Document:

EX-10.2

SECURITY AGREEMENT

among

TECHNICAL OLYMPIC USA, INC.

and certain of its Subsidiaries,

and

CITICORP NORTH AMERICA, INC.,

as Administrative Agent

Dated as of October 23, 2006

1

TABLE OF CONTENTS

Page

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	
 
	 	 	1.1	 	 	SECTION 1.DEFINED TERMS

Definitions

	 	 	 	 	 
	 
	 	 	 	 
	
 
	 	1.2

3.1

3.2
	 	Other Definitional Provisions

SECTION 2.GRANT OF SECURITY INTEREST

SECTION 3.REPRESENTATIONS AND WARRANTIES

Title; No Other Liens

Perfected First Priority Liens

	 	 	 
	3.3 Jurisdiction of Organization; Chief Executive Office

	 
	 	 
	3.4 Contracts for Sale.

SECTION 4.

	 	

COVENANTS

	 	 	 
	 
	 	 
	4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

5.1

5.2

5.3

5.4

	 	Maintenance of Perfected Security Interest; Further Documentation.

Changes in Locations, Name, etc

Notices

Contracts for Sale.

Deposit Accounts and Securities Accounts

Proceeds of Collateral

Further Identification of Collateral

Further Assurances

SECTION 5.REMEDIAL PROVISIONS; LIMITATION

Grantors Remain Liable, etc

Application of Proceeds

Code and Other Remedies

Deficiency

	 	 	 
	5.5 Proceeds to be Turned Over to Administrative Agent

	 
	 	 
	SECTION 6.

	 	ACTIONS AFTER EVENT OF DEFAULT

	 	 	 
	6.1 General Authority of the Administrative Agent over the Collateral

	 
	 	 
	6.2 Judicial Proceedings and Insolvency Events

6.3 Right to Appoint a Receiver

6.4 Remedies Not Exclusive.

6.5 Waiver and Estoppel.

	 	

	 
	 	 
	6.6 Limitation on Administrative Agent’s Duty in Respect of Collateral

	 
	 	 
	SECTION 7.

	 	THE ADMINISTRATIVE AGENT

	 	 	 
	 
	 	 
	7.1

7.2

7.3

7.4

7.5

7.6

7.7

7.8

7.9

7.10

7.11

7.12

7.13

7.14

7.15

7.16

8.1

8.2

	 	Administrative Agent’s Appointment as Attorney-in-Fact, etc

Duty of Administrative Agent

Filing of Financing Statements

Authority of Administrative Agent

Exculpatory Provisions.

Delegation of Duties

Reliance by Administrative Agent.

Limitations on Duties of Administrative Agent.

Moneys to be Held in Trust

Resignation of the Administrative Agent; Appointment of Successor

Merger of the Administrative Agent

Co-Administrative Agent; Separate Administrative Agent.

Treatment of Payee or Indorsee by Administrative Agent; Representatives of Issuers and Lenders.

Stamp and Other Similar Taxes

Filing Fees, Excise Taxes, Etc

Indemnification

SECTION 8.MISCELLANEOUS

Notices

Amendments, etc

8.3 No Waiver by Course of Conduct; Cumulative Remedies

8.4 Enforcement Expenses

8.5 Successors and Assigns

8.6 Counterparts

8.7 Severability

8.8 Section Headings

8.9 Integration

8.10 GOVERNING LAW

8.11 Submission to Jurisdiction; Service of Process.

8.12 WAIVER OF JURY TRIAL

8.13 Releases

8.14 Additional Grantors

8.15 Reinstatement

Schedules

Schedule 1 — Perfection Matters

Schedule 2 — Jurisdictions of Organization and Chief Executive Offices

Schedule 3 — Deposit Accounts

Exhibits

Exhibit A — Form of Assumption Agreement

2

SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of October 23, 2006, among TECHNICAL OLYMPIC USA, INC., a
Delaware corporation (the “Borrower”), and each of its subsidiaries signatories hereto (the
Borrower and such subsidiaries, together with any other entity that may become a party hereto as
provided herein, the “Grantors”), in favor of CITICORP NORTH AMERICA, INC., a Delaware corporation,
as administrative agent under the Credit Agreement referred to below (in such capacity, the
“Administrative Agent”) for its benefit and for the ratable benefit of the Issuers (as defined
below) and the Lenders (as defined below).

WITNESSETH:

WHEREAS, on March 9, 2006, the Borrower entered into that certain Credit Agreement (the
“Existing Credit Agreement”) among the Persons party thereto as Issuers (collectively, the
“Issuers”), the financial institutions and other entities party thereto as Lenders (collectively,
the “Lenders”), the Administrative Agent and certain other financial institutions in other agent
capacities;

WHEREAS, on March 9, 2006, each of the Grantors party hereto (other than the Borrower) entered
into that certain Guaranty (the “Guaranty”) in favor of the Administrative Agent, the Issuers, the
Lenders and each other holder of an Obligation (as defined in the Credit Agreement);

WHEREAS, on the date hereof, the Grantors, the Issuers, the Lenders party thereto and the
Administrative Agent are entering into that certain Amendment No. 1 to Credit Agreement (the
“Credit Agreement Amendment”), which, among other things, amends certain provisions of the Existing
Credit Agreement and requires the Grantors to provide collateral to secure the Obligations; and

WHEREAS, it is a condition precedent to the effectiveness of the Credit Agreement Amendment
that the Grantors enter into this Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent, the
Issuers and the Lenders to enter into the Credit Agreement Amendment and to induce the Issuers and
Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement,
the Grantors hereby agree with the Administrative Agent, for its benefit and for the ratable
benefit of the Issuers and the Lenders, as follows:

SECTION 1. DEFINED TERMS

1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit Agreement.

(b) The following terms shall have the following meanings:

“Agreement” means this Security Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.

“Borrower Obligations” means, without duplication, the Loans, the Letter of Credit Obligations
and all other amounts owing by the Borrower to the Administrative Agent, any Issuer, any Lender,
any Affiliate of any of them or any Indemnitee, of every type and description, present or future,
arising under the Credit Agreement, any other Loan Document, whether direct or indirect, including
all letter of credit and other fees, interest, charges, expenses, attorneys’ fees and disbursements
and other sums chargeable to the Borrower under the Credit Agreement or any other Loan Document.

“Collateral” has the meaning specified in Section 2.

“Credit Agreement” means the Existing Credit Agreement, as amended by the Credit Agreement
Amendment, and as the same may be further amended, supplemented or otherwise modified from time to
time.

“Guarantor” means each Grantor that is a Restricted Subsidiary of the Borrower and party to
the Guaranty.

“Guarantor Obligations” means, with respect to any Guarantor, the collective reference to all
obligations and liabilities of such Guarantor which may arise under or in connection with the
Guaranty or any other document related thereto to which such Guarantor is a party, in each case
whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, charges,
expenses, attorneys’ fees and disbursements or otherwise.

“New York UCC” means the Uniform Commercial Code as from time to time in effect in the State
of New York.

“Obligations” means the Borrower Obligations and the Guarantor Obligations.

“Opinion of Counsel” means an opinion in writing signed by legal counsel satisfactory to the
Administrative Agent.

1.2 Other Definitional Provisions. (a) The terms “Accounts”, “Deposit Accounts”,
“General Intangibles”, “Proceeds”, “Securities Accounts” and “Supporting Obligations” have the
respective meanings set forth in the New York UCC.

(b) The rules of construction set forth in Sections 1.2, 1.3 and 1.4 of the Credit Agreement
shall apply to this Agreement.

SECTION 2. GRANT OF SECURITY INTEREST

Each Grantor hereby assigns and transfers to the Administrative Agent for its benefit and for
the ratable benefit of the Issuers and the Lenders, and hereby grants to the Administrative Agent,
for its benefit and for the ratable benefit of the Issuers and the Lenders, a security interest in,
all of such Grantors’s right, title and interest in, to and under the following property, whether
now existing or at any time hereafter acquired (collectively, the “Collateral”), as collateral
security for the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Grantor’s Obligations:

(a) all Contracts for Sale to which such Grantor is or is to become a party, including without
limitation:

(i) all rights of such Grantor to receive monies due and to become due under or
pursuant to such Contracts for Sale;

(ii) all rights of such Grantor under or in respect of any escrow, settlement or
similar agreement entered into by such Grantor in connection with such Contracts for
Sale, including without limitation, all rights of such Grantor to receive monies pursuant
to any such escrow, settlement or similar agreement;

(iii) all claims of such Grantor for damages arising out of or for breach of or
default under such Contracts for Sale; and

(iv) all rights of such Grantor to terminate, amend, supplement, modify or waive
performance under such Contracts for Sale, to compel performance and otherwise to
exercise all remedies thereunder;

(b) to the extent not covered by clause (a) of this Section 2, all Accounts arising from or
relating to Contracts for Sale to which such Grantor is or is to become a party;

(c) to the extent not covered by clause (a) of this Section 2, all General Intangibles arising
from or relating to Contracts for Sale to which such Grantor is or is to become a party;

(d) the Deposit Accounts set forth on Schedule 3;

(e) all books and records pertaining to the foregoing; and

(f) all Proceeds, Supporting Obligations and products of any and all of the foregoing and all
other collateral security and guarantees given by any Person with respect to the foregoing,
including without limitation, Proceeds of Contracts for Sale constituting Escrow Proceeds
Receivables and any other escrowed funds relating to a Contract for Sale;

provided, however, that notwithstanding any of the other provisions set forth in
this Section 2, this Agreement shall not constitute a grant of security in any Contract for Sale to
the extent that such grant of a security interest is prohibited by, constitutes a breach or default
under, results in the termination of, or requires any consent not obtained under, such Contract for
Sale, except to the extent the relevant term in such Contract for Sale providing for such
prohibition, breach, default or termination or requiring such consent is ineffective under any
applicable law.

SECTION 3. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent, the Issuers and the Lenders to enter into the Credit
Agreement Amendment, and to induce the Issuers and the Lenders to make their respective extensions
of credit to the Borrower under the Credit Agreement, each Grantor hereby represents and warrants
to the Administrative Agent, each Issuer and each Lender that:

3.1 Title; No Other Liens. Except for the security interests granted pursuant to the
Loan Documents, such Grantor owns and has good title to each of the Collateral free and clear of
any and all Liens and options in favor of or claims of any other Person and except for Liens, if
any, expressly permitted under the Credit Agreement. No effective security agreement, financing
statement or other public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the Administrative Agent
for its benefit and the ratable benefit of the Issuers and the Lenders.

3.2 Perfected First Priority Liens. The security interests granted pursuant to this
Agreement, upon completion of the filings and other actions specified on Schedule 1 (which
in the case of all filings and other documents referred to on said Schedule, have been delivered to
the Administrative Agent in completed and duly executed form unless otherwise expressly provided in
the Credit Agreement) (i) will constitute valid perfected security interests in all of the
Collateral in favor of the Administrative Agent, for its benefit and for the ratable benefit of the
Issuers and Lenders, as collateral security for such Grantor’s Obligations, enforceable in
accordance with the terms hereof against all creditors of such Grantor (except a counterparty to
such Grantor under a Contract for Sale, but only to the extent such counterparty becomes a creditor
of such Grantor under and pursuant to such Contract for Sale) and any Persons purporting to
purchase any Collateral from such Grantor and (ii) are prior to all other Liens on the Collateral.

3.3 Jurisdiction of Organization; Chief Executive Office. On the date hereof, such
Grantor’s jurisdiction of organization, name as it appears in and identification number, if any
from the official filings in its jurisdiction of organization, and the location of such Grantor’s
chief executive office are specified on Schedule 2. Such Grantor’s jurisdiction of
organization is the only jurisdiction in which such Grantor is a “registered organization” (as such
term is used in Section 9-307 of the New York UCC). Except as disclosed in Schedule 2,
during the five years ending on the date hereof, such Grantor has not changed its name, location,
chief executive office, type of organization, jurisdiction of organization or organizational
identification number from the information set forth on Schedule 2.

3.4 Contracts for Sale.

(a) Such Grantor lawfully holds rights and interests in each Contract for Sale to which it is
a party, has the power and authority to assign its interest under such Contract for Sale and has
not executed any other document or instrument that might prevent or limit the Administrative Agent
from operating under or realizing the benefits of the terms, conditions and provisions of this
Agreement.

(b) Neither applicable law nor any provision of any Contract for Sale to which such Grantor is
a party restricts or prohibits such Grantor from assigning, transferring or granting a security
interest in such Grantor’s right, title or interest in any such Contract for Sale, and none of the
execution, delivery or the performance of this Agreement will violate any applicable law, result in
a breach by such Grantor of any of the terms of any such Contract for Sale or give rise to any
right of the counterparty or counterparties to any such Contract for Sale to terminate such
Contract for Sale.

(c) Such Grantor is not in default under any Contract for Sale to which it is a party, and to
such Grantor’s knowledge, no other party to any such Contract for Sale is in default thereunder.

SECTION 4. COVENANTS

Each Grantor covenants and agrees with the Administrative Agent for its benefit and for the
ratable benefit of the Issuers and the Lenders that, from and after the date hereof and as long as
any Obligations or the Revolving Credit Commitments remain outstanding:

4.1 Maintenance of Perfected Security Interest; Further Documentation.

(a) Such Grantor shall maintain each security interest created by this Agreement as a
perfected security interest having at least the priority described in Section 3.2 and shall defend
such security interest against the claims and demands of all Persons whomsoever.

(b) Such Grantor shall not sell, license, lease, transfer or otherwise dispose of any of the
Collateral, or attempt or contract to do so, except, with respect to Proceeds of a Contract for
Sale, as expressly permitted under the terms of such Contract for Sale.

(c) At any time and from time to time, at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, any and all such further instruments and
documents and take such further actions as may be required by applicable law or as necessary to
perfect and protect any security interest purported to be granted by such Grantor hereunder and
obtaining or preserving the full benefits of this Agreement and of the rights and powers herein
granted, including, without limitation, (i) filing any financing or continuation statements under
the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with respect to
the security interests created hereby and (ii) in the case of Deposit Accounts and Securities
Accounts constituting Collateral hereunder and any other relevant Collateral, taking any actions
necessary to enable the Administrative Agent to obtain “control” (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.

4.2 Changes in Locations, Name, etc. Such Grantor will not, except after not less
than 30 days’ prior written notice to the Administrative Agent and delivery to the Administrative
Agent of all additional authenticated financing statements and other documents necessary to
maintain the validity, perfection and priority of the security interests provided for herein:

(a) change its jurisdiction of organization or the location of its chief executive office
from, or take any action to become a “registered organization” (as used in Section 9-307 of the New
York UCC) in any jurisdiction other than, that referred to on Schedule 2; or

(b) change its name.

4.3 Notices. Such Grantor will advise the Collateral Agent promptly, in reasonable
detail, of (a) any Lien (other than security interests created hereby or by any other Loan Document
or any Lien, if any, expressly permitted under the Credit Agreement) on any of the Collateral; and
(b) of the occurrence of any other event that could reasonably be expected to have a material
adverse effect on the aggregate value of the Collateral or on the security interests created
hereby.

4.4 Contracts for Sale.

(a) Subject to Section 5.1(c), such Grantor shall perform and observe, in a timely manner, all
of the covenants, conditions, obligations and agreements of such Grantor under each Contract for
Sale to which it is a party and shall suffer or permit no delinquency on its part to exist
thereunder.

(b) Subject to Section 5.1(c), such Grantor shall use its commercially reasonable efforts to
enforce or secure the performance of each and every obligation, covenant, condition and agreement
to be performed by the counterparty or counterparties to each Contract for Sale to which such
Grantor is a party.

(c) In connection with each sale consummated under a Contract for Sale to which such Grantor
is a party, such Grantor shall direct the relevant title company, title agent or escrow agent to
transfer proceeds payable to such Grantor (including, without limitation, any related Escrow
Proceeds Receivables) directly to a Deposit Account constituting Collateral hereunder.

4.5 Deposit Accounts and Securities Accounts. Except as expressly provided in the
Credit Agreement, no Grantor shall maintain or establish any Deposit Account or any Securities
Account with any financial institution unless such Grantor, the Administrative Agent and such
financial institution shall have entered into an agreement which provides the Administrative Agent
with “control” (as such term is defined under the New York UCC) with respect to such Deposit
Account or Securities Account or the Administrative Agent otherwise has “control” (within the
meaning of the Uniform Commercial Code of any applicable jurisdiction) of such Deposit Account or
Securities Account; provided that the provisions of this Section 4.5 shall not apply to
Deposit Accounts established solely for the payment of taxes, workmens’ compensation or payroll and
other Deposit Accounts in which funds are held in trust under Requirements of Law or for payment to
a Governmental Authority.

4.6 Proceeds of Collateral. Each Grantor shall cause all or any part of Proceeds
constituting Collateral to be deposited directly into a Deposit Account constituting Collateral
hereunder, and shall not invest any funds on deposit in a Deposit Account constituting Collateral
hereunder in, or transfer any such funds to, any Securities Account unless (a) such Grantor, the
Administrative Agent and the financial institution that maintains such Securities Account shall
have entered into an agreement which provides the Administrative Agent with “control” (as such term
is defined under the New York UCC) with respect to such Securities Account or the Administrative
Agent otherwise has “control” (within the meaning of the Uniform Commercial Code of any applicable
jurisdiction) of such Securities Account and (b) the Administrative Agent shall have received an
Opinion of Counsel in form and substance reasonably satisfactory to it with respect to the creation
and perfection of the security interest in such Securities Account.

4.7 Further Identification of Collateral. Each Grantor shall furnish to the
Administrative Agent, requests, statements and schedules further identifying the Collateral as the
Administrative Agent may reasonably request and in such reasonable detail as the Administrative
Agent may specify.

4.8 Further Assurances. At any time and from time to time, upon the written request
of the Administrative Agent and at the sole expense of the Grantors, the Grantors shall promptly
and duly execute and deliver any and all such further instruments and documents and take such
further actions as the Administrative Agent may deem necessary or advisable to obtain the full
benefits of this Agreement and of the rights and powers herein granted, including filing any
financing statements (or amendments thereto) and continuation statements with respect to the Liens
granted hereunder.

SECTION 5. REMEDIAL PROVISIONS; LIMITATION

5.1 Grantors Remain Liable, etc. (a) Anything herein to the contrary notwithstanding,
each Grantor shall remain liable under each Contract of Sale to which it is a party to observe and
perform all the conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of such Contract for Sale. The Administrative Agent shall not have any
obligation or liability under any Contract for Sale by reason of or arising out of this Agreement
or the receipt by the Administrative Agent of any payment relating thereto, nor shall the
Administrative Agent be obligated in any manner to perform any of the obligations of such Grantor
under or pursuant to any such Contract for Sale, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the sufficiency of any performance
by any party thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been assigned to it or to which
it may be entitled at any time or times.

(b) Each Grantor hereby irrevocably directs the counterparty or counterparties to any Contract
for Sale to which such Grantor is a party, to the extent permitted by such Contract for Sale and
under any recognition or other agreement executed by such counterparty or counterparties, upon
demand from the Administrative Agent, to recognize and accept the Administrative Agent as the
holder of such Contract for Sale for any and all purposes as fully as it would recognize and accept
such Grantor and the performance of such Grantor thereunder. Following an Event of Default and
during the continuance thereof, each such counterparty or counterparties to the Contracts for Sale
upon written notice from the Administrative Agent of the occurrence of an Event of Default, shall
be and is hereby authorized by the Grantor party to such Contracts of Sale to perform under their
respective Contracts for Sale for the benefit of the Administrative Agent in accordance with the
terms and conditions thereof without any obligation to determine whether or not such an Event of
Default has in fact occurred or is continuing.

(c) Notwithstanding anything to the contrary contained herein, but subject to Section 4.6, for
so long as no Event of Default shall have occurred and be continuing, each Grantor may take or
refrain from taking any and all actions in the ordinary course of business with respect to each
Contract for Sale to which it is a party including, without limitation, exercising all of its
rights and privileges under each such Contract for Sale. Each Grantor’s foregoing right shall
immediately cease and terminate upon and during the continuance of any such Event of Default.

5.2 Application of Proceeds. All or any part of Proceeds constituting Collateral
shall be applied in accordance with Section 2.12(f) of the Credit Agreement.

5.3 Code and Other Remedies. If an Event of Default shall occur and be continuing,
the Administrative Agent may exercise, in addition to all other rights and remedies granted to it
in this Agreement, in the other Collateral Documents and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of a secured party
under the New York UCC or any other applicable law. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law referred to below)
to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements
and notices are hereby waived), may in such circumstances forthwith (i) collect, receive,
appropriate and realize upon the Collateral, or any part thereof, (ii) transfer all or any part of
the Collateral into the Administrative Agent’s name or the name of its nominee or nominees and/or
(iii) forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of
and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or
more parcels at public or private sale or sales, at any exchange, broker’s board or office of the
Administrative Agent or elsewhere upon such terms and conditions as it may deem advisable and at
such prices as it may deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Administrative Agent shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which
right or equity is hereby waived and released. If an Event of Default shall have occurred and
shall be continuing, each Grantor further agrees, at the Administrative Agent’s request, to
assemble the Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor’s premises or elsewhere, and
promptly to execute and deliver to the Administrative Agent such instruments or other documents as
may be necessary or advisable to enable the Administrative Agent or its agent or representative to
obtain possession of all or any part of the Collateral the possession of which the Administrative
Agent shall at the time be entitled to hereunder. The Administrative Agent shall also be entitled,
so long as an Event of Default shall have occurred and be continuing, to occupy any premises owned
or leased by any Grantor where the Collateral or any part thereof is assembled or located for a
reasonable period to effectuate its rights and remedies hereunder or under law, without obligation
to such Grantor for such occupation and to otherwise exercise any and all rights and remedies of
any Grantor under or in connection with the Collateral, or otherwise in respect of the Collateral.
The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this
Section 5.3, after deducting all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating
to the Collateral or the rights of the Administrative Agent hereunder, including, without
limitation, reasonable attorneys’ fees and disbursements, and only after such application and after
the payment by the Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need the Administrative
Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law,
each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent
arising out of the exercise by the Administrative Agent of any rights hereunder. If any notice of
a proposed sale or other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other disposition.

5.4 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the
fees and disbursements of any attorneys employed by the Administrative Agent to collect such
deficiency.

5.5 Proceeds to be Turned Over to Administrative Agent. If an Event of Default shall
occur and be continuing, all Proceeds with respect to Collateral received by any Grantor consisting
of cash, checks and other near-cash items shall be held by such Grantor in trust for the
Administrative Agent (for its benefit and for the ratable benefit of the Issuers and the Lenders),
segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be
deposited in a Deposit Account included in the Collateral in the exact form received by such
Grantor (duly indorsed by such Grantor to the Administrative Agent, if required). All Proceeds
with respect to Collateral while held in a Deposit Account (or by such Grantor in trust for the
Administrative Agent (for its benefit and for the ratable benefit of the Issuers and the Lenders))
shall continue to be held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in Section 5.2.

SECTION 6. ACTIONS AFTER EVENT OF DEFAULT

6.1 General Authority of the Administrative Agent over the Collateral. Each Grantor
and, by its acceptance of the benefits hereof, each Issuer and Lender, hereby irrevocably
constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power
of substitution, as its true and lawful attorney-in-fact with full power and authority in its or
his own name, from time to time in the Administrative Agent’s discretion so long as an Event of
Default has occurred and is continuing, to take any and all actions and to execute any and all
documents and instruments which may be necessary or advisable to carry out the terms of this
Agreement and accomplish the purposes hereof.

6.2 Judicial Proceedings and Insolvency Events. If an Event of Default has occurred
and is continuing, the Administrative Agent (a) shall have the right and power to institute,
maintain, defend and participate in such suits and proceedings as it may deem appropriate to
protect and enforce the rights vested in it by this Agreement and its interests and the interests
of the Issuers and the Lenders, (ii) may, either after entry, or without entry, proceed by suit or
suits at law or in equity to enforce such rights and to foreclose upon the Collateral and to sell
all or, from time to time, any of the Collateral under the judgment or decree of a court of
competent jurisdiction and (iii) may, on behalf of itself and the Issuers and the Lenders, file
claims concerning, stipulate or consent to, any matter concerning, and otherwise represent its
interests and the interests of the Issuers and the Lenders concerning, the Collateral.

6.3 Right to Appoint a Receiver. If an Event of Default has occurred and is
continuing, upon the filing of a bill in equity or other commencement of judicial proceedings to
enforce the rights of the Administrative Agent under this Agreement, the Administrative Agent
shall, to the extent permitted by law, with notice to the Borrower but without notice to any party
claiming through the Grantors, without regard to the solvency or insolvency at the time of any
Person then liable for the payment of any of the Obligations, without regard to the then value of
the Collateral, and without requiring any bond from any complainant in such proceedings, be
entitled as a matter of right to the appointment of a receiver or receivers of the Collateral, or
any part thereof, and of the rents, issues, tolls, profits, royalties, revenues and other income
thereof, pending such proceedings, with such powers as the court making such appointment shall
confer, and to the entry of an order directing that the rents, issues, tolls, profits, royalties,
revenues and other income of the property constituting the whole or any part of the Collateral be
segregated, sequestered and impounded for the benefit of the Administrative Agent and the Issuers
and the Lenders, and each Grantor irrevocably consents to the appointments of such receiver or
receivers and to the entry of such order; provided that, notwithstanding the appointment of
any receiver, the Administrative Agent shall be entitled to retain possession and control of all
cash and Cash Equivalents held by or deposited with it pursuant to any Loan Document.

6.4 Remedies Not Exclusive.

(a) No remedy conferred upon or reserved to the Administrative Agent herein is intended to be
exclusive of any other remedy or remedies, but every such remedy shall be cumulative and shall be
in addition to every other remedy conferred herein or now or hereafter existing at law or in equity
or by statute.

(b) No delay or omission by the Administrative Agent to exercise any right, remedy or power
hereunder or under any other Loan Document shall impair any such right, remedy or power or shall be
construed to be a waiver thereof, and every right, power and remedy given by this Agreement to the
Administrative Agent may be exercised from time to time and as often as may be deemed expedient by
the Administrative Agent.

(c) If the Administrative Agent shall have proceeded to enforce any right, remedy or power
under this Agreement and the proceeding for the enforcement thereof shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Administrative Agent, then
the Grantors, the Administrative Agent, the Issuers and the Lenders shall, subject to any
determination in such proceeding, severally and respectively be restored to their former positions
and rights hereunder or thereunder with respect to the Collateral and in all other respects, and
thereafter all rights, remedies and powers of the Administrative Agent shall continue as though no
such proceeding had been taken.

(d) All rights of action and of asserting claims upon or under this Agreement may be enforced
by the Administrative Agent without the possession of any Loan Document or instrument evidencing
any Obligation or the production thereof at any trial or other proceeding relative thereto, and any
suit or proceeding instituted by the Collateral Agent shall be, subject to Section 7, brought in
its name as Administrative Agent and any recovery of judgment shall be held as part of the
Collateral.

6.5 Waiver and Estoppel.

(a) Each Grantor agrees, to the extent it may lawfully do so, that it will not at any time in
any manner whatsoever claim, or take the benefit or advantage of, any appraisement, valuation,
stay, extension, moratorium, turnover or redemption law, or any law permitting it to direct the
order in which the Collateral shall be sold, now or at any time hereafter in force, which may
delay, prevent or otherwise affect the performance or enforcement of this Agreement or any other
Loan Document and hereby waives all benefit or advantage of all such laws and covenants that it
will not hinder, delay or impede the execution of any power granted to the Administrative Agent in
this Agreement or in any other Loan Document but will suffer and permit the execution of every such
power as though no such law were in force.

(b) Each Grantor, to the extent it may lawfully do so, on behalf of itself and all who may
claim through or under it, including without limitation any and all subsequent creditors, vendees,
assignees and lienors, waives and releases all rights to demand or to have any marshaling of the
Collateral upon any sale, whether made under any power of sale granted herein or pursuant to
judicial proceedings or upon any foreclosure or any enforcement of this Agreement or any other Loan
Document and consents and agrees that all the Collateral may at any such sale be offered and sold
as an entirety.

(c) Each Grantor waives, to the extent permitted by applicable law, presentment, demand,
protest and any notice of any kind (except notices explicitly required hereunder, under any other
Loan Document or under the New York UCC) in connection with this Agreement and any other Loan
Document and any action taken by the Administrative Agent with respect to the Collateral.

6.6 Limitation on Administrative Agent’s Duty in Respect of Collateral. Beyond its
duties as to the custody thereof expressly provided in Section 7.2 and to account to the Issuers,
the Lenders and the Grantors for moneys and other property received by it hereunder, the
Administrative Agent shall not have any duty to the Grantors or to the Issuers or the Lenders as to
any Collateral in its possession or control or in the possession or control of any of its agents or
nominees, or any income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto.

SECTION 7. THE ADMINISTRATIVE AGENT

7.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Grantor
hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in the name of such
Grantor or in its own name, for the purpose of carrying out the terms of this Agreement and the
other Collateral Documents, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the purposes of this
Agreement and the other Collateral Documents, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of the following:

(i) in the name of such Grantor or its own name, or otherwise, take possession of
and indorse and collect any checks, drafts, notes, acceptances or other instruments for
the payment of moneys due under or with respect to any Collateral and file any claim or
take any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and all such
moneys due with respect to the Collateral whenever payable;

(ii) pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral;

(iii) execute, in connection with any sale provided for in Section 5.3, any
endorsements, assignments or other instruments of conveyance or transfer with respect to
the Collateral; and

(iv) (1) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct; (2) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any Collateral;
(3) commence and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; (4) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral; (5) settle,
compromise or adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Administrative Agent may deem appropriate; and
(6) generally, sell, transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes, and do, at the Administrative
Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts
and things which may be required by applicable law or which the Issuers and the Lenders
deem necessary to protect, preserve or realize upon the Collateral and the Administrative
Agent’s, the Issuers’ and the Lenders’ security interests therein and to effect the
intent of this Agreement and the other Collateral Documents, all as fully and effectively
as such Grantor might do.

Anything in this Section 7.1(a) to the contrary notwithstanding, the Administrative Agent agrees
that it will not exercise any rights under the power of attorney provided for in this
Section 7.1(a) unless an Event of Default shall have occurred and be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements contained herein, the
Administrative Agent, at its option, but without any obligation so to do, may, upon not less than 5
Business Days’ notice to such Grantor, perform or comply, or otherwise cause performance or
compliance, with such agreement.

(c) The expenses of the Administrative Agent incurred in connection with actions undertaken as
provided in this Section 7.1, together with interest thereon at a rate per annum equal to the rate
per annum at which interest is then payable under the Credit Agreement, from the date of payment by
the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this Agreement and each other Loan Document is
terminated and the security interests created hereby and thereby are released.

7.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither the Administrative
Agent, any Issuer, any Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the Administrative Agent and
the Issuers and the Lenders hereunder are solely to protect the Administrative Agent’s, the
Issuers’ and the Lenders’ interests in the Collateral and shall not impose any duty upon the
Administrative Agent, any Issuer or any Lender to exercise any such powers. The Administrative
Agent, the Issuers and the Lenders shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor or any other Issuer or Lender for any act
or failure to act hereunder, except for their own gross negligence or willful misconduct.

7.3 Filing of Financing Statements. Pursuant to any applicable law, each Grantor
authorizes the Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral (including amendments to
financing statements and including continuation statements) without the signature of such Grantor
in such form and in such offices as necessary to perfect the security interests of the
Administrative Agent under this Agreement and under each other Collateral Document. Each Grantor
hereby ratifies and authorizes the filing by the Administrative Agent of any financing statement
with respect to the Collateral made prior to the date hereof. Notwithstanding the foregoing, in no
event shall the Administrative Agent have any obligation to monitor the perfection, continuation of
perfection or the sufficiency or validity of any security interest in or related to the Collateral
or to prepare or file any Uniform Commercial Code financing statement or continuation statement.

7.4 Authority of Administrative Agent. Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement and the other Collateral
Documents with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this Agreement or any other
Collateral Document shall, as between the Administrative Agent and the Issuers and the Lenders, be
governed by the Loan Documents and by such other agreements with respect thereto as may exist from
time to time among the Administrative Agent and the Issuers and the Lenders, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to
be acting as agent for the Issuers and the Lenders with full and valid authority so to act or
refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.

7.5 Exculpatory Provisions.

(a) The Administrative Agent shall not be responsible in any manner whatsoever for the
correctness of any recitals, statements, representations or warranties in any Loan Document which
are made by the Grantors. The Administrative Agent makes no representations as to, nor shall it be
responsible for, the existence, genuineness, value or condition of any of the Collateral or any
part thereof, the title of the Grantors thereto or the security afforded or intended to be afforded
by this Agreement and the other Collateral Documents, or the validity, execution (except its
execution), enforceability, legality or sufficiency of this Agreement or the other Collateral
Documents or the Obligations or the validity, perfection, priority or enforceability of the liens
or security interests in any of the Collateral created or intended to be created by this Agreement
or the other Collateral Documents, or the validity or sufficiency of the Collateral, or insuring
the Collateral or the payment of taxes, charges, assessments or liens upon the Collateral or
otherwise as to the maintenance of the Collateral, and the Administrative Agent shall incur no
liability or responsibility in respect of any such matters. The Administrative Agent shall have no
responsibility for preparing, recording, filing, re-recording or refiling any financing statement,
continuation statement or other instrument in any public office at any time.

(b) The Administrative Agent shall not be required to ascertain or inquire as to the
performance by the Grantors of any of the covenants or agreements contained herein, or in the other
Collateral Documents.

(c) The Administrative Agent shall be under no obligation or duty to take any action under
this Agreement or any other Loan Document or otherwise if taking such action (i) would subject the
Administrative Agent to a tax in any jurisdiction where it is not then subject to a tax or
(ii) would require the Administrative Agent to qualify to do business in any jurisdiction where it
is not then so qualified, unless the Administrative Agent shall receive security or indemnity
satisfactory to it against such tax (or equivalent liability), or any liability resulting from such
qualification, in each case as results from the taking of such action under this Agreement or any
other Loan Document.

(d) The Administrative Agent shall have the same rights with respect to any Obligation held by
it as any Issuer or Lender and may exercise such rights as though it were not the Administrative
Agent hereunder, and it and its Affiliates may accept deposits from, lend money to, provide
services to and generally engage in any kind of banking or trust business with, any of the Grantors
as if it were not the Administrative Agent.

(e) The Administrative Agent shall not be liable for any action taken or omitted to be taken
in accordance with this Agreement or any other Collateral Document except for its own gross
negligence or willful misconduct.

(f) The permissive right of the Administrative Agent to take any action under this Agreement
or any other Collateral Document shall not be construed as a duty to so act.

7.6 Delegation of Duties. The Administrative Agent may execute any of the trusts or
powers hereof and perform any duty hereunder or under any other Loan Document either directly or by
or through agents or attorneys-in-fact. The Administrative Agent shall be entitled to advice of
counsel concerning all matters pertaining to such trusts, powers and duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it without gross negligence or willful misconduct.

7.7 Reliance by Administrative Agent.

(a) Whenever in the administration of this Agreement, or any other Collateral Document the
Administrative Agent shall deem it necessary or desirable that a factual matter be proved or
established in connection with the Administrative Agent taking, suffering or omitting any action
hereunder or thereunder, such matter (unless other evidence in respect thereof is herein
specifically prescribed) may be deemed to be conclusively proved or established by a certificate of
a Responsible Officer of the Borrower delivered to the Administrative Agent, and the Administrative
Agent shall be entitled to take or refrain from taking any action in reliance thereon.

(b) The Administrative Agent may, at the reasonable expense of the Grantors, consult with
counsel, and any Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered by it hereunder in accordance therewith. Any Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a certificate of a Responsible
Officer of the Borrower or representations made by a Responsible Officer of the Borrower in a
writing delivered to the Administrative Agent.

(c) The Administrative Agent may conclusively rely upon, and shall be fully protected in
acting upon or failing to act as a consequence of, any resolution, statement, certificate,
instrument, opinion, report, notice, request, consent, order, bond or other paper or document which
it believes in good faith is genuine and has been signed or presented by the proper party or
parties or, in the case of cables, telecopies and telexes, to have been sent by the proper party or
parties. In the absence of its own gross negligence or willful misconduct, the Administrative
Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any such certificates, opinions or other information and need not
investigate any fact or matter stated therein.

(d) The Administrative Agent shall not be under any obligation to exercise any of the rights
or powers vested in the Administrative Agent by this Agreement or by any other Loan Document,
unless the Administrative Agent shall have been provided adequate security and indemnity against
the costs, expenses and liabilities which may be incurred by the Administrative Agent, its agents
and its counsel in the exercise of any such right or power or in compliance with such request or
direction, including such reasonable advances as may be requested by the Administrative Agent.

(e) Upon any application or demand by any of the Grantors to the Administrative Agent to take
or permit any action under any of the provisions of this Agreement or any other Loan Document, the
Borrower shall furnish to the Administrative Agent a certificate of a Responsible Officer of the
Borrower stating that all conditions precedent, if any, provided for in this Agreement or in any
other Loan Document relating to the proposed action have been complied with, and in the case of any
such application or demand as to which the furnishing of any document is specifically required by
any provision of this Agreement or any other Loan Document relating to such particular application
or demand, such additional document shall also be furnished.

7.8 Limitations on Duties of Administrative Agent.

(a) The Administrative Agent shall be obligated to perform such duties and only such duties as
are specifically set forth in this Agreement, or any other Loan Document, and no implied covenants
or obligations shall be read into this Agreement or any other Loan Document against the
Administrative Agent. If and so long as an Event of Default has occurred and is continuing, the
Administrative Agent may exercise the rights and powers vested in the Administrative Agent by this
Agreement or any other Loan Document. Subject to Section 7.5, the Administrative Agent shall not
be liable with respect to any action taken or omitted to be taken.

(b) Except as herein otherwise expressly provided, the Administrative Agent shall not be under
any obligation to take any action that is discretionary under the provisions of this Agreement or
of any other Loan Document, except upon the written request of the Issuers and the Lenders pursuant
to the terms of the Credit Agreement.

(c) No provision of this Agreement, or any other Loan Document shall be deemed to impose any
duty or obligation on the Administrative Agent to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be
illegal, or in which the Administrative Agent shall be unqualified or incompetent, to perform any
such act or acts or to exercise any such right, power, duty or obligation or if such performance or
exercise would constitute doing business by the Administrative Agent in such jurisdiction or impose
a tax on the Administrative Agent by reason thereof or to risk its own funds or otherwise incur any
financial liability in the performance of its duties hereunder.

7.9 Moneys to be Held in Trust. All moneys received by the Administrative Agent under
or pursuant to any provision of this Agreement, or any other Loan Document (except Administrative
Agent fees) shall be held in trust for the purposes for which they were paid or are held. The
Administrative Agent shall not be liable for interest on any money or assets received by it except
as the Administrative Agent may agree in writing. Assets held in trust by the Administrative Agent
need not be segregated from other assets except to the extent required by law.

7.10 Resignation of the Administrative Agent; Appointment of Successor. The
Administrative Agent may at any time, resign and be discharged of the responsibilities hereby
created, and in such event a successor Administrative Agent shall be appointed hereunder, in each
case, in accordance with Section 9.6 of the Credit Agreement, the provisions of which are hereby
deemed incorporated herein.

7.11 Merger of the Administrative Agent. Any corporation into which the
Administrative Agent may be merged, or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Administrative Agent shall be a party,
shall be Administrative Agent under this Agreement without the execution or filing of any paper or
any further act on the part of the parties hereto.

7.12 Co-Administrative Agent; Separate Administrative Agent.

(a) If at any time or times it shall be necessary or prudent in order to conform to any law of
any jurisdiction in which any of the Collateral shall be located, or to avoid any violation of law
or imposition on the Administrative Agent of taxes by such jurisdiction not otherwise imposed on
the Administrative Agent, or the Administrative Agent shall be advised by Opinion of Counsel that
it is necessary or prudent in the interest of the Issuers or the Lenders or the Administrative
Agent shall deem it desirable for its own protection in the performance of its duties hereunder,
the Administrative Agent and each of the Grantors shall execute and deliver all instruments and
agreements necessary or proper to constitute another financial institution, bank or trust company,
or one or more persons approved by the Administrative Agent and the Grantors, either to act as
Administrative Agent or co-Administrative Agents of all or any of the Collateral under this
Agreement, jointly with the Administrative Agent originally named herein or therein or any
successor Administrative Agent, or to act as separate Administrative Agent or Administrative Agents
of any of the Collateral. If any of the Grantors shall not have joined in the execution of such
instruments and agreements within 10 days after it receives a written request from the
Administrative Agent to do so, or if an Event of Default has occurred and is continuing, the
Administrative Agent may act under the foregoing provisions of this Section 7.12(a) without the
concurrence of such Grantors and execute and deliver such instruments and agreements on behalf of
such Grantors. Each of the Grantors hereby appoints the Administrative Agent as its agent and
attorney to act for it under the foregoing provisions of this Section 7.12(a) in either of such
contingencies.

(b) Every separate Administrative Agent and every co-Administrative Agent, other than any
successor Administrative Agent appointed pursuant to Section 7.10, shall, to the extent permitted
by law, be appointed and act and be such, subject to the following provisions and conditions:

(i) all rights, powers, duties and obligations conferred upon the Administrative
Agent in respect of the custody, control and management of moneys, papers or securities
shall be exercised solely by the Administrative Agent or any agent appointed by the
Administrative Agent;

(ii) all rights, powers, duties and obligations conferred or imposed upon the
Administrative Agent hereunder shall be conferred or imposed and exercised or performed
by the Administrative Agent and such separate Administrative Agent or separate
Administrative Agents or co-Administrative Agent or co-Administrative Agents, jointly, as
shall be provided in the instrument appointing such separate Administrative Agent or
separate Administrative Agents or co-Administrative Agent or co-Administrative Agents,
except to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed the Administrative Agent shall be incompetent or unqualified
to perform such act or acts, or unless the performance of such act or acts would result
in the imposition of any tax on the Administrative Agent which would not be imposed
absent such joint act or acts, in which event such rights, powers, duties and obligations
shall be exercised and performed by such separate Administrative Agent or separate
Administrative Agents or co-Administrative Agent or co-Administrative Agents;

(iii) no power given hereby to, or which it is provided herein or therein may be
exercised by, any such co-Administrative Agent or co-Administrative Agents or separate
Administrative Agent or separate Administrative Agents shall be exercised hereunder or
thereunder by such co-Administrative Agent or co-Administrative Agents or separate
Administrative Agent or separate Administrative Agents except jointly with, or with the
consent in writing of, the Administrative Agent, anything contained herein to the
contrary notwithstanding;

(iv) no Administrative Agent hereunder shall be personally liable by reason of any
act or omission of any other Administrative Agent hereunder; and

(v) the Borrower and the Administrative Agent, at any time by an instrument in
writing executed by them jointly, may accept the resignation of or remove (for any reason
or no reason at all) any such separate Administrative Agent or co-Administrative Agent
and, in that case by an instrument in writing executed by them jointly, may appoint a
successor to such separate Administrative Agent or co-Administrative Agent, as the case
may be, anything contained herein to the contrary notwithstanding. If the Borrower shall
not have joined in the execution of any such instrument within 10 days after it receives
a written request from the Administrative Agent to do so, or if an Event of Default has
occurred and is continuing, the Administrative Agent shall have the power to accept the
resignation of or remove any such separate Administrative Agent or co-Administrative
Agent and to appoint a successor without the concurrence of the Borrower, the Borrower
hereby appointing the Administrative Agent its agent and attorney to act for it in such
connection in such contingency. If the Administrative Agent shall have appointed a
separate Administrative Agent or separate Administrative Agents or co-Administrative
Agent or co-Administrative Agents as above provided, the Administrative Agent may at any
time, by an instrument in writing, accept the resignation of or remove any such separate
Administrative Agent or co-Administrative Agent and the successor to any such separate
Administrative Agent or co-Administrative Agent shall be appointed by the Borrower and
the Administrative Agent, subject to the terms of this Section 7.12(b).

7.13 Treatment of Payee or Indorsee by Administrative Agent; Representatives of Issuers
and Lenders.

(a) The Administrative Agent may treat the registered holder or, if none, the payee or
indorsee of any promissory note evidencing an Obligation as the absolute owner thereof for all
purposes and shall not be affected by any notice to the contrary, whether such promissory note
shall be past due or not.

(b) Any Person that shall be designated as the duly authorized representative of one or more
Issuers or Lenders to act as such in connection with any matters pertaining to this Agreement, any
other Loan Document or the Collateral shall present to the Administrative Agent such documents,
including, without limitation, Opinions of Counsel, as the Administrative Agent may reasonably
require, in order to demonstrate to the Administrative Agent the authority of such Person to act as
the representative of such Issuers or Lenders.

7.14 Stamp and Other Similar Taxes. Each Grantor, jointly and severally, agrees to
indemnify and hold harmless the Administrative Agent, each Issuer and each Lender from any present
or future claim for liability for any stamp or any other similar tax, and any penalties or interest
with respect thereto, which may be assessed, levied or collected by any jurisdiction in connection
with this Agreement, any other Loan Document or any Collateral. The obligations of the Grantors
under this Section 7.14 shall survive the termination of the other provisions of this Agreement and
the other Loan Documents and the resignation of the Administrative Agent hereunder.

7.15 Filing Fees, Excise Taxes, Etc. Each Grantor, jointly and severally, agrees to
pay or to reimburse the Administrative Agent for any and all payments made by the Administrative
Agent in respect of all search, filing, recording and registration fees, taxes, excise taxes and
other similar imposts which may be payable or determined to be payable in respect of the execution
and delivery of this Agreement and the other Loan Documents. The obligations of the Grantors under
this Section 7.15 shall survive the termination of the other provisions of this Agreement and the
other Loan Documents and the resignation of the Administrative Agent hereunder.

7.16 Indemnification. Each Grantor, jointly and severally, agrees to pay, indemnify,
and hold the Administrative Agent, each Issuer and each Lender (and their respective directors,
officers, agents and employees) harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses (including, without
limitation, the reasonable fees and expenses of counsel, advisors and agents) or disbursements of
any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, and each other Collateral Document including, without limitation,
in connection with any action taken with respect to the Collateral and any contract, agreement,
interest or obligation constituting part of the Collateral, unless arising from the gross
negligence or willful misconduct of the indemnified party, including for taxes in any jurisdiction
in which the Administrative Agent is subject to tax by reason of actions hereunder, unless such
taxes are imposed or measured by compensation paid to the Administrative Agent pursuant to the Loan
Documents. In any suit, proceeding or action brought by the Administrative Agent under or with
respect to any contract, agreement, interest or obligation constituting part of the Collateral for
any sum owing thereunder, or to enforce any provisions thereof, each Grantor, jointly and severally
will save, indemnify and keep the Administrative Agent, each Issuer and each Lender harmless from
and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction of liability whatsoever of the obligor thereunder, arising out of a breach
by any Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such obligor or its successors from any Grantor, and
all such obligations of any Grantor shall be and remain enforceable against and only against the
Grantors and shall not be enforceable against the Administrative Agent, any Issuer or any Lender.
The agreements in this Section 7.16 shall survive the termination of the other provisions of this
Agreement and the other Loan Documents and the resignation of the Administrative Agent hereunder.

SECTION 8. MISCELLANEOUS

8.1 Notices. All notices, requests and demands of the Borrower or the Administrative
Agent hereunder shall be effected in the manner provided for in Section 10.8 of the Credit
Agreement and all notices, requests and demands of any Grantor hereunder (other than the Borrower)
shall be effected in the manner provided for in Section 21 of the Guaranty.

8.2 Amendments, etc. None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except in accordance with Section 10.1 of the Credit
Agreement.

8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative
Agent nor any Issuer or Lender shall by any act (except by a written instrument pursuant to
Section 8.2), delay, indulgence, and omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any default or event of default under the Loan Documents.
No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent, any
Issuer or any Lender, any right, power or privilege hereunder or under any other Loan Document
shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder or under any other Loan Document shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Administrative Agent, any
Issuer or any Lender of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy that the Administrative Agent or such Issuer or Lender would otherwise
have on any future occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or remedies provided by
law.

8.4 Enforcement Expenses. (a) Each Grantor agrees to pay or reimburse each Issuer,
each Lender and the Administrative Agent for all its costs and expenses incurred in enforcing or
preserving any rights under this Agreement and the other Loan Documents to which such Grantor is a
party, including, without limitation, the fees and disbursements of counsel to such Issuer, such
Lender and the Administrative Agent.

(b) The agreements in this Section 8.4 shall survive repayment of the Obligations and all
other amounts payable under the Loan Documents.

8.5 Successors and Assigns. This Agreement shall be binding upon the successors and
assigns of each Grantor and shall inure to the benefit of the Administrative Agent, the Issuers and
the Lenders and their respective successors and assigns; provided that no Grantor may
assign, transfer or delegate any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent.

8.6 Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of an executed signature page
of this Agreement by facsimile transmission shall be as effective as delivery of a
manually-executed counterpart hereof.

8.7 Severability. Any provision of this Agreement 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, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

8.8 Section Headings. The Section headings used in this Agreement are for convenience
of reference only and are not to affect the construction hereof or be taken into consideration in
the interpretation hereof.

8.9 Integration. This Agreement and the other Loan Documents represent the entire
agreement of the parties with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative Agent, any Issuer or
any Lender relative to the subject matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.

8.10 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

8.11 Submission to Jurisdiction; Service of Process.

(a) Any legal action or proceeding with respect to this Agreement or any other Collateral
Document may be brought in the courts of the State of New York sitting in the City of New York or
of the United States of America for the Southern District of New York, and, by execution and
delivery of this Agreement, each Grantor hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The parties hereto hereby
irrevocably waive any objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, that any of them may now or hereafter have to the bringing
of any such action or proceeding in such respective jurisdictions.

(b) Each Grantor irrevocably consents to the services of any and all process in such action or
proceeding arising out of or in connection with this Agreement or any other Collateral Document by
mailing (by registered or certified mail, postage prepaid) of copies of such process to an
appointed process agent or the Borrower at its address specified in Section 10.8 of the Credit
Agreement. Each Grantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.

(c) Nothing contained in this Section 8.11 shall affect the right of the Administrative Agent
or any Lender to serve process in any other manner permitted by law or commence legal proceedings
or otherwise proceed against any Grantor in any other jurisdiction.

8.12 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT.

8.13 Releases. At such time as all of the Obligations shall have been paid in full in
cash and the Revolving Credit Commitments have been terminated, the Collateral shall be released
from the Liens created hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to and interests in the
Collateral shall revert to the relevant Grantor. At the request and sole expense of the Grantors
following any such termination, the Administrative Agent shall promptly deliver to the Grantors any
Collateral held by the Administrative Agent hereunder, and promptly execute and deliver to the
Grantors such documents as the Grantors shall reasonably request to evidence such release and
termination.

8.14 Additional Grantors. Each Subsidiary of the Borrower that is required to become
a party to the Guaranty pursuant to Section 23 of the Guaranty shall become a Grantor for all
purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Exhibit A.

8.15 Reinstatement. Each Grantor agrees that if any payment made by a Grantor or
other Person and applied to the Obligations is at any time annulled, avoided, set aside, rescinded,
invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or
repaid, or the proceeds of Collateral are required to be returned by the Administrative Agent, any
Issuer or any Lender to such Grantor, its estate, trustee, receiver or any other Person under any
requirement of law of a Governmental Authority (the portion of such payment of proceeds so
refunded, repaid or returned being the “Avoided Payment”), then to the extent of such Avoided
Payment, any Lien or other Collateral securing the Obligation that is the subject of such Avoided
Payment shall be and remain in full force and effect as fully as if such Avoided Payment had never
been made or, if prior thereto the Lien granted hereby or by any other Collateral Document or other
Collateral securing such Obligation hereunder shall have been released or terminated by virtue of
such cancellation or surrender, such Lien or other Collateral shall be reinstated in full force and
effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect any Lien or other Collateral securing the Obligations of any Grantor in respect of
the amount of such Avoided Payment.

[Remainder of page intentionally left blank; signature pages follow]

3

IN WITNESS WHEREOF, each of the undersigned has caused this Security Agreement to be
duly executed and delivered as of the date first above written.

	 	 	 	GRANTORS:

	 
	 

	TECHNICAL OLYMPIC USA, INC.

	 

	By: /s/ Randy Kotler

	 

	Name: Randy Kotler

Title: Senior Vice President, Chief Accounting                 Officer,

Interim Chief Financial Officer

	 

4

	 

	 	 	 	 	 
	SUBSIDIARIES	 	 	 	 
	ENGLE HOMES RESIDENTIAL CONSTRUCTION, L.L.C.

ENGLE/JAMES, LLC

MCKAY LANDING, LLC

NEWMARK HOMES, LLC

TOUSA VENTURES, LLC

	 

	By: TOUSA HOMES, INC., the sole member

	 

	By: /s/ Randy Kotler

	 

	Name: Randy Kotler

Title: Vice President and Treasurer

	 

5

6

	 	 	 
	TOUSA HOMES, L.P.
	TOUSA HOMES FLORIDA, L.P. F/K/A TOUSA HOMES INVESTMENT #1, L.P.
	By: TOUSA LLC, as General Partner
	By: TECHNICAL OLYMPIC USA, INC., its
	sole member
	By: /s/ Randy Kotler
	Name: Randy Kotler
	Title: Senior Vice President, Chief
	Accounting Officer, Interim Chief
	Financial Officer

7

	 	 	 
	TOUSA HOMES ARIZONA, LLC F/K/A TOUSA INVESTMENT #1, LLC
	TOUSA HOMES COLORADO, LLC F/K/A TOUSA INVESTMENT #2, LLC
	TOUSA HOMES NEVADA, LLC F/K/A TOUSA IN VESTMENT #3, LLC
	TOUSA HOMES MID-ATLANTIC HOLDING, LLC F/K/A TOUSA INVESTMENT #4, LLC
	TOUSA HOMES MID-ATLANTIC, LLC F/K/A TOUSA INVESTMENT #5, LLC
	TOI, LLC
	TOUSA, LLC
	By: TECHNICAL OLYMPIC USA, INC., as
	sole member
	By: /s/ Randy Kotler
	Name: Randy Kotler
	Title: Senior Vice President, Chief Accounting Officer and Interim Chief
	Financial Officer

8

	 	 	 
	TOUSA HOMES, INC.
	TOUSA HOMES INVESTMENT #1, INC.
	TOUSA HOMES INVESTMENT #2, INC.
	TOUSA REALTY, INC. F/K/A TOUSA INVESTMENT #1, INC.
	TOUSA INVESTMENT #2, INC.
	TOUSA/WEST HOLDINGS, INC.
	TOUSA DELAWARE, INC.
	ENGLE HOMES DELAWARE, INC.
	PREFERRED BUILDERS REALTY, INC.
	TOUSA ASSOCIATES SERVICES COMPANY
	By: /s/ Randy Kotler
	Name: Randy Kotler
	Title: Vice President and Treasurer

9

	 	 	 
	TOUSA HOMES INVESTMENT #2, LLC
	TOUSA MID-ATLANTIC INVESTMENT, LLC
	By: TOUSA HOMES, L.P., as sole member
	By: TOUSA, LLC, its general partner
	By: TECHNICAL OLYMPIC USA, INC.,
	its sole member
	By: /s/ Randy Kotler
	Name: Randy Kotler
	Title: Senior Vice President, Chief Accounting Officer and Interim Chief
	Financial Officer

10

	 	 	 
	TOUSA FUNDING, LLC
	By: TOUSA/WEST HOLDINGS, INC., its sole member
	By: /s/ Randy Kotler
	Name:	 	Randy Kotler
	Title: Vice President and Treasurer

11

	 	 	 
	NEWMARK HOMES BUSINESS TRUST
	By: /s/ Randy Kotler
	Name:	 	Randy Kotler
	Title: Managing Trustee

12

	 	 	 
	NEWMARK HOMES PURCHASING, L.P.
	By: NEWMARK HOMES, L.P., as General Partner
	By: TOUSA HOMES, INC., its General Partner
	By: /s/ Randy Kotler
	Name:	 	Randy Kotler
	Title: Vice President and Treasurer

13

	 	 	 
	SILVERLAKE INTERESTS, L.C.
	By: TOUSA HOMES, INC., its sole manager
	By: /s/ Randy Kotler
	Name:	 	Randy Kotler
	Title: Vice President and Treasurer

14

	 	 	 
	NEWMARK HOMES, L.P.
	By: TOUSA HOMES, INC., its General Partner
	By: /s/ Randy Kotler
	Name: Randy Kotler
	Title: Vice President and Treasurer

15

	 	 	 
	LORTON SOUTH CONDOMINIUMS, LLC
	By: TOUSA HOMES, INC., its Sole Member
	By: /s/ Randy Kotler
	Name: Randy Kotler
	Title: Vice President and Treasurer

	 	 	 
	ENGLE HOMES COMMERCIAL CONSTRUCTION, LLC
	By: TOUSA HOMES ARIZONA, LLC, its Sole Member
	By: TECHNICAL OLYMPIC USA, INC., as
	sole member
	By: /s/ Randy Kotler
	Name: Randy Kotler
	Title: Senior Vice President, Chief Accounting Officer and Interim Chief
	Financial Officer

16

	 	 	ADMINISTRATIVE AGENT:

CITICORP NORTH AMERICA, INC.,

as Administrative Agent

By: /s/ Jeanne M. Craig

Name: Jeanne M. Craig

Title: Vice President

17

PERFECTION MATTERS

	 	 	 
	Grantor

	 	Filing Office(s)
	 

	 	 

18

JURISDICTIONS OF ORGANIZATION AND CHIEF EXECUTIVE OFFICES

19

20

DEPOSIT ACCOUNTS

FORM OF ASSUMPTION AGREEMENT

ASSUMPTION AGREEMENT, dated as of      , 200_, made by
     (the “Additional Grantor”), in favor of Citicorp North America,
Inc., as administrative agent (in such capacity, the “Administrative Agent”) for its benefit and
for the ratable benefit of the Issuers and the Lenders. All capitalized terms not defined herein
shall have the meaning ascribed to them in the Security Agreement referred to below.

W I T N E S S E T H

:

WHEREAS, Technical Olympic USA, Inc. (the “Borrower”), certain of its subsidiaries and the
Administrative Agent have entered into a Security Agreement, dated as of October 23, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Security Agreement”);

WHEREAS, the Security Agreement requires the Additional Grantor to become a party to the
Security Agreement; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in
order to become a party to the Security Agreement;

NOW, THEREFORE, IT IS AGREED:

1. Security Agreement. By executing and delivering this Assumption Agreement, the
Additional Grantor, as provided in Section 8.14 of the Security Agreement, hereby becomes a party
to the Security Agreement as a Grantor thereunder with the same force and effect as if originally
named therein as a Grantor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of a Grantor thereunder. The information set forth in
Annex 1-A hereto is hereby added to the information set forth in the Schedules to the Security
Agreement. The Additional Grantor hereby represents and warrants that each of the representations
and warranties applicable to it contained in Section 3 of the Security Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on
and as of such date.

2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed
and delivered as of the date first above written.

[ADDITIONAL GRANTOR]

	 	 	 	By:

Name:

Title:

21

Annex 1-A to

Assumption Agreement

Supplement to Schedule 1

Supplement to Schedule 2

Supplement to Schedule 3

22EX-10.3

Amendment No. 1 to Security Agreement (this “Amendment”), dated as of January
30, 2007, among Technical Olympic USA, Inc., a Delaware corporation (“TOUSA”), each
subsidiary of TOUSA signatory to the Security Agreement defined below as a Grantor (TOUSA and such
subsidiaries, the “Grantors”) and Citicorp North America, Inc., a Delaware corporation, as
administrative agent (in such capacity, the “Administrative Agent”).

PRELIMINARY STATEMENTS

(1) TOUSA, as Administrative Borrower (the “Administrative Borrower”), certain of TOUSA’s
subsidiaries party thereto as Subsidiary Borrowers (such subsidiaries together with the
Administrative Borrower, the “Borrowers”), the Lenders (or their predecessors in interest), the
Issuer, the Administrative Agent and certain other financial institutions in other agent capacities
entered into that certain Amended and Restated Credit Agreement, dated as of January 30, 2007 (the
“Credit Agreement”).

(2) The Grantors (other than TOUSA) entered into that certain Guaranty dated as of March 9,
2006 in favor of the Administrative Agent, the Issuers, the Lenders and each other holder of an
Obligation (as defined in the Credit Agreement).

(3) The Grantors and the Administrative Agent are parties to the Security Agreement dated as
of October 23, 2006 (the “Security Agreement”), under which each Grantor assigned and transferred
to the Administrative Agent for its benefit and for the ratable benefit of the Issuers and the
Lenders, and granted to the Administrative Agent for its benefit and for the ratable benefit of the
Issuers and the Lenders, a security interest in, such Grantor’s right, title and interest in, to
and under the Collateral as collateral security for the prompt and complete payment and performance
when due of such Grantor’s Obligations.

(4) The Grantors and the Administrative Agent desire to amend the Security Agreement as set
forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this
Amendment, and for other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.01. Definitions. Capitalized terms used and not otherwise specifically defined in
this Amendment shall have the meanings given or otherwise assigned to such terms in the Security
Agreement.

Section 1.02. Certain Terms.

(a) The words “herein,” “hereof” and “hereunder” and similar words in
this Amendment refer to this Amendment as a whole, and not to any particular Article, Section,
subsection or clause in, this Amendment.

(b) Unless otherwise expressly indicated in this Amendment, references in this Amendment to an
Exhibit, Schedule, Article, Section, subsection or clause refer to the appropriate Exhibit or
Schedule to, or Article, Section, subsection or clause in this Amendment.

(c) References in this Amendment to any statute shall be to such statute as amended or
modified and in effect at the time any such reference is operative.

(d) The term “including” when used in this Amendment means “including without
limitation” except when used in the computation of time periods.

(e) In this Amendment, in the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including” and the words
“to” and “until” each mean “to but excluding” and the word
“through” means “to and including”.

Section 1.03. No Presumption Against any Party. Neither this Amendment nor any uncertainty or
ambiguity herein shall be construed or resolved against any party hereto, whether under any rule of
construction or otherwise. This Amendment has been reviewed by each of the parties and their
counsel and shall be construed and interpreted according to the ordinary meaning of the words used
so as to fairly accomplish the purposes and intentions of all parties hereto.

Section 1.04. Section Titles. The section titles contained in this Amendment are and shall be
without substantive meaning or content of any kind whatsoever and are not a part of the agreement
among the parties hereto.

ARTICLE II

AMENDMENTS TO SECURITY AGREEMENT

Section 2.01. Additional Definitions. Section 1.1 of the Security Agreement is hereby amended
by inserting the following new definitions in their appropriate alphabetical order:

“Finished Lot Contracts” means a sale and purchase agreement for a Finished Lot between (a)
the Administrative Borrower or any of its Restricted Subsidiaries and (b) an unrelated third party
purchaser.

“Land/Lot Under Development Contracts” means a sale and purchase agreement for a Land/Lot
Under Development between (a) the Administrative Borrower or any of its Restricted Subsidiaries and
(b) an unrelated third party purchaser.

“Land Sale Contracts” means Finished Lot Contracts, Land/Lot Under Development Contracts and
Unimproved Land Contracts.

“Linked Deposit Accounts” means the following Deposit Accounts maintained by Wachovia Bank
National Association: (a) Account No. 200003341735 in the name of Engle Homes Delaware, Inc.;
(b) Account No. 2000012137765 in the name of TOUSA Delaware Inc.; and (c) Account No. 2000029799620
in the name of TOUSA Funding, LLC.

“Unimproved Land Contracts” means a sale and purchase agreement for Unimproved Land between
(a) the Administrative Borrower or any of its Restricted Subsidiaries and (b) an unrelated third
party purchaser.

“U.S. Bank Accounts” means the following custodial accounts maintained by U.S. Bank: (a)
Account No. 6728003659 in the name of Engle Homes Delaware, Inc.; (b) Account No. 6728020649 in the
name of TOUSA Delaware Inc.; and (c) Account No. 6728020426 in the name of TOUSA Funding, LLC.

Section 2.02. Amendments to Existing Definitions.

(a) The definition of “Borrower Obligations” in Section 1.1 of the Security Agreement is
hereby amended and restated in its entirety to read as follows:

“Borrower Obligations” means, with respect to any Borrower, without duplication, the
collective reference to the Loans, the Letter of Credit Obligations and all other amounts owing by
such Borrower to the Administrative Agent, any Issuer, any Lender, any Affiliate of any of them or
any Indemnities, of every type and description, present or future, arising under the Credit
Agreement, any other Loan Document, whether direct or indirect, including all letter of credit and
other fees, interest, charges, expenses, attorneys’ fees and disbursements and other sums
chargeable to such Borrower under the Credit Agreement or any other Loan Document.”

Section 2.03. Amendments to Granting Clause. Section 2 of the Security Agreement is hereby
amended and restated in its entirety to read as follows:

“Each Grantor hereby assigns and transfers to the Administrative Agent for its benefit and for
the ratable benefit of the Issuers and the Lenders, and hereby grants to the Administrative Agent,
for its benefit and for the ratable benefit of the Issuers and the Lenders, a security interest in,
all of such Grantors’s right, title and interest in, to and under the following property, whether
now existing or at any time hereafter acquired (collectively, the “Collateral”), as collateral
security for the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Grantor’s Obligations:

(a) all Contracts for Sale and Land Sale Contracts to which such Grantor is or is to become a
party, including without limitation:

(i) all rights of such Grantor to receive monies due and to become due under or
pursuant to such Contracts for Sale and Land Sale Contracts;

(ii) all rights of such Grantor under or in respect of any escrow, settlement or
similar agreement entered into by such Grantor in connection with such Contracts for Sale
and Land Sale Contracts, including without limitation, all rights of such Grantor to
receive monies pursuant to any such escrow, settlement or similar agreement;

(iii) all claims of such Grantor for damages arising out of or for breach of or
default under such Contracts for Sale and Land Sale Contracts; and

(iv) all rights of such Grantor to terminate, amend, supplement, modify or waive
performance under such Contracts for Sale, to compel performance and otherwise to exercise
all remedies thereunder;

(b) to the extent not covered by clause (a) of this Section 2, all Accounts arising from or
relating to Contracts for Sale and Land Sale Contracts to which such Grantor is or is to become a
party;

(c) to the extent not covered by clause (a) of this Section 2, all General Intangibles arising
from or relating to Contracts for Sale and Land Sale Contracts to which such Grantor is or is to
become a party;

(d) the Deposit Accounts set forth on Schedule 3 and each other Deposit Account now or
hereafter maintained by such Grantor;

(e) all Securities Accounts now or hereafter maintained by such Grantor;

(f) all books and records pertaining to the foregoing; and

(g) all Proceeds, Supporting Obligations and products of any and all of the foregoing and all
other collateral security and guarantees given by any Person with respect to the foregoing,
including without limitation, Proceeds of Contracts for Sale and Land Sale Contracts constituting
Escrow Proceeds Receivables and any other escrowed funds relating to a Contract for Sale and Land
Sale Contract;

provided, however, that notwithstanding any of the other provisions set forth
in this Section 2, this Agreement shall not constitute a grant of security in any Contract for
Sale, Land Sale Contract or other General Intangible to the extent that such grant of a security
interest is prohibited by, constitutes a breach or default under, results in the termination of, or
requires any consent not obtained under, such Contract for Sale, Land Sale Contract or General
Intangible except to the extent the relevant term in such Contract for Sale, Land Sale Contract or
General Intangible providing for such prohibition, breach, default or termination or requiring such
consent is ineffective under any applicable law.

Section 2.04. Amendments to Contracts Representations. Section 3.4(a) and Section 3.4(b) of
the Security Agreement is hereby amended by deleting the reference to “Contract for Sale” therein
and replacing “Contract for Sale and Land Sale Contract” in lieu thereof.

Section 2.05. Amendments to Contracts Covenants. Section 4.4(c) of the Security Agreement is
hereby amended by deleting the reference to “Contract for Sale” therein and replacing “Contract for
Sale or Land Sale Contract” in lieu thereof.

Section 2.06. Amendments to Deposit Account Provisions. Section 4.5 of the Security Agreement
is hereby amended by inserting the following at the end thereof:

“; and provided, further, that the provisions of this Section 4.5
shall not apply to (i) any U.S. Bank Account so long as (x) such U.S. Bank Account
continues to be a custodial account and does not constitute a Deposit Account or
Securities Account and (y) the custodian of such U.S. Bank Account remains under
written instruction by an authorized officer of the customer of such U.S. Bank Account
to automatically transfer any cash that is deposited in such U.S. Bank Account to a
Linked Deposit Account (or such other Deposit Account as to which the Administrative
Agent shall have entered into an agreement which provides the Administrative Agent
with “control” (as such term is defined under the New York UCC) with respect to such
Deposit Account) and (ii) any Deposit Account and Securities Account maintained with
the Administrative Agent over which the Administrative Agent has, by operation of law,
obtained “control” (as such term is defined under the New York UCC).”

Section 2.07. Amendments to Right to Appoint a Receiver. The first sentence of Section 6.3 of
the Security Agreement is hereby amended by deleting the reference to “the Borrower” therein and
replacing “the Administrative Borrower” in lieu thereof.

Section 2.08. Amendments to Reliance by Administrative Agent. Subsections (a), (b) and (e) of
Section 7.7 of the Security Agreement is hereby amended by deleting references to “the Borrower”
therein and replacing “the Administrative Borrower” in lieu thereof.

Section 2.09. Amendments to Co-Administrative Agent. Section 7.12(b)(v) of the Security
Agreement is hereby amended by (a) deleting the reference to “the Borrower” in the first sentence
thereof and replacing with “the Administrative Borrower, on behalf of the other Grantors,” and (b)
deleting the reference to “the Borrower” in the second and third sentences thereof and replacing
with “the Administrative Borrower.”

Section 2.10. Amendments to Notice Provisions. Section 8.1 of the Security Agreement is
hereby amended and restated in its entirety to read as follows:

“Notices. All notices, requests and demands of any Borrower or the
Administrative Agent hereunder shall be effected in the manner provided for in
Section 10.8 of the Credit Agreement.”

Section 2.11. Amendments to Service of Process. The first sentence of Subsection (b) of
Section 8.11 of the Security Agreement is hereby amended by deleting the reference to “the
Borrower” therein and replacing “the Administrative Borrower” in lieu thereof.

Section 2.12. Amendments to Additional Grantors. Section 8.14 of the Security Agreement is
hereby amended and restated in its entirety to read as follows:

“Additional Grantors. Each Subsidiary of the Administrative Borrower that
is required to become a party to the Credit Agreement as an additional Subsidiary
Borrower pursuant to Section 6.13 of the Credit Agreement shall become a Grantor
for all purposes of this Agreement upon execution and delivery by such Subsidiary
of an Assumption Agreement in the form of Exhibit A.”

Section 2.13. Amendments to Schedules. Schedule 3 attached to the Security Agreement is
hereby amended by: (a) deleting the reference to the U.S. Bank Accounts set forth therein; and (b)
inserting in lieu thereof the information set forth on Exhibit A attached hereto.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.01. Representations and Warranties. Each Grantor hereby represents and warrants to
the Administrative Agent, each Issuer and each Lender that, as of the Amendment Effective Date, and
after giving effect to this Amendment:

(a) the representations and warranties made by such Grantor in Section 3 of the Security
Agreement are true and correct on and as of the Amendment Effective Date with the same effect as
though made on and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and warranties were true
and correct on and as of such earlier date; and

(b) no Default or Event of Default has occurred and is continuing.

ARTICLE IV

EFFECTIVENESS

Section 4.01. Conditions to Effectiveness. This Amendment will become effective on and as of
the first date (the “Amendment Effective Date”) on which all of the following conditions precedent
shall have been first satisfied (unless waived by the Requisite Lenders):

(a) Certain Documents. The Administrative Agent shall have received each of the following,
each dated as of the Amendment Effective Date unless otherwise indicated or agreed to by the
Administrative Agent, in form and substance satisfactory to the Administrative Agent:

(i) this Amendment, duly executed and delivered by each Grantor and the Administrative
Agent;

(ii) such other certificates, documents, agreements and information respecting any
Grantor that the Administrative Agent may reasonably request.

(b) Fee and Expenses Paid. There shall have been paid to the Administrative Agent all fees
and expenses due and payable on or before the Amendment Effective Date.

Section 4.02. References to Agreement. The Security Agreement and this Amendment shall be
read, taken and construed as one and the same instrument from and after the Amendment Effective
Date. Any references in the Security Agreement to “this Agreement”, “hereunder”, “herein” or words
of like import, and each reference in any other document executed in connection with the Security
Agreement, to “the Agreement”, “thereunder”, “therein” or words of like import, shall, from and
after the Amendment Effective Date, mean and be a reference to the Security Agreement as amended
hereby.

Section 4.03. Continued Effectiveness; Ratification of Security Agreement. The Security
Agreement, as modified by this Amendment, is and shall continue to be in full force and effect and
is hereby ratified and confirmed in all respects.

Section 4.04. Reservation of Rights. This Amendment shall be effective only in the specific
instance and for the specific purpose for which given. The Lenders, the Issuers and the
Administrative Agent expressly reserve the right to exercise any remedies they may have under the
Security Agreement at any time without notice to any Grantor or any other person or entity other
than as required in the Security Agreement.

ARTICLE V

MISCELLANEOUS

Section 5.01. Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall constitute one and the same
agreement. Signature pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are attached to the same document. Delivery of an
executed signature page of this Amendment by facsimile transmission shall be as effective as
delivery of a manually executed counterpart hereof. A set of the copies of this Amendment signed
by all parties shall be lodged with the Administrative Borrower and the Administrative Agent.

Section 5.02. Fees, Costs and Expenses. TOUSA agrees upon demand to pay, or reimburse the
Administrative Agent for, all of the Administrative Agent’s reasonable internal and external audit,
legal, appraisal, valuation, filing, lien search, document duplication and reproduction and
investigation expenses and for all other reasonable out-of-pocket costs and expenses of every type
and nature (including, without limitation, after receipt of invoice documentation, the reasonable
fees, expenses and disbursements of the Administrative Agent’s external counsel, local legal
counsel, auditors, accountants, appraisers, printers, insurance, environmental advisors and other
consultants and agents) incurred by the Administrative Agent in connection with the preparation,
negotiation and execution of this Amendment and the documents contemplated hereby, including the
control agreements with respect to the Linked Deposit Accounts.

Section 5.03. Loan Document. This Amendment shall be deemed to be a Loan Document.

Section 5.04. Additional Grantor. By executing and delivering this Amendment, LB/TE #1, LLC
hereby becomes a party to the Security Agreement as a Grantor thereunder with the same force and
effect as if originally named therein as a Grantor and, without limiting the generality of the
foregoing, hereby expressly assumes all obligations and liabilities of a Grantor thereunder. The
information set forth on Exhibit B hereto is hereby added to the information set forth in
the Schedules to the Security Agreement. LB/TE #1, LLC hereby represents and warrants that each of
the representations and warranties applicable to it contained in Section 3 of the Security
Agreement is true and correct on and as the date hereof (after giving effect to this Amendment) as
if made on and as of such date.

Section 5.05. Binding Effect. This Amendment shall become effective when it shall have been
executed by the Grantors and the Administrative Agent and thereafter shall be binding upon and
inure to the benefit of each Grantor, the Administrative Agent, each Lender, the Issuer and, in
each case, their respective successors and assigns.

Section 5.06. Governing Law. This Amendment and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with, the law of the State
of New York.

Section 5.07. Submission to Jurisdiction. Any legal action or proceeding with respect to this
Amendment may be brought in the courts of the State of New York sitting in the City of New York or
of the United States of America for the Southern District of New York, and, by execution and
delivery of this Amendment, each Grantor hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The parties hereto hereby
irrevocably waive any objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.

Section 5.08. WAIVER OF JURY TRIAL. EACH GRANTOR AND THE ADMINISTRATIVE AGENT IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AMENDMENT.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the day and year first above written.

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

1

Grantors:

TECHNICAL OLYMPIC USA, INC.

By:     /s/ Randy Kotler     

Name: Randy Kotler

Title: SVP and Chief Accounting Officer

2

	 	 	 	GRANTORS (continued):

	 	 	 	ENGLE
HOMES DELAWARE, INC.

	 	 	 	ENGLE
HOMES RESIDENTIAL CONSTRUCTION, L.L.C.

	 	 	 	ENGLE/JAMES LLC

	 	 	 	MCKAY
LANDING LLC

	 	 	 	NEWMARK HOMES PURCHASING, L.P.

	 	 	 	NEWMARK HOMES, L.L.C.

	 	 	 	NEWMARK HOMES, L.P.

	 	 	 	PREFERRED BUILDERS REALTY, INC.

	 	 	 	SILVERLAKE INTERESTS, L.C.

	 	 	 	TOI, LLC

	 	 	 	TOUSA, LLC

	 	 	 	TOUSA
ASSOCIATES SERVICES COMPANY

	 	 	 	TOUSA
DELAWARE, INC.

	 	 	 	TOUSA
FUNDING, LLC

	 	 	 	TOUSA
HOMES, INC.

	 	 	 	TOUSA
HOMES, L.P.

	 	 	 	TOUSA
HOMES INVESTMENT #1, INC.

	 	 	 	TOUSA
HOMES FLORIDA, L.P.

	 	 	 	TOUSA
HOMES INVESTMENT #2, INC.

	 	 	 	TOUSA
HOMES INVESTMENT #2, LLC

	 	 	 	TOUSA
REALTY, INC.

	 	 	 	TOUSA
INVESTMENT #2, INC.

	 	 	 	TOUSA
HOMES ARIZONA, LLC

	 	 	 	TOUSA
HOMES COLORADO, LLC

	 	 	 	TOUSA
HOMES NEVADA, LLC

	 	 	 	TOUSA
HOMES MID-ATLANTIC HOLDING, LLC

	 	 	 	TOUSA
HOMES MID-ATLANTIC, LLC

	 	 	 	TOUSA
MID-ATLANTIC INVESTMENT, LLC

	 	 	 	TOUSA
VENTURES, LLC

	 	 	 	TOUSA/WEST HOLDINGS, INC.

	 	 	 	LORTON SOUTH CONDOMINIUM, LLC

	 	 	 	ENGLE
HOMES COMMERCIAL CONSTRUCTION, LLC

	 	 	 	LB/TE
#1, LLC

By:     /s/ Randy Kotler     

Name: Randy Kotler

Title: VP and Treasurer

3

GRANTORS (continued):

NEWMARK HOMES BUSINESS TRUST

By:     /s/ Randy Kotler     

Name: Randy Kotler

Title: Managing Trustee

4

ADMINISTRATIVE AGENT:

	 	 	 	CITICORP NORTH AMERICA, INC., as Administrative
	 
	 	 	 	Agent

	 	 	 	By:
 /s/ Marni McManus

	 	 	Name: Marni McManus

Title: Vice President

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	State in which
	Legal Owner Account Number	Financial Institution	Account Name	Account is Located
	Engle Homes Delaware, Inc.

	 	 	200003341735	 	 	Wachovia Bank,

National Association
	 	Engle Homes

Delaware Inc.
	 	

Delaware
	 

	 	 	 	 	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	TOUSA Delaware Inc.

	 	 	2000012137765	 	 	Wachovia Bank,

National Association
	 	

TOUSA Delaware Inc.
	 	

Delaware
	 

	 	 	 	 	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	TOUSA Funding LLC

	 	 	2000029799620	 	 	Wachovia Bank,

National Association
	 	

TOUSA Funding LLC
	 	

Delaware
	 

	 	 	 	 	 	 
	 	 
	 	 

5

Schedule 1

	 	 	 	 	 
	 	 	 	 	NAME OF FILING AND
	 	 	 	 	JURISDICTION
	 	 	 	 	REQUIRED TO PERFECT
	 	 	 	 	THE SECURITY
	NAME	 	STATE OF INCORPORATION	 	INTEREST
	LB/TE #1, LLC

	 	Florida
	 	UCC-1 filing with

the Florida Secured

Transaction Registry

in the State of

Florida
	 

	 	 
	 	 

Schedule 2

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	ORGANIZATIONAL
	 	 	FORMER NAME AND	 	 	 	 	 	 	 	IDENTIFICATION
	 	 	ADDRESS OF CHIEF	 	 	 	 	 	 	 	NUMBER FOR
	NAME AND ADDRESS OF	 	EXECUTIVE OFFICE	 	 	 	 	 	 	 	JURISDICTION OF
	CHIEF EXECUTIVE	 	(WITHIN PREVIOUS 5	 	 	 	JURISDICTION OF	 	FOREIGN	 	DOMESTIC
	OFFICE	 	YEARS)	 	TYPE OF ORGANIZATION	 	ORGANIZATION	 	QUALIFICATIONS	 	ORGANIZATION
	LB/TE #1, LLC

4000 Hollywood

Blvd.,

Ste. 500N

Hollywood, FL 33021

	 	

N/A
	 	

Limited Liability

Company
	 	

Florida
	 	

N/A
	 	

L06000107142
	 

	 	 
	 	 
	 	 
	 	 
	 	 

Schedule 3

None

6

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