            	
              75

            
	
              9.15

            	
              Market
                Rate Projects

            	
              75

            
	
              9.16

            	
              Counterparts

            	
              75

            

    

    
      
        
        

      

      
        -
          iii
          -

        
          

        

      

      
        
        

      

    

    SCHEDULES
      AND EXHIBITS

     

    
      	
              Schedule

            	
              Description

            
	 	 
	
              A

            	
              Projects,
                Project Partnerships, Partners and Partnership
                Interests

            
	
              B*

            	
              Property
                Management Agreements, Development Agreements and Other Fee
                Agreements

            
	
              C*

            	
              Standalone
                Economic Guarantees

            
	
              D

            	
              Other
                Scheduled Documents

            
	
              E

            	
              Allocated
                Project Values

            
	
              1.1(a)*

            	
              Permitted
                Interest Liens

            
	
              1.1(b)-1

            	
              Pending
                Warranty Claims 

            
	
              1.1(b)-2

            	
              Other
                Excluded Claims

            
	
              1.2

            	
              Base
                Price Category Allocation

            
	
              1.4(b)

            	
              Sample
                Proration Adjustment Calculation

            
	
              1.4(c)

            	
              Incomplete
                Projects and Related Closing Credits

            
	
              1.4(d)

            	
              Schedule
                of Purchased Liabilities and Owed Liabilities

            
	
              1.5

            	
              †/†
                Interests

            
	
              2.1(c)

            	
              Personal
                Property

            
	
              2.1(d)

            	
              Other
                Assets

            
	
              2.2

            	
              Other
                Interests in Projects

            
	
              2.3

            	
              Restrictions
                on Purchased Interests

            
	
              2.5

            	
              Threatened
                Removal or Foreclosure

            
	
              2.6(a)*

            	
              Financial
                Statements

            
	
              2.7

            	
              Defaults
                under Material Agreements

            
	
              2.8

            	
              Other
                Related Agreements

            
	
              2.9

            	
              Litigation

            
	
              2.10*

            	
              Tax
                Matters

            
	
              2.11*

            	
              Recent
                Conduct of Business

            
	
              2.14(a)*

            	
              Labor
                Matters

            
	
              2.14(b)*

            	
              Seller
                Benefit Plans

            
	
              2.14(d)-1*

            	
              Employment
                Contracts

            
	
              2.14(d)-2*

            	
              Employee
                Manual and Policies

            
	
              2.14(e)*

            	
              Employment
                Related Claims

            
	
              2.14(g)*

            	
              Employee
                Participation Plan Documents

            
	
              2.17*

            	
              †
                Management Company Contracts

            
	
              3.5(a)

            	
              Rent
                Rolls

            
	
              3.5(b)*

            	
              Other
                Leases, Licenses or Occupancy Agreements

            
	
              3.6

            	
              Commission
                Agreements

            
	
              3.7*

            	
              Service
                Contracts

            
	
              3.8

            	
              Project
                Sale or Option Agreements

            
	
              3.10*

            	
              Licenses
                and Permits

            
	
              3.11

            	
              Title
                Matters

            
	
              3.13

            	
              Condemnation
                Proceedings

            
	3.15	
              Environment
                and Physical Matters

            
	
              3.18

            	Insurance
              Policies and Pending Insurance Claims

    

    
      
        
        

      

      
        -
          iv
          -

        
          

        

      

      
        
        

      

    

    

    
      	
              Schedule

            	
              Description

            
	
               

            	
               

            
	
              3.19(a)*

            	
              Projects
                Under Construction

            
	
              3.19(c)*

            	
              Capital
                Improvements Contracts

            
	
              3.21

            	
              Unsatisfied
                Project Partnership Obligations

            
	
              3.25(a)

            	
              Schedule
                of Tax Credits

            
	
              3.25(b)

            	
              Pre-8609
                Projects

            
	
              3.29*

            	
              Projects
                Managed by † Management Company, Inc.

            
	
              3.30

            	
              Tax
                Credit Shortfalls

            
	
              4.3*

            	
              Excluded
                Seller-Affiliated Projects

            
	
              5.2

            	
              Contemplated
                Actions

            
	
              5.8

            	
              Restrictions
                on Assignments and Pledges

            
	
              5.9(b)

            	
              Restrictions
                on Amendment or Terminations of Scheduled Documents

            
	
              5.9(j)*

            	
              Contemplated
                Acquisitions of Limited Partner Interests

            
	
              5.11(a)

            	
              †’s
                PTO Policies

            
	
              6.4

            	
              Required
                Consents

            
	
              8.3

            	
              Sun
                and Key Projects

            
	 	 
	
              Exhibit

            	
              Description

            
	 	 
	
              A

            	
              Defined
                Terms

            
	
              B

            	
              Form
                of Earnest Money Escrow Agreement

            
	
              C

            	
              Form
                of Holdback Escrow Agreement

            
	
              D-1

            	
              Form
                of Assignment and Assumption of Partnership Interest and Limited
                Partner
                Consent

            
	
              D-2

            	
              Form
                of Assignment and Assumption of Fee Agreement

            
	
              E

            	
              Form
                of Lender Estoppel and Consent Certificate

            
	
              F

            	
              Form
                of Assumption of Other Assumed Obligations

            
	
              G

            	
              Form
                of Bill of Sale

            
	 	 
	 	
              Note:
                Exhibits B-G to be finalized within 30 days after the Effective
                Date

            

    

    
      
        
        

      

      
        -
          v
          -

        
          

        

      

      
        
        

      

    

    PURCHASE
      AND SALE AGREEMENT

     

    This
      Purchase and Sale Agreement (the “Agreement”),
      dated
      as of February 23, 2007, is made by and among GIN Housing Partners I, L.L.C.,
      a
      Delaware limited liability company (the “Purchaser”),
      and
      the persons and entities identified as sellers on the signature pages hereto
      (individually and/or collectively as the context may require, the “Seller”).
      Unless otherwise indicated, all capitalized terms not otherwise defined herein
      shall have the meanings ascribed to such terms in Exhibit
      A
      attached
      hereto and made a part hereof.

     

    R
      E C I T A L S

     

    

      
        	
                A.

              	
                Seller
                  is engaged in the business (the “Business”)
                  of sponsoring, developing and managing each of the multi-family
                  residential projects identified by project name and address on
                  Schedule
                  A
                  (the “Projects”).

              

      

       

      
        	
                B.

              	
                Each
                  Project is owned and operated by a limited partnership or a limited
                  liability company as set forth on Schedule
                  A
                  (collectively, the “Project
                  Partnerships”),
                  and Seller, pursuant to limited partnership agreements or operating
                  agreements for each Project Partnership (the “Project
                  Partnership Agreements”)
                  owns partnership interests (both general and, in certain cases,
                  limited)
                  or member interests in each such Project Partnership as set forth
                  on
                  Schedule
                  A
                  (the “Project
                  Partnership Interests”,
                  and collectively with the Management Company Interests, the “Partnership
                  Interests”).
                  Each Project Partnership, other than the Market Rate Projects,
                  is further
                  owned, in part, by one or more third party limited partners or
                  co-general
                  partners, also as set forth on Schedule
                  A
                  (collectively, the “Limited
                  Partners”).
                  Schedule
                  A
                  also sets forth a complete and accurate list of all Project Partnership
                  Agreements (including all amendments and modifications thereto
                  and
                  restatements thereof).

              

      

      
        	
                C.

              	
                In
                  consideration for its services in connection with the Projects,
                  Seller or
                  † Management Company receives or is entitled to receive various payments,
                  including, but not limited to, cash distributions, property management
                  fees, incentive management fees, asset management fees, tax credit
                  fees,
                  principal amortization payments, disposition fees, sale and refinancing
                  proceeds, repayment of operating deficit loans and deferred development
                  fees (collectively, the “Economic
                  Interests,”
                  and together with the Partnership Interests and all other tangible
                  and
                  intangible personal property of Seller relating to the Economic
                  Interests
                  and/or the Partnership Interests, other than any interests excluded
                  from
                  the transaction contemplated hereby pursuant to the terms of this
                  Agreement, the “Purchased
                  Interests”).
                  The Economic Interests include, without limitation, rights and
                  interests
                  including (i) rights of † Management Company as property manager under
                  various property management agreements relating to the Projects
                  (the
                  “Property
                       Management Agreements”),
                  which Property Management Agreements are described on the “Property
                  Management Agreements” portion of Schedule
                  B,
                  (ii) rights of Seller or † Management Company as developer or development
                  manager under various development agreements and/or notes relating
                  to the
                  Projects (the “Development
                  Agreements”),
                  which Development Agreements are described on the “Development Agreements”
                  portion of Schedule
                  B,
                  (iii) rights of Seller or † Management Company to fees or other payments
                  under agreements and/or notes other than the Project Partnership
                  Agreements, Property Management Agreements or Development Agreements,
                  which other agreements and/or notes (the “Other
                  Fee Agreements,”
                  and together with the Property Management Agreements and the Development
                  Agreements, the “Fee
                  Agreements”)
                  are described on the “Other Fee Agreements” portion of Schedule
                  B,
                  and (iv) rights to be repaid loans made to the Project Partnerships
                  (pursuant to the Project Partnership Agreements or otherwise),
                  which loans
                  (including the identity of each applicable lender) are also listed
                  on
                  Schedule
                  B.
                  Without limiting the generality of the foregoing, the Economic
                  Interests
                  include the ability to dispose of a Project at the end of the applicable
                  Compliance Period and all right to the sale or refinancing proceeds
                  in
                  connection therewith or the liquidation proceeds, all as more fully
                  described in and subject to the provisions of the applicable Scheduled
                  Documents.

              

      

       

      
        
          
          

        

        
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                D.

              	
                Seller
                  has issued various guarantees and/or indemnities and has other
                  obligations
                  that are outstanding in connection with the Projects, including,
                  without
                  limitation, guarantees relating to operating deficits, repurchase
                  events,
                  tax credit compliance and recapture, permanent loan closing, loan
                  obligations, general partner obligations and environmental indemnities.
                  All of such guarantees or indemnities that are contained in documents
                  other than the Partnership Agreements and which are primarily guarantee
                  or
                  indemnity documents (as opposed to, for example, guarantee obligations
                  of
                  a General Partner that arise by operation of law due to the fact
                  that the
                  General Partner has unlimited liability for obligations of a Project
                  Partnership under any documents to which that Project Partnership
                  is a
                  party) are described on Schedule
                  C
                  (the “Standalone
                  Economic Guarantees”),
                  including indicating thereon the Project to which each Standalone
                  Economic
                  Guarantee relates and the identity of each Guarantor under each
                  Standalone
                  Economic Guaranty. Seller may also be a guarantor or indemnitor
                  under
                  various guarantees or indemnities not listed on Schedule
                  C,
                  but the term “Standalone Economic Guarantees” shall not include any such
                  other guarantees or
                  indemnities.

              

      

      
        	
                E.

              	
                Each
                  of the outstanding agreements (other than residential leases and
                  other
                  agreements with tenants and documents and agreements disclosed
                  on other
                  Schedules set forth herein) in Seller’s possession or control (including
                  in the possession of † Management Company or in the possession of Seller’s
                  attorneys) or of which Seller has Actual Knowledge pursuant to
                  which any
                  Seller or any Project Partnership is bound and which evidence,
                  among other
                  things, the Purchased Interests and the Seller Obligations are
                  listed on
                  Schedule
                  D.
                  Schedule
                  D
                  shall be deemed to include any document or agreement disclosed
                  in any
                  other Schedule hereto. Schedule
                  D
                  may, but shall not be required to, include any agreements that
                  have been
                  fully performed, official statements on tax exempt bond deals,
                  construction draw requests, opinion certificates, authorizing resolutions
                  or due diligence or application submittals to lenders, limited
                  partners
                  and housing authorities, entity
                  formation documents of record, repaid construction loans, land
                  purchase
                  documentation unless material obligations remain thereunder, payment
                  and
                  performance bonds, eligible basis cost certifications, continuing
                  compliance certifications, reliance letters, loans (such as operating
                  deficit loans) made to a Project Partnership but which are not
                  evidenced
                  by separate documentation other than the agreement (e.g. Project
                  Partnership Agreement) pursuant to which such loans were made (although
                  such loans are reflected on the financial statements delivered
                  to
                  Purchaser), UCC financing statements, or documents which an accurate
                  and
                  complete title search on the Projects as of the Effective Date
                  would
                  reveal, and, notwithstanding anything to the contrary herein, any
                  provision herein which references Schedule
                  D
                  shall not be required to separately reference any such items. Seller’s
                  or † Management Company’s obligations under the Partnership Agreements,
                  the Standalone Economic Guarantees, the Fee Agreements and the
                  other
                  Scheduled Documents are collectively referred to herein as the
                  “Seller
                  Obligations”.

              

      

       

      
        
          
          

        

        
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                F.

              	
                Seller
                  desires to sell to Purchaser, and Purchaser desires to purchase
                  from
                  Seller, the Purchased Interests. Purchaser shall thereby be admitted
                  as a
                  partner or member, as the case may be, in each of the Project Partnerships
                  and as both the general and limited partner in † Management Company and
                  shall become the service provider and fee recipient under each
                  of the Fee
                  Agreements (or analogous replacement agreements), all on the terms
                  and
                  subject to the conditions hereinafter set forth. Purchaser further
                  agrees,
                  in consideration therefor, to assume the Assumed Obligations (as
                  defined
                  below) on the terms and subject to the conditions hereinafter set
                  forth.
                  The owners of Purchaser contemplate forming two “sister” entities having
                  the same ultimate owners as Purchaser (Purchaser and such other
                  two
                  entities being “Purchaser
                  Upper Tier Entities”).
                  It is further contemplated that the Purchaser Upper Tier Entities
                  will
                  then own various direct and indirect subsidiaries that may take
                  title to
                  the various Purchased Interests and/or assume the various Assumed
                  Obligations.

              

      

       

      
        	
                G.

              	
                †
                  Management Company currently leases the building located at †
                  (the “Home
                  Office”),
                  which is the primary home office for the operations of the Business,
                  pursuant to a lease (the “Home
                  Office Lease”)
                  with † (“Home
                  Office Landlord”).
                  In addition to the Home Office Lease, † Management Company and/or Sellers
                  or their Affiliates (other than the Project Partnerships) lease
                  certain
                  offices or other spaces in connection with the Business (collectively,
                  the
                  “Leased
                  Spaces”),
                  and Purchaser shall (subject to obtaining Required Consents) assume
                  any
                  such leases where the lessee is an entity other than † Management Company
                  (it being understood that Purchaser will effectively acquire the
                  lessee’s
                  interest in leases under which † Management Company is the lessee by
                  virtue of Purchaser’s acquisition of † Management Company provided that
                  any required landlord consents are obtained). The term “Leased Spaces”
                  shall also include the Home Office
                  space.

              

      

       

      
        	
                H.

              	
                Included
                  in the Purchase Price is all tangible personal property owned (or,
                  to the
                  extent designated by Purchaser, leased) by Seller, † Management Company or
                  any of their Affiliates (other than the Project Partnerships) and
                  used in
                  connection with the operation of the Business (including, without
                  limitation, all office equipment, computers and computer software,
                  artwork, furniture and supplies) and located at any Project, at
                  the Home
                  Office or at any Leased Space (the “Personal
                  Property”).

              

      

      
        	
                I.

              	
                Also
                  included in the Purchase Price are all of the assets of †, including
                  without limitation all licenses, permits and other intellectual
                  property
                  and intangible assets (such as any rights to trademarks or
                  tradenames).

              

      

       

      
        
          
          

        

        
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    NOW,
      THEREFORE, in consideration of the foregoing Recitals (which are hereby
      incorporated by reference), the representations, warranties, agreements and
      conditions hereafter set forth and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, the Parties agree
      as
      follows:

     

    ARTICLE
      1. PURCHASE
      AND SALE OF INTERESTS; CLOSING

     

    1.1 Agreement
      to Purchase and Sell.

     

    (a) On
      the
      Closing Date, upon the terms and subject to the conditions set forth in this
      Agreement and after giving effect to the transactions set forth in Section
      1.6,
      Seller
      shall sell, assign, transfer, convey and deliver the Purchased Interests to
      the
      Purchaser, free and clear of all Liens other than (i) Liens in favor of Limited
      Partners for the purpose of securing obligations of the Seller to the Limited
      Partners arising under the Project Partnership Agreements or the related
      Standalone Economic Guarantees, (ii) Liens that are shown on any UCC searches
      obtained by Purchaser during the Due Diligence Period but to which Purchaser
      does not object during the Due Diligence Period, and (iii) the Liens listed
      on
Schedule
      1.1(a)
      (collectively, the “Permitted
      Interest Liens”),
      and
      Purchaser shall purchase the Purchased Interests from Seller and assume (x)
      the
      Seller Obligations relating to the period from and after Closing, and (y) such
      Seller Obligations which relate to the period prior to Closing as Purchaser
      agrees to assume at Closing (collectively, the “Assumed
      Obligations”).
      Purchaser agrees that the Purchaser Upper Tier Entities shall jointly and/or
      severally assume at Closing any Seller Obligations that relate to the period
      prior to Closing that the provider of a Required Consent requires Purchaser
      or
      any Purchaser Upper Tier Entities to assume as a condition to the granting
      of
      such Required Consent (provided that any such assumption shall not affect or
      negate Purchaser’s rights to indemnification as set forth in Section
      7.1).
      Purchaser also agrees that, to the extent required by the provider of a Required
      Consent as a condition to the granting of such Required Consent, the Purchaser
      Upper Tier Entities shall jointly and/or severally guarantee any Seller
      Obligations of General Partners that are currently guaranteed by any Seller
      or
      another party related to Seller. Purchaser may designate any Purchaser Upper
      Tier Entity and/or various directly or indirectly wholly owned subsidiaries
      of
      any of the Purchaser Upper Tier Entities as Purchaser’s designees to take title
      to the various Purchased Interests and/or (subject to the requirements of the
      providers of Required Consents) to assume Assumed Obligations. At least fifteen
      days prior to Closing, or sooner if requested by third parties in connection
      with the Required Consents or otherwise, Purchaser shall notify Seller of the
      identity of the subsidiary designated by Purchaser to take title to each of
      the
      Purchased Interests and/or to assume the Assumed Obligations.

     

    (b) Purchaser
      is not purchasing (and the Purchased Interests do not include) (i) the Pending
      Warranty Claims (which are listed on Schedule
      1.1(b)-1)
      or (ii)
      the other Claims listed on Schedule
      1.1(b)-2
      (collectively with the Pending Warranty Claims, the “Retained
      Claims”).
      All
      of the Retained Claims have been (or prior to Closing shall be) assigned to
      Seller or its designee, and all necessary consents to such assignments have
      been
      obtained and any payments required in connection therewith have been paid (or
      in
      each case will be so obtained/paid prior to Closing).

    
      
        
        

      

      
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    1.2 Purchase
      Price, Allocation and Tax Treatment.
      The
      aggregate consideration to be paid by Purchaser, in accordance with Section
      1.6(b),
      to
      Seller (the “Purchase
      Price”)
      shall
      be an amount equal to FOUR HUNDRED NINETY-FOUR MILLION THREE HUNDRED THOUSAND
      ($494,300,000) (the “Base
      Price”),
      subject to adjustment in connection with the removal of Removed Projects in
      accordance with the terms of this Agreement or adjustments in connection with
      the †/† Projects pursuant to Section
      1.5;
      plus or
      minus the Proration Adjustment, calculated in accordance with Section
      1.4.

     

    The
      Base
      Price shall be allocated among specific assets as set forth in Schedule
      1.2.
      The
      Proration Adjustment shall be allocated consistent therewith. Notwithstanding
      anything otherwise described herein, including but not limited to any
      description of Economic Interests, Purchased Interests or Partnership Interests,
      for income tax purposes, the parties shall report in a manner consistent with
      the allocation of Purchase Price set forth in Schedule
      1.2.

     

    1.3 Earnest
      Money.

     

    (a) If
      Purchaser does not exercise the Due Diligence Termination Option pursuant to
      and
      in accordance with Section
      6.2,
      then
      within 3 business days following the expiration of the Due Diligence Period,
      Purchaser shall deposit Twelve Million Dollars ($12,000,000) (the “Earnest
      Money”)
      with
      the Earnest Money Escrow Agent to be held in accordance with the Escrow
      Agreement in the form of Exhibit
      B
      attached
      hereto (the “Earnest
      Money Escrow Agreement”).
      

     

    (b) The
      Earnest Money Escrow Agent shall invest the Earnest Money in an interest bearing
      account as Purchaser may direct, and all interest earned thereon shall be deemed
      to be part of the Earnest Money. The Earnest Money shall either be applied
      against the Purchase Price at Closing or, if this Agreement is terminated prior
      to Closing, paid to Seller or refunded to Purchaser in accordance with the
      terms
      and conditions of this Agreement.

     

    1.4 Accrued
      Fees; Proration Adjustment.

     

    (a) Fees
      payable to Seller pursuant to the Project Partnership Agreements or Fee
      Agreements that are calculated with respect to a monthly, quarterly or annual
      period (e.g. property management fees and incentive management fees) shall
      be
      prorated such that Seller shall be paid the portion thereof which relates to
      Seller’s period of ownership and Purchaser shall be paid the portion thereof
      which relates to Purchaser’s period of ownership (determined on a pro rata basis
      based on the number of days in the applicable period that the respective party
      was the owner of the applicable Purchased Interest).

    (b) For
      purposes of determining the prorations hereunder relating to amounts paid by
      a
      Project Partnership from cash flow, the parties shall conduct a mock fiscal
      year
      end determination of cash flow available for distributions for each Project
      Partnership effective as of the Closing. This determination of cash flow
      available for distribution shall be based on interim financial statements
      prepared by Seller for the period beginning on the end of the last fiscal year
      for which distributions have been completed and ending on the last day of the
      month prior to Closing, and an estimate shall be made for the month of Closing
      based upon the average of the prior six months (excluding non-recurring
      extraordinary items). This determination shall be consistent with methods used
      for prior determinations of cash flow available for distribution and also
      consistent with the applicable Project Partnership Agreement; provided, however,
      if Closing occurs on a date other than the actual fiscal year end of a Project
      Partnership, then any fees or distributions payable to persons or entities
      other
      than Seller shall be prorated based on partial years; and provided further,
      however, to the extent not taken into account above, cash flow available for
      distribution shall be increased by current accrued assets and decreased by
      current accrued liabilities. Purchaser shall pay to Sellers at Closing the
      amount of any unpaid fees or distributions due to them under the foregoing
      calculation. To the extent Sellers have previously paid or distributed to
      themselves more than the amount due to them under the foregoing calculation
      and
      such distributed amounts have not thereafter been reimbursed to the applicable
      Project Partnership, Purchaser shall receive a corresponding credit against
      the
      Purchase Price. Schedule
      1.4(b)
      sets
      forth a sample calculation for a Project based on the interim statements for
      the
      month ending prior to the date hereof.

     

    
      
        
        

      

      
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    (c) If
      any
      Project Partnership listed on Schedule
      1.4(c)
      (each an
“Incomplete
      Project”)
      has
      not received its final capital contribution prior to Closing, then the Purchase
      Price shall be increased by the applicable amount set forth in Schedule
      1.4(c)
      provided
      that the basic assumptions and requirements set forth in Schedule
      1.4(c)
      with
      respect to the applicable Incomplete Project(s) are true and satisfied as of
      the
      Closing Date. Such amounts are based upon estimates of the amount of fees
      payable to the applicable Sellers from development sources as more fully set
      forth in Schedule
      1.4(c).
      If the
      basic assumptions and requirements set forth in Schedule
      1.4(c)
      with
      respect to any Incomplete Project are not true and satisfied as of the Closing
      Date, the parties shall negotiate in good faith to agree upon a reasonable
      modification to the Purchase Price adjustment contemplated by this subsection
      given the facts as they then exist, and if despite such good faith negotiation
      the parties are unable to agree upon any such adjustment, then either party
      may
      exercise the Project Removal Option with respect to the applicable Incomplete
      Project.

    (d) Schedule
      1.4(d)
      sets
      forth (i) certain liabilities of certain of the Project Partnerships pursuant
      to
      which payments thereon are expected to be received after Closing by Purchaser
      (as purchaser of the applicable Project Partnership Interests or Economic
      Interests) or † Management Company (other than the construction management fees,
      the “Purchased
      Liabilities”),
      and
      (ii) certain liabilities of certain of the Project Partnerships pursuant to
      which payments thereon are expected to be paid after Closing to the applicable
      Limited Partners or affiliates of the Limited Partners of the applicable Project
      Partnerships (the “Owed
      Liabilities”).
      The
      amounts of the Purchased Liabilities and Owed Liabilities set forth on
Schedule
      1.4(d)
      are as
      of December 31, 2006 (such amounts as of December 31, 2006, being referred
      to as
      the “Base
      Amounts”),
      and
      the agreed annual accrual rate applicable to each is set forth on Schedule
      1.4(d)
      as well.
      Within five days after the Effective Date, Schedule
      1.4(d)
      shall
      include the “A15”
cash
      flow/deficit workpapers for certain Project Partnerships, which A15 sets forth
      the past practice and methodology that Seller used to distribute and pay cash
      during and for the year 2005, and in a few cases the A15 has been modified
      by
      the parties (the past practice and methodology as modified is herein referred
      to
      as the “Methodology”).
      For
      purposes hereof (1) in those cases where there is no A15, the priorities and
      percentages set forth in the applicable Project Partnership Agreement shall
      be
      included in the Methodology and (2) unless otherwise noted on the A15, those
      priorities and percentages shown on an A15 as having an allocation of cash
      flow
      shall be used first in the Methodology and then the remaining priorities and
      percentages in the applicable Project Partnership Agreement shall be used in
      the
      Methodology. It is expected that the balances of the Purchased Liabilities
      and
      Owed Liabilities will change between December 31, 2006 and the Closing Date
      as
      the audits are finalized, as accrued interest is added, as capital contributions
      are made by Limited Partners, as debt financings are completed, and as payments
      from cash flow available for distribution are applied to pay down the balances
      (each of the foregoing events a “Change
      Event”).
      Seller shall make payments on Purchased Liabilities and Owed Liabilities in
      accordance with the Methodology. If, with respect to any Project, (x) Seller
      deviates from the Methodology, or (y) the Base Amounts are later determined
      to
      be incorrect (due to an audit), and as a result of either or both of the
      foregoing events described in the preceding clauses (x) and (y) occurring,
      there
      is a difference between the actual net balance of Purchased Liabilities and
      Owed
      Liabilities for the applicable Project as of closing (the “Actual
      Net Balance”)
      and
      what would have been the net balance of Purchased Liabilities and Owed
      Liabilities for the applicable Project had the Methodology been followed and
      the
      Base Amounts been correct (the “Expected
      Net Balance”)
      and
      such difference is greater than 5% of the Expected Net Balance for the
      applicable Project, then (i) the amount of any difference in a Purchased
      Liability which is positive (i.e. increased liability) shall be an increase
      in
      the Purchase Price and the amount of any difference in a Purchased Liability
      which is negative (i.e. reduced liability) shall be a reduction in the Purchase
      Price and (ii) the amount of any difference in an Owed Liability which is
      positive (i.e. increased liability) shall be a reduction in the Purchase Price
      and the amount of any difference in an Owed Liability which is negative (i.e.
      reduced liability) shall be an increase in the Purchase Price. As a matter
      of
      clarification and not limitation of the foregoing, (1) with respect to Projects
      107 146 134 123 8 25 (as numbered on Schedule A), if a Purchased Liability
      is
      reduced as a result of an upward adjuster payment by a Limited Partner, there
      shall be no reduction in Purchase Price as a result thereof, (2) with respect
      to
      Projects 100, 104 and 117 (as numbered on Schedule A), if an Owed Liability
      resulting from a change in the credit adjustor amount is reduced, then there
      shall be no increase in Purchase Price as a result thereof. Further,
      notwithstanding anything herein to the contrary, (1) with respect to Projects
      21, 73, 93 (as numbered on Schedule A), if a Seller makes an advance which
      is
      used to reduce a Purchased Liability, then there shall be no reduction in
      Purchase Price as a result of the reduction on the Purchased Liability and
      no
      increase in the Purchase Price as a result of the advance, and (2) any advance
      by a Partner in a Project Partnership made subsequent to the Effective Date
      that
      results in a change in the balance of a Purchased Liability or Owed Liability
      shall not result in an adjustment hereunder, and (3) the operation of
Section
      1.4(b)
      shall
      not create an adjustment under this Section
      1.4(d).

    
      
        
        

      

      
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    (e) Seller
      and Purchaser shall also prorate at Closing any amounts payable under any Space
      Leases or Personal Property Leases assumed by Purchaser, which prorations shall
      also be made based on the Parties’ respective periods of ownership.

     

    (f) Seller
      and Purchaser had initially contemplated structuring the transaction such that
      (i) Purchaser would have acquired the Property Management Agreements either
      by
      assignment thereof or by termination thereof with Purchaser entering into new
      Property Management Agreements with the Project Partnerships, and (ii) at
      Closing, † Management Company would have terminated its employees and Purchaser
      would have hired some or all of such employees. Seller and Purchaser have
      instead agreed to have Purchaser acquire ownership of † Management Company on
      the terms and subject to the conditions set forth herein but are not attributing
      any portion of the Purchase Price to the ownership interests in † Management
      Company. Accordingly, at Closing the parties shall determine † Management
      Company’s assets (including cash on hand, accrued receivables and prepaid
      expenses) and liabilities (including accrued payables and other accrued
      liabilities, including accrued liabilities relating to Employees of † Management
      Company to the extent set forth in Section
      5.11(a)),
      excluding in each case rights and obligations under the Property Management
      Agreements and any other items which are covered by other prorations under
      this
Section
      1.4.
      If such
      assets exceed such liabilities, Purchaser shall pay to Seller the net difference
      at Closing. If such liabilities exceed such assets, Seller shall credit
      Purchaser the amount of the net difference at Closing.

     

    
      
        
        

      

      
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    (g) To
      the
      extent any closing prorations are based on estimated amounts, the Parties shall
      reprorate such amounts within thirty days after the actual applicable revenues
      or expenses are known. The terms of this Section shall survive
      Closing.

     

    (h) The
      net
      prorations to be made at Closing as described in this Section are referred
      to
      herein as the “Proration
      Adjustment”.

     

    1.5 The
†
      Adjustment.
      Seller
      represents and warrants to Purchaser that (i) †, an individual (“†”),
      directly or indirectly owns (assuming † has not assigned such interests without
      notice to Seller, although the terms of this Section and definitions herein
      shall continue to apply even if † has assigned such interests) certain interests
      in †, †, and † (the “†/†
      Entities”).
      Schedule
      1.5
      sets
      forth the Projects to which the †/† Economic Interests relate (the “†/†
      Projects”).
      The
      Economic Interests held by the †/† Entities are the “†/†
      Economic Interests”,
      and
      the Seller Obligations that relate to the †/† Projects, the †/† Economic
      Interests and/or the †/† Entities are referred to herein as the “†/†
      Seller Obligations”.
      Schedule
      E
      to this
      Agreement shows the Allocated Value for (a) 100% of the †/† Economic Interests,
      (b) Seller’s portion of the †/† Economic Interests (such portion being referred
      to herein as “Seller’s
      Portion of the †/† Economic Interests”)
      and
      (c) †’s portion of the †/† Economic Interests (such portion being referred to
      herein as “†’s
      Portion of the †/† Economic Interests”).
      Seller shall use commercially reasonable efforts to obtain all necessary
      consents and/or assignments from †, such that 100% of the †/† Economic Interests
      can be transferred to Purchaser at Closing in the same manner and on the same
      terms and conditions as the other Purchased Interests and for the Allocated
      Value assigned to the †/† Economic Interests as set forth on Schedule
      E
      to this
      Agreement (such consents and/or assignments from † are referred to herein as the
“Required
      † Consents”
and
      are
      also Required Consents). If, however, Seller is not able to obtain the Required
      † Consents, then Purchaser must make one of the following elections (to be
      determined in the sole and absolute discretion of Purchaser):

    (a) Purchaser
      may elect to cause the †/† Projects to become Removed Projects, in which case
      the Base Price shall be reduced by the Allocated Value of the †/† Projects,
      Purchaser shall not acquire the †/† Economic Interests, and Purchaser shall not
      assume any obligations under any †/† Seller Obligations. 

     

    
      
        
        

      

      
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    (b) Purchaser
      may elect to cause only the †/† Economic Interests to be removed as Purchased
      Interests from the transaction, in which case the Base Price shall be reduced
      by
      the Allocated Value of the †/† Economic Interests, Purchaser shall not acquire
      the †/† Economic Interests, but Purchaser shall acquire all other Purchased
      Interests related to the †/† Projects and Purchaser shall assume the obligations
      under the †/† Seller Obligations.

     

    (c) If
†
      consents to the direct or indirect transfer by Seller of only Seller’s Portion
      of the †/† Economic Interests, then Purchaser may elect to acquire Seller’s
      Portion of the †/† Economic Interests, in which case the Base Price shall be
      reduced by the Allocated Value of †’s Portion of the †/† Economic Interests,
      Purchaser shall acquire only the Seller’s Portion of the †/† Economic Interests,
      Purchaser shall acquire all other Purchased Interests related to the †/†
Projects and Purchaser shall assume the obligations under the †/† Seller
      Obligations.

     

    1.6 Closing(s).

     

    (a) Consummation
      of the transactions contemplated hereby (the “Closing”)
      shall
      take place at the offices of Sonnenschein Nath & Rosenthal LLP, 7800 Sears
      Tower, Chicago, Illinois 60606, at 10:00 a.m., local time on a date (the
“Closing
      Date”)
      selected by Purchaser that is within thirty (30) business days following the
      day
      on which the last of the conditions set forth in Sections
      8.1
      and
8.2
      is
      fulfilled or waived (other than those conditions which can be fulfilled only
      on
      the Closing Date but subject to the waiver or fulfillment of such conditions),
      or at such other time and place and on such other date as Purchaser and Seller
      shall agree, but in no event later than the Drop Dead Date.

     

    (b) At
      the
      Closing, Purchaser shall pay to Seller an aggregate amount (the “Closing
      Payment”)
      equal
      to (1) the Base Price (as may be adjusted in connection with the removal of
      Removed Projects in accordance with the terms of this Agreement and/or as may
      be
      adjusted pursuant to Sections
      1.5(b)
      or
(c)
      above),
      minus (2) the Earnest Money, plus or minus (3) the Proration Adjustment.
 The
      Purchaser shall pay to Seller the Closing Payment by wire transfer of
      immediately available funds to the account specified by Seller.

     

    (c) At
      the
      Closing, Purchaser shall deliver to a mutually acceptable escrow agent the
      Seller Indemnity Letter of Credit and the † Management Letter of Credit to be
      held by such escrow agent pursuant to and in accordance with the terms of a
      joint order escrow agreement (“Holdback
      Escrow Agreement”)
      in the
      form of Exhibit
      C
      attached
      hereto, which Seller Indemnity Letter of Credit and † Management Letter of
      Credit shall be available to the Purchaser Indemnified Parties as their
      exclusive remedy for indemnification obligations of Seller pursuant to
Article
      7
      hereof.

    
      
        
        

      

      
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    (d) Sections
      8.3(b)
      and
8.3(c)
      allow
      for the Parties to exercise certain Project Removal Options with respect to
      Projects for which the Required Consents have not been obtained by the dates
      specified in those Sections (Projects that are so removed pursuant to
Section
      8.3(b)
      or
8.3(c)
      being
“Consent
      Removal Projects”),
      in
      which case, on and subject to the terms of this Agreement, Closing would occur
      with respect to the Projects for which Required Consents had been obtained.
      Section
      8.3(d)
      provides
      that (i) the Parties shall thereafter (unless they agree otherwise on either
      a
      Project-by-Project basis or in whole) continue to diligently and in good faith
      attempt to obtain the Required Consents with respect to the Consent Removal
      Projects, and (ii) if any such Required Consents are thereafter obtained for
      any
      such Consent Removal Projects, the Consent Removal Projects for which such
      Required Consents are obtained shall once again become Projects hereunder and
      shall cease to be Removed Projects. If any such Required Consents for Consent
      Removal Projects are obtained prior to the Drop Dead Date (as the same may
      be
      extended in accordance with Section
      8.4(e)),
      then
      the parties shall conduct one or more subsequent Closings (each a “Subsequent
      Closing”)
      on and
      subject to the terms of this Agreement pursuant to which Purchaser shall acquire
      from Seller the Purchased Interests relating to the former Consent Removal
      Projects for which such Required Consents were obtained. Each Subsequent Closing
      (if any) shall be conducted sixty days after the immediately preceding Closing
      or, if later, ten business days after the first Required Consents are obtained
      since the date of the immediately preceding Closing; provided that the final
      Subsequent Closing shall occur no later than the Drop Dead Date. Each Subsequent
      Closing shall include only former Consent Removal Projects for which Required
      Consents were obtained by the date which is ten business days prior to the
      date
      of such Subsequent Closing. The Base Price for any Subsequent Closing shall
      be
      the sum of the Allocated Values attributable Projects which are the subject
      such
      Subsequent Closing. All the terms and conditions of this Agreement relating
      to
      Closing (to the extent still applicable after taking into account the initial
      Closing) shall apply with respect to any Subsequent Closing(s).

     

    1.7 Seller’s
      Closing Deliveries.
      Subject
      to the conditions set forth in this Agreement, at the Closing, simultaneous
      with
      Purchaser’s deliveries hereunder, Seller shall deliver to Purchaser all of
      the following
      documents, certificates and instruments, all in form and substance reasonably
      satisfactory to Purchaser:

     

    (a) Assignment
      and Assumption of Partnership Interests and Limited Partner
      Consent.
      An
      Assignment and Assumption of Partnership Interest and Limited Partner Consent
      in
      the form of Exhibit
      D-1
      attached
      hereto (or such other form as may be reasonably acceptable to Purchaser, Seller
      and the consenting party(ies)) for each of the Project Partnership Interests,
      duly executed by Seller and the consenting party(ies) (each an “Assignment
      and Assumption of Partnership Interest”).
      If,
      despite using commercially reasonable efforts, Seller is unable to deliver
      an
      Assignment and Assumption of Partnership Interest, then Seller shall not be
      in
      default hereunder, but Purchaser’s receipt of a fully executed Assignment and
      Assumption of Partnership Interest for each of the Project Partnership Interests
      shall be a condition to Purchaser’s obligation to close pursuant to Section
      8.1(b).

    (b) Amendments.
      An
      amendment to each Project Partnership Agreement (the “Partnership
      Amendments”)
      duly
      executed by all of the Partners in each Project Partnership evidencing that
      Purchaser or its designee has been admitted, as of the Closing Date, as a
      General Partner in each Project Partnership. If, despite using commercially
      reasonable efforts, Seller is unable to deliver a Partnership Amendment, then
      Seller shall not be in default hereunder, but Purchaser’s receipt of a fully
      executed Partnership Amendment for each of the Project Partnership Agreements
      shall be a condition to Purchaser’s obligation to close pursuant to Section
      8.1(b).

     

    
      
        
        

      

      
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    (c) Assignment
      and Assumption of Fee Agreements.
      An
      Assignment and Assumption of Fee Agreements in the form of Exhibit
      D-2
      attached
      hereto (or such other form as may be reasonably acceptable to Purchaser, Seller
      and the consenting party(ies)) for each of the Fee Agreements (other than Fee
      Agreements under which † Management Company is the fee recipient), duly executed
      by Seller and such consenting party(ies) (each an “Assignment
      and Assumption of Fee Agreement”).
      No
      separate assignment shall be needed for fees payable to a General Partner under
      the terms of its applicable Project Partnership Agreement. † Management Company,
      Inc. (rather than † Management Company) is the property manager under certain of
      the Property Management Agreements, and such Property Management Agreements
      shall be assigned to † Management Company pursuant to Assignments and
      Assumptions of Fee Agreement. If, despite using commercially reasonable efforts,
      Seller is unable to deliver any Assignment and Assumption of Fee Agreement,
      then
      Seller shall not be in default hereunder, but Purchaser’s receipt of a fully
      executed Assignment and Assumption of Fee Agreement for each Fee Agreement
      shall
      be a condition to Purchaser’s obligation to close pursuant to Section
      8.1(b).

     

    (d) Assignment
      and Assumption of Management Company Interests.
      An
      assignment and assumption of partnership interest for each of the Management
      Company Interests duly executed by Seller;

     

    (e) Holdback
      Escrow Agreement.
      The
      Holdback Escrow Agreement, duly executed by Seller.

     

    (f) Resolutions.
      Copies
      of any resolutions required by the organizational documents of each Seller
      certified as of the Closing Date by the respective secretary (or other
      authorized representative) of such Seller as having been duly and validly
      adopted and as being in full force and effect on the Closing Date, authorizing
      the execution and delivery by each Seller of this Agreement, the Transaction
      Documents and the performance by each Seller of the transactions contemplated
      hereby and thereby, along with such further evidence of authority and incumbency
      as Purchaser may reasonably require (including copies of any powers of
      attorney).

     

    (g) Good
      Standing Certificates.
      Good
      standing certificates (or other similar certificates) for each Seller, †
Management Company and each Project Partnership, in each case no earlier than
      five (5) days prior to the Closing Date, issued by the Secretary of State (or
      other governmental authority, as applicable) of each jurisdiction in which
      such
      Seller, † Management Company or Project Partnership is either organized or
      qualified or licensed to do business.

    (h) Closing
      Certificate.
      A
      certificate executed by each Seller, dated as of the Closing Date, to the effect
      that (i) the representations and warranties of Seller contained herein were
      true and correct on the Effective Date, and are true and correct on the Closing
      Date with the same effect as though made on and as of the Closing Date; and
      (ii) Seller has performed and complied with all of the
      agreements and
      covenants to be performed or complied with by each of them under this Agreement
      prior to and as of the Closing Date.

     

    (i) UCC
      Releases.
      UCC
      termination statements releasing each of the Liens upon the Purchased Interests
      other than the Permitted Interest Liens, but only with respect to such Liens
      that are capable of being released by the filing of a UCC termination
      statement;

     

    
      
        
        

      

      
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    (j) Bank
      Documents.
      Signature and authorization cards for any Project Partnership bank accounts
      and
      any other accounts for which Purchaser or its designee needs to be a signatory
      as the assignee of any Purchased Interest;

     

    (k) Payoff
      Letters.
      Payoff
      letters, if necessary, setting forth, as of the Closing Date, the amount of
      principal and interest necessary to pay in full any indebtedness required to
      be
      discharged under this Agreement;

     

    (l) Opinion
      of Seller’s Counsel.
      An
      opinion of †, counsel to Seller, addressed to Purchaser, dated the Closing Date
      and in a form to be agreed upon during the Due Diligence Period;

     

    (m) Other
      Space Leases.
      For
      each Space Lease under which any Person other than † Management Company is the
      lessee, an assignment and assumption of such Space Lease (provided any required
      consents to assignment are obtained) or a sublease thereof (if any required
      consent to assignment cannot be obtained but a consent to sublease is either
      obtained or is not required), each in a form reasonably acceptable to Seller
      and
      Purchaser and duly executed by Seller as assignor or sublessor;

     

    (n) Bill
      of Sale.
      One or
      more bills of sale in the form of Exhibit
      G
      hereto
      transferring the Owned Personal Property to Purchaser;

     

    (o) Assignments
      of Leased Personal Property.
      For
      each item of Leased Personal Property under which any Person other than †
Management Company is the lessee, an assignment and assumption of the applicable
      Personal Property Lease (provided any required consents to assignment are
      obtained) or a sublease thereof (if any required consent to assignment cannot
      be
      obtained but a consent to sublease is either obtained or is not required),
      each
      in a form reasonably acceptable to Seller and Purchaser and duly executed by
      Seller as assignor or sublessor;

    (p) Books
      and Records.
      All
      books, records, Scheduled Documents, tax returns, licenses, permits, leases,
      Service Contracts and other documents relating to the Business, the Projects
      or
      the Project Partnerships which are in Seller’s possession or control. The
      Scheduled Documents and all other books, records, files and other materials
      owned by † Management Company or the Project Partnerships or relating to the
      Purchased Interests, the Projects or the Project Partnerships shall remain
      in
      their current location, or at Purchaser’s election Seller shall have any of such
      materials designated by Purchaser delivered at Purchaser’s expense to a location
      designated by Purchaser. Seller shall be responsible for making any copies
      of
      any such materials that Seller desires to retain, and Purchaser agrees to make
      any such materials in Purchaser’s possession or control available to Seller
      after Closing for review or copying at any reasonable time upon reasonable
      prior
      notice. Notwithstanding the foregoing, Seller shall not be required to deliver
      any of the materials in the possession of its attorneys, but all such materials
      shall be made available to Purchaser for review or copying at Purchaser’s
      expense at any reasonable time upon reasonable prior notice. The provisions
      of
      this Section
      1.7(q)
      shall
      survive Closing;

     

    
      
        
        

      

      
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    (q) FIRPTA.
      For
      each Person comprising Seller, a non-foreign transferor affidavit; 

     

    (r) †
      Assets.
      To the
      extent not covered by any of the foregoing documents, assignments of all assets
      (tangible and intangible) of †; and

     

    (s) Additional
      Agreements.
      All
      such other documents and instruments as Purchaser or its counsel shall
      reasonably request to consummate the transactions contemplated by this
      Agreement.

     

    1.8 Purchaser’s
      Closing Deliveries.
      Subject
      to the conditions set forth in this Agreement, at the Closing, simultaneous
      with
      the deliveries of Seller hereunder, Purchaser shall deliver all of the following
      documents, certificates and instruments, all in form and substance reasonably
      satisfactory to Seller and its counsel:

     

    (a) Assignment
      and Assumption of Partnership Interests.
      An
      Assignment and Assumption of Partnership Interest for each of the Project
      Partnership Interests duly executed by Purchaser;

     

    (b) Amendments.
      Duly
      executed Partnership Amendments, to the extent required to be executed by
      Purchaser or its designee as the new General Partner;

     

    (c) Assignment
      and Assumption of Fee Agreements.
      An
      Assignment and Assumption of Fee Agreement for each of the Fee Agreements (other
      than any Fee Agreements under which † Management Company is the fee recipient)
      duly executed by Purchaser.

     

    (d) Assignment
      and Assumption of Management Company Interests.
      An
      assignment and assumption of partnership interest for each of the Management
      Company Interests duly executed by Purchaser;

     

    (e) Holdback
      Escrow Agreement.
      The
      Holdback Escrow Agreement, duly executed by Seller.

    (f) Resolutions.
      A copy
      of resolutions for Purchaser and Purchaser’s member(s), certified as of the
      Closing Date by the secretary (or other authorized representative) of Purchaser
      as having been duly and validly adopted and as being in full force and effect
      on
      the Closing Date, authorizing the execution and delivery by Purchaser of this
      Agreement and the Transaction Documents and the performance by Purchaser of
      the
      transactions contemplated hereby and thereby;

     

    (g) Closing
      Certificate.
      A
      certificate executed by Purchaser and Purchaser’s member(s), dated as of the
      Closing Date, to the effect that (i) the representations and warranties of
      Purchaser contained herein were true when made on the Effective Date and are
      true on the Closing Date with the same effect as though made on and as of the
      Closing Date; and (ii) Purchaser has performed and complied with all of the
      agreements and covenants to be performed or complied with by it under this
      Agreement prior to and as of the Closing Date;

     

    
      
        
        

      

      
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    (h) Closing
      Payment.
      The
      Closing Payment as provided in Section
      1.6(b);

     

    (i) Assumptions.
      Assumptions of the Assumed Obligations (to the extent not otherwise assumed
      in
      connection with the Assignments and Assumptions of Partnership Interests or
      the
      Assignments and Assumptions of Fee Agreements) the in the form of Exhibit
      F
      attached
      hereto (or such other form as may be reasonably acceptable to Purchaser and
      Seller), duly executed by Purchaser;

     

    (j) Other
      Space Leases.
      For
      each Space Lease under which any Person other than † Management Company is
      lessee, an assignment and assumption of such Space Lease (provided any required
      consents to assignment are obtained) or a sublease thereof (if any required
      consent to assignment cannot be obtained but a consent to sublease is either
      obtained or is not required), each in a form reasonably acceptable to Seller
      and
      Purchaser and duly executed by Purchaser’s designee as assignee or sublessee;

     

    (k) Assignments
      of Leased Personal Property.
      For
      each item of Leased Personal Property under which any Person other than †
Management Company is lessee, an assignment and assumption of the applicable
      Personal Property Lease (provided any required consents to assignment are
      obtained) or a sublease thereof (if any required consent to assignment cannot
      be
      obtained but a consent to sublease is either obtained or is not required),
      each
      in a form reasonably acceptable to Seller and Purchaser and duly executed by
      Purchaser’s designee as assignee or sublessee; 

     

    (l) Opinion
      of Purchaser’s Counsel.
      An
      opinion of Sonnenschein Nath & Rosenthal LLP, counsel to Purchaser,
      addressed to Seller, dated the Closing Date and in a form to be agreed upon
      during the Due Diligence Period; 

     

    (m) Joinder
      Regarding Indemnity.
      A
      joinder executed by each of the Purchaser Upper Tier Entities whereby each
      such
      Purchaser Upper Tier Entity agrees to be jointly and severally liable for all
      of
      Purchaser’s obligations under Article
      7.

    (n) Additional
      Agreements.
      All
      such other documents and instruments as Seller or its counsel shall reasonably
      request to consummate the transactions contemplated by this
      Agreement.

     

    ARTICLE
      2. REPRESENTATIONS
      AND WARRANTIES OF EACH SELLER.

     

    Each
      Seller hereby represents and warrants to Purchaser the following:

     

    2.1 Ownership
      of Purchased Interests and Personal Property.

     

    (a) Partnership
      Interests.
      Each
      Seller is the sole lawful record and beneficial owner of the Partnership
      Interest set forth opposite such Seller’s name as set forth on Schedule
      A,
      which
      ownership is free and clear of all Liens (other than Permitted Interest Liens
      and any other Liens that will be released at or prior to Closing). Upon the
      sale
      of the Partnership Interests to Purchaser at Closing pursuant to this Agreement,
      Purchaser will acquire the entire legal and beneficial interest in, and good
      and
      marketable title to, such Partnership Interests, free and clear of all Liens
      other than Permitted Interest Liens.

     

    
      
        
        

      

      
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    (b) Economic
      Interests.
      Each
      Seller or † Management Company is the sole lawful record and beneficial owner of
      the Economic Interest set forth opposite such Seller’s name as set forth on
Schedule
      B,
      which
      ownership is free and clear of all Liens (other than Permitted Interest Liens
      and any other Liens that will be released at or prior to Closing). Upon the
      sale
      of the Economic Interests and † Management Company to Purchaser at Closing
      pursuant to this Agreement, Purchaser will acquire (directly or through its
      acquisition of † Management Company) the entire legal and beneficial interest
      in, and good and marketable title to, such Economic Interests, free and clear
      of
      all Liens other than Permitted Interest Liens.

     

    (c) Personal
      Property.
      Schedule
      2.1(c)
      sets
      forth a list of each item of Personal Property having a value of greater than
      $5,000 and a general description of all other Personal Property having a value
      of less than $5,000, in each case designating (x) the identity of each Seller
      or
† Management Company which owns or leases any of such Personal Property, and
      (y)
      whether the Personal Property is owned or leased. Seller or † Management Company
      owns the Owned Personal Property free and clear of all Liens (other than any
      to
      be released at Closing), restrictions on transfer, options, warrants and
      purchase rights. Upon the sale of the Owned Personal Property and † Management
      Company to Purchaser at Closing pursuant to this Agreement, Purchaser will
      acquire (directly or through its acquisition of † Management Company) the entire
      legal and beneficial interest in, and good and marketable title to, such Owned
      Personal Property, free and clear of all Liens. Seller or † Management Company
      leases the Leased Personal Property free and clear of (other than any set forth
      in the applicable Personal Property Lease) all Liens, restrictions on transfer,
      Taxes, options, warrants and purchase rights. Upon the assignment and assumption
      of any Personal Property Lease at Closing pursuant to this Agreement, Purchaser
      will acquire the entire leasehold interest of Seller in the applicable Leased
      Personal Property, free and clear of all Liens.

    (d) Other
      Assets.
      Schedule
      2.1(d)
      sets
      forth a list of any property comprising any portion of the Purchased Interests
      in addition to the property and assets described in subsections (a) - (c) of
      this Section
      2.1
      (the
“Other
      Assets”),
      as
      well as the identity of each Seller which owns any such Other Assets. Seller
      owns the Other Assets free and clear of all Liens (other than any to be released
      at Closing), restrictions on transfer, options, warrants and purchase rights.
      Upon the sale of the Other Assets to Purchaser at Closing pursuant to this
      Agreement, Purchaser will acquire the entire legal and beneficial interest
      in,
      and good and marketable title to, such Other Assets, free and clear of all
      Liens.

     

    (e) Retained
      Claims.
      Neither
      the pursuit nor the collection of any of the Retained Claims will have the
      effect of reducing any amounts which are expected to be paid to Purchaser after
      Closing pursuant to any of the Purchased Interests (e.g. payment on any Retained
      Claim would not result in a reduction of the amount payable in connection with
      any General Partner loan or other receivable that is included within the
      Purchased Interests).

     

    2.2 All
      Interests of Seller.
      The
      Purchased Interests comprise all direct and indirect interests of Seller and
      the
      Affiliates and principals of Seller in the Projects and any fees or other
      economic rights related thereto, other than the matters listed on Schedule
      2.2
      hereto
      (the “Excluded
      Economic Interests”)
      and
      the Retained Claims.

     

    
      
        
        

      

      
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    2.3 Other
      Restrictions on Purchased Interests.
      Except
      (i) as set forth in the Partnership Agreements, (ii) for the Permitted Interest
      Liens, (iii) as listed on Schedule
      2.3,
      or (iv)
      for this Agreement and the transactions contemplated hereby, there are no
      existing warrants, options, purchase agreements, redemption agreements, calls
      or
      rights to subscribe of any character relating to the Purchased Interests owned
      by Seller, and Seller has the full power and legal right to sell, assign,
      transfer and deliver the Purchased Interests to Purchaser (subject only to
      obtaining the Required Consents). It is understood and agreed that the foregoing
      representation is not intended to be, nor shall it be construed as, a
      representation by Seller as to what constitutes the Required Consents or that
      any consents have been obtained. 

     

    2.4 Organization;
      Authority.

     

    (a) Good
      Standing.
†
      Management Company and each Seller that is an entity is duly organized or
      formed, validly existing and in good standing under the laws of the state in
      which † Management Company or such Seller was organized or formed, and in each
      other jurisdiction where the failure to so qualify could reasonably be expected
      to have a Material Adverse Effect. † Management Company and each Seller has all
      requisite power and authority to own, lease, operate or otherwise hold its
      respective properties and assets and to carry on its respective business as
      now
      being conducted.

     

    (b) Capacity.
      Seller
      has the capacity and authority to execute and deliver to Purchaser this
      Agreement and the other Transaction Documents to which such Seller is a party,
      to perform such Seller’s obligations hereunder and thereunder and to consummate
      the transactions contemplated hereby and thereby (subject only to obtaining
      the
      Required Consents). It is understood and agreed that the foregoing
      representation is not intended to be, nor shall it be construed as, a
      representation by Seller as to what constitutes the Required Consents or that
      any consents have been obtained. 

    (c) Execution
      and Delivery.
      This
      Agreement and the other Transaction Documents to which such Seller is a party
      have been (or, in the case of Transaction Documents to be executed after the
      Effective Date, will be at or prior to the Closing) duly and validly executed
      and delivered by such Seller and, assuming due authorization, execution and
      delivery by Purchaser, constitute valid and binding obligations of such Seller,
      enforceable against such Seller in accordance with their terms, except to the
      extent that enforceability may be limited by bankruptcy, insolvency,
      reorganization, moratorium or other similar laws affecting the enforcement
      of
      creditors’ rights in general and subject to general principles of equity and the
      discretion of courts in granting equitable remedies.

     

    (d) No
      Springing Liens.
      The
      execution, delivery and performance of this Agreement by each Seller does not
      and will not, to Seller’s Actual Knowledge result in the creation or imposition
      of any Lien upon any of the Purchased Interests.

     

    
      
        
        

      

      
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    2.5 Removal
      or Foreclosure on Interest.
      To
      Seller’s Actual Knowledge, except as set forth on Schedule
      2.5,
      no
      Limited Partner has asserted grounds for or threatened removal of a Seller
      as
      general partner of a Partnership, nor has any Lender threatened foreclosure
      of
      any lien in a Seller’s general partner interest.

     

    2.6 Financial
      Statements.

     

    (a) Schedule
      2.6(a)
      contains
      the following financial statements (collectively, the “Financial
      Statements”):
      (x)
      for each Project Partnership and † Management Company, audited balance sheets
      and statements of income and cash flows as of and for each of 2001 through
      2005,
      and (y) for † Management Company, an unaudited balance sheet as of December 31,
      2006, together with the related unaudited statement of income for the
      twelve-month period ended on such date. Except as set forth on Schedule
      2.6(a),
      the
      Financial Statements, to Seller’s Actual Knowledge: (i) except as expressly
      set forth in the Financial Statements with respect to qualified opinions, were
      prepared in all material respects in accordance with GAAP applied on a
      consistent basis, except, in the case of interim Financial Statements, for
      the
      absence of notes thereto and normal year-end adjustments (the effect of which
      will not be individually or in the aggregate material); and (ii) present
      fairly, in all material respects, the financial position and results of
      operations of the applicable entities at the dates and for the periods indicated
      therein.

     

    (b) Seller
      has devised and maintained a system of internal accounting controls which are
      sufficient to provide reasonable assurances regarding the reliability of
      financial reporting and the preparation of annual financial statements for
      external purposes in accordance with GAAP. Seller has disclosed to Purchaser
      all
      2005 Tax Returns for each Project Partnership.

    2.7 Partnership
      Agreements; Fee Agreements and Seller Obligations.

     

    (a) Schedule
      A
      (to be
      delivered in installments as described in Section
      2.18)
      sets
      forth a complete and accurate list of all Project Partnership Documents
      (including all amendments and modifications thereto and restatements thereof).
      Schedule
      B
      (to be
      delivered in installments as described in Section
      2.18)
      sets
      forth a complete and accurate list of all Fee Agreements (including all
      amendments and modifications thereto and restatements thereof). Schedule
      C
      (to be
      delivered in installments as described in Section
      2.18)
      sets
      forth a complete and accurate list of all Standalone Economic Guarantees
      (including all amendments and modifications thereto and restatements thereof).
      Seller has made available to Purchaser a correct and complete copy of each
      written agreement referenced in such Schedules and all amendments and
      modifications thereto and restatements thereof. Each such agreement is in full
      force and effect and valid, binding and enforceable against the applicable
      Seller and, to Seller’s Actual Knowledge, against the other parties thereto. To
      Seller’s Actual Knowledge, except as set forth on Schedule
      2.7,
      neither
      Seller nor any other party thereto, is in breach or default under any such
      agreement in any material respect, and no event has occurred which with notice
      or lapse of time or both would constitute a breach or default thereunder by
      any
      Seller or any other party thereto.

     

    2.8 Other
      Related Agreements.
      Schedule
      D
      sets
      forth a complete and accurate list of the following contracts and other
      agreements (written or otherwise and including all amendments and modifications
      thereto and restatements thereof) relating in any way to † Management Company,
      any Purchased Interests or any Project to which any Seller, † Management Company
      or any Project Partnership is a party:

     

    
      
        
        

      

      
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    (a) any
      agreements evidencing rights or obligations of Seller or † Management Company
      with respect to the Purchased Interests or the Seller Obligations;

     

    (b) the
      Loan
      Documents and any other agreement under which it has created, incurred, assumed
      or guaranteed any Indebtedness or under which it has imposed a Lien on any
      of
      its assets, tangible or intangible;

     

    (c) The
      Regulatory Agreements;

     

    (d) The
      leases relating to the Leased Spaces (the “Space
      Leases”);

     

    (e) The
      Personal Property Leases;

     

    (f) any
      agreement that restricts the ability of † Management Company, any Seller or any
      Project Partnership to engage in the Business;

     

    (g) any
      agreement that provides for any payment or benefit in connection with any bonus,
      “phantom stock” plan or accelerated vesting or funding (such as a “golden
      parachute”) that would be due upon the execution of this Agreement or the
      Closing or in connection with the transactions contemplated hereby or any later
      (i.e. after Closing) sale (including either a sale of assets or a sale of
      ownership interests), merger or similar transaction involving † Management
      Company or any Project Partnership or General Partner interest;

    (h) any
      agreements granting to any Person an option or a first refusal, first-offer
      or
      similar preferential right to purchase or acquire any of the Purchased
      Interests; and

     

    (i) any
      agreements providing for powers of attorney or similar authorizations empowering
      any Person to act on behalf of any Seller.

     

    Seller
      has delivered or made available to Purchaser a correct and complete copy of
      each
      written agreement listed in Schedule
      D
      and all
      amendments thereto. Each such agreement is in full force and effect and is
      valid, binding and enforceable against † Management Company, the applicable
      Seller or the applicable Project Partnership and, to Seller’s Actual Knowledge,
      against the other parties thereto. To Seller’s Actual Knowledge, except as set
      forth on Schedule
      2.8,
      none of
† Management Company, Seller nor any Project Partnership nor any other party
      thereto, is in breach or default under any such agreement in any material
      respect, and no event has occurred which with notice or lapse of time or both
      would constitute a breach or default thereunder by † Management Company, any
      Seller or Project Partnership or any other party thereto. The Agreements listed
      on the Schedules
      A-D
      are all
      of the agreements pursuant to which any party might have the right to require
      that such party’s consent be obtained to the transactions contemplated by this
      Agreement.

     

    2.9 Litigation.
      Except
      as set forth on Schedule
      2.9,
      no
      litigation, action, investigation, event, or proceeding is pending with respect
      to any Seller (other than any litigation which is not (or is only tangentially)
      related to the Business and is not related to the transactions contemplated
      by
      this Agreement and which could not reasonably be expected to adversely affect
      the applicable Seller’s ability to perform its obligations hereunder or to
      adversely affect the transactions contemplated hereby) or † Management Company
      or any Project Partnership or Project. Further, to Seller’s Actual Knowledge,
      except as set forth on Schedule
      2.9,
      no such
      litigation, action, investigation, event or proceeding is threatened against
      or
      by † Management Company or any Seller, Project Partnership or Project, that, if
      adversely resolved, would: (i) have a Material Adverse Effect on †
Management Company or any Seller, Project Partnership or Project; (ii) have
      a Material Adverse Effect on the ability of † Management Company or any Seller,
      Project Partnership or Project to perform their respective obligations under
      this Agreement or any Project Document, as applicable; (iii) have a
      Material Adverse Effect on the financial condition of † Management Company or
      any Seller, Project Partnership or Project; or (iv) constitute or result in
      a material breach of any representation, warranty, covenant, or agreement set
      forth in this Agreement or any Project Document, as applicable. Seller has
      made
      available to Purchaser copies of all documents and other materials relevant
      to
      any of the matters described in this Section.

    
      
        
        

      

      
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    2.10 Tax
      Matters.
      Except
      as set forth in Schedule
      2.10:
      (a) to
      Seller’s Actual Knowledge, Seller has timely and properly filed, or caused each
      Project Partnership to file, all required Tax Returns relating to † Management
      Company, the Purchased Interests and/or the Project Partnerships with the
      appropriate Government Entity within the time period for filing such Tax
      Returns, including extensions; (b) to Seller’s Actual Knowledge, all such Tax
      Returns were true, correct and complete in all material respects; (c) to
      Seller’s Actual Knowledge, all Taxes due and owing by Seller relating to the
      Purchased Interests, and all Taxes due and owing by † Management Company or any
      Project Partnership, have been paid; (d) to Seller’s Actual Knowledge, all Taxes
      that Seller, or any Project Partnership, has been required to collect and
      withhold relating to the Purchased Interests have been timely and properly
      collected or withheld, and either have been or will be timely and properly
      paid
      over to the proper Government Entity; (e) to Seller’s Actual Knowledge, none of
† Management Company, Seller nor any Project Partnership is currently the
      beneficiary of any extension of time within which to file any Tax Return; (f)
      there are no Liens for Taxes on any of the Purchased Interests, or to Seller’s
      Actual Knowledge on the assets of any Project Partnership, other than Permitted
      Tax Liens; (g) to Seller’s Actual Knowledge, no deficiencies for Taxes relating
      to the Purchased Interests have been claimed, proposed or assessed against
      Seller, † Management Company or any Project Partnership by any Government
      Entity; (h) to Seller’s Actual Knowledge, (1) there are no pending audits,
      assessments or other actions for or relating to any liability in respect of
      Taxes relating to † Management Company or the Purchased Interests, and (2) there
      are no matters under discussion by Seller, † Management Company or any Project
      Partnership with any Government Entity with respect to Taxes relating to †
Management Company or the Purchased Interests that are likely to result in
      an
      additional Liability for Taxes with respect to any of † Management Company, the
      Seller or any Project Partnership; (i) Seller has delivered or made available
      to
      Purchaser complete and accurate copies of any audit, examination reports and
      statements of deficiencies or similar, report, form, protest, closing agreement
      or other document submitted to or received from any Government Entity with
      respect to Taxes of Seller (relating to the Purchased Interests) or † Management
      Company or any Project Partnership for all tax periods for which the statutory
      period of limitations has not closed, including, without limitation, any notices
      which may adversely affect the Credits, any Forms 8823 or other notices
      regarding compliance with Code Section 42 requirements or any Regulatory
      Agreement with respect to any Project, and all of such notices that relate
      to
      matters that have not been fully cured are listed on Schedule
      2.10;
      and (j)
      none of † Management Company, Seller or any Project Partnership has waived any
      statute of limitations in respect of Taxes or agreed to any extension of time
      with respect to a Tax assessment or deficiency, nor has any request been made
      for any such extension or waiver; (k) no Seller entity is a “foreign person”
within the meaning of Section 7701(a) of the Code; (l) to Seller’s Actual
      Knowledge, the Financial Statements fully and properly reflect, as of their
      dates, the liabilities for Taxes of each Project Partnership for all periods
      ending on or before such dates; and (m) each Project Partnership has in effect
      a
      valid election under Section 754 of the Code. Schedule
      2.10
      shall
      not be required to list matters which are not (or are only tangentially) related
      to the Business and are not related to the transactions contemplated by this
      Agreement and which could not reasonably be expected to adversely affect the
      applicable Seller’s ability to perform its obligations hereunder or to adversely
      affect the transactions contemplated hereby.

     

    
      
        
        

      

      
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    2.11 Recent
      Conduct of Business.

     

    Except
      as
      otherwise contemplated by this Agreement (including by disclosure on any other
      Schedule hereto) and except as set forth on Schedule
      2.11,
      since
      January 1, 2006:

     

    (a) To
      Seller’s Actual Knowledge, none of Seller, † Management Company or any Project
      Partnership has suffered a Material Adverse Effect;

    (b) Neither
†
      Management Company nor Seller has acquired, licensed, sold, leased or otherwise
      disposed of any properties or assets relating to the Business or the Purchased
      Interests, except in the ordinary course of business, and each has continued
      to
      run the Business and maintain its books and records on a basis consistent with
      past practice;

     

    (c) †
      Management Company has not mortgaged, pledged or otherwise subjected any of
      its
      assets to any Lien, and no Seller has mortgaged, pledged or otherwise subjected
      any Purchased Interest to any Lien;

     

    (d) Neither
†
      Management Company nor Seller has issued or sold, assigned or transferred any
      Interests;

     

    (e) To
      Seller’s Actual Knowledge, none of Seller, † Management Company, any Project
      Partnership or any Project has sustained or incurred any material loss or damage
      with respect to the Business or its Project (whether or not insured against)
      on
      account of fire, flood, accident or other calamity which has materially
      interfered with the operation of the Business and which has not been remedied,
      or paid, discharged, settled, compromised or satisfied or agreed to pay,
      discharge, settle, compromise or satisfy, any claim (whether or not insured
      against), other than claims involving solely money damages not in excess of
      $25,000. All such agreements to discharge, settle, compromise or satisfy, any
      claim (other than claims involving solely money damages not in excess of
      $25,000) are listed on Schedule
      2.11;

     

    
      
        
        

      

      
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    (f) Seller
      (with respect to any Taxes relating to the Business) has not, nor has †
Management Company or any Project Partnership, made, changed or rescinded any
      express or deemed election relating to Taxes other than in connection with
      filing a Tax Return in the ordinary course of business, settled or compromised
      any claim or controversy relating to Taxes, intentionally agreed to any
      adjustment of any Tax attribute, surrendered any right or claim to a refund
      of
      Taxes, consented to any extension or waiver of the statute of limitations period
      applicable to any Taxes which extension period has not expired, Tax Return
      or
      claim for Taxes, amended any Tax Return, entered into any closing agreement
      with
      respect to Taxes, or intentionally made any change to any of its material Tax
      accounting policies or procedures; and

     

    (g) None
      of
      Seller, † Management Company or any Project Partnership has agreed to take any
      of the foregoing actions.

     

    2.12 Brokers
      and Finders.
      There
      are no broker, finder or investment banker fees or commissions owed or that
      could become payable by Seller, † Management Company or any Project Partnership
      in connection with the transactions contemplated by this Agreement.

     

    2.13 Ethical
      Practices.
      Except
      as permitted under applicable Law, neither † Management Company nor Seller has
      offered or given (nor has caused any Project Partnership to offer or give),
      and
      to the Seller’s Actual Knowledge no Person has offered or given on its or any
      Project Partnership’s behalf: (a) anything of value to any official of a
      Governmental Entity, any political party or official thereof, or any candidate
      for political office; (b) anything with a value in excess of $100 to any
      customer; or (c) anything of value to any other Person, in any such case while
      knowing or having reason to know that all or a portion of such money or thing
      of
      value may be offered, given or promised, directly or indirectly, to any Person
      described in (a), (b) or (c) above, in any such case, for the purpose of the
      following: (x) influencing any action or decision of such Person, in such
      Person’s official capacity, including a decision to fail to perform such
      Person’s official function; (y) inducing such Person to use such Person’s
      influence with any Governmental Entity to affect or influence any act or
      decision of such Governmental Entity to assist Seller or any Project Partnership
      in obtaining or retaining business for, or with, or directing business to,
      any
      Person; or (z) constituting a bribe, kickback or illegal or improper payment
      to
      assist Seller in obtaining or retaining business for, or with, or directing
      business to, any Person.

    2.14 Labor
      and Employment Matters.
      

     

    (a) Except
      as
      set forth on Schedule
      2.14(a):

     

    (i) neither
†
      Management Company nor Seller is a party to any collective bargaining agreement
      (including any memoranda of understanding or letter agreements), neutrality
      agreement, or any similar agreement covering any of the Employees;

     

    (ii) neither
†
      Management Company nor Seller has received written notice that any such
      agreement is currently under negotiation by † Management Company or Seller or
      any of their Affiliates which would affect † Management Company, the Projects or
      the Project Partnerships nor has Seller or † Management Company received any
      notice or claim of any unfair labor practice;

     

    
      
        
        

      

      
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          21 -

        
          

        

      

      
        
        

      

    

     

    (iii) to
      Seller’s Actual Knowledge, there are no activities or proceedings of any labor
      union to organize any of the Employees;

     

    (iv) neither
†
      Management Company nor Seller has
      experienced any material work stoppage or other material labor difficulty since
      January 1, 2004;

     

    (v) as
      of the
      date hereof, and since January
      1, 2005,
      there
      have not been any plant closings, mass layoffs or other terminations of the
      Employees that would create any obligations upon or liabilities for Purchaser
      or
† Management Company under the Worker Adjustment and Retraining Notification
      Act, 29 U.S.C. 2101 et seq. (the “WARN
      Act”)
      or any
      applicable State WARN Act, and none have been planned or announced for the
      future; and

     

    (vi) to
      Seller’s Actual Knowledge, all of the Employees are lawfully authorized to work
      in the jurisdictions in which they are working according to applicable
      immigration laws, are properly classified as an exempt or non-exempt employee
      under the Fair Labor Standards Act or other applicable wage and hour law, and
      have been paid all wages (including any required minimum wages and overtime
      pay)
      and other compensation owed for all services performed by such
      Employee.

    (b) Schedule
      2.14(b)
      lists
      each Employee Benefit Plan maintained by Seller or † Management Company or their
      ERISA Affiliates (collectively, the “Seller
      Benefit Plan”)
      (and
      designates the party that maintains each such Employee Benefit Plan),
      and:

     

    (i) Each
      Seller Benefit Plan that is an “employee pension benefit plan” (as defined in
      section 3(2) of ERISA) is a “defined contribution plan” (as defined in Section
      3(34) of ERISA) and neither Seller nor † Management Company nor any of their
      respective ERISA Affiliates has ever sponsored, maintained or contributed to
      a
“defined benefit plan” (as defined in Section 3(35) of ERISA) that is subject to
      Title IV of ERISA or participated in or contributed to a “multiemployer plan”
(as defined in Section 3(37) of ERISA);

     

    (ii) To
      Seller’s Actual Knowledge, no
      Seller
      Benefit Plan is a "nonqualified deferred compensation plan" within the meaning
      of section 409A of the Code that is subject to the requirements of section
      409A
      of the Code and the regulations thereunder;

     

    (iii) Other
      than routine claims for benefits, there are no pending or, to Seller’s Actual
      Knowledge, overtly threatened claims by or on behalf of any Seller Benefit
      Plan,
      or by or on behalf of any participants or beneficiaries of any Seller Benefit
      Plan, alleging any violation of ERISA or other applicable law, or alleging
      a
      violation of the terms of any such plan;

     

    
      
        
        

      

      
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    (iv) Each
      Seller Benefit Plan that is an “employee pension benefit plan” within the
      meaning of section 3(2) of ERISA has received a favorable determination letter
      from the IRS that such plan is qualified under section 401(a) of the Code and,
      to Seller’s Actual Knowledge, nothing has occurred since the date of the most
      recent favorable determination letter that would adversely affect reliance
      upon
      such determination or qualification;

     

    (v) To
      Seller’s Actual Knowledge, no Seller Benefit Plan is the subject of any
      investigation, audit or other such adverse action on the part of the IRS, the
      United States Department of Labor or the Pension Benefit Guaranty Corporation
      and each Seller Benefit Plan is in material compliance with the terms of the
      plan documents, ERISA, the Code, and other applicable Law;

     

    (vi) To
      Seller’s Actual Knowledge, all IRS Forms 5500 and all annual reports required to
      be filed with respect to any Seller Benefit Plan have been timely filed with
      the
      appropriate Governmental Entity;

     

    (vii) To
      Seller’s Actual Knowledge, neither Seller, † Management Company, nor any of
      their ERISA Affiliates is delinquent in any contribution obligations with
      respect to any Seller Benefit Plan and all contributions to each such plan
      have
      been made in accordance with the applicable timing requirements of ERISA and
      the
      Code;

    (viii) To
      Seller’s Actual Knowledge, each Seller Benefit Plan that is subject to COBRA has
      been operated in material compliance with COBRA and Seller, † Management
      Company, and their respective ERISA Affiliates, as applicable, have satisfied
      all current COBRA obligations with respect to current or former Employees.
      Other
      than COBRA continuation coverage, neither Seller, † Management Company nor any
      of their ERISA Affiliates provide any post-employment or retiree health or
      welfare benefits to former Employees;

     

    (ix) To
      Seller’s Actual Knowledge, no “prohibited transaction" as defined in section 404
      of ERISA and section 4975 of the Code has been entered into with respect to
      any
      Seller Benefit Plan for which a statutory, individual or class exemption is
      not
      applicable;

     

    (x) Neither
†
      Management Company, Seller, nor any of their ERISA Affiliates is an "employee
      benefit plan" as defined in section 3(3) of ERISA, nor are they an
      Affiliate of an employee benefit plan; and none of the Project Partnerships
      constitute "plan assets" as that term is used in 29 C.F.R 2510.3-101;
      and

     

    (xi) With
      respect to each Seller Benefit Plan, Seller shall make available for review
      by
      Purchaser within ten (10) days after the Effective Date true and complete copies
      of (1) the plan documents, summary plan descriptions, any other document
      required to be filed with a Governmental Entity or any document distributed
      to
      any employee, participant or beneficiary of such Seller Benefit Plan, (2) the
      most recent determination letter received from the IRS, (3) the last Form 5500
      Annual Report and actuarial report, (4) the latest actuarial valuations and
      financial statements, (5) all related trust agreements, insurance contracts
      or
      other funding agreements that implement or apply to the Seller Benefit Plan,
      and
      (6) any recordkeeping, administrative, or other service agreements that apply
      to
      the Seller Benefit Plan.

     

    
      
        
        

      

      
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    (c) The
      Employee List to be delivered to Purchaser pursuant to Section
      5.12
      shall be
      true, correct and complete. All Employees engaged in the conduct of the Business
      are Employees of † Management Company. Except as Seller has notified Purchaser
      previously in writing, to the best of Seller’s knowledge and belief, no Employee
      or group of Employees of † Management Company has given oral or written notice
      to Seller or † Management Company of any plans to terminate his or her
      employment with † Management Company.

     

    (d) Except
      as
      set forth on Schedule 2.14(d)-1,
      (i) †
Management Company is not currently a party to or bound by employment,
      confidentiality, non-competition, non-solicitation, or proprietary rights
      agreements with any
      Employee, and (ii) there are no agreements, arrangements or understandings
      that
      would restrict the ability of † Management Company to terminate the employment
      of any of its Employees at any time, at will, without liability. Set forth
      on
Schedule 2.14(d)-2
      is an
      accurate and complete list of all current and prior, to the extent currently
      binding, manuals, brochures, publications, policies, procedures or similar
      documents of † Management Company regarding compensation, benefits, perquisites,
      hiring, evaluation, supervision, training, termination and promotion of
      employees, office administration and personnel matters and all communications
      to
      Employees concerning such matters.

    (e) There
      are
      no administrative proceedings or court complaints pending or, to Seller’s Actual
      Knowledge, threatened against † Management Company before the U.S. Equal
      Employment Opportunity Commission or any state or federal court or agency
      concerning alleged employment discrimination or any other matters relating
      to
      the employment of labor, other than those identified on Schedule
      2.14(e).
      There
      is no unfair labor practice charge or complaint pending or, to Seller’s Actual
      Knowledge, threatened against † Management Company before the National Labor
      Relations Board or any similar state or local body. There is not pending or
      to
      Seller’s Actual Knowledge threatened, nor has there been within the last three
      (3) years, any union organization attempts, labor disputes or general work
      stoppage or slowdowns due to labor disagreements with respect to † Management
      Company. There is no employee grievance or arbitration proceeding pending
      against † Management Company. † Management Company is not a party, directly or
      indirectly, to any contract, agreement or order with any Governmental Authority
      which would require it to maintain any affirmative action plan or similar
      program or arrangement.

     

    (f) Neither
      Seller nor † Management Company are parties to any agreements or arrangements or
      are subject to any requirement that alter Employees’ status as employees-at-will
      who may be terminated at any time without cause or notice, except as otherwise
      provided by applicable law.

     

    
      
        
        

      

      
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    (g) Neither
      Seller nor † Management Company is party to any agreement with any Employee or
      other Person that would entitle any Employee or other Person to  any
      payment or benefit payable in connection with any bonus, “phantom stock” plan or
      accelerated vesting or funding (such as a “golden parachute”) that is triggered
      by the execution of this Agreement or the Closing or in connection with the
      transactions contemplated hereby, other than pursuant to the documents listed
      on
Schedule
      2.14(g)
      (providing for certain payments to certain Employees that will be due upon
      consummation of the sale of certain of the Project Partnership Interests),
      which
      payment obligations shall be satisfied by Seller at Closing (and Purchaser
      shall
      not be responsible for any such payments). Neither Seller nor † Management
      Company is party to any agreement with any Employee or other Person that would
      entitle any Employee or other Person to any such payment upon any later (i.e.
      after Closing) sale (including either a sale of assets or a sale of ownership
      interests), merger or similar transaction involving † Management Company, any
      Project Partnership or any General Partner interest.

    2.15 Full
      Disclosure.
      To
      Seller’s knowledge (as described below in this Section), there is no fact unique
      to † Management Company or any Seller, Project, Project Partnership or the
      Business (as opposed to, for example, a market condition generally or a risk
      that affects a region or industry generally) that Seller has not disclosed
      to
      Purchaser in writing that materially adversely affects or may materially
      adversely affect † Management Company or the Project Partnerships or the value
      of the Purchased Interests. For purposes of this Section
      2.15,
      Seller’s knowledge shall mean (a) the actual current recollection of any one or
      more of †, †, †, † or †, or (b) the information contained in any notice to a
      Seller or Project Partnership or † Management Company from any Limited Partner,
      Lender or Governmental Entity.

     

    2.16 OFAC.
      Each
      Seller and † Management Company and each of its direct and indirect beneficial
      owners is not, and will not be, a person or entity (a “Prohibited
      Person”)
      with
      whom Purchaser is restricted from doing business with under the Uniting and
      Strengthening America by Providing Appropriate Tools Required to Intercept
      and
      Obstruct Terrorism Act of 2001, H.R. 3162, Public Law 107-56 (commonly known
      as
      the “USA
      Patriot Act”)
      and
      Executive Order Number 13224 on Terrorism Financing, effective September 24,
      2001 and regulations promulgated pursuant thereto, including without limitation
      persons and entities named on the Office of Foreign Asset Control Specially
      Designated Nationals and Blocked Persons List (the “List”).
      Seller and each Project Partnership have in place adequate policies and
      procedures to assure that no tenant at a Project is a person named on the List
      and, to Seller's Actual Knowledge, none of the tenants at any Project is a
      person named on the List or is otherwise a Prohibited Person.

     

    2.17 Other
      Representations Regarding † Management Company.
      

     

    (a) Set
      forth
      on Schedule 2.17
      is an
      accurate and complete list of each contract or other agreement (other than
      the
      Property Management Agreements and any Space Leases or Personal Property Leases
      to which † Management Company is a party or any of the other agreements listed
      on Schedule D) to which † Management Company is a party or is bound
      which
      (i) cannot be terminated without cause in less than 60 days and/or (ii) cannot
      be terminated without cause unless a penalty or termination payment is made.
      Seller
      has delivered or made available to Purchaser a correct and complete copy of
      each
      written agreement listed in Schedule
      2.17
      and all
      amendments thereto, and Seller will make available to Purchaser at each Project
      site or the Home Office upon request true, correct and complete copies of any
      of
      the other contracts to which † Management Agreement is a party. Each such
      agreement is in full force and effect and is valid, binding and enforceable
      against † Management Company and, to Seller’s Actual Knowledge, against the
      other parties thereto. To Seller’s Actual Knowledge, except as set forth on
Schedule
      2.17,
      neither
† Management Company nor any other party thereto is in breach or default under
      any such agreement in any material respect, and no event has occurred which
      with
      notice or lapse of time or both would constitute a breach or default thereunder
      by † Management Company or any other party thereto. 

     

    
      
        
        

      

      
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    (b) Except
      as
      set forth on Schedule 2.17,
†
      Management Company has (and at the time of Closing will have) no Liabilities
      except (x) Liabilities reflected in the Financial Statements of † Management
      Company, and (y) under the executory portion of any contract or other agreement
      to which † Management Company is a party which (i) was made in the ordinary
      course of business, (ii) is disclosed on a Schedule hereto, and (iii) does
      not otherwise constitute or result from a breach of any representation, warranty
      or covenant of this Agreement or from a breach or default by † Management
      Company under any contract or other agreement. 

    2.18 Schedules.
      As of
      the Effective Date, Seller has not yet delivered the Schedules designated with
      an asterisk in the list of Schedules at the beginning of this Agreement (and
      with respect to Schedule A, the Schedule delivered by Seller does not yet list
      the Project Partnership Agreements). Seller shall deliver such remaining
      Schedules (and the balance of Schedule A) within 35 days after the Effective
      Date. Failure to deliver such Schedules (and the balance of Schedule A) in
      accordance with such timeframe shall not be deemed to be a default by Seller
      unless Seller fails to deliver all of such Schedules (and the balance of
      Schedule A) within 75 days after the Effective Date, but to the extent Seller
      fails to deliver all of such Schedules (and the balance of Schedule A) within
      60
      days after the Effective Date, then the Due Diligence period shall be extended
      by one day for each day after such 60th
      day
      until the balance of the Schedules (and the balance of Schedule A) have been
      delivered. The Project Partnership Agreements that will be added to Schedule
      A
      and the information to be included on Schedules B and C are included within
      Schedule D (which has been delivered as of the Effective Date) but will be
      separately delivered by Seller (as completed Schedules A-D) within the time
      period set forth above. Prior to the Closing, Seller shall promptly supplement
      or amend the Schedules delivered in connection herewith with respect to any
      matter of which Seller has Actual Knowledge which, if existing, occurring or
      known at the date of this Agreement, would have been required to be set forth
      or
      described in any such Schedule or which is necessary to correct any information
      in any such Schedule which has been rendered inaccurate, in any material
      respect, thereby (provided that Seller shall not be obligated to update
Schedules
      2.17, 3.5(a), 3.5(b), 3.7, 3.10 or 3.19(c)
      more
      frequently than monthly). Notwithstanding the foregoing, no supplement or
      amendment to any Schedule pursuant to this Section
      2.18
      shall
      have any effect for the purpose of determining whether a Material Representation
      Breach exists or with respect to Purchaser’s right to terminate this Agreement
      pursuant to Section
      8.4(c)
      (i.e.
      Purchaser shall be entitled to rely on the accuracy of the representations
      and
      warranties herein as made on the Effective Date, and if any supplement or
      amendment to any Schedule reveals an inaccuracy in any representation or
      warranty herein as made on the Effective Date, Purchaser shall have the rights
      and remedies set forth in Sections
      6.2(h)
      and
8.4(c)
      with
      respect to breaches of representations and warranties).
      However,
      if Purchaser does not terminate this Agreement pursuant to Section
      6.2
      or
Section
      8.4,
      then
      after the end of the Due Diligence Period all of the representations and
      warranties of Seller set forth in Articles
      2
      and
3
      of this
      Agreement shall be deemed modified to the extent that any of the Schedules
      hereto have been supplemented or amended pursuant to this Section
      2.18
      prior to
      the date which is 2 business days prior to the end of the Due Diligence Period.
      Any supplementing or amending of any Schedules shall be done in such a manner
      as
      to “highlight” any changes to the then-existing Schedules such that it will be
      readily apparent how the applicable Schedule has been amended or updated. If
      Purchaser determines that any matter revealed by any update or amendment to
      any
      Schedule constitutes a Material Representation Breach (thus entitling Purchaser
      to the remedies set forth in Section
      6.2(h))
      or
      results in a Material Adverse Effect (thus entitling Purchaser to the remedies
      set forth in Section
      8.4(c)),
      then
      Purchaser shall notify Seller of such determination within ten business days
      after receiving the applicable update or amendment (and, accordingly, if the
      update or amendment was received by Purchaser after the date that is ten
      business days prior to the end of the Due Diligence Period, then the Due
      Diligence Period as it relates to the matter(s) covered by the applicable update
      or amendment shall be extended to the date that is ten business days after
      Purchaser’s receipt of the update or amendment). If Purchaser does not so notify
      Seller within such ten business day period, then the representations and
      warranties of Seller set forth in Articles
      2
      and
3
      of this
      Agreement shall be deemed modified to include the applicable matter revealed
      by
      the update or amendment to the applicable Schedule.

    
      
        
        

      

      
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    2.19 Deemed
      Modification to Representations and Warranties.

     

    If
      Purchaser does not terminate this Agreement pursuant to Section
      6.2
      or
Section
      8.4,
      then
      after the end of the Due Diligence Period all of the representations and
      warranties of Seller set forth in Articles
      2
      and
3
      of this
      Agreement shall be deemed modified to the extent that any of the information
      contained in any of the documents listed on Schedules A-C, the “Equity
      Documents”
portion
      of Schedule D, or in the described in subsections (b)-(e) of Section
      2.8,
      as
      updated, reveals that any of such representations and warranties are
      inaccurate.

     

    The
      representations and warranties set forth in this Article
      2
      shall
      survive Closing to the extent set forth in Section
      7.8.

     

    
      	ARTICLE 3.	 	
              ADDITIONAL
                REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH SELLER REGARDING
†
                MANAGEMENT COMPANY, THE PROJECTS AND THE PROJECT
                PARTNERSHIPS.

            

    

     

    Each
      Seller hereby represents and warrants to Purchaser the following:

     

    3.1 Project
      Partnerships; General Partner.
      Schedule
      A
      sets
      forth a complete and accurate list of: (i) the name of each Project; (ii) the
      address of each Project; (iii) the Project Partnership owning each Project;
      (iv)
      the state of organization or formation of each Project Partnership; (v) the
      Seller entity owning the General Partner interest and any limited partnership
      interest in † Management Company and each Project Partnership; (vi) the
      ownership percentage for each of the Interests in each Project Partnership
      and †
Management Company; and (vii) the name, address and percentage interest of
      the
      Limited Partner(s) in each Project Partnership (assuming the Limited Partners
      have not transferred their interest without notice to Seller). Seller has
      received no notice that any Limited Partner intends to transfer its interest
      in
      any Project Partnership, and to Seller’s Actual Knowledge there is no such
      transfer proposed or contemplated. Except as otherwise expressly noted on
Schedule
      A,
      the
      Seller set forth as the General Partner for each Project Partnership in
Schedule
      A
      is the
      sole General Partner in such Project Partnership and has sole management control
      and authority over such Project Partnership and Project operations and matters
      (subject to the terms of the Scheduled Documents). Except as expressly set
      forth
      in the applicable Scheduled Documents, there are no rights, contracts or other
      agreements or commitments pursuant to which any other Person has the right
      to
      become a General Partner of a Project Partnership.

     

    
      
        
        

      

      
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    3.2 Organization;
      Authority; No Violation.
      Each
      Project Partnership is duly organized or formed, validly existing and in good
      standing under the laws of the state in which such Project Partnership was
      organized or formed and in the state in which its Project is located. †
Management Company and each Project Partnership has undertaken all acts,
      including without limitation, the filing of all certificates and the payment
      of
      all fees, Taxes, and other sums necessary for † Management Company or such
      Project Partnership to operate as a limited partnership or limited liability
      company in the state in which † Management Company or such Project Partnership
      was organized or formed (in the case of each Project Partnership) and in the
      state in which its Project is located and to enable such Project Partnership
      to
      engage in its business and operate its Project in accordance with the Scheduled
      Documents relating to such Project.

     

    3.3 Limited
      Partnership Status.
      No
      event has occurred that has caused, and Seller has not acted in any manner
      that
      will cause: (i) † Management Company or a Project Partnership to be treated
      for federal income tax purposes as an association taxable as a corporation,
      or
      (ii) † Management Company or a Project Partnership to fail to qualify as a
      limited partnership under the Laws under which † Management Company or such
      Project Partnership was formed. To Seller’s Actual Knowledge, all consents or
      approvals of any Governmental Entity, or any other Person, necessary in
      connection with the transactions contemplated by the † Management Company
      partnership agreement and each Project Partnership Agreement or necessary to
      admit each Limited Partner to each Project Partnership, have been obtained
      by
      Seller. To Seller’s Actual Knowledge, all outstanding units of partnership
      interest or other equity interest of † Management Company and each Project
      Partnership (i) have been duly authorized and are validly issued, fully paid
      and
      nonassessable and (ii) are subject to no restrictions except as set forth in
      the
      applicable Scheduled Documents. Neither † Management Company nor, to Seller’s
      Actual Knowledge, except as set forth in the applicable Scheduled Documents,
      any
      of the Project Partnerships has issued or granted or is a party to any
      outstanding commitments, agreements, options, arrangements or undertakings
      of
      any kind relating to units of partnership interest or any other equity interest
      of † Management Company or such Project Partnership or securities convertible
      into units of partnership interest or any other equity interest of † Management
      Company or such Project Partnership. To Seller’s Actual Knowledge, none of the
      representations, warranties or statements contained in the Scheduled Documents,
      contain any untrue statement of a material fact or omit to state any material
      fact necessary in order to make any of such representations, warranties or
      statements not misleading. 

     

    
      
        
        

      

      
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    3.4 Securities
      Registration.
      To
      Seller’s Actual Knowledge, neither † Management Company nor any Project
      Partnership is under any obligation, and Seller has taken no action (and Seller
      knows of no event or action which has occurred) that would cause any Project
      Partnership or † Management Company to be obligated, under any federal or state
      law, rule, or regulation to register the Interests, and the Project Partnerships
      and † Management Company and each Seller have fully complied with any and all
      federal and state securities laws, as well as all applicable exemptions
      available for the sale of Interests without registration.

     

    3.5 Leases
      and Rent Rolls.
      The
      rent rolls (the “Rent
      Rolls”)
      for
      each Project attached hereto as Schedule
      3.5(a)
      are
      true, correct and complete in all material respects as of the date of each
      such
      Rent Roll. The Rent Rolls list all tenants or other Persons entitled to
      occupancy under any all leases, licenses or other occupancy agreements in effect
      on the date of the applicable Rent Roll relating to any portion of the
      applicable Project, except for those leases, licenses and occupancy agreements
      (excluding pending tenant lease applications) otherwise listed on Schedule
      3.5(b)
      (all of
      such leases, licenses and occupancy agreement (both those relating to the
      tenants listed on the Rent Rolls and those listed on Schedule
      3.5(b))
      being
      referred to herein as the “Leases”).
      There
      are no leases, license agreements, occupancy agreements or tenancies for any
      space in any Project other than those relating to the tenants listed on the
      Rent
      Rolls and those listed on Schedule
      3.5(b),
      and to
      Seller’s Actual Knowledge there are no oral agreements relating to use or
      occupancy of any portion of any Project or any oral leases which will be binding
      upon any portion of any Project or Project Partnership. Seller has delivered
      to
      Purchaser a true, correct and complete copy of the form of lease used for each
      Project and will make available to Purchaser at each Project site upon request
      true, correct and complete copies (or the originals) of each Lease (if Purchaser
      desires to copy any of the Leases, Purchaser may do so at Purchaser’s sole cost
      and expense). Except as may be otherwise disclosed on the Rent
      Rolls:
      (i) each
      of the Leases is in full force and effect;
      (ii)
no
      tenant
      is entitled to any free rent, rebate, rent concession, deduction or offset
      which
      is not set forth in the such tenant’s Lease;
      (iii)
      except
      for matters set forth in Schedule
      2.9,
      the
      applicable Project Partnership has not received from any tenant under a Lease
      a
      notice of material violation of any statute, rule, law, ordinance or other
      legal
      regulation pertaining to any Project or any part thereof; and
      (iv)
all
      security deposits required under the Leases have been paid and are being held
      by
      the applicable Project Partnership.

    3.6 Brokerage
      Arrangements.
      Except
      as set forth in Schedule
      3.6,
      no
      Seller or Project Partnership is presently under any commitment to any real
      estate broker, rental agent, finder, syndicator or other intermediary with
      respect to any Project Partnership, any Project, or any portion
      thereof.

     

    3.7 Service
      Contracts.
      Attached hereto as Schedule
      3.7
      is,
      along with the “Service Contracts” portion of Schedule D, a complete and
      accurate schedule of all Service Contracts now in effect which (i) cannot be
      terminated without cause in less than 60 days and/or (ii) cannot be terminated
      without cause unless a penalty or termination payment is made. Except for the
      Service Contracts and the other agreements described in the preceding sentence
      and other agreements disclosed on any other schedule hereto, there are no
      written or oral agreements relating to the management, leasing, operation or
      maintenance of any Project or any portion thereof other than agreements not
      required by the terms of this Agreement to be listed on any Schedule. The
      Service Contracts are each in full force and effect, and no Project Partnership
      has delivered or received any notice alleging any default in the performance
      or
      observance of any of the covenants, conditions or obligations to be kept,
      observed or performed under any of the Service Contracts. Seller has delivered
      or made available to Purchaser a true, correct and complete copy of each of
      the
      Service Contracts (including all amendments thereto) which (x) cannot be
      terminated without cause in less than 60 days and/or (y) cannot be terminated
      without cause unless a penalty or termination payment is made, and Seller will
      make available to Purchaser at each Project site or the Home Office upon request
      true, correct and complete copies of any of the other Service
      Contracts.

     

    
      
        
        

      

      
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    3.8 Sale
      Contracts.
      Except
      as set forth in Schedule
      3.8,
      neither
      Seller nor any Project Partnership has entered into any contracts for the sale
      of any of the Projects, nor do there exist any rights of first refusal or
      options to purchase any of the Projects, except for any options set forth in
      any
      Partnership Agreement. Except pursuant to any documents listed on the
“Other
      Documents”
portion
      of Schedule
      D,
      no
      Project Partnership has any continuing contractual liability (i) for
      indemnification or otherwise under any agreement relating to the sale of real
      estate previously owned, whether directly or indirectly, by such Project
      Partnership or (ii) to pay any additional purchase price for any
      Project.

    3.9 No
      Sale or Refinancing Restrictions.
      There
      are no restrictions on the sale or refinancing of the Projects, other than
      the
      restrictions set forth in the Scheduled Documents, under Section 42, Section
      47
      or Section 142 of the Code or under other applicable state or federal law
      respecting the Credits or tax exempt bond financing or other governmental
      financing.

     

    3.10 Licenses
      and Permits.
      Schedule
      3.10
      sets
      forth a true and complete list of all licenses, franchises, permits and
      authorizations (other than construction, development or occupancy related
      permits) that are material to Seller, † Management Company or any Project
      Partnership existing in Seller’s records. To Seller’s Actual Knowledge, Seller,
† Management Company and the Project Partnerships hold all licenses, franchises,
      permits and authorizations necessary for the lawful conduct of the Business,
      and
      are in compliance, in all material respects, with the terms of all such
      licenses, franchises, permits and authorizations.

     

    3.11 Title
      and Surveys; Ownership of Project Property; Real Estate Taxes.
      

     

    (a) Seller
      has delivered or made available to Purchaser true and correct copies of the
      most
      recent Title Policies for each Project and the most recent surveys for each
      Project in Seller’s possession or control. The Title Policies and the surveys in
      Seller’s possession are listed on Schedule
      3.11.
      To
      Seller’s Actual Knowledge, the Title Policies remain in full force and
      effect.

     

    (b) To
      Seller’s Actual Knowledge, the Project Partnerships, respectively, own the
      Projects, the buildings comprising the Projects, and the related tangible and
      intangible personal property, free and clear of any Liens other than (i) those
      set forth in the Title Policies or those
      which an accurate and complete title search and UCC searches on the Projects
      as
      of the Effective Date would reveal, (ii) liens for ad valorem taxes that are
      not
      yet delinquent,
      or (iii)
      mechanics’ or other liens that have been disclosed to the Purchaser in writing
      and bonded against in such a manner as to preclude the holder of such lien
      from
      having any recourse to any of the Projects or the Project Partnerships for
      payment of any debt secured thereby. To Seller’s Actual Knowledge, there are no
      easements, agreements, covenants or other documents of record encumbering any
      of
      the Projects except as set forth in the Title Policies or those
      which an accurate and complete title search on the Projects as of the Effective
      Date would reveal.
      To
      Seller’s Actual Knowledge, there are currently no claims pending relating to
      title to any Project (whether by or against any Project Partnership) except
      as
      listed on Schedule
      2.9.

     

    
      
        
        

      

      
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    (c) To
      Seller’s Actual Knowledge, all currently due real estate bills for the Projects
      have been paid. True and complete copies of all real estate tax bills for the
      Projects for the most recent fiscal year have been made available to the
      Purchaser prior to the date hereof. To Seller’s Actual Knowledge, none of
      Project Partnerships have received any written notice of any proposed special
      assessments or proposed reassessments relating to the Projects.

    3.12 Access
      and Utilities.
      To
      Seller’s Actual Knowledge, except as otherwise set forth in the Scheduled
      Documents: (i) each Project has and will continue to have permanent unrestricted
      access to appropriate public roadways; (ii) all public utilities necessary
      to
      the operation of each Project, including, but not limited to, sanitary and
      storm
      sewers, water, gas (if applicable), telephone and electricity, are or will
      by
      the date the Units in such a Project are placed in service be, and will remain
      available to and connected to, each such Project and each of the Units; (iii)
      each Project is an independent unit which does not rely on any drainage, sewer,
      access, parking, structural or other facilities located on any property not
      included in such Project or on public or utility easements for the
      (x) fulfillment of any zoning, building code or other requirement of any
      Governmental Entity that has jurisdiction over such Project, (y) structural
      support, or (z) the fulfillment of the requirements of any lease or other
      agreement affecting such Project; (iv) each respective Project Partnership,
      directly or indirectly, has the right to use all amenities, easements, public
      or
      private utilities, parking, access routes or other items necessary for the
      construction or operation of each respective Project; (v) each Project is either
      (A) contiguous to, or (B) benefits from an irrevocable unsubordinated
      easement permitting access from such Project to, a physically open, dedicated
      public street, and has all necessary permits for ingress and egress and adequate
      public water, sewer systems and utilities are available to such Project; and
      (vi) no building or other improvement not located on any Project relies on
      any
      part of such Project to fulfill any zoning requirements, building code or other
      requirement of any Governmental Entity that has jurisdiction over such Project
      for structural support or to furnish to such building or improvement any
      essential building systems or utilities.

     

    3.13 Condemnation;
      Changes in Use.
      Except
      as set forth in Schedule
      3.13,
      neither
      Seller nor any Project Partnership has received any notice of and Seller has
      no
      Actual Knowledge of any pending or contemplated condemnation or eminent domain
      proceedings affecting all or any part of any Project. To Seller’s Actual
      Knowledge, there is not any plan, study or effort of any applicable Governmental
      Entities, which in any way would materially adversely affect the use of any
      Project for its intended uses or any intended public improvements which will
      result in any material charge being levied against, or any material lien
      assessed upon, any Project. To Seller’s Actual Knowledge, there is not any
      existing, proposed or contemplated plan to widen, modify or realign any street
      or highway contiguous to any Project. To Seller’s Actual Knowledge, with respect
      to any Project that is unoccupied as of the Effective Date, none of the prior
      tenants or occupants thereof is eligible for relocation and/or moving payments
      or benefits under any applicable Law.

     

    
      
        
        

      

      
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    3.14 Compliance
      With Laws.
      Neither
      Seller nor any Project Partnership has received any written notice of any
      violations of Laws with respect to any Project, nor does Seller have any Actual
      Knowledge of any such violations. Except for annual affordable housing
      compliance audits performed by state Credit-allocating agencies as permitted
      or
      required by the Scheduled Documents, no investigation or review by any
      Governmental Entity with respect to any Project or Project Partnership is
      pending or, to the Actual Knowledge of Seller, threatened, nor to the Actual
      Knowledge of Seller has any Governmental Entity indicated an intention to
      conduct the same.

    3.15 Environmental
      Matters.
      Schedule
      3.15
      sets
      forth a complete and accurate list of all Environmental Reports in Seller’s or
      any Project Partnership’s possession. Seller has delivered or made available to
      Purchaser true and correct copies of all Environmental Reports. No amendments,
      modifications, or other changes or additions have been made to the Environmental
      Reports. Except as set forth in the Environmental Reports listed on Schedule
      3.15,
      to
      Seller’s Actual Knowledge no Project contains, and there is not located on, in
      or under any part of any Project, any Hazardous Materials. To Seller’s Actual
      Knowledge, no part of any Project has been previously used for the storage,
      manufacture or disposal of Hazardous Materials, except as may be disclosed
      in
      the Environmental Reports listed on Schedule
      3.15.
      Except
      as set forth on Schedule
      3.15,
      neither
      Seller nor any Project Partnership has received from any Governmental Entity
      any
      written complaint, order, citation or notice with regard to air emissions,
      water
      discharges, noise emissions and Hazardous Materials, if any, or any other
      environmental, health or safety matters affecting any Project or any part
      thereof. Except as set forth in the Environmental Reports listed on Schedule
      3.15,
      to
      Seller’s Actual Knowledge, there are no underground storage tanks of any nature
      located on any Project.

     

    3.16 Physical
      Reports.
      The
      reports referred to in Schedule
      3.15
      are all
      of the third party physical and structural reports (other than the Environmental
      Reports) in Seller's or any Project Partnership’s possession or control relating
      to the physical condition of any Project, including all reports and assessments
      relating to historical and current water penetration issues at any of the
      Projects, but excluding any third party reports required by a lender prior
      to or
      in connection with the final construction draw or by a Limited Partner prior
      to
      or in connection with the final capital contribution. Seller has delivered
      or
      made available to Purchaser true, correct and complete copies of all of the
      reports referred to in Schedule
      3.15,
      as well
      as copies of all contracts and warranties relating to repair or remediation
      of
      water penetration problems.

     

    3.17 Soil
      Defects.
      To
      Seller’s Actual Knowledge, there are no defects or conditions of the soil at any
      Project which will materially adversely affect the use, occupancy and operation
      of any Project, and no need for unusual or new subsurface excavations, fill,
      footings, caissons or other installations.

     

    3.18 Insurance.
      None of
      Seller, † Management Company or any Project Partnership has received from any
      Lender or Limited Partner any default notice relating to the failure to carry
      any required insurance coverage (or a required amount or type of coverage).
      Neither Seller nor any Project Partnership has received from any insurance
      company which carries insurance on any Project, or any board of fire
      underwriters, any notice of any defect or inadequacy in connection with any
      Project, or its operation and Seller has no Actual Knowledge of any such defect
      or inadequacy which might increase the premium or cause the cancellation of
      any
      insurance policy. Schedule
      3.18
      lists
      for † Management Company and each Project (i) all current insurance policies,
      and (ii) all pending insurance claims and a summary of the status of each such
      claim.

    
      
        
        

      

      
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    3.19 Projects
      Under Construction; Construction Contracts.
      

     

    (a) The
      initial construction of all Projects has been fully completed (including all
      punchlist items and warranty work) and all Units thereat have been placed in
      service, except for the Projects listed on Schedule
      3.19(a)
      (the
“Projects
      Under Construction”).
      Schedule
      3.19(a)
      also
      lists all general construction contracts and guarantees relating to the Projects
      Under Construction (collectively, “Construction
      Contracts”)
      and
      identifies the Affiliate of Seller that is the general contractor under each
      such Construction Contract. Seller has delivered or made available to Purchaser
      true, correct and complete copies of each Construction Contract and all related
      subcontracts, plans, specifications, warranties, guarantees, budgets,
      construction schedules and historic draw requests, to the extent in Seller’s
      possession or control. The Construction Contracts are in full force and effect,
      and the applicable Project Partnerships shall have all rights to enforce the
      obligations of the general contactors thereunder without limitation, and no
      provisions of this Agreement shall limit the enforceability thereof or the
      liability of the general contractors thereunder. Purchaser shall not assume
      any
      contractor or guarantor liability under any Construction Contracts or any
      guarantees (other than Standalone Economic Guarantees) related to construction
      of the Projects Under Construction (the “Construction
      Obligations”),
      and
      the applicable Seller entities or affiliates thereof shall remain liable
      thereunder; provided Purchaser shall, upon request of Seller or its Affiliate,
      use commercially reasonable efforts to assist Seller or its Affiliate in
      completing construction (i.e., respond to draw requests, order reports,
      etc.).

     

    (b) To
      Seller’s Actual Knowledge, all work to be performed, payments to be made and
      actions to be taken by any Project Partnership prior to the Effective Date
      pursuant to any agreement entered into with a Governmental Entity in connection
      with a site approval, zoning reclassification or similar action relating to
      any
      Project or as required as a condition to the issuance of any building permit,
      certificate of occupancy or zoning variance relating to any Project (e.g.,
      off-site improvements or services or zoning proffers), has been performed,
      paid
      or taken, as the case may be, and to Seller’s Actual Knowledge, there is no
      planned or proposed work, payments or actions that may be required after the
      Effective Date pursuant to such agreements. 

     

    (c) Except
      for budgeted construction disclosed in the most recent capital expenditure
      budgets of the Projects (true and complete copies of which have been made
      available to the Purchaser), Schedule
      3.19(c)
      lists
      all agreements (other than the Construction Contracts) entered into by any
      Project Partnership relating to capital replacements at, or additions or
      expansions to, any Project which are currently in effect and under which any
      Project Partnership currently has, or expects to incur, an obligation in excess
      of thirty-thousand dollars ($30,000). Complete and correct copies of such
      contracts have been made available to Purchaser. Seller shall make available
      to
      Purchaser upon request all such agreements (including those where the amounts
      expected to be expended are less than $30,000).

     

    
      
        
        

      

      
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    (d) Construction
      Completion.
      Prior
      to Closing, Seller shall cause all Projects Under Construction to be completed
      and all Units thereat to be placed in service, and for each Project Under
      Construction Seller shall deliver to Purchaser at or before Closing (i) the
      most
      recent lender’s title insurance policy or endorsement subject to no further
“pending disbursements” endorsement or any exceptions for mechanic’s liens and
      raising no Material Title or Survey Condition not disclosed herein or not raised
      in any prior title insurance policy delivered or made available to Purchaser
      during the Due Diligence Period, (ii) a final “as-built” ALTA survey raising no
      Material Title or Survey Condition not raised in any prior survey delivered
      to
      Purchaser during the Due Diligence Period, (iii) a certificate of completion
      from the applicable architect or other construction inspector certifying that
      the Project has been completed in substantial accordance with the plans and
      specifications provided to Purchaser, (iv) a valid and binding allocation of
      Credit (or, with respect to buildings meeting the requirements of Section
      42(h)(4)(B) of the Code, a certification pursuant to Section 42(m)(1)(D) of
      the
      Code) from the appropriate Governmental Entity in the amount shown on
Schedule
      3.25(a)
      for the
      applicable Project, including an IRS Form 8609, and (v) an updated draw schedule
      and sources and uses of funds and rent roll. Seller’s failure to comply with the
      terms of this Section
      3.19(d)
      by
      Closing shall not be deemed a default by Seller hereunder so long as Seller
      uses
      good faith efforts to so comply, but if Seller fails to so comply with the
      terms
      of this Section
      3.19(d)
      by
      Closing, Purchaser may exercise its Project Removal Option with respect to
      any
      Projects Under Construction for which Seller has not so completed the
      construction and otherwise satisfied the requirements of this Section
      3.19(d).
      If
      Purchaser does not so exercise its Project Removal Option with respect to any
      such Project Under Construction, then the parties shall proceed in the same
      manner as if the terms of this Section had been satisfied with respect to the
      applicable Project Under Construction.

    3.20 Insolvency
      Proceedings.
      No
      attachments, execution proceedings, assignments for the benefit of creditors,
      insolvency, bankruptcy, reorganization or other proceedings are pending or,
      to
      Seller’s Actual Knowledge, threatened against any Project Partnership, †
Management Company or Seller.

     

    3.21 Unsatisfied
      Partner Obligations.
      Except
      as set forth in Schedule
      3.21,
      (i)
      neither † Management Company nor any Project Partnership has any unsatisfied
      obligation to make any payments of any kind to any Seller other than amounts
      to
      be paid pursuant to the Economic Interests or Excluded Economic Interests;
      and
      (ii) no Limited Partner has made any loans or advances (other than capital
      contributions) to any Project Partnership. Except as set forth in Schedule
      3.21,
      all
      distributions to Limited Partners which have been declared by any Project
      Partnership prior to the Effective Date have been paid in full.

     

    3.22 Operating
      Statements.
      The
      operating statements for the Projects delivered by Seller to Purchaser prior
      to
      the Effective Date are the only operating statements for the Projects for the
      operating period to which they relate that have been prepared by or for Seller
      in the ordinary course of business.

     

    
      
        
        

      

      
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    3.23 Accounting.
      For
      federal income tax purposes, † Management Company and each Project Partnership
      reports, and shall continue to report its income on the accrual method of
      accounting. On behalf of each of the Project Partnerships, Seller has, to
      Seller’s Actual Knowledge, filed, and will continue to file, any and all
      certifications and other documents on a timely basis, with all applicable
      Governmental Entities (through the Closing) as have been and may be required
      to
      support the annual allocation of Credits.

    3.24 Other
      Agreements or Arrangements Affecting Credits.
      Except
      as otherwise set forth in the Scheduled Documents, neither any Seller nor any
      Project Partnership has entered into any agreement or contract for the payment
      or offset of any construction loan or loan discounts, additional interest,
      yield
      maintenance or other charges or financing fees or any agreement to incur any
      financial responsibility with respect to any Project or providing for the
      guaranty of payment of any such interest charges or financing fees relating
      to
      the Loan Documents or for any kickback or rebate of fees under any Loan Document
      or other Project Partnership Document, other than those disclosed in Project
      Partnership Agreements.

     

    3.25 Valid
      Tax Credits.
      To
      Seller’s Actual Knowledge, each Project Partnership has obtained a valid and
      binding allocation of Credit (or, with respect to buildings meeting the
      requirements of Section 42(h)(4)(B) of the Code, a certification pursuant to
      Section 42(m)(1)(D) of the Code) from the appropriate Governmental Entity in
      the
      amount shown on Schedule
      3.25(a),
      including an IRS Form 8609, except those projects set forth on Schedule
      3.25(b)
      (“Pre-8609
      Projects”).
      To
      Seller’s Actual Knowledge, each Pre-8609 Project has either received a binding
      carryover allocation in accordance with Section 42(h)(1) of the Code or a
      certification in accordance with Section 42(m)(1)(D) and 42(m)(2)(D) of the
      Code
      which remains in full force and effect. 

     

    3.26 Project
      Operation Requirements; Tax Credits.
      To
      Seller’s Actual Knowledge, each Project has been acquired, constructed and/or
      rehabilitated, has (except for Pre-8609 Projects) had its eligible basis and
      Credits determined, and has been operated, in a manner consistent with the
      requirements of the Loan Documents and Regulatory Agreements, and consistent
      with all requirements under Section 42 of the Code, and regulations thereunder,
      so as to allow such Project to claim Credits in the amounts shown on
Schedule
      3.25(a).

     

    3.27 No
      Employees.
      No
      Project Partnership has or has at any time had any employees.

     

    3.28 No
      Other Assets.
      Neither
† Management Company nor any of the Project Partnerships owns directly or
      indirectly any interest or investment (whether equity or debt) in any Person.
†
Management Company owns no real property, and no Project Partnership owns any
      real property other than its respective Project as shown on Schedule
      A.

     

    3.29 Management
      of Projects.
      Except
      for the Projects set forth on Schedule
      3.29
      (which
      are currently managed by † Management Company, Inc.), all of the Projects are
      managed by † Management Company.

     

    3.30 Tax
      Credit Shortfalls.
      As of
      December 31, 2005, to Seller’s Actual Knowledge, the amount (if any) by which
      the Credits projected to be allocated to the Limited Partners of each Project
      (i.e. the amounts projected in projections delivered to the Limited Partners
      at
      the time they became Limited Partners, as adjusted for any 8609 or other pricing
      adjustment already paid or reflected in Project projections given to Purchaser)
      through December 31, 2005 exceed the Credits actually allocated to the Limited
      Partners of each Project through December 31, 2005 is as set forth on
Schedule
      3.30.
      Seller
      shall deliver to Purchaser no later than April 30, 2007 an updated Schedule
      3.30
      containing the above described information for the period ending December 31,
      2006.

    
      
        
        

      

      
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    The
      representations and warranties set forth in this Article 3 shall survive Closing
      to the extent set forth in Section
      7.8.

     

    ARTICLE
      4. REPRESENTATIONS
      AND WARRANTIES OF THE PURCHASER

     

    Subject
      to the Schedules, Purchaser hereby represents, warrants and covenants to each
      Seller the following:

     

    4.1 Organization;
      Authority.
      

     

    (a) Good
      Standing.
      The
      Purchaser is a limited liability company duly organized, validly existing and
      in
      good standing under the Laws of the State of Delaware and, prior to the Closing,
      shall be in good standing in each other jurisdiction to the extent required
      by
      law.

     

    (b) Capacity.
      The
      Purchaser has the power and authority to execute and deliver this Agreement
      and
      the other Transaction Documents to which it is a Party and to consummate the
      transactions contemplated hereby and thereby (subject only to obtaining the
      Required Consents).

     

    (c) Execution
      and Delivery.
      The
      execution and delivery by Purchaser of this Agreement and the other Transaction
      Documents to which it is a Party, the performance by Purchaser of its
      obligations hereunder and thereunder and the consummation by Purchaser of the
      transactions contemplated hereby and thereby have been duly authorized and
      no
      other actions on the part of Purchaser are necessary to authorize such
      execution, delivery and performance. This Agreement and the other Transaction
      Documents to which Purchaser is a Party have been (or, in the case of
      Transaction Documents to be executed after the Effective Date, will be at or
      prior to the Closing) duly and validly executed and delivered by Purchaser
      and,
      assuming due authorization, execution and delivery by the Seller, constitute
      valid and binding obligations of Purchaser, enforceable against Purchaser in
      accordance with their terms, except to the extent that enforceability may be
      limited by the bankruptcy, insolvency, reorganization, moratorium or other
      similar Laws affecting the enforcement of creditors’ rights in general and
      subject to general principles of equity and the discretion of courts in granting
      equitable remedies.

     

    4.2 No
      Violation.
      The
      execution, delivery and performance by Purchaser of this Agreement and the
      transactions contemplated hereby does not and will not conflict with or result
      in any violation of, or constitute a breach or default under (or an event that
      with notice or lapse of time or both would become a default under), any term
      of
      the charter documents, by-laws or other organizational documents of Purchaser,
      any agreement, permit, indenture, deed of trust, mortgage, loan agreement or
      other instrument to which Purchaser is a party or by which Purchaser is subject,
      or any Law of any court or other Governmental Entity to which Purchaser is
      subject.

    
      
        
        

      

      
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    4.3 Property
      Management.
      For a
      one year period immediately after Closing, at Seller’s request Purchaser or its
      Affiliates shall provide property management services for the apartment
      complexes listed on Schedule
      4.3
      and also
      for any Removed Projects subject to and in accordance with a mutually acceptable
      property management contract (the form of which shall be agreed upon during
      the
      Due Diligence Period).

     

    4.4 Certain
      Notices to Seller.
      After
      Closing, Purchaser shall promptly provide Seller with copies of (i) any written
      notices received by Purchaser or any Affiliate of Purchaser alleging any
      potential claim against any Seller or Affiliate of Seller or any potential
      claim
      pertaining to the period of time prior to the Closing, or (ii) to the extent
      the
      matter could be reasonably expected to result in the exposure of any Seller
      to
      any material Liability, any written notices received by Purchaser or any
      Affiliate of Purchaser alleging any potential claim against Purchaser or any
      Affiliate of Purchaser. For a period of three years following the Closing,
      Purchaser shall promptly provide to Seller (i) a copy of any notice of any
      IRS
      proceeding received by any Purchaser or Project Partnership involving any
      Project Partnership, Seller or Purchaser relating directly or indirectly, in
      whole or in part, to the period prior to the Closing Date and (ii) a copy of
      any
      report issued by a tax credit authority or bond issuer with respect to the
      compliance of a Project relating directly or indirectly, in whole or in part,
      to
      the period prior to the Closing Date. 

     

    4.5 OFAC.
      Purchaser and each of its direct owners is not, and will not be, a person or
      entity with whom Seller is restricted from doing business with under the Uniting
      and Strengthening America by Providing Appropriate Tools Required to Intercept
      and Obstruct Terrorism Act of 2001, H.R. 3162, Public Law 107-56 (commonly
      known
      as the “USA
      Patriot Act”)
      and
      Executive Order Number 13224 on Terrorism Financing, effective September 24,
      2001 and regulations promulgated pursuant thereto, including without limitation
      persons and entities named on the Office of Foreign Asset Control Specially
      Designated Nationals and Blocked Persons List. 

     

    The
      representations, warranties and covenants set forth in this Article 4 shall
      survive Closing to the extent set forth in Section
      7.8.

     

    ARTICLE
      5. COVENANTS.

     

    Seller
      and Purchaser hereby agree as follows:

     

    5.1 Satisfaction
      of Conditions.
      Seller
      shall use commercially reasonable efforts to cause the conditions precedent
      to
      the obligations of Purchaser set forth in Section
      8.1
      to be
      fulfilled and Purchaser shall use commercially reasonable efforts to cause
      the
      conditions precedent to the obligations of each Seller set forth in Section 8.2
      to be
      fulfilled. Purchaser shall use commercially reasonable efforts to cooperate
      with
      Seller to satisfy the conditions set forth in Section 8.2
      and
      Seller shall use commercially reasonable efforts to cooperate with Purchaser
      to
      satisfy the conditions set forth in Section 8.1.
      Purchaser also agrees to (to the extent required by any Required Consent
      provider) deliver to the Required Consent provider organizational
      documents, good standing certificates and financial statements for each of
      applicable replacement general partners and replacement
      guarantors.

    
      
        
        

      

      
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    5.2 Conduct
      of Business.
      Except
      as expressly contemplated or permitted by this Agreement or to the extent that
      Purchaser shall otherwise consent in writing, Seller shall use reasonable best
      efforts to continue to and to cause † Management Company and the Project
      Partnerships to continue to conduct the Business in such a manner so that the
      representations, warranties and covenants contained in Article
      2
      and
Article
      3
      shall
      continue to be accurate and correct throughout such period, and on and as of
      the
      Closing Date as if made by Seller on the Closing Date, and throughout such
      period, each Seller shall and shall cause † Management Company and each Project
      Partnership to carry on the Business in the ordinary course in substantially
      the
      same manner as previously conducted. Seller plans to take certain actions as
      disclosed on Schedule
      5.2
      that are
      standard practices, but that Seller desires to obtain Purchaser’s
      acknowledgement thereof and Purchaser so acknowledges such actions. Seller
      shall
      update the Schedules with respect to such actions and transmit such updates
      to
      Purchaser.

     

    5.3 Hart-Scott-Rodino
      Act.
      As
      promptly as practicable, and in any event within three (3) business days
      following the execution and delivery of this Agreement by the Parties, Purchaser
      and Seller shall prepare and file any required notification and report form
      under the Hart-Scott-Rodino Act (“HSR
      Act”)
      in
      connection with the transactions contemplated hereby. If such notification
      and
      report is filed, Purchaser and Seller shall request early termination of the
      waiting period thereunder. Purchaser and Seller shall respond with reasonable
      diligence to any request for additional information made in response to any
      such
      filings.

     

    5.4 Publicity;
      Confidentiality.
      Each
      Party agrees that it will not issue any press release or other public disclosure
      of this Agreement or the transactions contemplated hereby without the prior
      written approval of the other Party, unless, in the good faith opinion of
      counsel, such disclosure is required by Law, or such disclosure is deemed
      reasonably necessary or appropriate under the rules and regulations of the
      Securities & Exchange Commission or the New York Stock Exchange, with
      respect to such Party or any Affiliate thereof, and then only to the extent
      deemed reasonably necessary. Purchaser and Seller will maintain the terms of
      this Agreement, as well as all negotiations concerning this Agreement in strict
      confidence; provided that (i) each Party may disclose such information on a
      need to know basis to its controlling persons, persons under common control
      with
      such party, Affiliates and each of their respective employees, potential
      partners and investors, advisors and financing sources to the extent reasonably
      necessary (provided that such persons are directed to hold such information
      in
      confidence in accordance with this letter) and (ii) both parties may make
      disclosure to the extent required by Law, regulation or legal process. The
      terms
      of this Section
      5.4
      (the
“Confidentiality
      Provisions”)
      shall
      survive Closing or termination of this Agreement for a period of two
      years.

     

    5.5 Notices.

     

    (a) Until
      the
      Closing, Seller shall promptly notify Purchaser of:

    
      
        
        

      

      
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    (i) any
      written notice or other written communication from any Governmental Entity
      to
      Seller, † Management Company or a Project Partnership disclosing an adverse
      event, determination, allegation or change (including without limitation, any
      Form 8823 notices of non-compliance received by any Project Partnership)
      relating to † Management Company, any Project, Project Partnership or Purchased
      Interest;

     

    (ii) any
      change or event of which Seller has Actual Knowledge which results in any
      representation or warranty of any Seller under this Agreement being inaccurate
      in any material respect when made or if restated;

     

    (iii) any
      written notice or other written communication from any Person alleging that
      the
      consent of such Person is or may be required in connection with the transactions
      contemplated by this Agreement;

     

    (iv) any
      notice or other communication (oral or written) from the FTC, the DOJ or the
      IRS
      or any written notice or other written communication from any other Governmental
      Entity in connection with the transactions contemplated by this
      Agreement;

     

    (v) the
      receipt of any loan, advance or capital contribution by † Management Company or
      any Project Partnership;

     

    (vi) any
      proceeding commenced or, to the Actual Knowledge of Seller, threatened against,
      relating to or involving or otherwise affecting † Management Company or any
      Seller, Project or Project Partnership that, if pending on the date of this
      Agreement, would have been required to have been disclosed pursuant to
Section 2.9
      or that
      relates to the consummation of the transactions contemplated by this Agreement;
      and

     

    (vii) any
      material damage or destruction by fire or other casualty of any Project or
      assets or part thereof or in the event that any such Project or part thereof
      becomes the subject of any proceeding or, to the knowledge of Seller, threatened
      proceeding for the taking thereof or any part thereof or of any right relating
      thereto by condemnation, eminent domain or other similar governmental
      action.

     

    (b) Until
      the
      Closing, Purchaser shall promptly notify Seller of:

     

    (i) any
      change or event that, individually or in the aggregate, has had or could
      reasonably be expected to have a Purchaser Material Adverse Effect;

     

    (ii) 
      any
      change or event of which Purchaser has actual knowledge which results in any
      representation or warranty of any Purchaser or Seller under this Agreement
      being
      inaccurate in any material respect when made or if restated;

    
      
        
        

      

      
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    (iii) any
      written notice or other written communication from any Person alleging that
      the
      consent of such Person is or may be required in connection with the transactions
      contemplated by this Agreement;

     

    (iv) any
      notice or other communication (oral or written) from the FTC, the DOJ or the
      IRS
      or any written notice or other written communication from any other Governmental
      Entity in connection with the transactions contemplated by this Agreement;
      and

     

    (v) any
      proceeding commenced or, to the knowledge of Purchaser, threatened that relates
      to the consummation of the transactions contemplated by this
      Agreement.

     

    5.6 Interim
      Financial Statements.
      Seller
      shall deliver to Purchaser by the 20th
      of each
      month monthly operating statements for the preceding month for † Management
      Company and each Project Partnership. Also, promptly following their preparation
      in the ordinary course of business, Seller shall deliver to Purchaser any other
      financial reports for Seller, † Management Company, the Projects and the Project
      Partnerships for interim and/or annual fiscal periods ending after the date
      of
      this Agreement in the form that is customarily prepared for Seller’s internal
      purposes. Seller covenants that such periodic statements (i) shall, to Seller’s
      Actual Knowledge, present fairly, in all material respects, the financial
      position of Seller, † Management Company, the Projects and the Project
      Partnerships as of their respective dates and the related results of their
      operations for the respective periods then ended, and (ii) shall, to Seller’s
      Actual Knowledge, be prepared in accordance with GAAP applied on a consistent
      basis within such periods.

     

    5.7 Correspondence
      and Reports.
      Seller
      shall deliver or make available to Purchaser, to the extent in Seller’s
      possession or control, copies of all notices, filings, reports, correspondence
      and other documents sent by Seller, † Management Company or any Project
      Partnership to, or received by Seller, † Management Company or any Project
      Partnership from, any Limited Partner, any Lender, any insurance company, the
      IRS or any other taxing authority or Governmental Entity.

     

    5.8 Exclusivity.
      From
      and after the date of this Agreement until the earlier of the Closing or the
      termination of this Agreement: (a) Seller shall not, and shall not permit †
Management Company or the Project Partnerships to, and Seller shall cause each
      of its Affiliates not to, directly or indirectly, through any representative
      of
      any of them or otherwise, initiate, solicit or encourage (including by way
      of
      furnishing non-public information or assistance), or enter into negotiations
      of
      any type, directly or indirectly, or enter into a confidentiality agreement,
      letter of intent or purchase agreement, merger agreement or other similar
      agreement with any Person other than Purchaser with respect to a sale of all
      or
      any substantial portion of the assets of † Management Company or any Seller,
      Project or Project Partnership, or a merger, consolidation, recapitalization,
      business combination, sale of all or any substantial portion of the equity
      interests of † Management Company or any Seller, Project or Project Partnership,
      or the liquidation or similar extraordinary transaction with respect to †
Management Company or any Seller, Project or Project Partnership, and (b) Seller
      shall not, except as set forth in Schedule
      5.8
      or
Schedule
      5.2,
      sell,
      assign, pledge or in any manner dispose of or create or suffer the creation
      of a
      Lien on any Purchased Interests.

    
      
        
        

      

      
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    5.9 Additional
      Covenants of Seller Regarding † Management Company, the Projects and the Project
      Partnerships.
      Each
      Seller covenants to Purchaser that:

     

    (a) The
      Seller shall cause † Management Company and the Project Partnerships to do all
      things necessary to maintain their status as limited partnerships in good
      standing and had, has, and shall continue to have full power and authority
      to
      acquire the Projects and to develop, construct, operate, and maintain the
      Projects in accordance with the terms of the respective Project Documents and
      to
      enable † Management Company and the Project Partnerships to engage in their
      business.

     

    (b) Except
      as
      set forth in Schedule
      5.9(b)
      or
Schedule
      5.2,
      Seller
      shall not (nor shall Seller allow † Management Company or any Project
      Partnership to) terminate or materially amend any Loan Document, Project
      Partnership Agreement, Regulatory Agreement, Fee Agreement, Standalone Economic
      Guarantee or any document of record affecting any Project Partnership, except
      to
      the extent that Seller or a Project Partnership is required to enter into any
      such termination or amendment pursuant to the terms of a Scheduled Document.
      Seller shall promptly provide Purchaser with a copy of any termination of or
      amendment to any Loan Document, Project Partnership Agreement, Regulatory
      Agreement, Fee Agreement, Standalone Economic Guarantee or any document of
      record affecting † Management Company or any Project Partnership entered into
      after the Effective Date. Furthermore, except as set forth in Schedule
      5.9(b)
      or
Schedule
      5.2,
      Seller
      shall not (nor shall Seller allow any Project Partnership to) (i) voluntarily
      grant, create, assume or permit to be created any mortgage, lien, lease, or
      material encumbrance, easement, covenant, condition, right-of-way or restriction
      upon any Project other than in the ordinary course of business or (ii)
      voluntarily take or permit any action adversely affecting the title to the
      Projects as it exists on the Effective Date. Seller shall promptly provide
      Purchaser with a copy of any mortgage, lien, lease, encumbrance, easement,
      covenant, condition, right-of-way or restriction upon any Project granted after
      the Effective Date.

     

    (c) The
      Seller shall use reasonable best efforts to cause † Management Company and each
      Project Partnership to continue to comply with their respective obligations
      in
      all material respects under all Scheduled Documents in accordance with past
      practices and in such a manner as to not knowingly materially alter the
      disclosures contained in Schedule
      2.7
      or
Schedule
      2.8.

     

    (d) The
      Seller shall not act in any manner that will cause (i) † Management Company
      or any Project Partnerships to be treated for federal income tax purposes as
      an
      association taxable as a corporation or a publicly traded partnership taxed
      as a
      corporation, or (ii) † Management Company or any Project Partnership to
      fail to qualify as a limited partnership under the relevant Laws of the state
      of
      formation of † Management Company or any such Project Partnership.

    (e) The
      Seller shall cause † Management Company and each Project Partnership to make
      timely, accurate and complete submissions of federal and state income tax
      returns consistent with prior tax accounting and reporting practices, and shall
      not (except to the extent required by any Project Partnership Agreement) make
      or
      modify any tax election or tax accounting method without Purchaser's
      approval.

     

    
      
        
        

      

      
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    (f) The
      Seller shall promptly inform Purchaser upon receiving any written notice of
      or
      having any Actual Knowledge of, any violation with respect to † Management
      Company or any Project of any law, rule, regulation, order, or decree of any
      Governmental Entity having jurisdiction, which would have a Material Adverse
      Effect on † Management Company or any Project or Project Partnership or the
      construction, rehabilitation, use, occupancy, or operation thereof. For these
      purposes, any violation of Section 42 of the Code or the regulations promulgated
      thereunder or of a Regulatory Agreement shall be deemed to have a Material
      Adverse Effect.

     

    (g) The
      Seller shall promptly furnish to Purchaser a copy of any written notice of
      default under any Scheduled Documents. 

     

    (h) Except
      as
      set forth in Schedule
      5.9(b)
      or
Schedule
      5.2,
      the
      Seller will not cause or allow restrictions on the sale or refinancing of any
      Project, other than the restrictions set forth in the existing Loan Documents
      and Scheduled Documents. 

     

    (i) Seller
      shall not cancel or materially modify the current Project insurance policies
      prior to their expiration, except that Seller may renew or replace such policies
      earlier than their current expiration. Any renewal or replacement policies
      (whether first put in place prior to or at the current expiration of the current
      policies) shall (i) be consistent with Seller’s past practices with respect to
      insurance policies, (ii) shall be on terms no less favorable to the Project
      Partnerships than the current policies, (iii) shall be with insurance carriers
      having S&P ratings of at least A-, and (iv) shall have policy terms of no
      longer than one year. Seller shall keep Purchaser informed during the process
      of
      selecting renewal or replacement policies (including, but not limited to,
      providing Purchaser with preliminary pricing and detailed summaries of coverage
      amounts, deductibles and other coverage information) and shall consider in
      good
      faith any comments of Purchaser relating thereto. If Closing occurs, Purchaser
      shall not cancel or materially modify any such policies obtained by Seller
      in
      conformance with the terms of this Section. At Seller’s election, any Removed
      Projects and the projects listed on Schedule
      4.3
      shall
      continue to be covered under the policies described in this Section, provided
      that Seller pays all insurance costs related to such Removed Projects and the
      projects listed on Schedule
      4.3.
      At
      Seller’s election, Seller may also cease to have the policies described in this
      Section apply to any of such projects designated by Seller provided Seller
      pays
      all costs and expenses related thereto.

     

    (j) The
      Seller shall investigate and report to Purchaser any proposal or offer of any
      Person, to acquire any Project or any Interests or Purchased Interests. Except
      as set forth on Schedule
      5.9(j),
      Seller
      shall also not, without the prior written consent of Purchaser, directly or
      indirectly acquire or offer to acquire any Limited Partner interest in any
      Project Partnership. The terms of the preceding sentence shall survive
      Closing.

    
      
        
        

      

      
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    (k) The
      Seller will use commercially reasonable best efforts to cause the Project
      Partnerships to comply in all material respects with all of the terms and
      conditions of the residential lease agreements for each of the Units.

     

    (l) No
      Project Partnership shall employ any Person as an employee of the Project
      Partnership. 

     

    5.10 Tax
      Matters.

     

    (a) Taxes
      determined by income, and all items relevant thereto, with respect to the
      taxable year of † Management Company and the Project Partnerships which includes
      the Closing Date, shall be allocated between Seller and Purchaser by “closing
      the books” of the Project Partnerships as of the end of the Closing Date. All
      other Taxes with respect to † Management Company or the Project Partnerships
      determined by reference to a taxable period that includes, but does not end
      on,
      the Closing Date, shall be apportioned between pre-Closing and post-Closing
      periods for any purpose of this Agreement based on the number of days in such
      taxable period occurring through the Closing Date, and the number of days in
      such taxable period occurring after the Closing Date.

     

    (b) Seller
      and Purchaser shall cooperate fully, as to the extent reasonably requested
      by
      the other Party, in connection with the filing of Tax Returns of each Project
      Partnership and † Management Company with respect to the year in which Closing
      occurs, and any audit, litigation or other proceeding with respect to Taxes.
      Purchaser shall file such Tax Returns for the year in which Closing occurs
      subject to Seller’s prior review and approval thereof (which review and approval
      shall not be unreasonably withheld or delayed). Such cooperation will include
      the retention and (upon the other Party’s request) the provision of records and
      information reasonably relevant to such audit, litigation or other proceeding
      and making employees available on a mutually convenient basis to provide
      additional information and explanation of any material provided hereunder.
      The
      Parties agree that Purchaser and Seller will (i) retain all books and records
      with respect to Tax matters pertinent to the Purchased Interests relating to
      any
      tax period beginning before the Closing Date until expiration of the statute
      of
      limitations (and, to the extent notified by the other Party, any extensions
      thereof) of the respective tax periods, and to abide by all record retention
      agreements entered into with any Government Entity, (ii) to deliver or make
      available to the other Party upon request copies of all such books and records,
      and (iii) to give reasonable written notice prior to transferring, destroying
      or
      discarding any such books and records and, if the other Party so requests,
      the
      allow such Party to take possession of such books and records.

    5.11 Employee
      Benefits.
      

     

    (a) In
      accordance with Section
      1.4(f)
      and
      except as otherwise expressly provided herein, at the Closing Seller shall
      provide Purchaser with a credit for all wages,
      salaries, compensation, paid time off and other paid leaves, Employee Benefit
      Plan contributions and benefits, fringe benefits and payroll taxes, if any,
      that
      accrued with respect to, or are payable to, the Employees prior to the Closing
      Date.
      With
      respect to paid time off (PTO) and other paid leaves, the credit shall apply
      only to accrued PTO and leaves actually used or taken prior to the Closing
      Date.
      On and after the Closing Date, † Management Company shall
      be
      responsible for any accrued but unused PTO and major medical leave owed to
      the
      Employees in accordance with † Management Company’s paid time off policies
      attached as Schedule
      5.11(a).
      Seller
      shall neither be obligated to pay nor to provide Purchaser with any credit
      on
      account of any such accrued but unused PTO or major medical leave.

     

    
      
        
        

      

      
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    (b) Notwithstanding
      anything contained in this Agreement to the contrary, Seller shall indemnify,
      defend and hold the Purchaser harmless from and against any and all claims
      of
      the Employees, any representatives of such Employees, and applicable units
      of
      local government based on failure to comply with (i) the WARN Act and/or (ii)
      any applicable State WARN Act, to the extent applicable, arising out of or
      relating to the termination of employment of any Employee before the Closing
      Date. Purchaser shall indemnify, defend and hold Seller and its Affiliates
      harmless from and against any and all claims of the Employees, any
      representatives of such Employees, and applicable units of local government
      based on failure to comply with (i) the WARN Act and/or (ii) any applicable
      State WARN Act, to the extent applicable, arising out of or relating to the
      termination of employment of any Employee on or after the Closing
      Date.

     

    (c) Except
      with respect to modifications of † Management Company’s group health plan
      effective March 1, 2007, Seller agrees that it will provide Purchaser at least
      ten (10) days’ advance written notice of any significant or comprehensive
      review, modification or renewal by Seller or † Management Company of Seller’s or
† Management Company’s employee benefits plans or policies, and shall allow
      representatives of Purchaser to participate in all aspects of any such
      review(s), modification(s) or renewal(s).

     

    (d) Seller
      shall indemnify, defend and hold the Purchaser harmless from and against any
      and
      all losses, damages, liabilities, taxes and sanctions arising from or relating
      to (i) any violation (or alleged violation) by Seller or † Management Company or
      any of their respective Affiliates of any law governing employment matters
      with
      respect to Employees occurring prior to the Closing Date, (ii) any claims
      asserted by any Employees or Seller or any other person or entity based upon
      any
      Pre-Closing Employee Obligations (except for any such obligation assumed by
      Purchaser under this Agreement such as COBRA continuation coverage), and (iii)
      any breach of the obligations of Seller under this Section
      5.11.

     

    (e) Purchaser
      shall indemnify, defend and hold Seller harmless from and against any and all
      losses, damages, liabilities, taxes and sanctions arising from or relating
      to
      (i) any violation (or alleged violation) of any law governing employment matters
      with respect to any Employees accruing on or after the Closing Date, (ii) any
      claims asserted by any Employees of Purchaser or any Project Partnership, or
      any
      other person or entity directly related to Purchaser’s Post-Closing Employee
      Obligations, and (iii) any breach of the obligations of Purchaser under this
      Section
      5.11.

    (f) On
      and
      after the Closing Date, Purchaser shall be responsible for providing (or causing
      † Management Company to provide) COBRA continuation coverage (as described in
      Sections 601 through 608 of ERISA and Section 4980B of the Code) to any persons
      who are “M&A qualified beneficiaries” under a group health plan of †
Management Company. Seller shall provide to Purchaser a list of such M&A
      qualified beneficiaries as soon as practicable after the Effective Date and
      again no later ten (10) days nor more than twenty (20) days prior to the Closing
      Date. From and after the Effective Date and prior to the Closing Date, Seller
      and † Management Company shall not (i) offer any material incentive to any
      Employee to elect continuation coverage with respect to any group health plan
      of
† Management Company, or (ii) take any action, other than an action in ordinary
      course of business, that will result in a person covered by a group health
      plan
      of † Management Company becoming entitled to COBRA continuation coverage. Except
      as expressly provided in this Section
      5.12(f),
      Seller
      shall retain full responsibility and liability for providing COBRA continuation
      coverage to all persons who are or previously were covered under a group health
      plan of Seller or † Management Company.

     

    
      
        
        

      

      
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    (g) Notwithstanding
      any other provision of this Agreement, the foregoing obligations of Seller
      and
      Purchaser in this Section
      5.11,
      with
      the exception of subsection (c), shall survive the Closing.

     

    5.12 Employees.
      

     

    (a) Within
      ten (10) days after the Effective Date, Seller will provide to Purchaser a
      written list (the “Employee
      List”)
      of all
      full-time and part-time employees of † Management Company (each an “Employee”
and
      collectively the “Employees”),
      which
      list shall indicate each Employee’s job title, work location, compensation
      (including base salary; 2005 and 2006 bonuses paid, if applicable; any Seller
      Benefit Plans in which such Employees participate; any in-place employment
      agreements; and any other compensation, benefits and/or perquisites), date
      of
      hire, classification (as exempt or non-exempt) under the Fair Labor Standards
      Act or other applicable wage and hour law, and whether such Employee is not
      actively at work for any reason such as a leave of absence, and, if so, the
      date
      the absence began and the anticipated date of return to work. The Employee
      List
      shall also denote the extent to which (if at all) compensation is reimbursed
      by
      any Project Partnership. The Employee List shall also set forth an accurate
      and
      complete list of all former Employees to whom † Management Company is currently
      obligated to pay any severance, compensation or other remuneration. Seller
      shall
      notify Purchaser in writing of any changes to the Employee List on a bi-monthly
      basis (with each such update covering changes occurring during the preceding
      sixty (60) days). Seller shall not nor shall Seller cause or permit † Management
      Company to terminate any Employee or to materially change the terms of any
      Employee’s employment other than in the ordinary course of business consistent
      with past practices and industry standards. Seller shall not nor shall Seller
      cause or permit † Management Company to engage in any layoffs or terminations of
      groups or classes of Employees after the Effective Date.

    (b) Except
      with respect to modifications of † Management Company’s group health plan
      effective March 1, 2007, subsequent to the Effective Date, Seller shall not,
      nor
      shall Seller cause or permit † Management Company or any of their respective
      Affiliates to (i) make any material change in or enhancement to the compensation
      or benefits payable or to become payable to any of the Employees other than
      any
      normal recurring increases (such as annual merit or cost of living adjustments
      which Employees typically receive on or before April 30 of each calendar year
      and previously scheduled benefit enhancements or payments), or other reasonable
      adjustments consistent with past practices and industry standards (such as
      promotional increases); (ii) except as may be required under the terms of
      existing Employee Benefit Plans or by Law, (A) establish, adopt, enter into,
      amend, agree to amend or terminate any Employee Benefit Plan or any plan,
      agreement, program, policy, trust, fund or other arrangement that would be
      an
      Employee Benefit Plan if it were in existence as of the date of this Agreement,
      or (B) establish, adopt, enter into, amend, agree to amend or terminate any
      Seller Benefit Plan; (iii) transfer or relocate management level Employees
      other
      than in the ordinary course of business consistent with past practice; (iv)
      effectuate or announce any employment terminations that constitute a “plant
      closing” or “mass layoff,” as those terms are defined in the WARN Act or any
      applicable State WARN Act, affecting in whole or in part any site of employment,
      facility, operating unit or employee of the Seller or † Management Company; (v)
      enter into any agreement with any Employee, other than an industry standard
      separation agreement which includes a release of claims; or (vi) enter into
      any
      collective bargaining agreement, neutrality agreement, or other labor
      contract.

     

    
      
        
        

      

      
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    (c) At
      the
      end of the Due Diligence Period and continuing until the Closing Date, Seller
      shall not permit † Management Company to hire any additional Employees
except
      as
      may be necessary to meet operational needs due to Employee
      attrition.
      During
      the Due Diligence Period, Seller shall cause † Management Company to continue to
      adhere to its current hiring policies and procedures, including but not limited
      to its use of background checks and prehire drug testing.

     

    (d) All
      Employees of † Management Company as of the Closing Date will remain employed by
† Management Company subject to their current at will employment status. †
Management Company will continue after Closing to use the Employees’ original
      dates of hire with † Management Company for benefits eligibility, vesting,
      accrual and all other employment purposes for which dates of hire are
      applicable.

     

    5.13 Costs
      and Expenses.
      Each
      Party shall bear its own expenses in connection with the transactions
      contemplated hereby, unless otherwise specifically provided herein. The Parties
      shall split equally any assumption fees and any other landlord, Limited Partner
      or other Required Consent provider fees or expenses required to be paid in
      connection with the assignment of the Purchased Interests or the Space Leases
      or
      Personal Property Leases or obtaining or attempting to obtain (even if Closing
      does not occur or any Required Consents are not obtained) the Required Consents
      (including any underwriting fees or costs due to any State Agencies (or their
      agents) in connection therewith), and each Party shall cooperate to structure
      around the necessity to pay such fees (so long as any such structuring does
      not
      result in any materially greater cost, risk or liability or materially decreased
      benefit to any Party unless such Party consents to such structuring in its
      sole
      discretion); provided that all such fees and expenses relating to obtaining
      Required Consents from Sun America or its Affiliates shall be paid by Seller
      rather than split. The fees and expenses described in the preceding sentence
      shall be limited to fees and expenses to which the applicable party (e.g. Lender
      or Limited Partner) is entitled under the terms of existing agreements plus
      fees
      of their counsel and their other out-of-pocket expenses, it being understood
      that neither Seller nor Purchaser shall without its consent be obligated to
      pay
      any other fees or expenses demanded by any Required Consent provider. Title
      insurance premiums for any new title reports or title policies, if required,
      will be the responsibility of Purchaser. Seller and Purchaser shall each pay
      one-half of any applicable sales or transfer taxes that may be due in connection
      with the sale of the Purchased Interests or Personal Property. The terms of
      this
Section
      5.13
      shall
      survive Closing or termination of this Agreement.

    
      
        
        

      

      
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    5.14 Further
      Assurances.
      Seller
      agrees that it will, at any time and from time to time after the Closing Date,
      upon request of Purchaser, do, execute, acknowledge and deliver, or will cause
      to be done, executed, acknowledged and delivered, all such further acts, deeds,
      assignments, transfers, conveyances and assurances as may reasonably be required
      for the assigning, transferring, granting, assuring and confirming to Purchaser,
      or to its successors and assigns, any or all of the assets or property being
      sold to Purchaser pursuant to this Agreement, provided that the same do not
      impose any liability on Seller beyond that provided in this Agreement or any
      document required to be executed by Seller pursuant to this Agreement. Purchaser
      agrees that it will, at any time and from time to time after the Closing Date,
      upon request of Seller, do, execute, acknowledge and deliver, or will cause
      to
      be done, executed, acknowledged and delivered, all such further acts, deeds,
      assignments, transfers, conveyances and assurances as may reasonably be required
      for the assumption of the Assumed Obligations, provided that the same do not
      impose any liability on Purchaser beyond that provided in this Agreement or
      any
      document required to be executed by Purchaser pursuant to this Agreement. The
      terms of this Section
      5.14
      shall
      survive Closing.

     

    5.15 Casualty.
      

     

    (a) If
      any
      material damage or destruction by fire or other casualty occurs at any Project
      prior to Closing, Seller shall promptly notify Purchaser. If (all as determined
      by Seller subject to Purchaser’s reasonable approval) the expected cost of
      repair of such casualty is less than the sum of the expected insurance proceeds
      plus the amount of Project Partnership funds expected to be available for such
      repair (such as reserves and expected excess net cash flow, with the amount
      of
      the expected insurance proceeds and expected Project Partnership funds being
      the
“Available
      Funds”)
      such
      that the Seller would not be required to fund any repair costs not covered
      by
      Available Funds (any such casualty for which the Available Funds are sufficient
      to pay the repair costs being a “Fully
      Covered Casualty”),
      then
      Seller shall cause the applicable Project Partnership to diligently proceed
      in a
      commercially reasonable manner to settle the insurance claim and repair the
      damage and (assuming Closing occurs and the damage is not fully repaired and/or
      the claim not fully processed by Closing) shall cooperate with Purchaser so
      that
      Purchaser (as the new general partner of the applicable Project Partnership)
      can
      continue with the process of repairing the damage and/or processing the
      claim
      (the
      actions described in this sentence being a “Normal
      Casualty Repair Process”).
      

    (b) If
      the
      casualty is not a Fully Covered Casualty, then Seller shall notify Purchaser
      within 5 days after the determination of the amount by which the expected cost
      of repair exceeds the expected Available Funds (as determined by Seller subject
      to Purchaser’s reasonable approval) and as to whether Seller shall (i) undertake
      and comply with the Normal Casualty Repair Process and provide Purchaser a
      credit at Closing against the Purchase Price in the amount, if any, by which
      the
      remaining unpaid cost of repairing the damage exceeds the remaining Available
      Funds (as determined by Seller subject to Purchaser’s reasonable approval) (the
“Remaining
      Insurance Shortfall”),
      (ii)
      undertake and comply with the Normal Casualty Repair Process, but to not provide
      Purchaser a credit at Closing against the Purchase Price in the amount of any
      Remaining Insurance Shortfall, or (iii) not repair the damage (the options
      described in this sentence being Seller’s sole options). If Seller fails to
      notify Purchaser of its election within such five day period, Seller shall
      be
      deemed to have elected option (iii). If Seller elects option (ii) or (iii),
      then
      Purchaser shall within five days after such election notify Seller as to whether
      Purchaser desires to proceed in accordance with the selected option or to
      exercise its Project Removal Option with respect to the applicable Project.
      If
      Purchaser fails to notify Seller of its election within such five day period,
      Purchaser shall be deemed to have elected to proceed in accordance with the
      option that Seller selected. If the result of the process described in this
      Section
      5.15(b)
      is that
      the parties have selected option (iii), then Seller shall cause the Project
      Partnership (at the Project partnership’s expense) to take such commercially
      reasonable prudent actions as are necessary to restore any undamaged areas
      to a
      functionally useful state and to eliminate any public safety
      hazards.

     

    
      
        
        

      

      
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    (c) Notwithstanding
      anything to the contrary in this Section
      5.15,
      if the
      Lender (and/or any other Person entitled to control the use or disposition
      of
      insurance proceeds) does not consent to make the applicable insurance proceeds
      available for restoration, then Purchaser may exercise its Project Removal
      Option with respect to the damaged Project. If Purchaser does not so exercise
      its Project Removal Option, the Parties shall proceed in accordance with the
      terms of Section
      5.15(b).

     

    5.16 Condemnation.
      If,
      prior to Closing, all or any part of a Project is taken by condemnation or
      a
      conveyance in lieu thereof, or if Seller receives notice of a condemnation
      proceeding with respect to a Project, then Seller shall promptly notify
      Purchaser of such condemnation or conveyance in lieu thereof. If the taking
      or
      threatened taking is a Material Taking (as defined below), then Purchaser may
      elect, by written notice to be delivered to Seller on or before the sooner
      of
      (i) the tenth (10th) day after Purchaser’s receipt of such notice, or
      (ii) the Closing Date, to exercise its Project Removal Option with respect
      to the applicable Project. If Purchaser does not so exercise its Project Removal
      Option, then the Parties shall proceed in the same manner as if there had been
      no Material Taking. As used herein, a “Material
      Taking”
means
      either (i) a taking of any part of the Project reasonably required for the
      operation of the Project in the manner operated on the date hereof or which
      would be expected to result in a material reduction in the Credits thereafter
      available with respect to the Project, or (ii) a taking where the related
      condemnation proceeds are reasonably expected to exceed 10% of the fair market
      value of the applicable Project.

     

    5.17 Purchaser
      Option to Restructure Transaction.
      Purchaser shall have the option, at any time prior to the end of the Due
      Diligence Period, in its sole discretion, and upon thirty (30) days’ prior
      written notice to Seller, to restructure the transactions contemplated by this
      Agreement so that Purchaser shall acquire any or all Seller entities designated
      by Purchaser rather than the Purchased Interests from the respective designated
      Seller entities. Notwithstanding the foregoing, the terms of any such
      restructuring and the documents relating thereto shall be subject to the
      agreement of both parties.

    ARTICLE
      6. DUE
      DILIGENCE.

     

    Seller
      and Purchaser hereby agree as follows:

     

    
      
        
        

      

      
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    6.1 Purchaser’s
      Due Diligence; Access.
      Between
      the Effective Date and Closing, Seller shall allow Purchaser and its authorized
      representatives to conduct customary due diligence and shall allow Purchaser
      and
      its authorized representatives full access to all personnel, offices and other
      facilities of Seller, the Projects and the Project Partnerships, with such
      due
      diligence including without limitation (but only to the extent within Seller’s
      possession or control): (a) property level due diligence for all of the
      Projects, including physical condition assessments, unit walk throughs,
      environmental assessments, lease audits, review of books, records and service
      contracts, zoning and law compliance confirmation, title and survey review;
      (b)
      the review of all existing financing documents, including the Loan Documents,
      pertaining to the Projects and/or the Project Partnerships; (c) the review
      of
      information pertaining to the Project Partnerships (e.g., partnership
      agreements, certificates of good standing and tax returns); (d) the review
      of
      information related to the Credits and/or tax exempt bonds (e.g., cost
      certifications, 8609s, 8823s, tenant compliance and monitoring reports of the
      Project Partnerships, IRS audits and settlement agreements); and (e) the asking
      questions of, and receiving answers from, the officers, directors, shareholders
      and representatives of Seller, the partners of each Project Partnerships, state
      housing agencies having jurisdiction over the Projects, and the auditors and
      accountants for Seller and the Project Partnerships; provided that
      notwithstanding the foregoing, Purchaser shall not, without prior written notice
      and approval of Seller (which approval shall not be unreasonably withheld,
      conditioned or delayed), approach or have access to Seller’s officers,
      directors, shareholders and representatives or other personnel or the partners
      of the Project Partnership, state housing agencies having jurisdiction over
      the
      Projects or the auditors and accountants for Seller or the Project Partnerships.
      Seller will provide Purchaser with copies of any documents in Seller’s
      possession as Purchaser may reasonably request. The representations and
      warranties of Seller contained herein and in any Transaction Documents shall
      not
      be deemed waived or otherwise affected by any such due diligence investigation
      made by Purchaser. Any Project-related inspections will be done at reasonable
      times after reasonable notice and Seller shall have the right to have a
      representative present at all inspections. Purchaser shall repair any damage
      to
      any Project caused by any entry upon any Project by Purchaser and shall
      indemnify and hold harmless Seller from any claims for damage, personal injury
      or death caused by Purchaser's activities on any Project (but not for any
      pre-existing conditions that may be revealed by Purchaser’s investigations or
      for any damages arising out of Seller’s negligence) (Purchaser’s obligations
      under this sentence being the “Purchaser
      Repair Obligations”).
      Purchaser shall promptly give to Seller copies of all title reports, all UCC
      searches and all final, written third party physical or environmental reports,
      derived from Purchaser’s due diligence activities (or, in the case where a draft
      report is not finalized, Purchaser shall provide to Seller the last draft)
      without any representation or warranty by Purchaser with respect thereto and
      with it being understood that Seller shall not be permitted to rely on any
      such
      reports or drafts absent reliance letters or other consents from the applicable
      report providers. Purchaser’s structural engineering and environmental
      assessment reports will be obtained by Purchaser from third parties. Purchaser
      shall promptly commence its physical due diligence and will proceed with such
      due diligence diligently and in good faith. Purchaser shall also promptly order
      UCC searches on (1) † Management Company and each Seller in their respective
      States of organization, in Orange County, Florida and in each County in which
      a
      Project is located, and (2) on each Project Partnership in its State of
      organization and in the County in which its Project is located. All due
      diligence conducted by Purchaser shall be at Purchaser’s sole expense.
      Notwithstanding this Section
      6.1,
      Seller
      shall promptly supplement or amend the Schedules prior to the Closing pursuant
      to Section
      2.18.

    
      
        
        

      

      
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    6.2 Due
      Diligence Termination Option and Project Removal Rights.
      

     

    (a) Due
      Diligence Termination Option.
      This
      Agreement may be terminated by Purchaser, in its sole discretion for any or
      no
      reason (the “Due
      Diligence Termination Option”),
      by
      written notice (a “Due
      Diligence Termination Notice”)
      given
      to Seller at any time prior to the expiration of the Due Diligence Period.
      If
      Purchaser terminates this Agreement pursuant to this Section
      6.2,
      then
      this Agreement shall be null and void, and no party shall have any further
      liability or obligation to any other party under this Agreement, except that
      Purchaser shall not be relieved of the Purchaser Repair Obligations, and the
      Confidentiality Provisions shall survive for the period set forth in
Section
      5.4.

     

    (b) Project
      Removals Generally.
      Under
      certain circumstances set forth in the remaining subsections of this
Section
      6.2
      or in
Sections
      1.4(c),
      1.5,
      3.19(d),
      5.15,
      5.16,
      8.3
      or
8.4,
      either
      Seller or Purchaser may elect to cause a Project to be removed from the
      portfolio of Projects in which Purchaser is acquiring an indirect interest
      (any
      such removal being a “Project
      Removal”
and
      any
      such removed Project being a “Removed
      Project”).
      If a
      Project becomes a Removed Project, then (i) Purchaser shall neither acquire
      the
      Purchased Interests relating to such Removed Project nor assume any Seller
      Obligations relating to such Removed Project, (ii) the Base Price shall be
      reduced by the Allocated Value of the Removed Project, and (iii) the term
“Project” as used in this Agreement shall no longer be deemed to refer to such
      Removed Project. The option of either Party to cause a Project Removal in
      accordance with the terms of this Agreement is referred to herein as a
“Project
      Removal Option”.
      Notwithstanding anything to the contrary in this Agreement, Purchaser may not
      exercise a Project Removal Option pursuant to this Section
      6.2
      or
      pursuant to Section
      8.3(a)
      that
      would cause the aggregate Allocated Values of all Projects removed at
      Purchaser’s election pursuant to Sections
      1.5,
      6.2
      or
8.3(a)
      to
      exceed $25,000,000.

     

    (c) Material
      Conditions Generally.
      The
      remaining subsections of this Section
      6.2
      describe
      in detail the rights and obligations of the Parties with respect to various
      Material Conditions, which include in some cases, (i) certain rights of Seller
      to remedy certain Material Conditions, and (ii) certain rights of Purchaser
      to
      cause Project Removals with respect to certain Material
      Conditions.

    (d) Material
      Title and Survey Conditions.
      Purchaser shall promptly order title commitments or title reports on each of
      the
      Projects. Seller shall within 30 days after the Effective Date deliver to
      Purchaser copies of the most recent surveys of each Project in Seller’
possession or control. If during the Due Diligence Period Purchaser discovers
      a
      Material Title or Survey Condition, then Purchaser may deliver to Seller a
      notice during the Due Diligence Period specifying the applicable Material Title
      or Survey Condition. Seller shall within ten days after delivery of any such
      objection notice notify Purchaser as to whether Seller shall cure such Material
      Title or Survey Condition to Purchaser’s reasonable satisfaction by the later of
      the end of the Due Diligence Period or 30 days after the date of Purchaser’s
      notice (such later date being the “Required
      Title Cure Date”),
      and
      if so, describe the means by which Seller shall cure such Material Title or
      Survey Condition. If Seller fails to notify Purchaser of Seller’s intent to cure
      the Material Title or Survey Condition within such ten day period, Seller shall
      be deemed to have elected not to cure. If (i) Seller is unwilling to cure such
      Material Title or Survey Condition by the Required Title Cure Date, (ii) Seller
      indicates that it will cure such Material Title or Survey Condition by the
      Required Title Cure Date but fails to do so, or (iii) Seller fails to notify
      Purchaser within such ten-day period of Seller’s intention to so cure a Material
      Title or Survey Condition, then Purchaser may, by written notice to Seller
      within five business days after the applicable event (i.e. Seller’s notification
      of Seller’s unwillingness to cure; passage of the ten day period described above
      expires and Seller delivers no notice; failure to cure by the Required Title
      Cure Date), (x) exercise its Project Removal Option with respect to the Project
      to which the Material Title or Survey Condition relates, (y) elect to accept
      the
      Material Title or Survey Condition as-is (subject to its Due Diligence
      Termination Option), or (z) terminate this Agreement (in which case the Earnest
      Money, if posted prior to such termination, shall be returned to Purchaser).
      If
      Purchaser does not deliver any such notice to Seller within the five business
      day period set forth in the preceding sentence, Purchaser shall be deemed to
      have elected to accept the Material Title or Survey Condition as-is (subject
      to
      its Due Diligence Termination Option).
      Furthermore, if Seller elects to cure a Material Title
      or
      Survey Condition by
      the
      Required Title Cure Date and fails to do so, then Seller shall not be deemed
      to
      be in default due to such failure to cure (so long as Seller has used diligent,
      good faith efforts to cure), but Purchaser may terminate this Agreement by
      written notice to Seller within five business days after the Required Title
      Cure
      Date, in which case the Earnest Money (if posted prior to such termination)
      shall be returned to Purchaser.

     

    
      
        
        

      

      
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    (e) Material
      Physical Conditions.
      If
      during the Due Diligence Period Purchaser discovers a Material Physical
      Condition, then Purchaser may deliver to Seller a notice during the Due
      Diligence Period specifying the applicable Material Physical Condition. Seller
      shall within ten days after delivery of any such objection notice notify
      Purchaser as to whether Seller shall cure such Material Physical Condition
      to
      Purchaser’s reasonable satisfaction by the later of the end of the Due Diligence
      Period or 30 days after the date of Purchaser’s notice (such later date being
      the “Required
      Physical Cure Date”),
      and
      if so, describe the means by which Seller shall cure such Material Physical
      Condition (which may be by reducing the Base Price by an amount equal to the
      resulting Required Physical Cure Amount). If Seller fails to notify Purchaser
      of
      Seller’s intent to cure the Material Physical Condition within such ten day
      period, Seller shall be deemed to have elected not to cure. If (i) Seller is
      unwilling to cure such Material Physical Condition by the Required Physical
      Cure
      Date, (ii) Seller indicates that it will cure such Material Physical Condition
      by the Required Physical Cure Date but fails to do so, or (iii) Seller fails
      to
      notify Purchaser within such ten-day period of Seller’s intention to so cure a
      Material Physical Condition, then Purchaser may, by written notice to Seller
      within five business days after the applicable event (i.e. Seller’s notification
      of Seller’s unwillingness to cure; passage of the ten day period described above
      expires and Seller delivers no notice; failure to cure by the Required Physical
      Cure Date), (x) exercise its Project Removal Option with respect to the Project
      to which the Material Physical Condition relates, (y) elect to accept the
      Material Physical Condition as-is (subject to its Due Diligence Termination
      Option), or (z) terminate this Agreement (in which case the Earnest Money,
      if
      posted prior to such termination, shall be returned to Purchaser). If Purchaser
      does not deliver any such notice to Seller within the five business day period
      set forth in the preceding sentence, Purchaser shall be deemed to have elected
      to accept the Material Physical Condition as-is (subject to its Due Diligence
      Termination Option). Furthermore, if Seller elects to cure a Material Physical
      Condition by the Required Physical Cure Date and fails to do so, then Seller
      shall not be deemed to be in default due to such failure to cure (so long as
      Seller has used diligent, good faith efforts to cure), but Purchaser may
      terminate this Agreement by written notice to Seller within five business days
      after the Required Physical Cure Date, in which case the Earnest Money (if
      posted prior to such termination) shall be returned to
      Purchaser.

    
      
        
        

      

      
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    (f) Material
      Credit Reductions.
      If
      during the Due Diligence Period Purchaser discovers a Material Credit Reduction,
      then Purchaser may deliver to Seller a notice during the Due Diligence Period
      specifying the applicable Material Credit Reduction. If the Material Credit
      Reduction is reasonably susceptible to cure (which may be by a credit against
      the Purchase Price if the monetary effect on Purchaser is reasonably
      determinable) and relates to one or more specific Project Partnerships (as
      described in clause (x) of the definition of “Material Credit Reduction”) and
      not to the Project Partnerships on an aggregate basis (as described in clause
      (y) of the definition of “Material Credit Reduction”) (any such Material Credit
      Reduction being a “Curable
      Credit Reduction”),
      Seller shall within ten days after delivery of any such objection notice notify
      Purchaser as to whether Seller shall cure such Curable Credit Reduction to
      Purchaser’s reasonable satisfaction by the later of the end of the Due Diligence
      Period or 30 days after the date of Purchaser’s notice (such later date being
      the “Required
      Credit Cure Date”),
      and
      if so, describe the means by which Seller shall cure such Curable Credit
      Reduction. If Seller fails to notify Purchaser of Seller’s intent to cure the
      Curable Credit Reduction within such ten day period, Seller shall be deemed
      to
      have elected not to cure. If (i) the Material Credit Reduction is not a Curable
      Credit Reduction, (ii) Seller is unwilling to cure a Curable Credit Reduction
      to
      Purchaser’s reasonable satisfaction by the Required Credit Cure Date, (iii)
      Seller indicates that it will cure such Curable Credit Reduction by the Required
      Credit Cure Date but fails to do so, or (iv) Seller fails to notify Purchaser
      within such ten-day period of Seller’s intention to so cure a Curable Credit
      Reduction, then Purchaser may, by written notice to Seller within five business
      days after the applicable event (i.e. Seller’s notification of Seller’s
      unwillingness to cure; passage of the ten day period described above expires
      and
      Seller delivers no notice; failure to cure by the Required Credit Cure Date;
      determination that the Material Credit Reduction is not a Curable Credit
      Reduction), (x) exercise its Project Removal Option with respect to the
      Project(s) designated by Purchaser to which the Material Credit Reduction
      relates, or (y) elect to accept the Material Credit Reduction as-is (subject
      to
      its Due Diligence Termination Option), or (z) terminate this Agreement (in
      which
      case the Earnest Money, if posted prior to such termination, shall be returned
      to Purchaser). If Purchaser does not deliver any such notice to Seller within
      the five business day period set forth in the preceding sentence, Purchaser
      shall be deemed to have elected to accept the Material Credit Reduction as-is
      (subject to its Due Diligence Termination Option). Furthermore, if Seller elects
      to cure a Curable Credit Reduction by the Required Credit Cure Date and fails
      to
      do so, then Seller shall not be deemed to be in default due to such failure
      to
      cure (so long as Seller has used diligent, good faith efforts to cure), but
      Purchaser may terminate this Agreement by written notice to Seller within five
      business days after the Required Credit Cure Date, in which case the Earnest
      Money (if posted prior to such termination) shall be returned to
      Purchaser.

    
      
        
        

      

      
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    (g) Material
      Litigation.
      If
      during the Due Diligence Period Purchaser discovers Material Litigation, then
      Purchaser may deliver to Seller a notice during the Due Diligence Period
      specifying the applicable Material Litigation. Seller shall within ten days
      after delivery of any such objection notice notify Purchaser as to whether
      Seller shall cure such Material Litigation by the later of the end of the Due
      Diligence Period or 30 days after the date of Purchaser’s notice (such later
      date being the “Required
      Litigation Cure Date”),
      and
      if so, describe the means by which Seller shall cure such Material Litigation.
      Acceptable cures with respect to Material Litigation shall be limited to (x)
      final dismissal with prejudice of such Material Litigation, (y) final, binding
      settlement of such litigation, or (z) an indemnity (and security therefor)
      acceptable to Purchaser in its sole discretion. If Seller fails to notify
      Purchaser of Seller’s intent to cure the Material Litigation within such ten day
      period, Seller shall be deemed to have elected not to cure. If (i) Seller is
      unwilling to cure any Material Litigation by the Required Litigation Cure Date,
      (ii) Seller indicates that it will cure such Material Litigation by the Required
      Litigation Cure Date but fails to do so, or (iii) Seller fails to notify
      Purchaser within such ten-day period of Seller’s intention to so cure such
      Material Litigation, then Purchaser may, by written notice to Seller within
      five
      business days after the applicable event (i.e. Seller’s notification of Seller’s
      unwillingness to cure; passage of the ten day period described above expires
      and
      Seller delivers no notice; failure to cure by the Required Litigation Cure
      Date), (1) if, and only if, the Material Litigation relates to specific Projects
      or Project Partnerships, exercise its Project Removal Option with respect to
      the
      Project(s) designated by Purchaser to which the Material Litigation relates,
      (2)
      accept the Material Litigation as-is (subject to its Due Diligence Termination
      Option), or (3) terminate this Agreement (in which case the Earnest Money,
      if
      posted prior to such termination, shall be returned to Purchaser). If Purchaser
      does not deliver any such notice to Seller within the five business day period
      set forth in the preceding sentence, Purchaser shall be deemed to have elected
      to accept the Material Litigation as-is (subject to its Due Diligence
      Termination Option). Furthermore, if Seller elects to cure any Material
      Litigation by the Required Litigation Cure Date and fails to do so, then Seller
      shall not be deemed to be in default due to such failure to cure (so long as
      Seller has used diligent, good faith efforts to cure), but Purchaser may
      terminate this Agreement by written notice to Seller within five business days
      after the Required Litigation Cure Date, in which case the Earnest Money (if
      posted prior to such termination) shall be returned to
      Purchaser.

    (h) Material
      Representation Breaches.
      If
      during the Due Diligence Period Purchaser discovers a Material Representation
      Breach, then Purchaser may deliver to Seller a notice during the Due Diligence
      Period specifying the applicable Material Representation Breach. If the Material
      Representation Breach is susceptible to cure by the later of the end of the
      Due
      Diligence Period or 30 days after the date of Purchaser’s notice (such later
      date being the “Required
      Rep Cure Date”),
      Seller shall within ten days after delivery of any such objection notice notify
      Purchaser as to whether Seller shall cure such Material Representation Breach
      by
      the Required Rep Cure Date, and if so, describe the means by which Seller shall
      cure such Material Representation Breach. If Seller fails to notify Purchaser
      of
      Seller’s intent to cure a curable Material Representation Breach within such ten
      day period, Seller shall be deemed to have elected not to cure. If (i) the
      Material Representation Breach is not susceptible to cure by the Required Rep
      Cure Date, (ii) Seller is unwilling to cure such Material Representation Breach
      by the Required Rep Cure Date, (iii) Seller indicates that it will cure such
      Material Representation Breach by the Required Rep Cure Date but fails to do
      so,
      or (iv) Seller fails to notify Purchaser within such ten-day period of Seller’s
      intention to so cure a curable Material Representation Breach, then Purchaser
      may, by written notice to Seller within five business days after the applicable
      event (i.e. Seller’s notification of Seller’s unwillingness to cure; passage of
      the ten day period described above expires and Seller delivers no notice;
      failure to cure by the Required Rep Cure Date; determination that the Material
      Representation Breach is not susceptible to cure), (x) if, and only if, the
      Material Representation Breach relates to specific Projects or Project
      Partnerships, exercise its Project Removal Option with respect to the Project
      to
      which the Material Representation Breach relates, (y) elect to accept the
      Material Representation Breach as-is (subject to its Due Diligence Termination
      Option), or (z) terminate this Agreement (in which case the Earnest Money,
      if
      posted prior to such termination, shall be returned to Purchaser). If Purchaser
      does not deliver any such notice to Seller within the five business day period
      set forth in the preceding sentence, Purchaser shall be deemed to have elected
      to accept the Material Representation Breach as-is (subject to its Due Diligence
      Termination Option). Furthermore, if Seller elects to cure a Material
      Representation Breach by the Required Rep Cure Date and fails to do so, then
      Seller shall not be deemed to be in default due to such failure to cure (so
      long
      as Seller has used diligent, good faith efforts to cure), but Purchaser may
      terminate this Agreement by written notice to Seller within five business days
      after the Required Rep Cure Date, in which case the Earnest Money (if posted
      prior to such termination) shall be returned to Purchaser. If this Agreement
      is
      terminated pursuant to Purchaser’s exercise of its Due Diligence Termination
      Option and a Material Representation Breach exists, then Purchaser shall also
      be
      entitled to all the remedies available to Purchaser pursuant to Section
      8.5(a)
      on
      account of a termination of this Agreement by Purchaser pursuant to Section
      8.4(c).

     

    
      
        
        

      

      
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    6.3 As-Is.
      Notwithstanding anything to the contrary herein, any representations and
      warranties specifically regarding the physical condition of the Projects shall
      not survive Closing and no claim may be made thereon after Closing. Purchaser
      acknowledges and agrees that, as between Seller and Purchaser, the physical
      condition of the Projects is "as is, where is, with all faults".

     

    6.4 Required
      Consents.
      Schedule
      6.4
      sets
      forth certain Required Consents the parties have preliminarily determined are
      necessary for the consummation of the transactions contemplated by this
      Agreement (and indicates thereon to which Purchased Interest(s) each such
      Required Consent relates). Each Party shall notify the other if between the
      Effective Date and Closing it determines that any additional consents in
      addition to those listed on Schedule
      6.4
      are
      necessary for the consummation of the transactions contemplated by this
      Agreement, and any such additional consents shall be Required Consents. The
      parties shall cooperate in good faith to obtain all Required Consents and shall
      promptly commence and diligently pursue the process of attempting to obtain
      the
      Required Consents. As set forth in Section
      1.1,
      Purchaser also agrees that, to the extent required by the provider of a Required
      Consent as a condition to the granting of such Required Consent, each of the
      Purchaser Upper Tier Entities shall jointly and severally guarantee any Seller
      Obligations that are currently guaranteed by any Seller or another party related
      to Seller (each a “Seller
      Guarantor”).
      To
      the extent the consent of Seller or any Affiliate of Seller is a Required
      Consent (e.g. as a Limited Partner in a Project Partnership), such consent
      is
      hereby granted. Once any Required Consent is executed, the Parties shall comply
      with their respective obligations thereunder. As
      set
      forth in Section
      8.2(e),
      a
      Required Consent shall be deemed to satisfy the closing condition set forth
      in
Section
      8.2(e)
      only if
      the Required Consent (or another document executed by the Required Consent
      provider) provides (if
      and
      only to the extent applicable) that each applicable Seller Guarantor is released
      from any contractual liabilities which first arise after Closing under any
      documents to which it is personally a party and under which it would otherwise
      have express contractual liability.
      The
      parties shall also seek to have the Required Consent providers also release
      each
      applicable Seller Guarantor from any liabilities under the applicable documents
      which arise before Closing (although it shall not be a condition to Closing
      or a
      condition to the effectiveness of a Required Consent that any Seller Guarantor
      be so released from any pre-Closing liabilities).

     

    
      
        
        

      

      
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    6.5 Space
      Leases.
      

     

    (a) Purchaser
      and Seller shall cooperate to attempt to obtain (i) any landlord consents or
      other consents as may be necessary in connection with the assignment and
      assumption of the Space Leases or in connection with Purchaser’s acquisition of
† Management Company (with respect to any such leases under which † Management
      Company is the lessee), and (ii) any landlord estoppels requested by Purchaser
      with respect to the Space Leases. If despite the parties’ good faith efforts to
      obtain any such required consent to any such assignment of a Space Lease cannot
      be obtained, Purchaser may elect to sublease the applicable Leased Space from
      Seller provided that all necessary consents, if any, required in connection
      with
      any such sublease are obtained. Any such sublease shall be on the same economic
      terms and for the same duration as the applicable Space Lease. It shall be
      a
      condition to Purchaser’s obligation to assume any Space Lease or to sublease the
      space leased thereunder that Purchaser receive a landlord estoppel reasonably
      acceptable to Purchaser. The inability to obtain consents necessary to assume
      any Space Lease (or to the change in ownership of † Management Company where †
Management Company is the lessee) or sublease the space leased thereunder shall
      not be deemed to be a failure of a condition to Closing. In connection with
      obtaining the consents described in this Section, the parties shall also
      endeavor to have the landlords release the current tenants (other than †
Management Company) and any guarantors from any liability under the Space Leases
      with respect to the period after Closing.

    (b) The
      parties have agreed that (assuming Closing occurs) † Management Company shall
      have the right to assign the Home Office Lease to † (or another Person
      designated by †) as of the end of the fifth lease year or (if not previously so
      assigned) as of the end of any lease year thereafter, and to be released from
      any further liability thereunder (other than with respect to events or
      circumstances that occurred between the date Purchaser acquired † Management
      Company and the date of such assignment) upon such assignment; provided that
†
Management Company shall not be entitled to make such an assignment at any
      time
      when a material default exists under the Home Office Lease (although †
Management Company may thereafter assign the Home Office Lease in accordance
      with the terms of this Section if such material default is first cured).
      Accordingly, † hereby agrees to so assume (or cause another Person to assume)
      the Home Office Lease upon not less than six months’ and not more than eighteen
      months’ prior written notice (an “Assignment
      Notice”)
      from †
Management Company effective upon the end of the fifth lease year or (if not
      previously so assigned) as of the end of any lease year thereafter, provided
      that the Home Office Landlord (i) consents to such assignment, and (ii) agrees
      that † Management Company shall be released from any liability under the Home
      Office Lease with respect to events or circumstances first occurring during
      the
      period from and after the date of such assignment (such consent and agreement
      to
      be evidenced by a written “Home
      Office Consent and Release”).
      Commencing promptly after † receives an Assignment Notice, † shall use
      commercially reasonable efforts to obtain the Home Office Consent and Release.
      If the Home Office Consent and Release is not obtained by the date which is
      60
      days after the delivery of the Assignment Notice, then † Management Company may
      deliver the Termination Notice referenced in Section 2.4 of the Home Office
      Lease, and † shall pay the Termination Fee referenced in such Section 2.4.
      Because such Termination Fee is required to be delivered simultaneously with
      such Termination Notice, † shall remit such Termination Fee to † Management
      Company (or, at his election, directly to Home Office Landlord with evidence
      thereof to † Management Company) within ten days after notice from † Management
      Company that it has elected to deliver such Termination Notice. If † fails to so
      remit the Termination Fee, † Management Company may itself pay the Termination
      Fee to Home Office Landlord, and † shall on demand reimburse † Management
      Company therefor with interest thereon at the prime rate of interest (as
      reported in the Wall Street Journal) plus six percent per annum until paid
      in
      full. If the Home Office Lease is assigned to † (or his designee) as
      contemplated by this Section
      6.5(b),
      then
      (1) † Management Company and Purchaser shall indemnify † (or such designee)
      against any liability under such lease arising out of any events or
      circumstances taking place during the period from the date Purchaser acquired
†
Management Company to the date of such assignment, and (2) † shall indemnify †
Management Company and Purchaser against any liability under such lease arising
      out of any events or circumstances taking place after the date of any such
      assignment. Without limiting the generality of the foregoing, † shall pay any
      termination fees due under such lease arising after any such assignment. The
      terms of this Section
      6.5(b)
      shall
      survive Closing and shall not be subject to or limited by any of the provisions
      of Article
      7
      hereof
      (e.g. amounts due shall not be subject to the liability caps or survival period
      limitations set forth therein).

    
      
        
        

      

      
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    6.6 Personal
      Property Leases.
      Purchaser and Seller shall cooperate to attempt to obtain (i) any lessor
      consents or other consents as may be necessary in connection with the assignment
      and assumption of any of the Personal Property or in connection with Purchaser’s
      acquisition of † Management Company (with respect to any such leases under which
† Management Company is the lessee), and (ii) any lessor estoppels requested
      by
      Purchaser with respect to the Personal Property Leases. If despite the parties’
good faith efforts to obtain any such required consent to any such assignment
      of
      a Personal Property Lease cannot be obtained, Purchaser may elect to sublease
      the applicable Leased Personal Property from Seller provided that all necessary
      consents, if any, required in connection with any such sublease are obtained.
      Any such sublease shall be on the same economic terms and for the same duration
      as the applicable Personal Property Lease. It shall be a condition to
      Purchaser’s obligation to assume any Personal Property Lease or to sublease the
      Leased Personal Property leased thereunder that Purchaser receive a lessor
      estoppel reasonably acceptable to Purchaser. The inability to obtain consents
      necessary to assume any Personal Property Lease (or to the change in ownership
      of † Management Company where † Management Company is the lessee) or sublease
      the personal property leased thereunder shall not be deemed to be a failure
      of a
      condition to Closing. In connection with obtaining the consents described in
      this Section, the parties shall also endeavor to have the lessors release the
      current lessees (other than † Management Company) and any guarantors from any
      liability under the Personal Property Leases with respect to the period after
      Closing.

     

    
      
        
        

      

      
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    ARTICLE
      7. INDEMNIFICATION.
      

     

    7.1 Seller’s
      Indemnification.
      Subject
      to the limitations set forth in this Article
      7,
      each
      Seller shall indemnify Purchaser (including each entity that Purchaser creates
      to take title to any of the Purchased Interests at Closing) and their Affiliates
      (excluding the Project Partnerships) and their respective officers, directors,
      employees, accountants, consultants, legal counsel, agents and other
      representatives (collectively, the “Purchaser
      Indemnified Parties”
and,
      individually, a “Purchaser
      Indemnified Party”)
      from
      and against and in respect of any and all demands, claims, causes of action,
      administrative orders and notices, losses, costs, fines, liabilities, claims,
      penalties, damages (direct or indirect) and expenses (including reasonable
      legal, paralegal, accountant and consultant fees and expenses incurred in the
      investigation and defense of claims and actions), as the same are incurred,
      of
      any kind or nature whatsoever (whether or not arising out of third party claims,
      except to the extent expressly stated to be limited to third party claims)
      (collectively, “Losses”)
      that
      may be sustained or suffered by any such Purchaser Indemnified Party resulting
      from, in connection with or arising out of (but only with respect to third
      party
      claims in the case of clauses (d), (e) and (f) below):

     

    (a) any
      breach of any representation or warranty made by any Seller in Article
      2
      or
Article
      3
      of this
      Agreement or in any Transaction Document to which a Seller is a party, to the
      extent such representation or warranty survives Closing pursuant to the terms
      hereof;

    (b) (i)
      events occurring before Closing and of which Seller has Actual Knowledge or
      with
      respect to which Seller has received written notice from a third party of a
      pending, threatened or potential breach, default, violation or claim and which
      (x) are not disclosed in this Agreement or the Schedules hereto (or the
      documents listed on any such Schedule) during the Due Diligence Period or
      otherwise disclosed to Purchaser in a written letter from Seller at least five
      days before the end of the Due Diligence Period, and (y) do not relate to the
      physical condition of the Projects; (ii) any claim made by any Required Consent
      provider (other than any claim or threatened claim by a Required Consent
      provider disclosed in writing by Seller to Purchaser during the Due Diligence
      Period) arising out of or attributable to any Assumed Obligations, to the extent
      such claim relates to events occurring or circumstances existing before Closing;
      (iii) events occurring or circumstances existing before Closing (other than
      those raised in any claim or threatened claim by a Required Consent provider
      disclosed in writing by Seller to Purchaser during the Due Diligence Period)
      that result in (1) a payment to a Required Consent provider or its
      Affiliate under a Standalone Guaranty, (2) a distribution to a Required
      Consent provider of Project Partnership cash flow to which such Required
      Consent provider would not otherwise have been entitled but for such event
      or
      circumstance, or (3) any other Loss incurred due to any payment required to
      be made by a General Partner to a Limited Partner pursuant to the provisions
      of
      a Project Partnership Agreement which payment would not otherwise have been
      required to be made but for such event or circumstance; or (iv) without limiting
      the generality of the foregoing items (i)-(iii), any Loss resulting from a
      Final
      Determination that any Tax basis, Tax allocation or other Tax determinations
      made before Closing were improper;

     

    
      
        
        

      

      
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    (c) any
      breach of any covenant or agreement made by any Seller in this Agreement or
      in
      any Transaction Document to which a Seller is a party (other than breach of
      a
      covenant or agreement relating to the physical condition of the Projects to
      the
      extent such breach first occurs only prior to (and not after) the expiration
      of
      the Due Diligence Period and Purchaser knows or should have known of such breach
      prior to the expiration of the Due Diligence Period);

     

    (d) any
      Liability resulting from Seller’s or its Affiliates’ pursuit of Retained
      Claims;

     

    (e) any
      event
      occurring prior to Closing which results in any liability to Purchaser under
      any
      Space Lease or Personal Property Lease where † Management Company is the lessee
      or that is assumed by Purchaser or its designee or with respect to which
      Purchaser or its designee subleases the applicable Leased Space or Leased
      Personal Property;

     

    (f) the
      matters covered by the indemnities of Seller set forth in Section
      5.11
      plus any
      (i) Liability of † Management Company arising out of any event occurring prior
      to Closing or (ii) any other act or omission of † Management Company occurring
      prior to Closing which results in any Liability of Purchaser, in each case
      with
      respect to such categories (i) and (ii) except to the extent (1) a proration
      credit was given by Seller to Purchaser at Closing on account of the applicable
      Liability (or the Liability is for accrued paid time off or major medical leave
      for an employee of † Management Company, for which Purchaser is not entitled to
      a credit as set forth in Section
      5.11(a))
      or (2)
      the applicable Liability was disclosed in this Agreement or the Schedules hereto
      (or the documents listed on any such Schedule) during the Due Diligence Period
      or otherwise disclosed to Purchaser in a written letter from Seller at least
      five days before the end of the Due Diligence Period (it being understood,
      however, that Seller shall remain liable with respect to any undisclosed
      defaults occurring prior to Closing under any disclosed agreements) (the matters
      described in this Section
      7.1(f)
      being
“†
      Management Liabilities”);

    (g) any
      disputes between or among any of the Seller entities or their direct or indirect
      owners or beneficial owners; and

     

    (h) any
      fraud
      of any Seller in connection with this Agreement or any Transaction Document
      to
      which a Seller is a party.

     

    Notwithstanding
      the provisions of any representation or warranty that includes, or requires
      disclosure of matters above, a specific monetary threshold or a materiality,
      Material Adverse Effect or Material Condition qualifier, if Seller breaches
      any
      of such representations and warranties due to the monetary thresholds or
      materiality, Material Adverse Effect or Material Condition qualifiers contained
      therein having been exceeded, then for purposes of Section 7.5(a) Losses for
      each such breached representation and warranty shall include the full amount
      of
      the Losses incurred by Purchaser Indemnified Parties relating to any such matter
      notwithstanding the monetary thresholds, materiality, Material Adverse Effect
      or
      Material Condition qualifiers listed in such representations or
      warranties.

     

    7.2 The
      Purchaser’s Indemnification.
      Subject
      to the limitations set forth in this Article
      7,
      Purchaser shall indemnify and hold harmless Seller and its Affiliates and their
      respective successors, permitted assigns, personal representatives, heirs,
      officers, directors, employees, accountants, consultants, legal counsel, agents,
      members and other representatives (collectively, the “Seller
      Indemnified Parties”
and,
      individually, a “Seller
      Indemnified Party”)
      from
      and against and in respect of any and all Losses that may be sustained or
      suffered by any such Seller Indemnified Party resulting from, in connection
      with
      or arising out of:

     

    
      
        
        

      

      
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    (a) any
      breach of any representation or warranty made by Purchaser in Article 4
      of this
      Agreement or in any Transaction Document to which Purchaser is a party, to
      the
      extent such representation or warranty survives Closing pursuant to the terms
      hereof;

     

    (b) any
      breach of any covenant or agreement made by Purchaser in this Agreement or
      in
      any Transaction Document pursuant to which Purchaser is a party;
      and

     

    (c) any
      Liability relating to the Purchased Interests or the Projects to the extent
      such
      claims arise after the Closing Date and during the period that is the longer
      of
      Purchaser’s or its Affiliate’s or designee’s ownership of such Purchased
      Interests or Projects and three years from the date of Closing, except to the
      extent any such Liability is the responsibility of Seller pursuant to
Section
      7.1;
      

     

    (d) any
      event
      occurring after Closing which results in any liability under any Space Lease
      or
      Personal Property Lease where † Management Company is the lessee or that is
      assumed by Purchaser or its designee or with respect to which Purchaser or
      its
      designee subleases the applicable Leased Space or Leased Personal Property
      (except that the foregoing shall not apply with respect to any liability arising
      under the Home Office Lease due to circumstances or events first occurring
      after
      such time, if any, that such lease is assigned to † or his designee as described
      in Section
      6.5(b));
      

    (e) any
      Liability pursuant to the indemnities of Purchaser set forth in Section
      5.11;
      and

     

    (f) any
      fraud
      of any Purchaser in connection with this Agreement or any Transaction Document
      to which a Purchaser is a party.

     

    7.3 Indemnification
      Procedures.

     

    (a) Procedures
      Relating to Indemnification.
      In the
      event that a third party (including any Governmental Entity) files a lawsuit,
      enforcement action or other proceeding against a Party entitled to
      indemnification under this Article
      7
      (an
“Indemnified
      Party”)
      or the
      Indemnified Party receives notice of, or becomes aware of, a condition or event
      which otherwise entitles such Party to the benefit of any indemnity hereunder
      in
      connection with a claim by a third party (including any Governmental Entity)
      (a
“Third
      Party Claim”),
      the
      Indemnified Party shall give written notice thereof (the “Claim
      Notice”)
      promptly to each Party obligated to provide indemnification pursuant to this
      Article 7 (an “Indemnifying
      Party”);
      provided,
      however,
      the
      failure to deliver a Claim Notice in a prompt fashion shall not result in a
      waiver of any right to indemnification hereunder except to the extent that
      the
      Indemnifying Party’s ability to defend against the event with respect to which
      indemnification is sought is adversely affected by the failure of the
      Indemnified Party to give notice in a timely fashion. The Claim Notice shall
      describe in reasonable detail the nature of the claim, including an estimate,
      if
      practicable, of the amount of Losses that have been or may be suffered or
      incurred by the Indemnified Party attributable to such claim and the basis
      of
      the Indemnified Party’s request for indemnification under this
      Agreement.

     

    
      
        
        

      

      
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    (b) Conduct
      of Defense.
      An
      Indemnifying Party shall have the right upon written notice to the Indemnified
      Party given within thirty (30) days following the receipt of a Claim Notice
      (a
“Defense
      Notice”)
      to
      assume at its expense (using counsel reasonably satisfactory to the Indemnified
      Party) the defense against such Third Party Claim in its own name, or, if
      necessary, in the name of the Indemnified Party. When the Indemnifying Party
      conducts the defense, the Indemnified Party shall have the right to approve
      the
      defense counsel representing the Indemnifying Party in such defense, which
      approval shall not be unreasonably withheld or delayed. The Indemnifying Party
      shall have the right to withdraw from the defense of any Third Party Claim
      with
      respect to which the Indemnifying Party had previously delivered a Defense
      Notice at any time upon reasonable notice to the Indemnified Party (it being
      understood that if the Indemnifying Party withdraws from the defense of any
      Third Party Claim that indemnifiable Losses pursuant to this Article 7 shall
      include any actual losses, costs, fines, liabilities, claims, penalties, damages
      and expenses attributable to or resulting from such withdrawal of
      defense).

    (c) Conduct
      by Indemnified Party.
      Notwithstanding Section
      7.3(b),
      in the
      event that (i) the Indemnifying Party fails to timely assume the defense of
      the
      Third Party Claim pursuant to Section
      7.3(b)
      or (ii)
      the Indemnifying Party withdraws from the defense of a Third Party Claim as
      contemplated by Section
      7.3(b),
      the
      Indemnified Party shall have the right to conduct such defense in good faith
      with counsel reasonably acceptable to the Indemnifying Party; provided,
      however,
      that
      the Indemnified Party may not compromise or settle the claim without the prior
      written consent of the Indemnifying Party (which consent shall not be
      unreasonably withheld, conditioned or delayed).

     

    (d) Cooperation.
      In the
      event that the Indemnifying Party elects to conduct the defense of such Third
      Party Claim in accordance with Section
      7.3(b),
      the
      Indemnified Party will cooperate with and make available to the Indemnifying
      Party such assistance, personnel, witnesses and materials as the Indemnifying
      Party may reasonably request. Regardless of which Party defends such Third
      Party
      Claim, the other Party shall have the right at its expense to participate in
      the
      defense assisted by counsel of its own choosing.

     

    (e) Settlements.
      Without
      the prior written consent of the Indemnified Party (which consent shall not
      be
      unreasonably withheld, conditioned or delayed), the Indemnifying Party shall
      not
      enter into any settlement of any Third Party Claim if, pursuant to or as a
      result of such settlement, such settlement (x) would result in any liability
      on
      the part of the Indemnified Party for which the Indemnified Party is not
      entitled to indemnification hereunder, (y) does not include an unconditional
      release of the Indemnified Party and its officers, directors, employees and
      Affiliates from all liability arising out of such claim, or (z) contains any
      equitable order, judgment or term that in any manner affects, restrains or
      interferes with the business of the Indemnified Party or any of its Affiliates.
      If a firm offer is made to settle a Third Party Claim, which offer the
      Indemnifying Party is permitted to settle under this Section 7.3,
      and the
      Indemnifying Party desires to accept and agree to such offer, the Indemnifying
      Party shall give prior written notice to the Indemnified Party to that effect.
      If the Indemnified Party objects to such firm offer within ten (10) days after
      its receipt of such notice, the Indemnified Party may continue to contest or
      defend such Third Party Claim and, in such event, the maximum liability of
      the
      Indemnifying Party as to such Third Party Claim shall not exceed the amount
      of
      such settlement offer, plus other Losses paid or incurred by the Indemnified
      Party up to the point such notice had been delivered. Failure to object within
      such time period shall be deemed acceptance of the offer. No Indemnified Party
      shall settle any Third Party Claim without the prior written consent of the
      Indemnifying Party.

    
      
        
        

      

      
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    (f) Tax
      Contests. Subject
      to obtaining any Required Consents which may be necessary to change the Tax
      Matters Partner, Seller
      shall cooperate with Purchaser in filing such forms and notices as are required
      to cause Purchaser or its designee to be the Tax Matters Partner, pursuant
      to
      the Code, for all taxable years of each Project Partnership. If a Governmental
      Entity shall propose an adjustment to, or examine or audit of, the Taxes of
      any
      Project Partnership with respect to any matter which, if determined adversely,
      would give rise to an indemnity obligation pursuant to Section
      7.1
      or a
      payment by Seller or a Seller Guarantor to a Limited Partner under a tax credit
      guaranty, then Purchaser shall notify Seller within twenty (20) days of receipt
      of notice of any such adjustment, examination or audit; provided, however,
      that
      the failure to give such notice shall not relieve Seller of its obligations
      hereunder unless such failure reasonably prevents Seller from exercising its
      rights under this Agreement, or materially impairs or prejudices the exercise
      of
      such rights. Seller may at any time after receipt of such notice provide, at
      its
      election, a notice (a “Control
      Notice”)
      to
      Purchaser that Seller intends to direct and control the examination, audit
      or
      contest as to one or more proposed adjustments. If Seller elects not to deliver
      a Control Notice to Purchaser, then Purchaser shall direct and control the
      audit, examination or contest, but shall nevertheless keep Seller reasonably
      informed as to all actions to be taken in connection with such contest, shall
      promptly provide Seller with all material correspondence sent to, or received
      from, the Governmental Entity regarding such adjustment and such other
      documentation as reasonably requested by Seller relating to the proposed
      adjustment, shall consult with Seller in good faith concerning the procedure
      in
      which such adjustment is contested, and the substantive arguments to be asserted
      by Purchaser in such contest, and shall allow a Seller representative to attend
      all meetings with representatives of the Governmental Entity regarding the
      proposed adjustment (the retention of control by Purchaser where no Control
      Notice is delivered shall not impair Purchaser’s rights to claim on any
      indemnity). Prior to proposing or entering into any settlement or agreement
      with
      the Government Entity or payment of Tax regarding any proposed adjustment as
      to
      which a Control Notice was not delivered, Purchaser shall provide Seller with
      the relevant information regarding such proposed settlement or agreement or
      payment of Tax and Seller shall have ten (10) days after receipt of such
      information to provide a Control Notice as to the adjustments that are the
      subject of such settlement or agreement or payment of Tax, and during such
      time
      period Purchaser shall not take any action with respect to such adjustments.
      If
      Seller at any time delivers a Control Notice to Purchaser, then, with respect
      only to those proposed adjustments as to which the Control Notice relates,
      Seller shall, subject to the rights of any limited partner under the applicable
      Project Partnership Agreement to provide prior written consent to various
      actions and to exercise other rights to participate in the applicable
      proceeding, direct and control the progress of and settle the audit, examination
      or contest, and specifically, without limitation: (i) Purchaser may not settle
      such proposed adjustments, or pay any tax with respect thereto, without Seller’s
      consent, (ii) Purchaser shall, if requested by Seller, contest any such proposed
      adjustment, except that Purchaser shall not be required to appeal any adverse
      determination to the United States Supreme Court, (iii) Seller or its
      representative may attend and direct all meetings with the Governmental Entity
      regarding such proposed adjustments, (iv) at Seller’s request, Purchaser shall
      provide a power of attorney to one or more counsel or other authorized
      representatives designated by Seller and reasonably acceptable to Purchaser,
      who
      shall represent the Project Partnership with respect to such adjustments, under
      the direction of Seller, and Purchaser shall cooperate with Seller and its
      representatives to provide documentation and other reasonable assistance in
      connection therewith. Delivery by Seller of a Control Notice shall constitute
      an
      agreement by Seller to indemnify Purchaser on demand for any Liability incurred
      by Purchaser by reason of any Taxes, additions to Tax, interest or penalties
      finally determined to be owing as a result of the proposed adjustments to which
      the Control Notice relates, provided that indemnification shall not include
      a
      gross up for the tax liability on indemnification payments made to Purchaser,
      or
      any other payment made to Purchaser relating to indemnification on an after
      tax
      basis. The parties shall share equally the reasonable actual costs of any
      unaffiliated third party professionals (e.g. attorneys and accountants) engaged
      in connection with any of the proceedings described in this Section
      7.3(f).

    
      
        
        

      

      
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    7.4 Nature
      of Other Liabilities.
      In the
      event any Indemnified Party should have a claim against any Indemnifying Party
      hereunder which does not involve a Third Party Claim, the Indemnified Party
      shall promptly transmit to the Indemnifying Party a written notice
      (“Indemnity
      Notice”)
      describing in reasonable detail the nature of the claim and the basis of the
      Indemnified Party’s request for indemnification under this Agreement. If the
      Indemnifying Party does not notify the Indemnified Party within thirty
      (30) days from its receipt of the Indemnity Notice that the Indemnifying
      Party disputes such claim, the claim specified by the Indemnified Party in
      the
Indemnity
      Notice shall be deemed a liability of the Indemnifying Party hereunder, with
      respect to which the Indemnified Party is entitled to prompt indemnification
      hereunder.

     

    7.5 Certain
      Limitations.
      

     

    (a) Basket.
      The
      Seller shall not be obligated to indemnify Purchaser Indemnified Parties
      pursuant to Sections 7.1
      with
      respect to matters other than † Management Liabilities unless claims for
      indemnification against Seller on account of matters other than † Management
      Liabilities exceed in the aggregate the Seller General Liability Basket, at
      which point Purchaser Indemnified Parties shall be entitled to indemnification
      for all Losses with respect to matters other than † Management Liabilities
      pursuant to Section 7.1.
      The
      Seller shall not be obligated to indemnify Purchaser Indemnified Parties
      pursuant to Sections 7.1
      with
      respect to † Management Liabilities unless claims for indemnification against
      Seller on account of † Management Liabilities exceed in the aggregate $500,000,
      at which point Purchaser Indemnified Parties shall be entitled to
      indemnification for all Losses with respect to † Management Liabilities pursuant
      to Section 7.1.
      

     

    (b) Fees.
      Notwithstanding anything contained herein to the contrary, no Party shall be
      liable to any Purchaser Indemnified Party or Seller Indemnified Party with
      respect to fees and expenses of more than one counsel for all Purchaser
      Indemnified Parties or Seller Indemnified Parties, as the case may be, with
      respect to any claim or claims for indemnification arising out of the same
      general allegations or circumstances.

     

    
      
        
        

      

      
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    (c) Seller
      Liability.
      Notwithstanding anything to the contrary herein (other than the terms of
Section
      6.5(b)
      regarding the Home Office Lease), after Closing, (i) the sole and exclusive
      remedy for Purchaser or any Purchaser Indemnified Party for any claim for any
      losses, liabilities, damages, expenses and costs relating to the Projects,
      the
      Purchased Interests, the Assumed Obligations or any other matters arising out
      of
      or under this Agreement or the transactions contemplated hereby shall be a
      claim
      made pursuant to this Article 7, (ii) Seller’s Liability for any such matters
      shall not exceed the General Liability Cap (as defined below in this subsection)
      in the aggregate with respect to all such matters other than † Management
      Liabilities and $5,000,000 with respect to † Management Liabilities, and (iii)
      the sole source of payment for any amounts payable to Purchaser or any Purchaser
      Indemnified Party on account of any such matters shall be funds drawn under
      the
      Seller Indemnity Letter of Credit (with respect to all matters other than †
Management Liabilities) or the † Management Letter of Credit (with respect to †
Management Liabilities); provided that, to the extent the issuer of either
      such
      letter of credit is unable or unwilling to fund any request for a draw
      thereunder, then † shall be personally liable for any amounts that such issuer
      is so unwilling or unable to fund and the applicable letter of credit shall
      be
      reduced in the amount of any such payments made by †. “General
      Liability Cap”
shall
      mean $25,000,000; provided that if there are Removed Projects, then (x) the
      amount of the General Liability Cap shall initially equal $25,000,000 multiplied
      by a fraction (i) having as its numerator the aggregate Allocated Values of
      all
      of the Projects which are the subject of the initial Closing and (ii) having
      as
      a denominator the sum of the aggregate Allocated Values of all of the Projects
      which are the subject of the initial Closing plus the aggregate Allocated Values
      of all of the Removed Projects, and (y) at each Subsequent Closing (if any),
      the
      amount of the General Liability Cap shall be increased to equal $25,000,000
      multiplied by a fraction (i) having as its numerator the aggregate Allocated
      Values of all of the Projects which are the subject of any Closing (i.e. those
      covered by the initial Closing plus those covered by each Subsequent Closing)
      and (ii) having as a denominator the sum of the aggregate Allocated Values
      of
      all of the Projects which are covered by any Closing plus the aggregate
      Allocated Values of all of the remaining Removed Projects.

    (d) Purchaser
      Liability.
      Notwithstanding anything to the contrary herein (other than the terms of
Section
      6.5(b)
      regarding the Home Office Lease), after Closing, (i) the sole and exclusive
      remedy for Seller or any Seller Indemnified Party for any claim for any Losses
      relating to the Projects, the Purchased Interests, the Assumed Obligations
      or
      any other matters arising out of or under this Agreement or the transactions
      contemplated hereby shall be a claim made pursuant to this Article 7, and (ii)
      Purchaser’s Liability for any such Losses shall not in the aggregate exceed the
      General Liability Cap. 

     

    7.6 Amount
      of Losses.
      The
      amount of any Loss payable hereunder shall be: (a) reduced by any insurance
      proceeds which any Indemnified Party collects with respect to the event or
      occurrence giving rise to such Losses, and (b) reduced by any amounts which
      any
      Indemnified Party collects from third parties in connection with Losses for
      which indemnification is sought under this Article
      7.
      The
      Purchaser Indemnified Parties and Seller Indemnified Parties, as the case may
      be, shall use commercially reasonable efforts to pursue insurance claims or
      Third Party Claims that may reduce or eliminate Losses. In
      the
      event Purchaser is entitled to indemnification hereunder and all or any part
      of
      the indemnifiable loss is covered by insurance or any other reimbursement or
      payment obligation, Purchaser shall, prior to making any claim against Seller,
      allow Seller the opportunity (with Purchaser’s cooperation and only so long as
      Seller is diligently pursuing the applicable claim) to pursue and settle the
      applicable insurance or reimbursement or payment obligation claim with counsel
      approved by Purchaser (which approval shall not be unreasonably
      withheld).
      If a
      Purchaser Indemnified Party or Seller Indemnified Party, as the case may be,
      both collects proceeds from any insurance company or third party and receives
      a
      payment for indemnification hereunder, and the sum of such proceeds and payment
      is in excess of the Loss with respect to the matter that is the subject of
      the
      indemnity, then the Indemnified Party thereof shall promptly refund the excess
      amount to the Indemnifying Party.

     

    
      
        
        

      

      
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    7.7 Subrogation.
      After
      any indemnification payment is made to any Party pursuant to this Article
      7,
      the
      other Parties shall, to the extent of such payment, be subrogated to all rights
      (if any) of the Indemnified Party against any third party in connection with
      the
      Losses to which such payment relates. Without limiting the generality of the
      preceding sentence, any Indemnified Party receiving an indemnification payment
      pursuant to the preceding sentence shall execute, upon the written request
      of
      the Indemnifying Party, any instrument reasonably necessary to evidence such
      subrogation rights.

    7.8 Survival
      of Representations, Warranties and Indemnities.

     

    (a) Except
      as
      otherwise provided in Section
      6.3,
      the
      representations and warranties of Seller in this Agreement and in any
      Transaction Documents and the indemnities and other obligations of Seller set
      forth in this Article
      7
      shall
      all be deemed to be material and to have been relied upon by Purchaser, shall
      survive the Closing and the consummation of the transactions contemplated hereby
      until the date (the “Seller
      Indemnity Expiration Date”)
      that
      is three (3) years after the Closing Date (except that if there are one or
      more
      Subsequent Closings, the Seller Indemnity Expiration Date shall be the date
      that
      is three (3) years after the date that is halfway between the date of the
      initial Closing and the date of the last of such Subsequent Closings), and
      Purchaser may not seek indemnification under this Article 7 after the
      Seller Indemnity Expiration Date. Notwithstanding the preceding sentence, the
      Seller Indemnity Expiration Date with respect to any claim relating to any
†
Management Liability shall be the date (the “†
      Management Liability Expiration Date”)
      that
      is one (1) year after the first Closing Date, and Purchaser may not seek
      indemnification under this Article 7 with respect to any † Management
      Liability after the † Management Liability Expiration Date. The representations
      and warranties of Purchaser in this Agreement and in any Transaction Documents
      and the indemnities and other obligations of Purchaser set forth in this Article
      7 shall all be deemed to be material and to have been relied upon by Seller,
      shall survive the Closing and the consummation of the transactions contemplated
      hereby until the date that is the later of three (3) years after the Closing
      Date after the Closing Date (or, if there are one or more Subsequent Closings,
      the date that is three (3) years after the date that is halfway between the
      date
      of the initial Closing and the date of the last of such Subsequent Closings)
      or,
      with respect to any particular indemnification claim, the date on which neither
      Purchaser nor any of its Affiliates any longer owns any Interest in the Project
      Partnership that owns the Project to which the indemnification claim relates
      (the “Purchaser
      Indemnity Expiration Date”),
      and
      Seller may not seek indemnification under this Article 7 after the
      Purchaser Indemnity Expiration Date. Notwithstanding the foregoing, if, prior
      to
      the close of business on the Seller Indemnity Expiration Date (with respect
      to
      Purchaser claims other than † Management Liabilities), the † Management
      Liability Expiration Date (with respect to † Management Liabilities) or the
      Purchaser Indemnity Expiration Date (with respect to Seller claims), a Party
      shall have been properly notified of a claim for indemnity hereunder and such
      claim shall not have been finally resolved or disposed of at such date, such
      claim shall continue to survive and shall remain a basis for indemnity hereunder
      until such claim is finally resolved or disposed of in accordance with the
      terms
      hereof.

     

    
      
        
        

      

      
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    7.9 Seller
      Obligations Not Assumed by Purchaser.
      With
      respect to any claim made by a third party against Seller for which Purchaser
      is
      not obligated to or fails to indemnify Seller, Seller shall retain any and
      all
      rights (including rights to indemnification or reimbursement) and defenses
      relating thereto and any and all benefits relating thereto or derived therefrom
      and shall have the right to enforce such rights and make claims and
      counterclaims thereon and Purchaser shall provide Seller access to records
      and
      documents as Seller shall reasonably request in connection
      therewith.

    ARTICLE
      8. CONDITIONS
      TO CLOSING.

     

    8.1 Conditions
      to Obligations of Purchaser.

     

    All
      obligations of Purchaser under this Agreement are subject to the fulfillment,
      at
      or prior to the Closing, of the following conditions:

     

    (a) Representations
      and Warranties of Seller.
      The
      representations and warranties made by Seller in this Agreement shall be true
      and correct as of the Effective Date and on and as of the Closing Date (as
      updated prior to the end of the Due Diligence Period), as if again made by
      Seller, on and as of such date, except for such representations that speak
      as of
      an earlier date and, solely for the purpose of determining whether the condition
      in this Section
      8.1(a)
      has been
      fulfilled, except for inaccuracies which individually or in the aggregate could
      not reasonably be expected to have a Material Adverse Effect (it being
      understood that the occurrence of the Closing shall not preclude any Purchaser
      Indemnified Party’s rights to indemnification under Article
      7
      for any
      inaccuracies or breaches of any representation or warranty under this
      Agreement).

     

    (b) Performance
      of Seller’s Obligations.
      Seller
      shall have delivered all documents and agreements described in Sections
      1.7
      and
      shall have otherwise performed or complied with in all material respects all
      obligations required under this Agreement by them on or prior to the Closing
      Date.

     

    (c) Pending
      Proceedings.
      No
      injunction, restraining order or other ruling or order issued by any court
      of
      competent jurisdiction or Governmental Entity or other legal restraint or
      prohibition preventing the consummation of the transactions contemplated by
      this
      Agreement shall be in effect.

     

    
      
        
        

      

      
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          65 -

        
          

        

      

      
        
        

      

    

     

    (d) Required
      Consents.
      Subject
      to the terms of Section
      8.3(b)
      and
(c),
      Purchaser shall have received original (i) consent certificates executed and
      delivered by the Limited Partners of each Project Partnership, each
      substantially in the form of Exhibit
      D-1
      (or such
      other form as may be reasonably acceptable to Purchaser, Seller and the Limited
      Partner(s)), (ii) consent certificates from and executed by each Lender, each
      substantially in the form of Exhibit
      E
      (or such
      other form as may be reasonably acceptable to Purchaser, Seller and such
      Lender), and (iii) executed copies of all other Required Consents.

     

    8.2 Conditions
      to Obligations of Seller.
      All
      obligations of Seller under this Agreement are subject to the fulfillment,
      at or
      prior to the Closing, of the following conditions:

     

    (a) Representations
      and Warranties of Purchaser.
      The
      representations and warranties made by Purchaser in this Agreement shall be
      true
      and correct as of the Effective Date and on and as of the Closing Date, as
      if
      again made by Purchaser, on and as of such date, except for such representations
      that speak as of an earlier date and, solely for the purpose of determining
      whether the condition in this Section
      8.2(a)
      has been
      fulfilled, except for inaccuracies which individually or in the aggregate could
      not reasonably be expected to have a Purchaser Material Adverse Effect (it
      being
      understood that the occurrence of the Closing shall not preclude any Seller
      Indemnified Party’s rights to indemnification under Article
      7
      for any
      inaccuracies or breaches of any representation or warranty under this
      Agreement).

    (b) Performance
      of Purchaser’s Obligations.
      The
      Purchaser shall have delivered all documents and agreements described in
Section
      1.8
      and
      shall have otherwise performed or complied with in all material respects all
      obligations required under this Agreement to be performed by Purchaser on or
      prior to the Closing Date.

     

    (c) Pending
      Proceedings.
      No
      injunction, restraining order or other ruling or order issued by any court
      of
      competent jurisdiction or Governmental Entity or other legal restraint or
      prohibition preventing the consummation of the transactions contemplated by
      this
      Agreement shall be in effect.

     

    (d) HSR
      Act Waiting Period.
      If the
      filing of any required notification and report form under the HSR Act is
      required, then any waiting period applicable to the consummation of the
      transactions contemplated by this Agreement under the HSR Act shall have expired
      or been terminated.

     

    (e) Required
      Consents.
      Subject
      to the terms of Section
      8.3(b)
      and
(c),
      Seller
      shall have received original (i) consent certificates executed and delivered
      by
      the Limited Partners of each Project Partnership, each substantially in the
      form
      of Exhibit
      D-1
      (or such
      other form as may be reasonably acceptable to Purchaser, Seller and the Limited
      Partner(s)), (ii) consent certificates from and executed by each Lender, each
      substantially in the form of Exhibit
      E
      (or such
      other form as may be reasonably acceptable to Purchaser, Seller and such
      Lender), and (iii) executed copies of all other Required Consents; and
      each
      such Required Consent (or another document executed by the Required Consent
      provider) shall provide (if
      and
      only to the extent applicable) that each applicable Seller and Seller Guarantor
      is released from any contractual liabilities which first arise after Closing
      under any documents to which it is personally a party and under which it would
      otherwise have express contractual liability.

     

    
      
        
        

      

      
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    8.3 Project
      Removals Due to Closing Conditions; Potential Bifurcated Closing.
      

     

    (a) In
      the
      event a condition to Closing in Section
      8.1(a),
      (b)
      or
(c)
      is not
      satisfied with respect to one or more specific Purchased Interests, Projects
      or
      Project Partnerships, Purchaser may in its sole discretion (subject to the
      limitations set forth in Section
      6.2(b))
      elect
      to exercise a Project Removal Option with respect to the Project(s) designated
      by Purchaser to which such failed condition relates and proceed to close the
      transactions contemplated hereby. If Purchaser is not willing to waive any
      such
      condition that relates to one or more specific Purchased Interests, Projects
      or
      Project Partnerships, and
      provided that
      the
      failed condition does not relate to any uncured intentional
      breach of any covenant of Seller in this Agreement, then Seller may in its
      sole
      discretion elect to exercise a Project Removal Option with respect to the
      Project(s) designated by Seller to which such failed condition relates, in
      which
      case the Parties shall proceed to close the transactions contemplated hereby
      so
      long as all other Closing conditions are satisfied or waived; provided that
      Seller may not exercise any Project Removal Option pursuant to this Section
      8.3(a)
      that
      would cause the aggregate Allocated Values of all Projects removed by Seller
      pursuant to this Section
      8.3(a)
      or
      pursuant to Section
      8.4(c)
      to
      exceed $25,000,000.

    (b) If
      at any
      time after the date that is 90 days after the expiration of the Due Diligence
      Period all Required Consents are obtained with respect to (i) all then remaining
      Projects listed on Schedule
      8.3(b)
      (the
“Sun
      and Key Projects”),
      and
      (ii) sufficient additional Projects such that (including the Sun and Key
      Projects) Required Consents are obtained with respect to Projects having an
      Allocated Value of at least 66% of the Allocated Values of the then remaining
      Projects (i.e. the initial Projects less any that had otherwise become Removed
      Projects) collectively, then Purchaser may in its sole discretion elect to
      exercise Project Removal Options with respect to all Projects for which the
      Required Consents have not then been obtained (in which case Closing shall
      then
      occur with respect to the Projects for which the Required Consents have been
      obtained).

     

    (c) If
      at any
      time after the date that is 90 days after the expiration of the Due Diligence
      Period all Required Consents are obtained with respect to Projects having an
      Allocated Value of at least 80% of the Allocated Values of the then remaining
      Projects (i.e. the initial Projects less any that had otherwise become Removed
      Projects) collectively, then Seller may in its sole discretion elect to exercise
      Project Removal Options with respect to all Projects for which the Required
      Consents have not then been obtained (in which case Closing shall then occur
      with respect to the Projects for which the Required Consents have been
      obtained).

     

    (d) For
      all
      Projects that become Consent Removal Projects pursuant to Section
      8.3(b)
      or
Section
      8.3(c),
      the
      parties shall continue to diligently and in good faith attempt to obtain the
      Required Consents therefor (except to the extent the Parties agree otherwise
      on
      either a Project-by-Project basis or in whole) unless and until this Agreement
      is terminated pursuant to Section
      8.4.
      If any
      such Required Consents are thereafter obtained prior to this Agreement being
      so
      terminated, the Consent Removal Projects for which such Required Consents are
      obtained shall once again become Projects hereunder and shall cease to be
      Removed Projects (unless thereafter again removed in accordance with another
      provision in this Agreement) and shall be included in a Subsequent Closing
      (provided that all conditions to any such Subsequent Closing are satisfied)
      as
      described in Section
      1.6(d).
      If any
      Projects are removed pursuant to Section
      8.3(b)
      or
Section
      8.3(c),
      then
      this Agreement shall not terminate at the initial Closing but instead shall
      remain in effect (other than any provisions hereof which by their nature have
      no
      further applicability after taking into account the initial Closing) unless
      and
      until (1) a final Subsequent Closing occurs that includes all Projects that
      were
      omitted from earlier Closings due to failure to obtain Required Consents or
      (2)
      this Agreement is terminated pursuant to Section
      8.4.
      Furthermore, if any Projects are removed pursuant to Section
      8.3(b)
      or
Section
      8.3(c),
      then
      only a pro rata portion of the Earnest Money shall be applied to the payment
      of
      the Purchase Price at the initial Closing, and the remainder shall continue
      to
      be held as Earnest Money under and subject to the terms of this Agreement.
      The
      pro rata portion of the Earnest Money applied to the payment of the Purchase
      Price at the initial Closing shall equal the full amount of the Earnest Money
      multiplied by a fraction (i) having as its numerator the aggregate Allocated
      Values of all of the Projects which are the subject of the initial Closing
      and
      (ii) having as a denominator the sum of the aggregate Allocated Values of all
      of
      the Projects which are the subject of the initial Closing plus the aggregate
      Allocated Values of all of the Consent Removal Projects. At each Subsequent
      Closing (if any), a pro rata portion of the remaining Earnest Money shall again
      be applied to the payment of the Purchase Price payable at the applicable
      Subsequent Closing. The pro rata portion of the Earnest Money applied to the
      payment of the Purchase Price at any Subsequent Closing shall equal the full
      amount of the then-remaining Earnest Money multiplied by a fraction (x) having
      as its numerator the aggregate Allocated Values of all of the Projects which
      are
      the subject of such Subsequent Closing and (y) having as a denominator the
      sum
      of the aggregate Allocated Values of all of the Projects which are the subject
      of such Subsequent Closing plus the aggregate Allocated Values of all of the
      then-remaining Consent Removal Projects. 

    
      
        
        

      

      
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    8.4 Termination
      Prior to Closing.

     

    This
      Agreement may be terminated and the transactions contemplated hereby may be
      abandoned at any time prior to the Closing:

     

    (a) by
      mutual
      consent of Seller and Purchaser;

     

    (b) by
      either
      Purchaser or Seller, if a Governmental Entity shall have issued an order, decree
      or ruling or taken any other action, in each case permanently restraining,
      enjoining or otherwise prohibiting the transactions contemplated by this
      Agreement, and such order, decree, ruling or other action shall have become
      final and nonappealable;

     

    (c) by
      Purchaser, at any time when Seller is in breach of any of their covenants
      pursuant to this Agreement or if any representation or warranty of Seller is
      false or misleading (in each case except such as could not individually or
      in
      the aggregate reasonably be expected to have a Material Adverse Effect and
      provided that such condition is not the result of any breach of any covenant,
      representation or warranty of Purchaser set forth herein); provided that (i)
      such breach shall not have been cured, in the case of a covenant, within
      forty-five (45) days following receipt by Seller of notice from Purchaser of
      such breach or, in the case of a representation or warranty, on or prior to
      the
      date on which the conditions other than the accuracy of the representation
      and
      warranty in question would be satisfied for the Closing, and (ii) in the case
      of
      a breach of representation or warranty or an unintentional breach of a covenant
      that relates to specific Projects or Project Partnerships, Seller may elect
      to
      exercise a Project Removal Option with respect to the Project(s) to which such
      breach of representation or warranty or an unintentional breach of a covenant
      relates (in which case Purchaser’s termination shall not be effective if such
      Project Removal effectively cures all breaches with respect to which Purchaser
      was exercising its termination right pursuant to this Subsection (c)); provided
      that Seller may not exercise any Project Removal Option pursuant to this
Section
      8.4(c)
      that
      would cause the aggregate Allocated Values of all Projects removed by Seller
      pursuant to this Section
      8.4(c)
      or
      pursuant to Section
      8.3(a)
      to
      exceed $25,000,000;

    
      
        
        

      

      
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          68 -

        
          

        

      

      
        
        

      

    

    (d) by
      Seller, at any time when Purchaser is in breach of any of its covenants pursuant
      to this Agreement or if any representation or warranty of Purchaser is false
      or
      misleading in any material respect; provided that such condition is not the
      result of any breach of any covenant, representation or warranty of Seller
      set
      forth herein; and provided further that such breach shall not have been cured,
      in the case of a covenant (other than payment of the Purchase Price), within
      forty-five (45) days following receipt by the Purchaser of notice of such breach
      or, in the case of a representation or warranty, on or prior to the date on
      which the conditions other than the accuracy of the representation and warranty
      in question would be satisfied for the Closing; or

     

    (e) by
      either
      Purchaser, on the one hand, or Seller, on the other hand, if the Closing has
      not
      occurred on or before the Drop Dead Date by reason of the failure of a Closing
      condition to occur which failure has not been cured under Section
      8.3;
      provided,
      however,
      that
      (i) the right to terminate this Agreement shall not be available to any Party
      whose breach of this Agreement has been the cause of, or resulted in, the
      failure of the Closing to occur on or before such date, and (ii) if the Required
      Consents are not obtained by the Drop Dead Date, either Party may extend the
      Drop Dead Date by up to three successive thirty day periods by notice given
      to
      the other Party at least three business days prior to the then current scheduled
      Closing Date for the purpose of continuing to attempt to obtain any remaining
      Required Consents (it being understood that the Drop Dead Date may not be
      extended beyond the date that is 90 days after the original Drop Dead Date
      without the consent of both Parties). The extension option described in clause
      (ii) of the preceding sentence shall continue to apply with respect to obtaining
      Required Consents relating to any Consent Removal Projects.

     

    (f) If
      an
      initial Closing occurs and this Agreement is subsequently terminated, all of
      the
      provisions hereof which would otherwise survive a Closing shall continue to
      survive to the extent provided herein (e.g. termination following an initial
      Closing shall not cause representations and warranties that would otherwise
      survive Closing to instead be terminated).

     

    8.5 Procedure
      and Effect of Termination.
      In the
      event of termination of this Agreement by Seller or Purchaser, this Agreement
      shall immediately become void and there shall be no liability hereunder on
      the
      part of any Party except as follows:

     

    
      
        
        

      

      
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          69 -

        
          

        

      

      
        
        

      

    

     

    (a) If
      Purchaser terminates this Agreement pursuant to any of Subsections (a), (b),
      (c), or (e) (but in the case of (e), only if due to failure to obtain Required
      Consents) of Section
      8.4,
      then
      this Agreement shall be null and void, the Earnest Money shall be returned
      to
      Purchaser and no party shall have any further liability or obligation to any
      other party under this Agreement, except that Purchaser shall not be relieved
      of
      the Purchaser Repair Obligations, and the Confidentiality Provisions shall
      survive for the period set forth in Section
      5.4.
      Notwithstanding the preceding sentence, if Purchaser terminates this Agreement
      pursuant to Section
      8.4(e),
      the
      Earnest Money shall be returned to Purchaser only if the events or unsatisfied
      closing conditions resulting in the failure of the Closing to occur were not
      within the sole control of Purchaser. If such events or unsatisfied closing
      conditions resulting in the failure of the Closing to occur were within the
      sole
      control of Purchaser, then the Earnest Money shall be delivered to Seller.
      If
      Purchaser terminates this Agreement pursuant to Section 8.4(c), Seller shall
      pay
      to Purchaser (if Purchaser is not then in material default under this
      Agreement), as Purchaser’s sole remedy, (i) an amount equal to all actual
      out-of-pocket amounts expended by Purchaser in connection with the pursuit
      of
      the transactions contemplated by this Agreement (including all reasonable legal
      expenses and due diligence costs, including fees and costs paid to Archon Group,
      LP) up to a maximum amount of $1,000,000; provided that in the case of
      termination due to a material intentional misrepresentation or Seller’s willful
      refusal to comply with any covenant hereunder or willful refusal to satisfy
      a
      closing condition that is within Seller’s control, such $1,000,000 cap shall be
      increased to $4,975,000. If Seller defaults in performing any covenants or
      agreements to be performed by Seller under this Agreement or Seller breaches
      any
      representations or warranties made by Seller in this Agreement, Purchaser shall
      also have the right, instead of terminating this Agreement, to elect to permit
      this Agreement to remain in effect and, in addition to the remedies set forth
      above, to seek specific performance or other injunctive relief. The liability
      of
      Seller under this Section 8.5(a) shall be joint and several as to all Persons
      comprising Seller; provided that the following entities shall have no liability
      hereunder for monetary payments to Purchaser: †; †; †; †; †; and
†.

    (b) If
      Seller
      terminates this Agreement pursuant to Section
      8.4,
      this
      Agreement shall become null and void and no party shall have any further
      liability or obligation to any other party under this Agreement, except that
      Purchaser shall not be relieved of the Purchaser Repair Obligations, and the
      Confidentiality Provisions shall survive for the period set forth in
Section
      5.4.
      If, but
      only if, Seller’s termination is pursuant to (i) Section
      8.4(d),
      or (ii)
Section
      8.4(e)
      and a
      material default hereunder by Purchaser was the cause of, or resulted in, the
      failure of the Closing to occur on or before the Drop Dead Date (and in the
      case
      of either (i) or (ii), only if Seller is not then in material default under
      this
      Agreement), the Earnest Money shall be paid to Seller as liquidated damages,
      and
      in all other cases the Earnest Money shall be returned to Purchaser upon
      Seller’s termination. Seller's sole and exclusive remedy for Purchaser's default
      shall be to receive the Earnest Money as liquidated damages, and in no event
      and
      under no circumstances shall Seller be entitled to receive more than the Earnest
      Money as damages for Purchaser's default.

     

    ARTICLE
      9. MISCELLANEOUS
      PROVISIONS.

     

    9.1 Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of, and be binding upon, the Parties hereto
      and their respective successors and permitted assigns; provided, however, that
      no Party shall assign or delegate this Agreement or any of its rights or
      obligations created hereunder without the prior consent of the other Parties,
      which consent shall not be unreasonably withheld or delayed; provided further,
      however, that Purchaser may transfer any of its rights hereunder to any directly
      or indirectly wholly owned subsidiary of any of the Purchaser Upper Tier
      Entities without the consent of Seller, but no such transfer shall relieve
      Purchaser of its obligations hereunder and any such transferee must execute
      and
      deliver to Seller an assumption agreement pursuant to which such transferee
      shall be jointly and severally liable with Purchaser with respect to those
      specific obligations assumed by such transferee. 

    
      
        
        

      

      
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    9.2 Notices.
      All
      notices, requests, consents, instructions and other communications required
      or
      permitted to be given hereunder shall be in writing and hand delivered, sent
      by
      nationally-recognized, next-day delivery service or mailed by certified or
      registered mail, return receipt requested, postage prepaid, addressed as set
      forth below or by facsimile, receipt confirmed, to the number set forth below;
      receipt shall be deemed to occur on the date of actual receipt or, if sent
      by a
      nationally-recognized, next-day delivery service, on the first business day
      after deposit with such service. All such communications shall be addressed
      as
      follows:

     

     

    
      	
              (a)

            	
              if to Purchaser, as follows:

               

               

              
                GIN
                  Housing Partners I, L.L.C.

                c/o
                  Archon Group, L.P.

                600
                  East Las Colinas Blvd.

                Suite
                  400

                Irving,
                  Texas 75039

                Attention:
                  Roger Beless

                Facsimile:
                  (972) 368-3599

                

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

                

                Archon
                  Acquisition, L.L.C.

                c/o
                  Archon Group, L.P.

                600
                  East Las Colinas Blvd.

                Suite
                  400

                Irving,
                  Texas 75039

                Attention:
                  Timothy Johnson, Esq.

                Facsimile:
                  (972) 368-4098

                

                And

                

                Sonnenschein
                  Nath & Rosenthal LLP

                7800
                  Sears Tower

                233
                  S. Wacker Drive

                Chicago,
                  Illinois 60606

                Attention:
                  Andrew L. Weil, Esq.

                Facsimile:
                  (312) 876-7934

              

            	 

    

      

    
    

    
      
        
        

      

      
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          71 -

        
          

        

      

      
        
        

      

    

    

    And

    

    NorthStar
      Realty Finance Corp.

    527
      Madison Avenue-16th Floor

    New
      York,
      NY 10022

    Attn:
      Al
      Tylis

    Facsimile:
      (212) 319-4557

    And

    

    Bryan
      Cave

    1290
      Avenue of the Americas

    New
      York,
      NY 10104-3300

    Attention:
      Gary Wolff

    Facsimile:
      (212) 541-4630

    

    And

    

    †

    †

    †

    Attention:
      †

    Facsimile:
      †

    

    And:

    

    †

    †

    Attention:
      †

    Facsimile:
      †

    

    And:

    

    †

    †

    †

    Attention:
      †

    Facsimile:
      †

    

    And:

    

    †

    †

    †

    Attention:
      †

    †
      Reference: [client/matter
      no.]

    Facsimile:
      †

    
       

      
        
          
          

        

        
          -
            72
            -

          
            

          

        

        
          
          

        

      

       

      
        	
                (b) 

              	
                if to any Seller:

                 

                
                  †

                  †

                  †

                  c/o
                    †

                  †

                  †

                  Facsimile:
                    †

                  

                  And

                  

                  †

                  †

                  †

                  Attention:
                    †

                  

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

                  

                  †

                   

                  †

                   

                  †

                   

                  Attention:
                    †

                   

                  Facsimile:
                    †

                

              	 

      

    

     

    
    

    or
      such
      other address or Persons as the Parties may from time to time designate in
      writing in the manner provided in this Section.

     

    9.3 Entire
      Agreement.
      This
      Agreement, together with the Schedules and Exhibits attached hereto, represent
      the entire agreement and understanding of the Parties hereto with respect to
      the
      transactions contemplated herein and therein, and no representations, warranties
      or covenants have been made in connection with this Agreement, other than those
      expressly set forth herein and therein, or in the certificates or agreements
      delivered in accordance herewith or therewith. This Agreement supersedes all
      prior negotiations, discussions, correspondence, communications, understandings,
      term sheets, letters of intent and agreements among the Parties relating to
      the
      subject matter of this Agreement and such other agreements and all prior drafts
      of this Agreement and such other agreements, all of which are merged into this
      Agreement.

     

    9.4 Amendments
      and Waivers.
      This
      Agreement may be amended, superseded, cancelled, renewed or extended, and the
      terms hereof may be waived, only by a written instrument signed by Purchaser
      and
      Seller or, in the case of a waiver, by the Party waiving compliance or his
      or
      her representative (including, in the case of any Seller, such Seller). No
      delay
      on the part of any Party in exercising any right, power or privilege hereunder
      shall operate as a waiver thereof; nor shall any waiver on the part of any
      Party
      of any such right, power or privilege, nor any single or partial exercise of
      any
      such right, power or privilege, preclude any further exercise thereof or the
      exercise of any other such right, power or privilege.

     

    
      
        
        

      

      
        -
          73 -

        
          

        

      

      
        
        

      

    

     

    9.5 Severability.
      This
      Agreement shall be deemed severable and the invalidity or unenforceability
      of
      any term or provision hereof shall not affect the validity or enforceability
      of
      this Agreement or of any other term or provision hereof so long as the economic
      or legal substance of the transactions contemplated hereby is not affected
      in
      any manner materially adverse to any Party.

    9.6 Headings.
      The
      article and section headings contained in this Agreement are solely for
      convenience of reference and shall not affect the meaning or interpretation
      of
      this Agreement or of any term or provision hereof.

     

    9.7 Terms.
      All
      references herein to Articles, Sections, Schedules and Exhibits shall be deemed
      references to such parts of this Agreement, unless the context shall otherwise
      require. All references to singular or plural shall include the other as the
      context may require, and all references to one gender include the other gender.
      Unless otherwise expressly stated, the words “herein,” “hereof,” and “hereunder”
and other words of similar import refer to this Agreement as a whole and not
      to
      any particular Section, Subsection or other subdivision. The words “include” and
“including” shall not be construed as terms of limitation.

     

    9.8 Governing
      Law; Jurisdiction and Venue.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Florida, without giving effect to choice of law principles. Each Party
      hereto hereby agrees that any proceeding relating to this Agreement and the
      transactions contemplated hereby shall be brought exclusively in a state court
      located in Florida, or a federal court located in the State of Florida. Each
      Party hereto hereby consents to personal jurisdiction in any such action brought
      in any such state or federal court, consents to service of process by registered
      mail made upon such Party and such Party’s agent and waives any objection to
      venue in any such state or federal court and any claim that any such state
      or
      federal court is an inconvenient forum.

     

    9.9 Schedules
      and Exhibits.
      The
      Schedules and Exhibits attached hereto are a part of this Agreement as if fully
      set forth herein. Purchaser acknowledges and agrees that the categories,
      headings and other attempts to make the Schedules more organized are merely
      for
      convenience and do not constitute a representation or warranty by Seller.
      Purchaser also acknowledges and agrees that document titles, dates and
      signatories may have typographical errors and should be verified by Purchaser
      during the Due Diligence Period. In certain cases, for Purchaser’s convenience,
      Seller has included information on Schedules which is not required (e.g. listing
      of Service Contracts that do not meet the materiality thresholds that would
      require such Service Contracts to be scheduled), and it is agreed that the
      inclusion of such information shall not result in a default hereunder unless
      such additional information was intentionally made inaccurate by
      Seller.

     

    9.10 No
      Third Party Beneficiaries.
      Except
      as expressly contemplated in this Agreement, this Agreement shall be binding
      upon and inure solely to the benefit of each Party hereto and nothing in this
      Agreement is intended to confer upon any other Person any rights or remedies
      of
      any nature whatsoever under or by reason of this Agreement. The Seller
      Guarantors shall be direct third party beneficiaries of the terms
      hereof.

     

    
      
        
        

      

      
        -
          74 -

        
          

        

      

      
        
        

      

    

     

    9.11 Expenses.
      Except
      as expressly provided in Section
      5.13
      or
      otherwise in this Agreement, Seller and Purchaser shall each bear their own
      respective transaction fees and expenses (including fees and expenses of legal
      counsel, accountants, investment bankers, brokers, finders or other
      representatives and consultants) incurred in connection with the preparation,
      execution and performance of this Agreement and the transactions contemplated
      hereby.

    9.12 Construction.
      The
      language used in this Agreement shall be deemed to be the language chosen by
      the
      Parties to express their mutual intent and no rule of strict construction shall
      be applied against any Party.

     

    9.13 Mutual
      Drafting.
      The
      parties hereto are sophisticated and have been represented by attorneys
      throughout the transactions contemplated hereby who have carefully negotiated
      the provisions hereof. As a consequence, the parties do not intend that the
      presumptions of laws or rules relating to the interpretation of contracts
      against the drafter of any particular clause should applied to this Agreement
      or
      any agreement or instrument executed in connection herewith, and therefore
      waive
      their effects.

     

    9.14 Prevailing
      Party.
      The
      prevailing party in any action brought to enforce the remedies reserved to
      the
      parties, respectively, hereunder shall be entitled to recover reasonable
      attorneys’ fees and court costs in addition to any other relief. 

     

    9.15 Market
      Rate Projects.
      None of
      the provisions herein relating to tax credits, housing bonds or affordable
      housing shall apply to the Market Rate Projects.

     

    9.16 Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original and all of which together shall be considered one and the
      same agreement.

     

    Remainder
      of this Page Intentionally Left Blank

     

    Signature
      Pages Follow

    
      
        
        

      

      
        -
          75 -

        
          

        

      

      
        
        

      

    

     

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

     

    PURCHASER:

    

    GIN
      HOUSING PARTNERS I, L.L.C., a Delaware limited liability company

    

    By:
†,
      a
      Delaware limited liability company, a Member

    

    By:___________________________________________

    Name:_________________________________________

    Title:_________________________________________

     

     

     

    Remainder
      of this Page Intentionally Left Blank

     

    Seller
      Signature Pages Follow

     

    
      
        
        

      

      
        Signature Page
          to
          Purchase and Sale Agreement

        
          

        

      

      
        
        

      

    

    

    SELLERS:

    

    
      	†,
              a Florida
              limited partnership
	 	 
	
              By:

            	
              †,
                a Florida limited

              liability
                company, its general partner

               

              By:
                ________________________________________     

              †,
                Manager

            
	
              †

              By:
                __________________________________________________________________________       

            
	
              †,
                Trustee

            
	 
	
              †

              
                By:
                  __________________________________________________________________________       

              

              †,
                Trustee

            
	 
	
              †

              
                
                  By:
                    __________________________________________________________________________       

                

                †,
                  Trustee     

              

            
	 
	†,
              a
              Delaware limited partnership
	 	 
	
              By: 

            	
              †,
                a Florida corporation, its general partner

               

              By:
                ________________________________________ 

              †,
                President

            
	 	 
	†,
              a Florida limited partnership
	 	 
	
              By:

            	
              †,
                a Florida corporation, its general partner

               

              
                By:
                  ________________________________________ 

                †,
                  President

              

            
	 	 
	
              †,
                a Delaware limited partnership

            
	 	 
	
              By: 

            	
              †,
                a Florida corporation, its general partner

               

              
                
                  By:
                    ________________________________________ 

                  †,
                    President

                

              

            

    

    

    
      
        
          
          

        

        
          Signature
            Page to Purchase and Sale Agreement

          
            

          

        

        
          
          

        

      

    

    

    

    
      	†,
              a Florida
              limited partnership
	 	 
	
              By:

            	
              †,
                a Florida corporation,

              its
                general partner

               

              
                
                  By:
                    ________________________________________ 

                  †,
                    President

                

              

            
	 	 
	
              †,
                a Florida corporation

               

              By:
                __________________________________________________________________________       

              †,
                President

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            

    

     

    
      
        
        

      

      
        Signature
          Page to Purchase and Sale Agreement

        
          

        

      

      
        
        

      

    

     

    
      	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            
	 
	
              †,
                a Florida limited liability company

               

              By:
                __________________________________________________________________________       

              †,
                Manager

            

    

     

    
      
        
        

      

      
        Signature
          Page to Purchase and Sale Agreement

        
          

        

      

      
        
        

      

    

    
       

      
        	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

      

    

     

    
      
        
        

      

      
        Signature
          Page to Purchase and Sale Agreement

        
          

        

      

      
        
        

      

    

    
       

      
        	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              
	 
	
                †,
                  a Florida limited liability company

                 

                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

      

    

     

    
      
        
        

      

      
        Signature
          Page to Purchase and Sale Agreement

        
          

        

      

      
        
        

      

    

    

    

    
      	
              †,
                a Florida limited liability company

               

              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 
	
              †,
                a Florida limited liability company

               

              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 
	
              †,
                a Florida limited liability company

               

              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 
	
              †,
                a Florida limited liability company

               

              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 
	
              †,
                a Florida limited liability company

               

              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 	 
	†,
              a Florida
              limited partnership
	 
	
              By

            	
              
                †,
                  a Florida corporation, its managing

                general
                  partner

              

            
	 	
               

              
                
                  By:
                    ________________________________________ 

                

              

              †,
                Chief Executive Officer

            
	 	 
	†,
              a Florida
              limited partnership
	 	 
	By:	
              
                
                  †,
                    a Florida corporation, its managing

                  general
                    partner

                

              

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  Chief Executive Officer

              

            
	 	 
	†,
              a Florida
              limited partnership
	 
	By:	
              
                †,
                  a Florida corporation, its managing

                general
                  partner

              

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  Chief Executive Officer

              

            

    

    

      
        
          
          

        

        
          Signature
            Page to Purchase and Sale Agreement

          
            

          

        

        
          
          

        

      

    

    

    
      	†,
              a Florida
              limited partnership
	 	 
	
              By:

            	
              †,
                a Florida corporation, its

              general
                partner

               

            
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  Vice President

              

            
	 	 
	†,
              a Florida
              limited partnership
	 	 
	By:	
              †,
                a Florida corporation, its

              managing
                general partner

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  President

              

            
	 	 
	†,
              a Florida
              limited partnership
	 	 
	By:	
              †,
                a Florida corporation, its

              managing
                general partner

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  President

              

            
	†,
              a Florida
              limited partnership
	 	 
	By:	
              †,
                a Florida corporation, its

              managing
                general partner

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  President

              

            
	†,
              a Florida
              limited partnership
	 	 
	By:	
              †,
                a Florida corporation, its

              managing
                general partner

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  President

              

            
	 	 
	†,
              a Florida
              limited partnership
	
            	 
	By:	
              †,
                a Florida corporation, its managing
                

              general
                partner

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  Manager

              

            

    

     

    
      
        
        

      

      
        Signature
          Page to Purchase and Sale Agreement

        
          

        

      

      
        
        

      

    

     

    
      	†,
              a Florida
              limited partnership
	 	 
	
              By:

            	
              †,
                a Florida corporation, its

              managing
                general partner

               

            
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  President

              

            
	 	 
	†,
              a Florida
              limited partnership
	 
	
              By:

            	
              †,
                a Florida corporation, its

              managing
                general partner

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  President

              

            
	 	 
	†,
              a Florida
              limited partnership
	 	 
	
              By:

            	
              †,
                a Florida corporation, its

              managing
                general partner

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  President

              

            
	 	 
	
              †,
                a Florida limited liability company

            
	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 
	
              †,
                a Florida limited liability company

            
	
            
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 
	
              †,
                a Florida limited liability company

            
	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 
	
              †,
                a Florida limited liability company

            
	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 
	
              †,
                a Florida limited liability company

            
	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            

    

     

    
      
        
        

      

      
        
          Signature
            Page to Purchase and Sale Agreement

        

        
          

        

      

      
        
        

      

    

     

    
      	†,
              a Florida
              limited liability company
	 
	By:	
              
                †,
                  a Florida corporation, its

                managing
                  general partner

              

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †,
                  President

              

            
	 	 
	†,
              a Florida
              limited liability company
	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 
	†,
              a Florida
              corporation
	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Vice President

              

            
	 	 
	†,
              a Florida
              limited partnership
	 	 
	By:	
              
                
                  †,
                    a Florida corporation, its managing
                    

                  general
                    partner

                

              

            
	 	 
	 	
              
                
                  
                    By:
                      ________________________________________ 

                  

                

                †, Chief
                  Executive Officer

              

            
	 	 
	†,
              a Florida
              limited partnership
	 	 
	By:	
              
                †,
                  a Florida corporation, its

                managing
                  general partner

              

            
	 	 
	 	
              By:
                ________________________________________ 

              †,
                President

            
	 	 
	†,
              a Florida
              limited partnership
	 	 
	By: 	†, a Florida
              corporation, its general partner
	 	 
	 	
              By:
                ________________________________________ 

              †,
                President

            
	 	 
	By:	†, a Florida
              corporation, its general
	 	partner
	 	 
	 	
              By:
                ________________________________________ 

              †,
                President

            

    

    

      
        
          
          

        

        
          Signature
            Page to Purchase and Sale Agreement

          
            

          

        

        
          
          

        

      

    

     

    
      	†,	 
	 	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Trustee

              

            
	
            	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Trustee

              

            
	 	 
	†,
              a Florida
              limited partnership
	
            	 
	By:	†, a Florida
              limited
              liability
              company,
                its general partner

            
	 	 
	 	
              By:
                ________________________________________ 
                †,
                  Manager

              

            
	 	 
	†,
              a Florida
              limited partnership
	 	 
	By:	†, a Florida
              corporation, its 
              general
                partner

            
	 	 
	 	
              By:
                ________________________________________ 

              †,
                President

            
	 	 
	 	 
	†,
              a Florida
              limited liability company
	 	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Manager

              

            
	 	 
	†,
              a Florida
              corporation
	 	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  President

              

            
	 
	
              
                By:
                  __________________________________________________________________________       

                †,
                  Trustee

              

            
	 	 
	†,
              a Florida
              limited liability company
	 	 
	
              
                By:
                  ____________________________________________________________________       

                †,
                  Manager

              

            
	 	 
	†,
              a Florida
              limited partnership
	 	 
	By:	†, a Florida
              corporation, its
              managing
                general partner

            
	 	 
	 	
              By:
                ________________________________________ 

              †,
                President

            

    

    

    
      
        
          
          

        

        
          Signature
            Page to Purchase and Sale Agreement

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              †,
                a Florida corporation

               

              
                
                  By:
                    __________________________________________________________________________       

                  †,
                    President

                

              

            

    

    

    

    The
      undersigned † hereby joins the foregoing Agreement solely for the purpose of
      agreeing to be bound by the provisions of Sections
      7.5(c)
      and
6.5(b)
      hereof.

     

    

    ______________________________

    †

    
      
        
        

      

      
        Signature
          Page to Purchase and Sale Agreement

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    DEFINED
      TERMS

     

    “Actual
      Knowledge”
shall
      mean (a) the actual current recollection of (i) the party making the
      representation or warranty and of (ii) any one or more of †, †, †, † or † as of
      the date such representation or warranty is made, or (b) the information
      contained in a written notice to a Seller or Project Partnership or † Management
      Company from a Limited Partner, Governmental Entity, Lender or third party
      claimant which is contrary to the applicable representation or warranty. For
      purposes of (a)(i) above, if the party making the representation is an entity,
      then (a)(i) above shall be deemed to refer to the actual current recollection
      of
      the president, manager or member of such entity.

     

    Affiliate”
shall
      mean a Person that directly or indirectly, through one or more intermediaries,
      controls, is controlled by, or is under common control with, another
      Person.

     

    “Agreement”
shall
      have the meaning set forth in the Preamble.

     

    “Allocated
      Value”
shall
      mean, with respect to any Project, the portion of the Base Price attributed
      thereto as shown on Schedule
      E.

     

    “Assignment
      and Assumption of Partnership Interest”
shall
      have the meaning set forth in Section 1.7(a).

     

    “Assignment
      and Assumption of Fee Agreement”
shall
      have the meaning set forth in Section 1.7(c).

     

    “Assumed
      Obligations”
shall
      have the meaning set forth in Section
      1.1.

     

    “Assumption”
shall
      have the meaning set forth in Section
      1.8(i).

     

    “Available
      Funds”
shall
      have the meaning set forth in Section
      5.15(a).

     

    “Base
      Price”
shall
      have the meaning set forth in Section
      1.2.

     

    “Business”
shall
      have the meaning set forth in the Recitals.

     

    “Claim
      Notice”
shall
      have the meaning set forth in Section
      7.3(a).

     

    “Closing”
shall
      have the meaning set forth in Section
      1.6(a)
      and
      shall apply to the initial Closing and/or any Subsequent Closing, as the context
      may require.

     

    “Closing
      Date”
shall
      have the meaning set forth in Section
      1.6(a).

     

    “Closing
      Payment”
shall
      have the meaning set forth in Section
      1.6(b).

     

    “COBRA”
means
      the Consolidated Omnibus Budget Reconciliation Act of 1985.

    
      
        
        

      

      
        A
          - 1 

        
          

        

      

      
        
        

      

    

    
 

    “Code”
means
      the Internal Revenue Code of 1986, as amended, any successor statute thereto,
      and the rules and regulations promulgated thereunder.

     

    “Compliance
      Period”
shall
      mean, with respect to a building in a Project, the period specified in
      Section 42(i)(1) of the Code with respect to such building and when used
      with respect to the Project as a whole, means the period starting with the
      beginning of the first period under Section 42(i)(1) to start for any building
      in such Project and ending with the end of the last period under Section
      42(i)(1) to end for any building in such Project.

     

    “†
      Management Liability”
shall
      have the meaning set forth in Section
      7.1(f).

     

    “†
      Management Liability Expiration Date”
shall
      have the meaning set forth in Section
      7.8(a).

     

    “†
      Management Letter of Credit”
means
      a
      clean, irrevocable letter of credit which (i) is in the amount of $5,000,000,
      (ii) is in form and substance and from an issuing bank reasonably satisfactory
      to Purchaser, (iii) allows for partial draws, and (iv) has an expiry date no
      earlier than 30 days after the † Management Expiration Date.

     

    “†
      Management Company”
means
†
      Management, Ltd., a Florida limited partnership.

     

    “Confidentiality
      Provisions”
shall
      have the meaning set forth in Section
      5.4.

     

    “Consent
      Removal Projects”
shall
      have the meaning set forth in Section
      1.6(d).

     

    “Construction
      Contracts”
shall
      have the meaning set forth in Section
      3.19.

     

    “Construction
      Obligations”
shall
      have the meaning set forth in Section
      3.19.

     

    “Credits”
shall
      mean the low income housing tax credits provided for under Section 42 of the
      Code, including the seventy percent (70%) present value credit and/or the thirty
      percent (30%) present value credit, as applicable.

     

    “Defense
      Notice”
shall
      have the meaning set forth in Section
      7.3(b).

     

    “Development
      Agreement”
shall
      have the meaning set forth in the Recitals.

     

    “DOJ”
shall
      mean the United States Department of Justice.

     

    “Drop
      Dead Date”
shall
      mean the date which is six (6) months following the expiration of the Due
      Diligence Period (subject to extension pursuant to the terms of Section
      8.4(e)).

     

    “Due
      Diligence Period”
shall
      mean the 120 day period after the Effective Date, subject to extension to the
      extent expressly provided in Section
      2.18.

     

    “Due
      Diligence Termination Notice”
shall
      have the meaning set forth in Section
      6.2(a).

    
      
        
        

      

      
        A
          - 2 

        
          

        

      

      
        
        

      

    

    “Due
      Diligence Termination Option”
shall
      have the meaning set forth in Section
      6.2(a).

     

    “Earnest
      Money”
shall
      have the meaning set forth in Section
      1.3(a).

     

    “Earnest
      Money Escrow Agent”
shall
      have the meaning ascribed to that term in the Earnest Money Escrow
      Agreement.

     

    “Earnest
      Money Escrow Agreement”
shall
      have the meaning set forth in Section
      1.3(a).

     

    “Economic
      Interests”
shall
      have the meaning set forth in the Recitals.

     

    “Effective
      Date”
shall
      mean the last date on which this Agreement has been fully executed by Seller
      and
      Purchaser and a fully executed copy has been received by Seller and
      Purchaser.

     

    “Employee”
shall
      have the meaning set forth in Section
      5.12.

     

    “Employee
      Benefit Plan”
means
      any pension, retirement, savings, disability, medical, dental, health, life,
      death benefit, group insurance, profit sharing, deferred compensation, stock
      option, equity compensation, bonus, incentive, vacation pay, tuition
      reimbursement, severance pay, employment continuation, change of control, fringe
      benefit or other employee benefit plan, trust, agreement, contract, policy
      or
      commitment (including without limitation, any employee pension benefit plan,
      as
      defined in Section 3(2) of ERISA and the rules and regulations promulgated
      thereunder, and any employee welfare benefit plan as defined in
      Section 3(1) of ERISA, whether any of the foregoing is funded, insured or
      self-funded, written or oral.

     

    “Environmental
      Laws”
shall
      have the meaning set forth in the definition of Hazardous
      Materials.

     

    “Environmental
      Reports”
shall
      mean any environmental assessment report prepared with respect to any Project
      (which shall not include reliance letters).

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended, any successor
      statute thereto, and the rules and regulations promulgated
      thereunder.

     

    “ERISA
      Affiliate”
means
      (a) a member of any “controlled group” (as defined in section 414(b) of the
      Code) of which a Person is a member, (b) a trade or business, whether or not
      incorporated, under common control (within the meaning of section 414(c) of
      the
      Code) with a Person, or (c) a member of any affiliated service group (within
      the
      meaning of section 4.14(m) of the Code) of which a Person is a
      member.

     

    “Excluded
      Economic Interests”
shall
      have the meaning set forth in the Section
      2.2.

     

    “Exhibit”
shall
      mean any exhibit attached hereto.

    
      
        
        

      

      
        A
          - 3 

        
          

        

      

      
        
        

      

    

    “Extended
      Use Agreement”
shall
      mean any agreement entered into between a Project Partnership and any state
      tax
      credit agency as required pursuant to Section 42(h)(6) of the Code.

     

    “Final
      Determination”
shall
      mean, with respect to any Tax basis, Tax allocation or other Tax determination
      made before Closing that is alleged to have been improper, the first to occur
      of: (i) a decision, judgment, decree or other order issued by any court of
      competent, or assessment by a Tax authority, reflecting an inconsistent
      treatment, which decision, judgment, decree, other order or assessment has
      become final (i.e., all allowable appeals have been exhausted); or (ii) any
      binding settlement in writing is made in accordance with the provisions of
      Section
      7.3(f)
      between
      the applicable person and the Tax authority reflecting an inconsistent
      treatment.

     

    “Financial
      Statements”
shall
      have the meaning set forth in Section
      2.6(a).

     

    “Fiscal
      Year”
shall
      mean the calendar year or such other year that a Project Partnership is required
      by the Code to use as its taxable year. 

     

    “FTC”
shall
      mean the United Stated Federal Trade Commission.

     

    “Fully
      Covered Casualty”
shall
      have the meaning set forth in Section
      5.15(a).

     

    “GAAP”
shall
      mean generally accepted accounting principles, consistently applied with such
      principles as applied with respect to the Financial Statements.

     

    “General
      Liability Cap”
shall
      have the meaning set forth in Section
      7.5(c).

     

    “General
      Partner”
shall
      mean any Person who owns a general partner or managing member Interest in any
      Project Partnership.

     

    “†”
shall
      mean †, an individual.

     

    “Governmental
      Entity”
means
      the United States of America or any other nation, any state or other political
      subdivision thereof, or any entity exercising executive, legislative, judicial,
      regulatory or administrative functions of government.

     

    "Hazardous
      Materials"
      shall
      mean any of the following: "toxic substances," "toxic materials," "hazardous
      waste," "hazardous substances," "pollutants," or "contaminants" [as those terms
      are defined in the Resource, Conservation and Recovery Act of 1976, as amended
      ("RCRA") (42 U.S.C. § 6901 et.
      seq.),
      the
      Comprehensive Environmental Response Compensation and Liability Act of 1980,
      as
      amended (42 U.S.C. § 9601 et.
      seq.),
      the
      Hazardous Materials Transportation Act, as amended (49 U.S.C. § 1801
et.
      seq.),
      the
      Toxic Substances Control Act of 1976, as amended (15 U.S.C. § 2601 et.
      seq.),
      the
      Clean Air Act, as amended (42 U.S.C. § 1251 et.
      seq.)
      and
      any other federal, state or local law, statute, ordinance, rule, regulation,
      code, order, approval, policy and authorization relating to health, safety
      or
      the environment (said laws being hereafter referred to collectively as
      "Environmental
      Laws");
      asbestos or asbestos-containing materials; lead or lead-containing materials;
      oils; petroleum-derived compounds; pesticides; or polychlorinated
      biphenyls.

    
      
        
        

      

      
        A
          - 4 

        
          

        

      

      
        
        

      

    

    “Holdback
      Escrow Agreement”
shall
      have the meaning set forth in Section
      1.6(c).

     

    “Home
      Office”
shall
      have the meaning set forth in the Recitals.

     

    “Home
      Office Landlord”
shall
      have the meaning set forth in the Recitals.

     

    “Home
      Office Lease”
shall
      have the meaning set forth in the Recitals.

     

    “HSR
      Act”
shall
      have the meaning set forth in Section
      5.3.

     

    “Income
      Tax”
means
      any Tax imposed on, or measured by, net income.

     

    “Indebtedness”
means
      the following liabilities and obligations of Seller or any Project Partnership
      as they relate solely to a Project or a Project Partnership: (a) all
      indebtedness for borrowed money or for the deferred purchase price of property
      or services in respect of which the applicable party is liable, contingently
      or
      otherwise, as obligor or otherwise (other than trade payables and other current
      working capital liabilities incurred in the ordinary course of business);
      (b) all indebtedness guaranteed in any manner; (c) all obligations
      under capitalized leases in respect of which the applicable party is liable,
      contingently or otherwise, as obligor, guarantor or otherwise, and (d) all
      obligations under any interest rate cap, swap, collar or similar transaction
      or
      currency hedging transactions.

     

    “Indemnified
      Party”
shall
      have the meaning set forth in Section
      7.3(a).

     

    “Indemnifying
      Party”
shall
      have the meaning set forth in Section
      7.3(a).

     

    “Indemnity
      Notice”
shall
      have the meaning set forth in Section
      7.4.

     

    “Interest”
shall
      mean any partnership or membership interest in a Project Partnership or †
Management Company.

     

    “IRS”
shall
      mean the United States Internal Revenue Service.

     

    “Law(s)”
means
      any federal, state and foreign laws, statutes, regulations, rules, ordinances,
      decrees, orders and judgments.

     

    “Leases”
shall
      have the meaning set forth in Section
      3.5.

     

    “Leased
      Personal Property”
shall
      mean all of the Personal Property leased by Seller or † Management
      Company.

     

    “Leased
      Spaces”
shall
      have the meaning set forth in the Recitals.

     

    “Lender” shall
      mean each lender under any Loan Documents.

    
      
        
        

      

      
        A
          - 5 

        
          

        

      

      
        
        

      

    

    “Liability”
means
      any obligation or liability, absolute or contingent, known or unknown,
      liquidated or unliquidated, whether due or to become due and regardless of
      when
      or by whom asserted.

     

    “Lien(s)”
shall
      mean any mortgage, pledge, lien or security interest.

     

    “Limited
      Partners”
shall
      have the meaning set forth in the Recitals.

     

    “Loan
      Documents”
any
      loan agreements, notes, bonds, mortgages, indentures, assignments, guarantees
      or
      other agreements evidencing or securing any Indebtedness of any Project
      Partnership or pursuant to which all or any portion of any Project secures
      any
      Indebtedness.

     

    “Losses”
shall
      have the meaning set forth in Section
      7.1.

     

    “Management
      Company Interests”
shall
      mean all of the ownership interests in † Management Company.

     

    “Market
      Rate Projects”
shall
      mean those Projects owned by † and †.

     

    “Material
      Adverse Effect”
means,
      with respect to any Seller, any Project Partnership or any Project, any change,
      event or effect (a) that is materially adverse to the business, assets,
      condition (financial or otherwise), liabilities or results of operations of
      Seller, any Project Partnership or any Project, or (b) that would have a
      material adverse effect on, or materially impair or delay, the ability of Seller
      to consummate the transactions contemplated by this Agreement or to perform
      its
      respective obligations hereunder.

     

    “Material
      Condition”
shall
      mean: (i) a Material Title or Survey Condition; (ii) a Material Physical
      Condition; (iii) a Material Credit Reduction; (iv) Material Litigation; (v)
      a
      Material Representation Breach.

     

    “Material
      Credit Reduction”
shall
      mean an actual or expected reduction of Credits available to the Limited
      Partners in the Project Partnerships resulting in either (x) a 15% or greater
      reduction (as compared to the projections set forth on Schedule
      3.25(a))
      as to
      any one Project Partnership or (y) a $2,500,000 or greater reduction (as
      compared to the projections set forth on Schedule
      3.25(a))
      as to
      all Project Partnerships on an aggregate basis, all as reasonably determined
      by
      Purchaser (it being agreed that Purchaser may not dispute any final
      determinations previously made by the IRS with respect to Credits).

     

    “Material
      Litigation”
shall
      mean any pending or threatened litigation that could result in a material
      reduction in the economic value of the Purchased Interests or material increase
      in amounts which may be owed by Purchaser under any Assumed Obligations, each
      as
      reasonably determined by Purchaser, which litigation was not disclosed to
      Purchaser on a Schedule to this Agreement.

    
      
        
        

      

      
        A
          - 6 

        
          

        

      

      
        
        

      

    

    “Material
      Physical Condition”
shall
      mean an environmental condition, physical condition, zoning, design or
      construction code compliance issue (including local, state and federal design
      and construction standards) with respect to any particular Project the monetary
      consequence of which (as reasonably determined by Purchaser) exceeds the
      applicable reserves, if any, for that particular Project that are designated
      or
      available for the cure of such a condition (as reasonably determined by
      Purchaser) (the difference between such monetary consequence and such reserve
      amount being a “Required
      Physical Cure Amount”,
      and if
      there are no applicable reserves designated or available for the cure of such
      a
      condition, then the Required Physical Cure Amount shall be the monetary
      consequence (as reasonably determined by Purchaser) of the applicable
      condition).

     

    “Material
      Representation Breach”
shall
      mean the material breach by Seller of any representation or warranty made by
      Seller under this Agreement (as made on the Effective Date, without regard
      to
      any later updating).

     

    “Material
      Title or Survey Condition”
shall
      mean a title or survey matter objectionable to Purchaser that is not (a) a
      recorded instrument securing existing financing, (b) a recorded instrument
      required to be filed pursuant to an existing Project Partnership Agreement,
      (c)
      a recorded instrument required by a Governmental Entity in connection with
      the
      issuance of low income housing tax credits or housing bonds (such as a
      restrictive covenant agreement) or (d) an easement customarily filed of record
      against a multi-family project (such as a public utility easement) that would
      not reasonably be expected to have a material adverse impact on use or value.
      

     

    “Normal
      Casualty Repair Process”
shall
      have the meaning set forth in Section
      5.15(a).

     

    “Other
      Assets”
shall
      have the meaning set forth in Section
      2.1(d).

     

    “Other
      Fee Agreements”
shall
      have the meaning set forth in the Recitals.

     

    “Owned
      Personal Property”
shall
      mean all of the Personal Property owned by Seller.

     

    “Partnership
      Amendments”
shall
      have the meaning set forth in Section
      1.7(b).

     

    “Partnership
      Interests”
shall
      have the meaning set forth in the Recitals.

     

    “Party”
or
      “Parties”
shall
      mean a party or the parties to this Agreement as set forth on the signature
      page.

     

    “Pending
      Warranty Claim”
shall
      mean any claim related to, arising out of or in connection with subcontractor
      work at any Project which was paid for by †.. 

     

    “Permitted
      Interest Liens”
shall
      have the meaning set forth in Section
      1.1.

     

    “Permitted
      Tax Liens”
shall
      mean statutory Liens or Liens for Taxes, in each case which are not yet due
      and
      payable, and are incurred in the normal, ordinary course.

    
      
        
        

      

      
        A
          - 7 

        
          

        

      

      
        
        

      

    

    “Person”
shall
      mean any individual, partnership, corporation, company, limited liability
      company, trust or other entity.

     

    “Personal
      Property”
shall
      have the meaning set forth in the Recitals.

     

    “Personal
      Property Lease”
shall
      mean any lease of any Leased Personal Property.

     

    “Post-Closing
      Employee Obligations”
means
      all obligations and liabilities, actual or contingent, with respect to Purchaser
      Employees arising from the employment relationship with Purchaser, any Affiliate
      of Purchaser or † Management Company from and after the Closing, including any
      and all obligations or liabilities: (i) for wages, salaries, accrued
      vacation, medical insurance, fringe benefits, and payroll taxes; (ii) for
      workers' compensation claims based on any real or alleged occurrence;
      (iii) for benefits and employer contributions to Employee Benefit Plans;
      and (iv) for claims or penalties under applicable laws governing
      employer/employee relations (including the National Labor Relations Act and
      other labor relations laws, wages, hours and employment standards laws, fair
      employment practices and anti-discrimination laws, the WARN Act, the State
      WARN
      Act, and any other similar state or local regulations, ERISA and COBRA). The
      term Post-Closing Employee Obligations expressly excludes any and all statutory
      or contractual successorship liabilities in connection with any Employee Benefit
      Plan of any Seller or any Affiliate of Seller other than † Management
      Company.

     

    “Pre-Closing
      Employee Obligations”
means
      all obligations and liabilities, actual or contingent, with respect to Employees
      arising from their employment relationship with Seller or † Management Company
      prior to the Closing, including any and all obligations or liabilities:
      (i) for wages, salaries, accrued vacation, medical insurance, fringe
      benefits, and payroll taxes; (ii) for workers' compensation claims based on
      any real or alleged occurrence; (iii) for benefits and employer
      contributions to Employee Benefit Plans; and (iv) for claims or penalties under
      applicable laws governing employer/employee relations (including the National
      Labor Relations Act and other labor relations laws, wage, hours and employment
      standards laws, fair employment practices and anti-discrimination laws, the
      WARN
      Act, State WARN, ERISA and COBRA). The term Pre-Closing Employee Obligations
      includes any and all statutory and contractual liabilities in connection with
      any Employee Benefit Plan of any Seller or Affiliate of Seller other than †
Management Company.

     

    “Projects”
shall
      have the meaning set forth in the Recitals.

     

    “Project
      Documents”
shall
      mean the following documents with respect to any Project: construction
      contracts, plans and specifications, agreements with architects, engineers,
      environmental abatement consultants and contractors and other third party
      contractors agreements with the management agent, agreements with the General
      Partner and its Affiliates, any guaranty, the Extended Use Agreement, the
      Project Partnership Documents, the Loan Documents, the Fee Agreements, the
      Standalone Economic Guarantees, and any other document or instrument executed
      in
      connection with any of the aforesaid documents.

     

    “Project
      Partnerships”
shall
      have the meaning set forth in the Recitals.

    
      
        
        

      

      
        A
          - 8 

        
          

        

      

      
        
        

      

    

    “Project
      Partnership Agreement”
shall
      have the meaning set forth in Recital
      B.

     

    “Project
      Partnership Documents”
means,
      with respect to any Project, the Project Partnership Agreement or other
      organizational documents of a Project Partnership and all amendments
      thereto.

     

    “Project
      Partnership Interest”
shall
      have the meaning set forth in Recital B.

     

    “Project
      Removal”
shall
      have the meaning set forth in Section
      6.2(b).

     

    “Project
      Removal Option”
shall
      have the meaning set forth in Section
      6.2(b).

     

    “Project
      Under Construction”
shall
      have the meaning set forth in Section
      3.19(a).

     

    “Property
      Management Agreement”
shall
      have the meaning set forth in Recital
      C.

     

    “Proration
      Adjustment”
shall
      have the meaning set forth in Section
      1.4.

     

    “Purchase
      Price”
shall
      have the meaning set forth in Section
      1.2.

     

    “Purchased
      Interests”
shall
      have the meaning set forth in the Recitals.

     

    “Purchaser”
shall
      have the meaning set forth in the Preamble.

     

    “Purchaser
      Employees”
means
      the Employees employed by Purchaser, any Affiliate of Purchaser or any manager
      designated by Purchaser to employ such employees from and after the
      Closing.

     

    “Purchaser
      Indemnity Expiration Date”
shall
      have the meaning set forth in Section
      7.8.

     

    “Purchaser
      Indemnified Parties”
and
      “Purchaser
      Indemnified Party”
shall
      have the meanings set forth in Section
      7.1.

     

    “Purchaser
      Material Adverse Effect”
shall
      mean a material adverse effect on the ability of Purchaser to consummate the
      transactions contemplated by this Agreement.

     

    “Purchaser
      Repair Obligations”
shall
      have the meaning set forth in Section
      6.1.
      

     

    “Purchaser
      Upper Tier Entities”
shall
      have the meaning set forth in the Recitals.

     

    “Recitals”
shall
      mean the recitals set forth on the first page of this Agreement.

     

    “Regulatory
      Agreements”
means
      the Extended Use Agreements, Declaration of Restrictive Covenants and regulatory
      agreements encumbering the Projects for the benefit of the Lenders or
      Governmental Entities and providing for the use of a Project as low income
      housing.

     

    “Remaining
      Insurance Shortfall”
shall
      have the meaning set forth in Section
      5.15(b).

    
      
        
        

      

      
        A
          - 9 

        
          

        

      

      
        
        

      

    

    “Removed
      Project”
shall
      have the meaning set forth in Section
      6.2(b).

     

    “Rent
      Roll”
shall
      have the meaning set forth in Section
      3.5.

     

    “Required
      Consents”
means
      all required consents, waivers, authorizations and approvals from any
      Governmental Entities, Lenders, Limited Partners or any other Persons in
      connection with the execution, delivery and performance by Seller of this
      Agreement, the Transaction Documents and the transactions contemplated hereby
      and thereby.

     

    “Required
      Physical Cure Amount”
shall
      have the meaning set forth in the definition of Material Physical
      Condition.

     

    “Retained
      Claims”
shall
      have the meaning set forth in Section
      1.1(b).

     

    “Scheduled
      Documents”
shall
      mean any document listed on Schedules
      A, B, C
      or
D
      attached
      hereto, as updated during the Due Diligence Period.

     

    “Schedules”
shall
      mean the disclosure schedules attached hereto and incorporated herein by
      reference.

     

    “Seller”
shall
      have the meaning set forth in the Preamble.

     

    “Seller
      Benefit Plan”
shall
      have the meaning set forth in Section
      2.14(b).

     

    “Seller
      General Liability Basket”
shall
      mean $2,500,000; provided that if there are Removed Projects, then (x) the
      amount of the Seller General Liability Basket shall initially equal $2,500,000
      multiplied by a fraction (i) having as its numerator the aggregate Allocated
      Values of all of the Projects which are the subject of the initial Closing
      and
      (ii) having as a denominator the sum of the aggregate Allocated Values of all
      of
      the Projects which are the subject of the initial Closing plus the aggregate
      Allocated Values of all of the Removed Projects, and (y) at each Subsequent
      Closing (if any), the amount of the Seller General Liability Basket shall be
      increased to equal $2,500,000 multiplied by a fraction (i) having as its
      numerator the aggregate Allocated Values of all of the Projects which are the
      subject of any Closing (i.e. those covered by the initial Closing plus those
      covered by each Subsequent Closing) and (ii) having as a denominator the sum
      of
      the aggregate Allocated Values of all of the Projects which are covered by
      any
      Closing plus the aggregate Allocated Values of all of the remaining Removed
      Projects.

     

    “Seller
      Guarantor”
shall
      have the meaning set forth in Section
      6.4.

     

    “Seller
      Indemnified Parties”
and
      “Seller
      Indemnified Party”
shall
      have the meanings set forth in Section
      7.2.

     

    “Seller
      Indemnity Expiration Date”
shall
      have the meaning set forth in Section
      7.8.

    
      
        
        

      

      
        A
          - 10 

        
          

        

      

      
        
        

      

    

    “Seller
      Indemnity Letter of Credit”
means
      a
      clean, irrevocable letter of credit which (i) is in the amount of $25,000,000
      (subject to adjustment as described below), (ii) is in form and substance and
      from an issuing bank reasonably satisfactory to Purchaser, (iii) allows for
      partial draws, and (iv) has an expiry date no earlier than 30 days after the
      Seller Indemnity Expiration Date. If there are Removed Projects, then the amount
      of the Seller Indemnity Letter of Credit posted at the initial Closing shall
      equal $25,000,000 multiplied by a fraction (i) having as its numerator the
      aggregate Allocated Values of all of the Projects which are the subject of
      the
      initial Closing and (ii) having as a denominator the sum of the aggregate
      Allocated Values of all of the Projects which are the subject of the initial
      Closing plus the aggregate Allocated Values of all of the Removed Projects.
      At
      each Subsequent Closing (if any), Seller shall cause the amount of the Seller
      Indemnity Letter of Credit to be increased to equal $25,000,000 multiplied
      by a
      fraction (i) having as its numerator the aggregate Allocated Values of all
      of
      the Projects which are the subject of any Closing (i.e. those covered by the
      initial Closing plus those covered by each Subsequent Closing) and (ii) having
      as a denominator the sum of the aggregate Allocated Values of all of the
      Projects which are covered by any Closing plus the aggregate Allocated Values
      of
      all of the remaining Removed Projects.

     

    “Seller
      Obligations”
shall
      have the meaning set forth in the Recitals.

     

    “Service
      Contracts”
means
      all contracts relating to any Project pursuant to which third parties render
      services or provide products to any Project.

     

    “Space
      Leases”
shall
      have the meaning set forth in Section
      2.8(d).

     

    “Standalone
      Economic Guarantees”
shall
      have the meaning set forth in Recital
      D.

     

    “Subsequent
      Closing”
shall
      have the meaning set forth in Section
      1.6(d).

     

    “Tax”
and
      “Taxes”
means
      any federal, state, local or foreign net income, alternative or add-on minimum,
      gross income, gross receipts, property, sales, use, transfer, gains, goods
      and
      services, value-added, registration, stamp, recording, commodity, documentary,
      franchise, license, excise, employment, employee health, payroll, withholding
      or
      minimum tax, or any other tax of any kind whatsoever, together with any interest
      or any penalty, addition to tax or additional amount imposed by any Governmental
      Entity.

     

    “Tax
      Return(s)”
means
      any return, report or similar statement required to be filed with respect to
      any
      Taxes (including any attached schedules), including any information return,
      claim for refund, amended return and declaration of estimated Tax.

     

    “Third
      Party Claim”
shall
      have the meaning set forth in Section
      7.3(a).

     

    “Title
      Policy”
means
      the most recently dated title insurance policy issued by a title insurance
      company in favor of a Project Partnership with respect to a Project Property
      and
      in the possession or control of the Seller.

     

    “Transaction
      Documents”
means
      this Agreement, and all other agreements, instruments, certificates and other
      Closing documents entered into or delivered by any Party on or after the
      Effective Date pursuant to the terms of this Agreement.

    
      
        
        

      

      
        A
          - 11 

        
          

        

      

      
        
        

      

    

    “Treasury
      Regulations”
shall
      mean the regulations promulgated under the Code.

     

    “UCC”
shall
      mean the Uniform Commercial Code.

     

    “Units”
shall
      mean the
      individual units of residential rental housing located at a Project.

     

    “WARN
      Act”
shall
      have the meaning set forth in Section
      2.14(a).

     

    “†
      Adjustment”
shall
      have the meaning set forth in Section
      1.5.

    
      
        
        

      

      
        A
          - 12

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