Document:

EX-10.2 Credit Agreement

 

Exhibit _____

$450,000,000

CREDIT AGREEMENT

by and among

EH/TRANSEASTERN, LLC

and

TE/TOUSA SENIOR, LLC

as the Borrowers

DEUTSCHE BANK TRUST COMPANY AMERICAS,

and

THE
INSTITUTIONS FROM TIME TO TIME PARTY HERETO

as Lenders

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as the Administrative Agent for the Lenders

DEUTSCHE BANK SECURITIES INC.,

as Sole Lead Arranger and Sole Book Running Manager

Dated as of August 1, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	ARTICLE I DEFINED TERMS 
	 	 	1	 
	 
	 	 	 	 
	1.1 Defined terms 
	 	 	1	 
	1.2 Other Interpretive Provisions 
	 	 	36	 
	 
	 	 	 	 
	ARTICLE II CREDIT FACILITY 
	 	 	39	 
	 
	 	 	 	 
	2.1 Term Loans 
	 	 	39	 
	2.2(a) Revolving Loans 
	 	 	39	 
	2.2(b) Swing Line Loans 
	 	 	40	 
	2.3 Issuance of Letters of Credit 
	 	 	43	 
	2.4 Funding of Borrowings 
	 	 	48	 
	2.5 Interest Elections 
	 	 	49	 
	2.6 Termination; Reduction and Extension of the Revolving Commitments; Maturity
	 	 	50	 
	2.7 Manner of Payment of Loans; Evidence of Debt 
	 	 	52	 
	2.8 Repayment and Prepayment of Loans 
	 	 	54	 
	2.9 Interest
	 	 	56	 
	2.10 Presumptions of Payment 
	 	 	57	 
	2.11 Pro Rata Treatment 
	 	 	57	 
	2.12 Inability to Determine Rates
	 	 	57	 
	2.13 Illegality 
	 	 	58	 
	2.14 Funding 
	 	 	58	 
	2.15 Increased Costs 
	 	 	58	 
	2.16 Obligation of Lenders to Mitigate; Defaulting Lenders; Replacement of Lenders
	 	 	 	 
	 
	 	 	59	 
	2.17 Funding Indemnification 
	 	 	61	 
	2.18 Taxes 
	 	 	62	 
	2.19 Fees
	 	 	63	 
	2.20 Joint Borrower Provisions 
	 	 	64	 
	2.21 Credit Support 
	 	 	66	 
	2.22 Facility Increase 
	 	 	66	 
	 
	 	 	 	 
	ARTICLE III CONDITIONS PRECEDENT 
	 	 	68	 
	 
	 	 	 	 
	3.1 Conditions to Funding of Loans 
	 	 	68	 
	3.2 Outside Closing Date 
	 	 	70	 
	3.3
Conditions Precedent to Each Revolving Loan, Swing Line Loan and Letter of Credit
	 	 	70	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES 
	 	 	71	 
	 
	 	 	 	 
	4.1 Financial Condition 
	 	 	71	 
	4.2 No Material Adverse Effect 
	 	 	71	 

i

 

	 	 	 	 	 
	 	 	Page	 
	 
	4.3 Compliance with Laws 
	 	 	71	 
	4.4 Organization, Powers; Authorization; Enforceability 
	 	 	72	 
	4.5 No Conflict 
	 	 	73	 
	4.6 No Material Litigation 
	 	 	73	 
	4.7 Taxes 
	 	 	73	 
	4.8 Regulated Entities 
	 	 	74	 
	4.9 Subsidiary Entities 
	 	 	74	 
	4.10 Federal Reserve Board Regulations 
	 	 	74	 
	4.11 ERISA Compliance. Except as disclosed on Schedule 4.11 
	 	 	75	 
	4.12 Assets and Liens 
	 	 	75	 
	4.13 Securities Acts 
	 	 	76	 
	4.14
Consents, Etc. 
	 	 	76	 
	4.15 Hazardous Materials 
	 	 	76	 
	4.16 Intellectual Property 
	 	 	77	 
	4.17 Insurance 
	 	 	77	 
	4.18 Full Disclosure 
	 	 	78	 
	4.19 Brokers
	 	 	78	 
	4.20 No Default 
	 	 	78	 
	4.21 Solvency 
	 	 	78	 
	4.22 Contractual Obligations 
	 	 	78	 
	4.23 Representations Regarding the Mortgaged Property 
	 	 	78	 
	4.24 Use of Proceeds 
	 	 	80	 
	4.25 Single Purpose Entity
	 	 	80	 
	4.26 Labor
	 	 	80	 
	4.27 Taxpayer Identification Number 
	 	 	80	 
	4.28 Anti-Terrorism Laws 
	 	 	80	 
	4.29 Blocked Accounts 
	 	 	81	 
	 
	 	 	 	 
	ARTICLE V AFFIRMATIVE COVENANTS 
	 	 	81	 
	 
	 	 	 	 
	5.1 Reporting Requirements 
	 	 	81	 
	5.2 Maintenance of Existence and Rights 
	 	 	84	 
	5.3 Compliance with Laws; Forfeiture 
	 	 	84	 
	5.4 Access 
	 	 	85	 
	5.5 Insurance; Casualty; Condemnation; Restoration 
	 	 	85	 
	5.6 Books and Records 
	 	 	87	 
	5.7 Maintenance of Property 
	 	 	87	 
	5.8 Taxes 
	 	 	88	 
	5.9 Environmental 
	 	 	88	 
	5.10 Business and Operations 
	 	 	88	 
	5.11 Title to the Mortgaged Property 
	 	 	88	 
	5.12 Loan Proceeds 
	 	 	89	 
	5.13 Hedging Arrangements 
	 	 	89	 
	5.14 Single Purpose Entities
	 	 	89	 
	5.15 Subordination 
	 	 	89	 
	5.16 Cash Management System 
	 	 	90	 
	5.17 Further Assurances 
	 	 	91	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	 
	ARTICLE VI NEGATIVE COVENANTS 
	 	 	91	 
	 
	 	 	 	 
	6.1 Liens
	 	 	91	 
	6.2 Indebtedness 
	 	 	91	 
	6.3 Fundamental Change 
	 	 	91	 
	6.4 Disposition 
	 	 	92	 
	6.5 Investments 
	 	 	94	 
	6.6 Transactions with Affiliates 
	 	 	96	 
	6.7 Modifications to Organizational Documents and Material Agreements
	 	 	97	 
	6.8 Restricted Payments 
	 	 	97	 
	6.9 Financial Covenants 
	 	 	99	 
	6.10 Sale Leaseback
	 	 	99	 
	6.11 Negative Pledges
	 	 	100	 
	 
	 	 	 	 
	ARTICLE VII EVENTS OF DEFAULT
	 	 	100	 
	 
	 	 	 	 
	7.1 Event of Default
	 	 	100	 
	7.2 Remedies
	 	 	102	 
	 
	 	 	 	 
	ARTICLE VIII THE ADMINISTRATIVE AGENT
	 	 	103	 
	 
	 	 	 	 
	8.1 Appointment
	 	 	103	 
	8.2 Delegation of Duties
	 	 	103	 
	8.3 Exculpatory Provisions 
	 	 	103	 
	8.4 Reliance by the Agents 
	 	 	104	 
	8.5 Notice of Default
	 	 	104	 
	8.6 Non-Reliance on Agents and Other Lenders
	 	 	105	 
	8.7 Indemnification
	 	 	105	 
	8.8 Agents in Their Individual Capacity
	 	 	105	 
	8.9 Successor Administrative Agent and Swing Line Lender
	 	 	106	 
	8.10 Limitations on Agents Liability
	 	 	106	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS PROVISIONS
	 	 	106	 
	 
	 	 	 	 
	9.1 No Assignment by Borrowers 
	 	 	106	 
	9.2 Modification 
	 	 	107	 
	9.3 Cumulative Rights; No Waiver 
	 	 	107	 
	9.4 Entire Agreement 
	 	 	108	 
	9.5 Survival 
	 	 	108	 
	9.6 Notices 
	 	 	108	 
	9.7 Governing Law
	 	 	108	 
	9.8
Assignments, Participations, Syndication, Etc. 
	 	 	108	 
	9.9 Counterparts 
	 	 	110	 
	9.10 Sharing of Payments 
	 	 	110	 
	9.11 Confidentiality 
	 	 	111	 
	9.12 Consent to Jurisdiction 
	 	 	111	 
	9.13 Waiver of Jury Trial 
	 	 	111	 

iii

 

	 	 	 	 	 
	 	 	Page	 
	 
	9.14 Indemnity
	 	 	112	 
	9.15 Telephonic Instruction
	 	 	113	 
	9.16 Marshalling; Payments Set Aside 
	 	 	113	 
	9.17 Set-off 
	 	 	113	 
	9.18 Severability
	 	 	114	 
	9.19 No Third Parties Benefited
	 	 	114	 
	9.20 Time
	 	 	114	 
	9.21 Reinstatement
	 	 	114	 

iv

 

SCHEDULES
AND EXHIBITS

	 	 	 	 
	SCHEDULES:	 	 	 
	Schedule 4.1

	 	 	Material Obligations and Liabilities
	Schedule 4.6

	 	 	Material Litigation
	Schedule 4.7

	 	 	Taxes
	Schedule 4.9

	 	 	Subsidiary Entities
	Schedule 4.11

	 	 	ERISA Compliance
	Schedule 4.14

	 	 	Required Consents
	Schedule 4.15

	 	 	Hazardous Materials
	Schedule 4.17

	 	 	Existing Insurance
	Schedule 4.23(5)

	 	Purchase and Option Agreements
	Schedule 4.27

	 	 	Taxpayer Identification Number
	Schedule 4.29

	 	 	Blocked Accounts
	Schedule 5.1(2)

	 	Conditions to Funding of Loan
	Schedule 5.5

	 	 	Insurance Requirements
	Schedule 6.5

	 	 	Investments
	Schedule 6.6

	 	 	Affiliate Transactions
	Schedule 6.12(1)

	 	Liens
	Schedule 6.21

	 	 	Permitted Indebtedness
	Schedule 9.6

	 	 	Notices
	Schedule I

	 	 	Pro Rata Shares
	Schedule II

	 	 	Mortgaged Property/Operating Company Entitys/ Security Instruments

v

 

	 	 	 
	EXHIBITS	 	 
	Exhibit A-1

	 	Form of Guaranty
	Exhibit A-2

	 	Form of Carve-Out Guaranty
	Exhibit B

	 	Form of Assignment and Acceptance Agreement
	Exhibit C

	 	Form of Closing Certificate
	Exhibit D

	 	Form of Rate Request
	Exhibit E-l

	 	Form of Term Loan Note
	Exhibit E-2

	 	Form of Revolving Loan Note
	Exhibit E-3

	 	Form of Swing Line Note
	Exhibit F

	 	Form of Pledge Agreement
	Exhibit G

	 	Form of Borrowing Base Certificate
	Exhibit H

	 	Form of Blocked Deposit Account Agreement
	Exhibit I

	 	Form of Borrowing Request
	Exhibit J

	 	Form of Funding Notice
	Exhibit K

	 	Form of Letter of Credit Request
	Exhibit L

	 	Form of Environmental Indemnity
	Exhibit M

	 	Form of Compliance Certificate
	Exhibit N

	 	Form of Assignment of Contracts
	Exhibit O

	 	Form of Completion Guaranty
	Exhibit P

	 	Assignment of Qualified Contract

vi

 

CREDIT AGREEMENT

     THIS
CREDIT AGREEMENT (this “Agreement”) is made and dated as of the 1st day of August, 2005
(“Effective Date”), by and among EH/TRANSEASTERN, LLC, a limited liability company organized under
the laws of the state of Delaware (the “Operating Company”), TE/TOUSA SENIOR, LLC, a limited
liability company organized under the laws of the state of Delaware
(“TOUSA Senior” and together
with Operating Company, jointly and severally, the
“Borrowers” and each a “Borrower”); THE LENDERS
FROM TIME TO TIME PARTY HERETO (collectively and severally, the
“Lenders”); and DEUTSCHE BANK TRUST
COMPANY AMERICAS (“DBTCA”), as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”).

RECITALS

     A. The Borrowers have requested that the Lenders extend certain credit facilities to
Company, in an initial principal amount of $450,000,000, consisting of $335,000,000 aggregate
principal amount of Term Loans, and up to $115,000,000 aggregate principal amount of Revolving
Commitments. Proceeds from the Term Loans and the Revolving Loans shall be used to finance the
acquisition (“Acquisition”) of the Transeastern Assets (as defined below), and pay transaction
costs and expenses. Proceeds from the Revolving Loans shall be used for the corporate needs of the
Borrowers, including working capital and a $75,000,000 sub-facility for letters of credit.

     B. The Lenders party hereto have agreed to extend such credit facilities and DBTCA has agreed
to act as administrative agent on behalf of the Lenders on the terms and subject to the conditions
set forth herein and in the other Loan Documents (as that term and other capitalized terms used
herein are defined in, or the location of the definitions thereof
referenced in, Article I).

     NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:

AGREEMENT

ARTICLE I

DEFINED TERMS

     1.1 Defined terms. As used in this Agreement, the following terms
have the following meanings:

     “Account Collateral” shall mean (a) the Blocked Accounts and all cash, checks, drafts,
certificates, instruments and other property, including, without limitation, all deposits and/or
wire transfers from time to time deposited or held in, credited to or made to the Blocked Accounts;
(b) all interest, dividends, cash, instruments and other property from time to time received,
receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and
(c) to the extent not covered by clauses (a) or (b) above, all proceeds (as defined under the UCC)
of any or all of the foregoing.

1

 

     “Acquisition” shall have the meaning set forth in Section 4.24 of this
Agreement.

     “Acquisition Cost” shall mean the cost of the Entitled Land, Lots Under Development,
and/or Finished Lots in question, determined in accordance with GAAP (including any write downs in
such costs required under GAAP).

     “Act” shall have the meaning set forth in Section 4.13 of this Agreement.

     “Additional Letter of Credit Facility” shall have the meaning set forth in Section
2.22(3) of this Agreement.

     “Administrative Agent” shall have the meaning given such term in the preamble to this
Agreement and shall include any successor to DBTCA as the initial “Administrative Agent”
thereunder.

     “Affiliate” shall mean, as to any Person, any other Person directly or indirectly
Controlling, Controlled by or under direct or indirect common Control with, such Person. In the case of a Lender which is a fund that invests in loans, any other fund that invests in loans which
is managed by the same investment advisor as such Lender, or by another Affiliate of such Lender or
such investment advisor, shall be deemed an Affiliate of such Lender.

     “Agents” shall mean the Administrative Agent, the Lead Arranger and any other Persons
acting in the capacity of an agent for the Lenders under this Agreement, together with their
permitted successors and assigns.

     “Aggregate Commitments” shall mean the sum of (i) the outstanding principal amount
under the Term Loans; and (ii) the Total Revolving Commitments (whether or not then funded).

     “Agreement” shall mean this Credit Agreement, as the same may be Modified.

     “Allocated Cost” shall mean, with respect to each Unit, the Acquisition Cost and the
Unit Construction Cost.

     “ALTA” shall mean American Land Title Association, or any successor thereto.

     “Anti-Terrorism Laws” shall have the meaning set forth in Section 4.28(1)
of this Agreement.

     “Applicable Base Rate” shall mean the floating rate per annum equal to the daily
average Base Rate in effect during the applicable calculation period plus 1.50%.

     “Applicable
LIBO Rate” shall mean, with respect to the applicable Interest Period, the
per annum rate equal to the Reserve Adjusted LIBO Rate plus a “LIBOR Spread” of 2.75%.

     “Applicable Unused Line Fee Percentage” shall mean, for any day, with respect to the
unused line fee payable under Section 2.19, the applicable rate per annum set forth below
under the caption “Unused Line Fee Rate” based upon the average daily Usage Percentage during the

2

 

immediately preceding month or shorter period if calculated on the Revolving Commitment
Termination Date:

	 	 	 
	Usage Percentage	 	Unused Line Fee Rate
	Less than 50%

50% up to but not including 100%

	 	0.50%

0.375%  

     “Appraisal” shall mean a real estate appraisal conducted in accordance with the
Uniform Standards of Professional Appraisal Practice (as promulgated by the Appraisal Standards
Board of the Appraisal Foundation) and all Requirements of Law applicable to Lenders, including in
conformity with the Financial Institutions Reform Recovery and Enforcement Act (FIRREA), undertaken
by an independent appraisal firm reasonably satisfactory to Administrative Agent, and providing an
assessment of fair market value of the subject Real Property.

     “Appraised Value” shall mean the most recent fair market value established by an
Appraisal reasonably acceptable to Administrative Agent.

     “Asset Purchase Agreement” shall mean that certain Asset Purchase Agreement dated as
of June 6, 2005 by and among Operating Company, Seller, Arthur J. Falcone, Edward W. Falcone and
Falcone/Ritchie, LLC.

     “Assignee” shall have the meaning given such term in Section 9.8(1) of this
Agreement.

     “Assignment and Acceptance Agreement” shall mean an agreement in the form of that
attached to this Agreement as Exhibit B.

     “Assumption Agreement” shall have the meaning given such term in Section
2.22(2) of this Agreement.

     “Available Credit” shall mean, at any time, an amount equal to (a) the Maximum Credit,
minus (b) the aggregate principal amount of the Revolving Loans at such time; minus (c) the
aggregate principal amount of any Swing Line Loan.

     “Bankruptcy Code” shall mean Title 11, U.S.C.A., as amended from time to time and any
successor thereto.

     “Base Distribution Conditions” shall have the meaning given such term in
Section 6.8(2)(iv) of this Agreement.

     “Base
Rate” shall mean on any day the higher of: (a) the Prime Rate in effect on such day, and
(b) the sum of the Federal Funds Rate in effect on such day plus one half of one percent (0.50%).

     “Base Rate Loans” shall mean any Swing Line Loan and any other Loan bearing interest
at a rate determined by reference to the Base Rate.

     “Beneficial” when used in the context of beneficial ownership has the analogous
meaning to that specified in Rule 13d-3 under the Securities Exchange Act of 1934, as amended.

3

 

     “Blocked Account” shall mean a bank account with a financial institution approved
by Agent in its reasonable discretion, which bank account is subject to a Blocked Deposit Account
Agreement.

     “Blocked Deposit Account Agreements” shall mean each of the Blocked Deposit Account
Agreements, to be executed by Borrowers, the Administrative Agent and the applicable financial
institution at which a Blocked Account is established, which Agreement shall be substantially in
the form of Exhibit H.

     “Bona Fide Employee Sale” shall mean a sale to an employee or officer of an Operating
Company Entity in the Ordinary Course of Business and (1) pursuant to a Bona Fide Sales Contract
(except with respect to the affiliation of such person), and (2) upon fair and reasonable terms no
less than favorable to the Operating Company Entity than would be obtained in a comparable arm’s
length transaction with a Person who is not an employee or officer of such Operating Company Entity
(provided, however, that in the event no brokerage commission or fee will be incurred in
connection with such transaction, a reasonable sum in respect thereof may be deducted from the fair
market purchase price).

     “Bona Fide Sales Contract” shall mean a duly executed contract, in substantially a
form approved by Administrative Agent, for the sale of a Unit to a Person who is not related or
affiliated with any Transaction Party (other than in connection with a Bona Fide Employee Sale),
and: (i) which contract is in full force and effect without any default thereunder on the part of
the purchaser or seller, (ii) for which contract all rescission rights under Law or Regulation have
expired, (iii) which contract is subject to no contingencies or conditions other than completion of
construction, and (iv) a deposit in an amount customary for the type of property has been made by
the buyer, and is non-refundable except as provided in clause (iii) above.

     “Borrowers”
and “Borrower” shall have the meaning given to such term in the preamble
to this Agreement.

     “Borrower Parties” shall mean, jointly and severally, each of the Borrowers,
Guarantors, Pledgor and any Affiliate of the foregoing executing any Loan Document.

     “Borrowing” shall mean (a) all Base Rate Loans made, converted or continued on the
same date, or (b) all LIBO Rate Loans of the same Interest Period. For purposes hereof, the date of
a Borrowing comprising one or more Loans that have been converted or continued shall be the
effective date of the most recent conversion or continuation of such Loan or Loans.

     “Borrowing Base” shall mean, at any time, with respect to the Borrowing Base Assets,
the sum of:

           (i) the product of (x) 0.35 and (y) the Fair Market Value of the
Qualified Purchase/Option Agreements; provided that at no time shall the aggregate sum under this
clause (i) exceed 20% of the Borrowing Base as a whole;

           (ii) the product of (x) 0.50 and (y) the Fair Market Value of the
Unimproved Land owned by the Operating Company Entities; provided that at no time shall the
aggregate sum under this clause (ii) exceed 25% of the Borrowing Base as a whole;

4

 

           (iii) the product of (x) 0.65 and (y) the Fair Market Value of the
Lots
Under Development and Finished Lots owned by the Operating Company Entities; provided that at no
time shall the aggregate sum under this clause (iii) exceed 50% of the Borrowing Base as a whole;

           (iv) the product of (x) 0.80 and (y) the Fair Market Value of the Unsold Homes Under
Construction owned by the Operating Company Entities;

           (v) the product of (x) 0.80 and (y) the Fair Market Value of the Completed Unsold
Homes owned by the Operating Company Entities;

           (vi) the product (x) 0.90 and (y) the Fair Market Value of the Sold Homes owned by
the Operating Company Entities; and

          (vii) the product of (x) 1.00 and (y) the sum of (a) Escrow Proceeds Receivables and (b)
Unrestricted Cash in excess of $10,000,000;

provided, however, that (i) Unentitled Land shall receive zero ($0) credit with respect to
Borrowing Base determinations and at no time shall the Fair Market Value of such Unentitled Land
exceed $40 million, (ii) all assets of the Operating Company Entities included in the Borrowing
Base shall not be subject to any Lien (other than Permitted Encumbrances, excluding those described
in clause (iv) and (v) of such definition) and shall be owned 100% by the Operating Company
Entities.

     “Borrowing Base Assets” shall mean each of the following: Qualified Purchase/Option
Agreements, Unimproved Land, Lots Under Development, Finished Lots, Unsold Homes Under
Construction, Completed Unsold Homes, Sold Homes, Escrow Proceeds Receivables and Unrestricted Cash
in excess of $10,000,000 included in the calculation of the Borrowing Base; provided that with
respect to any Real Property acquired after the Closing Date (including any Real Property acquired
pursuant to a Qualified Purchase/Option Agreement), the acquisition of such Real Property complies
with the requirements set forth in Section 6.5(8).

     “Borrowing Base Certificate” shall mean a certificate of the Borrower substantially in
the form of Exhibit G.

     “Borrowing Request” shall mean a request by the Borrowers for a Borrowing in
accordance with Section 2.5, substantially in the form of
Exhibit I.

     “Bulk Sale” shall mean the Disposition of portions of the Mortgaged Property with a
Fair Market Value in excess of $10 million in a single transaction or related series of
transactions.

     “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which
banks in New York are authorized or obligated to close their regular banking business.

     “Capital Stock” shall mean (i) with respect to any Person that is a corporation, any
and all shares, interests, participations or other equivalents (however designated and whether or
not voting) of corporate stock, including, without limitation, each class or series of common stock

5

 

and preferred stock of such Person and (ii) with respect to any Person that is not a
corporation, any and all investment units, partnership, membership or other equity interests of
such Person.

     “Carveout Guaranties” shall mean each Guaranty (Carveout) of even date herewith
executed by Guarantors in favor of Administrative Agent in the form
of Exhibit A-2.

     “Cash Equivalents” shall mean, with respect to any Person: (a) securities issued,
guaranteed or insured by the United States of America or any of its agencies with maturities of not
more than one year from the date acquired; (b) certificates of deposit with maturities of not more
than one year from the date acquired by a United States federal or state chartered commercial bank
of recognized standing, which has capital and unimpaired surplus in excess of $500,000,000 and
which bank or its holding company has a short-term commercial paper rating of at least A-2 or the
equivalent by S&P or at least P-2 or equivalent by Moody’s; (c) reverse repurchase agreements with
terms of not more than seven days from the date acquired, for securities of the type described in
clause (a) above and entered into only with commercial banks having the qualifications described in
clause (b) above; (d) commercial paper issued by any Person incorporated under the laws of the
United States of America or any state thereof and rated at least A-2 or the equivalent thereof by
S&P or at least P-2 or the equivalent thereof of Moody’s, in each case with maturities of not more
than one year from the date acquired; and
(e) investments in money market funds registered under the Investment Company Act of 1940, which
have net assets of at least $500,000,000 and at least 85% of whose assets consist of securities and
other obligations of the type described in clauses (a) through
(d) above and (f) other investments of comparable security and liquidity to those enumerated in clauses (a)
through (e) above.

     “Casualty” shall mean a fire, explosion, flood, collapse, hurricane, or other
casualty affecting one or more Mortgaged Property.

     “CERCLIS” shall have the meaning set forth in Section 4.15 of this
Agreement.

     “Change in Control” shall mean, at any time, the occurrence of any
of the following:

           (i) TOUSA shall cease to own and control, directly or indirectly, one hundred percent
(100%) of the Capital Stock of TOUSA Member; or

           (ii) TOUSA Member shall cease to be the sole managing member of Investment Vehicle.

     “Change in Law” shall mean (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender (or by any lending office of such Lender or by such Lender’s holding
company, if any) with any guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

     “Closing Certificate” shall mean a certificate in the form of that attached
to this Agreement as Exhibit C.

6

 

     “Closing Date” shall mean the date as of which all conditions set forth in
Section 5.1 of this Agreement shall have been satisfied or waived and the Loan shall have
been funded.

     “Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder, as from time to time in effect.

     “Commitment” shall mean, collectively, the Term Loan Commitment and the Total
Revolving Commitments.

     “Completed Unsold Homes” shall mean, as of any date, all Units (including all Model
Homes), for which construction has been “completed”, but for which there is in existence no Bona
Fide Sales Contract. Construction will be considered “completed” when a temporary certificate of
occupancy, a certificate of occupancy, or substantially equivalent approval has been issued.

     “Completion Guaranty” shall mean that certain Completion Guaranty of even date
herewith executed by the TOUSA Guarantors in favor of Administrative Agent substantially in the
form attached hereto as Exhibit O.

     “Compliance Certificate” shall have the meaning set forth in Section
5.1(3)(i) of this Agreement.

     “Condemnation” shall mean a taking or voluntary conveyance during the term hereof of
all or any part of the Mortgaged Property or any interest therein or right accruing thereto or use
thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding
by any Governmental Authority, whether or not the same shall have actually been commenced.

     “Consolidated” shall mean with respect to any Person, the consolidation of accounts of
such Person and its Subsidiaries, in conformity with GAAP. “Consolidation” shall have a meaning
correlative thereto.

     “Consolidated Entity” shall mean, with respect to any Person, (a) any Subsidiary of
such Person and (b) any Person consolidated in the financial statements of such Person in
accordance with GAAP.

     “Consolidated Net Income” shall mean, for any period, the net income (or loss) of the
Borrowers for such period, determined on a Consolidated basis in conformity with GAAP.

     “Contact Office” shall mean the office of DBTCA located at Deutsche Bank Trust Company
Americas, 60 Wall Street, MS NYC60-1110, New York, NY 10005-2858, Attention: Loan Administration,
or such other offices in New York, New York as the Administrative Agent may notify the Borrowers
and the Lenders from time to time in writing.

     “Contractual Obligation” as to any Person shall mean any provision of any security
issued by such Person or of any agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.

7

 

     “Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise, and the terms “Controlled,” “Controlling” and
“Common Control” shall have correlative meanings.

     “Credit Date” means the date of the making of a Revolving Loan or a Swing Line Loan or
the issuing of a Letter of Credit.

     “DBTCA” shall mean Deutsche Bank Trust Company Americas.

     “Defaulted Loan” shall have the meaning set forth in Section 2.16(2) of this
Agreement.

     “Defaulting Lender” shall have the meaning set forth in Section
2.16(2) of this Agreement.

     “De Minimis Accounts” means Deposit Accounts with a balance, in the aggregate of less
than $500,000.

     “Deposit Account” means a demand, time, savings, passbook or like account with a bank,
savings and loan association, credit union or like organization, other than an account evidenced by
a negotiable certificate of deposit.

     “Disposition” shall mean the sale, conveyance, pledge, hypothecation, ground lease,
encumbrance, creation of a security interest with respect to, or other transfer, whether voluntary
or involuntary, direct or indirect, of any legal or beneficial interest in a Mortgaged Property, or
other Property of the Borrowers; provided, however, that Disposition shall not include any
Permitted Encumbrances.

     “Distribution” shall mean with respect to any Borrower Party: (i) any distribution of
cash or Cash Equivalent, directly or indirectly, to the partners or holders of Capital Stock of
such Persons, or any other distribution on or in respect of any partnership, company or equity
interests of such Persons; (ii) the declaration or payment of any dividend on or in respect of any
shares of any class of Capital Stock of such Persons; or (iii) the purchase, redemption, or other
retirement of any shares of any class of Capital Stock of such Persons, directly or indirectly.

     “Dollars” and the sign “$” mean the lawful money of the United States of America.

     “EBITDA” shall mean for the Borrowers and their Subsidiaries for any period ending on
any date of determination, an amount equal to (a) the Consolidated Net Income for such period,
minus (b) gains from extraordinary items for such period, to the extent included in the
calculation of Consolidated Net Income for such period in conformity with GAAP, but without
duplication, plus (c) the sum of (i) any provision for income taxes for such period, (ii)
Interest Expense deducted in the calculation of Consolidated Net Income for such period in
conformity with GAAP (including, without duplication, previously capitalized Interest Expense which
would be included in “cost of goods sold” and deducted from Consolidated revenues in determining
Consolidated Net Income), (iii) the amount of depreciation and amortization for such period
(including the amortization or write-down of goodwill associated with the purchase price under the
Asset Purchase Agreement of Four Hundred Seventeen Million One Hundred

8

 

Forty-Two Thousand Five Hundred Dollars ($417,142,500.00) plus the Permitted Post Closing
Payments, (iv) any write-off of goodwill, and (v) the amount of (x) any item of extraordinary loss
not paid in cash in such period and (y) any non-cash impairment charges in such period, in each
case to the extent included in the calculation of Consolidated Net Income for such period in
conformity with GAAP, but without duplication.

     “Effective Date” shall mean the date first written in the introductory paragraph of
this Agreement.

     “Eligible Assignee” shall mean any of the following:

          (a) A commercial bank organized under the laws of the United States, or any state thereof, and
having a combined capital and surplus of at least $100,000,000;

          (b) A commercial bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of
any such country, and having a combined capital and surplus of at least $100,000,000 (provided that
such bank is acting through a branch or agency located in the country in which it is organized or
another country which is also a member of the OECD);

          (c) A Person that is engaged in the business of commercial banking and that is: (1) an
Affiliate of a Lender, (2) an Affiliate of a Person of which a Lender is an Affiliate, or (3) a
Person of which a Lender is an Affiliate;

          (d) An insurance company, mutual fund or other financial institution organized under the laws
of the United States, any state thereof, any other country which is a member of the OECD or a
political subdivision of any such country which invests in bank loans and has total assets of
$500,000,000; and

          (e) Any fund which invests in bank loans and whose assets exceed $100,000,000;

provided, however, that no Person shall be an “Eligible Assignee” unless at the time of the
proposed assignment to such Person: (i) such Person is able to make or maintain, as applicable, its
portion of the Loan in Dollars, (ii) such Person is exempt from withholding of tax on interest and
is able to deliver the documents related thereto pursuant to Section 2.18(5) of this
Agreement, and (iii) such Person is not a Transaction Party or an Affiliate thereof.

     “Eligible Collateral” shall mean U.S. Government Obligations, Letter of Credit
Collateral or cash and Cash Equivalents, or any combination thereof.

     “Entitled Land” shall mean Real Property with respect to which all applicable discretionary
land use and environmental approvals, including zoning and discretionary subdivision (not including
recordation of a final subdivision plat), have been obtained from federal, state, and local
agencies with jurisdiction over the subject property; provided, however, that “entitled” shall not
require Borrower to obtain any permits or other approvals that are administrative, ministerial, or
otherwise subject to issuance upon satisfaction of or compliance with objective criteria (such as
building permits, grading permits or similar approvals).

9

 

     “Environmental Claim” shall mean any claim, action, cause of action,
investigation or written notice by any Person alleging potential liability (including potential
liability for investigatory costs, cleanup costs, natural resource damages, property damages,
personal injuries or penalties) arising out of, based upon or resulting from (a) the presence,
threatened presence, release or threatened release into the environment of any Hazardous Materials
from or at the Mortgaged Property, or (b) the violation, or alleged violation, of any Hazardous
Materials Law relating to the Mortgaged Property.

     “Environmental Indemnity” shall mean the Environmental Indemnity, dated the date
hereof, made by Borrowers and Guarantors in favor of Administrative Agent.

     “Environmental Law” shall have the meaning provided in the Environmental Indemnity.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as Modified, and the
rules and regulations promulgated thereunder as from time to time in effect.

     “ERISA Affiliate” shall mean any trade or business (whether or not incorporated) under
common control with any Consolidated Entity within the meaning of Section 414(b) or (c) of the Code
(and Sections 414(m) and (o) for purposes of provisions relating to Section 412 of the Code).

     “ERISA Event” shall mean (a) a Reportable Event with respect to a Pension Plan or a
Multiemployer Plan; (b) a withdrawal by any Consolidated Entity or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated
as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any
Consolidated Entity or any ERISA Affiliate from a Multiemployer Plan or notification that a
multiemployer is in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a plan amendment as a termination under Section 4041 or 4041A of ERISA or the
commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) a
failure by any Consolidated Entity to make required contributions to a Pension Plan, Multiemployer
Plan or other Plan subject to Section 412 of the Code; (f) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (g) the
imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon any Consolidated Entity or any ERISA Affiliate; or (h)
an application for a funding waiver or an extension of any amortization period pursuant to Section
412 of the Code with respect to any Plan.

     “Escrow Proceeds Receivables” shall mean with respect to any Operating Company Entity,
the aggregate amount of funds held in escrow by a title company or escrow agent which are payable
(without any requirement of the satisfaction or waiver of any further condition) to the Operating
Company Entity and which constitute proceeds of sales of Units.

     “Eurodollar Business Day” shall mean a Business Day on which commercial banks in
London, England are open for domestic and international business.

10

 

     “Event of Default” shall have the meaning given such term in
Section 7.1 of this Agreement.

     “Evidence of No Withholding” shall have the meaning given such term in Section
2.18(5) of this Agreement.

     “Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender, or any
other recipient of any payment to be made by or on account of any obligation of the Borrowers
hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United
States of America, or by any state, locality or foreign jurisdiction under the laws of which such
recipient is organized or in which it maintains an office or permanent establishment, (b) any
branch profits taxes imposed by the United States of America or any similar tax imposed by any
other jurisdiction in which the Borrowers are located and (c) in the case of a Foreign Lender, any
withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement or is attributable to such Foreign Lender’s failure to
comply with Section 2.18(5) of this Agreement; provided, however, Excluded Taxes shall not
include any withholding tax resulting from any inability to comply with Section 2.18(5) of
this Agreement solely by reason of there having occurred a Change in Law.

     “Executive Order” shall have the meaning set forth in Section 4.28(1) of
this Agreement.

     “Extension Fee” shall have the meaning set forth in Section
2.6(5)(ii)(B) of this Agreement.

     “Extension Period” shall have the meaning set forth in Section 2.6(5)(i).

     “F/R Member” shall mean Falcone/Ritchie, LLC, a Florida limited liability company.

     “Facility
Increase” shall have the meaning set forth in Section 2.22 of this Agreement.

     “Facility Increase Effective Date” shall have the meaning set forth in Section
2.22(2) of this Agreement.

     “Facing Fee” shall have the meaning set forth in Section 2.19(2)(ii) of this
Agreement.

     “Fair Market Value” shall mean:

          (i) with respect to any Real Property that is part of the Borrowing Base as of the
Closing Date, the Appraised Value thereof;

          (ii) with respect to a Qualified Purchase/Option Agreement, the sum of (a) the Appraised
Value of the Qualified Option Land subject to such agreement; less (b) the purchase price under the
Qualified Purchase/Option Agreement.

          (iii) with respect to all other Real Property, the lesser of (a) the Allocated Cost
of such Real Property; and (b) the Appraised Value of such Real Property.

          

11

 

     “Federal Funds Rate” shall mean for any day, an interest rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as published for such day
(or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations at approximately 1:00 p.m. (New York time) on such day on such
transactions received by the Administrative Agent from three Federal funds brokers of recognized
standing selected by the Administrative Agent in its sole discretion.

     “Fee Letter” shall mean the letter agreement dated August 1, 2005 between DBTCA, the
Borrowers and the Mezzanine Borrowers relating to fees.

     “Finished Lots” shall mean lots of Entitled Land as to which offsite construction has
been substantially completed, utilities and all major infrastructure have been completed and
stubbed to the site, and building permits for Units may be promptly pulled and vertical
construction commenced without the satisfaction of any further conditions.

     “Fiscal
Quarter” or “fiscal quarter” shall mean any three-month period ending on March
31, June 30, September 30 or December 31 of any Fiscal Year.

     “Fiscal
Year” or “fiscal year” shall mean the 12-month period ending on December 31 in
each year or such other period as any Borrower may designate and the Administrative Agent may
approve in writing.

     “Foreign Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of this definition, the
United States of America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

     “Funding Default” shall have the meaning set forth in Section 2.16(2) of
this Agreement.

     “Funding
Notice” means a notice substantially in the form of
Exhibit J.

     “GAAP” shall mean generally accepted accounting principles in the United States of
America as in effect from time to time set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of determination;
provided that with respect to determining compliance with any financial covenants set forth
in Section 6.9 (including related definitions), “GAAP” shall be determined based upon those
accounting principles referred to above as of the Closing Date.

     “Good Faith Contest” shall mean the contest of an item if (1) no Event of Default
shall exist and be continuing; (2) the item is diligently contested in good faith, and, if
appropriate, by proceedings timely instituted, (3) the Borrowers shall keep the Administrative
Agent informed of the status of such contest at reasonable intervals; (4) if the Borrowers are not
providing security as provided in clause (5) below, adequate reserves are established in accordance
with GAAP

12

 

with respect to the contested item; (5) either such contest operates to suspend collection or
enforcement (as the case may be) of the contested item or the Borrowers have deposited with
Administrative Agent security (which may be in the form of a bond) in amount and form reasonably
satisfactory to Administrative Agent; and (6) the failure to pay or comply with the contested item
during the period of the contest is not reasonably likely to result in a Material Adverse Effect.

     “Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or regulatory authority)
thereof, any court or other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

     “Guaranties” shall mean individually and collectively, (i) the Carveout Guaranties,
executed by the TOUSA Guarantors and F/R Member in favor of the Administrative Agent, in each case
in the form attached to this Agreement as Exhibit A-2; (ii) the Recourse Guaranty executed
by each Operating Company Entity (other than Borrowers) in favor of the Administrative Agent, in
each case in the form attached to this Agreement as
Exhibit A-1; and (iii) the Completion
Guaranty executed by the TOUSA Guarantors in favor of the Administrative Agent, in the form
attached to this Agreement as Exhibit O.

     “Guarantors” shall mean, individually and collectively, the TOUSA Guarantors, F/R
Member and the Operating Company Entities (other than Borrowers), each in its capacity as a
guarantor under the Guaranties to which it is a party.

     “Hazardous Materials” shall mean any flammable materials, explosives, radioactive
materials, hazardous wastes, toxic substances or related materials, including, without limitation,
any substances defined as or included in the definitions of “hazardous substances,” “hazardous
wastes,” “hazardous materials,” or “toxic substances” under any applicable federal, state, or local
laws or regulations.

     “Hazardous Materials Claims” shall mean any enforcement, cleanup, removal or other
governmental or regulatory action or order with respect to the Property, pursuant to any Hazardous
Materials Laws, and/or any claim asserted in writing by any third party relating to damage,
contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials.

     “Hazardous Materials Laws” shall mean any applicable federal, state or local
laws, ordinances or regulations relating to Hazardous Materials.

     “Hedging Contracts” shall mean all Interest Rate Contracts, foreign exchange
contracts, currency swap or option agreements, forward contracts, commodity swap, purchase or
option agreements, other commodity price hedging arrangements, and all other similar agreements or
arrangements designed to alter the rights of any Person arising from fluctuations in interest
rates, currency valves or commodity prices.

     “Impositions” shall mean all taxes (including all ad valorem, sales (including those
imposed on lease rentals), use, single business, gross receipts, value added, intangible
transaction, privilege or license or similar taxes), governmental assessments (including all
assessments

13

 

for public improvements or benefits, whether or not commenced or completed prior to the
date of this Agreement and whether or not commenced or completed within the term of this
Agreement), water, sewer or other rents and charges, excises, levies, fees (including license,
permit, inspection, authorization and similar fees), and all other governmental charges, in each
case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Mortgaged Property and/or any Rents (including all interest and
penalties thereon), which at any time prior to, during or in respect of the term of the Loan may be
assessed or imposed on or in respect of or be a Lien upon (a) Borrowers or their Subsidiary
Entities (including all income, franchise, single business or other taxes), (b) the Mortgaged
Property, or any other collateral delivered or pledged to the Administrative Agent, or any Rents
therefrom or any estate, right, title or interest therein, or (c) any occupancy, operation, use or
possession of, or sales from, or activity conducted on, or in connection with the Mortgaged
Property.

     “Improvements” shall have the meaning set forth in the Security Instruments.

     “Increased-Cost Lender” shall have the meaning set forth in Section
2.16(3) of this Agreement.

     “Indebtedness” of any Person shall mean without duplication (a) all indebtedness of
such Person for borrowed money, (b) all obligations of such Person evidenced by notes, bonds,
debentures or similar instruments that bear interest, (c) all reimbursement and all obligations
with respect to letters of credit and bankers’ acceptances, (d) all indebtedness for the deferred
purchase price of property or services, other than trade payables incurred in the Ordinary Course
of Business that are not overdue, (e) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to Property acquired by such
Person (even though the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such Property), (f) all capital lease
obligations of such Person and the present value of future rental payments under all synthetic
leases, (g) all guaranty obligations of such Person with respect to obligations of another Person
that would otherwise constitute Indebtedness hereunder, (h) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any stock or stock equivalents of
such Person, valued, in the case of redeemable preferred stock, at the greater of its voluntary
liquidation preference and its involuntary liquidation preference plus accrued and unpaid
dividends, (i) all payments that such Person would have to make in the event of an early
termination on the date Indebtedness of such Person is being determined in respect of Hedging
Contracts of such Person and (j) all Indebtedness of the type referred to above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any lien upon or in Property (including accounts and general intangibles) owned by such Person,
even though such Person has not assumed or become liable for the payment of such Indebtedness but
only to the extent of the lesser of (x) the amount of such Indebtedness and (y) the fair market
value of the Property securing such Indebtedness. Notwithstanding the foregoing, “Indebtedness”
shall not include (x) the face amount of any undrawn Performance Letters of Credit, (y)
Indebtedness Associated with Assets Not Owned, or (z) obligations with respect to options to
purchase Real Property that have not been exercised.

14

 

     “Indebtedness Associated with Assets Not Owned” shall mean any Indebtedness of any
land bank, or any other third party Indebtedness that would be required to be included on the
balance sheet or financial statements of the Borrowers pursuant to any accounting rule requiring
such Consolidation, except to the extent that such Indebtedness would otherwise fall under clause
(g) of the definition of “Indebtedness” with respect to any of the Borrowers.

     “Indemnified Liabilities” shall have the meaning given such term in Section
9.14 of this Agreement.

     “Indemnified Person” shall have the meaning given such term in Section
9.14 of this Agreement.

     “Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

     “Initial Maturity Date” shall mean the earlier of (i) August 1, 2008, and (ii) the
date that all Loans shall become due and payable in full hereunder, whether by acceleration or
otherwise.

     “Insurance Requirements” shall mean, collectively, (i) all material terms of any
insurance policy required pursuant to this Agreement and (ii) all material regulations and then
current standards applicable to or affecting the Mortgaged Property or any part thereof or any use
or condition thereof, which may, at any time, be recommended by the Board of Fire Underwriters, if
any, having jurisdiction over the Mortgaged Property, or such other body exercising similar
functions.

     “Interest Coverage Ratio” shall mean, at any time, the ratio of (i) EBITDA for the
fiscal quarter then most recently ended, to (ii) Interest Incurred for such period.

     “Interest Expense” shall mean, for any period, for any Person for any period, total
interest expense of such Person and its Subsidiaries for such period determined on a Consolidated
basis in conformity with GAAP. Notwithstanding that GAAP may otherwise provide, the Borrowers shall
not be required to include in Interest Expense the amount of any premium paid to prepay
Indebtedness.

     “Interest Incurred” shall mean for any period the aggregate amount (without
duplication and determined in each case in conformity with GAAP) of interest incurred during such
period, whether such interest was expensed or capitalized, paid, accrued, or scheduled to be paid
or accrued by Borrowers and their Subsidiary Entities during such period, including (a) original
issue discount and non-cash interest payments of accruals on any Indebtedness, (b) the interest
portion of all deferred payment obligations, and (c) all commissions, discounts, and other fees and
charges owed with respect to bankers’ acceptances and letter of credit financings and Interest Rate
Contracts. For purposes of this definition, (i) interest on any capital lease obligations shall be
deemed to accrue at an interest rate reasonably determined by Borrowers to be the rate of interest
implicit in such obligations in conformity with GAAP, and (ii) interest incurred attributable to
any Indebtedness represented by the guaranty of an obligation of another Person shall be deemed to
be the interest incurred attributable to the Indebtedness so guaranteed.

     “Interest Period” shall mean (i) with respect to any portion of the Loan which
bears interest at the Applicable Base Rate or the default rate under
Section 2.9(5),
the period

15

 

commencing on the date of such borrowing and ending on the last day of the calendar month in
which made, and each succeeding calendar month thereafter; provided, that if any Base Rate
Borrowing is converted to a LIBO Rate Borrowing, the applicable Base Rate Interest Period shall end
on such date of conversion; and (ii) with respect to any portion of the Loan which bears interest
at the Applicable LIBO Rate, the period commencing on the date of such Loan and ending on the
numerically corresponding day in the calendar month that is one, two, three or six months
thereafter, as specified in the applicable Borrowing Request or Rate Request. Notwithstanding the
foregoing: (x) if any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case of a LIBO Rate
Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and (y) any Interest Period
pertaining to a LIBO Rate Borrowing that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month of such Interest
Period. For purposes hereof, the date of a Loan initially shall be the date on which such Loan is
made and thereafter shall be the effective date of the most recent conversion or continuation of
such Loan.

     “Interest Rate Contracts” shall mean all interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements and interest rate insurance.

     “Interest Rate Determination Date” means, with respect to any Interest Period, the
date that is two Business Days prior to the first day of such Interest Period.

     “Investment” shall mean, with respect to any Person, (i) any purchase or other
acquisition by that Person of Securities, or of a beneficial interest in Securities, issued by any
other Person, (ii) any purchase by that Person of a Property or assets (Real Property or Personal
Property) from a Person other than a wholly owned Subsidiary of the Borrowers, and (iii) any loan
(other than loans to employees), advance (other than deposits with financial institutions available
for withdrawal on demand, prepaid expenses, accounts receivable, advances to employees and similar
items made or incurred in the Ordinary Course of Business) or capital contribution by that Person
to any other Person, including, without limitation, all Indebtedness to such Person arising from a
sale of property by such Person other than in the ordinary course of its business. The amount of
any Investment shall be the original cost of such Investment, plus the cost of all additions
thereto less the amount of any return of capital or principal to the extent such return is in cash
with respect to such Investment without any adjustments for increases or decreases in value or
write-ups, write-downs or write-offs with respect to such Investment.

     “Investment Vehicle” shall mean TE/TOUSA, LLC, a Delaware limited liability
company.

     “Investment Vehicle Limited Liability Company Agreement” shall mean the limited
liability company agreement dated as of July 28, 2005 by and between TOUSA Member and F/R Member.

     “Issuing Lender” shall mean DBTCA, in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.3(10) of this
Agreement.

16

 

     “IRS” shall mean the Internal Revenue Service or any entity succeeding to
any of its principal functions under the Code.

     “Joint Venture” shall mean, as to any Person: (i) any corporation fifty percent (50%)
or less of the outstanding securities having ordinary voting power of which shall at the time be
owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries
or by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability
company, association, joint venture or similar business organization fifty percent (50%) or less of
the ownership interests having ordinary voting power of which shall at the time be so owned or
controlled.

     “Junior Mezzanine Borrower” shall mean TE/TOUSA Mezzanine Two, LLC, a Delaware limited
liability company, in its capacity as the borrower under the Junior Mezzanine Credit Agreement.

     “Junior Mezzanine Credit Agreement” shall mean that certain Junior Mezzanine Credit
Agreement, dated as of the Closing Date, by and among Junior Mezzanine Borrower and the lenders
(each, a “Junior Mezzanine Lender”) and any Mezzanine Agent party thereto, in form
and substance reasonably satisfactory to Administrative Agent, as such agreement may be Modified.

     “Knowledge” shall mean the knowledge of any Responsible Officer of any Borrower or any
Transaction Party, as applicable, or any other Person delegated by such Responsible Officer as to
any particular matter, of the facts or matters that each such Person could reasonably be expected
to discover or otherwise become aware of after due inquiry in the course of performing their duties
for any Borrower or any Transaction Party, as applicable, in the Ordinary Course of Business.

     “Lead Arranger” shall mean Deutsche Bank Securities Inc., in its capacity as lead
arranger for the credit facility evidenced by this Agreement, together with its permitted
successors and assigns.

     “Lease” shall mean any lease, sublease or subsublease, letting, license, concession,
or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to
which any Person is granted or permitted to have by the applicable Operating Company Entity a
possessory interest in, or right to use or occupy all or any portion of any space in the Mortgaged
Property or any facilities at the Mortgaged Property, and every Modification thereto and every
guarantee of the performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.

     “Lenders” shall mean each of the lenders from time to time party to this
Agreement, including any Assignee permitted pursuant to Section 9.8 of this Agreement.

     “Letter of Credit” shall mean any standby letter of credit issued pursuant
to this Agreement.

     “Letter of Credit Collateral” shall have the meaning given such term in
Section 2.3(11)(iii) of this Agreement.

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     “Letter of Credit Collateral Account” shall have the meaning given such term in
Section 2.3(11)(i) of this Agreement.

     “Letter of Credit Disbursement” shall mean a payment made by the Issuing Lender
pursuant to a Letter of Credit.

     “Letter of Credit Exposure” shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all Letter of Credit Disbursements that have not yet been reimbursed by or on behalf of
the Borrowers at such time. The Letter of Credit Exposure of any Lender at any time shall be its
Applicable Percentage of the total Letter of Credit Exposure at such time.

     “Letter of Credit Fee” shall have the meaning given such term in Section
2.19(2) of this Agreement.

     “Letter of Credit Request” shall have the meaning given such term in Section
2.3(2) of this Agreement.

     “Letter of Credit Sublimit” means the lesser of (i) $75,000,000 (as it may be
increased pursuant to Section 2.22(3) of this Agreement) and (ii) the aggregate unused
amount of the Revolving Commitments then in effect.

     “LIBO Rate” shall mean, with respect to any Interest Period, the per annum rate for
such Interest Period and for an amount equal to the amount of the Loan shown on Dow Jones Telerate
Page 3750 (or any equivalent successor page) at approximately 11:00 (London time) two Eurodollar
Business Days prior to the first day of such Interest Period or if such rate is not quoted, the
arithmetic average as determined by the Administrative Agent of the rates at which deposits in
immediately available Dollars in an amount equal to the amount of the Loan having a maturity
approximately equal to such Interest Period are offered to four (4) reference banks to be selected
by the Administrative Agent in the London interbank market, at approximately 11:00 a.m. (London
time) two Eurodollar Business Days prior to the first day of such Interest Period.

     “LIBO Rate Loan” shall mean a Loan bearing interest at a rate determined by reference
to the LIBO Rate.

     “LIBO Reserve Percentage” shall mean with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and other reserves and
taking into account any transitional adjustments) which is imposed under Regulation D on
eurocurrency liabilities. As of the Closing Date, the LIBO Reserve Percentage is zero, provided,
however, there can be no assurance as to what such amount may be in the future.

     “Loan” shall mean any loan made by any Lender pursuant to this Agreement.

     “Lien” shall mean any security interest, mortgage, pledge, lien, claim on property,
charge or encumbrance (including any conditional sale or other title retention agreement), any
lease in the nature thereof, and any agreement to give any security interest.

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     “Loan
Documents” shall mean, collectively, this Agreement, the Notes, the
Guaranties, each Security Instrument, the Pledge Agreement, the Environmental Indemnity, and all
other documents executed and/or delivered by Borrowers in connection with the Loan including any
certifications or representations delivered by or on behalf of Borrower Parties.

     “Lots Under Development” shall mean Entitled Land where (i) all governmental permits,
consents and approvals have been obtained for all work necessary to improve such Entitled Land to
Finished Lot stage; and (ii) substantial physical site improvement has commenced and is continuing.

     “Management Fee Payment Date” shall mean the later of (i) October 1, 2006; and (ii)
the date (at the end of a calendar quarter) the ratio (expressed as a percentage) of Total Funded
Debt to Total Book Capitalization (calculated on a pro forma basis with effect given to the
Permitted Management Fee being paid) is less than 70%.

     “Margin Stock” shall mean “margin stock” as defined in Regulation U.

     “Material Adverse Effect” shall mean any of the following: (1) with respect to (a)
TOUSA Guarantors, taken as a whole, or (b) Borrowers and Borrowers’ Subsidiaries taken as a whole,
a material adverse change in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of such Persons from and after the
Closing Date; (2) a material impairment of the ability of any Borrower Party to otherwise perform
under any Loan Document; or (3) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Borrower Party of any Loan Document.

     “Material Casualty” shall have the meaning set forth in Section
5.5(2).

     “Material Condemnation” shall have the meaning set forth in
Section 5.5(6).

     “Material Lease” shall mean any Lease (a) demising a premises within a Mortgaged
Property that is more than 10,000 net rentable square feet or (b) that is for a term equal to
or greater than sixty (60) months (exclusive of existing renewal options in such Lease).

     “Maturity Date” shall mean the Initial Maturity Date as the same may be extended
as provided in Section 2.6. The Maturity Date shall be subject to acceleration upon an
Event of Default as otherwise provided in this Agreement.

     “Maximum
Credit” shall mean, at any time, the lesser of (a) the Revolving Commitments in
effect at such time and (b) the amount by which Borrowing Base at such time exceeds the amount of
Senior Funded Debt outstanding at such time.

     “Mezzanine Agent” shall mean the Administrative Agent under each of the Mezzanine
Loans.

     “Mezzanine Borrowers” shall mean, collectively, the Junior Mezzanine Borrower and the
Senior Mezzanine Borrower.

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     “Mezzanine Credit Agreements” shall mean, collectively, the Junior Mezzanine
Credit Agreement and the Senior Mezzanine Credit Agreement.

     “Mezzanine Debt Service” shall mean for any period, all scheduled payments due and
owing in connection with the Mezzanine Loans, in accordance with the terms of the Mezzanine Loan
Documents, including all payments of interest and principal. Mezzanine Debt Service shall not
include any payments of principal upon maturity or the acceleration of the Mezzanine Loans
following an event of default thereunder.

     “Mezzanine Funded Debt” shall mean Indebtedness of the Mezzanine Borrowers arising
from the Mezzanine Loans.

     “Mezzanine Lender” shall mean the lenders from time to time party to the Junior
Mezzanine Credit Agreement and the Senior Mezzanine Credit Agreement.

     “Mezzanine Loan” shall mean a term loan made pursuant to the Junior Mezzanine Credit
Agreement or the Senior Mezzanine Credit Agreement.

     “Mezzanine Loan Documents” shall mean any of the Mezzanine Credit Agreements and all
other documents or agreements executed and delivered by Mezzanine Borrowers for the benefit of any
Mezzanine Agent or any Mezzanine Lender in connection therewith, as each may be Modified.

     “Model Homes” shall mean all Units which are used as models, sales offices, or design
centers to market a particular real estate development project and the contents thereof.

     “Modifications” shall mean any amendments, supplements, modifications, renewals,
replacements, consolidations, severances, substitutions and extensions of any document or
instrument from time to time; “Modify,” “Modified,” or related words shall have meanings
correlative thereto.

     “Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.

     “Mortgaged Property” shall mean the “Property” or the “Collateral” as such term is
defined in the Security Instruments and, if the context requires, “Mortgaged Property”
shall mean the individual subject or applicable Mortgaged Property and “Mortgaged Property”
or “Mortgaged Properties” shall mean each and every Mortgaged Property collectively, less,
however, any immaterial property or any individual Mortgaged Property released from the Lien of any
Security Instrument pursuant to the terms hereof. The initial Mortgaged Properties are identified
in Schedule II to this Agreement.

     “Multiemployer Plan” shall mean a “multiemployer plan” (within the meaning of Section
4001(a)(3) of ERISA) and to which any Consolidated Entity or any ERISA Affiliate makes, is making,
or is obligated to make contributions or, during the preceding three calendar years, has made, or
been obligated to make, contributions.

20

 

     “Net Worth” shall mean the net worth of the Borrowers as determined in
conformance with GAAP; for the purposes of calculating Net Worth it is understood that equity in
the Borrowers will include member loans to the extent permitted under this Agreement.

     “Non-Consenting Lender” shall have the meaning set forth in Section
2.16(3) of this Agreement.

     “Note” shall mean a promissory note in substantially the form of that attached to this
Agreement as Exhibit E-l, Exhibit E-2 or
Exhibit E-3, as applicable (or such other
form approved by the Borrowers, the applicable Lender and the Administrative Agent) issued by the
Borrowers at the request of a Lender pursuant to this Agreement.

     “NPL” shall have the meaning set forth in Section 4.15 of this Agreement.

     “Obligations” shall mean any and all debts, obligations and liabilities of the
Borrower or the other Borrower Parties to the Administrative Agent, the other Agents and the
Lenders (whether now existing or hereafter arising, voluntary or involuntary, whether or not
jointly owed with others, direct or indirect, absolute or contingent, liquidated or unliquidated,
and whether or not from time to time decreased or extinguished and later increased, created or
incurred), arising out of or related to the Loan Documents. Subject to Section 9.21 hereof,
for purposes of defining “Obligations” secured by the Security Instruments, “Obligations” shall not
include any obligation or liability of any Borrower hereunder which survives the repayment of Loans
and the termination of this Agreement.

     “Officers’ Certificate” shall mean as to any entity, a certificate executed on
behalf of such entity by a Responsible Officer.

     “Operating Company” shall mean EH/TRANSEASTERN, LLC, a limited liability company
organized under the laws of the state of Delaware.

     “Operating Company Entities” shall mean the Operating Company and any of its wholly
owned Subsidiaries that own any portion of the Mortgaged Property.

     “Ordinary Course of Business” shall mean, with respect to a specific Person, the
ordinary course of such Person’s business, substantially as conducted by any such Person prior to
and as of the Closing Date, and (A) undertaken by such Person in good faith and not for purposes of
evading any covenant or restriction in any Loan Document, and (B) which shall not in any event
interfere with the ongoing operation of the Property of such Person in a manner consistent with
similar properties and shall not interfere with the day-to-day operations of such Property as
contemplated in the Loan Documents.

     “Originating Lender” shall have the meaning set forth in Section
9.8(4) of this Agreement.

     “Organizational Documents” shall mean: (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of designation or instrument relating to the
rights of preferred shareholders of such corporation, and all applicable resolutions of the board
of directors (or any committee thereof) of such corporation, (b) for any partnership, the
partnership

21

 

agreement, any certificate of formation, and any other instrument or agreement relating to the
rights between the partners or pursuant to which such partnership is formed, (c) for any limited
liability company, the operating agreement, any articles of organization or formation, and any
other instrument or agreement relating to the rights between the members, pertaining to the
manager, or pursuant to which such limited liability company is formed, and (d) for any trust, the
trust agreement and any other instrument or agreement relating to the rights between the trustors,
trustees and beneficiaries, or pursuant to which such trust is formed.

     “Original Revolving Commitment Termination Date” shall mean the earliest to occur of
(i) August 1, 2008, (ii) the date the Revolving Commitments are permanently reduced to zero
pursuant to Section 2.6(2), and (iii) the date of the termination of the Revolving
Commitments pursuant to Section 7.1.

     “Other Charges” shall mean maintenance charges, impositions other than Impositions,
and any other charges, including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Mortgaged Property, now or hereafter levied or
assessed or imposed against the Mortgaged Property or any part thereof by any Governmental
Authority, other than those required to be paid by a Tenant pursuant to its respective Lease.

     “Other Taxes” shall mean any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies of a Governmental Authority with
respect to any payment made under any Loan Document or from the execution, delivery or enforcement
of any Loan Document.

     “Participant” shall have the meaning given such term in Section 9.8(4) of
this Agreement.

     “Payment Date” shall mean the date payments of interest are due pursuant to
Section 2.9(3).

     “PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to
any of its principal functions under ERISA.

     “Pension Plan” shall mean a pension plan (as defined in Section 3(2) of ERISA) subject
to Title IV of ERISA which the Consolidated Entities or any ERISA Affiliate sponsors, maintains, or
to which it makes, is making, or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years, but excluding any Multiemployer Plan.

     “Performance Letters of Credit” shall mean any letter of credit issued (a) on behalf
of a Person in favor of a Governmental Authority, including, without limitation, any utility,
water, or sewer authority, or other similar entity, for the purpose of assuring such Governmental
Authority that such Person or an Affiliate of such Person will properly and timely complete work it
has agreed to perform for the benefit of such Governmental Authority; or (b) in lieu of other
contract performance, including, without limitation, bid and performance bonds.

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     “Permitted Debt” shall mean collectively,

               (i) the Obligations;

               (ii) the Indebtedness described in Schedule 6.21 to this
Agreement;

               (iii) trade payables and other liabilities incurred in the Ordinary Course of Business of
the applicable Transaction Party and payable by on or behalf of such Person in respect of the
operation of the Mortgaged Property, not secured by Liens on the Mortgaged Property (other than
those liens which are the subject of a Good Faith Contest or Liens which are Permitted
Encumbrances), provided, however, that (but subject to the remaining terms of this
definition) each such amount shall be paid within sixty (60) days following the date on which each
such amount is incurred;

               (iv) with respect to the Operating Company Entities, Indebtedness (if any) under
agreements otherwise permitted under the Loan Documents (including Purchase/Option Agreements and
equipment leases); and

               (v) with respect to the Operating Company Entities, non-recourse Indebtedness secured by
Real Property the Fair Market Value of which does not exceed $10 million.

     “Permitted Encumbrances” shall mean:

               (i) Liens pursuant to any Loan Document;

               (ii) Liens (other than environmental Liens and Liens in favor of the PBGC) with respect
to the payment of Taxes, assessments or governmental charges, including liens securing community
development district bonds or similar bonds issued by any Governmental Authority to accomplish
similar purposes, and in all cases which are not yet due and payable or which are the subject of a
Good Faith Contest;

               (iii) Liens listed on Schedule 6.12(1) of this Agreement;

               (iv) Purchase money Liens on Personal Property granted by the
Borrowers or their Subsidiary Entities or Capital Leases as otherwise permitted under this Agreement and limited in each case to the property purchased with the proceeds of such purchase
money Indebtedness or subject to such Capital Lease; provided,
however, that no such Lien
shall attach to any Mortgaged Property;

               (v) Liens on the Real Property owned by the Operating Company and securing Indebtedness
as permitted under clause (v) of the definition of Permitted Debt;

               (vi) Liens incurred or deposits made in the Ordinary Course of
Business in connection with worker’s compensation, unemployment insurance and other types of social
security, other than any Lien imposed by ERISA; and

23

 

               (vii) Any Liens with respect to the Mortgaged Property consisting of the following:

                    (A) Liens or deposits to secure the performance of bids,
tenders, sales, options, contracts (other than for the repayment of borrowed money), surety, stay,
appeal, customs, indemnity, performance obligations or other similar bonds or obligations (not
constituting Indebtedness), arising in the Ordinary Course Of Business;

                    (B) Liens incidental to the conduct of the business of the
Borrowers and their Subsidiary Entities consisting of encumbrances arising by reason of zoning
restrictions, easements, licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar encumbrances on the use of Real Property which (i) do not
materially detract from the value of such Real Property or interfere with the ordinary conduct of
the business conducted and proposed to be conducted at such Real Property, (ii) violate any other
terms and conditions of this Agreement; and (iii) are not incurred in connection with the borrowing
of money or the obtaining of advances or credit;

                    (C) Liens arising under leases or subleases of Real Property not
otherwise prohibited under the terms of this Agreement and which do not in the aggregate materially
detract from the value of such Real Property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such Real Property;

                    (D) Liens arising from filing UCC financing statements relating solely to leases not
prohibited by this Agreement and otherwise in the Ordinary Course Of Business of Borrowers;

                    (E) Liens set forth in the Title Policy issued with respect to the Security Instruments;

                            (F) Liens securing judgments for the payment of money not
constituting an Event of Default or securing appeal or other surety bonds related to such
judgments;

provided, that with respect to any Liens described in subsections (vii)(A), (B) or (F), all
such Liens shall be junior and subordinate to the lien of the Administrative Agent created by the
Security Instruments.

     “Permitted Entitlement Cure Payment” shall mean a one-time capital contribution by
TOUSA Member made to Operating Company (through the Upper Tier Entities) to prevent a default by
Operating Company under the Asset Purchase Agreement as a result of its failure to timely make a
Permitted Entitlement Payment.

     “Permitted Entitlement Payment” shall mean the “Entitlement Payments” described in
Section 3.6(b) of the Asset Purchase Agreement, provided that each of the conditions to such
payments have been fully satisfied in accordance with the Asset Purchase Agreement and
Administrative Agent has received reasonable evidence thereof.

24

 

     “Permitted Management Fee” shall mean the management fee to be paid to TOUSA Member or
its designated Affiliate pursuant to Section 6.6 of the Investment Vehicle Limited
Liability Company Agreement, provided that such fee is then due and payable thereunder.

     “Permitted Post Closing Sale Payments” shall mean the payments to be made to Seller
pursuant to Section 3.6 of the Asset Purchase Agreement, provided that: (i) in no event shall the
aggregate amount of such payments exceed $75 million; (ii) each of the conditions to such payments
have been fully satisfied in accordance with the Asset Purchase Agreement and Administrative Agent
has received reasonable evidence thereof.

     “Permitted Tax Distribution” shall mean for any period, an amount equal to the taxable
income of the Investment Vehicle taking into account the taxable income of its direct and indirect
Subsidiary Entities, multiplied by the highest marginal tax rate (including federal, state and
local taxes) applicable to a corporation residing in New York, New York in effect for the taxable
period with respect to which the income is deemed earned for federal income tax purposes, taking
into account the character and type of income earned and the deductibility of state and local
income taxes for federal income tax purposes, which Permitted Tax Distribution shall be made to the
Investment Vehicle for distribution to its members in accordance with its Organizational Documents.

     “Person” shall mean an individual, partnership, corporation (including a business
trust), joint stock company, estate, trust, limited liability company, unincorporated association,
Joint Venture or other entity, or a Governmental Authority.

     “Personal Property” shall have the meaning set forth in the granting clause of the
Security Instruments.

     “Plan” shall, mean an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Consolidated Entities or any ERISA Affiliate sponsors or maintains or to which the
Consolidated Entities or any ERISA Affiliate makes, is making, or is obligated to make
contributions and includes any Pension Plan, other than a Multiemployer Plan.

     “Pledge Agreement” shall mean the Pledge Agreement dated as of even date herewith, in
substantially the form attached to this Agreement as
Exhibit F, executed by the Pledgor,
pursuant to which shall be pledged to Administrative Agent, for the ratable benefit of the Lenders,
all of each Pledger’s direct ownership interests in the Operating Company.

     “Pledgor” shall mean TOUSA Senior, in its capacity as pledgor under the Pledge
Agreement.

     “Potential Default” shall mean an event which but for the lapse of time or the giving
of notice, or both, would constitute an Event of Default.

     “Preferential Payment” shall have the meaning set forth in Section
2.20(5) of this Agreement.

     “Prime Rate” shall mean the fluctuating per annum rate announced from time to time by
DBTCA or any successor Administrative Agent at its principal office in New York, New York as

25

 

its “prime rate”. The Prime Rate is a rate set by DBTCA as one of its base rates and serves as
the basis upon which effective rates of interest are calculated for those loans making reference
thereto, and is evidenced by the recording thereof after its announcement in such internal
publication or publications as DBTCA may designate. The Prime Rate is not tied to any external
index and does not necessarily represent the lowest or best rate of interest actually charged to
any class or category of customers. Each change in the Prime Rate will be effective on the day the
change is announced within DBTCA.

     “Principal Office” means, for each of Administrative Agent, Swing Line Lender and
Issuing Lender, the Contact Office, or such other office as such Person may from time to time
designate in writing to Borrowers, Administrative Agent and each Lender.

     “Priority Capital Investment” shall mean the priority capita] provided by TOUSA
Member to the Investment Vehicle in the amount of $20 million.

     “Pro Rata Share” means (i) with respect to all payments, computations and other
matters relating to the Term Loan of any Lender, the percentage obtained by dividing (a) the Term
Loan Exposure of that Lender by (b) the aggregate Term Loan Exposure of all Lenders and (ii) with
respect to all payments, computations and other matters relating to the Revolving Commitment or
Revolving Loans of any Lender or any Letters of Credit issued or participations purchased therein
by any Lender or any participations in any Swing Line Loans purchased by any Lender, the percentage
obtained by dividing (a) the Revolving Exposure of that Lender by (b) the aggregate Revolving
Exposure of all Lenders. For all other purposes with respect to each Lender, “Pro Rata Share” means
the percentage obtained by dividing (A) an amount equal to the sum of the Term Loan Exposure and
the Revolving Exposure by (B) an amount equal to the sum of the aggregate Term Loan Exposure and
the aggregate Revolving Exposure.

     “Proceeds” shall mean amounts, awards or payments payable to or for the benefit of the
Borrower (including, without limitation, amounts payable under any title insurance policies
covering the Mortgaged Property owner’s ownership interest in the Mortgaged Property) or the
Administrative Agent in respect of all or any part of the Mortgaged Property in connection with a
Casualty or Condemnation thereof (after the deduction therefrom and payment to the Borrower and the
Administrative Agent, respectively, of any and all reasonable expenses incurred by the Borrower and
the Administrative Agent in the recovery thereof, including all attorneys’ fees and disbursements,
the fees of insurance experts and adjusters and the costs incurred in any litigation or arbitration
with respect to such Casualty or Condemnation).

     “Property” of any Person shall mean, collectively and severally, any and all Real
Property and all Personal Property owned or occupied by the subject Person. “Property” shall
include all Capital Stock owned by the subject Person in a Subsidiary Entity.

     “Purchase/Option Agreements” shall mean (i) those certain purchase and option
agreements identified in Schedule 4.23(5); and (ii) agreements pursuant to which the
Operating Company Entities have the option or right to purchase Real
Property; provided, however, that the agreement is either substantially in the form previously approved by
Administrative Agent or Administrative Agent reasonably approves the agreement.

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     “Qualified Purchase/Option Agreement” shall mean a Purchase/Option Agreement with
respect to Qualified Option Land.

     “Qualified Option Land” shall mean Real Property that satisfies each of the following
conditions:

               (i) the Real Property is the subject of a Purchase/Option Agreement as to which each of the
representations set forth in Section 4.23 are true, correct, and complete;

               (ii) the Operating Company Entity party to such Purchase/Option
Agreement has made a non-refundable cash deposit to the owner of the Real Property (which deposit
may be in the form of a letter of credit), which deposit (or letter of credit) is in an amount
which equals or exceeds 10% of the purchase price for the subject Real Property pursuant to such
Purchase/Option Agreement;

               (iii) the Operating Company Entity party to such Purchase/Option
Agreement has satisfied all conditions to the closing of the purchase of the subject Real Property
other than those exclusively within the control of the Operating Company Entity to perform or waive
and (A) all such conditions are customary and commercially reasonable, and (B) upon performance or
waiver of such conditions, the owner of the subject Real Property shall be obligated to convey it
to the Operating Company Entity;

               (iv) Administrative Agent shall have received a Title Policy in the
amount of 120% of the Fair Market Value of the Real Property (unless Administrative Agent shall
have approved, in its sole discretion, such lesser amount of insurance), naming Administrative
Agent as the insured, covering the subject Real Property and Qualified Purchase/Option Agreement,
reflecting no Liens on such Real Property other than Permitted Encumbrances, and otherwise in form
and substance reasonably satisfactory to Administrative Agent. In no event shall any borrowed
indebtedness secured by such Real Property be deemed a Permitted Encumbrance without the express
written consent of Administrative Agent in its sole and absolute discretion (and, without limiting
Administrative Agent’s other options, it shall have the right to condition any consent with respect
thereto upon Administrative Agent’s review and approval of the underlying loan documents evidencing
and securing such Indebtedness and upon the lender’s execution and delivery of a non-disturbance
agreement in form a substance satisfactory to Administrative Agent in its sole discretion).

               (v) Administrative Agent shall have received reports and other
information, in form, scope and substance reasonably satisfactory to Administrative Agent
regarding environmental matters relating to the Real Property, which reports shall include a
Phase I Report and shall demonstrate compliance with Section 4.15..

               (vi) Administrative Agent shall have received a duly executed Collateral Assignment of
Contracts, Contract Rights, and Related Property Interests (a “Assignment of Qualified
Contract”) in recordable form with respect to the subject Real Property and Qualified
Purchase/Option Agreement, which Assignment of Qualified Contract shall be substantially in the
form attached hereto as Exhibit P.

27

 

               (vii) Administrative Agent shall have received an Appraisal with respect to the subject
Real Property; and

               (viii) Administrative Agent shall have received a Consent and Estoppel Agreement from the fee
owner of the subject Real Property, which agreement shall specifically acknowledge Administrative
Agent’s rights under the Assignment of Qualified Contract, Administrative Agent’s reasonable cure
rights in the event of a default by the Operating Company Entity under the Qualified
Purchase/Option Agreement, and shall otherwise be in form and substance satisfactory to
Administrative Agent.

     “Rate Request” shall mean a request for the conversion or continuation of a Base Rate
Loan or LIBO Rate Loan as set forth in 
Section 2.5(2).

     “Real Property” shall mean each of those parcels (or portions thereof) of real
property, improvements and fixtures thereon and appurtenances thereto now or hereafter owned or
leased by the Borrowers and their Subsidiaries.

     “Recourse Guaranty” shall mean a Guaranty to be executed by any Subsidiary Entity of
the Borrowers pursuant to Section 6.5(5).

     “Refunded Swing Line Loans” shall have the meaning given to such term in Section
2.2(b)(b)(iv).

     “Register” shall have the meaning set forth in Section 9.8(2) of this
Agreement.

     “Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and shall include any successor or other regulation of
said Board of Governors relating to reserve requirements applicable to member banks of the Federal
Reserve System.

     “Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System (12 C.F.R. § 221), as the same may from time to time be Modified.

     “Regulation T” shall mean Regulation T of the Board of Governors of the Federal
Reserve System (12 C.F.R. § 221), as the same may from time to time be Modified.

     “Regulation X” shall mean Regulation X of the Board of Governors of the Federal
Reserve System (12 C.F.R. § 221), as the same may from time to time be Modified.

     “Release
Property” shall have the meaning set forth in
Section 6.4(5)(iii) of
this Agreement.

     “Rents” shall mean all rents, rent equivalents, moneys payable as damages or in lieu
of rent or rent equivalents, royalties (including, without limitation, all oil and gas or other
mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including,
without limitation, security, utility and other deposits), accounts, cash, issues, profits, charges
for services rendered, termination or surrender fees, penalties and other consideration of whatever
form or nature arising from the use or enjoyment of all or any portion of the Mortgaged Property,

28

 

or received by or paid to or for the account of or benefit of the Borrowers or any Operating
Company Entity from any and all sources arising from or attributable to the Mortgaged Property,
including the rental or surrender of any office space, retail space, parking space, halls, stores,
and offices of every kind, the rental or licensing of signs, sign space or advertising space and
all membership fees and dues, receipts, accounts receivable, cancellation fees, credit card
receipts and other receivables relating to or arising from rentals, rent equivalent income, income
and profits from guest rooms, meeting rooms, conference and banquet rooms, food and beverage
facilities, health clubs, spas, vending machines, parking facilities, telecommunication and
television systems, guest laundry, the provision or sale of other goods and services, and Proceeds,
if any, from business interruption or other loss of income insurance.

     “Replacement Lender” shall have the meaning set forth in Section 2.16(3)
of this Agreement.

     “Reportable Event” shall mean any of the events set forth in Section 4043(b) of ERISA
or the regulations thereunder, other than any such event for which the thirty (30)-day notice
requirement under ERISA has been waived in regulations issued by the PBGC.

     “Requisite Class Lenders” shall mean, at any time of determination, (i) for the class
of Lenders having Term Loan Exposure, Lenders holding more than 662/3% of the
aggregate Term Loan Exposure of all Lenders; and (ii) for the class of Lenders having Revolving
Exposure, Lenders holding more than 66 2/3% of the aggregate Revolving Exposure of all
Lenders.

     “Required Lenders” shall mean at any date, Lenders holding not less than 66 2/3% of
the Aggregate Commitments.

     “Requirements of Law” shall mean, as to any Person, the Organizational Documents of
such Person, and any law, treaty, rule or regulation, or a final and binding determination of an
arbitrator or a determination of a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or any of its
property is subject, including, without limitation, Environmental Laws and all covenants,
restrictions and conditions now or hereafter of record which may be applicable to the Borrowers or
to the Mortgaged Property and the Improvements and the Building Equipment thereon, or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration, repair or reconstruction
of the Mortgaged Property and the Improvements and the Building Equipment thereon including,
without limitation, building and zoning codes and ordinances and laws relating to handicap
accessibility.

     “Reserve Adjusted LIBO Rate” shall mean the rate per annum (rounded upward, if
necessary, to the next higher 1/16 of one percent) calculated as of the first day of such Interest
Period in accordance with the following formula:

	 	 	 
	Reserve Adjusted LIBO Rate =

	 	LR
	 

	 	1-LRP

where

LR = LIBO Rate 
LRP = LIBO Reserve Percentage

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     “Responsible Financial Officer” shall mean, with respect to any Person, the chief
financial officer, controller or treasurer of such Person or any other officer, partner or member
having substantially the same authority and responsibility.

     “Responsible Officer” shall mean, with respect to any Person, the president, chief
executive officer, vice president, Responsible Financial Officer, general partner, managing member
of such Person or any other officer, partner or member having substantially the same authority and
responsibility.

     “Restoration” shall have the meaning set forth in Section 5.5(3) of this
Agreement.

     “Revolving Commitment” means the commitment of a Revolving Lender to make or otherwise
fund any Revolving Loan and to acquire participations in Letters of Credit and Swing Line Loans
hereunder and “Revolving Commitments” means such commitments of all Lenders in the aggregate. The
amount of each Lender’s Revolving Commitment, if any, is set forth on Appendix II-2 or in the
applicable Assignment and Acceptance Agreement, subject to any adjustment or reduction pursuant to
the terms and conditions hereof.

     “Revolving Commitment Period” means the period from the Closing Date to but
excluding the Revolving Commitment Termination Date.

     “Revolving Commitment Termination Date” shall mean the Original Revolving
Commitment Termination Date as the same may be extended pursuant to
Section 2.6(5).

     “Revolving Exposure” means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Revolving Commitments, that Lender’s Revolving
Commitment; and (ii) after the termination of the Revolving Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that Lender, (b) in the case of
Issuing Bank, the aggregate Letter of Credit Exposure in respect of all Letters of Credit issued by
that Lender (net of any participations by Lenders in such Letters of Credit), (c) the aggregate
amount of all participations by that Lender in any outstanding Letters of Credit or any
unreimbursed drawing under any Letter of Credit, (d) in the case of Swing Line Lender, the
aggregate outstanding principal amount of all Swing Line Loans (net of any participations therein
by other Lenders), and (e) the aggregate amount of all participations therein by that Lender in any
outstanding Swing Line Loans.

     “Revolving Lender” means any Lender that has a Pro Rata Share in the Revolving
Loans.

     “Revolving Loan” means a Loan made by a Lender to Borrowers pursuant to
Section 2.2(a).

     “S&P” shall mean Standard & Poor’s Rating Services, a division of the McGraw-Hill
Companies, Inc., or any successor thereto.

     “Securities” shall mean any stock, shares, partnership interests, membership
interests, voting trust certificates, certificates of interest or participation in any profit
sharing agreement or arrangement, bonds, debentures, options, warrants, notes, or other evidences
of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments

30

 

commonly known as “securities” or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

     “Security Instruments” shall mean, individually and collectively, with respect to each
Mortgaged Property, the mortgage, deed of trust, collateral assignment, or other document set forth
opposite the name of such Mortgaged Property on Schedule II to this Agreement.

     “Seller” shall mean, collectively, Transeastern Properties, Inc. and various of its
affiliate “Companies” as further described in the Asset Purchase Agreement.

     “Senior Funded Debt” shall mean Indebtedness of the Borrowers arising from the
Obligations.

     “Senior Mezzanine Borrower” shall mean TE/TOUSA Mezzanine, LLC, a Delaware
limited liability company, in its capacity as the borrower under the Senior Mezzanine Credit
Agreement.

     “Senior Mezzanine Credit Agreement” shall mean that certain Senior Mezzanine Credit
Agreement, dated as of the Closing Date, by and among Senior Mezzanine Borrower and the lenders
(each, a “Senior Mezzanine Lender”) and any Mezzanine Agent party thereto, in form
and substance reasonably satisfactory to Administrative Agent, as such agreement may be Modified.

     “Single Purpose Entity” means a Person, other than an individual, which (A) is formed
or organized solely for the purpose of holding, directly or indirectly, an ownership interest in
the Mortgaged Property or the Capital Stock of Persons holding directly or indirectly, ownership
interests in the Mortgaged Property (in respect of such Person, its
“Purpose”), (B) does not engage
in any business unrelated to its Purpose, (C) has not and will not have any assets other than those
related to its Purpose, and has not or will not have any Indebtedness, other than as expressly
permitted by the Loan Documents or Mezzanine Loan Documents, as applicable, (D) maintains its own
separate books and records and its own accounts, in each case which are separate and apart from the
books and records and accounts of any other Person, (E) holds itself out as being a Person,
separate and apart from any other Person, (F) does not and will not commingle its funds or assets
with those of any other Person, (G) conducts its own business in its own name, (H) maintains
separate financial statements (except where consolidated financial statements are permitted or
required by applicable law or GAAP, provided that such consolidated statements shall reflect that
such Person and any other Person covered by such financial statements are separate legal entities)
and files its own tax returns (except as otherwise required or permitted by applicable law), (I)
pays its own debts and liabilities when they become due out of its own funds, (J) observes all
partnership, corporate, limited liability company or trust formalities, as applicable, and does all
things necessary to preserve its existence as an entity, (K) except as expressly permitted by the
Loan Documents or Mezzanine Loan Documents, as applicable, maintains an arm’s-length relationship
with its Affiliates and shall not enter into any Contractual Obligations with any Affiliates except
upon terms and conditions that are intrinsically fair and substantially similar to those that would
be available on an arms-length basis (taking into account the relative standards of quality and
reputation of the party rendering

31

 

the service) with third parties other than an Affiliate, (L) pays the salaries of its own
employees and maintains a sufficient number of employees in light of its contemplated business
operations, (M) does not guarantee or otherwise obligate itself with respect to the debts of any
other Person, or hold out its credit as being available to satisfy the obligations of any other
Person, except as expressly contemplated by the Loan Documents or Mezzanine Loan Documents, as
applicable, (N) does not acquire obligations or securities of its partners, members or
shareholders, (O) allocates fairly and reasonably shared expenses, including any overhead for
shared office space, (P) uses separate stationery, invoices, and checks, (Q) does not and will not
pledge its assets for the benefit of any other Person (except in connection with Permitted
Encumbrances) or make any loans or advances to any other Person, (R) does and will correct any
known misunderstanding regarding its separate identity, (S) maintains adequate capital in light of
its contemplated business operations, and (T) has and will have a partnership or operating
agreement, certificate of incorporation or other organizational document which complies with the
requirements set forth in this definition. In addition, the Organizational Documents of such Person
shall provide that such Person without the unanimous consent of all of the partners, directors or
members, as applicable, shall not with respect to itself or to any other Person in which it has a
direct or indirect legal or beneficial interest (i) seek or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or other similar official for the
benefit of the creditors of such Person or all or any portion of such Person’s properties, or (b)
take any action that might cause such Person to become insolvent, petition or otherwise institute
insolvency proceedings or otherwise seek any relief under any laws relating to the relief from
debts or the protection of debtors generally.

     “Sold Homes” shall mean all Units (including Model Homes) on which a building permit
has been issued and construction has begun or has been completed, for which the Operating Company
Entity has entered into a Bona Fide Sales Contract.

     “Solvent” shall mean, when used with respect to any Person, that at the time of
determination: (i) the fair saleable value of its assets is in excess of the total amount of its
liabilities (including, without limitation, contingent liabilities); (ii) the present fair saleable
value of its assets is greater than its probable liability on its existing debts as such debts
become absolute and matured; (iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments) as they mature; and (iv) it
has capital sufficient to carry on its business as conducted and as proposed to be conducted.

     “Subordinated Creditor” shall have the meaning given such term in Section
5.15(1) of this Agreement.

     “Subordinated Indebtedness” shall have the meaning given such term in Section
5.15(1) of this Agreement.

     “Subsidiary” shall mean, with respect to any Person: (a) any corporation more than
fifty percent (50%) of the outstanding securities having ordinary voting power of which shall at
the time be owned or Controlled, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, or (b) any partnership, limited
liability company, association, joint venture or similar business organization more than fifty

32

 

percent (50%) of the ownership interests having ordinary voting power of which shall at the
time be so owned or Controlled.

     “Subsidiary Entities” with respect to any Person, shall mean a Subsidiary or
Joint Venture of such Person.

     “Survey” shall mean a survey of the Mortgaged Property prepared by a surveyor licensed
in the State and satisfactory to the Administrative Agent and the company or companies issuing the
Title Policy, and containing a certification of such surveyor satisfactory to the Administrative
Agent.

     “Swing Line Lender” means DBTCA in its capacity as Swing Line Lender hereunder,
together with its permitted successors and assigns in such capacity.

     “Swing Line Loan” means a Loan made by Swing Line Lender to Borrowers pursuant to
Section 2.2(b).

     “Swing
Line Note” means a promissory note in the form of Exhibit E-3, as it may
be Modified, in accordance with the terms hereof.

     “Swing Line Sublimit” means the lesser of (i) $20,000,000, and (ii) the aggregate
unused amount of Revolving Commitments then in effect.

     “Tax Affiliate” shall mean, with respect to any Person, (a) any Subsidiary of such
Person, and (b) any Affiliate of such Person with which such Person files or is eligible to file
Consolidated, combined or unitary tax returns.

     “Tax Expense” shall mean (without duplication), for any period, total tax expense (if
any) attributable to income and franchise taxes based on or measured by income, whether paid or
accrued, of the Consolidated Entities.

     “Tax Returns” shall have the meaning set forth in Section 4.7 of this
Agreement.

     “Taxes” shall mean any and all federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental, customs duties, capital stock, franchise, profits, withholding, social
security, unemployment, disability, Real Property, Personal Property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

     “Tenant” shall mean any Person leasing, subleasing or otherwise occupying any portion
of the Mortgaged Property or permitted to use any portion of the facilities at the Mortgaged
Property, other than the Manager and its employees, agents and assigns.

     “Term Lender” shall mean a Lender under a Term Loan.

     “Term Loan” means a Term Loan made by a Term Lender to Borrowers pursuant to
Section 2.1.

33

 

     “Term Loan Commitment” means the commitment of a Lender to make or otherwise fund
a Term Loan and “Term Loan Commitments” means such commitments of all Lenders in the aggregate. The
amount of each Lender’s Term Loan Commitment, if any, is set
forth on Appendix II-1 or in the
applicable Assignment and Acceptance Agreement, subject to any adjustment or reduction pursuant to
the terms and conditions hereof. The aggregate amount of the Term Loan Commitments as of the
Closing Date is $335,000,000.

     “Term Loan Exposure” means, with respect to any Term Lender, as of any date of
determination, the outstanding principal amount of the Term Loans of such Lender.

     “Terminated Lender” shall have the meaning given set forth in Section 2.16(3)
of this Agreement.

     “Title Company” shall mean Chicago Title Insurance Company.

     “Title Policy” shall mean an ALTA mortgagee title insurance policy in a form
reasonably acceptable to the Administrative Agent (or, if the Mortgaged Property is in a state
which does not permit the issuance of such ALTA policy, such form as shall be permitted in such
state and acceptable to the Administrative Agent ) issued by the Title Company with respect to the
Mortgaged Property and insuring the lien of a Security Instrument.

     “Total Book Capitalization” shall mean the sum of (i) Total Funded Debt and (ii)
Borrowers’ Net Worth.

     “Total Funded Debt” shall mean the sum of (i) the Senior Funded Debt; and (ii)
the Mezzanine Funded Debt.

     “Total Utilization of Revolving Commitments” means, as at any date of determination,
the sum of (i) the aggregate principal amount of all outstanding Revolving Loans (other than
Revolving Loans made for the purpose of repaying any Refunded Swing Line Loans or made for the
purpose of reimbursing Issuing Lender for any amount drawn under any Letter of Credit, but not yet
so applied), (ii) the aggregate principal amount of all outstanding Swing Line Loans, and (iii) the
Letter of Credit Exposure.

     “Total Revolving Commitments” shall mean the Revolving Commitments of all Revolving
Lenders in the aggregate. The Total Revolving Commitments as of the Closing Date are $115,000,000.

     “TOUSA” shall mean Technical Olympic USA, Inc., a Delaware corporation.

     “TOUSA Guarantors” shall mean TOUSA and TOUSA Member.

     “TOUSA Member” shall mean TOUSA Homes, L.P., a Delaware limited partnership.

     “TOUSA Senior” shall mean TE/TOUSA SENIOR, LLC, a Delaware limited liability company.

34

 

     “Transaction Parties” shall mean, jointly and severally, each of the Borrower
Parties and the Upper Tier Entities.

     “Transactional Affiliate” shall have the meaning set forth in Section
6.6 of this Agreement.

     “Transeastern Assets” shall mean the assets being acquired under the Asset
Purchase Agreement.

     “Transfer” shall mean to, directly or indirectly, sell, assign, convey, mortgage,
transfer, pledge, hypothecate, encumber, grant a security interest in, exchange or otherwise
dispose of any beneficial interest or grant any option or warrant with respect to, or where used as
a noun, a direct or indirect sale, assignment, conveyance, transfer, pledge or other disposition of
any beneficial interest by any shall mean whatsoever whether voluntary, involuntary, by operation
of law or otherwise.

     “Type” of Loan shall mean (i) with respect to either Term Loans or Revolving
Loans, a Base Rate Loan or a LEBO Rate Loan, and (ii) with respect to Swing Line Loans, a Base Rate
Loan.

     “UCC” shall mean the Uniform Commercial Code in effect in the State.

     “Unfunded Pension Liability” shall mean the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that Plan’s assets,
determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section
412 of the Code for the applicable plan year.

     “Unentitled Land” shall mean any Real Property owned by the Operating Company Entity
that is not Entitled Land or does not otherwise meet the criteria
necessary for inclusion in the Borrowing Base.

     “Unimproved Land” shall mean Entitled Land owned exclusively by a Operating Company
Entity on which no construction of on-site infrastructure improvements has begun.

     “Unit” shall mean a single or multi family residential unit, including a condominium
unit and a townhouse unit.

     “Unit Construction Cost” shall mean, with respect to each Unit, the sum of (i) the
“hard costs” associated with the construction of the Unit; (ii) the “soft costs” associated with
the construction of the Unit, including property taxes, appraisal costs, architects, and engineers
fees, entitlement costs, project supervision costs and review and inspection fees; (iii) “up-front
fees” with respect to such Unit including building permit fees, tap fees and fees of Governmental
Authorities which are required to be paid prior to the start of the construction of the Unit; and
(iv) any amount representing the allocated financing costs and other costs with respect to such
Unit (determined in accordance with GAAP). With respect to Model Homes, the Unit Construction Cost
shall also include upgrades associated with the use of such Unit as a Model Home.

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     “Unrestricted Cash” shall mean all cash and Cash Equivalents of the Borrowers and
their Subsidiary Entities that is (i) not subject to a Lien or other restriction (including,
without limitation, any escrow in connection with a Bona Fide Sales Contract); and (ii) are held in
a Deposit Account subject to a Blocked Deposit Account Agreement.

     “Unsold Homes Under Construction” shall mean all Units on Finished Lots for which
building permits have been issued and substantial construction has commenced, but which have not
been completed, and for which there is no Bona Fide Sales Contract.

     “Upper Tier Entities” shall mean the Mezzanine Borrowers, the Investment Vehicle and
any other Person that is a borrower or pledgor under the Mezzanine Loans.

     “USA Patriot Act” shall have the meaning set forth in Section 4.28(1) of
this Agreement.

     “Usage Percentage” shall mean, for any period, the ratio, expressed as a percentage,
of (i) the sum of (x) the average daily outstanding amount of the Revolving Loans and (y) the
average daily drawn face amount of all outstanding Letters of Credit, to (ii) the Total Revolving
Commitments during such period.

     “U.S. Government Obligations” shall mean any direct obligations of, or obligations
guaranteed as to principal and interest by, the United States Government or any agency or
instrumentality thereof, provided that such obligations are backed by the full faith and credit of
the United States. Any such obligation must be limited to instruments that have a predetermined
fixed dollar amount of principal due at maturity that cannot vary or change. If any such obligation
is rated by S&P, it shall not have an “r” highlighter affixed to its rating. Interest must be fixed
or tied to a single interest rate index plus a single fixed spread (if any), and move
proportionately with said index. U.S. Government Obligations include, but are not limited to: U.S.
Treasury direct or fully guaranteed obligations, Farmers Home Administration certificates of
beneficial ownership, General Services Administration participation certificates, U.S. Maritime
Administration guaranteed Title XI financing, Small Business Administration guaranteed
participation certificates or guaranteed pool certificates, U.S. Department of Housing and Urban
Development local authority bonds, and Washington Metropolitan Area Transit Authority guaranteed
transit bonds. In no event shall any such obligation have a maturity in excess of 365 days.

     1.2 Other Interpretive Provisions.

          In this Agreement and in the other Loan Documents, except as otherwise expressly
provided:

               (i) words expressing the singular include the plural and vice versa;

               (ii) words denoting gender include all genders;

               (iii) words denoting the whole of a matter or thing include a part of the matter or
thing;

36

 

               (iv) the term “Mortgaged Property” shall be construed to be followed by the phrase “or
any part or portion thereof or interest therein”;

               (v) words and expressions importing natural Persons include Persons that are not natural
Persons and vice versa;

               (vi) the words “hereof, “herein” and “hereunder” and words of similar import shall refer
to this Agreement or the applicable Loan Document, as the case may be, as a whole and not to any
particular provision of this Agreement or such Loan Document;

               (vii) the words “include”, “includes”, “including” and similar terms shall be construed as
if followed by the words “without being limited to”;

               (viii) the words “shall” and “will” shall be construed as obligatory terms;

               (ix) the word “may” shall be construed as a discretionary term (and, as if followed by
“but shall not be obligated to”);

               (x) all references to sections, schedules and exhibits are to
sections,
schedules and exhibits in or to this Agreement or the applicable Loan Document, as the case may be;

               (xi) article,
section, subsection and paragraph headings and captions and any tables of
contents are included solely for convenience of reference only and shall not constitute a part of
this Agreement or the applicable Loan Document, as the case may be, for any other purpose;

               (xii) exhibits and schedules annexed to this Agreement or the applicable Loan Document, as
the case may be, are hereby incorporated into this Agreement or such Loan Document, as the case may
be, as a part of this Agreement or such Loan Document, as the case may be, with the same effect as
if set forth in the body of this Agreement or such Loan Document, as the case may be;

               (xiii) the recitals to this Agreement are incorporated into this Agreement and form a part
of this Agreement and the Borrowers represent and warrant that, as of the date hereof, Recital A is
true and correct;

               (xiv) a reference to a document or agreement, including this Agreement or any Loan
Document, includes a reference to such document or agreement as novated, amended, modified,
supplemented or replaced from time to time;

               (xv) derivatives of a word defined herein or therein, as the case may be, have a
corresponding meaning;

               (xvi) a reference to writing includes printing, engraving, typewriting,
lithography, photography and any other mode of reproducing or representing words, figures or
symbols in a permanent and visible form;

37

 

               (xvii) a reference to any legislation or to any provision of any legislation shall
include any amendment to, and any modification, replacement or re-enactment thereof, any
legislative provision substituted therefor, and all regulations, rules, rulings and statutory
instruments issued thereunder or pursuant thereto;

               (xviii) a reference to a party to this Agreement, any Loan Document or
another agreement or document includes such party’s executors, administrators, successors and
permitted assigns (provided that the foregoing shall not be deemed to permit any Transfer
of any ownership interest that is otherwise prohibited hereunder);

               (xix) if a provision binds two or more parties that provision binds those parties jointly
and severally;

               (xx) if a party comprises two or more Persons, the provisions of this
Agreement or the applicable Loan Document, as the case may be, binding that party bind those
Persons jointly and severally;

               (xxi) if a payment obligation comes due on a day which is not a Business Day, payment
shall be due on the immediately following Business Day;

               (xxii) attorneys’, consultants’ and experts’ fees shall include customary disbursements and
related charges of the professional involved;

               (xxiii) “Approval”, “Approved”, “approval” or “approved” shall mean, as the context so
determines, an approval in writing given to the party seeking approval after full disclosure to the
party giving approval of all material facts necessary in order to determine whether approval should
be granted. Approvals by Agent or any Lender may be granted or withheld in the absolute and sole
discretion of Agent or such Lender unless this Agreement or any Loan Document expressly provides
otherwise. Similarly, where a matter is stated to be in Agent’s or any Lender’s opinion, in Agent’s
or any Lender’s judgment, acceptable to Agent or any Lender, satisfactory to Agent or any Lender,
required by Agent or any Lender, determined by Agent or any Lender or subject to Agent’s or any
Lender’s consent or like phrases, unless this Agreement or any Loan Document expressly provides
otherwise, such terms shall be construed to mean in Agent’s or such Lender’s sole opinion, in
Agent’s or such Lender’s sole judgment, acceptable to Agent or such Lender in its sole discretion,
satisfactory to Agent or such Lender in its sole discretion, required by Agent or such Lender in
its sole discretion, determined by Agent or such Lender in its sole discretion, and subject to
Agent’s or such Lender’s consent in its sole discretion;

               (xxiv) whenever a consent, approval, request or like act may not be unreasonably
withheld, it shall also not be unreasonably delayed or conditioned; and

               (xxv) the principle of construing this Agreement or any other Loan Document against the
party that drafted the same is expressly excluded.

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ARTICLE II

CREDIT FACILITY 

     2.1
Term Loans.

          (a)
Term Loan Commitments. Subject to the terms and conditions hereof, each Term
Lender severally agrees to make, on the Closing Date, a Term Loan to Borrowers in an amount equal
to such Lender’s Term Loan Commitment, if any. Borrowers may make only one borrowing under the Term
Loan Commitment which shall be on the Closing Date. Any amount borrowed under this Section 2.1(1)
and subsequently repaid or prepaid may not be reborrowed. All amounts owed hereunder with respect
to the Term Loans shall be paid in full no later than the Maturity Date. Each Lender’s Term Loan
Commitment shall terminate immediately and without further action on the Closing Date after giving
effect to the funding of such Lender’s Term Loan Commitment on such date.

          (b)
Borrowing Mechanics for Term Loans.

               (i) Borrowers shall deliver to Administrative Agent a fully executed
Borrowing Request no later than one (1) day prior to the Closing Date. Promptly upon receipt by
Administrative Agent of such Borrowing Request, Administrative Agent shall notify each Term Lender
of the proposed borrowing.

               (ii) Each Term Lender shall make its Term Loan available to
Administrative Agent not later than 12:00 p.m. (New York time) on the Closing Date, by wire
transfer of same day funds in Dollars, at Administrative Agent’s Contact Office. Upon satisfaction
or waiver of the conditions precedent specified herein, Administrative Agent shall make the
proceeds of the Term Loans available to Borrowers on the Closing Date by causing an amount of same
day funds in Dollars equal to the proceeds of all such Loans received by Administrative Agent from
Lenders to be credited to the account of Borrowers at Administrative Agent’s Contact Office or to
such other account as may be designated in writing to Administrative Agent by Borrowers.

     2.2
(a) Revolving Loans.

           (1)
Revolving Commitments. During the Revolving Commitment Period, subject to
the terms and conditions hereof, each Revolving Lender severally agrees to make Revolving Loans to
Borrowers in an aggregate amount up to but not exceeding such Lender’s Revolving Commitment, if
any; provided, that after giving effect to the making of any Revolving Loans in no event
shall (i) any Lender be obligated to make a Revolving Loan in excess of such Lender’s Pro Rata
Share of the Available Credit; and (ii) the Total Utilization of Revolving Commitments exceed the
Available Credit. Amounts borrowed pursuant to this
Section 2.2(a)(1) may be repaid and
reborrowed during the Revolving Commitment Period. Each Lender’s Revolving Commitment shall expire
on the Revolving Commitment Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Commitments shall be paid in full
no later than such date.

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     (2) Borrowing
Mechanics for Revolving Loans.

               (i) Except
pursuant to Section 2.3(3), Revolving Loans that are Base Rate Loans or
LIBO Rate Loans shall be made in an aggregate minimum amount of $1,000,000 and integral multiples
of $100,000 in excess of that amount.

               (ii) Whenever Borrowers desire that Lenders make Revolving Loans, Borrowers shall
deliver to Administrative Agent a fully executed and delivered Borrowing Request no later than
10:00 a.m. (New York time) at least three Business Days in advance of the proposed Credit Date in
the case of a LIBO Rate Loan, and at least one Business Day in advance of the proposed Credit Date
in the case of a Revolving Loan that is a Base Rate Loan. Except as otherwise provided herein, a
Borrowing Request for a Revolving Loan that is a LIBO Rate Loan shall be irrevocable on and after
the related Interest Rate Determination Date, and Borrowers shall be bound to make a borrowing in
accordance therewith.

               (iii) Notice of receipt of each Borrowing Request in respect of
Revolving Loans, together with the amount of each Lender’s Pro Rata Share thereof, if any, together
with the applicable interest rate, shall be provided by Administrative Agent to each applicable
Revolving Lender by telefacsimile with reasonable promptness, but (provided Administrative Agent
shall have received such notice by 10:00 a.m. (New York time)) not later than 2:00 p.m. (New York
time) on the same day as Administrative Agent’s receipt of such Notice from Borrowers.

               (iv) Each Revolving Lender shall make the amount of its Revolving Loan available to
Administrative Agent not later than 12:00 p.m. (New York time) on the applicable Credit Date by
wire transfer of same day funds in Dollars, at Administrative Agent’s Contact Office. Except as
provided herein, upon satisfaction or waiver of the conditions precedent specified herein,
Administrative Agent shall make the proceeds of such Revolving Loans available to Borrowers on the
applicable Credit Date by causing an amount of same day funds in Dollars equal to the proceeds of
all such Revolving Loans received by Administrative Agent from Revolving Lenders to be credited to
the account of Borrowers at Administrative Agent’s Contact Office or such other account as may be
designated in writing to Administrative Agent by Borrowers.

     2.2(b)
Swing Line Loans.

          (a)
Swing Line Loan Commitments. During the Revolving Commitment Period, subject to
the terms and conditions hereof, Swing Line Lender hereby agrees to make Swing Line Loans to
Borrowers in the aggregate amount up to but not exceeding the lesser of the Swing Line Sublimit and
the Available Credit; provided, that after giving effect to the making of any Swing Line
Loan, in no event shall the Total Utilization of Revolving Commitments exceed the Revolving
Commitments then in effect. Amounts borrowed pursuant to this Section 2.2(b) may be repaid and
reborrowed during the Revolving Commitment Period. Swing Line Lender’s Revolving Commitment shall
expire on the Revolving Commitment Termination Date and all Swing Line Loans and all other amounts
owed hereunder with respect to the Swing Line Loans and the Revolving Commitments shall be paid in
full no later than such date.

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          (b)
Borrowing Mechanics for Swing Line Loans.

               (i) Swing Line Loans shall be made in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount.

               (ii) Whenever Borrowers desire that Swing Line Lender make a Swing Line Loan, Borrowers shall
deliver to Administrative Agent a Funding Notice no later than 12:00 p.m. (New York City time) on
the proposed Credit Date.

               (iii) Swing Line Lender shall make the amount of its Swing Line Loan available to
Administrative Agent not later than 2:00 p.m. (New York City time) on the applicable Credit Date by
wire transfer of same day funds. Except as provided herein, upon satisfaction or waiver of the
conditions precedent specified herein, Administrative Agent shall make the proceeds of such Swing
Line Loans available to Borrowers on the applicable Credit Date by causing an amount of same day
funds equal to the proceeds of all such Swing Line Loans received by Administrative Agent from
Swing Line Lender to be credited to the account of Borrowers maintained with Administrative Agent
in New York City, or to such other account as may be designated in writing to Administrative Agent
by Borrowers.

               (iv) With respect to any Swing Line Loans which have not been
voluntarily prepaid by Borrowers pursuant to Section 2.8, Swing Line Lender may at any time in its
sole and absolute discretion, deliver to Administrative Agent (with a copy to Borrowers), no later
than 11:00 a.m. (New York City time) at least one Business Day in advance of the proposed Credit
Date, a notice (which shall be deemed to be a Funding Notice given by Borrowers) requesting that
each Lender holding a Revolving Commitment make Revolving Loans that are Base Rate Loans to
Borrowers on such Credit Date in an amount equal to the amount of such Swing Line Loans (the
“Refunded Swing Line Loans”) outstanding on the date such notice is given which
Swing Line Lender requests Lenders to prepay. Anything contained in this Agreement to the contrary
notwithstanding, (1) the proceeds of such Revolving Loans made by the Lenders pursuant to this
Section 2.2(b)(b)(iv) (other than Swing Line Lender) shall be immediately delivered by
Administrative Agent to Swing Line Lender (and not to Borrowers) and applied to repay a
corresponding portion of the Refunded Swing Line Loans and (2) on the day such Revolving Loans are
made, Swing Line Lender’s Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be
paid with the proceeds of a Revolving Loan made by Swing Line Lender to Borrowers, and such portion
of the Swing Line Loans deemed to be so paid shall no longer be outstanding as Swing Line Loans and
shall no longer be due under the Swing Line Note of Swing Line Lender but shall instead constitute
part of Swing Line Lender’s outstanding Revolving Loans to Borrowers and shall be due under the
Revolving Loan Note issued by Borrowers to Swing Line Lender. Borrowers hereby authorize
Administrative Agent and Swing Line Lender to charge Borrowers’ accounts with Administrative Agent
and Swing Line Lender (up to the amount available in each such account) in order to immediately pay
Swing Line Lender the amount of the Refunded Swing Line Loans to the extent of the proceeds of such
Revolving Loans made by Lenders, including the Revolving Loans deemed to be made by Swing Line
Lender, are not sufficient to repay in full the Refunded Swing Line Loans. If any portion of any
such amount paid (or deemed to be paid) to Swing Line Lender should be recovered by or on behalf of
Borrowers from Swing Line Lender in bankruptcy, by assignment

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for the benefit of creditors or otherwise, the loss of the amount so recovered shall be
ratably shared among all Lenders in the manner contemplated by Section 2.11.

               (v) If for any reason Revolving Loans are not made pursuant to
Section 2.2(b)(b)(iv) in an amount sufficient to repay any amounts owed to Swing Line Lender in
respect of any outstanding Swing Line Loans on or before the third Business Day after demand for
payment thereof by Swing Line Lender, each Lender holding a Revolving Commitment shall be deemed
to, and hereby agrees to, have purchased a participation in such outstanding Swing Line Loans, and
in an amount equal to its Pro Rata Share of the applicable unpaid amount together with accrued
interest thereon. Upon one Business Day’s notice from Swing Line Lender, each Lender holding a
Revolving Commitment shall deliver to Swing Line Lender an amount equal to its respective
participation in the applicable unpaid amount in same day funds at the Principal Office of Swing
Line Lender. In order to evidence such participation each Lender holding a Revolving Commitment
agrees to enter into a participation agreement at the request of Swing Line Lender in form and
substance reasonably satisfactory to Swing Line Lender. In the event any Lender holding a Revolving
Commitment fails to make available to Swing Line Lender the amount of such Lender’s participation
as provided in this paragraph, Swing Line Lender shall be entitled to recover such amount on demand
from such Lender together with interest thereon for three Business Days at the rate customarily
used by Swing Line Lender for the correction of errors among banks and thereafter at the Base Rate,
as applicable.

               (vi) Notwithstanding anything contained herein to the contrary, (1)
each Lender’s obligation to make Revolving Loans for the purpose of repaying any Refunded Swing
Line Loans pursuant to the second preceding paragraph and each Lender’s obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the immediately preceding paragraph shall
be absolute and unconditional and shall not be affected by any circumstance, including without
limitation (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may
have against Swing Line Lender, any Borrower Party or any other Person for any reason whatsoever;
(B) the occurrence or continuation of a Potential Default or Event of Default; (C) any adverse
change in the business, operations, properties, assets, condition (financial or otherwise) or
prospects of any Borrower Party; (D) any breach of this Agreement or any other Loan Document by any
party thereto; or (E) any other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing; provided that such obligations of each Lender are subject to the
condition that Swing Line Lender believed in good faith that all conditions under Section 3.3 to
the making of the applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, were
satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line Loans were made, or the
satisfaction of any such condition not satisfied had been waived by the Required Lenders prior to
or at the time such Refunded Swing Line Loans or other unpaid Swing Line Loans were made; and (2)
Swing Line Lender shall not be obligated to make any Swing Line Loans (A) if it has elected not to
do so after the occurrence and during the continuation of a Potential Default or Event of Default
or (B) at a time when a Funding Default exists unless Swing Line Lender has entered into
arrangements reasonably satisfactory to it and Borrowers to eliminate Swing Line Lender’s risk with
respect to the Defaulting Lender’s participation in such Swing Line Loan, including by cash
collateralizing such Defaulting Lender’s Pro Rata Share of the outstanding Swing Line Loans.

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     2.3
Issuance of Letters of Credit.

          (1)
General. Subject to the terms and conditions set forth herein, in addition to the
Revolving Loans and the Swing Line Loans provided for in Section 2.2(a) and Section
2.2(b), respectively, the Borrowers may request the Issuing Lender to issue Letters of
Credit for its own account in such form as is acceptable to the Issuing Lender in its reasonable
determination at any time prior to the date that is thirty (30) days prior to the Revolving
Commitment Maturity Date. Letters of Credit issued hereunder shall constitute utilization of the
Revolving Commitments. All Letters of Credit issued pursuant to this Agreement must be denominated
in Dollars and must be standby letters of credit. The only drawings permitted on the Letters of
Credit issued pursuant to this Agreement shall be sight drawings.

          (2)
Notice of Issuance, Amendment, Renewal or Extension. Whenever it requires that a
Letter of Credit be issued, the Borrowers shall give the Administrative Agent and the Issuing
Lender written notice thereof at least three (3) Business Days (or such shorter period acceptable
to the Issuing Lender) in advance of the proposed date of issuance (which shall be a Business Day),
which notice shall be in the form of Exhibit L (each such
notice being a “Letter of Credit
Request”). Whenever the Borrowers require an amendment, renewal or extension of any outstanding
Letter of Credit, the Borrowers shall, on their letter head, give the Administrative Agent and the
Issuing Lender written notice thereof at least three (3) Business Days (or such shorter period
acceptable to the Issuing Lender) in advance of the proposed date of the amendment (which shall be
a Business Day). Letter of Credit Requests and amendment requests may be delivered by facsimile.
Promptly after the issuance or amendment (including a renewal or
extension) of a Letter of Credit;
the Issuing Lender shall notify the Borrowers and the Administrative Agent, in writing, of such
issuance or amendment and such notice will be accompanied by a copy of such issuance or amendment.
Upon receipt of such notice, the Administrative Agent shall promptly notify each Revolving Lender
of such issuance or amendment and if requested to do so by any Revolving Lender, the Administrative
Agent shall provide such Revolving Lender with a copy of such issuance or amendment.

          (3)
Limitations on Amounts. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the aggregate Letter of Credit Exposure shall not exceed the
Letter of Credit Sublimit; and (ii) the sum of the total Revolving Exposures shall not exceed the
Maximum Credit. Each Letter of Credit shall be in an amount of $50,000 or larger.

          (4)
Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date twelve months after the date of the issuance of such Letter
of Credit or, in the case of any renewal or extension thereof (which renewals or extensions,
subject to clause (ii) hereof may be automatic pursuant to the terms of such Letter of Credit),
twelve months after the then-current expiration date of such Letter of Credit and (ii) the date
that is thirty days prior to the Revolving Commitment Maturity Date.

          (5)
Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) by the Issuing Lender, and without any further

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action on the part of the Issuing Lender or the Revolving Lenders, the Issuing Lender hereby
grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Lender,
an undivided interest and participation in such Letter of Credit equal to such Revolving Lender’s
Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit. Each
Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to
this section in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or Event of Default or reduction or
termination of the Revolving Commitments, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for account of the Issuing Lender, such Revolving Lender’s Pro Rata Share of
each Letter of Credit Disbursement made by the Issuing Lender promptly upon the request of the
Issuing Lender at any time from the time of such Letter of Credit Disbursement until such Letter of
Credit Disbursement is reimbursed by Borrowers or at any time after any reimbursement payment is
required to be refunded to Borrowers for any reason. Each such payment shall be made in the same
manner as provided in Section 2.7 with respect to Loans made by such Revolving Lender (and
Section 2.7 shall apply, mutatis mutandis, to the payment obligations of the
Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Lender the
amounts so received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrowers pursuant to the next following paragraph,
the Administrative Agent shall distribute such payment to the Issuing Lender or, to the extent that
the Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing
Lender, then to such Revolving Lenders and the Issuing Lender as their interests may appear. Any
payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Lender for
any Letter of Credit Disbursement shall not constitute a Revolving Loan and shall not relieve the
Borrowers of their obligation to reimburse such Letter of Credit Disbursement.

          (6)
Reimbursement. If the Issuing Lender shall make any Letter of Credit
Disbursement in respect of a Letter of Credit, the Borrowers shall reimburse the Issuing Lender in
respect of such Letter of Credit Disbursement by paying to the Administrative Agent an amount equal
to such Letter of Credit Disbursement not later than 1:00 p.m. (New York time) on (i) the Business
Day that the Borrowers receive notice of such Letter of Credit Disbursement, if such notice is
received prior to 11:00 a.m. (New York time) or (ii) the Business Day immediately following the day
that the Borrowers receive such notice, if such notice is not received prior to such time;
provided that, anything contained in this Agreement to the contrary notwithstanding, (A)
unless the Borrowers shall have notified Administrative Agent and such Issuing Lender prior to 1:00
P.M. (New York time) on the date of such Letter of Credit Disbursement that the Borrowers intend to
reimburse such Issuing Lender for the amount of such payment with funds other than the proceeds of
a Base Rate Loan, the Borrowers shall be deemed to have delivered an irrevocable Borrowing Request
to Administrative Agent containing all of the representations set forth in Exhibit I
requesting Revolving Lenders to make Base Rate Loans on the Business Day following such Letter of
Credit Disbursement in an amount equal to the amount of such payment and (B) subject to
satisfaction or written waiver of the conditions specified in Section 2.2(a) and
3.2 in accordance with the terms thereof, Revolving Lenders shall, on such date, make Base
Rate Loans in the amount of such payment, the proceeds of which shall be applied directly by

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Administrative Agent to reimburse such Issuing Lender for the amount of such payment;
provided, further, that no Default or Event of Default shall be deemed to exist by reason
of a failure of the Borrowers to reimburse such Issuing Lender pending the making of such Revolving
Loans in accordance with the terms hereof, including the prior satisfaction or written waiver of
the conditions specified in Section 2.2(a) and 3.2 in accordance with the terms
thereof; and ‘ provided, further that, if for any reason proceeds of Revolving Loans are
not received by Issuing Lender on such date in an amount equal to the amount of such payment,
Borrowers shall immediately reimburse Issuing Lender, on demand, in an amount in same day funds
equal to the excess of the amount of such payment over the aggregate amount of such Revolving
Loans, if any, which are so received. If the Borrowers fail to make such payment when due, the
Administrative Agent shall notify each Revolving Lender of the applicable Letter of Credit
Disbursement, the payment then due from the Borrowers in respect thereof and such Revolving
Lender’s Pro Rata Share thereof. The Issuing Lender shall promptly notify the Administrative Agent
upon the making of each Letter of Credit Disbursement.

          (7)
Obligations Absolute. The Borrowers’ obligation to reimburse Letter of
Credit Disbursements as provided in Section 2.3(6) shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under
any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability
of any Letter of Credit, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing
Lender under a Letter of Credit against presentation of a draft or other document that does not
comply strictly with the terms of such Letter of Credit, and (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of the Borrowers’ obligations hereunder.
Neither the Administrative Agent, the Revolving Lenders nor the Issuing Lender shall have any
liability or responsibility by reason of or in connection with the issuance or amendment of any
Letter of Credit by the Issuing Lender or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Lender; provided that the foregoing shall not be
construed to excuse the Issuing Lender from liability to the Borrowers to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by applicable law) suffered by the Borrowers that are caused by
the Issuing Lender’s gross negligence or willful misconduct (as determined by a final and
non-appealable judgment of a court of competent jurisdiction) when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that: (i) the Issuing Lender may accept documents that appear on their face
to be in substantial compliance with the terms of a Letter of Credit without responsibility for
further investigation, and may make payment upon presentation of documents that appear on their
face to be in substantial compliance with the terms of such Letter of Credit; (ii) the Issuing
Lender shall have the right, in its sole discretion, to decline to accept such documents and to
make such payment if such documents are not in strict compliance with the terms of such Letter of
Credit; and (iii) this sentence shall establish the standard of care to be

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exercised by the Issuing Lender when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof (and the parties hereto hereby waive, to the
extent permitted by applicable law, any standard of care inconsistent with the foregoing).

          (8)
Disbursement Procedures. The Issuing Lender shall, within a reasonable time
following its receipt thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit. The Issuing Lender shall promptly after such examination notify the
Administrative Agent and the Borrowers by telephone (confirmed by facsimile) of such demand for
payment and whether the Issuing Lender has made or will make a Letter of Credit Disbursement
thereunder; provided that any failure to give or delay in giving such notice shall not
relieve the Borrowers of its obligation to reimburse the Issuing Lender and the Revolving Lenders
with respect to any such Letter of Credit Disbursement.

          (9)
Interim Interest. If the Issuing Lender shall make any Letter of Credit
Disbursement, then, unless the Borrowers shall reimburse such Letter of Credit Disbursement in full
on the date Borrowers receive notice that such Letter of Credit Disbursement was made, the unpaid
amount thereof shall bear interest, for each day from and including the date such Letter of Credit
Disbursement is made to but excluding the date that the Borrowers reimburse such Letter of Credit
Disbursement, at the rate per annum then applicable to Base Rate Loans; provided that, if
the Borrowers fail to reimburse such Letter of Credit Disbursement within three (3) days when due
pursuant to Section 2.3(7), then an Event of Default described in Section 7.1(1)
shall have occurred. Interest accrued pursuant to this section shall be for account of the Issuing
Lender, except that a pro rata portion of the interest accrued on and after the date of payment by
any Revolving Lender pursuant to Section 2.3(5) of this Section to reimburse the Issuing
Lender shall be for account of such Revolving Lender to the extent of such payment.

          (10)
Replacement of the Issuing Lender. The Issuing Lender may be replaced at any time
by written agreement between the Borrowers, the Administrative Agent, the replaced Issuing Lender
and the successor Issuing Lender. The Administrative Agent shall notify the Revolving Lenders of
any such replacement of the Issuing Lender. From and after the Closing Date of any such
replacement, (i) the successor Issuing Lender shall have all the rights and obligations of the
replaced Issuing Lender under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Lender” shall be deemed to refer to such
successor or to any previous Issuing Lender, or to such successor and all previous Issuing Lenders,
as the context shall require. After the replacement of an Issuing Lender hereunder, the replaced
Issuing Lender shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Lender under this Agreement with respect to Letters of Credit issued by
it prior to such replacement, but shall not be required to issue additional Letters of Credit.

          (11)
Cash Collateralization.

               (i) If an Event of Default shall occur and be continuing and the
Borrowers receive notice from the Administrative Agent or the Requisite Class Lenders of the
Revolving Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with
Letter of Credit Exposure representing more than 50% of the total Letter of Credit Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, the

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Borrowers shall immediately deposit into an account (the “Letter of Credit Collateral
Account”) established by the Administrative Agent an amount in cash equal to the Letter
of Credit Exposure with respect to such Borrowers as of such date plus any accrued and
unpaid interest thereon; provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default described in
Section 7.1(6). Such deposit shall be held by the Administrative Agent in the Letter of
Credit Collateral Account as collateral in the first instance for the Letter of Credit Exposure
with respect to the Borrowers under this Agreement and thereafter for the payment of the other
Obligations of the Borrowers.

               (ii) The Letter of Credit Collateral Account shall be maintained in the name of the
Administrative Agent (on behalf of the Lenders) and under its sole dominion and control at such
place as shall be designated by the Administrative Agent. Interest shall accrue on the Letter of
Credit Collateral Account at a rate equal to the rate on overnight funds.

               (iii) The Borrowers hereby pledge, assign and grant to the
Administrative Agent, as Administrative Agent for its benefit and the ratable benefit of the
Lenders, a lien on and a security interest in the following collateral (the “Letter of
Credit Collateral”):

                    (A)
the Letter of Credit Collateral Account, all cash deposited therein and all certificates and instruments, if any, from time to time representing or evidencing
the Letter of Credit Collateral Account;

                    (B) all notes, certificates of deposit and other cash-equivalent instruments from time to time
hereafter delivered to or otherwise possessed by the Administrative Agent for or on behalf of the
Borrowers in substitution for or in respect of any or all of the then existing Letter of Credit
Collateral;

                    (C) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or in exchange for
any or all of the then existing Letter of Credit Collateral; and

                    (D) to the extent not covered by the above clauses, all proceeds of any or all of the
foregoing Letter of Credit Collateral.

The lien and security interest granted hereby secures the payment of all obligations of the
Borrowers now or hereafter existing hereunder and under any other Loan Document.

               (iv) Neither the Borrowers nor any Person claiming or acting on behalf of or through the
Borrowers shall have any right to withdraw any of the funds held in the Letter of Credit Collateral
Account, except as provided in Section 2.3(11)(vii).

               (v) The Borrowers agree that they will not (i) sell or otherwise dispose of any interest
in the Letter of Credit Collateral or (ii) create or permit to exist any lien, security interest or
other charge or encumbrance upon or with respect to any of the Letter of Credit Collateral, except
for the security interest created by this Section 2.3(11).

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               (vi) At any time an Event of Default shall be continuing:

                    (A) The
Administrative Agent may, in its sole
discretion, without notice to the Borrowers except as required by law
and at any time from time to time, instruct the Administrative Agent
to charge, set off or otherwise apply all or any part of the Letter
of Credit Collateral Account to first, the aggregate amount of Letter
of Credit Disbursements that have not been reimbursed by the
Borrowers and second, any other unpaid Obligations then due and
payable, in such order as the Administrative Agent shall elect. The
rights of the Administrative Agent under this Section 2.3(11) are in addition to any rights and remedies which any
Agent or any Lender may have.

                    (B) The Administrative Agent may also exercise, in its sole
discretion, in respect of the Letter of Credit Collateral
Account, in addition to the other rights and remedies provided herein
or otherwise available to it, all the rights and remedies of a
secured party upon default under the UCC.

               (vii) At such time as all Events of Default have been cured or waived in writing and there
are no unreimbursed Letter of Credit Disbursements outstanding, all amounts remaining in the Letter
of Credit Collateral Account shall be promptly returned to the Borrowers. Any surplus of the funds
held in the Letter of Credit Collateral Account remaining after payment in full of all of the
Obligations, the termination of the Revolving Commitments and the return of all outstanding Letters
of Credit shall be paid to the Borrowers or to whomsoever may be lawfully entitled to receive such
surplus.

     2.4
Funding of Borrowings.

          (1)
Funding by Lenders. Each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds to the Administrative
Agent at the Contact Office, ABA 021-001-033 for the Administrative Agent’s Account No. 99-401-268,
Ref: TE/TOUSA Senior LLC, no later than 12:00 p.m. (New York time). The Administrative Agent will
make such Loans available to the Borrowers pursuant to the terms and conditions hereof by promptly
crediting the amounts so received, in like funds, to an account of the Borrowers maintained with
the Administrative Agent in New York City and designated by the Borrowers in the applicable
Borrowing Request; provided that Base Rate Loans made to finance the reimbursement of a Letter of
Credit Disbursement as provided in Section 2.3(6) shall be remitted by the Administrative
Agent to the Issuing Lender.

          (2)
Presumption by the Administrative Agent. Unless the Administrative Agent shall
have received notice from a Revolving Lender prior to the proposed date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing,
the Administrative Agent may assume that such Lender has made such share available on such date in
accordance with
Section 2.4(1) and may, in reliance upon such assumption, make available to
the Borrowers a corresponding amount. In such event, if a Lender

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has not in fact made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrowers to but excluding the date of
payment to the Administrative Agent, at (i) in the case of such Lender, the Federal Funds Rate or
(ii) in the case of the Borrowers, the interest rate applicable to Base Rate Loans (it being
intended that such interest payment shall be the only interest payment payable by the Borrowers
with respect to any amount repaid by the Borrowers to the Administrative Agent in accordance with
this paragraph, except that Section 2.18(5) shall apply if the Borrowers fail to make such
repayment within three (3) days after the date of such payment as required hereunder). If such
Lender pays such amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.

     2.5
Interest Elections.

          (1)
Elections by the Borrowers for Borrowings. Each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a LIBO Rate Loan, shall
have an initial Interest Period as specified in such Borrowing Request (which shall be a period
contemplated by the definition of the term “Interest Period”). Thereafter, the Borrowers may elect
to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a
LIBO Rate Loan, may elect Interest Periods therefor, all as provided in this Section; provided,
however, any conversion or continuation of LIBO Rate Loans shall be subject to the provisions of
Sections 2.2(a)(2)(iii) and (iv). The Borrowers may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. At any time, the Borrowers may have
only eight (8) Interest Periods then in effect.

          (2)
Notice of Elections. To make an election pursuant to this
Section, the Borrowers
shall notify the Administrative Agent in writing of such election (which notice may be by
facsimile) by the time that a Borrowing Request would be required under Section 2.4 if the
Borrowers were requesting a Borrowing of the Type resulting from such election to be made on the
effective date of such election. Each such Rate Request shall be irrevocable, shall be signed by a
Responsible Officer and shall be in the form of Exhibit D hereto.

          (3)
Information in Interest Election Requests. Each Rate Request shall specify
the following information in compliance with Section 2.2:

                    (A) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the information to be
specified pursuant to clauses (C) and (D) of this section shall be specified for
each resulting Borrowing);

                    (B) the effective date of the election made pursuant to such Rate Request, which shall be
a Business Day;

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                    (C) whether the resulting Borrowing is to be a Base Rate Loan or a LIBO Rate Loan; and

                    (D) if the resulting Borrowing is a LIBO Rate Loan, the Interest Period to be applicable
thereto after giving effect to such election, which shall be a period contemplated by the
definition of the term “Interest Period”.

If any such Rate Request requests a LIBO Rate Loan but does not specify an Interest Period, then
the Borrowers shall be deemed to have selected an Interest Period of one month’s duration.

          (4)
Notice by the Administrative Agent to Lenders. Promptly following receipt of
a Rate Request, the Administrative Agent shall advise each Lender of the details thereof and
of such Lender’s portion of each resulting Borrowing.

          (5)
Failure to Elect; Potential Default and Events of Default. If the Borrowers fail
to deliver a timely Rate Request with respect to a LIBO Rate Loan prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to a Base Rate Loan. Notwithstanding any
contrary provision hereof, if a Potential Default or an Event of Default has occurred and is
continuing on the day occurring three Eurodollar Business Days prior to the date of, or on the date
of, the requested funding, continuation or conversion, then, so long as a Potential Default or an
Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a
LIBO Rate Loan and (ii) unless repaid, each LIBO Rate Loan shall be converted to a Base Rate Loan
at the end of the Interest Period applicable thereto.

     2.6 Termination; Reduction and Extension of the Revolving Commitments;
Maturity.

          (1)
Scheduled Termination; Initial Maturity Date. Unless previously terminated, or
extended pursuant to Section 2.6(5) below, the Revolving Commitments shall terminate at
1:00 p.m., New York time, on the Revolving Commitment Termination Date. Unless previously
accelerated, or extended pursuant to Section 2.6(5) below, all Obligations with respect to
the Loans shall be paid in full no later than 1:00 p.m., New York time on the Initial Maturity
Date.

          (2)
Voluntary Termination or Reduction. The Borrowers may at any time terminate, or
from time to time reduce, the Revolving Commitments; provided that (i) each reduction of the
Revolving Commitments shall be in a minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof and (ii) the Borrowers shall not terminate or reduce the Revolving
Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.8, the total Revolving Exposures would exceed the Available Credit.

          (3)
Notice of Voluntary Termination or Reduction. The Borrowers shall notify the
Administrative Agent of any election to terminate or reduce the
Revolving Commitments under Section
2.6(2) above at least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly following receipt of
any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice
delivered by the Borrowers pursuant to this Section shall be

50

 

irrevocable; provided that a notice of termination of the Revolving Commitments delivered by
the Borrowers may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrowers (by notice to the
Administrative Agent on or prior to the specified effective date) if such condition is not
satisfied.

          (4) Effect of Termination or Reduction. Any termination or reduction of the Revolving
Commitments shall be permanent. Each reduction of the Revolving Commitments shall be made ratably
among the Revolving Lenders in accordance with their respective Revolving Commitments.

          (5) Extension of Revolving Commitment Termination Date and Initial Maturity Date.

               (i) Provided that no Potential Default or Event of Default shall have occurred and be
continuing, the Borrowers shall have the option, to be exercised by giving written notice to the
Administrative Agent at least thirty (30) days prior to the Original Revolving Commitment
Termination Date and the Initial Maturity Date, subject to the terms and conditions set forth in
this Agreement, to extend the Original Revolving Commitment Termination Date and Initial Maturity
Date by twelve (12) months to August 1, 2009 (the “Extension Period”). The request by the Borrowers
for the extension of the Original Revolving Commitment Termination Date and Initial Maturity Date
shall constitute a representation and warranty by the Borrowers that no Potential Default or Event
of Default then exists and that all of the conditions set forth in Section 2.6(5)(ii) below
shall have been satisfied on the Original Revolving Commitment Termination Date and the Initial
Maturity Date.

               (ii) The obligations of the Administrative Agent and the Lenders to extend the Original
Revolving Commitment Termination Date and Initial Maturity Date as provided in Section
2.6(5)(i) shall be subject to the prior satisfaction of each of the following conditions
precedent as determined by the Administrative Agent in its good faith judgment:

                    (A) on the Original Revolving Commitment Termination Date and Initial Maturity Date there
shall exist no Potential Default or Event of Default;

                    (B) the Borrowers shall have paid to the Administrative Agent
for the ratable benefit of the Lenders an extension fee (the “Extension Fee”) equal to one-quarter
of one percent (0.25%) of the Aggregate Commitments (which fee Borrowers hereby agree shall be
fully earned and nonrefundable under any circumstances when paid);

                    (C) the representations and warranties made by the Borrower
Parties in the Loan Documents shall have been true and correct in all material respects when made
and shall also be true and correct in all material respects on the Original Revolving Commitment
Termination Date and Initial Maturity Date, unless such representations and warranties specifically
relate to an earlier date, in which case, they shall have been true and correct in all material
respects as of such earlier date (provided, however, that any factual matters disclosed in the
Schedules referenced in Article 4 shall be subject to update in accordance with clause (D)
below);

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                    (D) the Borrower Parties shall have delivered updates to the
Administrative Agent of all the Schedules set forth in Article 4 hereof and such
updated Schedules shall be acceptable to Administrative Agent in its reasonable judgment;

                    (E) the Borrowers shall have delivered to the Administrative
Agent a Compliance Certificate demonstrating the Borrowers are in compliance with the
covenants set forth in Article 6;

                    (F) the Borrowers shall have paid all reasonable out-of-pocket
costs and expenses incurred by the Administrative Agent and all reasonable fees and expenses paid
to third party consultants (including reasonable attorneys’ fees and expenses) by Administrative
Agent in connection with such extension;

                    (G) the ratio (expressed as a percentage) of Total Funded Debt to Total Book Capitalization,
shall be 60% or less;

                    (H) the initial maturity date of the Mezzanine Loans shall have
been extended for one year such that the maturity date thereof does not occur before August 1,
2010; and

                    (I) the Borrower Parties shall have acknowledged and ratified
that their obligations under the applicable Loan Documents remain in full force and effect, and
continue to guaranty the Obligations under the Loan Documents, as extended.

     (iii) The Administrative Agent shall notify each of the Lenders in the
event that the Borrowers request that the Original Revolving Commitment Termination Date and
Initial Maturity Date be extended as provided in this Section 2.6(5).

     2.7 Manner of Payment of Loans; Evidence of Debt.

          (1) Repayment. Subject to any earlier acceleration of the Loans following an Event of
Default, the Borrowers hereby unconditionally promise to pay to the Administrative Agent for
account of the Lenders the outstanding principal amount of the Loans on the Maturity Date.

          (2) Manner of Payment.

               (i) The Borrowers shall notify the Administrative Agent in writing
(which notice may be by facsimile or electronic mail) of any repayment or prepayment hereunder (i)
in the case of repayment or prepayment of a LIBO Rate Loan with an Interest Period not expiring on
the date of payment, not later than 1:00 p.m. (New York time) three Business Days before the date
of repayment or prepayment, or (ii) in the case of repayment or prepayment of a LIBO Rate Loan with
Interest Periods expiring on the date of repayment or prepayment or a Base Rate Loan, not later
than 1:00 p.m. (New York time) on the date of repayment or prepayment. Each such notice shall be
irrevocable and shall specify the repayment or prepayment date and the principal amount of each
Borrowing or portion thereof to be repaid or prepaid; provided that, if a notice of repayment or
prepayment is given in connection with a conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.6,

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then such notice of repayment or prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.6. Promptly following receipt of any such notice
relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.
Each repayment or prepayment of a Borrowing shall be applied ratably to the Loans included in the
repaid or prepaid Borrowing. Repayments and prepayments shall be accompanied by (A) accrued
interest to the extent required by Section 2.9 and (B) any payments due pursuant to
Section 2.8. If the Borrowers fail to make a timely selection of the Borrowing or
Borrowings to be repaid or prepaid, such payment shall be applied, first, to pay any outstanding
Base Rate Loans and, second, to other Borrowings in the order of the remaining duration of their
respective Interest Periods (the Borrowing with the shortest remaining Interest Period to be repaid
first).

               (ii) The Borrowers shall make each payment required to be made by them hereunder
(whether of principal, interest or fees or reimbursement of Letter of Credit Disbursements) or
under any other Loan Document (except to the extent otherwise provided therein) prior to 1:00 p.m.
(New York time) (unless otherwise specified in this Agreement), on the date when due, in
immediately available funds, without set-off or counterclaim; provided that if a new Loan
is to be made by any Lender on a date the Borrowers are to repay any principal of an outstanding
Loan of such Lender, such Lender shall apply the proceeds of such new Loan to the payment of the
principal to be repaid and only an amount equal to the difference between the principal to be
borrowed and the principal to be repaid shall be made available by such Lender to the
Administrative Agent as provided in Section 2.4 or paid by the Borrowers to the
Administrative Agent pursuant to this paragraph, as the case may be. Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating interest thereon. All such
payments shall be wired to the Administrative Agent at the Contact Office, ABA 021-001-033 for the
Administrative Agent’s Account No. 99-401-268, Ref: TE/TOUSA Senior LLC, except as otherwise
expressly provided in the relevant Loan Document, and except payments to be made directly to the
Issuing Lender as expressly provided herein and except that payments
pursuant to Sections 2.15, 2.17, 2.18 and 9.14 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the account of any other
Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day and, in the case of any payment accruing interest, interest thereon
shall be payable for the period of such extension. All payments hereunder or under any other Loan
Document (except to the extent otherwise provided therein) shall be made in Dollars.

          (3) Maintenance of Loan Accounts by Lenders. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

          (4) Maintenance of Loan Accounts by the Administrative Agent. The Administrative Agent
shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the
Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to

53

 

each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.

          (5) Effect of Entries. The entries made in the accounts maintained pursuant to
Sections 2.7(3) and (4) above shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.

          (6) Promissory Notes. Upon the request of a Lender, the Borrowers shall promptly
execute and deliver to such Lender a Note evidencing such Lender’s Commitment.

     2.8 Repayment and Prepayment of Loans.

          (1) Mandatory Prepayments. The Borrowers shall remit to the Administrative Agent as a
mandatory prepayment for application against the outstanding principal balance of the Loan:

               (i) Concurrently with the consummation of any Disposition of a
Mortgaged Property, the sums required to be repaid, if any, in accordance with Section
6.4(5)(iii) below.

               (ii) The Proceeds of a Casualty or Condemnation of a Mortgaged Property to the
extent required to be applied to the prepayment of the Loan under this Agreement.

               (iii) Beginning on the July 1, 2007 and on the first day of October,
January, April and July thereafter, Borrowers shall make quarterly payments of $10 million each,
which installments (so long as no Event of Default has occurred and is then continuing) shall be
applied against the outstanding principal amount under the Term Loans. Any voluntary prepayments of
the Loan pursuant to Section 2.8(2) or payments pursuant
to Section 2.8(1)(i)
above, shall be credited against (and shall reduce pro tanto) the Borrowers obligation to make
quarterly principal installment payments as provided in this subsection (iii).

               (iv) Concurrently with any prepayment of principal of the Mezzanine Loans., Borrowers
shall prepay the principal amount of the Term Loans (or if the full amount of the Term Loans has
been prepaid, the Revolving Loans) on a pro rata basis based on the outstanding principal balance
of the Loans and the Mezzanine Loans.

          (2) Optional Prepayments. Upon not less than five (5) Business Days’ prior written
notice to the Administrative Agent (which shall promptly provide telephonic notice of the receipt
thereof to each of the Lenders), the Borrowers may voluntarily prepay principal amounts outstanding
under the Loan in whole or in part (without any release of collateral securing the Loan except as
provided in Section 6.4(5)(iii) hereof); provided, however, that voluntary prepayments
shall be in the minimum amount of $1,000,000 and integral multiples of $100,000 in excess thereof.
Voluntary prepayments of principal pursuant to this
Section 2.8(2), shall be credited
against Borrowers’ obligation to make prepayments pursuant to
Section 2.8(1)(iii).

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          (3) Accrued Interest. The Borrowers shall pay in connection with any prepayment
hereunder, whether voluntary or mandatory, all interest accrued but unpaid on that portion of the
Loan to which such prepayment is applied, and all amounts payable
pursuant to Section 2.8(1)(i) above, concurrently with payment of any principal amounts.

          (4) Priority of Payments.

               (i) Any
voluntary prepayment of any Loan pursuant to Section 2.8(2) shall be
applied as specified by Borrowers in the applicable notice of
prepayment; provided however, so long as no Event of Default has occurred and is continuing, in the event Borrowers fail to
specify the Loans to which any such prepayment shall be applied, such prepayment shall be applied
first to repay outstanding Swing Line Loans to the full extent thereof; second, to repay
outstanding Revolving Loans to the full extent thereof; and third, to prepay the Term Loans on a
pro rata basis (in accordance with the respective outstanding principal amounts thereof).

               (ii) Any
mandatory prepayment of any Loan pursuant to Section 2.8(1) shall be
applied as follows:

                    (A) first, to prepay Term Loans on a pro rata basis (in
accordance with the respective outstanding principal amounts thereof) and shall be further
applied on a pro rata basis to the remaining scheduled installments of principal of the Term
Loans;

                    (B) second, to prepay the Swing Line Loans to the full extent
thereof and, if the prepayment is pursuant to
Section 2.8(1)(iv), to permanently
reduce the Revolving Commitments by the amount of such prepayment;

                    (C) third, to prepay the Revolving Loans on a pro rata basis (in
accordance with the respective Revolving Commitments) to the full extent thereof and, if the
prepayment is pursuant to Section 2.8(1)(iv), to further permanently reduce the Revolving
Commitments by the amount of such prepayment;

                    (D) fourth, to prepay outstanding reimbursement obligations with respect to Letters of Credit
and to further permanently reduce the Revolving Commitments
by the amount of such prepayment; and

                    (E) fifth, to cash collateralize Letters of Credit and to further permanently reduce the
Revolving Commitments by the amount of such cash collateralization.

               (iii) Following the occurrence and continuance of an Event of Default, all amounts
received by the Administrative Agent on account of the Obligations, shall be promptly disbursed by
the Administrative Agent as follows:

                    (A) First, to the payment of expenses incurred by the
Administrative Agent in the performance of its duties and the enforcement of the rights of the
Lenders under the Loan Documents, including, without limitation, all costs and expenses of
collection, reasonable attorneys’ fees (including all allocated costs of internal counsel), court
costs and other amounts payable as provided in Section 9.14 below;

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                    (B) Then, to the Lenders, pro rata in accordance with their respective Pro Rata
Shares, until interest accrued on the Loan has been paid in full;

                    (C) Then, to the Lenders, pro rata in accordance with their respective Pro Rata Shares,
until principal under the Loan has been paid in full;

                    (D) Then, to the Lenders, pro rata to each Lender in accordance
with the amount expressed in a percentage, which the amount of remaining Obligations owed to such
Lender bears to all remaining Obligations held by all Lenders, until all other Obligations have
been paid in full.

               (iv) The order of priority set forth in Section 2.8(4)(iii) and the related
provisions of this Agreement are set forth solely to determine the rights and priorities of the
Administrative Agent and the other Lenders as among themselves. The order of priority set forth in
clauses (B) through (D) of Section 2.8(4)(iii) may at any time and from time to time be changed by
the Required Lenders without necessity of notice to or consent of or approval by the Borrowers or
any other Person. The order of priority set forth in clause
(A) of Section 2.8(4)(iii) may be
changed only with the prior written consent of the Administrative Agent.

     2.9 Interest.

          (1) Base Rate Loans. The Loans comprising each Base Rate Loan shall bear interest at a
rate per annum equal to the Applicable Base Rate.

          (2) LIBO Rate Loans. The Loans constituting each LIBO Rate Loan shall bear interest at
a rate per annum equal to the Applicable LIBO Rate for the Interest Period for such Borrowing.

          (3) Payment of Interest.

               (i) The Borrowers shall pay interest on Base Rate Loans quarterly, in arrears, on the
last Business Day of each calendar quarter, as set forth on an interest billing statement delivered
by the Administrative Agent to the Borrowers (which delivery may be by facsimile transmission) no
later than 1:00 p.m. (New York time) on a date at least one Business Day prior to the date such
interest is due.

               (ii) The Borrowers shall pay interest on the LIBO Rate Loans on the last day of the
applicable Interest Period or, in the case of LIBO Rate Loans with an Interest Period ending later
than three months after the date funded, converted or continued, at the end of each three month
period from the date funded, converted or continued and on the last day of the applicable Interest
Period, as set forth on an interest billing statement delivered by the Administrative Agent to the
Borrowers (which delivery may be by facsimile transmission) no later than 1:00 p.m. (New York time)
on a date at least one Business Day prior to the date such interest is due.

          (4) Computations. All computations of interest and fees payable hereunder shall be
based upon a year of 360 days for the actual number of days elapsed (which results in more interest
being paid than if computed on the basis of a 365-day year).

56

 

          (5) Default Interest. During such time as there shall have occurred and be
continuing an Event of Default, all Obligations outstanding, shall, at the election of the
Administrative Agent, bear interest at a per annum rate equal to two percent (2%) above the
Applicable Base Rate in effect during the applicable calculation period (whether or not such
Applicable Base Rate shall otherwise have been elected by Borrowers in accordance with this
Agreement).

     2.10 Presumptions of Payment.

          Unless the Administrative Agent shall have received notice from the Borrowers prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Lender hereunder that the Borrowers will not make such payment, the Administrative Agent
may assume that the Borrowers have made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Lender, as the case may
be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each
of the Lenders or the Issuing Lender, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing
Lender with interest thereon, for each day from and including the date such amount is distributed
to it to but excluding the date of payment to the Administrative Agent, at the Federal Funds Rate.

     2.11 Pro Rata Treatment.

          Except to the extent otherwise provided herein: (i) each Borrowing shall be made from the
Revolving Lenders, each payment of the Unused Line Fee under Section 2.19 shall be made for
account of the Revolving Lenders, and each termination or reduction of the amount of the Revolving
Commitments under Section 2.6 shall be applied to the respective Revolving Commitments of
the Revolving Lenders, pro rata according to the amounts of their respective Revolving Commitments;
(ii) each Borrowing shall be allocated pro rata among the Revolving Lenders according to the
amounts of their respective Revolving Commitments (in the case of the making of Loans) or their
respective Loans (in the case of conversions and continuations of Loans); (iii) each payment or
prepayment of principal of Loans by the Borrowers shall be made for account of the Lenders pro rata
in accordance with the respective unpaid principal amounts of the Loans held by them; and (iv) each
payment of interest on Loans by the Borrowers shall be made for account of the Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to the respective
Lenders.

     2.12 Inability to Determine Rates.

          In the event that the Administrative Agent shall have reasonably determined (which
determination shall be conclusive and binding upon the Borrowers) that by reason of circumstances
affecting the interbank market adequate and reasonable means do not exist for ascertaining the LDBO
Rate for any Interest Period, the Administrative Agent shall forthwith give telephonic notice of
such determination to each Lender and to the Borrowers. If such notice is given: (1) no portion of
the Loans may be funded as a LIBO Rate Loan, (2) any Base Rate Loan that was to have been converted
to a LIBO Rate Loan shall, subject to the provisions hereof, be continued as a Base Rate Loan, and
(3) any outstanding LIBO Rate Loan shall be converted, on

57

 

the last day of the Interest Period applicable thereto, to a Base Rate Loan. Until such notice
has been withdrawn by the Administrative Agent, the Borrowers shall not have the right to convert
any Base Rate Loan to a LIBO Rate Loan or to continue a LIBO Rate Loan as such. The Administrative
Agent shall withdraw such notice in the event that the circumstances giving rise thereto no longer
pertain and that adequate and reasonable means shall exist for ascertaining the LIBO Rate for the
Interest Period requested by the Borrowers, and, following withdrawal of such notice by the
Administrative Agent, the Borrowers shall have the right to convert any Base Rate Loan to a LIBO
Rate Loan and to continue any LIBO Rate Loan as such in accordance with the terms and conditions of
this Agreement.

     2.13 Illegality.

          Notwithstanding any other provisions herein, if any law, regulation, treaty or directive
issued by any Governmental Authority or any change therein or in the interpretation or application
thereof, shall make it unlawful for any Lender to maintain LIBO Rate Loans as contemplated by this
Agreement: (1) the commitment of such Lender hereunder to continue LIBO Rate Loans or to convert
Base Rate Loans to LIBO Rate Loans shall forthwith be cancelled, and (2) LIBO Rate Loans held by
such Lender then outstanding, if any, shall be converted automatically to Base Rate Loans at the
end of their respective Interest Periods or within such earlier period as may be required by law.
In the event of a conversion of any LIBO Rate Loan prior to the end of its applicable Interest
Period, the Borrowers hereby agree promptly to pay any Lender affected thereby, upon demand, the
amounts required pursuant to Section 2.17 below, it being agreed and understood that such
conversion shall constitute a prepayment for all purposes of this Section 2.13. The
provisions hereof shall survive the termination of this Agreement and payment of all other
Obligations.

     2.14 Funding.

          Each Lender shall be entitled to fund all or any portion of its Commitment to make Loans in
any manner it may determine in its sole discretion, including, without limitation, in the Grand
Cayman inter-bank market, the London inter-bank market and within the United States, but all
calculations and transactions hereunder shall be conducted as though all Lenders actually fund all
LIBO Rate Loans through the purchase of offshore Dollar deposits in the amount of such Lender’s
Commitment of the relevant LIBO Rate Loan with a maturity corresponding to the applicable Interest
Period.

     2.15  Increased Costs.

          (1) In the event that any applicable law, order, regulation, treaty or directive issued
by any central bank or other governmental authority, agency or instrumentality or in the
governmental or judicial interpretation or application thereof, or compliance by any Lender or the
Issuing Lender with any request or directive (whether or not having the force of law) issued by any
central bank or other governmental authority, agency or instrumentality:

               (i) Does or shall subject any Lender or the Issuing Lender to any
Taxes of any kind whatsoever with respect to this Agreement or any Loan, or change the basis of
determining the Taxes imposed on payments to such Lender or the Issuing Lender of principal,

58

 

fee, interest or any other amount payable hereunder (except for change in the rate of tax on
the overall net income of such Lender or Issuing Lender);

               (ii) Does or shall impose, modify or hold applicable any reserve,
capital requirement, special deposit, compulsory loan or similar requirements against assets held
by, or deposits or other liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of such Lender or the Issuing
Lender which are not otherwise included in the determination of interest payable on the
Obligations; or

               (iii) Does or shall impose on such Lender or Issuing Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender or Issuing Lender of
making, renewing or maintaining its Revolving Commitment, its Revolving Exposure, its Term Loans
(as applicable) or to increase the cost of such Lender or the Issuing Lender of participating in,
issuing or maintaining any Letter of Credit or to reduce any amount receivable in respect thereof
or the rate of return on the capital of such Lender or the Issuing Lender or any corporation
controlling such Lender or the Issuing Lender, then, in any such case, the Borrowers shall, without
duplication of amounts payable pursuant to Section 2.18, promptly pay to such Lender or
Issuing Lender, upon its written demand made through the Administrative Agent, any additional
amounts necessary to compensate such Lender or the Issuing Lender for such additional cost or
reduced amounts receivable or rate of return as determined by such Lender or Issuing Lender with
respect to this Agreement or such Lender’s or Issuing Lender’s Revolving Commitment, its Revolving
Exposure, Term Loan, or Letter of Credit obligations, so long as such Lender or Issuing Lender
requires substantially all obligors under other commitments of this type made available by such
Lender or Issuing Lender to similarly so compensate such Lender or Issuing Lender.

          (2) If a Lender or the Issuing Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.15, it shall promptly notify the Borrowers of the event by
reason of which it has become so entitled. A certificate specifying the reason for any additional
amounts so claimed payable containing the calculation thereof in reasonable detail submitted by
a Lender or the Issuing Lender to the Borrowers, accompanied by a certification that such Lender or
Issuing Lender has required substantially all obligors under other commitments of this type made
available by such Lender or Issuing Lender to similarly so compensate such Lender or Issuing
Lender, shall constitute prima facie evidence thereof.

          (3) Failure or delay on the part of any Lender or Issuing Lender to demand compensation
pursuant to this Section 2.15 shall not constitute a waiver of such Lender’s or Issuing
Lender’s right to demand such compensation. The provisions of this Section 2.15 shall
survive the termination of this Agreement and payment of the Loans and all other Obligations.

     2.16 Obligation of Lenders to Mitigate; Defaulting Lenders; Replacement of
Lenders.

          (1) As promptly as reasonably practicable after the officer of any Lender responsible
for administering such Lender’s Commitment or Term Loan becomes aware of any

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event or
condition that would entitle such Lender to receive payments under
Section 2.15 above or Section 2.18 below or to cease maintaining LIBO Rate Loans under Section 2.13
above, such Lender will use reasonable efforts: (i) to maintain its Revolving Commitment, Revolving
Exposure, and Term Loans (as applicable) through another lending office of such Lender or (ii) take
such other reasonable measures, if as a result thereof the additional amounts which would otherwise
be required to be paid to such Lender pursuant to Section 2.15 above or pursuant to
Section 2.18 below would be materially reduced or eliminated or the conditions rendering
such Lender incapable of maintaining LIBO Rate Loans under Section 2.5 above no longer
would be applicable, and if, as determined by such Lender in its sole discretion, the maintaining
of such LIBO Rate Loans through such other lending office or in accordance with such other
measures, as the case may be, would not otherwise materially adversely affect such LIBO Rate Loans
or the interests of such Lender.

          (2) Anything contained herein to the contrary notwithstanding, in the event that any
Lender, other than at the direction or request of any regulatory agency or authority, defaults (a
“Defaulting Lender”) in its obligation to fund (a
“Funding Default”) any Revolving Loan or its
portion of any unreimbursed payment under Section 2.3(2)(iv) or 2.3(5) (in each
case, a “Defaulted Loan”), then (a) during any Default Period with respect to such Defaulting
Lender, such Defaulting Lender shall be deemed not to be a “Lender” for purposes of voting on any
matters (including the granting of any consents or waivers) with respect to any of the Loan
Documents; (b) to the extent permitted by applicable law, until such time as the Funding Default
with respect to such Defaulting Lender shall have been reduced to zero, (i) any voluntary
prepayment of the Revolving Loans shall, if Borrowers so direct at the time of making such
voluntary prepayment, be applied to the Revolving Loans of other Lenders as if such Defaulting
Lender had no Revolving Loans outstanding and the Revolving Exposure of such Defaulting Lender were
zero, and (ii) any mandatory prepayment of the Revolving Loans shall, if Borrowers so direct at the
time of making such mandatory prepayment, be applied to the Revolving Loans of other Lenders (but
not to the Revolving Loans of such Defaulting Lender) as if such Defaulting Lender had funded all
Defaulted Loans of such Defaulting Lender, it being understood and agreed that Borrowers shall be
entitled to retain any portion of any mandatory prepayment of the Revolving Loans that is not paid
to such Defaulting Lender solely as a result of the operation of the provisions of this clause (b);
(c) such Defaulting Lender’s Revolving Commitment and outstanding Revolving Loans and such
Defaulting Lender’s percentage share of the Letter of Credit Exposure shall be excluded for
purposes of calculating the Revolving Commitment fee pursuant to Section 2.19 payable to
Lenders in respect of any day during any Default Period with respect to such Defaulting Lender, and
such Defaulting Lender shall not be entitled to receive any Revolving Commitment fee pursuant to
Section 2.19 with respect to such Defaulting Lender’s Revolving Commitment in respect of
any Default Period with respect to such Defaulting Lender; and (d) the Total Utilization of
Revolving Commitments as at any date of determination shall be calculated as if such Defaulting
Lender had funded all Defaulted Loans of such Defaulting Lender. No Revolving Commitment of any
Lender shall be increased or otherwise affected, and, except as otherwise expressly provided in
this Section 2.16, performance by Borrowers of their obligations hereunder and the other
Loan Documents shall not be excused or otherwise modified as a result of any Funding Default or the
operation of this Section 2.16. The rights and remedies against a Defaulting Lender under
this Section 2.16 are in addition to other rights and remedies which Borrowers may have
against such Defaulting Lender with

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respect to any Funding Default and which Administrative Agent or any Lender may have against
such Defaulting Lender with respect to any Funding Default.

          (3) Anything contained herein to the contrary notwithstanding, in the event that: (a)
(i) any Lender (an “Increased-Cost Lender”) shall give notice to Borrowers that such Lender is
adversely affected under Section 2.13 (other than in circumstances where events subject to
such Section generally affect Lenders) or is entitled to receive payments under Section
2.15 or 2.18 (other than in circumstances where events subject to such Sections
generally entitle Lenders to payment), (ii) the circumstances which have caused such Lender to be
so adversely affected or which entitle such Lender to receive such payments shall remain in effect,
and (iii) such Lender shall fail to withdraw such notice within five Business Days after Borrowers’
request for such withdrawal; or (b) any Lender shall become and then be a Defaulting Lender; or (c)
in connection with any proposed amendment, modification, termination, waiver or consent which
requires unanimous approval as contemplated by Section 9.2, the consent of Required Lenders
shall have been obtained but the consent of one or more of such other Lenders (each a
“Non-Consenting Lender”) whose consent is required shall not have been obtained; then so long as no
Potential Default or Event of Default is then continuing, with respect to each such Increased-Cost
Lender, Defaulting Lender or Non-Consenting Lender (the “Terminated Lender”),
Borrowers may, by giving written notice to Administrative Agent and any Terminated Lender of its
election to do so, elect to cause such Terminated Lender (and such Terminated Lender hereby
irrevocably agrees) to assign its outstanding Loans and its Revolving Commitments, if any, in full
to one or more Eligible Assignees (each a “Replacement
Lender”) in accordance with the provisions
of Section 9.8 and Terminated Lender shall pay any fees payable thereunder in connection with such
assignment; provided, (1) on the date of such assignment, the Replacement Lender shall pay
to Terminated Lender an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Terminated Lender, (B) an amount equal to all
unreimbursed drawings that have been funded by such Terminated Lender, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to
Section 2.19; (2) on
the date of such assignment, Borrowers shall pay any amounts payable to such Terminated Lender
pursuant to Section 2.15 and 2.18; or otherwise as if it were a prepayment and (3) in the
event such Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall consent, at
the time of such assignment, to each matter in respect of which such Terminated Lender was a
Non-Consenting Lender; provided, Borrowers may not make such election with respect to any
Terminated Lender that is also an Issuing Lender unless, prior to the effectiveness of such
election, Borrowers shall have caused each outstanding Letter of Credit issued thereby to be
cancelled. Upon the prepayment of all amounts owing to any Terminated Lender and the termination of
such Terminated Lender’s Revolving Commitments, if any, such Terminated Lender shall no longer
constitute a “Lender” for purposes hereof; provided, any rights of such Terminated Lender
to indemnification hereunder shall survive as to such Terminated Lender.

     2.17 Funding Indemnification.

          In the event of (a) the payment of any principal of any LIBO Rate Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any LIBO Rate Loan other than on the last day of the Interest

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Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Loan on
the date specified in any notice delivered pursuant hereto (regardless of whether such notice is
permitted to be revocable under Section 2.5 and is revoked in accordance herewith), or (d)
the assignment of any LIBO Rate Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrowers pursuant to
Section 2.5, then, in any
such event, the Borrowers shall compensate each Lender for the loss, cost and expense attributable
to such event. In the case of a LIBO Rate Loan, the loss to any Lender attributable to any such
event shall be deemed to include an amount determined by such Lender to be equal to the excess, if
any, of (i) the amount of interest that such Lender would have accrued on the principal amount of
such Loan for the period from the date of such payment, conversion, failure or assignment to the
last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow,
convert or continue, the duration of the Interest Period that would have resulted from such
borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to
the Reserve Adjusted LIBO Rate for such Interest Period, over (ii) the amount of interest
that such Lender would earn on such principal amount for such period if such Lender were to invest
such principal amount for such period at the interest rate that would be bid by such Lender (or an
affiliate of such Lender) for Dollar deposits from other banks in the eurodollar market at the
commencement of such period. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrowers and
shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as
due on any such certificate within 10 days after receipt thereof.

     2.18 Taxes.

          (1) Any and all payments by or on account of any obligation of the Borrowers hereunder or
under any other Loan Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrowers shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this
Section 2.18) the Administrative Agent,
Lender or Issuing Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrowers shall make such deductions and (iii)
the Borrowers shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

          (2) In addition, the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

          (3) The Borrowers shall indemnify the Administrative Agent, each Lender and the Issuing
Lender, within ten (10) Business Days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this
Section 2.18) paid by the Administrative
Agent, such Lender or such Issuing Lender, as the case may be, and any penalties, interest (except
to the extent such penalties and/or interest arise as a result of a Lender’s or Issuing Lender’s
delay in dealing with any such Indemnified Tax) and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental

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Authority. A certificate as to the amount of such payment or liability delivered to the
Borrowers by a Lender, the Issuing Lender or by the Administrative Agent on its own behalf or on
behalf of a Lender or Issuing Lender, shall be conclusive absent manifest error.

          (4) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrowers to a Governmental Authority, the Borrowers shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

          (5) Each Foreign Lender shall deliver to the Borrowers (with copies to the Administrative
Agent) on or before the date hereof (or in the case of a Foreign Lender who became a Lender by way
of an assignment, on or before the date of the assignment) or at least five (5) Business Days prior
to the first date for any payment herewith to such Lender, and from time to time as required for
renewal under applicable law, such certificates, documents or other evidence, as required by the
Code or Treasury Regulations issued pursuant thereto, including, without limitation, Internal
Revenue Service Form W-8BEN or W-ECI, as appropriate, and any other certificate or statement of
exemption required by Section 871(h) or Section 881(c) of the Code or any subsequent version
thereof, properly completed and duly executed by such Lender establishing that payments to such
Lender hereunder are not subject to withholding under the Code
(“Evidence of No Withholding”). Each
Foreign Lender shall promptly notify the Borrowers and the Administrative Agent of any change in
its applicable lending office and upon written request of the Borrowers or the Administrative Agent
shall, prior to the immediately following due date of any payment by the Borrowers hereunder or
under any other Loan Document, deliver Evidence of No Withholding to the Borrowers and the
Administrative Agent. The Borrowers shall be entitled to rely on such forms in their possession
until receipt of any revised or successor form pursuant to this
Section 2.18(5). If a
Lender fails to provide Evidence of No Withholding as required pursuant to this Section
2.18(5), then (i) the Borrowers (or the Administrative Agent) shall be entitled to deduct or
withhold from payments to Administrative Agent or such Lender as a result of such failure, as
required by law, and (ii) the Borrowers shall not be required to make payments of additional
amounts with respect to such withheld Taxes pursuant to Section 2.18(1) to the extent such
withholding is required solely by reason of the failure of such Lender to provide the necessary
Evidence of No Withholding.

     2.19 Fees.

          (1)
Unused Line Fee. Until the Obligations have been paid in full and this Agreement terminated, the Borrowers agree to pay, on the first day of each calendar quarter and on
the Revolving Commitment Termination Date, to the Administrative Agent, for the ratable account of
the Lenders, an unused line fee equal to the Applicable Unused Line Fee Percentage per annum on the
average daily amount by which, during the immediately preceding calendar quarter or shorter period
if calculated on the Revolving Commitment Termination Date, the Total Revolving Commitments during
such period exceeded the sum of (i) the average daily outstanding amount of the Revolving Loans and
(ii) the undrawn face amount of all outstanding Letters of Credit. The unused line fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.

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          (2) Letter of Credit Fees and Costs.

               (i) The Borrowers agree to pay to the Administrative Agent for
distribution to each Non-Defaulting Lender (based on their respective Applicable Percentage) in
Dollars, a fee in respect of each Letter of Credit issued for the
account of any Borrower (the“Letter of Credit Fee”), in each case for the period from and including the date of issuance of the
respective Letter of Credit to and including the date of termination of such Letter of Credit,
computed at a rate per annum equal to the applicable “LIBO Spread” as listed in the definition of
“applicable LIBO rate” on the daily face amount of such Letter of Credit. Accrued Letter of Credit
Fees shall be due and payable on the first Business Day of each August, November, February and May,
commencing with the first such day occurring after the Closing Date, and on the Revolving
Commitment Termination Date.

               (ii) The Borrowers agree to pay the Issuing Lender, for its own
account, in Dollars, a facing fee in respect of each Letter of Credit issued for the account of any
Borrower by such Issuing Lender (the “Facing Fee”), for the period from and including the date of
issuance of such Letter of Credit to and including the date of the termination of such Letter of
Credit, computed at a rate equal to one-eighth of one percent (.125%) per annum of the daily Stated
Amount of such Letter of Credit; provided that in no event shall the annual Facing Fee with respect
to any Letter of Credit be less than $250. Accrued Facing Fees shall be due and payable in arrears
on the first Business Day of each August, November, February and May commencing with the first such
day occurring after the Closing Date, and on the Revolving Commitment Termination Date.

               (iii) The Borrowers shall pay, upon each payment under, issuance of, or amendment to, any
Letter of Credit, such amount as shall at the time of such event be the administrative charge and
the reasonable expenses which the applicable Issuing Lender is generally imposing for payment
under, issuance of, or amendment to, Letters of Credit issued by it, not to exceed $500 per
issuance or amendment.

          (3) Administrative Agent Fee. The Borrowers agree to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately agreed upon between
TOUSA and the Administrative Agent in that certain Fee Letter dated as of August 1, 2005.

          (4) Payment of Fees. All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (except the Facing Fee which shall be paid
to the Issuing Lender) for distribution, in the case of the Unused Line Fee and the Letter of
Credit Fee, to the Lenders entitled thereto. Fees paid shall not be refundable under any
circumstances.

     2.20 Joint Borrower Provisions.

          (1) Each Borrower hereby irrevocably designates, appoints and authorizes the other
Borrower as its agent and attorney-in-fact to take actions under this Agreement and any other Loan
Document, together with such powers as are reasonably incidental thereto. The Administrative Agent
and the Lenders shall be entitled to rely, and shall be fully protected in

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relying, upon any communication from or to any of the Borrowers (including, without
limitation, any notice, consent or other instructions from any of the Borrowers) without any
confirming communication from or to the other Borrower; provided, however, that upon notice to any
Borrower (which notice shall be given at the sole and absolute discretion of the Administrative
Agent), the Administrative Agent shall be entitled to fail or refuse to take any action under this
Agreement or any other Loan Document (to the extent such action requires communication, including,
without limitation, any notice, consent, or other instructions, from any of the Borrowers), unless
the Administrative Agent has received confirming communications from all Borrowers. Any action
taken by one Borrower under this Agreement and any other Loan Document shall be conclusively
binding upon the other Borrowers.

          (2) Each Borrower agrees that it is jointly and severally liable to the
Administrative Agent and the Lenders for the payment of all Obligations and that such liability is
independent of the liability and obligation of the other Borrower with respect thereto, whether
such Obligations are due or not due, absolute or contingent, liquidated or unliquidated or whether
such Obligations otherwise become unenforceable against the other Borrowers. Any payment by a
Borrower of an Obligation shall not reduce its liability and obligation with respect to all other
Obligations hereunder. A separate action or actions may be brought and prosecuted against one of
the Borrowers whether action is brought against the other Borrower or whether the other Borrower is
joined in such action or actions. Each Borrower authorizes the Administrative Agent, on behalf of
the Lenders, without notice or demand and without affecting its liability and obligations
hereunder, from time to time, to (i) receive and hold security for the payment of the Obligations
and exchange, enforce, waive, release, fail to perfect, sell or otherwise dispose of any such
security, (ii) apply such security and direct the order or manner of sale thereof as the
Administrative Agent in its discretion may determine, and (iii) release or substitute any one or
more of endorser, guarantor or co-obligors of the Obligations.

          (3) Each Borrower waives any right to require the Administrative Agent or the Lenders to (i)
proceed against the other Borrower, (ii) proceed against or exhaust any security, or (iii) pursue
any other remedy in the Administrative Agent’s or the Lenders’ power whatsoever. Each Borrower
waives any defense arising by reason of any disability or other defense (excluding defense that all
sums have been paid) of the other Borrower, or the cessation from any cause whatsoever of the
liability of the other Borrower, or any claim that such Borrower’s Obligations exceed or are more
burdensome than those of the other Borrower. Until the Obligations shall have been finally,
irrevocably, indefeasibly paid in full, each Borrower waives any right of subrogation,
reimbursement, indemnification or contribution (contractual, statutory, or otherwise) including,
without limitation, any claim or right of subrogation under the Bankruptcy Code or any successor
statute, arising from the existence or performance of this Agreement, and each Borrower waives any
right to enforce any remedy which the Administrative Agent and/or the Lenders now have or may
hereafter have against the other Borrower and waives any benefit of, and any right to participate
in, any security hereafter held by the Administrative Agent, on behalf of the Lenders for the
Obligations. Each Borrower waives all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of
this Agreement and of the existence, creation or incurring of new or additional Obligations by the
other Borrower.

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          (4) Each Borrower acknowledges and agrees that it will have the sole responsibility for
obtaining from the other Borrower such information concerning the other Borrower’s financial
conditions or business operations as such Borrower may require, and that the Administrative Agent
and the Lenders have no duty at any time to disclose to any Borrower any information relating to
the other Borrower, including, without limitation, information regarding its business, operations
or financial condition.

          (5) Notwithstanding anything to the contrary contained in this Agreement or in any other Loan
Document, if any amount paid on account of the Obligations is subsequently invalidated, declared to
be fraudulent or preferential, set aside or required to be repaid by any Lender or the
Administrative Agent or paid over to a trustee, receiver or any other entity, whether under any
bankruptcy act or otherwise (such payment, a “Preferential
Payment”), then, to the extent of such
Preferential Payment, the Obligations or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been made.

     2.21 Credit Support

          (1) Guaranties. As credit support for the Obligations, on or before the Closing Date,
the Guarantors shall execute and deliver to the Administrative Agent, the Guaranties.

          (2) Pledge Agreement. As credit support for the Obligations, on or before the Closing
Date, the Pledger shall execute and deliver to the Administrative Agent, the Pledge Agreement.

          (3) Borrowers Security Documents. As collateral security for the Obligations, on or
before the Closing Date, the Borrowers shall execute and deliver to the Administrative Agent, each
Security Instrument.

     2.22 Facility Increase.

          At any time after August 1, 2006, the Borrowers may request, in writing, one-time increase in
the aggregate Revolving Commitments by up to the sum of $100,000,000
(the “Facility Increase”) in
accordance with the terms of this Section 2.22.

          (1) Such request shall be subject to the voluntary participation of Lenders or Eligible
Assignees in such Facility Increase as otherwise provided herein and the satisfaction of the each
of the following conditions:

               (i) The Borrower shall have given the Administrative Agent at least
30 days prior written notice of its intention to effect a Facility Increase and the desired amount
of such Facility Increase;

               (ii) At the time of and after giving effect to such increase, the
Borrowers are in pro forma compliance with the financial covenants set forth in Section
6.9 hereof;

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               (iii) No Potential Default or Event of Default has occurred and is continuing
or would result therefrom;

               (iv) Borrowers shall deliver to Administrative Agent such
endorsements to the Title Policy as Administrative Agent may request increasing the insured amount
of such Title Policy to include the Facility Increase;

               (v) The Borrower Parties shall have acknowledged and ratified that their obligations
under the applicable Loan Documents remain in full force and effect, and continue to guaranty the
Obligations under the Loan Documents, as Modified by the Facility Increase;

               (vi) The Borrowers shall have paid all reasonable out-of-pocket costs
and expenses incurred by the Administrative Agent and all reasonable fees and expenses paid to
third party consultants (including reasonable attorneys’ fees and expenses) by Administrative Agent
in connection with the Facility Increase;

               (vii) The Borrowers shall have paid all additional mortgage and intangible taxes
associated with the Facility Increase; and

               (viii) The
conditions precedent to a Borrowing set forth in Section 3.3 are
satisfied as of such date.

          (2) The Administrative Agent shall have the right to offer such increase to (x) the existing
Lenders, and each existing Lender will have the right, but not the obligation, to commit to all or
a portion of the proposed increase or (y) other Eligible Assignees acceptable to the Administrative
Agent and each Issuing Lender in its respective sole and absolute
discretion; provided, however, that the minimum Revolving Credit Commitment of each such new Eligible Assignee
accepting a Revolving Credit Commitment as part of such Facility Increase equals or exceeds
$5,000,000, and such Lender or Eligible Assignee executes an Assumption Agreement (each an
“Assumption Agreement”) pursuant to which such Lender agrees to commit to all or a
portion of such Facility Increase and, in the case of an Eligible Assignee, to be bound by the
terms of this Agreement as a Lender. On the effective date provided for in the Assumption Agreement
providing for a Facility Increase (each a “Facility Increase Effective Date”), the
Revolving Commitments will be increased by the amount committed to by each Lender or Eligible
Assignee on the Facility Increase Effective Date. In the event there are Lenders and Eligible
Assignees that have committed to a Facility Increase in excess of the maximum amount requested (or
permitted), then the Administrative Agent shall have the right to allocate such commitments, first
to Lenders and then to Eligible Assignees, on whatever basis the Administrative Agent determines is
appropriate.

          (3) Up to 25% of the Facility Increase (not to exceed $25 million) may be allocated by
Borrowers as an additional Letter of Credit Sublimit (the “Additional Letter of Credit
Facility”) subject to the following conditions: (i) each of the Lenders or Eligible Assignees
participating in the Facility Increase will have agreed to be subject to the same rights and
obligations with respect to the Additional Letter of Credit Facility as the Revolving Lenders have
pursuant to Section 2.3; (ii) unless it determines not to do so (in which event, another

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Lender shall have agreed to do so), DBTCA shall serve as the Issuing Lender in respect of the
Additional Letter of Credit Facility on the same terms as otherwise set forth in this Agreement;
and (iii) Borrowers shall have executed such additional documentation as Administrative Agent and
Issuing Lender may reasonably request to evidence the terms and conditions of the Additional Letter
of Credit Facility.

ARTICLE III

CONDITIONS PRECEDENT

     3.1 Conditions to Funding of Loans. As conditions precedent to the agreement of
the Lenders to fund their respective Pro Rata Shares of the Loans as of the date hereof:

          (1) The Borrower Parties, as applicable, shall have delivered or shall have caused to be
delivered to the Administrative Agent, in form and substance satisfactory to the Lenders and their
counsel and duly executed by the appropriate Persons (with sufficient copies for each of the
Lenders), each of the following:

               (i) This Agreement;

               (ii) To
the extent requested by any Lender pursuant to this
Section 3.1, a Note
payable to such Lender;

               (iii) the Guaranties;

               (iv) the Pledge Agreement;

               (v) each Security Instrument;

               (vi) [reserved];

               (vii) the Environmental Indemnity;

               (viii) Blocked Account Deposit Agreements as required under Section 4.29.

               (ix) A certificate of the Secretary or Assistant Secretary of the
general
partner or managing member of those Borrower Parties which are partnerships or limited liability
companies attaching copies of resolutions duly adopted by the Board of Directors of such general
partner or managing member approving the execution, delivery and performance of the Loan Documents
on behalf of such Borrower Parties and certifying the names and true signatures of the officers of
such general partner or managing member authorized to sign the Loan Documents to which such
Borrower Parties are party on behalf of such Borrower Parties;

               (x) A
certificate or certificates of the Secretary or an Assistant
 Secretary of those Borrower Parties which are corporations attaching copies of resolutions duly
adopted by the Board of Directors of such Borrower Parties approving the execution, delivery and
performance of the Loan Documents to which such Borrower Parties are party and certifying the names
and true signatures of the officers of each of such Borrower Parties authorized to sign

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the Loan Documents to which such Borrower Parties are party on behalf of such Borrower
Parties;

               (xi) Opinions of counsel for the Borrower Parties, in form and substance reasonably
acceptable to the Administrative Agent and the Lenders;

               (xii) Copies of the Organizational Documents of each of the
Transaction Parties, certified by the Secretary of State of the state of formation of such Person
as of a recent date;

               (xiii) A certificate of authority and good standing or analogous
documentation as of a recent date for each of the Borrower Parties, for each state in which such
Person is organized, formed or incorporated, as applicable, and each state with respect to which
the failure to be in good standing will have or is reasonably likely to have a Material Adverse
Effect with respect to such Person;

               (xiv) From a Responsible Officer of each of the Borrower Parties, a
Closing Certificate dated as of the Closing Date and a Borrowing Base Certificate dated as of the
Closing Date;

               (xv) Confirmation from the Administrative Agent that all fees required to be paid by the
Borrowers on or before the Closing Date (including pursuant to the Fee Letter) have been, or will
upon the funding of the Loan be, paid in full;

               (xvi) A complete and accurate copy of the most recent audited financial statement of TEP
Holdings Inc. (f/k/a Transeastern Properties, Inc.);

               (xvii) pro forma financial statements for each of the Borrowers as at the
Closing Date, and reflecting the consummation of the transactions contemplated under the Asset
Purchase Agreement, the related financings and the other transactions contemplated by the Loan
Documents to occur on or prior to the Closing Date, which pro forma financial statements shall be
in form and substance satisfactory to the Administrative Agent.

               (xviii) Evidence satisfactory to the Administrative Agent that all
reasonable costs and expenses of the Administrative Agent and the Lenders, including, without
limitation, fees of outside counsel and fees of third party consultants and appraisers, required
to be paid by the Borrowers on or prior to the Closing Date have been, or will upon the funding
of the Loan be, paid in full;

          (2) Each of the requirements set forth on Schedule 5.1(2) attached hereto shall have
been met to the satisfaction of the Administrative Agent and the Lenders.

          (3) All representations and warranties of the Borrower Parties set forth herein and in the
other Loan Documents shall be accurate and complete in all material respects as if made on and as
of the Closing Date (unless any such representation and warranty speaks as of a particular date, in
which case it shall be accurate and complete in all material respects as of such date).

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          (4) There shall not have occurred and be continuing as of the Closing Date any Event of
Default or Potential Default.

          (5) All acts and conditions (including, without limitation, the obtaining of any third party
consents and necessary regulatory approvals and the making of any required filings, recordings or
registrations) required to be done and performed and to have happened precedent to the execution,
delivery and performance of the Loan Documents by each of the Borrower Parties shall have been done
and performed.

          (6) All documentation, including, without limitation, documentation for corporate and legal
proceedings in connection with the transactions contemplated by the Loan Documents shall be
satisfactory in form and substance to the Administrative Agent, the Lenders and their counsel.

     3.2 Outside Closing Date. If all conditions precedent set forth in Section 3.1 above
shall not have been met to the satisfaction of the Administrative Agent and the Lenders on or
before August 15, 2005, then the agreement of the Lenders to fund their respective Pro Rata Shares
of the Loan shall terminate and this Agreement shall automatically be deemed of no further force or
effect (except to the extent terms and provisions of this Agreement specifically provide that they
shall survive termination hereof).

     3.3 Conditions Precedent to Each Revolving Loan, Swing Line Loan and Letter of
Credit.

          (1) Request for Borrowing or Issuance of Letter of Credit. With respect to any
Revolving Loan or Swing Line Loan, as applicable, the Administrative Agent shall have received a
duly executed Borrowing Request and with respect to any Letter of Credit, the Administrative Agent
and the Issuer shall have received a duly executed Letter of Credit Request.

          (2) Conditions to Borrowing. The obligation of each Lender to make a Loan on the
occasion of any new Borrowing (and with respect to subsection (ii) below, any LIBO Rate Loan), and
of the Issuing Lender to issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:

               (i) The representations and warranties of the Borrowers set forth in
this Agreement and in the other Loan Documents shall be true and correct in all material respects
(subject to updates as approved by the Administrative Agent) on and as of the date of such new
Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable (or, if any such representation or warranty is expressly stated to have been made as of
a specific date, as of such specific date);

               (ii) At the time of and immediately after giving effect to a new
Borrowing or any LIBO Rate Loan or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Potential Default or Event of Default shall have occurred and
be continuing;

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               (iii) At the time of each new Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, a Responsible Officer
shall certify that (i) no Potential Default or Event of Default shall have occurred and be
continuing and (ii) after giving effect to such new Borrowing or issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, the Borrower Parties remain in compliance with
the covenants set forth in Articles V and VI, including supporting documentation reasonably
satisfactory to the Administrative Agent; and

               (iv) Each new Borrowing and each issuance, amendment, renewal or
extension of such Letter of Credit shall be deemed to constitute a representation and warranty by
the Borrowers on the date thereof as to the matters specified in the preceding sentence.

          (3) Additional Matters. The Administrative Agent shall have received such
additional documents, information and materials as any Lender, through the Administrative Agent,
may reasonably request.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

     As an inducement to the Administrative Agent, each Lender, and the Issuing Lender to
enter into this Agreement, and for the Lenders to advance their respective Pro Rata Shares of the
Loans, each of the Borrowers, collectively and severally, represent and warrant as follows:

     4.1 Financial Condition.

          (1) The pro forma Consolidated balance sheets of the Borrowers and their Subsidiary Entities
as at June 30, 2005, and the related pro forma Consolidated statements of income, retained earnings
and cash flows of the Borrowers and their Subsidiary Entities for the fiscal year or fiscal
quarter, as the case may be, then ended, (and the June 30, 2004 financial statements of TEP
Holdings Inc. (f/k/a Transeastern Properties, Inc.) certified by independent certified public
accountants acceptable to the Administrative Agent), copies of which have been furnished to each
Lender, fairly present the pro forma Consolidated financial condition of the Borrowers and their
Subsidiary Entities as at such date and the pro forma Consolidated results of the operations of the
Borrowers and their Subsidiary Entities for the period ended on such date, all in conformity with
GAAP (subject, in the case of the financial statements as of and for the period ended June 30,
2005, to normal year-end adjustments and to the absence of notes).

          (2) Except
as set forth on Schedule 4.1, neither the Borrowers nor any of their
Subsidiary Entities has any material obligation, material contingent liability or material
liability for taxes, material long-term leases or unusual forward or long-term material commitment
that is not reflected in the financial statements referred to in clause (1) above or in the
notes thereto and not otherwise permitted by this Agreement.

     4.2 No Material Adverse Effect. Since December 31, 2004, no event has occurred which
has resulted in, or is reasonably likely to have, a Material Adverse Effect.

     4.3 Compliance with Laws. Each of the Borrowers and their Subsidiary Entities is in
compliance with all Requirements of Law and is not in default or in violation of any order, writ,

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injunction, decree or demand of any Governmental Authority, except where the failure to do so
or such default, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. To the Knowledge of the Borrowers, there are no Requirements of Law
applicable to any Transaction Party the compliance with which by such Transaction Party would, in
the aggregate, have a Material Adverse Effect. There has not been committed by Borrowers any act or
omission affording the federal government or any other Governmental Authority the right of
forfeiture as against any Mortgaged Property or any part thereof or any monies paid in performance
of Borrowers’ obligations under any of the Loan Documents.

     4.4 Organization, Powers; Authorization; Enforceability.

          (1) Each Borrower Party (A) is either a corporation, a limited partnership or a limited
liability company duly incorporated, formed or organized, validly existing, and in good standing
under the laws of the state of its incorporation, organization and/or formation, (B) is duly
qualified to do business and is in good standing under the laws of each jurisdiction in which the
failure to be so qualified and in good standing will have or is reasonably expected to have a
Material Adverse Effect, and (C) has all requisite corporate, partnership or limited liability
company power and authority to own, operate and encumber its Property and to conduct its business
as presently conducted and as proposed to be conducted in connection with and following the
consummation of the transactions contemplated by this Agreement. Each Borrower is a single member
limited liability company for purposes of federal income taxation and for purposes of the tax laws
of any state or locality in which it is subject to taxation based on its income.

          (2) True, correct and complete copies of the Organizational Documents of each Borrower,
Pledgor, and their respective Subsidiary Entities have been delivered to the Administrative Agent
and have not been Modified except to the extent indicated therein. All of the Organization
Documents are in full force and effect, and there are no defaults under such Organizational
Documents (including with respect to any restrictions on Indebtedness contained therein), and no
events which, with the passage of time or giving of notice or both, would constitute a default
under such Organizational Documents (including with respect to any restrictions on Indebtedness
contained therein).

          (3) The Borrower Parties have the requisite power and authority to execute, deliver and
perform this Agreement and each of the other Loan Documents which are required to be executed on
their behalf. The execution, delivery and performance of each of the Loan Documents which must be
executed in connection with this Agreement by any Borrower Party and to which any Borrower Party is
a party and the consummation of the transactions contemplated thereby are within such Borrower
Party’s partnership, company, or corporate powers, have been duly authorized by all necessary
partnership, company, or corporate action and such authorization has not been rescinded. No other
partnership, company, or corporate action or proceedings on the part of any Borrower Party is
necessary to consummate such transactions.

          (4) Each of the Loan Documents to which any Borrower Party is a party has been duly executed
and delivered on behalf of such Borrower Party and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms (subject to

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bankruptcy, insolvency, reorganization, or other laws affecting creditors’ rights generally
and to principles of equity, regardless of whether considered in a proceeding in equity or at law),
is in full force and effect and all the terms, provisions, agreements and conditions set forth
therein and required to be performed or complied with by such Borrower Party on or before the
Closing Date have been performed or complied with, and no Potential Default or Event of Default
exists thereunder.

     4.5 No Conflict. The execution, delivery and performance of the Loan Documents, the
borrowing hereunder, and the use of the proceeds thereof, will not violate any material Requirement
of Law or any Organizational Document or any material Contractual Obligation of any of the
Borrowers or their Subsidiary Entities; or create or result in the creation of any Lien on any
material assets of any of the Borrowers or their Subsidiary Entities other than the Liens created
by the Loan Documents.

     4.6 No Material Litigation. Except as disclosed on Schedule 4.6 hereto, no litigation,
investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to
Borrowers’ Knowledge, threatened by or against Borrowers or their Subsidiary Entities or against
any such Person’s Properties or revenues which is likely to be adversely determined and which, if
adversely determined, either individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect. The performance of any action by any Borrower Party required or
contemplated by any Loan Documents is not restrained or enjoined (either temporarily, preliminarily
or permanently).

     4.7 Taxes. (1) All federal, state, local and foreign income and franchise and other
material Tax returns, reports and similar statements or filings of the Borrowers and their Tax
Affiliates (collectively, the “Tax Returns”) have been filed with the appropriate Governmental
Authorities in all jurisdictions in which such Tax Returns are required to be filed, all such Tax
Returns are true and correct in all material respects, and all taxes, charges and other impositions
reflected therein have been paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof except to the extent such Taxes,
assessments, fees and other charges of Governmental Authorities are subject to a Good Faith
Contest. The Borrower Parties have no Knowledge of any proposed tax assessment against any Borrower
Party that will have or is reasonably likely to have a Material Adverse Effect. There are no
pending or proposed special or other assessments for public improvements or otherwise affecting the
Mortgaged Property, nor are there any contemplated improvements to the Mortgaged Property that may
result in such special or other assessments, which would, individually or collectively have or
would be reasonably likely to have a material adverse effect on such Mortgaged Property. Except as
set forth on Schedule 4.7, no Tax Return is under audit or examination by any Governmental
Authority and no notice of such an audit or examination or any assertion of any claim for Taxes has
been received from any Governmental Authority. Proper and accurate amounts have been withheld by
the Borrowers and each of its Tax Affiliates from their respective employees for all periods in
full and complete compliance with the tax, social security and unemployment withholding provisions
of applicable Requirements of Law and such withholdings have been timely paid to the respective
Governmental Authorities.

          (2) Except
as set forth on Schedule 4.7, none of the Borrower or any of its Tax
Affiliates has (i) executed or filed with the IRS or any other Governmental Authority any

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agreement or other document extending, or having the effect of extending, the period for the
filing of any Tax Return or the assessment or collection of any charges, (ii) incurred any
obligation under any tax sharing agreement or arrangement other than those of which the
Administrative Agent has received a copy prior to the date hereof, or (iii) been a member of an
affiliated, combined or unitary group other than the group of which the Borrowers (or its Tax
Affiliate) is the common parent.

          (3) All mortgage, mortgage recording, stamp, intangible or other similar Tax required to
be paid by any Person under applicable Requirements of Law currently in effect in connection with
the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the
Loan Documents, including, without limitation, the Security Instruments, have been paid or have
been collected by the closing agent for payment, and, under current Requirements of Law, the
Security Instruments are enforceable against the Borrowers in accordance with their terms by the
Administrative Agent (or any subsequent holder thereof) subject only to applicable bankruptcy,
insolvency and similar laws affecting rights of creditors generally, and subject as to
enforceability, to general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

     4.8 Regulated Entities. None of the Borrower Parties, nor any Person controlling such
entities, is (a) an “investment company” or an “affiliated Person” of, or “promoter” or “principal
underwriter” for, or otherwise “controlled” by an “investment company,” as such terms are defined
in the Investment Company Act of 1940, as amended. None of the Borrowers and their Subsidiary
Entities (1) is subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other
Federal or state statute or regulation limiting its ability to incur Indebtedness, or (2) is a
“foreign Person” within the meaning of Section 1445 of the Code.

     4.9 Subsidiary Entities. The Borrower Parties have fully disclosed to Administrative
Agent all material aspects of the ownership structure of the Transaction Parties and their
respective Subsidiary Entities and have disclosed to Administrative Agent the correct legal name of
each such Person, the type of organization, and the jurisdiction of its incorporation or
organization, and (2) the class of outstanding Capital Stock of Borrowers and their Subsidiary
Entities along with the percentage thereof owned, directly or indirectly, by the Transaction
Parties. None of such issued and outstanding Capital Stock is subject to any vesting, redemption,
or repurchase agreement, and there are no warrants or options outstanding with respect to such
Capital Stock, except as disclosed in Schedule 4.9. The outstanding Capital Stock of each
Subsidiary Entity is duly authorized, validly issued, fully paid, nonassessable and not subject to
any Liens. Each Transaction Party: (A) is a corporation, limited liability company, or partnership,
which is duly organized, validly existing and, if applicable, in good standing under the laws of
the jurisdiction of its organization, (B) is duly qualified to do business and, if applicable, is
in good standing under the laws of each jurisdiction in which failure to be so qualified and in
good standing would result in a Material Adverse Effect, and (C) has all requisite power and
authority to own, operate and encumber its Property and to conduct its business as presently
conducted and as proposed to be conducted hereafter.

     4.10 Federal Reserve Board Regulations. None of the Borrower Parties is engaged or
will engage, principally or as one of its important activities, in the business of extending credit

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for the purpose of “purchasing” or “carrying” any “Margin Stock” within the respective
meanings of such terms under Regulations U, T and X. No part of the proceeds of the Loan will be
used for “purchasing” or “carrying” “Margin Stock” as so defined or for any purpose which violates,
or which would be inconsistent with, the provisions of, the Regulations of the Board of Governors
of the Federal Reserve System.

     4.11 ERISA Compliance. Except as disclosed on Schedule 4.11:

          (1) Each Plan is in compliance with the applicable provisions of ERISA, the Code and other
federal or state law failure to comply with which would reasonably be likely to result in a
Material Adverse Effect. Each Plan which is intended to qualify under Section 401(a) of the Code
has received a favorable determination letter from the IRS and to Borrowers’ Knowledge, nothing has
occurred which would cause the loss of such qualification.

          (2) There are no pending or, to Borrowers’ Knowledge, threatened claims, actions or lawsuits,
or action by any Governmental Authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to any Plan which has
resulted or could reasonably be expected to result in a Material Adverse Effect.

          (3) No ERISA Event has occurred or is reasonably expected to occur with respect to any Pension
Plan or, to Borrowers’ Knowledge, Multiemployer Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect.

          (4) No Pension Plan has any Unfunded Pension Liability which has resulted or could reasonably
be expected to result in a Material Adverse Effect.

          (5) None of the Borrower Parties or their respective Subsidiaries, nor any ERISA Affiliate has
incurred, nor reasonably expects to incur, any liability under Title IV of ERISA with respect to
any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA) which has
resulted or could reasonably be expected to result in a Material Adverse Effect.

          (6) None of the Borrower Parties or their respective Subsidiaries, nor any ERISA Affiliate has
incurred nor reasonably expects to incur any liability (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect.

          (7) None of the Borrower Parties or their respective Subsidiaries, nor any ERISA Affiliate has
transferred any Unfunded Pension Liability to any Person or otherwise engaged in a transaction that
is subject to Section 4069 or 4212(c) of ERISA which has resulted or could reasonably be expected
to result in a Material Adverse Effect.

     4.12 Assets and Liens.

          (1) Each of the Borrowers and their Subsidiaries has good and marketable title to all
Property and assets reflected in the financial statements referred to in Section 4.1 above,

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except Property and assets sold or otherwise disposed of in the Ordinary Course of Business
subsequent to the respective dates thereof. The Operating Company Entities have good and marketable
title to all of the Mortgaged Property, free and clear of all Liens whatsoever except the Permitted
Encumbrances. The Mortgaged Property constitutes all of the Real Property, Personal Property,
equipment and fixtures currently owned, leased or licensed by the Operating Company Entities.

          (2) The Security Instruments, when properly recorded in the appropriate records,
together with any Uniform Commercial Code financing statements required to be filed in connection
therewith, will create (a) a valid, perfected first mortgage lien on the Real Property and the
Improvements, subject only to Permitted Encumbrances and (b) perfected security interests in and
to, and perfected collateral assignments of, all personality (including any Qualified
Purchase/Option Agreements and the Leases), all in accordance with the terms thereof, in each case
subject only to any applicable Permitted Encumbrances. Except as may be indicated in and insured
over by the Title Policy, to the Borrowers’ Knowledge there are no claims for payment for work,
labor or materials affecting the Mortgaged Property which are or may become a lien prior to, or of
equal priority with, the Liens created by the Loan Documents. None of the Permitted Encumbrances
will have a material adverse affect on the Mortgaged Property which they encumber. Except for Lots
released in accordance with Section 6.4(5) hereto, the Operating Company Entities shall
each preserve its right, title and interest in and to the Mortgaged Property for so long as any
Obligations remain outstanding and will warrant and defend same and the validity and priority of
the Lien of the Security Instruments from and against any and all claims whatsoever other than the
Permitted Encumbrances.

     4.13 Securities Acts. None of the Borrowers and their Subsidiary Entities have issued
any unregistered securities in violation of the registration requirements of Section 5 of the
Securities Act of 1933 (as amended from time to time, the “Act”) or any other law, nor are they in
violation of any rule, regulation or requirement under the Act, or the Securities Exchange Act of
1934 (as amended from time to time) other than violations which could not reasonably be expected to
have a Material Adverse Effect. None of the Borrowers and their Subsidiary Entities is required to
qualify an indenture under the Trust Indenture Act of 1939, (as amended from time to time) in
connection with its execution and delivery of this Agreement or the incurrence of Indebtedness
hereunder.

     4.14 Consents, Etc. Except as disclosed in Schedule 4.14, no consent, approval or
authorization of, or registration, declaration or filing with any Governmental Authority or any
other Person is required (i) in connection with the execution and delivery of the Loan Documents by
the Borrower Parties; or (ii) the performance of or compliance with the terms, provisions and
conditions of the Loan Documents by such Persons, other than those that have been obtained, copies
of which have been or will be delivered to the Administrative Agent pursuant to Section 3.1, and
each of which on the Effective Date will be in full force and effect.

     4.15 Hazardous Materials. The Borrowers and their Subsidiary Entities have caused
Phase I and the other environmental assessments as set forth in Schedule 4.15 to be conducted or
have taken other steps to investigate the past and present environmental condition and use of their
Real Properties. Based on such investigation, except as otherwise disclosed in the assessments
listed on Schedule 4.15: (1) during the period of ownership of any Mortgaged

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Property by any Operating Company Entity, such Mortgaged Property (or any portion thereof) has
not been used for the purpose of, or in any way involving, the handling, manufacture, treatment,
storage, use, generation, release, discharge, refining, dumping or disposal of any Hazardous
Materials on, under, in or about the Mortgaged Property, or transporting any Hazardous Materials
to, from or across the Mortgaged Property, except in all cases in material compliance with
Hazardous Materials Laws and only in the course of legitimate business operations at the Mortgaged
Property, and to the Borrowers’ Knowledge, (a) no such use occurred at any time prior to the period
of ownership of such Mortgaged Property by any Operating Company Entity, and (b) no such use has
occurred on any property adjacent to such Mortgaged Property at any time prior to the date hereof;
(2) the Operating Company Entities have obtained all material environmental, health and safety
permits and licenses necessary for their respective operations, and all such permits are in good
standing and the holder of each such permit is currently in compliance with all terms and
conditions of such permits; (3) none of the Mortgaged Property is listed or proposed for listing on
the National Priorities List (“NPL”) pursuant to CERCLA or on the Comprehensive Environmental
Response Compensation Liability Information System List (“CERCLIS”) or any similar applicable state
list of sites requiring remedial action under any Hazardous Materials Laws; (3) none of the
Operating Company Entities has sent or directly arranged for the transport of any hazardous waste
to any site listed or proposed for listing on the NPL, CERCLIS or any similar state list; and (4)
to the Borrowers’ Knowledge, there is not now on or in any Mortgaged Property: (a) any landfill or
surface impoundment; (b) any underground storage tanks; (c) any asbestos-containing material; or
(d) any polychlorinated biphenyls (PCB), which in the case of any of clauses (a) through (d) could
reasonably result in a violation of any Hazardous Materials Laws.

     Except as set forth in the environmental reports and studies delivered to the Administrative
Agent prior to the date hereof, (i) to Borrowers’ Knowledge, no Hazardous Materials are presently
constructed, deposited, stored, or otherwise located on, under, in or about the Mortgaged Property
except in material compliance with Hazardous Materials Laws; (ii) to Borrowers’ Knowledge, no
Hazardous Materials have migrated from the Mortgaged Property upon or beneath other properties
which would reasonably be expected to result in material liability for any Borrowers or Operating
Company Entity; and (iii) to Borrowers’ Knowledge, no Hazardous Materials have migrated or threaten
to migrate from other properties upon, about or beneath the Mortgaged Property which would
reasonably be expected to result in material liability for any Borrowers.

     4.16 Intellectual Property. The Borrowers and their Subsidiary Entities own or are
licensed or otherwise have the right to use all of the patents, trademarks, service marks, trade
names and copyrights that are necessary for the operation of their respective businesses, without
any conflict with the rights of any other Person that could reasonably be expected to have a
Material Adverse Effect. To Borrowers’ Knowledge no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now contemplated to be
employed, by the Borrowers and their Subsidiary Entities infringes upon any rights held by any
other Person.

     4.17 Insurance. Schedule 4.17 accurately describes the insurance coverages for the
Borrowers and their Subsidiary Entities as of the Closing Date. Such insurance coverages are
currently in full force and effect and in compliance with the applicable requirements of Section

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5.5. The Borrowers have obtained and delivered to the Administrative Agent evidence of all
insurance policies as required under Section 5.5. The Borrowers have not, and to the Borrowers’
Knowledge no Person has, done by act or omission anything that would impair the coverage of any
such policy.

     4.18 Full Disclosure. The information provided to the Administrative Agent and the
Lenders by or on behalf of the Borrower Parties relating to such Persons and the transactions
contemplated under the Loan Documents does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained therein or herein not
materially misleading.

     4.19 Brokers. None of the Borrower Parties has dealt with any broker or finder with
respect to the transactions embodied in this Agreement and the other Loan Documents except for JMP
Securities, LLC (“JMP”), and any commissions or fees due to IMP shall have been paid.

     4.20 No Default. No Potential Default or Event of Default has occurred and is
continuing.

     4.21 Solvency. After giving effect to the Loan, and the disbursement of the proceeds
thereof pursuant to the Borrowers’ instructions, the Transaction Parties shall each be Solvent.
None of the Transaction Parties is contemplating either the filing of a petition by it under any
state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of such
entity’s assets or property, and no Transaction Party has any Knowledge of any Person contemplating
the filing of any such petition against it or against any other Transaction Party.

     4.22 Contractual Obligations. None of the Borrower Parties is a party to any
Contractual Obligation which is reasonably likely to have a Material Adverse Effect. None of the
Borrower Parties is in default in any respect in the performance, observance or fulfillment of any
of its Contractual Obligations, which default is reasonably likely to have a Material Adverse
Effect. None of the Borrower Parties has any material financial obligation (contingent or
otherwise) under any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it or any Mortgaged Property is otherwise bound,
other than (a) obligations incurred in the ordinary course of the operation of the Mortgaged
Property, (b) Permitted Encumbrances; and (c) obligations under the Loan Documents.

     4.23 Representations Regarding the Mortgaged Property.

          (1) Condemnation and Casualty. No Condemnation has been commenced or, to Borrower’s
Knowledge, is contemplated with respect to all or any material portion of the Mortgaged Property.
No portion of the Mortgaged Property has been materially damaged as a result of any Casualty.

          (2) Assessments. To Borrowers’ Knowledge, except as disclosed in the Title Policy, on
the real estate tax bill, the existing and/or proposed entitlement and land use and zoning
approvals (copies of which tax bills and zoning compliance have been provided to Administrative
Agent), there are no pending or proposed special or other assessments for public improvements or
otherwise affecting the Mortgaged Property, nor are there any contemplated improvements to the
Mortgaged Property that may result in such special or other assessments.

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          (3) Flood Plain. The Mortgaged Property is not located in an area identified by
the Federal Emergency Management Agency as an area having special flood hazards, except as
disclosed on the Surveys or if located in such area, that status has been disclosed to
Administrative Agent and does not unreasonably impair the value of the subject Mortgaged Property.

          (4) No Prior Assignment. There are no prior sales, transfers or assignments of any
portion of the Rents due and payable or to become due and payable which are presently outstanding
following the funding of the Loan, other than those being terminated or assigned to the
Administrative Agent concurrently herewith.

          (5) Leases and Purchase/Option Agreements. The Mortgaged Property is not subject to
any Leases demising any portion of the Mortgaged Property other than Approved Leases. No Person
(other than the Operating Company Entities) has any possessory interest in the Mortgaged Property
or right to occupy the same except under and pursuant to the provisions of Approved Leases, the
Purchase/Option Agreements, or other Permitted Encumbrances. The Approved Leases and
Purchase/Option Agreements are in full force and effect, and are enforceable in accordance with
their terms (subject to bankruptcy, insolvency, reorganization, or other laws affecting creditors’
rights generally and to principles of equity, regardless of whether considered in a proceeding in
equity or at law). There are no material defaults under the Purchase/Option Agreements and
Permitted Encumbrances by Borrowers or their Subsidiary Entities, or to the Borrowers’ Knowledge
any other Person, and to the Borrowers’ Knowledge there are no conditions that, with the passage of
time or the giving of notice, or both, would constitute material defaults thereunder. There has
been no prior sale, transfer or assignment, hypothecation or pledge by the Borrowers or any
Operating Company Entity of any Purchase/Option Agreement or of any Rents payable pursuant thereto,
which will be outstanding following the funding of the Loan, other than those being assigned to the
Administrative Agent concurrently herewith. All construction and other obligations of a material
nature to be performed by the Borrowers and the Operating Company Entities under the
Purchase/Option Agreements, and other Permitted Encumbrances either have been satisfied or are
reasonably capable of being satisfied without undue expense in accordance with the provisions of
the subject Purchase/Option Agreement, or Permitted Encumbrance. Any payments by the Borrowers or
any Operating Company Entity to the other parties to the Purchase/Option Agreements, and other
Permitted Encumbrances for tenant improvements, infrastructure, or land development have been made
to the extent then required. No Person party to any Approved Lease, Purchase/Option Agreement, or
any Permitted Encumbrance is entitled to any material offsets, abatements, deductions against the
Rent payable thereunder from and after the date hereof.

          (6) Options to Acquire. Except in connection with Bona Fide Sales Contracts, none of
the Mortgaged Property is subject to any right of first refusal, right of first offer or other
options to purchase other than those in favor of the Operating Company Entities pursuant to the
Purchase/Option Agreements.

          (7) Borrowing Base Certificates. All Borrowing Base Certificates submitted to
Administrative Agent pursuant to Section 5.1(9) hereof, including the statements regarding
the satisfaction of the criteria comprising each category of the Borrowing Base (as set forth in
the

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applicable defined terms in Article I) and the calculations pertaining thereto, are true,
correct and complete in all material respects.

     4.24 Use of Proceeds. The proceeds of the Loans and the Letters of Credit have been or
are being used by the Borrowers solely (a) to finance the acquisition of the Transeastern Assets
(“Acquisition”), (b) to pay transaction costs and expenses, and (c) for the general corporate needs
of the Borrowers, including the development of the Borrowing Base assets and the acquisition of
qualified Borrowing Base assets.

     4.25 Single Purpose Entity. Each Transaction Party (other than the TOUSA
Guarantors and F/R Member) is a Single Purpose Entity.

     4.26 Labor. There are no strikes, work stoppages, slowdowns or lockouts pending or to
Borrowers’ Knowledge, threatened against or involving the Borrowers or any of their Subsidiary
Entities, other than those that in the aggregate would not have a Material Adverse Effect. There
are no unfair labor practices, grievances or complaints pending, or, to the Borrowers’ Knowledge,
threatened, against or involving the Borrowers or any of their Subsidiary Entities, nor are there
any pending or, to the Borrower’s Knowledge, threatened arbitrations or grievances involving the
Borrowers or any of their Subsidiary Entities, other than those that, in the aggregate, if resolved
adversely to the Borrowers, would not have a Material Adverse Effect.

     4.27 Taxpayer Identification Number. The Borrowers’federal taxpayer identification
numbers are as set forth on attached Schedule 4.27.

     4.28 Anti-Terrorism Laws

          (1) Neither of the Borrowers nor, to the Knowledge of any of the Transaction Parties, any of
their Affiliates is in violation of any laws relating to terrorism or money laundering
(“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective
September 23, 2001 (the “Executive Order”), and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56
(signed into law on October 26, 2001) (the “USA Patriot Act”).

          (2) Neither of the Borrowers nor, to the Knowledge of any of the Transaction Parties, any of
their Affiliates acting or benefiting in any capacity in connection with the Loans is any of the
following:

               (i) a Person or entity that is listed in the annex to, or is otherwise subject to
the provisions of, the Executive Order;

               (ii) a Person or entity owned or controlled by, or acting for or on behalf of, any
Person or entity that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order;

               (iii) a Person or entity with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;

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               (iv) a Person or entity that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order; or

               (v) a Person or entity that is named as a “specially designated national and blocked
Person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets
Control at its official website or any replacement website or other replacement official
publication of such list.

          (3) Neither of the Borrowers nor, to the Knowledge of any Transaction Party, any of
their Affiliates acting in any capacity in connection with the Loans (i) conducts any business or
engages in making or receiving any contribution of funds, goods or services to or for the benefit
of any Person described in clause (2) above, (ii) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant to the Executive
Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has
the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in
any Anti-Terrorism Law.

     4.29 Blocked Accounts. Schedule 4.29 hereof contains as of the Closing Date a
complete and accurate list of all Blocked Accounts (including, without limitation, any Deposit
Account), other than any De Minimis Accounts, maintained with any bank or other financial
institution by the Borrowers or their Subsidiary Entities, each of which financial institutions
shall be an Eligible Assignee and shall have executed a Blocked Deposit Account Agreement.

ARTICLE V

AFFIRMATIVE COVENANTS.

     Each of the Borrower Parties, jointly and severally, hereby covenants and agrees with the
Administrative Agent and each Lender that, as long as any Obligations or the Revolving Commitments
remain unpaid, or any Letters of Credit remain outstanding, it will do, and cause any Transaction
Party to do directly or indirectly, the following:

     5.1 Reporting Requirements

     The Borrowers shall furnish to the Administrative Agent each of the
following:

          (1) Quarterly Reports.

          Within 60 days after the end of each fiscal quarter (other than fiscal quarters ending
December 31), financial information regarding the Borrowers and their Subsidiaries consisting of
Consolidated and consolidating unaudited balance sheets as of the close of such quarter and the
related statements of income and cash flow for such quarter and that portion of the fiscal year
ending as of the close of such quarter, setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the Projections, or, if
applicable the latest business plan provided pursuant to clause (d) below, for the current
fiscal year, in each case certified by the Responsible Financial Officer of the Borrowers as fairly
presenting the Consolidated and consolidating financial position of the Borrowers and their
Subsidiaries as at the dates indicated and the results of their operations and cash flow for the

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periods indicated in conformity with GAAP (subject to the absence of footnote disclosure and
normal year-end audit adjustments).

          (2) Annual Reports.

          Within 90 days after the end of each fiscal year, financial information regarding the
Borrowers and their Subsidiaries consisting of Consolidated and consolidating balance sheets of the
Borrowers and their Subsidiaries as of the end of such year and related statements of income and
cash flows of the Borrowers and their Subsidiaries for such fiscal year, all prepared in conformity
with GAAP and certified, in the case of such Consolidated financial statements, without
qualification as to the scope of the audit or as to the Borrower being a going concern by
independent certified public accountants reasonably acceptable to the Administrative Agent,
together with the report of such accounting firm stating that such financial statements fairly
present the Consolidated financial position of the Borrowers and their Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except for changes with which such
independent certified public accountants shall concur and which shall have been disclosed in the
notes to the financial statements).

          (3) Compliance Certificate. Together with each delivery of any report pursuant to
clauses (1) and (2) of this Section 5.1,

               (i) a certificate of a Responsible Officer of the Borrowers (each, a “Compliance
Certificate”) (A) showing in reasonable detail the calculations used in demonstrating compliance
with each of the financial covenants contained in Section 6.9 as of the end of such
quarter, and (B) stating that no Potential Default or Event of Default has occurred and is
continuing or, if a Potential Default or an Event of Default has occurred and is continuing,
stating the nature thereof and the action that the Borrowers propose to take with respect thereto;
and

               (ii) summary Consolidated and consolidating financial statements for the Borrowers.

          (4) Projections/Business Plan.

          Not later than the end of each Fiscal Year, the annual business and financial plans of the
Borrowers for the next succeeding Fiscal Year.

          (5) Default Notices.

          As soon as practicable, and in any event within five Business Days after a Responsible Officer
of any Transaction Party has Knowledge of the existence of any Potential Default, Event of Default
or other event having had a Material Adverse Effect, the Borrowers shall give the Administrative
Agent notice specifying the nature of such Potential Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given by telephone, shall be promptly
confirmed in writing on the next Business Day.

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          (6) Notice of Litigation.

          Promptly after the commencement thereof, the Borrowers shall give the Administrative Agent
written notice of the commencement of all actions, suits and proceedings before any domestic or
foreign Governmental Authority or arbitrator, affecting the Borrowers or any of their Subsidiary
Entities, that, in the reasonable judgment of the Borrowers, expose the Borrowers or their
Subsidiary Entities to liability which, if adversely determined could reasonably be expected to
have a Material Adverse Effect.

          (7) ERISA Matters.

          The Borrowers shall furnish the Administrative Agent the following:

               (i) promptly and in any event within ten (10) days after the
Borrowers, any of their Subsidiaries or any ERISA Affiliate knows or has reason to know that any
ERISA Event reasonably likely to result in a liability of the Borrowers or their Subsidiaries in
excess of $1,000,000 has occurred, a written statement of a Responsible Officer of the Borrowers
describing such ERISA Event and the action, if any, that the Borrowers, their Subsidiaries and
ERISA Affiliates propose to take with respect thereto and a copy of any notice filed by the
Borrowers, any of their Subsidiaries or any ERISA Affiliate with the PBGC or the IRS pertaining
thereto; and

               (ii) promptly following any request therefor, copies of (i) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by the Borrowers or any ERISA
Affiliate with the Internal Revenue Service with respect to each Title IV Plan; (ii) the most
recent actuarial valuation report for each Title IV Plan; (iii) all notices received by the
Borrowers or any ERISA Affiliate from a Multiemployer Plan sponsor or any governmental agency
concerning an ERISA Event; and (iv) such other documents or governmental reports or filings
relating to any Title IV Plan (or employee benefit plan sponsored or contributed to by any Company)
as the Administrative Agent shall reasonably request.

          (8) Environmental Matters.

          The Borrowers shall provide to the Administrative Agent promptly (and in any event within 10
Business Days): (i) any Hazardous Material Claims Known to the Borrowers (not listed on Schedule
4.15 hereto) which would be reasonably expected to result in a Material Adverse Effect to the
portion of the Mortgaged Property subject to such Hazardous Material Claim; (ii) the receipt of any
credible notice of any alleged violation of Hazardous Materials Laws with respect to the Mortgaged
Property provided that such alleged violation, if true (and if any release of the
Hazardous Materials alleged therein were not promptly remediated), would result in a breach of
subsections (1) or (2) of Section 5.9; and (iii) the discovery of any occurrence or condition on
the Mortgaged Property that could cause the Borrowers to be in violation of clause (1) or, if not
promptly remediated, clause (2) of Section 5.9.

          (9) Borrowing Base Determination.

               (i) No later than 20 days after the last day of each calendar month or more frequently
as requested by the Administrative Agent, the Borrowers shall provide a

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Borrowing Base Certificate as of the first day of such month executed by a Responsible Officer
of the Borrowers. The Borrowers agree that each Borrowing Base Certificate delivered by the
Borrowers shall be accompanied by appropriate supporting data. The Borrowers agree that the
Administrative Agent in the process of its verification may determine, in its reasonable
discretion, the particular category to which any Borrowing Base Asset belongs; and the Borrowers
further agree that, if Administrative Agent reasonably determines that it would be necessary or
desirable, such process of verification may include new Appraisals of the Real Property, provided
that, unless an Event of Default shall have occurred and be continuing at the time such Appraisals
are undertaken, Borrowers shall not be liable for the expense of more than one Appraisal for each
Real Property in any twelve (12) month period.

               (ii) The Administrative Agent may (prior to the occurrence of a
Potential Default or an Event of Default, at its sole cost and expense and with reasonable prior
written notice (not to exceed three (3) Business Days) to the Borrower, and, after and during the
continuance of a Potential Default or an Event of Default, at the Borrower’s sole cost and expense)
make physical verifications of the Borrowing Base Assets in any manner and through any medium that
the Administrative Agent considers advisable, and the Borrower shall furnish all such assistance
and information as the Administrative Agent may require in connection therewith.

          (10) Other Information.

          The Borrower will provide the Administrative Agent or any Lender with such other information
respecting the business, properties, condition, financial or otherwise, or operations of the
Borrowers or any of their Subsidiary Entities as the Administrative Agent or any Lender through the
Administrative Agent may from time to time reasonably request.

     5.2 Maintenance of Existence and Rights. The Borrower Parties shall do or cause to be
done all things necessary to (i) preserve, renew and keep in full force and effect such Person’s
existence, rights, licenses, permits and franchises necessary to comply with all Requirements of
Law applicable to them and the Mortgaged Property, except to the extent permitted in Section 6.3;
and (ii) remain qualified to do business and maintain its good standing in each jurisdiction in
which failure to be so qualified and in good standing would reasonably be expected to have a
Material Adverse Effect.

     5.3 Compliance with Laws; Forfeiture.

     Subject to any Good Faith Contest, each of the Borrower Parties shall comply and cause the
Mortgaged Property to be in material compliance with all material Requirements of Law applicable to
the Borrower Parties and the Mortgaged Property and the uses permitted upon the Mortgaged Property.
There shall never be committed by the Borrowers Parties, and the Borrower Parties shall not
knowingly permit, any other Person in occupancy of or involved with the operation or use of the
Mortgaged Property to commit, any act or omission affording the federal government or any state or
local government the right of forfeiture as against the Mortgaged Property or any part thereof or
any monies paid in performance of the Borrowers’ obligations under any of the Loan Documents.
Borrowers hereby covenant and agree not to

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commit, knowingly permit or suffer to exist any act or omission affording such right
of forfeiture.

     5.4 Access. The Borrowers shall from time to time permit the Administrative Agent and
the Lenders, or any agents or representatives thereof, promptly after written notification of the
same (except that during the continuance of an Event of Default, no such notice shall be required)
to (a) examine and make copies of and abstracts from the records and books of account of the
Borrowers and each of their Subsidiary Entities, (b) visit the properties of the Borrowers and each
of their Subsidiary Entities, (c) discuss the affairs, finances and accounts of the Borrowers and
each of their Subsidiary Entities with any of their respective officers or directors and (d)
communicate directly with any of the Borrowers’ certified public accountants. The Borrowers shall
authorize their independent certified public accountants to disclose to the Administrative Agent or
any Lender during the continuance of an Event of Default any and all financial statements and other
information of any kind, as the Administrative Agent or any Lender reasonably requests from the
Borrowers and that such accountants may have with respect to the business, financial condition,
results of operations or other affairs of the Borrowers or any of their Subsidiary Entities.

     5.5 Insurance; Casualty; Condemnation; Restoration

          (1) Insurance. The Administrative Agent has accepted the Borrowers’ current insurance
program and policies through December 31, 2005 and any requirements set forth in this Section
5.5 which are not satisfied by said current insurance program are hereby waived through such
date. On and after December 31, 2005, the Borrowers shall, at their sole cost and expense, keep in
full force and effect insurance coverage of the types and minimum limits as set forth in
Schedule 5.5.

          (2) Insurance Proceeds.

               (i) If any portion of the Mortgaged Property is damaged or destroyed, in whole or in
part in any material respect, by a Casualty, the Borrowers shall give prompt written notice thereof
to the Administrative Agent, generally describing the nature and extent of such Casualty. Following
the occurrence of a Casualty, the Borrowers, regardless of whether proceeds are available, shall in
a reasonably prompt manner (unless otherwise required by any Requirement of Law or Insurance
Requirement) proceed to restore, repair, replace or rebuild the Mortgaged Property to the extent
practicable to be of at least equal value and of substantially the same character as prior to the
Casualty.

               (ii) Subject to clause (v) below, in the event of a Casualty where the
loss does not exceed $5,000,000, the Borrowers may settle and adjust such claim; provided that such
adjustment is carried out in a competent and timely manner. In such case, the Borrowers are hereby
authorized to collect and receive for the Administrative Agent any Proceeds.

               (iii) Subject to clause (v) below, in the event of a Casualty where the
loss exceeds $10,000,000 (“Material Casualty”), the Borrowers may settle and adjust such claim only
with the consent of the Administrative Agent (which consent shall not be unreasonably

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withheld or delayed) and the Administrative Agent shall have the opportunity to participate in
any such adjustments.

               (iv) The proceeds of any Policy in excess of $1,000,000 shall be due
and payable jointly to the Administrative Agent and the Borrowers as their interests may appear and
held and applied in accordance with the terms hereof, with Administrative Agent to be shown as
Mortgagee and Loss Payee on all Property Insurance.

               (v) Notwithstanding the terms of clauses (i) and (ii) above, the
Administrative Agent shall have the sole authority to collect all Proceeds if an Event of Default
shall have occurred and is continuing.

          (3) Right of the Borrowers to Apply to Restoration. In the event of (a) a Casualty
that does not constitute a Material Casualty, or (b) a Condemnation that does not constitute a
Material Condemnation, the Administrative Agent shall permit the application of the Proceeds (after
reimbursement of any expenses incurred by the Administrative Agent) to reimburse the Borrowers for
the cost of restoring, repairing, replacing or rebuilding or otherwise curing title defects at the
Mortgaged Property (the “Restoration”), in the manner required hereby, provided and on the
condition that (1) no Event of Default shall have occurred and be then continuing and (2) in the
reasonable judgment of the Administrative Agent:

               (i) the Mortgaged Property, after such Restoration and stabilization, will adequately
secure the outstanding balance of the Loan, and

               (ii) the Restoration can be completed by the 90th day prior to the Maturity Date.

          (4) Material Casualty or Condemnation and the Administrative Agent’s Right to
Apply. In the event of a Material Casualty or a Material Condemnation, then the Administrative
Agent shall have the option to (i) apply the Proceeds therefrom in respect of the Obligations, or
(ii) make such Proceeds available to reimburse the Borrowers for the cost of any Restoration in the
manner set forth below in Section 5.5(5) hereof. Notwithstanding anything to the contrary
contained herein, in the event of a Material Casualty or a Material Condemnation, if, either, the
Administrative Agent determines in its reasonable discretion that the conditions in Sections
5.5(3)(i) or (ii) above will not be satisfied, or the Borrowers cannot restore, repair, replace
or rebuild the Mortgaged Property to be of at least substantially equal value and of substantially
the same character as prior to the Material Casualty or Material Condemnation or title defect
because the Mortgaged Property is a legally non-conforming use or as a result of any other
Requirement of Law, the Borrowers hereby agree that the Administrative Agent may apply the Proceeds
payable in connection therewith in respect of the Obligations.

          (5) Manner of Restoration and Reimbursement. If the Borrowers are entitled pursuant to
Sections 5.5(3) or (4) above to reimbursement out of Proceeds (and the conditions
specified therein shall have been satisfied), such Proceeds shall be disbursed by Administrative
Agent in accordance with Administrative Agent’s customary renovation and restoration standards.

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          (6) Condemnation. Borrowers shall promptly notify, or cause to be notified,
Administrative Agent of the actual or threatened commencement of any proceeding for the
Condemnation of any Mortgaged Property of which Borrowers have Knowledge and deliver or cause to be
diligently delivered to Administrative Agent copies of any and all material papers served in
connection with such proceedings. Administrative Agent may participate in any such proceedings, and
the Borrowers shall from time to time deliver to Administrative Agent all instruments requested by
them to permit such participation. Borrowers shall, at their expense, diligently prosecute or cause
to be diligently prosecuted any such proceedings, and shall consult with Administrative Agent, its
attorneys, and experts, and cooperate with them in the carrying on or defense of any such
proceedings. Borrowers may settle and compromise the Proceeds of any Condemnation where the loss
exceeds $5,000,000 (a “Material Condemnation”) only with the consent of the Administrative Agent
(which consent shall not be unreasonably withheld or delayed). Notwithstanding any taking by any
public or quasi-public authority through Condemnation or otherwise (including but not limited to
any transfer made in lieu of or in anticipation of the exercise of such taking), the Borrowers
shall continue to pay the Obligations at the time and in the manner provided for herein and the
other Loan Documents, and the Obligations shall not be reduced unless and until any Proceeds shall
have been actually received and applied by Administrative Agent, after the deduction of expenses of
collection, to the reduction or discharge of the Obligations pursuant to the terms of Section
5.5(3) or 5.5(4) above. Administrative Agent shall not be limited to the interest paid on
such Proceeds by the condemning authority but shall be entitled to receive out of such Proceeds
interest at the rate or rates provided herein applicable to the Loan. To the extent the Proceeds of
any Condemnation are to be applied by Administrative Agent pursuant to Section 5.5(3) or
5.5(4) above, the Borrowers shall cause such Proceeds to be paid directly to the
Administrative Agent to be held and applied pursuant to such provisions. If any Mortgaged Property
or any portion thereof is taken by a condemning authority, the Borrowers shall promptly commence
and diligently prosecute the restoration of such Mortgaged Property to the extent practicable to be
of at least equal value and of substantially the same character as prior to such Condemnation.

     5.6 Books and Records

          The Borrowers and their Subsidiary Entities shall keep and maintain on a Fiscal Year basis
proper books and records in which accurate and complete entries shall be made of all dealings or
transactions of or in relation to the Loan, the Mortgaged Property and the business and affairs of
the Borrowers relating to the Mortgaged Property which shall reflect all items of income and
expense in connection with the operation of the Mortgaged Property and in connection with any
services, equipment or furnishings provided in connection with the operation of the Mortgaged
Property, in accordance with GAAP.

     5.7 Maintenance of Property.

          The Borrowers and their Subsidiary Entities shall keep and maintain, or cause to be kept and
maintained, the Mortgaged Property and every part thereof in good condition and repair, subject to
ordinary wear and tear, and, subject to the provisions of this Agreement with respect to damage or
destruction caused by a Casualty or Condemnation, shall not permit or commit any waste, impairment,
or deterioration of any portion of the Mortgaged Property in any material respect. The Borrowers
further covenant to do all other acts which from the character or

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use of the Mortgaged Property may be reasonably necessary to protect the security hereof,
the specific enumerations herein not excluding the general.

     5.8 Taxes.

          (1) The Borrower Parties shall file all Tax Returns required to be filed in any
jurisdiction and, if applicable, and except with respect to Taxes subject to any Good Faith
Contest, pay and discharge all Taxes imposed upon it or any of its Properties or in respect of any
of its franchises, business, income or property before any material penalty shall be incurred with
respect to such Taxes.

          (2) The Borrowers shall pay all Impositions now or hereafter levied or assessed or imposed
against the Mortgaged Property or any part thereof prior to the imposition of any interest, charges
or expenses for the non-payment thereof and shall pay all Other Charges on or before the date they
are due. Subject to the Borrowers’ right to pursue a Good Faith Contest, the Administrative Agent,
on behalf of the Borrowers, may pay, but shall not be obligated to pay, any delinquent Impositions
and Other Charges which are attributable to or affect the Mortgaged Property or the Borrowers
directly to the applicable taxing authority with respect thereto, and the Borrowers agree to
reimburse the Administrative Agent for such payments promptly on demand.

     5.9
Environmental.

          The Borrowers shall:

          (1) Keep and maintain the Mortgaged Property in material compliance with all Hazardous
Materials Laws.

          (2) Promptly cause the removal of any Hazardous Materials discharged, disposed of, or
otherwise released in, on or under the Mortgaged Property that are in material violation of any
Hazardous Materials Laws, and cause any remediation required by any Hazardous Material Laws or
Governmental Authority to be performed, though no such action shall be required if any action is
subject to a Good Faith Contest. In the course of carrying out such actions, the Borrowers shall
provide the Administrative Agent with such periodic information and notices regarding the status of
investigation, removal, and remediation, as the Administrative Agent may reasonably require.

     5.10 Business and Operations. The Borrowers and Operating Company Entities shall
continue to engage in the businesses presently conducted by them as and to the extent the same are
necessary for the ownership, maintenance, management and operation of the Mortgaged Property.

     5.11 Title to the Mortgaged Property. Each Borrower and Operating Company Entity shall
warrant and defend (a) its title to the Mortgaged Property and every part thereof, subject only to
Liens permitted hereunder (including Permitted Encumbrances) and (b) the validity and priority of
the Liens of the applicable Security Instrument and this Agreement on the Mortgaged Property,
subject only to Liens permitted hereunder (including Permitted Encumbrances), in each case against
the claims of all Persons whomsoever.

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     5.12 Loan Proceeds. The Borrowers shall use the entire amount of the proceeds of
the Loans and Letters of Credit as provided in Section 4.24.

     5.13 Hedging Arrangements. Within ninety (90) days after the Closing Date, Borrowers
shall enter into Interest Rate Contracts in form and substance reasonably satisfactory to
Administrative Agent, and shall be assigned to Administrative Agent pursuant to assignment
documents in form and substance satisfactory to Administrative Agent in its reasonable discretion.

     5.14 Single Purpose Entities

          Borrowers shall cause each Transaction Party (other than the TOUSA Guarantors) to maintain
themselves as Single Purpose Entities.

     5.15 Subordination.

          (1) Except with respect to Permitted Entitlement Payments permitted under Section
6.8(1), each Borrower Party hereby absolutely and irrevocably subordinates, and agrees that
each other Transaction Party shall subordinate (each such Transaction Party, in such capacity, a
“Subordinated Creditor”), both in right of payment and in time of payment any and all present or
future obligations and liabilities of the Borrowers to such Persons (such obligations and
liabilities referred to in clauses (a) or (b) being “Subordinated Indebtedness”), to the prior
payment in full in cash of the Obligations. Each Subordinated Creditor agrees to make no claim for,
or receive payment with respect to, such Subordinated Indebtedness until all Obligations and such
obligations have been fully discharged in cash.

          (2) All amounts and other assets that may from time to time be paid or distributed to or
otherwise received by any Subordinated Creditor in respect of Subordinated Indebtedness in
violation of this Section 5.15 shall be segregated and held in trust by the
Subordinated Creditor for the benefit of the Lenders and promptly paid over to the
Administrative Agent.

          (3) Each Subordinated Creditor further agrees not to assign all or any part of the
Subordinated Indebtedness unless the Administrative Agent is given prior notice and such assignment
is expressly made subject to the terms of this Agreement. If the Administrative Agent so
requests, (a) all instruments evidencing the Subordinated Indebtedness shall be duly endorsed and
delivered to the Administrative Agent, (b) all security for the Subordinated Indebtedness shall be
duly assigned and delivered to Administrative Agent for the benefit of the Lenders, (c) the
Subordinated Indebtedness shall be enforced, collected and held by the relevant Subordinated
Creditor as trustee for the Lenders and shall be paid over to the Administrative Agent for the
benefit of the Lenders on account of the Obligations, and (d) the Subordinated Creditors shall
execute, file and record such documents and instruments and take such other action as the
Administrative Agent deems necessary or appropriate to perfect, preserve and enforce the Lenders’
rights in and to the Subordinated Indebtedness and any security therefor. If any Subordinated
Creditor fails to take any such action, the Administrative Agent, as attorney-in-fact for such
Subordinated Creditor, is hereby authorized to do so in the name of the

           

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Subordinated Creditor. The foregoing power of attorney is coupled with an interest and cannot
be revoked.

          (4) In any bankruptcy or other proceeding in which the filing of claims is required by
Requirements of Law, each Subordinated Creditor shall file all claims relating to the Subordinated
Indebtedness that the Subordinated Creditor may have against the obligor thereunder and shall
assign to the Administrative Agent, for the benefit of the Lenders, all rights relating to the
Subordinated Indebtedness thereunder. If any Subordinated Creditor does not file any such claim,
the Administrative Agent, as attorney-in-fact for the Subordinated Creditor, is hereby authorized
to do so in the name of the Subordinated Creditor or, in the Administrative Agent’s discretion, to
assign the claim to a nominee and to cause proof of claim to be filed in the name of the
Administrative Agent or the Administrative Agent’s nominee. The foregoing power of attorney is
coupled with an interest and cannot be revoked. The Administrative Agent or its nominee shall have
the right, in its reasonable discretion, to accept or reject any plan proposed in such proceeding
and to take any other action which a party filing a claim is entitled to do. In all such cases,
whether in administration, bankruptcy or otherwise, the Person or Persons authorized to pay such
claim shall pay to the Administrative Agent for the benefit of the Lenders the amount payable on
such claim and, to the full extent necessary for that purpose, each Subordinated Creditor hereby
assigns to the Administrative Agent for the benefit of the Lenders all of the Subordinated
Creditor’s rights to any such payments or distributions; provided, however, the Subordinated
Creditor’s obligations hereunder shall not be satisfied except to the extent that the
Administrative Agent receives cash by reason of any such payment or distribution.

          (5) Each of the Subordinated Creditors hereby agrees that the Administrative Agent and the
Lenders may at any time in their discretion renew or extend the time of payment of the Obligations
or exercise, fail to exercise, waive or Modify any other of their rights under this Agreement, any Loan Document or any instrument evidencing or securing or delivered in connection therewith, and
in reference thereto may make and enter into such agreements as to them may seem proper or
desirable, all without notice to or further assent from the Subordinated Creditors (except as
otherwise expressly required pursuant to this Agreement), and any such action shall not in any
manner impair or affect the subordination set forth in this Section 5.15 or any of the
Administrative Agent’s or Lenders’ rights hereunder. The Subordinated Creditors each hereby waive
and agree not to assert against the Administrative Agent or the Lenders any rights which a
guarantor or surety could exercise with respect to any indebtedness of any Transaction Party, but
nothing in this Section 5.15 shall constitute the Subordinated Creditors as a guarantor or
surety.

     5.16 Cash Management System

          Borrowers shall, and shall cause each of their Subsidiary Entities to, establish and maintain
cash management systems reasonably acceptable to Administrative Agent. At no time shall more than
$500,000 be held in any Deposit Account or other account of Borrowers or any of their Subsidiary
Entities in which Administrative Agent does not have a perfected first-priority Lien pursuant to a
Blocked Deposit Account Agreement.

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     5.17 Further Assurances.

          (1) The Borrower Parties shall, and shall cause each of the Borrowers and their Subsidiary
Entities to, promptly upon request by the Administrative Agent or any Lender, do any acts or,
execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register, any and
all such further deeds, conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments the Administrative Agent or
such Lender, as the case may be, may reasonably require from time to time in order (i) to carry out
more effectively the purposes of this Agreement or any other Loan Document, and (ii) to assure,
convey, grant, assign, transfer, preserve, protect and confirm to the Administrative Agent and
Lenders the rights granted or now or hereafter intended to be granted to the Lenders under any Loan
Document or under any other document executed in connection therewith.

          (2) Administrative Agent will take such action as may be reasonably required in order to
permit the filing of plats or other documents necessary for the development of improvements on the
Mortgaged Property to the extent required by any applicable Governmental Authority and otherwise
permitted under the terms of this Agreement.

ARTICLE VI

NEGATIVE COVENANTS.

     The Borrowers, jointly and severally, hereby covenant and agree with the Administrative Agent,
the Issuing Lender and each Lender that, as long as any Obligations or the Revolving Commitments
remain outstanding:

     6.1 Liens. The Borrowers shall not, and shall not permit any of their Subsidiary
Entities to, create, incur, assume or suffer to exist, any Lien upon any of its Property
except:

          (1) Permitted Encumbrances; and

          (2) Other Liens which are the subject of a Good Faith Contest.

     6.2 Indebtedness. TOUSA Senior shall not incur any Indebtedness other than the
Obligations. The Operating Company Entities shall not incur any Indebtedness other than Permitted
Debt.

     6.3 Fundamental Change.

          (1) The Borrowers shall not, and shall not permit any of their Subsidiary Entities to do
any or all of the following: merge or consolidate with any Person, or sell, assign, lease or
otherwise effect a Disposition, whether in one transaction or in a series of transactions, of all
or substantially all of its Properties and assets, whether now owned or hereafter acquired, or
enter into any agreement to do any of the foregoing.

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          (2) The Borrowers shall not, and shall not permit any of their Subsidiary Entities
to engage to any material extent in any business other than such Person’s business as conducted on
the date hereof and businesses which are incidental thereto.

     6.4 Disposition.

          The Borrowers shall not cause or permit, and shall not permit any of their Subsidiary
Entities to cause or permit, any of the following to occur:

          (1) Any Change of Control; or

          (2) Any Disposition by TOUSA Member or F/R Member of any of the Capital Stock in the
Investment Vehicle; or

          (3) Any Disposition by the Investment Vehicle of any of the Capital Stock in any other Upper
Tier Entity or indirect ownership of 100% of the Capital Stock in Borrowers; or

          (4) Any Disposition by TOUSA Senior of any of the Capital Stock in the Operating Company or
indirect ownership of 100% of the Capital Stock in any other Operating Company Entity; or

          (5) Without the Administrative Agent’s prior written consent in its sole and absolute
discretion, a Disposition of legal, Beneficial or direct or indirect equitable interests in all or
any part of the Mortgaged Property, except as follows:

               (i) Sale of Personal Property. The Borrowers and their
Subsidiary
Entities may effect a Disposition of Personal Property (other than Capital Stock as restricted in
this Section 6.4), free from the Lien of the applicable Security Instrument, to the extent such
Personal Property is being replaced or is no longer necessary in connection with the operation of
the Mortgaged Property, and will not materially impair the value, utility, or operation of the
subject Mortgaged Property and provided that any new Personal Property acquired by the Borrowers or
their Subsidiary Entities (and not so disposed of) shall be subject to the Lien of the applicable
Security Instrument. The Administrative Agent shall, from time to time, upon receipt of an
Officer’s Certificate requesting the same and confirming satisfaction of the conditions set forth
above, execute a written instrument in form reasonably satisfactory to the Administrative Agent to
confirm that such Personal Property which is to be, or has been, sold or disposed of is free from
the Lien of the applicable Security Instrument.

               (ii) Immaterial Transfers. The Borrowers and their Subsidiary Entities may,
without the consent of the Administrative Agent, (a) make immaterial Dispositions (including, but
not limited to, lot line adjustments) of portions of the Mortgaged Property to Governmental
Authorities for dedication or public use or, portions of the Mortgaged Property to third parties
for the purpose of erecting and operating additional structures whose use is integrated with the
use of the Mortgaged Property or resolving encroachment issues, and (b) grant easements,
restrictions, covenants, reservations and rights of way for resolving minor encroachment issues or
for access, water and sewer lines, telephone and telegraph lines, electric lines or other utilities
or for other similar purposes, provided that no such Disposition set forth in the foregoing clauses
(a) and (b) shall materially impair the value, utility or operation of the

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subject Mortgaged Property. In connection with any Disposition permitted pursuant to this
Section 6.4(5)(ii), the Administrative Agent shall execute and deliver any instrument
reasonably necessary or appropriate, in the case of the Dispositions referred to in clause (a)
above, to release the portion of the Mortgaged Property affected by such Disposition from the Lien
of the applicable Security Instrument or, in the case of clause (b) above, to subordinate the Lien
of such Security Instrument to such easements, restrictions, covenants, reservations and rights of
way or other similar grants upon receipt by the Administrative Agent of:

                    (A) ten (10) days prior written notice thereof;

                    (B) a copy of the instrument or instruments of Disposition;

                    (C) an Officer’s Certificate stating (x) with respect to any
Disposition, the consideration, if any, being paid for the Disposition and (y) that such
Disposition does not materially impair the value, utility or operation of the subject Mortgaged
Property; and

                    (D) reimbursement of all of the Administrative Agent’s reasonable costs and expenses
incurred in connection with such Disposition.

               (iii) Release
Property. Provided that no Default or Event of Default then exists,
Administrative Agent shall from time to time release from the Lien of the Security Instruments
portions of the Mortgaged Property subject to a Bona Fide Sales Contract (“Release Property”) and
deliver to the Borrowers a duly executed partial release with respect to such Release Property in
recordable form, a UCC-3 release of security interest and other such documents as may be reasonably
required to release such Release Property from the Lien of the Security Instruments. Borrower
agrees Administrative Agent may process such releases and other documents in batches not more often
than twice in any calendar month. The release of any Release Property from the Lien of the Security
Instruments shall occur pursuant to an escrow arrangement with the escrow agent and such
arrangement shall be reasonably satisfactory to Administrative Agent. Any release pursuant to this
Section 6.4(5)(iii) is conditional upon satisfaction of each of the following conditions:

                    (A) The Release Property is being sold in the Ordinary Course
of Business or constitutes common areas of the project to be developed and is being conveyed to a
community development district, homeowners’ association or condominium association which governs
the development of infrastructure improvements for the benefit of the project;

                    (B) Not less than three (3) Business Days prior to the desired
release date, the Borrowers shall have given to Administrative Agent a written request for the
release accompanied by (i) a release of Liens and related Loan Documents for the applicable portion
of the Mortgaged Property for execution by the Administrative Agent, which release documents shall
be in a form appropriate in the applicable state and otherwise satisfactory to the Administrative
Agent in its reasonable discretion; (ii) an Officer’s Certificate certifying that the requirement
described in paragraph (D) below is satisfied in connection with such release; and (iii) all other
evidence, information and other items required by Administrative Agent;

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                    (C) Neither the release from the Lien of the Security Instrument nor the conveyance to
the Purchaser of such Release Property will violate any Requirements of Law (including zoning and
subdivision laws and regulations) and the Release Property, the remaining portion of the Mortgaged
Property, and the conveyance shall be in compliance with all Requirements of Law (including zoning
and subdivision laws and regulations);

                    (D) Either (i) after giving effect to such Release, the Aggregate Commitments shall not exceed
the Borrowing Base, or (ii) with respect to a Bulk Sale or any sale which would result in the
Aggregate Commitments exceeding the Borrowing Base, Borrowers shall deposit with Administrative
Agent immediately available funds as needed to restore Borrowing Base compliance (which deposit may
consist of the transfer from escrow of proceeds resulting from such Bulk Sale), and upon receipt by
Administrative Agent such sums shall be applied in accordance with Section 2.8(4)(ii)
above;

                    (E) Administrative Agent shall have received such other documents, certificates, instruments,
opinions or assurances as Administrative Agent may reasonably request; and

                    (F) In the event of a Bulk Sale, Borrowers shall have paid all reasonable out-of-pocket costs
and expenses incurred by the Administrative Agent and all reasonable fees and expenses paid to
third party consultants (including reasonable attorneys’ fees and expenses) by Administrative Agent
and the Lenders in connection with such release.

     6.5 Investments.

          The Borrowers shall not, and shall not permit any of their Subsidiary Entities to, directly or
indirectly make or maintain any Investment except:

          (1) Investments existing on the date of this Agreement and disclosed on Schedule 6.5;

          (2) Investments in cash and Cash Equivalents;

          (3) Investments by the Operating Company in accounts, contract, general intangibles and
chattel paper (each as defined in the UCC), notes receivable and similar items arising or acquired
in the Ordinary Course of Business;

          (4) Investments received in settlement of amounts due to the Borrowers or any Subsidiary
Entity of the Borrowers effected in the Ordinary Course of Business;

          (5) Investments by the Operating Company in any wholly owned Subsidiary of Operating Company
provided that:

               (i) The Subsidiary is a Single Purpose Entity;

               (ii) The Organization Documents of such Subsidiary are approved by Administrative Agent in
its reasonable judgment;

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               (iii) The Subsidiary guarantees the Loans pursuant to a Guaranty in form and substance
reasonably satisfactory to Administrative Agent;

               (iv) The applicable Operating Company Entity executes a Pledge
Agreement in form and substance reasonably satisfactory to Administrative Agent creating a first
priority Lien in favor of Administrative Agent in and to all the equity interests in the new
Subsidiary and the Operating Company Entities execute and deliver such additional financing
statements, security documents, and other materials as may be necessary or appropriate to perfect
Administrative Agent’s first priority Lien thereon;

               (v) Unless the Property of such Subsidiary is exempt from the Lien of the Security
Instruments pursuant to clause (v) of the definition of Permitted Encumbrances, such Subsidiary
shall:

                    (A) execute and deliver a Security Instrument granting Administrative Agent a first priority
lien on its Property, which Security Instrument shall be in form and substance reasonably
satisfactory to Administrative Agent;

                    (B) satisfy all of the conditions set forth in Section 6.5(8) with respect to any
Real Property it owns or will acquire; and

                    (C) execute and deliver such additional financing statements, security documents, and other
materials as may be necessary or appropriate to perfect Administrative Agent’s first priority Lien
on such Property.

          (6) Loans or advances to employees of the Operating Company Entities in the Ordinary Course
Of Business, which loans and advances shall not exceed the aggregate outstanding principal amount
of $1,000,000 at any time;

          (7) Advances on sales commissions to the sales agents of the Operating Company Entities; and

          (8) Acquisitions by the Operating Company Entities of Real Property (and ancillary Personal
Property in connection therewith) in the Ordinary Course of Business of such Persons, subject to
satisfying each of the following conditions (which conditions shall be satisfied regardless of
whether the Real Property was subject to a Qualified Purchase/Option Agreement prior to such
Acquisition):

               (i) No Potential Default or Event of Default shall have occurred and then be continuing nor
shall any Potential Default or Event of Default arise as a result of such acquisition;

               (ii) Administrative Agent shall have received and reasonably approved a fully executed and
notarized Security Instrument, in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering the subject Real Property and any related Personal Property;

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               (iii) All representations and warranties under Section 4.23 shall be true, correct,
and complete with respect to the subject Real Property;

               (iv) Administrative Agent shall have received an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) with respect to the enforceability of the Security
Instrument and such other matters as Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative Agent;

               (v) Administrative Agent shall have received: (a) a Title Policy issued by one or more title
companies reasonably satisfactory to Administrative Agent, in amounts not less than the Fair Market
Value of such Real Property, dated not more than thirty (30) days prior to the Closing Date and
copies of all recorded documents listed as exceptions to title or otherwise referred to therein,
each in form and substance reasonably satisfactory to Administrative Agent; (b) evidence
satisfactory to Administrative Agent that the Operating Company Entities have paid to the title
company or to the appropriate governmental authorities all expenses and premiums of the title
company and all other sums required in connection with the issuance of such title policy and all
recording, mortgage, transfer, and stamp taxes (including mortgage recording and intangible taxes)
payable in connection with recording the Security Instrument in the appropriate real estate
records; and (c) a Survey with respect to the subject Real Property.

               (vi) Administrative Agent shall have received reports and other
information, in form, scope and substance reasonably satisfactory to Administrative Agent regarding
environmental matters relating to the Real Property, which reports shall include a Phase I Report
and shall demonstrate compliance with Section 4.15.

               (vii) The Real Property shall be covered by the insurance policies required to be maintained by
Borrowers under this Agreement.

               (viii) At the request of Administrative Agent, deliver an Appraisal with respect to the subject
Real Property.

               (ix) In no event shall the aggregate Fair Market Value of any Unentitled Land owned by the
Operating Company Entities exceed $40 million.

     6.6 Transactions with Affiliates

     The Borrowers shall not, and shall not permit any of their Subsidiary Entities to directly or
indirectly enter into or permit to exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any service) with (i) a
holder or holders of more than five percent (5%) of any class of
Capital Stock of TOUSA Guarantors,
F/R Member, or their respective constituent equity holders; or (ii) with any Affiliate of the
foregoing which is not a wholly owned Subsidiary of Borrowers (a “Transactional
Affiliate”), except (A) as set forth on Schedule 6.6 or (B) upon prior notice to
Administrative Agent and upon fair and reasonable terms no less favorable to the Borrowers than
would be obtained in a comparable arm’s-length transaction with a Person not a Transactional
Affiliate.

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     6.7 Modifications to Organizational Documents and Material Agreements

          (1) The Borrowers shall not, and shall not permit any of their Subsidiary Entities to Modify
any of their Organizational Documents without the Administrative Agent’s prior written consent,
other than (a) Modifications necessary to clarify existing provisions of such Organizational
Documents; and (b) Modifications which would have no adverse effect on the rights or interests of
Administrative Agent or Lenders in conjunction with the Loan or under the Loan Documents and would
not change in any material respect the rights and obligations of the parties to such Organizational
Documents.

          (2) The Borrowers shall not, and shall not permit any of their Subsidiary Entities to Modify
any Purchase/Option Agreements with respect to Qualified Option Land without the Administrative
Agent’s prior written consent, other than Modifications which would have no adverse effect on the
rights or interests of Administrative Agent or Lenders in conjunction with the Loan or under the
Loan Documents and would not change in any material respect the rights and obligations of the
parties to such Purchase/Option Agreements.

     6.8 Restricted Payments.

          (1) If any Event of Default has occurred and is continuing, the Borrowers shall not make, and
shall not permit any of their Subsidiary Entities to make any Distributions other than
Distributions to the Seller in respect of Permitted Entitlement Payments, provided that such
Permitted Entitlement Payments are then due in accordance with the terms of the Asset Purchase
Agreement.

          (2) The Borrowers shall not make, and shall not permit any of their Subsidiary Entities to
make any other Distributions unless no Event of Default has occurred and is then continuing and
such Distribution consists of one or more of the following:

               (i) Such Distribution is to the Seller in respect of Permitted Post Closing Sale Payments,
provided that such Permitted Post Closing Sale Payments are then due in accordance with the terms
of the Asset Purchase Agreement.

               (ii) Permitted Tax Distributions.

               (iii) Distributions to the Mezzanine Borrowers in an amount equal to the Mezzanine Debt
Service in accordance with the terms of the Mezzanine Loan Documents.

               (iv) In the event, as of the end of a calendar quarter, taking into consideration the proposed
Distribution, the ratio (expressed as a percentage) of Total Funded Debt to Total Book
Capitalization is less than 60% and trailing twelve (12) months EBITDA is $225 million or more (the
“Base Distribution Conditions”), Distributions not exceeding $2.5 million in any calendar
quarter.

               (v) The Permitted Management Fee may be paid to TOUSA Member subject to the following
conditions:

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                    (A) The aggregate amount of the fee shall not exceed $5 million with respect to any calendar
year;

                    (B) All such fees shall accrue and shall only be payable on and after the Management Fee
Payment Date if such payments will not, on a pro-forma basis, result in non-compliance with any of
the covenants in Section 6.9 below; and

                    (C) The Permitted Management Fee shall be (and is hereby) fully subordinated to the payment
of the Obligations.

               (vi) Distributions to TOUSA Member (through the Upper Tier Entities) as reimbursement for any
Permitted Entitlement Cure Payment, provided that each of the following conditions has been
satisfied:

                    (A) The aggregate amount of such Distributions does not exceed $37.5 million;

                    (B) The Distributions shall occur quarterly in three equal installments; and

                    (C) At the time of each such quarterly Distribution the ratio (expressed as a percentage) of
Total Funded Debt to Total Book Capitalization is less than 70%, and trailing twelve (12) months
EBITDA is $225 million or more.

               (vii) Distributions to TOUSA Member (through the Upper Tier Entities) as reimbursement for the
Priority Capital Investment provided the following conditions have been satisfied:

                    (A) the Distributions are made only during the Extension Period (provided all conditions

thereto have been satisfied, including those under
Section 2.6(5)(ii), and the Facilities have in
fact been extended);

                    (B) the Distributions shall occur quarterly in four equal installments and the aggregate
amount of the Distributions shall not exceed the Priority Capital Investment;

                    (C) no interest or preferred return shall have been or shall be paid in respect of the
Priority Capital Investment prior to the repayment in full of all Obligations (including all
outstanding principal and interest) and the termination of all Commitments; and

                    (D) at the time of each such quarterly redemption no Potential Default or Event of Default
then exists and each of the Base Distribution Conditions shall have been satisfied.

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     6.9 Financial Covenants.

               (i) Maximum Total Leverage. At any time during the periods indicated below, the ratio
(expressed as a percentage) of Total Funded Debt to Total Book Capitalization, shall not be greater
than the percentages set forth below:

	 	 	 	 	 
	Period	 	Percentage
	From December 31, 2005 to December 31, 2006

	 	 	80	%
	From December 31, 2006 to September 30, 2007

	 	 	70	%
	From September 30, 2007 
	 	 	60	%

               (ii) Maximum Senior Leverage. At any time during the periods indicated below, the ratio
(expressed as a percentage) of Senior Funded Debt to Total Book Capitalization, shall not
be greater than the percentages set forth below:

	 	 	 	 	 
	Period	 	Percentage
	From December 31, 2005 to December 31, 2006

	 	 	60	%
	From December 31, 2006 to September 30, 2007

	 	 	50	%
	From September 30, 2007 
	 	 	40	%

               (iii) Minimum Interest Coverage Ratio. As of the last day of any Fiscal Quarter
(beginning with the Fiscal Quarter ending December 31, 2005), the Interest Coverage Ratio shall not
be less than 2.5.

               (iv) Minimum Net Worth. At any time, Net Worth shall not be less than $125,000,000.

               (v) Minimum Liquidity. At all times the sum of (A) the Available Credit then in effect; and
(B) Unrestricted Cash (other than any Unrestricted Cash then included in the Borrowing Base) shall
not be less than $25,000,000.

     6.10 Sale Leaseback

          The Borrowers shall not, and shall not permit any of their Subsidiary Entities to, enter into any
sale and leaseback transaction covering any Real Property;
provided, however, that the Operating Company Entities may sell Model Homes in the Ordinary Course Of Business and
leaseback such Model Homes for a term not to exceed three years so long as none of the Borrowers or
any of their Subsidiary Entities has any obligation to sell or repurchase the leased Model Homes at
the end of the lease term.

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     6.11 Negative Pledges

          The Borrowers shall not, and shall not permit any of their Subsidiary Entities to (a) enter into or
suffer to exist or become effective any consensual encumbrance or restriction of any kind on their
ability to pay dividends or make any other Distributions or make loans or advances to or other
Investments in, or pay any Indebtedness owed to, the Borrowers or any other Subsidiary Entity of
the Borrowers, except for customary profit allocation provisions or (b) enter into or suffer to
exist or become effective any agreement prohibiting or limiting the ability of the Borrowers or any
Subsidiary Entity of the Borrowers to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, to secure the
Obligations, including any agreement requiring any other Indebtedness or Contractual Obligation of
the Borrowers or any of their Subsidiary Entities to be equally and ratably secured with the
Obligations.

ARTICLE VII

EVENTS OF DEFAULT

     7.1 Event of Default. Each of the following shall constitute an event of default
under this Agreement (an “Event of Default”):

          (1) (i) The Borrowers shall fail to make any payment of principal or interest on the Loans
(including any mandatory prepayments under Section 2.8(1)) or pay any reimbursement
obligation in respect of any Letter of Credit Disbursement on the date when due, or (ii) shall fail
to pay any other Obligation within five days of the date when due; or

          (2) any representation or warranty made or deemed made by any Borrower Party in any Loan
Document or by any Borrower Party (or any of its officers) in connection with any Loan Document
shall prove to have been incorrect in any material respect when made or deemed made; or

          (3) Any of the Borrower Parties shall default in the observance or performance of any
covenant or agreement contained in Article VI; or

          (4) Any Transaction Party shall fail to perform or observe any term, covenant or agreement
contained in this Agreement or in any other Loan Document (other than those that are otherwise the
subject of an Event of Default under this Section 7.1), if such failure shall remain
unremedied for 30 days after the date on which written notice thereof shall have been given to the
Borrowers by the Administrative Agent; or

          (5) The Borrowers or any of their Subsidiary Entities shall fail to make any payment on any
Indebtedness (other than the Obligations), and in each such case, such failure relates to
Indebtedness having a principal amount of $5,000,000 or more, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or otherwise); or (ii)
any other event shall occur or condition shall exist under any agreement or instrument relating to
any Indebtedness of the Borrowers or any of their Subsidiary Entities having a principal amount of
$5,000,000 or more, if the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or (iii) any Indebtedness of the Borrowers and
any of their Subsidiary Entities having a principal amount of

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$5,000,000 or more shall become or be declared to be due and payable, or required to be prepaid or
repurchased (other than by a regularly scheduled required prepayment), prior to the stated maturity
thereof; or

          (6) (i) the Borrowers or any of their Subsidiary Entities shall generally not pay its debts
as such debts become due, shall admit in writing its inability to pay its debts generally or shall
make a general assignment for the benefit of creditors, (ii) any proceeding shall be instituted by
or against the Borrowers or any of their Subsidiary Entities seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any Requirement of Law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a custodian, receiver, trustee or other similar official
for it or for any substantial part of its property; provided, however, in the case
of any such proceedings instituted against the Borrowers or any of their Subsidiary Entities (but
not instituted by the Borrowers or any of their Subsidiary Entities), either such proceedings shall
remain undismissed or unstayed for a period of sixty (60) days or any of the actions sought in such
proceedings shall occur, or (iii) the Borrowers or any of their Subsidiary Entities shall take any
corporate action to authorize any of the actions set forth above in clauses (i) and (ii) of this
subsection (6); or

          (7) any final judgment or order (or other similar process) involving, in any single case or
in the aggregate, an amount in excess of $10,000,000 in the case of a money judgment, to the extent
not covered by insurance, or that could reasonably be expected to have a Material Adverse Effect,
in the case of a non-monetary judgment, shall be rendered against one or more of the Borrowers or
their Subsidiary Entities by a court having jurisdiction, and such judgment or order shall continue
unsatisfied and in effect for a period of thirty (30) days without being vacated, discharged,
satisfied, or stayed or bonded pending appeal; or

          (8) (1) an ERISA Event shall occur and the amount of all liabilities and deficiencies
resulting therefrom that are or are reasonably likely to be imposed on the Borrowers, any of their
Subsidiary Entities, or any ERISA Affiliate, whether or not assessed, exceeds $1,000,000 in the
aggregate, (2) the commencement or increase of contributions to, or the adoption of or the
amendment of a Pension Plan by any of the Borrower Parties or an ERISA Affiliate which has resulted
or could reasonably be expected to result in an increase in Unfunded Pension Liability among all
Pension Plans in an aggregate amount in excess of $1,000,000 or (3) any of the Borrower Parties or
an ERISA Affiliate shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under
a Multiemployer Plan, which has resulted or could reasonably be expected to result in a Material
Adverse Effect; or

          (9) Any Guarantor shall attempt to rescind or revoke its Guaranty, with respect to future
transactions or otherwise, or shall fail to observe or perform any term or provision of its
Guaranty; or

          (10) Any Event of Default shall occur under any of the other Loan Documents; or

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          (11) There shall occur a Change of Control; or

          (12) One or more of the Borrowers and their Subsidiary Entities shall have entered into one or
more consent or settlement decrees or agreements or similar arrangements with a Governmental
Authority or one or more judgments, orders, decrees or similar actions shall have been entered
against one or more of the Borrowers and their Subsidiary Entities based on or arising from the
violation of or pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all the foregoing, the
Borrowers and their Subsidiary Entities are likely to incur uninsured environmental liabilities and
costs in excess of $15,000,000 in the aggregate.

     7.2 Remedies.

          (1) If any Event of Default shall occur, the Administrative Agent may (or at the direction of
the Required Lenders shall): (i) declare the outstanding principal balance of the Loans and
interest accrued but unpaid thereon and all other Obligations immediately due and payable, without
demand upon or presentment to any of the Borrower Parties, which are expressly waived by the
Borrower Parties; (ii) exercise, on behalf of the Lenders, all rights and remedies under the
Guaranties, the Pledge Agreements, the Security Instruments and any other collateral documents
entered into with respect to the Loan, (iii) declare that all or any portion of the Revolving
Commitments be terminated, whereupon the obligation of each Lender to make any Loan and each
Issuing Lender to issue any Letter of Credit shall immediately be decreased or terminate, as the
case may be; and (iv) immediately exercise all rights, powers and remedies available at law, in
equity or otherwise, including, without limitation, under the other Loan Documents, all of which
rights, powers and remedies are cumulative and not exclusive; provided, however,
that upon the occurrence of the Events of Default specified in Section 7.1(6)(ii), the
Revolving Commitments of each Lender to make Loans and the commitments of each Lender and Issuer to
issue or participate in Letters of Credit shall each automatically be terminated and the Loans, all
such interest and all such amounts and Obligations shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrowers.

          (2) Upon the occurrence and during the continuance of an Event of Default, with respect to
the Account Collateral, the Administrative Agent may:

               (i) without notice to the Borrowers, except as required by law, and at any time or from time
to time, charge, set-off and otherwise apply all or any part of the Account Collateral against the
Obligations, or any operating or capital expenses with respect to the Mortgaged Property or any
part thereof;

               (ii) in the Administrative Agent’s sole discretion, at any time and from time to time, exercise any
and all rights and remedies available to it under this Agreement, and/or as a secured party under
the UCC;

               (iii) demand, collect, take possession of or receipt for, settle, compromise, adjust, sue for,
foreclose or realize upon the Account Collateral (or any portion thereof) as the Administrative
Agent may determine in its sole discretion; and

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               (iv) take all other actions provided in, or contemplated by, this Agreement.

          (3) With respect to the Borrowers, the Account Collateral, and the Mortgaged Property,
nothing contained herein or in any other Loan Document shall be construed as requiring the
Administrative Agent to resort to the Mortgaged Property for the satisfaction of any of the
Obligations, and, the Administrative Agent may seek satisfaction out of the Mortgaged Property or
any part thereof, in its absolute discretion in respect of the Obligations. In addition, the
Administrative Agent shall have the right from time to time to partially foreclose this Agreement
and the Security Instruments (or any of them) in any manner and for any amounts secured by this
Agreement or any Security Instrument then due and payable as determined by the Administrative Agent
in its sole discretion; provided, however, that the Administrative Agent shall
issue a “Notice of Exclusive Control” pursuant to the Blocked Deposit Account Agreement only upon
the occurrence and during the continuance of an Event of Default. Notwithstanding one or more
partial foreclosures, the Mortgaged Property shall remain subject to this Agreement and the
Security Instruments to secure payment of sums secured by this Agreement and the Security
Instruments and not previously recovered.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

     8.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under the Loan Documents and each such Lender
hereby irrevocably authorizes the Administrative Agent, as the agent for such Lender, to take such
action on its behalf under the provisions of the Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by the terms of the Loan
Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in the Loan Documents, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein or therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into the Loan Documents or otherwise exist against
the Administrative Agent.

     8.2 Delegation of Duties. The Administrative Agent may execute any of its duties
under the Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. With respect to the Lenders, the
Administrative Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

     8.3 Exculpatory Provisions. None of the Administrative Agent, the other Agents, nor
any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (1) liable for any action lawfully taken or omitted to be taken by it or such Person under
or in connection with the Loan Documents (except for its or such Person’s own gross negligence or
willful misconduct), or (2) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower Parties or any officer thereof
contained in the Loan Documents or in any certificate, report, statement or other document referred
to or provided for in, or received by the Administrative Agent under or in connection

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with the Loan Documents or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of the Loan Documents or for any failure of the Borrower Parties to perform their
obligations hereunder or thereunder. The Administrative Agent and the other Agents shall not be
under any obligation to any Lender to ascertain or to inquire as to the observance or performance
of any of the agreements contained in, or conditions of, the Loan Documents or to inspect the
properties, books or records of the Borrower Parties.

     8.4 Reliance by the Agents. Each of the Agents shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice, consent, certification,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation reasonably believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Borrowers), independent accountants and
other experts selected by such Agent. As to the Lenders: (1) the Administrative Agent shall be
fully justified in failing or refusing to take any action under the Loan Documents unless it shall
first receive such advice or concurrence of one hundred percent (100%) of the Lenders (or, if a
provision of this Agreement expressly provides that a lesser number of the Lenders may direct the
action of the Administrative Agent, such lesser number of Lenders) or it shall first be indemnified
to its satisfaction by the Lenders ratably in accordance with their respective Pro Rata Shares
against any and all liability and expense which may be incurred by it by reason of taking or
continuing to take any action (except for liabilities and expenses resulting from the
Administrative Agent’s gross negligence or willful misconduct), and (2) the Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting, under the Loan
Documents in accordance with a request of one hundred percent (100%) of the Lenders (or, if a
provision of this Agreement expressly provides that the Administrative Agent shall be required to
act or refrain from acting at the request of a lesser number of the Lenders, such lesser number of
Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders.

     8.5 Notice of Default. The Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of any Potential Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrowers referring to the Loan
Documents, describing such Potential Default or Event of Default and stating that such notice is a
“notice of default.” In the event that the Administrative Agent receives such a notice and a
Potential Default or Event of Default has occurred, the Administrative Agent shall promptly give
notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such
Potential Default or Event of Default as shall be reasonably directed by the Required Lenders;
provided that, unless and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Potential Default or Event of Default as it shall deem advisable
in the best interest of the Lenders (except to the extent that this Agreement, the Pledge
Agreements or the Guaranties expressly require that such action be taken or not taken by the
Administrative Agent with the consent or upon the authorization of the Required Lenders or such
other group of Lenders, in which case such action will be taken or not taken as directed by the
Required Lenders or such other group of Lenders or Lenders).

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     8.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that
none of the Administrative Agent, the other Agents nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Administrative Agent or the other Agents hereinafter taken, including any
review of the affairs of the Borrower Parties, shall be deemed to constitute any representation or
warranty by the Administrative Agent or the other Agents to any Lender. Each Lender represents to
the Administrative Agent and the other Agents that it has, independently and without reliance upon
the Administrative Agent, the other Agents or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and creditworthiness of the Borrower
Parties and made its own decision to make its loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the Administrative
Agent, the other Agents or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent and the other Agents shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Borrower Parties which may come into the
possession of the Administrative Agent or any other Agent or any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates.

     8.7 Indemnification. The Lenders agree to indemnify the Administrative Agent and the
other Agents in their respective capacity as such (to the extent not reimbursed by the Borrowers
and without limiting the obligation of the Borrowers to do so), ratably according to the respective
amounts of their Pro Rata Shares, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against the Administrative Agent or the
other Agents in any way relating to or arising out of the Loan Documents or any documents
contemplated by or referred to herein or the transactions contemplated hereby or any action taken
or omitted by the Administrative Agent or the other Agents under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent’s or any other Agent’s gross negligence or
willful misconduct, respectively. The provisions of this Section 8.7 shall survive the payment of
the Obligations and the termination of this Agreement.

     8.8 Agents in Their Individual Capacity. The Administrative Agent, the other Agents
and their affiliates may make loans to, accept deposits from and generally engage in any kind of
business with any of the Borrower Parties or any of their respective Subsidiary Entities and
Affiliates as though the Administrative Agent and the other Agents were not, respectively, the
Administrative Agent, the Lead Arranger or an Agent hereunder. With respect to such loans made or
renewed by them and any Note issued to them, the Administrative Agent and the other

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Agents shall have the same rights and powers under the Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, the Lead Arranger or an Agent,
respectively, and the terms “Lender” and “Lenders” shall include the Administrative Agent, the Lead
Arranger and each other Agent in its individual capacity.

     8.9 Successor Administrative Agent and Swing Line Lender. The Administrative Agent
may resign as Administrative Agent under the Loan Documents upon thirty (30) days’ notice to the
Lenders. If the Administrative Agent shall resign, then the Lenders (other than the Lender
resigning as Administrative Agent) shall (with, so long as there shall not exist and be continuing
an Event of Default, the consent of the Borrowers, such consent not to be unreasonably withheld or
delayed) appoint a successor agent or, if the Lenders are unable to agree on the appointment of a
successor agent, the Administrative Agent shall appoint a successor agent for the Lenders whereupon
such successor agent shall succeed to the rights, powers and duties of the Administrative Agent,
and the term “Administrative Agent” shall mean such successor agent effective upon its appointment,
and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former Administrative
Agent or any of the parties to this Agreement or any of the Loan Documents or successors thereto.
After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of the Loan Documents shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under the Loan Documents. Any resignation or
removal of DBTCA or its successor as Administrative Agent pursuant to this Section shall also
constitute the resignation or removal of DBTCA or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to this Section shall, upon its acceptance of
such appointment, become the successor Swing Line Lender for all purposes hereunder. In such event
(a) the Borrowers shall prepay any outstanding Swing Line Loans made by the retiring or removed
Administrative Agent in its capacity as Swing Line Lender, (b) upon such prepayment, the retiring
or removed Administrative Agent and Swing Line Lender shall surrender any Swing Line Note held by
it to the Borrowers for cancellation, and (c) the Borrowers shall issue, if so requested by the
successor Administrative Agent and Swing Line Loan Lender, a new Swing Line Note to the successor
Administrative Agent and Swing Line Lender, in the principal amount of the Swing Line Loan Sublimit
then in effect and with other appropriate insertions.

     8.10 Limitations on Agents Liability. The Lead Arranger, in such capacity, shall not
have any right, power, obligation, liability, responsibility or duty under this Agreement or the
other Loan Documents.

ARTICLE IX

MISCELLANEOUS PROVISIONS

     9.1 No Assignment by Borrowers. None of the Borrower Parties may assign its
rights or obligations under this Agreement or the other Loan Documents without the prior written
consent of the Administrative Agent and one hundred percent (100%) of the Lenders. Subject to the
foregoing, all provisions contained in this Agreement and the other Loan Documents and in any
document or agreement referred to herein or therein or relating hereto or thereto shall inure to
the benefit of the Administrative Agent and each Lender, their respective successors and

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assigns, and shall be binding upon each of the Borrower Parties and such Person’s successors and
assigns.

     9.2 Modification.

          (1) Neither this Agreement nor any other Loan Document may be Modified or waived unless such
Modification or waiver is in writing and signed by the Administrative Agent, the Swing Line Lender,
the Borrowers and, except for the Modifications and waivers requiring consent of one hundred
percent (100%) of the Lenders referred to below, the Required Lenders. No such Modification or
waiver shall, without the prior written consent of one hundred percent (100%) of the Lenders: (1)
reduce the principal of, or rate of interest on, the Loan or fees payable to the Lenders hereunder
or under the Fee Letter, (2) except as expressly contemplated by Sections 2.22 and 9.8
below, modify the Pro Rata Share of any Lender, (3) Modify the definition of “Required Lenders”,
(4) extend or waive any scheduled payment date for any principal, interest or fees (other than in
connection with the permitted extension of the Initial Maturity Date and Original Revolving
Commitment Termination Date as provided in Section 2.6(5)), (5) release TOUSA Guarantors
from their obligations under the Guaranties entered into by them, release Borrowers from their
obligation to repay the Loan, release any of the pledgors under the Pledge Agreements or release
any portion of the collateral pledged under the Pledge Agreements (except for such releases as may
be specifically authorized by or otherwise approved in accordance with this Agreement), (6) Modify
this Section 9.2, (7) Modify any provision of the Loan Documents which by its terms
requires the consent or approval of one hundred percent (100%) of the Lenders, or (8) amend,
modify, terminate or waive any provision hereof relating to the Swing Line Sublimit or the Swing
Line Loans without the consent of Swing Line Lender.

          (2) It is expressly agreed and understood that the election by the Required Lenders to
accelerate amounts outstanding hereunder and/or to terminate the obligation of the Lenders to make
Loans hereunder shall not constitute a Modification or waiver of any term or provision of this
Agreement or any other Loan Document. No Modification of any provision of the Loan Documents
relating to the Administrative Agent shall be effective without the written consent of the
Administrative Agent.

          (3) Notwithstanding anything to the contrary contained in this Agreement, no consent of the
Required Lenders and no unanimous consent of the Lenders shall be required to implement the
provisions of Section 2.22, including any Modifications to this Agreement reasonably
necessary to reflect the Facility Increase or the Additional Letter of Credit Facility as
contemplated by Section 2.22.

     9.3 Cumulative Rights; No Waiver. The rights, powers and remedies of the
Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative
and in addition to all rights, power and remedies provided under any and all agreements among the
Borrower Parties, the Administrative Agent and the Lenders relating hereto, at law, in equity or
otherwise. Any delay or failure by Administrative Agent and the Lenders to exercise any right,
power or remedy shall not constitute a waiver thereof by the Administrative Agent or the Lenders,
and no single or partial exercise by the Administrative Agent or the Lenders of any right, power or
remedy shall preclude other or further exercise thereof or any exercise of any other rights, powers
or remedies.

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     9.4 Entire Agreement. This Agreement, the Fee Letter, the other Loan Documents and
the schedules, appendices, documents and agreements referred to herein and therein embody the
entire agreement and understanding between the parties hereto and supersede all prior agreements
and understandings relating to the subject matter hereof and thereof.

     9.5 Survival. All representations, warranties, covenants and agreements contained in
this Agreement and the other Loan Documents on the part of the Borrower Parties shall survive the
termination of this Agreement and shall be effective until the Obligations are paid and performed
in full or longer as expressly provided herein.

     9.6 Notices. All notices given by any party to the others under this Agreement and
the other Loan Documents shall be in writing unless otherwise provided for herein, and any such
notice shall become effective (i) upon personal delivery thereof, including, but not limited to,
delivery by overnight mail and courier service, (ii) four (4) days after it shall have been mailed
by United States mail, first class, certified or registered, with postage prepaid, or (iii) in the
case of notice by a telecommunications device, when properly transmitted, in each case addressed to
the party at the address set forth on Schedule 9.6 attached hereto. Any party may change the
address to which notices are to be sent by notice of such change to each other party given as
provided herein. Such notices shall be effective on the date received or, if mailed, on the third
Business Day following the date mailed.

     9.7 Governing Law. This Agreement and the other Loan Documents shall be governed by
and construed in accordance with the laws of the State of New York without giving effect to its
choice of law rules.

     9.8 Assignments, Participations, Syndication, Etc.

          (1) With the prior written consent of the Administrative Agent, such consent not to be
unreasonably withheld or delayed, any Lender may at any time assign and delegate to one or more
Eligible Assignees (provided that no written consent of the Administrative Agent shall be required
in connection with any assignment and delegation by a Lender to an Affiliate of such Lender) (each
an “Assignee”) all or any part of such Lender’s Pro Rata Share of the Loan and the other
Obligations held by such Lender hereunder, in a minimum amount of $1,000,000, which minimum amount
may be an aggregated amount in the event of simultaneous assignments to or by two or more funds
under common management (or if such Lender’s Pro Rata Share of the Loan is less than $1,000,000,
one hundred percent (100%) thereof); provided, however, that the Borrowers and the Administrative
Agent may continue to deal solely and directly with such Lender in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee, shall have been given
to the Borrowers and the Administrative Agent by such Lender and the Assignee; (ii) such Lender and
its Assignee shall have delivered to the Borrowers and the Administrative Agent an Assignment and
Acceptance Agreement, (iii) the assignment shall have been recorded in the Register, and (iv) the
Assignee has paid to the Administrative Agent a processing fee in the amount of $3,500.

          (2) The Agent shall, on behalf of the Borrowers, maintain a copy of each Assignment and
Acceptance Agreement delivered to it and a register (the “Register”) for the

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recordation of the names and addresses of the Lenders and the principal amount of the Loan owing to
each Lender from time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrowers, each Lender and the Administrative Agent shall treat each Person
whose name is recorded in the Register as the owner of the Loans for all purposes of this
Agreement. From and after the date that the Administrative Agent notifies the assignor Lender and
the Borrowers that it has received an executed Assignment and Acceptance Agreement and payment of
the above-referenced processing fee, and the assignment has been recorded in the Register: (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned to it pursuant to such Assignment
and Acceptance Agreement, shall have the rights and obligations of a Lender under the Loan
Documents, (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and
under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance
Agreement, relinquish its rights and be released from its obligations under the Loan Documents (but
shall be entitled to indemnification as otherwise provided in this Agreement with respect to any
events occurring prior to the assignment) and (iii) this Agreement shall be deemed to be amended to
the extent, but only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Pro Rata Shares resulting therefrom.

          (3) Within five Business Days after its receipt of notice by the Administrative Agent that it
has received an executed Assignment and Acceptance Agreement and payment of the processing fee
(which notice shall also be sent by the Administrative Agent to each Lender), the Borrowers shall,
if requested by the Assignee, execute and deliver to the Administrative Agent, a new Note
evidencing such Assignee’s Pro Rata Share of the Loan.

          (4) Any Lender may at any time sell to one or more commercial banks or other Persons not
Affiliates of the Borrowers (a “Participant”) participating interests in the Loan and the
other interests of that Lender (the “Originating Lender”) hereunder and under the other
Loan Documents; provided, however, that (i) the Originating Lender’s obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for
the performance of such obligations, and (iii) the Borrowers and the Administrative Agent shall
continue to deal solely and directly with the Originating Lender in connection with the Originating
Lender’s rights and obligations under this Agreement and the other Loan Documents. In the case of
any such participation, the Participant shall be entitled to the benefit of Sections 2.13,
2.15, and 2.18 (and subject to the burdens of Sections 2.15, 2.16
and 9.8 above) as though it were also a Lender thereunder, and if amounts outstanding under
this Agreement are due and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it as a Lender under
this Agreement, and Section 9.10 of this Agreement shall apply to such Participant as if it
were a Lender party hereto.

          (5) Notwithstanding any other provision contained in this Agreement or any other Loan
Document to the contrary, any Lender may assign all or any portion of its Pro Rata Share of the
Loan held by it to any Federal Reserve Lender or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve

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System and any Operating Circular issued by such Federal Reserve Lender, provided that any payment
in respect of such assigned Pro Rata Share of the Loan made by the Borrowers to or for the account
of the assigning and/or pledging Lender in accordance with the terms of this Agreement shall
satisfy the Borrowers’ obligations hereunder in respect to such assigned Pro Rata Share of the Loan
to the extent of such payment. No such assignment shall release the assigning Lender from its
obligations hereunder. Notwithstanding anything to the contrary contained herein, any Lender that
is a fund that invests in bank loans may create a security interest in all or any portion of the
sums owing to it and the Note or Notes held by it to the trustee for holders of obligations owed,
or securities issued, by such fund as security for such obligations or securities, provided, that
unless and until such trustee actually becomes a Lender in compliance with the other provisions of
this Section 9.8, (i) no such pledge shall release the pledging Lender from any of its
obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of
the rights of a Lender under the Loan Documents even though such trustee may have acquired
ownership rights with respect to the pledged interest through foreclosure or otherwise.

          (6) Subject to Section 9.8(1) above, the Lead Arranger may syndicate the Loan and
the other Obligations held by the Lenders hereunder before or after the Closing Date, and the Lead
Arranger (or its designated Affiliates) shall manage all aspects of such syndication, including the
number and identity of the potential Lenders participating in the syndication and the Loan amounts
and compensation offered in connection therewith. Each Borrower Party agrees to take all actions as
the Lead Arranger (or its designated Affiliates) may reasonably request to assist in the
syndication, including: (i) making its senior management and representatives available to
participate in informational meetings with potential Lenders at such times and places as the Lead
Arranger (or its designated Affiliates) may reasonably request;

(ii) using its reasonable efforts to ensure that the syndication efforts benefit from such Borrower
Party’s lending relationships; and (iii) providing the Lead Arranger (or its designated Affiliates)
with all information reasonably deemed necessary to successfully complete the syndication.

          (7) Until the date the Lead Arranger notifies the Borrowers that the
syndication of the Loan has been completed, the Borrower Parties shall not, and shall not permit
the Borrowers and their Subsidiary Entities to engage any Person to effect any offering, placement
or arrangement of debt securities or any bank financing by or on behalf of any Transaction Party.

     9.9 Counterparts. This Agreement and the other Loan Documents may be executed in any
number of counterparts, all of which together shall constitute one agreement.

     9.10 Sharing of Payments. If any Lender shall receive and retain any payment, whether
by setoff, application of deposit balance or security, or otherwise, in respect of the Obligations
in excess of such Lender’s Pro Rata Share thereof, then such Lender shall purchase from the other
Lenders for cash and at face value and without recourse, such participation in the Obligations held
by them as shall be necessary to cause such excess payment to be shared ratably as aforesaid with
each of them; provided, that if such excess payment or part thereof is thereafter recovered from
such purchasing Lender, the related purchases from the other Lenders shall be rescinded ratably and
the purchase price restored as to the portion of such excess payment so recovered, but without
interest. Each Lender is hereby authorized by the Borrower Parties to

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exercise any and all rights of setoff, counterclaim or bankers’ lien against the full amount of the
Obligations, whether or not held by such Lender. Each Lender hereby agrees to exercise any such
rights first against the Obligations and only then to any other Indebtedness of the Borrowers to
such Lender.

     9.11 Confidentiality. Each Lender agrees to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all information provided to it by any of the
Borrower Parties or by the Administrative Agent on the Borrower Parties’ behalf, in connection with
this Agreement or any other Loan Document, and neither it nor any of its Affiliates shall use any
such information for any purpose or in any manner other than pursuant to the terms contemplated by
this Agreement, except to the extent such information: (1) was or becomes generally available to
the public other than as a result of a disclosure by any Lender or any prospective Lender, or (2)
was or becomes available from a source other than the Borrower Parties not known to the Lenders to
be in breach of an obligation of confidentiality to the Borrower Parties in the disclosure of such
information. Nothing contained herein shall restrict any Lender from disclosing such information
(i) pursuant to any requirement of any Governmental Authority; (ii) pursuant to subpoena or other
court process; (iii) when required to do so in accordance with the provisions of any applicable
Requirement of Law; (iv) to the extent reasonably required in connection with any litigation or
proceeding to which the Administrative Agent, any Lender or their respective Affiliates may be
party; (v) to the extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (vi) to such Lender’s independent auditors and other
professional advisors; and (vii) to any Participant or Assignee and to any prospective Participant
or Assignee, provided that each Participant and Assignee or prospective Participant or Assignee
first agrees to be bound by the provisions of this Section 9.11.

     9.12 Consent to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK LOCATED
IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION
AND DELIVERY OF THIS CREDIT AGREEMENT, EACH OF THE BORROWER PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION
OF THOSE COURTS. EACH OF THE BORROWER PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH
OF THE BORROWER PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS EACH AGREE THAT SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS MAY BE MADE BY ANY MEANS PERMITTED BY NEW YORK LAW.

     9.13 Waiver of Jury Trial. EACH OF THE BORROWER PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS WAIVE ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING

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OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH OF THE BORROWER PARTIES, THE ADMINISTRATIVE AGENT AND THE
LENDERS AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH OF SUCH PARTIES FURTHER AGREES THAT ITS RESPECTIVE RIGHT
TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE
VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.

     9.14 Indemnity. Whether or not the transactions contemplated hereby are consummated,
each of the Borrower Parties shall indemnify and hold the Administrative Agent, the other Agents
and each Lender and each of their respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an “Indemnified Person”) harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges,
expenses and disbursements (including reasonable attorney’s fees and expenses) of any kind or
nature whatsoever which may at any time (including at any time following repayment of the Loan and
the termination, resignation or replacement of the Administrative Agent or replacement of any
Lender) be imposed on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such Person under or in
connection with any of the foregoing, including with respect to any investigation, litigation or
proceeding (including any insolvency proceeding or appellate proceeding) related to or arising out
of this Agreement or the Loan or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”);
provided, however, that the Borrower Parties shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities resulting solely from the gross negligence or
willful misconduct of such Indemnified Person. Without limiting the foregoing, the Borrower shall
pay all reasonable out-of-pocket expenses (including reasonable fees and disbursements of outside
counsel) (1) of the Administrative Agent incident to the preparation, negotiation and
administration and performance of the Loan Documents, including any proposed Modifications or
waivers with respect thereto, the due diligence review undertaken in connection therewith, and the
syndication of the Loan (but such expenses shall not include any fees paid to the syndicate
members), and the preservation and protection of the rights of the Lenders and the Administrative
Agent under the Loan Documents (including expenses incurred in creating and perfecting the Lien in
favor of the Administrative Agent pursuant to this Agreement and the other Loan Documents), and (2)
of the Administrative Agent and each of the Lenders incident to the enforcement of payment of the
Obligations, whether by judicial proceedings or otherwise, including, without limitation, in
connection with bankruptcy, insolvency, liquidation, reorganization, moratorium or other similar
proceedings involving any

112

 

Transaction Party or a “workout” of the Obligations. The agreements in this Section 9.14
shall survive payment of all other Obligations.

     9.15 Telephonic Instruction. Any agreement of the Administrative Agent and the Lenders
herein to receive certain notices by telephone is solely for the convenience and at the request of
the Borrowers. The Administrative Agent and the Lenders shall be entitled to reasonably rely on the
authority of any Person purporting to be a Person authorized by the Borrowers to give such notice
and the Administrative Agent and the Lenders shall not have any liability to the Borrowers or other
Person on account of any action taken or not taken by the Administrative Agent or the Lenders in
reliance upon such telephonic notice. The obligation of the Borrowers to repay the Loans shall not
be affected in any way or to any extent by any failure by the Administrative Agent and the Lenders
to receive written confirmation of any telephonic notice or the receipt by the Administrative Agent
and the Lenders of a confirmation which is at variance with the terms understood by the
Administrative Agent and the Lenders to be contained in the telephonic notice.

     9.16 Marshalling; Payments Set Aside. Neither the Administrative Agent nor the Lenders
shall be under any obligation to marshal any assets in favor of any of the Borrower Parties or any
other Person or against or in payment of any or all of the Obligations. To the extent that any of
the Borrower Parties makes a payment or payments to the Administrative Agent or the Lenders, or the
Administrative Agent or the Lenders enforce their Liens or exercise their rights of set-off, and
such payment or payments or the proceeds of such enforcement or set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent in its discretion)
to be repaid to a trustee, receiver or any other party in connection with any insolvency
proceeding, or otherwise, then (1) to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set-off had not occurred, and (2) each Lender
severally agrees to pay to the Administrative Agent upon demand its ratable share of the total
amount so recovered from or repaid by the Administrative Agent.

     9.17 Set-off. In addition to any rights and remedies of the Lenders provided by law, if
an Event of Default exists, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower Parties, any such notice being waived by the Borrower Parties to the
fullest extent permitted by law, to set off and apply in favor of the Lenders any and all deposits
(general or special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing to, such Lender to or for the credit or the account of the Borrower
Parties against any and all Obligations owing to the Lenders, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall have made demand under
this Agreement or any Loan Document and although such Obligations may be contingent or unmatured.
Each Lender agrees promptly to (i) notify the Borrower Parties and the Administrative Agent after
any such set-off and application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application and (ii) pay such amounts
that are set-off to the Administrative Agent for the ratable benefit of the Lenders.

113

 

     9.18 Severability. The illegality or unenforceability of any provision of this
Agreement or any other Loan Document or any instrument or agreement required hereunder or
thereunder shall not in any way affect or impair the legality or enforceability of the remaining
provisions hereof or thereof.

     9.19 No Third Parties Benefited. This Agreement and the other Loan Documents are made
and entered into for the sole protection and legal benefit of the Borrower Parties, the Lenders and
the Administrative Agent, and their permitted successors and assigns, and no other Person shall be
a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim
in connection with, this Agreement or any of the other Loan Documents.

     9.20 Time. Time is of the essence as to each term or provision of this Agreement and
each of the other Loan Documents.

     9.21 Reinstatement. This Agreement and the security interests created herein shall
continue to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Borrowers’ Obligations hereunder, or any part thereof, is, pursuant to
bankruptcy, insolvency or other applicable laws, rescinded or reduced in amount, or must otherwise
be restored or returned by Administrative Agent or any Lender. In the event that any payment or any
part thereof is so rescinded, reduced, restored or returned, such Obligations and the security
interests created herein shall continue to be effective or be reinstated (except to the extent the
related collateral has been sold to a bona fide purchaser for value) and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.

[SIGNATURE PAGES FOLLOWING]

114

 

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

	 	 	 	 	 	 	 
	 	 	BORROWERS:	 	 
	 
	 	 	 	 	 	 
	 	 	EH/TRANSEASTERN, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tommy McAden	 	 
	 

	 	Name:
	 	 

Tommy McAden
	 	 
	 

	 	Title:
	 	Executive Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tommy McAden	 	 
	 

	 	Name:
	 	 

Tommy McAden
	 	 
	 

	 	Title:
	 	Executive Vice President	 	 

Signature page to Credit Agreement

 

 

	 	 	 	 	 	 	 
	 	 	LENDERS AND AGENTS:	 	 
	 
	 	 	 	 	 	 
	 	 	DEUTSCHE BANK
TRUST COMPANY AMERICAS,

as Administrative Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James Rolison 
	 	 
	 

	 	Name:
	 	James Rolison
	 	 
	 

	 	Title:
	 	Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Linda Wang	 	 
	 

	 	Name:
	 	 

Linda Wang
	 	 
	 

	 	Title:
	 	Vice President	 	 

Signature page to Credit Agreement

 

 

SCHEDULE
5.5: INSURANCE REQUIREMENTS

	(1)	 	Property Insurance

	 	A)	 	Owned, Leased Or Rented Real Or Personal Property.
Property insurance insuring
against loss or damage by standard perils included within the classification “All Risks
of Physical Loss.” Such insurance (i) shall be Replacement Cost Coverage, on a “no
coinsurance” or agreed amount basis, in an amount equal to 100% of the actual
replacement cost of each property (exclusive of costs of land, excavation, foundation,
footings and underground utilities), and (ii) shall have deductibles no greater than
$100,000 per occurrence (or, with respect to named storm windstorm insurance,
deductibles no greater than 5% subject to a minimum “per occurrence” deductible of the
affected property values of the Mortgaged Property). The policies of insurance carried
in accordance with this paragraph shall be paid annually in advance or approved periodic
installments.
	 
	 	B)	 	Property in the Course of Construction, Homes Completed but Not Sold, Model
Homes, and Other Production Related Property. Builder’s Risk insurance insuring
against loss or damage to cover the improvements in the course of construction and while
awaiting final sale or transfer on a “special form” (all risk) basis (including
materials in storage and while in transit) (i) in an amount equal to 100% of the actual
cost of each property (exclusive of costs of land, excavation, foundation, footings and
underground utilities), and (ii) shall have deductibles no greater than $100,000 per
occurrence (or, with respect to named storm windstorm insurance, deductibles no greater
than 5% subject to a minimum “per occurrence” deductible of the affected property values
of the Mortgaged Property). The policies of insurance carried in accordance with this
paragraph shall be paid annually in advance or approved periodic installments.

	(2)	 	Liability Insurance. Coverage shall be written on an occurrence or modified
occurrence form to include all premises, operations, products and completed operations
coverage, personal and advertising injury coverage, and contractual liability coverage
(applicable to written contracts). Claims-made coverage is not acceptable. The minimum limits
of liability are Ten Million Dollars ($10,000,000) Each Occurrence with Ten Million Dollars
($10,000,000) General and Products/Completed Operations Aggregate Limits. Limits can be
achieved through primary or excess liability policies, or a combination of both.
	 
	(3)	 	Workers Compensation Insurance. Worker’s compensation insurance with respect to all
employees of the Borrowers as and to the extent required by any Governmental Authority or
Requirement of Law and employer’s liability coverage of at least One Million Dollars
($1,000,000).

 

 

	(4)	 	Flood Insurance. Flood insurance if any part of any structure or
improvement comprising the Mortgaged Property is located in an area identified by the Federal
Emergency Management Agency as an area federally designated a “100 year flood plain” and (a)
flood insurance is generally available at reasonable premiums and in such amount as generally
required by institutional lenders for similar properties or (b) if not so available from a
private carrier, from the federal government at commercially reasonable premiums to the
extent available. Deductibles shall not exceed One Million Dollars ($1,000,000) for any one
occurrence.
	 
	(5)	 	Terrorism Insurance. Provided that foreign
insurance coverage (“Terrorism Insurance”)
relating to the acts of terrorism on behalf of foreign individuals or interests as
contemplated by the Foreign Terrorism Insurance Act is (i) commercially available; and (ii)
commonly obtained by other national homebuilders in the same geographic area as the Mortgaged
Property and with similar size and scope of operations, the Borrowers shall carry Terrorism
Insurance throughout the term of the Loan (including any extension terms) on a per occurrence
basis in policy amounts as required under Section 5.5
(1)(A)&(B), and Section 5.5 (2)
	 
	(6)	 	Other Insurance. Upon sixty (60) days’ written notice, such other reasonable types of
insurance not covered in Sections 5.5(1) through 5.5(5) and in such reasonable
amounts as the Administrative Agent from time to time may reasonably request against such
other insurable hazards (but not earthquake) which at the time are commonly insured against
for property similar to the Mortgaged Property located in or around the region in which the
Mortgaged Property is located and as may be reasonably required to protect the Administrative
Agent’s interests. The Borrowers must maintain seismic insurance as follows:

(A) If a Mortgaged Property is located in an “earthquake prone zone” as determined by the
U.S. Geological Survey, earthquake insurance in an amount no less than the probable maximum
loss less any applicable deductibles not exceeding 10% of the full replacement value of such
property in an amount not less than the amount required under
Section 5.5 (1)(A)&(B),
all as determined by a recognized earthquake engineering firm, and

(B) sinkhole and mine subsidence insurance, if required, as determined by Administrative
Agent in its sole discretion and in form and substance satisfactory to Administrative Agent,
provided such insurance is (i) commercially available, and (ii) commonly obtained by other
national homebuilders of similar size and scope of operations in the same geographic area as
the Mortgaged Property and (iii) that the insurance pursuant to this Section 5.5
(6)(B) shall be on terms consistent with the all risk insurance policy required under
Section 5.5 (1)(A)&(B).

	(7)	 	General Requirements

ii

 

	 	(A)	 	Ratings of Insurers. All insurance required by Section 5.5 shall be obtained and
maintained by, or caused to be maintained, at all times by Borrower under valid and
enforceable policies in form and substance acceptable to Administrative Agent. Any new
policies for Mortgaged Property shall be issued by financially sound and responsible
insurance companies authorized to do business in the State and having a claims paying ability
rating of “A-” or better by S&P (or such other debt rating agencies approved by
Administrative Agent) and a general policy rating of “A-” or better and a Financial size of
IX or better by A.M. Best Company, Inc.
	 
	 	(B)	 	Form of Insurance Policies; Endorsements. All required policies except the workers’
compensation/employer’s liability shall (i) designate Administrative Agent and its successors
and assigns as an additional insured, mortgagee and/or loss payee as deemed appropriate by
Administrative Agent; (ii) shall include effective waivers by the insurer of all claims for
insurance premiums against all loss payees, additional insureds and named insureds (other than
the Borrowers) and all rights of subrogation against any loss payee, additional insured or
named insured; (iii) shall contain such provisions as the Administrative Agent deems
reasonably necessary or desirable to protect its interest, including endorsements providing
that neither the Borrowers, the Administrative Agent nor any other party shall be a
Contributor-insurer (except deductibles and/or self insured retentions) under said Policies
and that no material modification, reduction, cancellation or termination in amount of, or
material change (other than an increase) in, coverage of any of the Policies shall be
effective until at least thirty (30) days after receipt by each named insured, additional
insured and loss payee of written notice thereof or ten (10) days after receipt of such notice
with respect to nonpayment of premium; (iv) and shall permit the Administrative Agent to pay
the premiums and continue any insurance upon failure of the Borrowers to pay premiums when
due, upon the insolvency of any of the Borrowers or through foreclosure or other transfer of
title to the Mortgaged Property (it being understood that the Borrowers’ rights to coverage
under such policies may not be assignable without the consent of the insurer).
	 
	 	(C)	 	Premiums; Certificates; Renewals.

(i) The Borrowers shall pay or cause to be paid the premiums for such Policies
(the “Insurance Premiums”) as the same become due and payable and shall furnish to the
Administrative Agent the receipts for the payment of the Insurance Premiums or other evidence
of such payment reasonably satisfactory to the Administrative Agent (provided, however, that
Borrowers are not required to furnish such evidence of payment to the Administrative Agent if
such Insurance Premiums are to be paid by the Administrative Agent pursuant to the terms of
this Agreement).

(ii) The Borrowers shall deliver to the Administrative Agent on or prior to the Closing
Date acceptable insurance evidence in the form of certificates setting

iii 

 

forth in reasonable detail the material terms (including any applicable notice requirements)
of all Policies from the respective insurance companies (or their authorized agents) that
issued the Policies, including that such Policies may not be canceled or modified in any
material respect without thirty (30) days’ prior notice to the Administrative Agent, or ten
(10) days’ notice with respect to nonpayment of premium.

(iii) Prior to the expiration, termination or cancellation of any Policy, the Borrowers
shall renew such policy or obtain a replacement policy or policies (or a binding commitment
for such replacement policy or policies), which shall be effective no later than the date of
the expiration, termination or cancellation of the previous policy, and shall deliver to the
Administrative Agent acceptable insurance evidence in the form of a certificate in respect of
such policy .or policies (A) containing the same information as the certificates required to
be delivered by the Borrowers pursuant to clause (ii) above, or a copy of the binding
commitment for such policy or policies and (B) confirming that such policy complies with all
requirements hereof.

(iv) If the Borrowers do not furnish to the Administrative Agent the certificates as
required under clause (iii) above, upon three (3) Business Days prior notice to the
Borrowers, the Administrative Agent may procure, but shall not be obligated to procure, such
replacement policy or policies and pay the Insurance Premiums thereof, and the Borrowers
agree to reimburse the Administrative Agent for the cost of such Insurance Premiums promptly
on demand.

	 	(D)	 	Separate Insurance. The Borrowers shall not take out separate insurance contributing
in the event of loss with that required to be maintained pursuant to this Section 5.5
unless such insurance complies with this Section 5.5.
	 
	 	(E)	 	Blanket Policies. In the event the Borrowers satisfy the requirements under this Section
5.5 through the use of a Policy covering properties in addition to the Mortgaged Property,
then (unless such policy is provided in substantially the same manner as it is as of the date
hereof), the Borrowers shall provide evidence satisfactory to the Administrative Agent that
the Insurance Premiums for the Mortgaged Property are separately allocated under such Policy
and that payment of such allocated amount (A) shall maintain the effectiveness of such Policy
as to the Mortgaged Property and (B) shall otherwise provide the same protection as would a
separate policy that complies with the terms of this Agreement as to the Mortgaged Property,
notwithstanding the failure of payment of any other portion of the insurance premiums.

iv 

 

DISCLOSURE SCHEDULES

          This document comprises the Disclosure Schedules referred to in the Credit Agreement
(the “Agreement”) dated as of August 1, 2005 by and among EH/Transeastern, LLC, a Delaware
limited liability company and TE/TOUSA Senior, LLC, a Delaware limited liability company
(collectively, the “Borrowers”), the Lenders from time to time party thereto and Deutsche Bank
Trust Company Americas, as administrative agent for the Lenders. All capitalized terms used, but
not otherwise defined herein, shall have the meaning ascribed to them in the Agreement.

          The
representations and warranties of the Borrowers contained in Section 4 of the Agreement
are made and given subject to the disclosures in these Disclosure Schedules. Any disclosures made
with respect to a section of Section 4 in these Disclosure Schedules shall be deemed to qualify (a)
the corresponding section of Section 4 of the Agreement and (b) other sections of Section 4 of the
Agreement to the extent it is clear (notwithstanding the absence of a specific cross reference)
from a reading of the disclosure that such disclosure (i) applies to such other sections and (ii)
contains sufficient detail to enable a reasonable person to recognize the relevance of such
disclosure to such other sections.

          Certain matters set forth in these Disclosure Schedules are included solely for informational
purposes for the convenience of the parties to the Agreement. The inclusion of any information in
these Disclosure Schedules shall not be deemed to be an admission or acknowledgement, in and of
itself, that such information (i) is required by the terms of the Agreement to be disclosed, (ii)
is material to the applicable Borrower, (iii) has had or would reasonably be expected to have
material adverse effect or (iv) is outside the ordinary course of business of the Borrowers.

          These Disclosure Schedules are qualified in their entirety by reference to the specific
provisions of the Agreement and are not intended to constitute, and shall not be construed as
constituting any additional representation or warranty or covenant of the Borrowers, except as and
to the extent expressly provided in these Disclosure Schedules or in the Agreement.

 

 

SCHEDULE 4.1

MATERIAL OBLIGATIONS AND LIABILITIES

None.

2

 

SCHEDULE 4.6

MATERIAL LITIGATION

None.

3

 

SCHEDULE 4.7

TAXES

None.

4

 

SCHEDULE 4.9

SUBSIDIARY ENTITIES

None.

5

 

SCHEDULE 4.11

ERISA COMPLIANCE

None.

6

 

SCHEDULE 4.14

REQUIRED CONSENTS

None.

7

 

SCHEDULE 4.15

 HAZARDOUS MATERIALS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	PROJECT	 	TYPE OF REPORT	 	REPORT PREPARED BY	 	DATE OF REPORT
	Olympia Pointe

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	June 18, 2004 and June 14, 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Phase I & Limited Phase II
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	October 22, 2003
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Subsurface Soil Exploration
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	October 6, 2003
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Laguna Lakes

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	March 9, 2001 and June 10, 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Phase II Environmental Assessment
	 	•
	 	Ardamon & Associates, Inc.
	 	•
	 	March 29, 2001
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Subsurface Soil Exploration
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	March 26, 2001
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Coral Lakes

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	May 27, 2003 and June 8, 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Cypress Landing

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	August 12, 2002 and June 
13, 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Subsurface Soil Exploration
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	July 29, 2002
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	South Park

	 	•
	 	Environmental Site Assessment — Phase
I and Update
	 	•
	 	US South Engineering &
Testing Lab, Inc.
	 	•
	 	April 18, 2003 and Jun 20, 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Report of Subsurface Investigation and
Recommendations Foundation
Recommendation
	 	•
	 	US South Engineering &
Testing Lab, Inc.
	 	•
	 	April 18, 2003
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Note: Property is located within
secondary zone of the Eagle Protection
Zone	 	 	 	 	 	 

8

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	PROJECT	 	TYPE OF REPORT	 	REPORT PREPARED BY	 	DATE OF REPORT
	Bayshore

	 	•
	 	Phase I Environmental Assessment Report
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	August 3, 2004 and June 9, 2005
	 

	 	•
	 	Environmental Due Diligence Report
	 	•
	 	Calusa Coast Ecologist, Inc.
	 	•
	 	August 18, 2004
	 
	 

	 	•
	 	Surface Soil Exploration
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	August 26, 2004
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Oak Creek

	 	•
	 	Phase I Environmental Assessment and Update
	 	•
	 	Universal Engineers
	 	•
	 	September 17, 2003 and July 15, 2005
	 
	 

	 	•
	 	Eagle Study
	 	•
	 	Boylan Environmental Consultants, Inc.
	 	•
•
	 	May 2004
April 15, 2004
	 

	 	 	 	 	 	 	 	 	 	 
	 	 
	 

	 	•
	 	Protected Species Survey
	 	•
	 	US Department of the Interior
	 	•
	 	April 30, 2003
	 
	 

	 	•
	 	Geotechnical Exploration Phase 1 & 2
	 	•
	 	Allied Engineering & Testing, Inc.
	 	•
	 	December 18, 2003
	 
	 

	 	•
	 	Test Pit Report	 	 	 	 	 	 	 	 
	 
	 

	 	•
	 	Cultural Resource Assessment
	 	•
	 	Allied Engineering & Testing, Inc.
	 	•
	 	November 2003
	 

	 	 	 	 	 	•
	 	Archeological Consultants, Inc.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Daniels Landing

	 	•
	 	Phase I Environmental Assessment and Update
	 	•
	 	Universal Engineering Sciences
	 	•
	 	April 2002 and June 1, 2005
	 
	 

	 	•
	 	Subsurface Soil Exploration
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	May 13, 2002
	 
	 

	 	•
	 	Report of Geotechnical Exploration
	 	•
	 	Nordarse Associates, Inc.
	 	•
	 	November 4, 2002
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Independence

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	May 16, 2002 and April 14, 2005
	Independence (I)

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	Independence
(I)
	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Ardaman & Associates, Inc.	 	•	 	March 17, 2004 
	Independence (III)

	 	•
	 	Phase I Cultural Resource Survey of the Signature Lakes P.D.
	 	•
	 	Southeast Archeological Research, Inc.
	 	•
	 	June 2003

9

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	PROJECT	 	 	 	TYPE OF REPORT	 	 	 	REPORT PREPARED BY	 	 	 	DATE OF REPORT
	Westyn Bay

	 	•
	 	Phase I Environmental Assessment provided by West Groves Ventures, LLLP
	 	•
	 	Universal Engineering Sciences
	 	•
	 	August 2003 and June 5, 2005
	 
	 

	 	•
	 	Phase II Environmental Assessment provided by West Groves Ventures, LLLP
	 	•
•
•
	 	Universal Engineering
Sciences
Ardaman & Associates, Inc.
Universal Engineering Sciences	 	•
•
•
	 	August 1999
January 24,
2003
August 17, 2001
	 
	 

	 	•
	 	Subsurface Soil Exploration
	 	•
	 	Universal Engineering Sciences 	 	 
	 	 
	 
	 

	 	•
	 	Geotechnical Exploration Report
	 	 	 	 	 	 	 	 
	 
	 

	 	•
	 	Geotechnical Exploration Report
	 	 	 	 	 	•
	 	September 30, 2003
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Metro West
	 	•
	 	Phase I Environmental Assessment and Update
	 	•
	 	Nodarse & Associates, Inc.
	 	•
	 	October 23, 2003 and June 21, 2005
	 
	 

	 	•
	 	Report of Subsurface Exploration & Geotechnical Engineering Evaluation
	 	•
	 	Nodarse & Associates, Inc.
	 	•
	 	June 22, 2004
	 
	 

	 	•
	 	Environmental Assessment
	 	•
	 	Miller Sellen Conner Walsh
	 	•
	 	September 9, 2003
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Moss Park

	 	•
	 	Phase I Environmental Assessment and Update
	 	•
	 	Nodarse & Associates, Inc.
	 	•
	 	May 9, 2003 and June 23, 2005
	 
	 

	 	•
	 	Subsurface Exploration and Geotechnical Engineering Evaluation Cornerstone at Lake Hart
— Parcel B
	 	•
	 	Nodarse & Associates, Inc.
	 	•
•
	 	November 12, 2003 
 July 2, 2004
	 
	 

	 	•
	 	Design Phase Subsurface Exploration and Geotechnical Engineering Evaluation/Lake Hart
P.D. — Lot 10
	 	•
	 	Nodarse Associates, Inc.
	 	•
	 	May 9, 2003
	 
	 

	 	•
	 	Cursory Environmental Assessment
	 	•
	 	Miller Sellen Conner Walsh	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

10

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	PROJECT	 	TYPE OF REPORT	 	REPORT PREPARED BY	 	DATE OF REPORT
	Young Pines

	 	•
	 	Phase I Environmental Assessment and Update
	 	•
	 	Nordarse Associates, Inc.
	 	•
	 	August 27, 2003 and
June 23, 2005
	 
	 

	 	•
	 	Geotechnical Engineering Evaluation Parcel 3
	 	•
	 	Nordarse Associates, Inc.
	 	•
	 	May 21, 2004
	 
	 

	 	•
	 	Geotechnical Engineering Evaluation Parcel 2
	 	•
	 	Nordarse Associates, Inc.
	 	•
	 	April 27, 2004
	 
	 

	 	•
	 	Report of Preliminary Geotechnical Exploration
	 	•
	 	Nordarse Associates, Inc.
	 	•
	 	September 12, 2003
	 
	 

	 	•
	 	Environmental Assessment
	 	•
	 	Miller Sellen Conner Walsh
	 	•
	 	December 31, 2003
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Legacy Park

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Universal Engineering Sciences
	 	•
	 	January 23, 2003 and June 1, 2005
	 

	 	•
	 	Phase I Environmental Assessment provided by Legacy Park Ventures, LLLP
	 	•
	 	Universal Engineering Sciences
	 	•
	 	May 9, 2001
	 
	 

	 	•
	 	Phase II Environmental Assessment
	 	•
	 	Universal Engineering Sciences
	 	•
	 	January 24, 2003
	 
	 

	 	•
	 	Geotechnical Exploration Report
	 	•
	 	Universal Engineering Sciences
	 	•
	 	August 26, 2002
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Bronson

	 	•
	 	Phase I and Phase II Environmental Assessment and Update
	 	•
	 	Universal Engineering Sciences
	 	•
	 	August 2004 and June 20, 2005
	 
	 

	 	•
	 	Cultural Resource Survey and Assessment
	 	•
	 	SouthArc, Inc.
	 	•
	 	December 8, 2004
	 
	 

	 	•
	 	Bald Eagle Nest Memo
	 	•
	 	Miller Sellen Conner Walsh
	 	•
	 	May 26, 2004
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Tampa Bay Golf & Tennis

	 	•
	 	Report of the Geotechnical Investigation
	 	•
	 	Driggers Engineering Services Incorporated
	 	•
	 	October 22, 2004

11

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	PROJECT	 	TYPE OF REPORT	 	REPORT PREPARED BY	 	DATE OF REPORT
	Live Oak II

	 	•
	 	Report of the Roadway Classification & Pond Boring
	 	•
	 	Driggers Engineering Services Incorporated
	 	•
	 	March 6, 2003
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Environmental Site Assessment and Update
	 	•
	 	HSA Engineers
	 	•
	 	November 2002 and June 28, 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Transmittal of Test Pit Observation
	 	•
	 	Driggers Engineering Services Incorporated
	 	•
	 	May 24, 2002
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Grand Hampton

	 	•
	 	Phase I Environmental Assessment and Update
	 	•
	 	Land Assessment Services, Inc.
	 	•
	 	November 14, 2003 and June 16, 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Heller

	 	•
	 	Phase I Environmental Site Assessment
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	October 22, 2004
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Phase II Environmental Site Assessment
	 	•
	 	Empire Environmental
	 	•
	 	January 5, 2005 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Report of the Preliminary Geotechnical Investigation
	 	•
	 	Driggers Engineering Services Incorporated
	 	•
	 	September 8, 2004
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Tradition

	 	•
	 	EDR Radius Map Report
	 	•
	 	Environ., Safety & Health, LC
	 	•
	 	July 16, 2003
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Synergetic Environ. Services, Inc.
	 	•
	 	April 30, 2002
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Phase I Environmental Assessment	 	•
	 	Envirospec, Inc.
	 	•
	 	July 14, 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Versailles

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Arcadis Geraghley & Miller
	 	•
	 	November 6, 2000
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Preliminary Geotechnical Investigation
	 	•
	 	Allterra Engineering
	 	•
	 	March 26, 2001
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Source Removal Report
	 	•
	 	Arcadis Geraghley & Miller
	 	•
	 	December 14, 2000
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Dunkelberger
	 	•
	 	June 22, 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Victoria Grove

	 	 	 	Phase I/II Environmental Site Assessment
	 	•
	 	Empire Environmental
	 	 	 	November 18, 1999 and July 13, 2005

12

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	PROJECT	 	TYPE OF REPORT	 	REPORT PREPARED BY	 	DATE OF REPORT
	Williams Island

	 	•
	 	Limited — Scope Phase II Environmental Site Assessment
	 	•
	 	Evans Environmental and Geosciences
	 	•
	 	September 2003
	 
	 

	 	•
	 	Limited Site Assessment Report
	 	•
	 	Evans Environmental and Geosciences
	 	 	 	May 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Duval Road / Duval Road 2

	 	•
	 	Phase I Environmental Assessment and Update
	 	•
	 	Access Environmental Associates, Inc.
	 	•
	 	July 24, 2003 and June 1, 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Development Issues Letter
	 	 	 	• Prosser Hallock
	 	•
	 	September 1, 2004
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Cummer

	 	•
	 	Phase I Environmental Assessment and Update
	 	•
	 	United Consulting
	 	•
	 	January 28, 2004 and July 5, 2005
	 
	 

	 	•
	 	Phase II Environmental Site Assessment
	 	•
	 	United Consulting
	 	•
	 	March 10, 2004
	 
	 

	 	•
	 	Environmental Site Assessment
	 	•
	 	Environmental Resource
Solutions, Inc.
	 	•
	 	July 23, 2004
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Preliminary Geotechnical Exploration
	 	•
	 	United Consulting
	 	•
	 	January 23, 2004
	 
	 

	 	•
	 	Cummer Land Trust Due Diligence Property Report
	 	•
	 	Prosser Hallock
	 	•
	 	December 1, 2003
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Kendall Town

	 	• 	 	Geotechnical Investigation
submitted to Beazer Homes, Inc.	 	•
	 	Golder Associates, Inc.
	 	•
	 	November, 2003
September, 2002
	 
	Center/Kendall Pointe

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Golder Associates, Inc.
	 	•
	 	and July 1, 2005

13

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	PROJECT	 	 	 	TYPE OF REPORT	 	 	 	REPORT PREPARED BY	 	 	 	DATE OF REPORT
	Kendall Commons/Vizcaya

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Nutting Environmental of Florida, Inc.
	 	•
	 	January,
2002 and June 1, 2005

	 
	 

	 	•
	 	Phase II Environmental Site Assessment
	 	•
	 	Empire Environmental
	 	•
	 	July 10, 2003
	 
	 

	 	•
	 	Follow-up Phase II
	 	•
	 	Empire Environmental
	 	•
	 	November 4, 2003
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Orange Avenue

	 	•
	 	Due Diligence Geotechnical Study

	 	•
	 	Dunkelberger Engineering and
Testing, Inc.
	 	•
	 	March 2005
	 
	 
	 	•
	 	Enhanced Phase I Environmental Site

Assessment
	 	•

	 	Dunkelberger Engineering and Testing, Inc.
	 	•
	 	March 2005
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Tampa 301

	 	•
	 	Phase I Environmental Assessment and Update
	 	•
	 	Empire Environmental
	 	•
	 	August 6,
2004 and July 14, 2005

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Lake Butler Sound

	 	•
	 	Transeastern did not order environmental reports for this project
	 	•
	 	N/A
	 	•
	 	N/A
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Weston Reserve

	 	•
	 	Transeastern did not order environmental reports for this project
	 	•
	 	N/A
	 	•
	 	N/A
	 
	Westwood

	 	•
	 	Environmental Assessment
	 	•
	 	Boylan Environmental
Consultants, Inc.
	 	•
	 	July 3, 2002
	 
	 

	 	•
	 	Geotechnical Recommendations
	 	•
	 	GFA International
	 	•
	 	February 17, 2004
	 
	 

	 	•
	 	Phase I Environmental Assessment
	 	•
	 	Universal Engineering Sciences
	 	•
	 	August 2003 and
July 8, 2005
	 
	 

	 	•
	 	Cultural Resource Assessment Survey
	 	•
	 	Archeological Consultants, Inc.	 	•
	 	March 2004
	 
	Westwood (town-

homes)

	 	•
	 	Protected Species Survey
	 	•
	 	Boylan Environmental
Consultants, Inc.
	 	•

	 	November 17, 2003

	 
	 
	 	•
	 	Subsurface Soil Exploration
	 	•
	 	Ardaman & Associates, Inc.
	 	•
	 	
March 5, 2003
	 
	 

	 	•
	 	Phase 1 Environmental Site Assessment
	 	•
	 	GFA International
	 	•
	 	Nov. 21, 2003
	 
	 

	 	•	 	Environmental Assessment
	 	•
	 	Boylan Environmental
Consultants, Inc.
	 	•
	 	November 12, 2003
and July 1, 2005
	 
	 

	 	Environmental Supplement
	 	•
	 	Boylan Environmental
Consultants, Inc.	 	•	 	March 14 2004
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Summerport / Village Center

	 	•
	 	Phase I Environmental Site Assessment and Update
	 	•
	 	Nordarse & Associates, Inc.
	 	•
	 	Sept. 22, 2004 and
June 23, 2005
	 
	 

	 	•
	 	Report of Preliminary Geotechnical Engineering Evaluation
	 	•
	 	Nordarse & Associates, Inc.
	 	•
	 	Sept. 28, 2004
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Cummer West

	 	•
	 	Phase I Environmental Site Assessment and Update
	 	•
	 	United Consulting
	 	•
	 	January 24, 2004
and July 5, 2005

14

 

SCHEDULE 4.17

EXISTING INSURANCE

	 	 	 	 	 	 	 
	Insurer	 	Description
	 	 	Homebuilders Umbrella Policy
	 
	 	Policy Number	 	9746383
	American International
	 	Policy Period	 	7-27-2005 to 7-27-2006
	Specialty Lines Insurance
Company
	 	 	 	 	 	Policy Limits
	(AIG Group)
	 	Each Occurrence	 	$25,000,000
	 
	 	General Aggregate	 	$25,000,000
	 
	 	Products/Completed	 	 
	AM Best
Rating: A+XV
	 	Operations Aggregate	 	$25,000,000
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	Retained Limits
	 
	 	General Liability	 	$2,000,000 Self Insured Retention
	 
	 	 	 	 	 	(each
and every occurrence)

	 
	 	Employer’s Liability	 	$1,000,000 Each Accident
	 
	 	 	 	 	 	$1,000,000 Disease/Each Employee
	 
	 	 	 	 	 	$1,000,000 Disease/Policy Limit
	 
	 	Auto Liability	 	$1,000,000 Combined Single Limit
	 
	 	Liquor Liability	 	$1,000,000 Each Claim
	 
	 	 	 	 	 	 
	 
	 	TRIA and Non-Cert	 	 
	 
	 	Terrorism	 	Included ($1,000,000 SIR)
	 
	 	Estimated Annual	 	 
	 
	 	Premium	 	$2,457,790 plus applicable taxes and fees

15

 

	 	 	 	 	 
	Insurer	 	Description
	 	 	Workers Compensation and Employers’ Liability
	 

	 	Policy Number
	 	001-WC05A-30708
	FCCI Insurance

	 	Policy Period
	 	3/1/2005 to 3/1/2006
	 
	Insurance
Company 
(FCCI Group)

	 	 	 	Policy Limits
	 

	 	Workers’	 	 
	 

	 	Compensation
	 	Statutory Limits
	AM Best Rating: A- IX

	 	 	 	$1,000,000 Each Accident
	 

	 	Employers’ Liability
	 	$1,000,000 Disease/Each Employee
	 

	 	 	 	$1,000,000 Disease/Policy Limit
	 
	 	 	 	 
	 

	 	Reporting Basis
	 	Monthly
	 

	 	Estimated Annual	 	 
	 

	 	Premium
	 	Varies, based on monthly reports

16

 

	 	 	 	 	 
	Insurer	 	Description
	 	 	Primary Property Insurance, including Builder’s Risk
	 

	 	Policy Number
	 	BK000054Q002
	Lexington Insurance 

Company (London)

	 	Policy Period
	 	7-21-2005 to 5-1-2006 (note short term)
	(AIG Group)	 	Policy Limits and
Material Sub-Limits

	 

	 	Per Occurrence
	 	$7,500,000 Total Policy Limit-
	 

	 	 	 	Any One Occurrence
	AM Best Rating: A+XV

	 	 	 	$7,500,000 Occurrence/Aggregate, except:
	 

	 	Flood
	 	$2,500,000 Occ/Agg applies for properties
	 

	 	 	 	located in 100-year flood plain.
	 

	 	Earthquake
	 	$7,500,000 Occurrence/Aggregate
	 

	 	Fixed Property
	 	Limits per Schedule on file
	 

	 	Terrorism
	 	Included
	 

	 	 	 	Deductibles
	 

	 	Named Windstorm
	 	3% of Affected Values, subject to $250,000
minimum per occurrence
	 

	 	Flood
	 	$100,000 each occurrence, except:
	 

	 	 	 	$500,000 each occurrence applicable to
	 

	 	 	 	properties located within the 100 year flood
plain.
	 

	 	Earthquake
	 	$100,000 each occurrence
	 

	 	All Other Perils
	 	$50,000 each occurrence; except
	 

	 	 	 	$10,000 each occurrence — scheduled fixed
property locations.
	 

	 	Estimated Annual
	 	$539,000.00 (Includes Terrorism Premium)
	 

	 	Premium
	 	(Taxes and Fees Additional)

17

 

	 	 	 	 	 
	Insurer	 	Description

	 	 	 
	 	 	Excess Property Insurance, including Builder’s Risk

	 
	 	 	 	 
	Lloyds of London (50%)

	 	Policy Number (Lloyds)
	 	BK000052Q002
	AM Best Rating: A XV

	 	Policy Number (ACE)
	 	l20855812001
	 

	 	Policy Period
	 	7-21-2005 to 5-1-2006 (note short term)
	 
	 	 	 	 
	Westchester Surplus Lines
	 	 	 	 
	Insurance Company (50%)

	 	Policy Limits
	 	$22,500,000 excess of $7,500,000
	(ACE INA Group)

	 	 	 	primary coverage (see above)
	AM Best Rating A X
	 	 	 	 
	 
	 	 	 	 
	 

	 	Estimated Annual	 	 
	 

	 	Premium
	 	$200,000 (Taxes and Fees Additional)

18

 

	 	 	 	 	 
	Insurer	 	 	 	Description
	 	 	 
	Chubb ForeFront Portfolio Policy

	 

	 	Policy Number
	 	6803-1460
	Federal Insurance

	 	Policy Term
	 	7-27-2005 to 7-27-2006
	Company

	 	Premium
	 	$73,350
	(Chubb Group)
	 	 	 	 
	 
	 	 	 	 
	 	 	Directors and Officers Liability

	 
	 	 	 	 
	AM Best Rating-A+XV

	 	Policy Limits	 	 
	 

	 	Maximum Aggregate Limit
of Liability
	 	$5,000,000 (including defense costs)
	 

	 	Deductibles	 	 
	 

	 	Individual Non-Indemnified	 	 
	 

	 	Liability Coverage
	 	None
	 

	 	Individual Indemnified	 	 
	 

	 	Liability Coverage
	 	$100,000
	 

	 	Corporate Liability
	 	$100,000
	 
	 	 	 	 
	 	 	Employment Related Practices Liability

	 
	 	 	 	 
	 

	 	Policy Limits	 	 
	 

	 	Each Claim
	 	$1,000,000 (including defense costs)
	 

	 	Aggregate
	 	$1,000,000 (including defense costs)
	 

	 	Deductible	 	 
	 

	 	Each Claim
	 	$25,000
	 
	 	 	 	 
	 	 	Fiduciary Liability
	 
	 	 	 	 
	 

	 	Policy Limits	 	 
	 

	 	Maximum Aggregate Limit
of Liability
	 	$1 ,000,000 (including defense costs)
	 

	 	Deductible	 	 
	 

	 	Each Claim
	 	None

19

 

	 	 	 	 	 
	Insurer	 	Description
	 	 	 
	 	 	Crime

	 
	 	 	 	 
	 

	 	Policy Limits	 	 
	 

	 	All Coverage Parts
	 	$1,000,000
	 

	 	Expense Coverage
	 	$25,000
	 

	 	Deductible	 	 
	 

	 	All Coverage Parts
	 	$50,000 Each Claim 
	 

	 	Expense Coverage
	 	None
	 
	 	 	 	 
	 	 	Kidnap, Ransom, Extortion

	 
	 	 	 	 
	 

	 	Policy Limit
	 	$1,000,000 (All Coverage Parts)
	 

	 	Deductible
	 	None

20

 

SCHEDULE 4.23(5)

PURCHASE AND OPTION AGREEMENTS

	 	 	 
	Project	 	Contract Description
	Westyn Bay (Parcel 1)

	 	Contract to Purchase dated June 7,
2002, between West Groves Ventures,
L.L.L.P., as “seller,” and
Transeastern Properties, Inc., as
“buyer” Amendment to Contract to
Purchase dated July 19, 2002, between
West Groves Ventures, L.L.L.P., as
“seller,” and Transeastern
Properties, Inc., as “buyer” Second
Amendment to Contract to Purchase
dated June 20, 2003, between West
Groves Ventures, LLLP, as “seller,”
and Transeastern Properties, Inc., as
“buyer”
 Third Amendment to Contract
to Purchase dated December 12, 2003,
between West Groves Ventures, LLLP,
as “seller,” and Transeastern
Properties, Inc., as “buyer”
	 
	 	 
	Westyn Bay (Parcel 2)

	 	Contract to Purchase date November 5,
2003, between West Groves Ventures,
LLLP, as “seller,” and Transeastern
Properties, Inc., as “buyer”
	 
	 	 
	Legacy Park

	 	Contract to Purchase between Legacy
Park Ventures, LLLP, as “seller,” and
Transeastern Properties, Inc., as
“buyer,” dated May 6, 2004.
	 
	 	 
	Metro West 1 & 2

	 	Agreement of Sale and Purchase dated
August 5, 2004 between Transeastern
Properties, Inc., as “seller,” and
Metro West Commercial Partners, LLC
as “buyer”
 First Amendment to
Agreement of Purchase and Sale dated
December 1, 2004 between Transeastern
Properties, Inc., as “seller” and
Metro West Commercial Partners, LLC,
as “buyer” (assigning the Agreement
For Purchase and Sale from
Transeastern Properties, Inc. to
Transeastern Villa Capri at
Metrowest, LLC)

21

 

	 	 	 
	Project	 	Contract Description
	 

	 	Second Amendment to Agreement of Purchase and Sale dated December 30,
2004 between Transeastern Villa Capri at Metrowest, LLC, as “seller” and
Metrowest Commercial Partners, LLC, as “buyer”
	 
	 	 
	Moss Park

	 	PUT/Option Agreement between Regional Development/Lake Hart, LLC, as “seller”,
Transeastern Properties, Inc., as “buyer” dated February 27, 2004
	 
	 	 
	Maurie Carter

	 	Option and Development Agreement dated April 8, 2004 between Moss Park Landco, LLC
and Transeastern Properties, Inc., as amended by the Amendment to Option and Development
Agreement dated July 28, 2005.

Purchase and Sale Agreement dated May 3, 2005 between Metro Development, a
Florida limited liability Properties,
company, as “seller”, and Transeastern Inc., a Florida corporation, as
buyer
 Purchase and Sale Agreement dated April 18, 2005 between Metro
Development, a Florida limited liability company as “seller” and
Transeastern Properties, Inc., a Florida corporation, as “buyer”
	 
	 	 
	Bronson 2

	 	Agreement for the Purchase and Sale or Real Property dated May 31, 2005 between Falcon
739 Partners, LLC, a Florida limited liability company, and Transeastern
Properties, Inc., a Florida corporation
	 
	 	 
	Cummer 1400

	 	Agreement for the Purchase and Sale of Real Property dated May 6, 2005 between BF South
Jacksonville Properties, LLC, a Florida limited liability company, and Transeastern
Properties, Inc., a Florida corporation
	 
	 	 
	Cummer 691

	 	Agreement For the Purchase and Sale of Real Property dated May 6, 2005 between BF South
Jacksonville Properties, LLC, a Florida limited liability company, and Transeastern
Properties, Inc., a Florida corporation

22

 

	 	 	 
	Project	 	Contract Description
	Independence 185

	 	Agreement for the Purchase and Sale of Real
Property dated as of May 31, 2005 between
Independence Land Development, LLC, a Florida
limited liability company, and
Transeastern Properties, Inc., a Florida
corporation
	 
	 	 
	Summerport

	 	Agreement for the Purchase and Sale of Real
Property dated June 6, 2005 between Falcon
Village Center Partners, LLC, a Florida limited
liability company, and Transeastern Properties,
Inc., a Florida corporation.
	 
	 	 
	Williams Island

	 	Deferred Purchase Price Covenant and
Agreement dated October 15, 2004
between WICC Development, Inc., as “seller” and
WI 825 Partners, LLC as “purchaser”

Assignment and Assumption of Deferred
Purchase Price Covenant and
Agreement dated March, 2005 between WI 825
Partners, LLC, as “assignor” and
Transeastern, Inc., as “assignee”

Option and Development Agreement dated
October 14, 2004 between WI 825 Partners,
LLC (Owner) and Transeastern Properties, Inc.
(Builder), as amended by the Amendment to
Option and Development Agreement dated July 28,
2005. Construction Agreement dated October 14,
2004 between WI 825 Partners, LLC and
Transeastern Properties, Inc. (attached as
Exhibit “H” to the Option and
Development Agreement between these parties)
	 
	 	 
	Coral Lakes I

	 	Option and Development Agreement dated October
29, 2004, as amended July 12, 2005, between
North Cape Development Associates I, LLC, North
Cape Development Associates II, LLC and
North Cape Development Associates III, LLC,
as owner (collectively, the “North Cape
Entities”) and Transeastern
Properties. Inc., as Builder, as amended by the
Amendment to Option and Development Agreement
dated July 28, 2005 by and between Landco
Investments, LLC (Owner), Transeastern
Properties, Inc. (Builder), and the

23

 

	 	 	 
	Project	 	Contract Description
	 

	 	North Cape Entities.

Construction Agreement dated
October 29, 2004, as amended
July 12, 2005, between North
Cape Development Associates I,
LLC, North Cape Development
Associates II, LLC and North
Cape Development Associates
III, LLC, as owner and
Transeastern Properties, Inc.,
as Builder (attached as Exhibit
“F” to the Option and
Development Agreement between
these parties)
	 
	 	 
	Coral Lakes II and III

	 	Option and Development
Agreement dated November 12,
2004 between Coral Lakes
Landbank, LLC (Owner) and
Transeastern Properties, Inc.
(Builder), as amended by the
Amendment to Option and
Development Agreement dated
July 28, 2005.
 Construction
Agreement dated November 12,
2004 between Coral Lakes
Landbank, LLC (attached as
Exhibit “F” to Option and
Development Agreement between
these parties)
	 
	 	 
	Olympia Pointe (Phase 2)

	 	Option and Development
Agreement dated June 21, 2004
between Colonial Crossing
Associates, LLC (Owner) and
Transeastern Properties, Inc.
(Builder), as amended by the
Amendment to Option and
Development Agreement dated
July 28, 2005.
 Construction
Agreement dated June 21, 2004
between Colonial Crossing
Associates, LLC and
Transeastern Properties, Inc.
(attached as Exhibit “F” to the
Option and Development
Agreement between these
parties)
	 
	 	 
	Independence Land Development

	 	Option and Development
Agreement — Phase I dated
August 2, 2004 between
-Independence Land Development,
LLC (Owner) and Transeastern
Independence, LLC (Builder), as
amended by the First Amendment
to Option and Development
Agreement dated July 25, 2005
and the Second Amendment to
Option and Development
Agreement dated July 28,
2005.

24

 

	 	 	 
	Project	 	Contract Description
	 

	 	Construction Agreement — Phase I dated August 2, 2004 between
Independence Land Development, LLC and Transeastern Independence, LLC
(attached as Exhibit “H” to Option and Development Agreement between these
parties)
	 
	 	 
	Bigwater Independence

	 	Option and Development Agreement dated May 31, 2005 between Independence Land
Development 23, LLC and Transeastern Independence, LLC. 
	 

	 	 Construction
Agreement dated May 31, 2005 between Independence Land Development 23, LLC
and Transeastern Independence, LLC (attached as Exhibit “F” to Option and
Development Agreement between these parties)
	 
	 	 
	Moss Park

	 	Option and Development Agreement dated April 8, 2004 between Moss Park
Landco, LLC (Owner) and Transeastern Properties, Inc. (Builder), as amended
by the Amendment to Option and Development Agreement dated July 28, 2005.

Construction Agreement dated April 8, 2004 between Moss Park Landco, LLC and
Transeastern Properties. Inc. (attached as Exhibit “H” to the Option and
Development Agreement between these parties)
	 
	 	 
	Tampa Bay Golf &

Tennis

(Tract 1)

	 	Option and Development Agreement dated July 1 , 2004 between Tampa Bay Landco
II, LLC (Owner) and Transeastern Properties, Inc. (Builder), as amended by
the Amendment to Option and Development Agreement dated July 28,2005.

Construction Agreement dated July 1 , 2004 between Tampa Bay Landco II, LLC
and Transeastern 
	 

	 	Properties, Inc. (attached as Exhibit H to the Option and
Development Agreement executed by these parties)
	 
	 	 
	Live Oak II

	 	Option and Development Agreement — Live Oak dated January 12, 2005

25

 

	 	 	 
	Project	 	Contract Description
	 

	 	between Live Oak Landbank 2, LLC (Owner) and
Live Oak Development II, LLC (Builder), as amended
by the Amendment to the Option and Development
Agreement dated July 28, 2005.
 Construction
Agreement dated January 12, 2005 between Live Oak
Landbank 2, LLC and Live Oak Development II, LLC
(attached as Exhibit F to the Option and
Development Agreement executed by these parties)
	 
	 	 
	Grand Hampton

	 	Option and Development Agreement dated June 28,
2004 between Bruce B. Downs Partners, LLC (Owner)
and Transeastern Properties, Inc. (Builder), as
amended by the Amendment to Option and Development
Agreement dated July 28, 2005. 
	 

	 	Construction
Agreement dated June 28, 2004 between Bruce B.
Downs Partners, LLC and Transeastern Properties,
Inc. (attached as Exhibit “H” to the Option and
Development Agreement between these parties)
	 
	 	 
	Kendall Commons

	 	Option and Development Agreement,
dated August 31, 2004 between Kendall Land Development, LLC (Owner)
and Transeastern Vizcaya, LLC (Builder), as amended
by the Amendment to Option and Development
Agreement dated July 28, 2005.
 Construction
Agreement dated August 31, 2004 between Kendall
Land Development, LLC and Transeastern Vizcaya, LLC
(attached as Exhibit “H” to the Option and
Development Agreement between these parties)
	 
	 	 
	Duval Road 1

	 	Option and Development Agreement dated October 25,
2004 between Equity Investments, LLC (Owner) and
Transeastern Properties, Inc. (Builder), as amended
by amendments dated April 8, 2005, May 6, 2005,
June 30, 2005 and July 28, 2005.
 Construction
Agreement dated October 25, 2004 between Equity
Investments,

26

 

	 	 	 
	Project	 	Contract Description
	 

	 	LLC and Transeastern Properties, Inc.
(attached as Exhibit “H” to the Option
 and Development Agreement between these
parties)
	 
	 	 
	Duval Road 2

	 	Option and Development Agreement dated May
3, 2005 between Equity
Investments, LLC (Owner) and Transeastern
Properties, Inc. (Builder), as amended by
the Amendment to Option and Development
Agreement dated July 28, 2005.
 Construction
Agreement dated May 3, 2005 between Equity
Investments, LLC and Transeastern
Properties, Inc. (attached, as Exhibit “H”
to the Option and Development Agreement
between these parties)
	 
	 	 
	Cummer 1044

	 	Agreement for the Purchase and Sale of Real
Property, dated May 30, 2005, between BF
South Jacksonville Properties, LLC and
NICKMATDAN LANDBANK, LLC.
 Option and
Development Agreement dated May 31, 2005
between NICKMATDAN LANDBANK, LLC and
Transeastern Properties, Inc. Construction
Agreement dated May 31, 2005 between
NICKMATDAN LANDBANK, LLC and Transeastern
Properties, Inc. (attached as Exhibit “F”
to the Option and Development Agreement
between these parties)
	 
	 	 
	Cummer West

	 	Option and Development Agreement dated May
31, 2005 between LTK TRANSOI, LLC and
Transeastern Properties, Inc. 
	 

	 	 Construction
Agreement dated May 31, 2005 between LTK
TRANSOI, LLC and Transeastern Properties,
Inc. (attached as Exhibit “F” to the Option
and Development Agreement between
these parties)
	 
	 	 
	Kendall Town Center

	 	Agreement for Purchase and Sale dated as of
June 9, 2004, by and between
Transeastern Properties, Inc. and GL
National, Inc.

27

 

	 	 	 
	Project	 	Contract Description
	 

	 	Option and Development Agreement dated May 16,
2005 between Kendall Pointe Land
Development, LLC and Transeastern Kendall Pointe,
LLC, as amended by the Amendment to Option
and Development Agreement dated July 28, 2005. 

Construction Agreement dated May 16, 2005 between
Kendall Pointe Land Development, LLC and
Transeastern Kendall Pointe, LLC (attached as Exhibit
“F” to the Option and Development Agreement between
these parties)
	 
	 	 
	Heller 301

	 	Agreement for the Purchase and Sale of Real
Property, dated as of May 30, 2005, by and
between Heller 301 Partners Investors, LLC and Heller
301 Landbank, LLC.

Option and Development
Agreement dated May 31, 2005 between Heller 301
Landbank, LLC and Transeastern Properties, Inc.

	 

	 	
Construction Agreement dated May 31, 2005 between
Heller 301 Landbank, LLC and Transeastern
Properties, Inc. (attached as Exhibit “F” to the
Option and Development Agreement between these
parties)
	 
	 	 
	Bayshore

	 	Option and Development Agreement dated May 1 6, 200
between Bayshore 65 Landbank, LLC and
Transeastern Properties, Inc.

Construction Agreement dated
May 16, 2005 between Bayshore 65 Landbank, LLC and
Transeastern Properties, Inc. (attached as Exhibit
“F” to the Option and Development Agreement
between these parties)
	 
	 	 
	Oak Creek

	 	Real Estate Purchase and Sale Agreement dated October
8, 2004, between S.W. Florida Land 411, LLC, a
Florida limited liability company (“Seller”) and
Falcon Oak Creek, LLC, a Florida limited
liability company (“Purchaser”). First
Amendment to Real Estate Purchase and Sale Agreement
dated December 14, 2004, between S.W. Florida Land
411, LLC, a Florida limited liability

28

 

	 	 	 
	Project	 	Contract Description
	 

	 	company (“Seller”) and Falcon Oak Creek,
LLC, a Florida limited liability company
(“Purchaser”).
 Second Amendment to Real Estate
Purchase and Sale Agreement dated March 23, 2005,
between S.W. Florida Land 411, LLC, a Florida
limited liability company (“Seller”) and Falcon Oak
Creek, LLC, a Florida limited liability company
(“Purchaser”).
Agreement for Assignment of
Agreement for the Purchase and Sale of Real
Property dated May 15, 2005 from Transeastern Oak
Creek, LLC, a Florida limited liability company
f/k/a Falcon Oak Creek, LLC, to Oak Creek Landbank,
LLC, a Florida limited liability company. 
	 

	 	Option
and Development Agreement dated May 16, 2005
between Oak Creek Landbank, LLC and Transeastern
Properties, Inc. 
	 

	 	Construction Agreement dated May
16, 2005 between Oak Creek Landbank, LLC and
Transeastern Properties, Inc. (attached as Exhibit
“F” to the Option and Development Agreement between
these parties)
	 
	 	 
	Bronson 1

	 	Option and Development Agreement dated May
31, 2005 between Carroll Dyer Landbank, LLC and
Transeastern Properties, Inc. 
	 

	 	Construction Agreement dated May
16, 2005 between Carroll Dyer Landbank, LLC and
Transeastern Properties, Inc. (attached as Exhibit
“F” to the Option and Development Agreement between
these parties)
	 
	 	 
	Orange Avenue

	 	Option and Development Agreement dated May 16, 2005
between Fort Pierce Orange Avenue Landbank LLC and
Transeastern Properties, Inc.
 Construction
Agreement dated May 16, 2005 between Fort Pierce
Orange Avenue Landbank, LLC and Transeastern
Properties, Inc. (attached as Exhibit “F’ to the
Option and Development Agreement between these
parties)

29

 

	 	 	 
	Project	 	Contract Description
	Westwood 1 & 2

	 	Real Estate Purchase and Sale Agreement, dated
April 8, 2005, between Westwood, LLC and Falcon
Land and Development, LLC.
 Assignment dated June 1, 2005 from Falcon Land & Development, LLC, as
assignor and Westwood 1191 Associates, LLC, as
assignee.
 Option and Development Agreement dated
May 16, 2005 between Westwood Berkshire Landbank,
LLC and Transeastern Properties, Inc.
 Construction
Agreement dated May 16, 2005 between Westwood
Berkshire Landbank, LLC and Transeastern
Properties, Inc. (attached as Exhibit “F” to the
Option and Development Agreement between these
parties)

30

 

SCHEDULE 4.27

TAXPAYER IDENTIFICATION NUMBER

	 	 	 
	Entity	 	Tax Identification Number
	TE/TOUSA Senior, LLC

	 	20-2988796
	 
	 	 
	EH/Transeastern, LLC

	 	20-2988874

31

 

SCHEDULE 4.29

BLOCKED ACCOUNTS

Account Number

2000028091552

Account Name

EH/Transeastern, LLC

State in Which Account is Located

Florida

32

 

SCHEDULE 5.1(2)

CONDITIONS TO FUNDING OF LOAN

Latham & Watkins to prepare.

33

 

SCHEDULE 5.5

INSURANCE REQUIREMENTS

	(1)	 	Property Insurance

	 	A)	 	Owned, Leased Or Rented Real Or Personal Property. Property insurance insuring
against loss or damage by standard
perils included within the classification “All Risks of Physical Loss.” Such insurance (i)
shall be Replacement Cost
Coverage, on a “no coinsurance” or agreed amount basis, in an amount equal to 100% of the
actual replacement cost of
each property (exclusive of costs of land, excavation, foundation, footings and underground
utilities), and (ii) shall have
deductibles no greater than $100,000 per occurrence (or, with respect to named storm
windstorm insurance, deductibles no
greater than 5% subject to a minimum “per occurrence” deductible of the affected property
values of the Mortgaged
Property). The policies of insurance carried in accordance with this paragraph shall be
paid annually in advance or
approved periodic installments.
	 
	 	B)	 	Property in the Course of Construction, Homes Completed but Not Sold, Model Homes,
and Other Production
Related Property. Builder’s Risk insurance insuring against loss or damage to cover the
improvements in the course of
construction and while awaiting final sale or transfer on a “special form” (all risk) basis
(including materials in storage and
while in transit) (i) in an amount equal to 100% of the actual cost of each property
(exclusive of costs of land, excavation,
foundation, footings and underground utilities), and (ii) shall have deductibles no greater
than $100,000 per occurrence (or,
with respect to named storm windstorm insurance, deductibles no greater than 5% subject to
a minimum “per occurrence”
deductible of the affected property values of the Mortgaged Property). The policies of
insurance carried in accordance
with this paragraph shall be paid annually in advance or approved periodic installments.

	(2)	 	Liability Insurance. Coverage shall be written on an occurrence or modified
occurrence form to include all premises,
operations, products and completed operations coverage, personal and advertising injury
coverage, and contractual liability
coverage (applicable to written contracts). Claims-made coverage is not acceptable. The
minimum limits of liability are Ten
Million Dollars ($10,000,000) Each Occurrence with Ten Million Dollars ($10,000,000) General
and Products/Completed
Operations Aggregate Limits. Limits can be achieved through primary or excess liability
policies, or a combination of both.

34

 

	(3)	 	Workers Compensation Insurance. Worker’s compensation insurance with respect to
all employees of the Borrowers as and
to the extent required by any Governmental Authority or Requirement of Law and employer’s
liability coverage of at least One
Million Dollars ($1,000,000).
	 
	(4)	 	Flood Insurance. Flood insurance if any part of any structure or
improvement comprising the Mortgaged Property is located
in an area identified by the Federal Emergency Management Agency as an area federally
designated a “100 year flood plain”
and (a) flood insurance is generally available at reasonable premiums and in such amount as
generally required by institutional
lenders for similar properties or (b) if not so available from a private carrier, from the
federal government at commercially
reasonable premiums to the extent available. Deductibles shall not exceed One Million Dollars
($1,000,000) for any one
occurrence.
	 
	(5)	 	Terrorism Insurance. Provided that foreign
insurance coverage (“Terrorism Insurance”)
relating to the acts of terrorism on
behalf of foreign individuals or interests as contemplated by the Foreign Terrorism Insurance
Act is (i) commercially available;
and (ii) commonly obtained by other national homebuilders in the same geographic area as the
Mortgaged Property and with
similar size and scope of operations, the Borrowers shall carry Terrorism Insurance throughout
the term of the Loan (including
any extension terms) on a per occurrence basis in policy amounts as required under Section 5.5
(1)(A)&(B) and Section 5.5 (2)
	 
	(6)	 	Other Insurance. Upon sixty (60) days’ written notice, such other reasonable types of
insurance not covered in Sections 5.5(1) through 5.5(5) and in such reasonable amounts as the Administrative
Agent from time to time may reasonably request
against such other insurable hazards (but not earthquake) which at the time are commonly
insured against for property similar
to the Mortgaged Property located in or around the region in which the Mortgaged Property is
located and as may be
reasonably required to protect the Administrative Agent’s interests. The Borrowers must
maintain seismic insurance as
follows:

(A) If a Mortgaged Property is located in an “earthquake prone zone” as determined by the U.S.
Geological Survey,
earthquake insurance in an amount no less than the probable maximum loss less any applicable
deductibles not exceeding 10%
of the full replacement value of such property in an amount not less than the amount required
under Section 5.5 (1)(A)&(B),
all as determined by a recognized earthquake engineering firm, and

(B) sinkhole and mine subsidence insurance, if required, as determined by Administrative Agent
in its sole discretion and
in form and substance satisfactory to Administrative Agent, provided such insurance is (i)
commercially available, and (ii)
commonly obtained by other national homebuilders of similar size and scope of operations in
the same geographic area as the

35

 

Mortgaged Property and (iii) that the insurance pursuant to this Section 5.5 (6)(B)
shall be on terms consistent with the all risk

insurance policy required under Section 5.5 (1)(A)&(B).

	(7)	 	General Requirements

	 	(A)	 	Ratings of Insurers. All insurance required by Section 5.5 shall be obtained and
maintained by, or caused to be
maintained, at all times by Borrower under valid and enforceable policies in form and
substance acceptable to
Administrative Agent. Any new policies for Mortgaged Property shall be issued by
financially sound and responsible
insurance companies authorized to do business in the State and having a claims paying
ability rating of “A-” or better
by S&P (or such other debt rating agencies approved by Administrative Agent) and a
general policy rating of “A-” or
better and a Financial size of IX or better by A.M. Best Company, Inc.
	 
	 	(B)	 	Form of Insurance Policies; Endorsements. All required policies except the workers’
compensation/employer’s
liability shall (i) designate Administrative Agent and its successors and assigns as an
additional insured, mortgagee
and/or loss payee as deemed appropriate by Administrative Agent; (ii) shall include
effective waivers by the insurer of
all claims for insurance premiums against all loss payees, additional insureds and named
insureds (other than the
Borrowers) and all rights of subrogation against any loss payee, additional insured or
named insured; (iii) shall contain
such provisions as the Administrative Agent deems reasonably necessary or desirable to
protect its interest, including
endorsements providing that neither the Borrowers, the Administrative Agent nor any
other party shall be a
Contributor-insurer (except deductibles and/or self insured retentions) under said
Policies and that no material
modification, reduction, cancellation or termination in amount of, or material change
(other than an increase) in,
coverage of any of the Policies shall be effective until at least thirty (30) days after
receipt by each named insured,
additional insured and loss payee of written notice thereof or ten (10) days after
receipt of such notice with respect to
nonpayment of premium; (iv) and shall permit the Administrative Agent to pay the
premiums and continue any
insurance upon failure of the Borrowers to pay premiums when due, upon the insolvency of
any of the Borrowers or
through foreclosure or other transfer of title to the Mortgaged Property (it being
understood that the Borrowers’ rights
to coverage under such policies may not be assignable without the consent of the
insurer).
	 
	 	(C)	 	Premiums; Certificates; Renewals.

(i) The Borrowers shall pay or cause to be paid the premiums for such
Policies (the “Insurance Premiums”) as the
same become due and payable and shall furnish to the Administrative Agent the receipts
for the payment of the
Insurance Premiums or other evidence of such payment reasonably satisfactory to the
Administrative Agent (provided,

36

 

however, that Borrowers are not required to furnish such evidence of payment to the
Administrative Agent if such Insurance Premiums are to be paid by the Administrative Agent pursuant to the terms of this
Agreement).

(ii) The Borrowers shall deliver to the Administrative Agent on or prior to the Closing
Date acceptable insurance
evidence in the form of certificates setting forth in reasonable detail the material terms
(including any applicable notice
requirements) of all Policies from the respective insurance companies (or their authorized
agents) that issued the
Policies, including that such Policies may not be canceled or modified in any material respect
without thirty (30) days’
prior notice to the Administrative Agent, or ten (10) days’ notice with respect to nonpayment
of premium.

(iii) Prior to the expiration, termination or cancellation of any Policy, the Borrowers
shall renew such policy or
obtain a replacement policy or policies (or a binding commitment for such replacement policy
or policies), which shall
be effective no later than the date of the expiration, termination or cancellation of the
previous policy, and shall deliver
to the Administrative Agent acceptable insurance evidence in the form of a certificate in
respect of such policy or
policies (A) containing the same information as the certificates required to be delivered by
the Borrowers pursuant to
clause (ii) above, or a copy of the binding commitment for such policy or policies and (B)
confirming that such policy
complies with all requirements hereof.

(iv) If the Borrowers do not furnish to the Administrative Agent the certificates as
required under clause (iii) above,
upon three (3) Business Days prior notice to the Borrowers, the Administrative Agent may
procure, but shall not be
obligated to procure, such replacement policy or policies and pay the Insurance Premiums
thereof, and the Borrowers
agree to reimburse the Administrative Agent for the cost of such Insurance Premiums promptly
on demand.

	(D)	 	Separate Insurance. The Borrowers shall not take out separate insurance contributing
in the event of loss with that
required to be maintained pursuant to this Section 5.5 unless such insurance complies
with this Section 5.5.
	 
	(E)	 	Blanket Policies. In the event the Borrowers satisfy the requirements under this Section
5.5 through the use of a Policy
covering properties in addition to the Mortgaged Property, then (unless,such policy is
provided in substantially the
same manner as it is as of the date hereof), the Borrowers shall provide evidence satisfactory
to the Administrative
Agent that the Insurance Premiums for the Mortgaged Property are separately allocated under
such Policy and that
payment of such allocated amount (A) shall maintain the effectiveness of such Policy as to the
Mortgaged Property and
(B) shall otherwise provide the same protection as would a separate policy that complies with
the terms of this
Agreement as to the Mortgaged Property, notwithstanding the failure of payment of any other
portion of the insurance
premiums.

37

 

SCHEDULE 6.5

INVESTMENTS

None.

38

 

SCHEDULE 6.6

AFFILIATE TRANSACTIONS

1. First Florida Title Services II, LLC, until such time that it assigns all its pending files
(as described in more detail in the Asset
Purchase Agreement (“APA”)) to Universal Land Title, Inc.

2. Liberty Mortgage, until the mortgage provider role is taken over by Preferred Home Mortgage
Company (“PHMC”)

3. Century Communications of Florida, Inc. as service provider under the Master Cable Services
Agreement dated June 2, 2002 with
respect to the communities identified for this purpose in the APA

4. TEP Holdings, Inc. under the Transition Agreement and Cooperation Agreements

5. Universal Land Title and its subsidiaries

6. Preferred Home Mortgage Company

7. Alliance Insurance and Information Services, LLC

8. Century Marketing International, LLC

9. Cooperation Agreements

Heller:     Heller 301 Partners Investors, LLC, Heller 301 Landbank, LLC

Cummer: South Jacksonville Properties, LLC, BF South Jacksonville Properties, LLC, Nickmatdan Landbanks, LLC

Bronson: Falcon Land & Development, LLC, Carroll Dyer Landbank, LLC

39

 

SCHEDULE 6.12(1)

LIENS

	 	 	 
	Williams Island

	 	• Mortgage between
WI 825 Partners, LLC and
Ohio Savings Bank, a
Federal Savings Bank said
Mortgage dated October
15, 2004 recorded October
28, 2004 in Official
Records Book 22776, Page
2364.

	 
	 	 
	Coral Lakes I

(except with respect to the
six lots owned by the
Borrowers)

	 	• Mortgage
executed by North Cape
Development Associates I,
LLC, a Florida limited
liability company, North
Cape Development
Associates II, LLC, a
Florida limited liability
company, and North Cape
Development Associates
III, LLC, a Florida
limited liability
company, et al, in favor
of KeyBank, dated
February 11, 2005,
recorded March 3, 2005,
in Official Records Book
4613, page 1210, Public
Records of Lee County,
Florida, given to secure
the indebtedness in the
original principal sum of
$25,000,000,00.

	 
	 	 
	 

	 	• Mortgage,
Security Agreement and
Financing Statement from
North Cape Development
Associates I, LLC, a
Florida limited liability
company, North Cape
Development Associates
II, LLC, a Florida
limited liability
company, North Cape
Development Associates
III, LLC, a Florida
limited liability
company, North Cape
Holdings, LLC, a Florida
limited liability
company, North Cape
Warehouse Associates,
LLC, a Florida limited
liability company, to
Franklin Bank, SSB, a
Texas savings bank, dated
May 28, 2003, recorded
June 3, 2003 in O.R. Book
3950, Page 618; as
modified by Receipt of
Future Advance recorded
in O.R. Book 4036, Page
1779; and by Mortgage
Modification Agreement
and Receipt of Future
Advance recorded in O.R.
Book 4160, Page 319; and
as assigned to KeyBank
National Association, a
national banking
association, by
Assignment of Notes,
Mortgage and Loan
Documents recorded in
O.R. Book 4503, Page
1815; and further
modified by Amended and
Restated Mortgage and
Security Agreement
recorded in O.R. Book
4503, Page 1829.

	 
	 	 
	Coral Lakes II & III

	 	• Mortgage
executed by Coral Lakes
Landbank, LLC, et al, in
favor of KeyBank, dated
February 11, 2005,
recorded March 3, 2005,
in Official Records book
4613, page 1210, Public
Record of Lee County,
Florida, given to secure
the indebtedness in the
original principal sum of
$25,000,000,00.

	 
	 	 
	 

	 	• Mortgage from
Coral Lakes Landbank,
LLC, a Florida limited
liability company to
Keybank National
Association, recorded in
Official Records Book
4503, Page 1616.

40

 

	 	 	 
	Olympia Pointe (Phase 2)

	 	• Mortgage from
Colonial Crossing
Associates, LLC, a Florida
limited liability company,
to BankAtlantic, dated June
21, 2004, recorded June 29,
2004, in Official Records
Book 4349, page 3502, as
modified by Receipt for
Future Advance and Mortgage
Modification Agreement
recorded in Office Records
Book 4722, Page 775.

	 
	 	 
	Independence Land Development

	 	Mortgage executed by
Transeastern Independence,
LLC, in favor of Colonial
Bank, N.A., dated March 15,
2005, recorded in Official
Records Book 7879, page
1925, as modified in
Official Record Book 7966,
page 3357.
	 
	 	 
	Independence Bigwater

	 	• Mortgage from
Bigwater Partners, LLC and
Falcon Partners Realty and
Capital II, LLC to Ohio
Savings Bank, recorded
September 13, 2002, in
Official Records Book 6614;
page 8221; being assigned
to Wachovia Bank; National
Association by Assignment
of Note and Other
Documents, recorded in
Official Records Book 6956,
page 4124; Aforesaid
Mortgage being restated by
Restated Mortgage and
Notice of Future Advance
Agreement between Bigwater
Partners, LLC and Wachovia
Bank, National Association,
recorded in Official
Records Book 6956, Page
4130; Said Mortgage being
further modified in
Official Records Book 7271,
Page 2451, all as affected
by Partial Release of
Mortgage recorded in
Official Records Book 7610,
Page 4360, and further
modified in Official
Records Book 7782, page 813
and Collateral Assignment
of Amended and Restated
Agreement of Sale and
Purchase recorded in
Official Records Book 7794,
page 85 all of the Public
Records of Orange County,
Florida.

	 
	 	 
	 

	 	• Mortgage from
Independence Land
Development, LLC to
Colonial Bank, N.A.,
recorded September 13,
2004, in Official Records
Book 7610, page 4442,
Public Records of Orange
County, Florida.

	 
	 	 
	Moss Park

	 	Mortgage and Security
Agreement (A&D Loan) (Moss
Park Road Parcel) between
Moss Park Landco, LLC, a
Florida limited liability
company, and Ohio Savings
Bank, a federal savings
bank, recorded March 4,
2004, in Official Records
Book 7332, Page 526, Public
Records of Orange County,
Florida (as to all parcels
herein).
	 
	 	 
	Tampa Bay Golf & 

Tennis (Tract I
only)

	 	• Mortgage and
Security Agreement from
Tampa Bay Landco II, LLC, a
Florida limited liability
company, in favor of Citrus
Bank, N.A., dated December
19, 2002, recorded December
27, 2002, in Official
Records Book 5183, Page
1851, of the public records
of Pasco County,
Florida.

	 
	 	 
	Live Oak II

	 	• Mortgage executed
by Live Oak Landbank 2,
LLC, in favor of
Residential Funding
Corporation, dated January
12, 2005, recorded January
19, 2005, in Official
Records Book 14603, Page
341.

	 
	 	 
	Grand Hampton

	 	• Mortgage and
Security Agreement from
Bruce B. Downs Partners,
LLC, a Florida limited
liability company, to
Indymac Bank, F.S.B., dated
June 30, 2004, recorded
July 2, 2004 in O.R. Book
13991, Page 610; and
release of mortgage
recorded in Official
Records Book 13407, page
652, as it affects the
subject property under the
Cross- Default and Cross
Collateralization Agreement
recorded in Official
Records Book 14583, page
1703, all of the

41

 

	 	 	 
	 

	 	public records of Hillsborough County, Florida.

	 
	 	 
	Kendall Commons

	 	• MORTGAGE AND SECURITY AGREEMENT in favor of City
National Bank of Florida filed September 10, 2004 in Official
Records Book 22645, page 2442 and Termination of the
UCC-1
Financing Statement in Official Records Book 22645, page
2459.

	 
	 	 
	 

	 	• SECOND MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF
RENTS in favor of Falcon Funding, LLC filed September 10, 2004
in Official Records Book 22645, page 2464 and Termination of
the UCC- 1 Financing Statement in Official Records Book 22645,
page 2493 as Subordinated in Official Records Book 22645, page
2500

	 
	 	 
	 

	 	• MORTGAGE DEED AND SECURITY AGREEMENT in favor of
BankAtlantic, filed December 30, 2004 in Official Records
Book 22958, page 4372, together with release of the Assignment
of Rents, Leases and Deposits recorded in Official Records
Book 22958, page 4412 and Termination of UCC-1 Financing
Statement recorded in Official Records Book 22958, page
4428.

	 
	 	 
	Duval Road I

	 	None
	 
	 	 
	Duval Road II

	 	None
	 
	 	 
	Cummer 

1044,1400,691

	 	• Mortgage and Security Agreement executed by SOUTH
JACKSONVILLE PROPERTIES, LLC, a Florida limited liability
company, and JACKSONVILLE WEST 95 PARTNERS, LLC, a Florida
limited liability company, to WACHOVIA BANK, NATIONAL
ASSOCIATION, dated April 30, 2004, filed on May 4, 2004, in
Official Records Book 2190, Page 1637, under Clerk’s File
Number 04-032970, in the Public Records of St. Johns County,
Florida, securing the original principal amount of
$55,250,000.00, as affected by Subordination Agreement
recorded in Official Records Book 2209, Page 1197, and Partial
Release of Mortgage and Other Loan Documents
recorded in
Official Records Book 2298, Page 1821, all of the Public
Records of St. Johns County, Florida.

	 
	 	 
	 

	 	• Second Mortgage and Security Agreement from SOUTH
JACKSONVILLE PROPERTIES, LLC, a Florida limited liability
company, and JACKSONVILLE WEST 95 PARTNERS, LLC, a Florida
limited liability company, to WACHOVIA BANK, NATIONAL
ASSOCIATION, dated April 30, 2004, filed on May, 4, 2004, in
Official Records Book 2190, Page 1687, as affected by
Subordination Agreement recorded in Official Records Book
2209,

42

 

	 	 	 
	 

	 	Page 1197, and Partial Release of Mortgage and Other Loan Documents recorded in Official Records Book 2298, Page
1818, all of the Public Records of St. Johns County, Florida.

	 
	 	 
	Cummer West

	 	• Mortgage executed by R&F 44 Jacksonville, LLC, in favor of Wachovia Bank, National Association, recorded
October 12, 2004, in Official Records Book 2298, Page 1847, given to secure the indebtedness in the original principal
sum of $4,160,000.00.

	 
	 	 
	Kendall Town Center

	 	• Mortgage from Kendall Pointe Land Development, LLC to Wachovia Bank, National Association, recorded in Official
Records Book 12497, page 2039.

	 
	 	 
	Heller 301

	 	• Mortgage and Security Agreement from Heller 301 Partners, LLC, a Florida limited liability company, to City
National Bank of Florida, recorded January 18, 2005, in Official Records Book 1986, page 4563, of the public records of
Manatee County, Florida.

	 
	 	 
	Bayshore

	 	None
	 
	 	 
	Oak Creek

	 	• Mortgage from S.W. Florida Land 411, L.L.C., a Florida limited liability company to National City Bank,
recorded in Official Records Book 4073, page 1256.

	 
	 	 
	Bronson 1 & Bronson 2

	 	• Mortgage from Regional Development/27, LLC to National City Bank, recorded August 23, 2004, in Official Records
Book 2581, page 190.

	 
	 	 
	 

	 	• Mortgage from Regional Development Group, Inc. and Dyer Blvd., LLC to National City Bank, recorded August 23,
2004, in Official Records Book 2581, page 1.

	 
	 	 
	 

	 	• Mortgage from Dyer Blvd., LLC and Regional Development Group, Inc. to National City Bank, recorded August 23,
2004, in Official Records Book 2581, page 39

	 
	 	 
	Orange Avenue

	 	None
	 
	 	 
	Westwood 1 & 2

	 	• Mortgage on Lot 14 Block F, lot 11 Block G, lots 15, 16, 21, 22, 23, and 24 Block K, and Lots 1 and 2 Block J
Serena park as and described in Schedule A fro the Mortgage executed by Chandler M. Lucas and Shirley Lucas et al to
Future Days of America, Inc., recorded in Official Records Book 2778 page 3160, of the Pubic Records of Lee County,
Florida.

	 
	 	 
	 

	 	• Mortgage from Westwood, LLC to Florida Community Bank, recorded in Official Records Book 4079, Page 2780

43

 

	 	 	 
	 

	 	and Mortgage Spreader Agreements recorded in Official Records Book 4080 page 2448, Official Records Book 4085 Page 1327, Official Records Book 4095 Page 387 and
Official Records Book 4139 Page 2973, of the Public Records of Orange County, Florida.

	 
	 	 
	Westyn Bay I

	 	None
	 
	 	 
	Westyn Bay II

	 	• Mortgage executed by West Groves Venture, L.L.L.P. to SunTrust Bank, dated October 8, 2002, recorded October 10, 2002, in Official Records Book 6638, page
4058.

	 
	 	 
	 

	 	• As modified by Modification of Mortgage and Notice of Future Advance recorded in Official Records Book 6773, page 3169, Official Records Book 7057, page 961 and
Official Records Book 7575, page 4538.

	 
	 	 
	Legacy Park (Phase II 

only)

	 	• Mortgage from Legacy Park Venture, L.L.L.P., a Florida limited liability partnership, to SunTrust Bank, recorded October 3, 2003, in Official Records Book
55335, page 468, as subordinated by Joinder And Consents recorded in Official Records Book 5740, page 762 and Official Records Book 5923, page 318.

	 
	 	 
	Maurie Carter

	 	• Mortgage executed by Tampa 301 Partners, LLC to Indymac Bank, F.S.B., recorded December 19, 2003, in Official Records Book 13407, page 652, modified by
Mortgage. Note and Loan Documents Modification and Confirmation Agreement recorded in Official Records Book 14538, page 1683; and release of the mortgage recorded in
Official Records Book 13991, page 644, as it affects the subject property under the Cross-Default and Cross Collateralization Agreement recorded in Official Records Book
14538, page 1703, of the Public Records of Hillsborough County, Florida.

	 
	 	 
	Independence 185

	 	• Mortgage from Bigwater Partners, LLC and Falcon Partners Realty and Capital II, LLC to Ohio Savings Bank, recorded September 13, 2002, in Official Records Book
6614, page 8221; being assigned to Wachovia Bank, National Association by Assignment of Note and Mortgage and Other Documents, recorded in Official Records Book 6956,
page 4124;

	 
	 	 
	 

	 	• Aforesaid Mortgage being restated by Restated Mortgage and Notice of Future Advance Agreement between Bigwater Partners, LLC and Wachovia Bank, National
Association, recorded in Official Records Book 6956, page 4130;

	 
	 	 
	 

	 	• Said Mortgage being further modified by Modification and Notice of Future Advance Agreement recorded in Official Records Book 7271, page 2451, all as affected
by Partial Release of Mortgage recorded in Official Records Book 7610, page 4360, all of the Public Records of Orange County, Florida.

44

 

	 	 	 
	Summerport

	 	• Mortgage executed by Falcon
Village Center Partners, LLC, in favor
Wachovia Bank, National Association,
dated January 13, 2005, recorded January
18, 2005, in Official Records Book 7784,
page 1827.

THERE WILL BE NO OUTSTANDING MORTGAGES ON THE FOLLOWING PROJECTS: DANIEL’S LANDING,

YOUNG PINES, METRO WEST 1 AND 2, VERSAILLES, TRADITION, SOUTH PARK, LAGUNA LAKES, LAKE

BUTLER, LIVE OAK I, WESTON RESERVE, CORAL LAKES (6 LOTS), TAMPA BAY GOLF & TENNIS (TRACT 2),

LEGACY PARK (PHASE 1), OLYMPIA POINTE (PHASE I).

45

 

SCHEDULE
6.21

PERMITTED INDEBTEDNESS

None.

46

 

SCHEDULE 9.6

NOTICES

	 	 	 	 	 
	 

	 	If to Borrowers, to:
	 	EH/Transeastern, LLC
	 

	 	 	 	c/o Tousa Homes LP
	 

	 	 	 	Suite 500-N
	 

	 	 	 	4000 Hollywood Blvd.
	 

	 	 	 	Hollywood, Florida 33021
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Technical Olympic USA, Inc.
	 

	 	 	 	Suite 500-N
	 

	 	 	 	4000 Hollywood Blvd.
	 

	 	 	 	Hollywood, Florida 33021
	 

	 	 	 	Attention: Tommy McAden, Executive Vice President
	 

	 	 	 	Fax No.: (954) 364-4010
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Technical Olympic USA, Inc.
	 

	 	 	 	Suite 500-N
	 

	 	 	 	4000 Hollywood Blvd.
	 

	 	 	 	Hollywood, Florida 33021
	 

	 	 	 	Attention: Patricia Petersen, Esq.
	 

	 	 	 	Senior Vice President & General Counsel
	 

	 	 	 	Fax No.: (954) 364-4037
	 
	 	 	 	 
	 

	 	If to F/R Member, to:
	 	Falcone Group, LLC
	 

	 	 	 	1951 N.W. 19th Street, Suite 200
	 

	 	 	 	Boca Raton, Florida 33431
	 

	 	 	 	Attention: Arthur Falcone, Chief Executive Officer
	 

	 	 	 	Fax No.: (561) 338-2971

47

 

	 	 	 	 	 
	 

	 	With a copy to:
	 	Nason Yeager Gerson White & Lioce, P.A.
	 

	 	 	 	Mellon United National Bank Tower
	 

	 	 	 	1645 Palm Beach Lakes Boulevard
	 

	 	 	 	Suite 1200
	 

	 	 	 	West Palm Beach, Florida 33401
	 

	 	 	 	Attention: Gary Gerson, Esq.
	 

	 	 	 	Fax No.: (561) 686-5442
	 
	 	 	 	 
	 	 	If to Administrative
Agent:

	 	Deutsche Bank Trust Company Americas
	 

	 	 	 	200 Crescent Court
	 

	 	 	 	Suite 550
	 

	 	 	 	Dallas, Texas 75201
	 

	 	 	 	Attention: Ann Ramsey
	 

	 	 	 	Fax No.: (214) 740-7910
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Latham & Watkins LLP
	 

	 	 	 	633 West Fifth Street
	 

	 	 	 	Suite 4000
	 

	 	 	 	Los Angeles, California 90071
	 

	 	 	 	Attention: Donald I. Berger, Esq.
	 

	 	 	 	Fax No. : (213) 891-8763
	 
	 	 	 	 
	 

	 	To a Lender:
	 	To Administrative Agent

or to such other address as such party may indicate by a notice delivered to the other party
hereto.

48

 

SCHEDULE I

PRO RATA SHARES

Deutsche Bank Trust Company Americas — 100%

49

 

SCHEDULE II

MORTGAGED PROPERTY/MORTGAGED PROPERTY OWNERS/SECURITY INSTRUMENT

	 	 	 	 	 	 	 
	 	 	Legal	 	 	 	 
	Project Name	 	Description	 	Name of Owner	 	Security Instrument
	Live Oak I

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Legacy Park Phase I

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Young Pines

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Metrowest 1&2

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Versailles

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Tradition

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Laguna Lakes

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	South Park

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Independence Outparcel

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Daniels Landing

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Weston Reserve

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Independence Land Development

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Lake Butler Sound

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Duval Road I

	 	See Attached
	 	EH/Transeastern
	 	Mortgage & Collateral Assignment
	Coral Lakes I

	 	See Attached
	 	EH/Transeastern
	 	Mortgage & Collateral Assignment
	Tampa Bay Golf &Tennis

	 	See Attached
	 	EH/Transeastern
	 	Mortgage & Collateral Assignment
	Williams Island

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Coral Lakes II & III

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Olympia Pointe

	 	See Attached
	 	EH/Transeastern
	 	Mortgage & Collateral Assignment
	Big Water Independence

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Moss Park

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Live Oak II

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Grand Hampton

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment

50

 

	 	 	 	 	 	 	 
	 	 	Legal	 	 	 	 
	Project Name	 	Description	 	Name of Owner	 	Security Instrument
	Kendall Commons

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Duval Road II

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Cummer 1044/1400/691

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Cummer West

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Kendall Town Center

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Heller 301

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Orange Avenue

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment
	Transeastern Independence

	 	See Attached
	 	EH/Transeastern
	 	Mortgage
	Summerport

	 	See Attached
	 	EH/Transeastern
	 	Collateral Assignment

51

 

EXHIBIT A-l

FORM OF

GUARANTY

     THIS UNCONDITIONAL GUARANTY (this “Guaranty”) is dated as of August 1, 2005,
and made by [            
               
             
], a [             
               
            
] (“Guarantor”),
in favor of DEUTSCHE BANK TRUST COMPANY AMERICAS, in its capacity as Administrative Agent for the
Lenders described below (in such capacity, together with its successors in such capacity, the
“Administrative Agent”).

RECITALS

     A. Pursuant to that certain Credit Agreement dated as of the date hereof (as the same may be
Modified from time to time, the “Loan Agreement”) by and among EH/TRANSEASTERN, LLC, a limited
liability company organized under the laws of the state of Delaware and TE/TOUSA SENIOR, LLC, a
limited liability company organized under the laws of the state of Delaware (together, jointly and
severally, the “Borrowers” and each a
“Borrower”), the Lenders from time to time party thereto (the
“Lenders”), and Administrative Agent, the Lenders have agreed to make a loan to Borrowers
in an initial principal amount of $450,000,000 (the “Loan”), consisting of $335,000,000 aggregate
principal amount of Term Loans, and up to $115,000,000 aggregate principal amount of Revolving
Commitments.

     B. It is a condition precedent to the making of the Loan by the Lenders that Guarantor shall
have executed and delivered this Guaranty to the Administrative Agent.

     C. Capitalized terms used and not otherwise defined herein shall have the meaning ascribed to
such terms in the Loan Agreement.

AGREEMENT

     NOW THEREFORE, to induce the Lenders to extend the Loan to Borrowers, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Guarantor
hereby covenants and agrees as follows:

     1. Guarantee
of Obligations. Guarantor does hereby unconditionally, absolutely
and irrevocably guarantee to the Administrative Agent, for the benefit of the Lenders and their
respective successors and assigns, as a primary obligor and not merely as a surety, (a) the due and
punctual payment by Borrowers of (i) the principal of and premium, if any, and interest (including
interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding or otherwise enforceable)
on the Loan, when and as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, and (ii) all other monetary obligations, including fees, costs, expenses
and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such proceeding or
otherwise enforceable), of Borrowers to the Lenders and the

1

 

Administrative Agent under the Loan Agreement or the other Loan Documents, and (b) the due  and
punctual performance of all covenants, agreements, obligations and liabilities of Borrowers under
or pursuant to the Loan Agreement and the other Loan Documents (all the monetary and other
obligations referred to in the preceding clauses (a) and (b) being collectively called the
“Guaranteed Obligations”). Guarantor further agrees that the Guaranteed Obligations may be
Modified, waived, accelerated or compromised from time to time, in whole or in part, without notice
to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any
Modification, waiver, acceleration or compromise of any of the Guaranteed Obligations.

     2. Nature of Guaranty. This is an irrevocable, absolute, continuing guaranty of
payment and performance and not a guaranty of collection. Guarantor waives any right to require
that any resort be had by the Administrative Agent or any Lender to any of the security held for
payment of the Guaranteed Obligations or to any balance of any deposit account or credit on the
books of the Administrative Agent or any Lender in favor of Borrowers or any other person. This
Guaranty may not be revoked by Guarantor and shall continue to be effective with respect to the
Guaranteed Obligations arising or created after any attempted revocation by Guarantor. It is the
intent of Guarantor that the obligations and liabilities of Guarantor hereunder are absolute and
unconditional under any and all circumstances and that until the Guaranteed Obligations are fully
and finally satisfied, such obligations and liabilities shall not be discharged or released in
whole or in part, by any act or occurrence which might, but for the provisions of this Guaranty, be
deemed a legal or equitable discharge or release of Guarantor.

     3. Rights
Independent. The obligations of Guarantor hereunder are independent of the
Obligations of Borrowers or the obligations of any other Person, including any other Person
executing a guaranty of any or all of the Guaranteed Obligations (such Person, an “Other
Guarantor”) or any security for the Guaranteed Obligations, and the Administrative Agent may
proceed in the enforcement hereof independently of any other right or remedy that the
Administrative Agent may at any time hold with respect to the Guaranteed Obligations or any
security or other guarantee therefor. The Administrative Agent may file a separate action or
actions against Guarantor hereunder, whether action is brought and prosecuted with respect to any
security or against Borrowers or any Other Guarantor or any other Person, or whether Borrowers or
any Other Guarantor or any other Person is joined in any such action or actions. Guarantor waives
the benefit of any statute of limitations affecting its liability hereunder or the enforcement of
the Guaranteed Obligations. The liability of Guarantor hereunder shall be reinstated and revived,
and the rights of the Administrative Agent and each Lender shall continue, with respect to any
amount at any time paid on account of the Guaranteed Obligations which shall thereafter be required
to be restored or returned by the Administrative Agent or any Lender upon the bankruptcy,
insolvency, or reorganization of Borrowers or any other Person, or otherwise, all as though such
amount had not been paid. Guarantor further agrees to the extent (i) Borrowers or Guarantor make
any payment to the Administrative Agent or any Lender in connection with the Guaranteed Obligations
and all or any part of such payment is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid by the trustee, receiver or any other entity,
whether under any Bankruptcy Law or otherwise, or (ii) in the event following the payment in full
of the principal amount of the Loan, the Administrative Agent or any Lender is subject to further
liability, loss, or expense covered by the indemnification obligations set forth in the Loan
Documents (the payments and obligations

2

 

referred to in clauses (i) and (ii) above are hereafter referred to, collectively, as
“Preferential Payments”), then this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, and, to the extent of such payment or repayment by the
Administrative Agent or such Lender, the Guaranteed Obligations or part thereof intended to be
satisfied by such Preferential Payment shall be revived and continued in full force and effect as
if said Preferential Payment had not been made.

     4. Authority to Modify the Guaranteed Obligations. Guarantor authorizes the
Administrative Agent and each Lender, without notice to or demand on Guarantor and without
affecting its liability hereunder or the enforceability hereof, from time to time to: (a) Modify,
waive, accelerate or compromise the time for payment or the terms of the Guaranteed Obligations or
any part thereof, including increase or decrease the rates of interest thereon; (b) Modify, waive,
accelerate, compromise, or enter into or give any agreement, approval, or consent with respect to,
the Guaranteed Obligations or any part thereof or any of the Loan Documents or any security or
additional guaranties, or any condition, covenant, default, remedy, right, representation, or term
thereof or thereunder; (c) accept new or additional instruments, documents, or agreements in
exchange for or relative to any of the Loan Documents or the Guaranteed Obligations or any part
thereof; (d) accept partial payments on the Guaranteed Obligations; (e) receive and hold additional
security or guaranties for the Guaranteed Obligations or any part thereof or this Guaranty; (f)
release, reconvey, terminate, waive, abandon, subordinate, exchange, substitute, transfer, and
enforce the Guaranteed Obligations or any security or any other guaranties, and apply any security
and direct the order or manner of sale thereof as the Administrative Agent or such Lender in its
discretion may determine; (g) release Borrowers or any other Person or any Other Guarantor from any
personal liability with respect to the Guaranteed Obligations or any part thereof; (h) settle,
release on terms reasonably satisfactory to the Administrative Agent or such Lender or by operation
of law or otherwise, compound, compromise, collect, or otherwise liquidate or enforce any of the
Guaranteed Obligations and any security or other guarantee in any manner, consent to the transfer
of any security, and bid and purchase at any sale; and (i) consent to the merger or any other
change, restructure, or termination of the corporate existence of Borrowers or any other Person and
correspondingly restructure the Guaranteed Obligations, and any such merger, change, restructure,
or termination shall not affect the liability of Guarantor hereunder or the enforceability hereof
with respect to all Guaranteed Obligations.

     5. Waiver
of Defenses.

          (a) Guarantor waives any right to require the Administrative Agent or any Lender, prior to or
as a condition to the enforcement of this Guaranty, to: (i) proceed against Borrowers or any other
Person or any Other Guarantor; (ii) proceed against or exhaust any security for the Guaranteed
Obligations or to marshal assets in connection with foreclosing collateral security; (iii) give
notice of the terms, time, and place of any public or private sale of any security for the
Guaranteed Obligations; or (iv) pursue any other remedy in the Administrative Agent’s or such
Lender’s power whatsoever.

          (b) Guarantor waives any defense arising by reason of: (i) any disability or other defense of
Borrowers or any other Person with respect to the Guaranteed Obligations; (ii) the unenforceability
or invalidity of the Guaranteed Obligations, any of the Loan Documents or

3

 

any security or any other guarantee for the Guaranteed Obligations, or the lack of perfection or
failure of priority of any security for the Guaranteed Obligations; (iii) the cessation from any
cause whatsoever of the liability of Borrowers or any other Person or any Other Guarantor (other
than by reason of the full payment and discharge of the Guaranteed Obligations); (iv) any act or
omission of the Administrative Agent or any Lender or any other Person which directly or indirectly
results in or aids the discharge or release of Borrowers or any other Person or the Guaranteed
Obligations or any security or other guarantee therefor by operation of law or otherwise; (v) the
taking or accepting of any other security, collateral or guaranty, or other assurance of the
payment or performance of all or any of the Guaranteed Obligations; (vi) any release, surrender,
exchange, subordination, deterioration, waste, loss or impairment by the Administrative Agent or
any Lender (including any negligent impairment but excluding any gross negligent or willful
impairment) of any collateral, property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guaranteed Obligations; (vii) the failure
of the Administrative Agent, any Lender or any other Person to exercise diligence or reasonable
care in the preservation, protection, enforcement, sale or other handling or treatment of all or
any part of any collateral, property or security (but excluding any gross negligence or willful
misconduct on the part of the Administrative Agent or any Lender); (viii) the fact that any
collateral, security, security interest or lien contemplated or intended to be given, created or
granted as security for the repayment of the indebtedness evidenced by the Notes or the Guaranteed
Obligations shall not be properly perfected or created, or shall prove to be unenforceable or
subordinate to any other security interest or lien, it being recognized and agreed by Guarantor
that Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the
benefits of, the validity, enforceability, collectibility or value of any of the collateral for the
Guaranteed Obligations or any security interest in such collateral; (ix) any payment by Borrowers
to the Administrative Agent or any Lender is held to constitute a preference under the Bankruptcy
Code or any another federal, state or local laws concerning bankruptcy, insolvency, reorganization
or relief of debtors, or for any reason the Administrative Agent or any Lender is required to
refund such payment or pay such amounts to Borrowers or any other Person legally entitled thereto;
and (x) any and all other suretyship or guarantor defenses that may be available to Guarantor.

          (c) Guarantor waives: (i) all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and all other notices of any
kind or nature whatsoever with respect to the Guaranteed Obligations, and notices of acceptance of
this Guaranty and of the existence, creation, or incurring of new or additional Guaranteed
Obligations; (ii) any rights to set-offs, recoupments, claims or counterclaims; and (iii) any right
to revoke or terminate this Guaranty.

     6.  Subordination.

          (a) Guarantor hereby covenants and agrees that the principal of, or interest on, all now
existing and hereafter arising Indebtedness of Borrowers to Guarantor
(the “Claims”) and all rights
and remedies of Guarantor with respect thereto and any lien securing payment thereof are and shall
continue to be subject, subordinate and rendered junior in the right of payment to all amounts due
and payable in respect of the Guaranteed Obligations, as the same may be Modified, waived,
accelerated or compromised from time to time.

4

 

          (b) Guarantor represents and warrants to the Administrative Agent that Guarantor is or will be
the sole and absolute owner of the Claims and has not sold, assigned, transferred or otherwise
disposed of any right it may have to repayment of the Claims or any security therefor. Guarantor
hereby further covenants and agrees that upon the occurrence and during the continuation of any
Potential Default or Event of Default, until the Guaranteed Obligations are paid and performed in
full: (i) Guarantor will not receive, directly or indirectly, any payment, advance, credit or
further security of any kind whatsoever on account of the Claims; (ii) Guarantor will not sell,
assign, transfer or endorse the Claims or any part or evidence thereof; (iii) Guarantor will not
Modify the Claims or any part or evidence thereof; and (iv) Guarantor will not take, or permit any
action to be taken, to assert, collect or enforce the Claims or any part thereof.

          (c) Upon any distribution of all of the assets of any Borrower to its creditors upon the
dissolution, winding up, liquidation, arrangement, or reorganization of any Borrower, whether in
any bankruptcy, insolvency, arrangement, reorganization or receivership proceeding or upon an
assignment for the benefit of creditors or any other marshalling of the assets and liabilities of
any Borrower or otherwise, any payment or distribution of any kind (whether in cash, property or
securities) which is payable or deliverable upon or with respect to the Claims shall be held in
trust for the Administrative Agent and the Lenders and shall be paid over or delivered to the
Administrative Agent for the benefit of the Lenders to be applied against the payment or prepayment
of the Guaranteed Obligations until the Guaranteed Obligations shall have been indefeasibly paid in
full. If any proceeding referred to in the preceding sentence is commenced by or against any
Borrower: (i) the Administrative Agent is hereby irrevocably authorized and empowered (in its own
name or in the name of Guarantor or otherwise), but shall have no obligation, to demand, sue for,
collect and receive every payment or distribution referred to the preceding sentence and give
acquittance therefor and to file claims and proofs of claim and take such other action (including,
without limitation, voting the Claims or enforcing any security interest or other lien securing
payment of the Claims) as the Administrative Agent may deem necessary or advisable for the exercise
or enforcement of any of the rights or interests of the Administrative Agent hereunder; and (ii)
Guarantor shall duly and promptly take such action as the Administrative Agent may reasonably
request (A) to collect the Claims for account of the Administrative Agent and to file appropriate
claims or proofs of claim in respect of the Claims,
(B) to execute and deliver to the Administrative Agent such powers of attorney, assignments, or
other instruments as it may reasonably request in order to enable it to enforce any and all claims
with respect to, and any security interests and other liens securing payment of, the Claims, and
(C) to collect and receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the Claims.

          (d) All payments or distributions upon or with respect to the Claims which are received by
Guarantor contrary to the provisions of this Guaranty shall be received in trust for the benefit of
the Administrative Agent, shall be segregated from other funds and property held by Guarantor and
shall be forthwith paid over to the Administrative Agent in the same form as so received (with any
necessary endorsement) to be applied (in the case of cash) to, or held as collateral (in the case
of non-cash property or securities) for, the payment or prepayment of the Guaranteed Obligations.

5

 

     7. Deferral of Subrogation. Until all of the Guaranteed Obligations have been paid and
performed in full, (i) Guarantor shall not exercise any rights of subrogation, contribution or
reimbursement against any Borrower or any Other Guarantor of the Guaranteed Obligations, and (ii)
Guarantor shall not exercise any right to enforce any right, power or remedy which the
Administrative Agent or any Lender now has or may in the future have against Borrowers or any Other
Guarantor and any benefit of, and any right to participate in, any security for this Guaranty or
for the obligations of Borrowers or any Other Guarantor now or in the future held by the
Administrative Agent or any Lender. If Guarantor nevertheless receives payment of any amount on
account of any such subrogation, contribution or reimbursement rights or otherwise in respect of
any payment by Guarantor of the Guaranteed Obligations prior to payment and performance in full of
all of the Guaranteed Obligations, such amount shall be held in trust for the benefit of the
Administrative Agent and immediately paid to the Administrative Agent for application to the
Guaranteed Obligations in such order and manner as the Administrative Agent may determine.

     8. Condition of Borrowers. Guarantor represents and warrants to the Administrative
Agent, for the benefit of the Lenders that: (a) this Guaranty is executed at the request of
Borrowers; (b) Guarantor has established adequate means of obtaining from Borrowers on a continuing
basis financial and other information pertaining to the business of each such Borrower; (c)
Guarantor is now and will continue to be adequately familiar with the business, operations,
condition, and assets of Borrowers; (d) Guarantor will receive substantial direct and indirect
benefits from the financing arrangements contemplated by the Loan Documents; and (e) the
agreements, waivers and acknowledgements contained herein are knowingly made in contemplation of
such benefits. Guarantor hereby waives and relinquishes any duty on the part of the Administrative
Agent or any Lender to disclose to Guarantor any matter, fact or thing relating to the business,
operations, condition, or assets of Borrowers now known or hereafter known by the Administrative
Agent or any Lender during the life of this Guaranty. With respect to any of Guaranteed
Obligations, neither the Administrative Agent nor any Lender need inquire into the powers of
Borrowers or the officers or employees acting or purporting to act on its behalf, and all
Guaranteed Obligations made or created in good faith reliance upon the professed exercise of such
powers shall be guaranteed hereby.

     9. Representations and Warranties of Guarantor. Guarantor represents and warrants to
the Administrative Agent that all of representations and warranties relating to Guarantor contained
in the Loan Agreement are true and correct. Guarantor further represents and warrants to the
Administrative Agent that all of the representations and warranties set forth in Schedule 1
hereto are true and correct as of the date hereof.

     10. Payments. All payments made by Guarantor to or for the account of the
Administrative Agent or any Lender shall be made without condition or deduction of any kind,
including for any counterclaim, defense, recoupment of set-off. All payments made by Guarantor
hereunder shall be made free and clear of and without deduction for any present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto (collectively, “Taxes”). Guarantor shall pay such Taxes and shall
promptly furnish to the Administrative Agent copies of any tax receipts or such evidence of payment
as the Administrative Agent or any Lender may reasonably require.

6

 

     11. Costs and Expenses in Enforcement. Guarantor agrees to pay to the
Administrative Agent all out of pocket advances, charges, costs, and expenses, including reasonable
attorneys fees, incurred or paid by the Administrative Agent in exercising any right, power, or
remedy conferred by this Guaranty, or in the enforcement of this Guaranty, whether or not an action
is filed in connection therewith.

     12. Notices. All notices, requests, demands and other communications which are
required or may be given under this Guaranty shall be in writing and shall be delivered to the
parties hereto in the manner provided in the Loan Agreement to the following addresses:

	 	 	 	 	 
	 
	 	To Guarantor:	 	c/o Technical Olympic USA, Inc.
	 
	 	 	 	Suite 500-N
	 
	 	 	 	4000 Hollywood Blvd.
	 
	 	 	 	Hollywood, FL 33021
	 
	 	 	 	Facsimile: (954) 364-4037
	 
	 	 	 	Attention: Patricia M. Petersen, Esq.
	 
	 	 	 	 
	 
	 	with a copy to:	 	Greenberg Traurig P.A.
	 
	 	 	 	1221 Brickell Avenue
	 
	 	 	 	Miami, FL 33131
	 
	 	 	 	Facsimile: (305) 579-0717
	 
	 	 	 	Attention: Paul Berkowitz, Esq.
	 
	 	 	 	 
	 
	 	To	 	Deutsche Bank Trust Company Americas
	 
	 	Administrative	 	200 Crescent Court, Suite 550
	 
	 	Agent:	 	Dallas, Texas 75201
	 
	 	 	 	Facsimile: (214) 740-7910
	 
	 	 	 	Attention: Ann Ramsey
	 
	 	 	 	 
	 
	 	With a copy to:	 	Latham & Watkins LLP
	 
	 	 	 	633 West Fifth Street, Suite 4000
	 
	 	 	 	Los Angeles, California 90071
	 
	 	 	 	Facsimile: (213) 891-8763
	 
	 	 	 	Attention: Donald I. Berger, Esq.

Any party may change the address to which notices are to be sent by notice of such change to
each other party given as provided above.

     13. Termination. The guarantees made hereunder (a) shall terminate when all of the
Guaranteed Obligations have been indefeasibly paid and performed in full, and (b) shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of
any Guaranteed Obligation is rescinded or must otherwise be restored by any Lender or Guarantor
upon the bankruptcy or reorganization of any Borrower, Guarantor or otherwise.

     14. No Waiver; Cumulative Remedies. The rights, powers and remedies of the
Administrative Agent hereunder and under the other Loan Documents are cumulative and in addition to
all rights, power and remedies provided under any and all agreements among

7

 

Guarantor, Borrowers, the Administrative Agent and the Lenders relating to the Guaranteed
Obligations, at law, in equity or otherwise. Any delay or failure by the Administrative Agent to
exercise any right, power or remedy shall not constitute a waiver thereof by the Administrative
Agent or the Lenders, and no single or partial exercise by the Administrative Agent of any right,
power or remedy shall preclude any other or further exercise thereof or any exercise of any other
rights, powers or remedies. Without limiting the foregoing, the Administrative Agent on behalf of
the Lenders is hereby authorized to demand specific performance of this Guaranty at any time when
Guarantor shall have failed to comply with any of the provisions of this Guaranty applicable to it.

     15. Amendments. Subject to Section 9.2 of the Loan Agreement, this Guaranty may be
Modified only by, and none of the terms hereof may be waived without, a written instrument executed
by Guarantor and the Administrative Agent.

     16. Waivers. Guarantor warrants and agrees that each of the waivers set forth in this
Guaranty are made with Guarantor’s full knowledge of their significance and consequences, and that
under the circumstances, the waivers are reasonable and not contrary to public policy or law. If
any of such waivers are determined to be contrary to any applicable law or public policy, such
waivers shall be effective only to the maximum extent permitted by law.

     17. Binding Agreement. This Guaranty and the terms, covenants, and conditions hereof
shall be binding upon and inure to the benefit of Guarantor, the Administrative Agent, each Lender,
and their respective successors and assigns; provided, however, that Guarantor shall not be
permitted to transfer, convey, assign or delegate this Guaranty or any interest herein without the
prior written consent of the Administrative Agent and, to the extent required pursuant to the Loan
Agreement, the Lenders. Each Lender may assign its interest hereunder in whole or in part in
connection with an assignment of its interest in the Guaranteed Obligations pursuant to Section
9.8(1) of the Loan Agreement.

     18. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

     19. JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY, GUARANTOR CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON- EXCLUSIVE JURISDICTION OF THOSE COURTS. GUARANTOR IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS GUARANTY. GUARANTOR WAIVES PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR

8

 

OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

     20. WAIVER OF JURY TRIAL. GUARANTOR, AND BY ACCEPTANCE OF THIS GUARANTY, THE
ADMINISTRATIVE AGENT AND EACH OF THE LENDERS, WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
THE PARTIES TO THE LOAN AGREEMENT AGAINST ANY OTHER PARTY OR ANY PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. GUARANTOR, AND BY ACCEPTANCE OF THIS
GUARANTY, THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS, AGREES THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, GUARANTOR,
AND BY ACCEPTANCE OF THIS GUARANTY, THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS, FURTHER
AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS GUARANTY OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.

     21. Severability. In case any one or more of the provisions contained in this Guaranty
should be held invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular provision hereof in a
particular jurisdiction shall not in and of itself affect the validity of such provision in any
other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the effect of which comes as close
as possible to that of the invalid, illegal or unenforceable provisions.

     22. Miscellaneous. All words used herein in the plural shall be deemed to have been
used in the singular, and all words used herein in the singular shall be deemed to have been used
in the plural, where the context and construction so require. Section headings in this Guaranty are
included for convenience of reference only and are not a part of this Guaranty for any other
purpose.

9

 

     IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed as of the
date first written above.

	 	 	 	 	 	 	 
	 	 	GUARANTOR:	 	 
	 
	 	 	 	 	 	 
	 	 	[                                                            ]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

Schedule 1

Representations and Warranties of Guarantor

          1.
Organization; Requisite Power and Authority; Qualification.

	(a)	 	Guarantor (A) is either a corporation, a limited partnership or a limited liability company
duly incorporated, formed or organized, validly existing, and in good standing under the laws
of the state of its incorporation, organization and/or formation, (B) is duly qualified to
do business and is in good standing under the laws of each jurisdiction in which the failure
to be so qualified and in good standing will have or is reasonably expected to have a Material
Adverse Effect, and (C) has all requisite corporate, partnership or limited liability company
power and authority to own, operate and encumber its Property and to conduct its business as
presently conducted and as proposed to be conducted in connection with and following the
consummation of the transactions contemplated by this Agreement. Guarantor is a single
member limited liability company for purposes of federal income taxation and for purposes of
the tax laws of any state or locality in which it is subject to taxation based on its income.

	(b)	 	True, correct and complete copies of the Organizational Documents of Guarantor have been
delivered to the Administrative Agent and have not been Modified except to the extent
indicated therein. All of the Organizational Documents are in full force and effect, and there
are no defaults under such Organizational Documents (including with respect to any
restrictions on Indebtedness contained therein), and no events which, with the passage of time
or giving of notice or both, would constitute a default under such Organizational Documents
(including with respect to any restrictions on Indebtedness contained therein).

	(c)	 	Guarantor has the requisite power and authority to execute, deliver and perform this
Agreement and each of the other Loan Documents which are required to be executed on its
behalf. The execution, delivery and performance of each of the Loan Documents which must be
executed in connection with this Agreement by Guarantor and to which Guarantor is a party and
the consummation of the transactions contemplated thereby are within such Guarantor’s
partnership, company, or corporate powers, have been duly authorized by all necessary
partnership, company, or corporate action and such authorization has not been rescinded. No
other partnership, company, or corporate action or proceedings on the part of Guarantor is
necessary to consummate such transactions.

	(d)	 	Each of the Loan Documents to which Guarantor is a party has been duly executed and delivered
on behalf of such Guarantor and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (subject to bankruptcy, insolvency,
reorganization, or other laws affecting creditors’ rights generally and to principles of
equity, regardless of whether considered in a proceeding in equity or at law), is in full
force and effect and all the terms, provisions, agreements and conditions set forth therein
and required to be performed or complied with by such

 

 

	 	 	Guarantor on or before the Closing Date have been performed or complied with, and no
Potential Default or Event of Default exists thereunder.

          2. No Conflict. As of the Closing Date, the execution, delivery and performance by the
Guarantor of the Loan Documents to which it is a party and the consummation of the transactions
contemplated by the Loan Documents do not and will not (a) violate (i) any provision of any law or
any governmental rule or regulation applicable to Guarantor, (ii) any of the Organizational
Documents of Guarantor, or (iii) any order, judgment or decree of any court or other agency of
government binding on Guarantor, except in the case of clauses (i), (ii) and (iii) to the extent
such violation will not result in a Material Adverse Effect; (b) conflict with, result in a breach
of or constitute (with due notice or lapse of time or both) a default under any material
Contractual Obligation of Guarantor, except to the extent such conflict, breach or default will not
result in a Material Adverse Effect; or (c) require any approval of stockholders, members or
partners or any approval or consent of any Person under any Contractual Obligation of Guarantor
except for such approvals or consents which will be obtained on or before the Closing Date and
except for any such approvals or consents the failure of which to obtain will not result in a
Material Adverse Effect.

          3. No Material Litigation. No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to Guarantor’s Knowledge, threatened by or
against Guarantor or against Guarantor’s Properties or revenues which is likely to be adversely
determined and which, if adversely determined, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. The performance of any action by
Guarantor required or contemplated by any Loan Documents is not restrained or enjoined (either
temporarily, preliminarily or permanently).

 

 

EXHIBIT A-2

FORM OF
CARVE-OUT GUARANTY

     THIS UNCONDITIONAL GUARANTY (this “Guaranty”) is dated as of August 1, 2005, and
made by TOUSA HOMES, L.P., a Delaware limited partnership (“TOUSA Member”), and TECHNICAL
OLYMPIC USA, INC., a Delaware corporation (together with TOUSA Member, jointly and severally, the
“Guarantors”), in favor of DEUTSCHE BANK TRUST COMPANY AMERICAS, in its capacity as
Administrative Agent for the Lenders described below (in such capacity, together with its
successors in such capacity, the “Administrative Agent”).

RECITALS

     A. Pursuant to that certain Credit Agreement dated as of the date hereof (as the same may be
Modified from time to time, the “Loan Agreement”) by and among EH/TRANSEASTERN, LLC, a
limited liability company organized under the laws of the state of Delaware and TE/TOUSA SENIOR,
LLC, a limited liability company organized under the laws of the state of Delaware (together,
jointly and severally, the “Borrowers” and each a “Borrower”), the Lenders from
time to time party thereto (the “Lenders”), and Administrative Agent, the Lenders have
agreed to make a loan to Borrowers in an initial principal amount of $450,000,000 (the
“Loan”), consisting of $335,000,000 aggregate principal amount of Term Loans, and up to
$115,000,000 aggregate principal amount of Revolving Commitments.

     B. It is a condition precedent to the making of the Loan by the Lenders that Guarantors shall
have executed and delivered this Guaranty to the Administrative Agent.

     C. Capitalized terms used and not otherwise defined herein shall have the meaning ascribed
to such terms in the Loan Agreement.

AGREEMENT

     NOW THEREFORE, to induce the Lenders to extend the Loan to Borrowers, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Guarantors
hereby covenant and agree, jointly and severally, as follows:

     1. Guarantee of Obligations. Guarantors do hereby, jointly and severally,
unconditionally, absolutely and irrevocably guarantee to the Administrative Agent, for the benefit
of the Lenders and their respective successors and assigns, as a primary obligor and not merely as
a surety (all the monetary and other obligations referred to in this Section being collectively
referred to as the “Guaranteed Obligations”):

               (a) any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including reasonable attorney’s fees
and expenses) of any kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against Administrative Agent or Lenders and arising out of or in connection with the
matters listed below:

1

 

          (i) fraud or material misrepresentation by any Transaction Party in
connection with the Loan Documents;

          (ii) the misappropriation by any Transaction Party or any Affiliate
thereof of any Rents or Distributions in violation of Section 6.8;

          (iii) any failure of the Borrower Parties to perform their obligations
to properly account to Administrative Agent for any proceeds of insurance or awards or
condemnation as required by the Loan Documents, to properly apply same in accordance with
the terms and provisions of the Loan Documents, or for the misapplication or
misappropriation by the Borrower Parties of condemnation or insurance proceeds;

          (iv) any act by a Transaction Party or any Affiliate thereof
constituting intentional misconduct or waste of the Mortgaged Property;

          (v) the Borrower Parties’ failure to observe the covenants set forth
in Sections 6.1 and 6.4 of the Credit Agreement;

          (vi) the Borrowers failure to maintain the insurance required to be
maintained under the Loan Documents or pay Taxes or Impositions, required to be paid under
Section 5.8;

               (b) upon the occurrence of any of the following events, all of the Obligations:

                    (i) any Transaction Party files a petition or commences any
proceeding as to which such Person is the debtor therein pursuant to the Bankruptcy Code, any
successor statute, any similar debtor relief law, or any state insolvency proceedings, or

                    (ii) any Transaction Party shall institute any proceeding for the
dissolution or liquidation of a Transaction Party, or shall make an assignment for the benefit
of creditors with respect to a Transaction Party, or

                    (iii) any of the actions described in subsections (a) or (b) is
commenced or filing is made as to which a Transaction Party is the debtor therein by any
Affiliate of any Transaction Parties or through collusion with any third party.

Guarantors further agree that the Guaranteed Obligations may be Modified, waived, accelerated or
compromised from time to time, in whole or in part, without notice to or further assent from them,
and that they will remain bound upon its guarantee notwithstanding any Modification, waiver,
acceleration or compromise of any of the Guaranteed Obligations.

     2. Nature of Guaranty. This is an irrevocable, absolute, continuing guaranty of
payment and performance and not a guaranty of collection. Guarantors waive any right to require
that any resort be had by the Administrative Agent or any Lender to any of the security held for
payment of the Guaranteed Obligations or to any balance of any deposit account or credit on the
books of the Administrative Agent or any Lender in favor of Borrowers or any other person. This
Guaranty may not be revoked by Guarantors and shall continue to be

2

 

effective with respect to the Guaranteed Obligations arising or created after any attempted
revocation by Guarantors. It is the intent of Guarantors that the obligations and liabilities of
Guarantors hereunder are absolute and unconditional under any and all circumstances and that until
the Guaranteed Obligations are fully and finally satisfied, such obligations and liabilities shall
not be discharged or released in whole or in part, by any act or occurrence which might, but for
the provisions of this Guaranty, be deemed a legal or equitable discharge or release of Guarantors.

     3. Rights Independent. The obligations of Guarantors hereunder are independent of the
Obligations of Borrowers or the obligations of any other Person, including any other Person
executing a guaranty of any or all of the Guaranteed Obligations (such Person, an “Other
Guarantor”) or any security for the Guaranteed Obligations, and the Administrative Agent may
proceed in the enforcement hereof independently of any other right or remedy that the
Administrative Agent may at any time hold with respect to the Guaranteed Obligations or any
security or other guarantee therefor. The Administrative Agent may file a separate action or
actions against Guarantors hereunder, whether action is brought and prosecuted with respect to any
security or against Borrowers or any Other Guarantor or any other Person, or whether Borrowers or
any Other Guarantor or any other Person is joined in any such action or actions. Guarantors waive
the benefit of any statute of limitations affecting their liability hereunder or the enforcement of
the Guaranteed Obligations. The liability of Guarantors hereunder shall be reinstated and revived,
and the rights of the Administrative Agent and each Lender shall continue, with respect to any
amount at any time paid on account of the Guaranteed Obligations which shall thereafter be required
to be restored or returned by the Administrative Agent or any Lender upon the bankruptcy,
insolvency, or reorganization of Borrowers or any other Person, or otherwise, all as though such
amount had not been paid. Guarantors further agree to the extent (i) Borrowers or Guarantors make
any payment to the Administrative Agent or any Lender in connection with the Guaranteed Obligations
and all or any part of such payment is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid by the trustee, receiver or any other entity,
whether under any Bankruptcy Law or otherwise, or (ii) in the event following the payment in full
of the principal amount of the Loan, the Administrative Agent or any Lender is subject to further
liability, loss, or expense covered by the indemnification obligations set forth in the Loan
Documents (the payments and obligations referred to in clauses (i) and (ii) above are hereafter
referred to, collectively, as “Preferential Payments”), then this Guaranty shall continue
to be effective or shall be reinstated, as the case may be, and, to the extent of such payment or
repayment by the Administrative Agent or such Lender, the Guaranteed Obligations or part thereof
intended to be satisfied by such Preferential Payment shall be revived and continued in full force
and effect as if said Preferential Payment had not been made.

     4. Authority to Modify the Guaranteed Obligations. Each Guarantor authorizes the
Administrative Agent and each Lender, without notice to or demand on Guarantors and without
affecting its liability hereunder or the enforceability hereof, from time to time to: (a) Modify,
waive, accelerate or compromise the time for payment or the terms of the Guaranteed Obligations or
any part thereof, including increase or decrease the rates of interest thereon; (b) Modify, waive,
accelerate, compromise, or enter into or give any agreement, approval, or consent with respect to,
the Guaranteed Obligations or any part thereof or any of the Loan Documents or any security or
additional guaranties, or any condition, covenant, default, remedy,

3

 

right, representation, or term thereof or thereunder; (c) accept new or additional instruments,
documents, or agreements in exchange for or relative to any of the Loan Documents or the Guaranteed
Obligations or any part thereof; (d) accept partial payments on the Guaranteed Obligations; (e)
receive and hold additional security or guaranties for the Guaranteed Obligations or any part
thereof or this Guaranty; (f) release, reconvey, terminate, waive, abandon, subordinate, exchange,
substitute, transfer, and enforce the Guaranteed Obligations or any security or any other
guaranties, and apply any security and direct the order or manner of sale thereof as the
Administrative Agent or such Lender in its discretion may determine; (g) release Borrowers or any
other Person or any Other Guarantor from any personal liability with respect to the Guaranteed
Obligations or any part thereof; (h) settle, release on terms reasonably satisfactory to the
Administrative Agent or such Lender or by operation of law or otherwise, compound, compromise,
collect, or otherwise liquidate or enforce any of the Guaranteed Obligations and any security or
other guarantee in any manner, consent to the transfer of any security, and bid and purchase at any
sale; and (i) consent to the merger or any other change, restructure, or termination of the
corporate existence of Borrowers or any other Person and correspondingly restructure the Guaranteed
Obligations, and any such merger, change, restructure, or termination shall not affect the
liability of Guarantors hereunder or the enforceability hereof with respect to all Guaranteed
Obligations.

     5. Waiver of Defenses.

          (a) Each Guarantor waives any right to require the Administrative Agent or any Lender, prior
to or as a condition to the enforcement of this Guaranty, to: (i) proceed against Borrowers or any
other Person or any Other Guarantor; (ii) proceed against or exhaust any security for the
Guaranteed Obligations or to marshal assets in connection with foreclosing collateral security;
(iii) give notice of the terms, time, and place of any public or private sale of any security for
the Guaranteed Obligations; or (iv) pursue any other remedy in the Administrative Agent’s or such
Lender’s power whatsoever.

          (b) Each Guarantor waives any defense arising by reason of: (i) any disability or other
defense of Borrowers or any other Person with respect to the Guaranteed Obligations; (ii) the
unenforceability or invalidity of the Guaranteed Obligations, any of the Loan Documents or any
security or any other guarantee for the Guaranteed Obligations, or the lack of perfection or
failure of priority of any security for the Guaranteed Obligations; (iii) the cessation from any
cause whatsoever of the liability of Borrowers or any other Person or any Other Guarantor (other
than by reason of the full payment and discharge of the Guaranteed Obligations); (iv) any act or
omission of the Administrative Agent or any Lender or any other Person which directly or indirectly
results in or aids the discharge or release of Borrowers or any other Person or the Guaranteed
Obligations or any security or other guarantee therefor by operation of law or otherwise; (v) the
taking or accepting of any other security, collateral or guaranty, or other assurance of the
payment or performance of all or any of the Guaranteed Obligations; (vi) any release, surrender,
exchange, subordination, deterioration, waste, loss or impairment by the Administrative Agent or
any Lender (including any negligent impairment but excluding any gross negligent or willful
impairment) of any collateral, property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guaranteed Obligations; (vii) the failure
of the Administrative Agent, any Lender or any other Person to exercise diligence or reasonable
care in the preservation, protection, enforcement, sale or other

4

 

handling or treatment of all or any part of any collateral, property or security (but excluding any
gross negligence or willful misconduct on the part of the Administrative Agent or any Lender);
(viii) the fact that any collateral, security, security interest or lien contemplated or intended
to be given, created or granted as security for the repayment of the indebtedness evidenced by the
Notes or the Guaranteed Obligations shall not be properly perfected or created, or shall prove to
be unenforceable or subordinate to any other security interest or lien, it being recognized and
agreed by Guarantors that Guarantors are not entering into this Guaranty in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectibility or value of any of
the collateral for the Guaranteed Obligations or any security interest in such collateral; (ix) any
payment by Borrowers to the Administrative Agent or any Lender is held to constitute a preference
under the Bankruptcy Code or any another federal, state or local laws concerning bankruptcy,
insolvency, reorganization or relief of debtors, or for any reason the Administrative Agent or any
Lender is required to refund such payment or pay such amounts to Borrowers or any other Person
legally entitled thereto; and (x) any and all other suretyship or defenses that may be available to
Guarantors.

          (c) Each Guarantor waives: (i) all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and all other notices of any
kind or nature whatsoever with respect to the Guaranteed Obligations, and notices of acceptance of
this Guaranty and of the existence, creation, or incurring of new or additional Guaranteed
Obligations; (ii) any rights to set-offs, recoupments, claims or counterclaims; and (iii) any right
to revoke or terminate this Guaranty.

     6. Subordination.

          (a) Each Guarantor hereby covenants and agrees that the principal of, or interest on, all now
existing and hereafter arising Indebtedness of Borrowers to Guarantors (the “Claims”) and
all rights and remedies of Guarantors with respect thereto and any lien securing payment thereof
are and shall continue to be subject, subordinate and rendered junior in the right of payment to
all amounts due and payable in respect of the Guaranteed Obligations, as the same may be Modified,
waived, accelerated or compromised from time to time.

          (b) Guarantors represent and warrant to the Administrative Agent that Guarantors are or will
be the sole and absolute owners of the Claims and have not sold, assigned, transferred or otherwise
disposed of any right they may have to repayment of the Claims or any security therefor. Guarantors
hereby further covenant and agree that upon the occurrence and during the continuation of any
Potential Default or Event of Default, until the Guaranteed Obligations are paid and performed in
full: (i) Guarantors will not receive, directly or indirectly, any payment, advance, credit or
further security of any kind whatsoever on account of the Claims; (ii) Guarantors will not sell,
assign, transfer or endorse the Claims or any part or evidence thereof; (iii) Guarantors will not
Modify the Claims or any part or evidence thereof; and (iv) Guarantors will not take, or permit any
action to be taken, to assert, collect or enforce the Claims or any part thereof.

          (c) Upon any distribution of all of the assets of any Borrower to its creditors upon the
dissolution, winding up, liquidation, arrangement, or reorganization of any Borrower, whether in
any bankruptcy, insolvency, arrangement, reorganization or receivership proceeding

5

 

or upon an assignment for the benefit of creditors or any other marshalling of the assets and
liabilities of any Borrower or otherwise, any payment or distribution of any kind (whether in cash,
property or securities) which is payable or deliverable upon or with respect to the Claims shall be
held in trust for the Administrative Agent and the Lenders and shall be paid over or delivered to
the Administrative Agent for the benefit of the Lenders to be applied against the payment or
prepayment of the Guaranteed Obligations until the Guaranteed Obligations shall have been
indefeasibly paid in full. If any proceeding referred to in the preceding sentence is commenced by
or against any Borrower: (i) the Administrative Agent is hereby irrevocably authorized and
empowered (in its own name or in the name of Guarantors or otherwise), but shall have no
obligation, to demand, sue for, collect and receive every payment or distribution referred to the
preceding sentence and give acquittance therefor and to file claims and proofs of claim and take
such other action (including, without limitation, voting the Claims or enforcing any security
interest or other lien securing payment of the Claims) as the Administrative Agent may deem
necessary or advisable for the exercise or enforcement of any of the rights or interests of the
Administrative Agent hereunder; and (ii) Guarantors shall duly and promptly take such action as the
Administrative Agent may reasonably request (A) to collect the Claims for account of the
Administrative Agent and to file appropriate claims or proofs of claim in respect of the Claims,
(B) to execute and deliver to the Administrative Agent such powers of attorney, assignments, or
other instruments as it may reasonably request in order to enable it to enforce any and all claims
with respect to, and any security interests and other liens securing payment of, the Claims, and
(C) to collect and receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the Claims.

          (d) All payments or distributions upon or with respect to the Claims which are received
by Guarantors contrary to the provisions of this Guaranty shall be received in trust for the
benefit of the Administrative Agent, shall be segregated from other funds and property held by
Guarantors and shall be forthwith paid over to the Administrative Agent in the same form as so
received (with any necessary endorsement) to be applied (in the case of cash) to, or held as
collateral (in the case of non-cash property or securities) for, the payment or prepayment of the
Guaranteed Obligations.

     7. Deferral of Subrogation. Until all of the Guaranteed Obligations have been
paid and performed in full, (i) Guarantors shall not exercise any rights of subrogation,
contribution or reimbursement against any Borrower or any Other Guarantor of the Guaranteed
Obligations, and (ii) Guarantors shall not exercise any right to enforce any right, power or remedy
which the Administrative Agent or any Lender now has or may in the future have against Borrowers or
any Other Guarantor and any benefit of, and any right to participate in, any security for this
Guaranty or for the obligations of Borrowers or any Other Guarantor now or in the future held by
the Administrative Agent or any Lender. If Guarantors nevertheless receive payment of any amount on
account of any such subrogation, contribution or reimbursement rights or otherwise in respect of
any payment by Guarantors of the Guaranteed Obligations prior to payment and performance in full of
all of the Guaranteed Obligations, such amount shall be held in trust for the benefit of the
Administrative Agent and immediately paid to the Administrative Agent for application to the
Guaranteed Obligations in such order and manner as the Administrative Agent may determine.

6

 

     8. Condition of Borrowers. Each Guarantor represents and warrants to the
Administrative Agent, for the benefit of the Lenders that: (a) this Guaranty is executed at the
request of Borrowers; (b) such Guarantor has established adequate means of obtaining from Borrowers
on a continuing basis financial and other information pertaining to the business of each such
Borrower; (c) such Guarantor is now and will continue to be adequately familiar with the business,
operations, condition, and assets of Borrowers; (d) such Guarantor will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the Loan Documents; and (e)
the agreements, waivers and acknowledgements contained herein are knowingly made in contemplation
of such benefits. Each Guarantor hereby waives and relinquishes any duty on the part of the
Administrative Agent or any Lender to disclose to Guarantors any matter, fact or thing relating to
the business, operations, condition, or assets of Borrowers now known or hereafter known by the
Administrative Agent or any Lender during the life of this Guaranty. With respect to any of
Guaranteed Obligations, neither the Administrative Agent nor any Lender need inquire into the
powers of Borrowers or the officers or employees acting or purporting to act on its behalf, and all
Guaranteed Obligations made or created in good faith reliance upon the professed exercise of such
powers shall be guaranteed hereby.

     9. Representations and Warranties of Guarantors. Each Guarantor represents and
warrants to the Administrative Agent that all of representations and warranties relating to such
Guarantor contained in the Loan Agreement are true and correct. Each Guarantor further represents
and warrants to the Administrative Agent that all of the representations and warranties set forth
in Schedule 1 hereto are true and correct as of the date hereof.

     10. Payments. All payments made by Guarantors to or for the account of the
Administrative Agent or any Lender shall be made without condition or deduction of any kind,
including for any counterclaim, defense, recoupment of set-off. All payments made by Guarantors
hereunder shall be made free and clear of and without deduction for any present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto (collectively, “Taxes”). Guarantors shall pay such Taxes
and shall promptly furnish to the Administrative Agent copies of any tax receipts or such evidence
of payment as the Administrative Agent or any Lender may reasonably require.

     11. Costs and Expenses in Enforcement. Guarantors agree to pay to the Administrative
Agent all out of pocket advances, charges, costs, and expenses, including reasonable attorneys
fees, incurred or paid by the Administrative Agent in exercising any right, power, or remedy
conferred by this Guaranty, or in the enforcement of this Guaranty, whether or not an action is
filed in connection therewith.

     12. Notices. All notices, requests, demands and other communications which are
required or may be given under this Guaranty shall be in writing and shall be delivered to the
parties hereto in the manner provided in the Loan Agreement to the following addresses:

7

 

	 	 	 
	To Guarantors:

	 	Technical Olympic USA, Inc.
	 

	 	Suite 500-N
	 

	 	4000 Hollywood Blvd.
	 

	 	Hollywood, FL 33021
	 

	 	Facsimile: (954) 364-4037
	 

	 	Attention: Patricia M. Petersen, Esq.
	 
	 	 
	 

	 	c/o TOUSA Homes, L.P.
	 

	 	c/o Technical Olympic USA, Inc.
	 

	 	Suite 500-N
	 

	 	4000 Hollywood Blvd.
	 

	 	Hollywood, FL 33021
	 

	 	Facsimile: (954) 364-4037
	 

	 	Attention: Patricia M. Petersen, Esq.
	 
	 	 
	with a copy to:

	 	Greenberg Traurig P.A.
	 

	 	1221 Brickell Avenue
	 

	 	Miami, FL 33131
	 

	 	Facsimile: (305) 579-0717
	 

	 	Attention: Paul Berkowitz, Esq.
	 
	 	 
	To Administrative Agent:

	 	Deutsche Bank Trust Company Americas
	 

	 	200 Crescent Court, Suite 550
	 

	 	Dallas, Texas 75201
	 

	 	Facsimile: (214) 740-7910
	 

	 	Attention: Ann Ramsey
	 
	 	 
	With a copy to:

	 	Latham & Watkins LLP
	 

	 	633 West Fifth Street, Suite 4000
	 

	 	Los Angeles, California 90071
	 

	 	Facsimile: (213) 891-8763
	 

	 	Attention: Donald I. Berger, Esq.

Any party may change the address to which notices are to be sent by notice of such change to
each other party given as provided above.

     13. Termination. The guarantees made hereunder (a) shall terminate when all of the
Guaranteed Obligations have been indefeasibly paid and performed in full, and (b) shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of
any Guaranteed Obligation is rescinded or must otherwise be restored by any Lender or Guarantors
upon the bankruptcy or reorganization of any Borrower, Guarantors or otherwise.

     14. No
Waiver; Cumulative Remedies. The rights, powers and remedies of the
Administrative Agent hereunder and under the other Loan Documents are cumulative and in addition to
all rights, power and remedies provided under any and all agreements among Guarantors, Borrowers,
the Administrative Agent and the Lenders relating to the Guaranteed

8

 

Obligations, at law, in equity or otherwise. Any delay or failure by the Administrative Agent to
exercise any right, power or remedy shall not constitute a waiver thereof by the Administrative
Agent or the Lenders, and no single or partial exercise by the Administrative Agent of any right,
power or remedy shall preclude any other or further exercise thereof or any exercise of any other
rights, powers or remedies. Without limiting the foregoing, the Administrative Agent on behalf of
the Lenders is hereby authorized to demand specific performance of this Guaranty at any time when
Guarantors shall have failed to comply with any of the provisions of this Guaranty applicable to
it.

     15. Amendments. Subject to Section 9.2 of the Loan Agreement, this Guaranty may be
Modified only by, and none of the terms hereof may be waived without, a written instrument executed
by Guarantors and the Administrative Agent.

     16. Waivers. Each Guarantor warrants and agrees that each of the waivers set forth in this
Guaranty are made with such Guarantor’s full knowledge of their significance and consequences, and
that under the circumstances, the waivers are reasonable and not contrary to public policy or law.
If any of such waivers are determined to be contrary to any applicable law or public policy, such
waivers shall be effective only to the maximum extent permitted by law.

     17. Binding Agreement. This Guaranty and the terms, covenants, and conditions hereof
shall be binding upon and inure to the benefit of Guarantors, the Administrative Agent, each
Lender, and their respective successors and assigns; provided, however, that Guarantors shall not
be permitted to transfer, convey, assign or delegate this Guaranty or any interest herein without
the prior written consent of the Administrative Agent and, to the extent required pursuant to the
Loan Agreement, the Lenders. Each Lender may assign its interest hereunder in whole or in part in
connection with an assignment of its interest in the Guaranteed Obligations pursuant to Section
9.8(1) of the Loan Agreement.

     18. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

     19. JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH GUARANTOR CONSENTS, FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GUARANTOR
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS GUARANTY. EACH GUARANTOR WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW
YORK LAW.

9

 

     20. WAIVER OF JURY TRIAL. EACH GUARANTOR, AND BY ACCEPTANCE OF THIS GUARANTY, THE
ADMINISTRATIVE AGENT AND EACH OF THE LENDERS, WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
THE PARTIES TO THE LOAN AGREEMENT AGAINST ANY OTHER PARTY OR ANY PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GUARANTOR, AND BY ACCEPTANCE OF
THIS GUARANTY, THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS, AGREES THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,
EACH GUARANTOR, AND BY ACCEPTANCE OF THIS GUARANTY, THE ADMINISTRATIVE AGENT AND EACH OF THE
LENDERS, FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS
TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE
VALIDITY OR ENFORCEABILITY OF THIS GUARANTY OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.

     21. Severability. In case any one or more of the provisions contained in this
Guaranty should be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular provision hereof in a
particular jurisdiction shall not in and of itself affect the validity of such provision in any
other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions.

     22. Miscellaneous. All words used herein in the plural shall be deemed to have been
used in the singular, and all words used herein in the singular shall be deemed to have been used
in the plural, where the context and construction so require. Section headings in this Guaranty are
included for convenience of reference only and are not a part of this Guaranty for any other
purpose.

10

 

     IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed as of the
date first written above.

	 	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	TECHNICAL OLYMPIC USA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	TOUSA HOMES, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

 

 

Schedule 1

 Representations and Warranties of Each Guarantor

          1.
Organization; Requisite Power and Authority; Qualification.

	(a)	 	Such Guarantor (A) is either a corporation, a limited partnership or a limited liability
company duly incorporated, formed or organized, validly existing, and in good standing under
the laws of the state of its incorporation, organization and/or formation, (B) is duly
qualified to do business and is in good standing under the laws of each jurisdiction in which
the failure to be so qualified and in good standing will have or is reasonably expected to
have a Material Adverse Effect, and (C) has all requisite corporate, partnership or limited
liability company power and authority to own, operate and encumber its Property and to conduct
its business as presently conducted and as proposed to be conducted in connection with and
following the consummation of the transactions contemplated by this Agreement.

	(b)	 	True, correct and complete copies of the Organizational Documents of such Guarantor have
been delivered to the Administrative Agent and have not been Modified except to the extent
indicated therein. All of the Organizational Documents are in full force and effect, and there
are no defaults under such Organizational Documents (including with respect to any
restrictions on Indebtedness contained therein), and no events which, with the passage of time
or giving of notice or both, would constitute a default under such Organizational Documents
(including with respect to any restrictions on Indebtedness contained therein).

	(c)	 	Such Guarantor has the requisite power and authority to execute, deliver and perform this
Agreement and each of the other Loan Documents which are required to be executed on its
behalf. The execution, delivery and performance of each of the Loan Documents which must be
executed in connection with this Agreement by such Guarantor and to which such Guarantor is a
party and the consummation of the transactions contemplated thereby are within such
Guarantor’s partnership, company, or corporate powers, have been duly authorized by all
necessary partnership, company, or corporate action and such authorization has not been
rescinded. No other partnership, company, or corporate action or proceedings on the part of
such Guarantor is necessary to consummate such transactions.

	(d)	 	Each of the Loan Documents to which such Guarantor is a party has been duly executed and
delivered on behalf of such Guarantor and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (subject to bankruptcy, insolvency,
reorganization, or other laws affecting creditors’ rights generally and to principles of
equity, regardless of whether considered in a proceeding in equity or at law), is in full
force and effect and all the terms, provisions, agreements and conditions set forth therein
and required to be performed or complied with by such Guarantor on or before the Closing Date
have been performed or complied with, and no Potential Default or Event of Default exists
thereunder.

 

 

          2. No Conflict. As of the Closing Date, the execution, delivery and performance by
such Guarantor of the Loan Documents to which it is a party and the consummation of the
transactions contemplated by the Loan Documents do not and will not (a) violate (i) any provision
of any law or any governmental rule or regulation applicable to such Guarantor, (ii) any of the
Organizational Documents of such Guarantor, or (iii) any order, judgment or decree of any court or
other agency of government binding on such Guarantor, except in the case of clauses (i), (ii) and
(iii) to the extent such violation will not result in a Material Adverse Effect; (b) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a default under any
material Contractual Obligation of such Guarantor, except to the extent such conflict, breach or
default will not result in a Material Adverse Effect; or (c) require any approval of stockholders,
members or partners or any approval or consent of any Person under any Contractual Obligation of
such Guarantor except for such approvals or consents which will be obtained on or before the
Closing Date and except for any such approvals or consents the failure of which to obtain will not
result in a Material Adverse Effect.

          3. No Material Litigation. No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to such Guarantor’s Knowledge, threatened by or
against such Guarantor or against such Guarantor’s Properties or revenues which is likely to be
adversely determined and which, if adversely determined, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. The performance of any action by
such Guarantor required or contemplated by any Loan Documents is not restrained or enjoined (either
temporarily, preliminarily or permanently).

 

 

EXHIBIT B TO CREDIT AGREEMENT

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

     This Assignment and Acceptance Agreement (this “Assignment”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of
Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized
terms used herein but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (as it may be Modified from time to time, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions for Assignment and Assumption Agreement
set forth in Annex 1 attached hereto (the “Standard Terms and Conditions”) are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment as if set forth herein in full.

     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to
the Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with the Standard Terms and Conditions and the
Credit Agreement, as of the Effective Date inserted by Administrative Agent as
contemplated below, the interest in and to all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount and
percentage interest identified below of all of the Assignor’s outstanding rights and
obligations under the respective facilities identified below (including, to the extent
included in any such facilities, letters of credit and swing line loans) (the
“Assigned Interest”). Such sale and assignment is without recourse to the Assignor
and, except as expressly provided in this Assignment and the Credit Agreement, without
representation or warranty by the Assignor.

	 	 	 	 	 	 	 
	1.

	 	Assignor:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	2.

	 	Assignee:
	 	 	 	[and is an Affiliate/Approved Fund[*****]]
	 

	 	 	 	 	 	 

	 	 	 	 	 
	3.

	 	Borrower(s):
	 	EH/Transeastern, LLC, a Delaware
limited liability company, and TE/TOUSA Senior, LLC, a Delaware limited liability company
	 
	 	 	 	 
	4.

	 	Administrative Agent:
	 	Deutsche Bank Trust Company
Americas, as the Administrative Agent under the Credit Agreement
	 
	 	 	 	 
	5.

	 	Credit Agreement:
	 	The Credit Agreement, dated as of
August 1, 2005, and entered into by and among EH/Transeastern, LLC and TE/TOUSA Senior, LLC (jointly and severally, the “Borrowers” and
each a “Borrower”), the Lenders party thereto from time to time, and Deutsche Bank Trust Company
Americas, as Administrative Agent for the Lenders.
	 
	 	 	 	 
	6.

	 	Assigned Interest:	 	 

	 	 	 	 	 	 	 	 	 
	 	 	Aggregate Amount	 	Amount of
	 	 	of Commitment/Loans	 	Commitment/Loans
	Facility Assigned	 	for all Lenders	 	Assigned
	Term Loan Commitment
	 	$	335,000,000	 	 	$	                    	 
	Revolving Loan Commitment
	 	$	115,000,000	 	 	$	                    	 
	                    
	 	$	                    	 	 	$	                    	 

Effective Date:                    , 20___[TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

			
	[*****]	 	Select as applicable.

B-1

 

7. Notice and Wire Instructions:

	 	 	 	 	 	 	 	 	 	 	 	 
	 	[NAME OF ASSIGNOR]	 	 	 	[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 	Notices:	 	 	 	Notices:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	Attention:
	 	 	 	 	 	Attention:	 	 
	 

	 	 	Telecopier:
	 	 	 	 	 	Telecopier:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 	with a copy to:	 	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	Attention:
	 	 	 	 	 	Attention:	 	 
	 

	 	 	Telecopier:
	 	 	 	 	 	Telecopier:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 	Wire Instructions:	 	 	 	Wire Instructions:	 	 

B-2

 

The terms set forth in this Assignment are hereby agreed to:

	 	 	 	 	 	 	 
	 	 	ASSIGNOR

[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE

[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

Consented to and Accepted:

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent

	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	Name:

	 	 

	 	 	 	 
	Title:
	 	 	 	 	 	 

S-1

 

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT

AND ACCEPTANCE AGREEMENT

	1.	 	Representations and Warranties.

	 	1.1	 	Assignor. The Assignor (a) represents and warrants that (i)
it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim (other
than any Permitted Lien) and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and to consummate
the transactions contemplated hereby; and (b) assumes no responsibility with
respect to (i) any statements, warranties or representations made in or in
connection with any Credit Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document delivered pursuant thereto, other than this
Assignment (herein collectively the “Credit Documents”), or any collateral
thereunder, (iii) the financial condition of the Borrowers, any of their
Subsidiaries or Affiliates or any other Person obligated in respect of any Credit
Document or (iv) the performance or observance by the Borrowers, any of their
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Credit Document.
	 
	 	1.2	 	Assignee. The Assignee (a) represents and warrants that (i)
it has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies all
requirements of an Eligible Assignee under the Credit Agreement, (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit
Agreement and, to the extent of the Assigned Interest, shall have the obligations
of a Lender thereunder, (iv) it has received a copy of the Credit Agreement and
such other Credit Documents, documents and information as it has deemed
appropriate to make, independently and without reliance on Administrative Agent,
the Assignor or any other Lender, its own credit analysis and decision to enter
into this Assignment and to purchase the Assigned Interest, and (v) if it is a
Non-US Lender, attached to this Assignment is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed and
executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at that
time, continue to make its own credit decisions in taking or not taking action
under the Credit Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Documents are
required to be performed by it as a Lender.

	2.	 	Payments. All payments with respect to the Assigned Interest shall be made on the
Effective Date as follows:

	 	2.1	 	With respect to the Assigned Interest for Term Loans, unless notice
to the contrary is delivered to the Lender from Administrative Agent, payment to
the Assignor by the Assignee in respect of the Assigned Interest shall include
such compensation to the Assignor as may be agreed upon by the Assignor and the
Assignee with respect to all unpaid interest which has accrued on the Assigned
Interest to but excluding the Effective Date. On and after the applicable
Effective Date, the Assignee shall be entitled to receive all interest paid or
payable with respect to the Assigned Interest, whether such interest accrued
before or after the Effective Date.
	 
	 	2.2	 	With respect to Assigned Interest for Revolving Loans, from and
after the Effective Date, Administrative Agent shall make all payments in respect
of the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignor for amounts which

S-1

 

	 	 	 	have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.[ * ]

	3.	 	General Provisions. This Assignment shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns. This Assignment may be
executed in any number of counterparts, which together shall constitute one instrument.
Delivery of an executed counterpart of a signature page of this Assignment by telecopy or
electronic mail shall be effective as delivery of a manually executed counterpart of this
Assignment. This Assignment shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without regard to conflict of laws principles thereof.

 

			
	[ * ]	 	Administrative Agent should consider whether this method conforms to its systems. In
some circumstances, the
following alternative language may be appropriate: “From and after the Effective Date,
Administrative Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have
accrued prior to or on or after the Effective Date. The Assignor and
the Assignee shall make all
appropriate adjustments in payments by Administrative Agent for periods prior to the Effective Date
or with respect to the making of this assignment directly between themselves.”

S-3

 

EXHIBIT C TO LOAN AGREEMENT

FORM OF CLOSING DATE CERTIFICATE

          THE UNDERSIGNED HEREBY CERTIFY AS FOLLOWS:

          1. We are, respectively, the [Secretary/Assistant Secretary] of EH/TRANSEASTERN, LLC, a
limited liability company organized under the laws of the state of
Delaware (“EH Transeastern”) and
the [Secretary/Assistant Secretary] of TE/TOUSA SENIOR, LLC, a limited liability company organized
under the laws of the state of Delaware (“TE/TOUSA Senior” and, together with
EH/Transeastern, the “Borrowers”) and [OTHER BORROWER PARTIES AS APPLICABLE].

          2. Pursuant to Section 3.1 of that certain Credit Agreement, dated as of August 1, 2005 (as it
may be Modified, the “Credit Agreement”; capitalized terms used herein but not defined herein shall
have the meanings given to them in the Credit Agreement), and entered into by and among Borrowers,
the Lenders from time to time party thereto (the “Lenders”), and DEUTSCHE BANK TRUST COMPANY
AMERICAS in its capacity as Administrative Agent for the Lenders (in such capacity, together with
its successors in such capacity, the “Administrative
Agent”), Borrowers request that the Lenders
make the following Loans to the Borrowers on August 1, 2005 (the “Closing Date”):

	 	 	 	 	 
	 
	 	 	 	 
	(a) Term Loans (in aggregate):
	 	$	[          ,          ,          ]	 
	 
	 	 	 	 
	(b) Revolving Loans (in aggregate):
	 	$	[          ,          ,          ]	 
	 
	 	 	 	 
	(b) Swing Line Loans (in aggregate):
	 	$	[          ,          ,          ]	 

          3. We have reviewed the terms of Section 4 of the Credit Agreement and the definitions and
provisions contained in such Credit Agreement relating thereto, and in our opinion we have made, or
have caused to be made under our supervision, such examination or investigation as is necessary to
enable us to express an informed opinion as to the matters referred to herein.

          4. Based upon our review and examination described in paragraph 3 above, we certify,
respectively, in our capacities as [Secretary/Assistant Secretary] of EH Transeastern and
[Secretary/Assistant Secretary] of TE/TOUSA Senior, that as of the date hereof:

     (i) as of the Closing Date, the representations and warranties contained in the Credit
Agreement and each other Loan Document are true, correct and complete in all material
respects on and as of the Closing Date to the same extent as though made on and as of
such date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and warranties are true,
correct and complete in all material respects on and as of such earlier date;

     (ii) as of the Closing Date, other than as described in the Credit
Agreement, there shall not exist any action, suit, investigation, litigation or
proceeding or other legal or regulatory developments, pending or threatened in any
court or before any arbitrator or Governmental Authority that, singly or in the
aggregate, materially impairs any of the transactions contemplated by the Loan
Documents or the Asset Purchase Agreement, or that could reasonably be expected to
have a Material Adverse Effect; and

     (iii) as of the Closing Date, no event has occurred and is continuing or would
result from the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Default.

C-1-1

 

          5. Each Borrower Party has requested the applicable counsel to deliver to Administrative Agent
and Lenders on the Closing Date favorable written opinions in form and substance reasonably
acceptable to the Administrative Agent pursuant to Section 3.1(1)(x) of the Credit Agreement.

          6. Each Borrower Party has delivered or caused to be delivered the Borrowing Base Certificate
pursuant to Section 3.1(1)(xiv) of the Credit Agreement.

          7. Attached hereto as Annex A are true, complete and correct copies of (a) the most
recent audited financial statement of TEP Holdings Inc. and (b) pro forma financial statements for
each of the Borrowers as at the Closing Date and reflecting the consummation of the transactions,
the related financings and the other transactions contemplated by the Loan Documents to occur on or
prior to the Closing Date.

[Remainder of page intentionally left blank.]

C-1-2

 

          The foregoing certifications are made and delivered as of August 1, 2005.

	 	 	 	 	 	 	 
	 	 	EH/TRANSEASTERN, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[OTHER BORROWER PARTIES]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

S-1

 

ANNEX A-I TO

CLOSING DATE CERTIFICATE

HISTORICAL FINANCIAL STATEMENTS

C-1-Annex A-I

 

 

ANNEX A-II TO

CLOSING DATE CERTIFICATE

PRO FORMA FINANCIAL STATEMENTS

[SEE ATTACHED]

C-1-ANNEX
A-II

 

 

EXHIBIT D TO CREDIT AGREEMENT

FORM OF RATE REQUEST

     Reference is made to that certain Credit Agreement, dated as of August 1, 2005 (as it may be
Modified, the “Credit Agreement”; capitalized terms used herein but not defined herein shall have
the meanings given to them in the Credit Agreement), and entered into by and among EH/TRANSEASTERN,
LLC, a limited liability company organized under the laws of the state of Delaware (“EH
Transeastern”) and TE/TOUSA SENIOR, LLC, a limited liability company organized under the laws of
the state of Delaware (“TE/TOUSA Senior” and, together with EH Transeastern, the
“Borrowers”), the Lenders from time to time party thereto (the “Lenders”), and DEUTSCHE BANK TRUST
COMPANY AMERICAS in its capacity as Administrative Agent for the Lenders (in such capacity,
together with its successors in such capacity, the “Administrative Agent”).

     Pursuant to Section 2.9 of the Credit Agreement, Borrowers desire to convert or to continue
the following Loans, each such conversion and/or continuation to be
effective as of ___,
200___:

     1. Term Loans:

	 	 	 	 
	 	$[___,___,___]

	 	Eurodollar Rate Loans to be
continued with Interest Period of ___ month(s)
	 	 
	 	 
	 	$[___,___,___]

	 	Base Rate Loans to be converted to Eurodollar Rate Loans with
Interest Period of ___ month(s)
	 	 
	 	 
	 	$[___,___,___]

	 	Eurodollar Rate Loans to be converted to Base Rate Loans

     2. Revolving Loans:

	 	 	 	 
	 	$[___,___,___]

	 	Eurodollar Rate Loans to be
continued with Interest Period of ___
month(s)
	 	 
	 	 
	 	$[___,___,___]

	 	Base Rate Loans to be converted to Eurodollar Rate Loans with
Interest Period of ___ month(s)
	 	 
	 	 
	 	$[___,___,___]

	 	Eurodollar Rate Loans to be converted to Base Rate Loans

D-1

 

	 	 	 	 	 
	Date:                     , 200_	 	EH/TRANSEASTERN, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

 

 

EXHIBIT E-l TO CREDIT AGREEMENT

FORM OF TERM LOAN NOTE

			
	 	 	 
	$[1][___,___,___]	 	 
	[2]                    , 200_
	 	New York, New York

     FOR VALUE RECEIVED, EH/Transeastern, LLC and TE/TOUSA Senior, LLC (jointly and severally, the
“Borrowers” and each a “Borrower”),
jointly and severally promise to pay [NAME OF
LENDER] (“Payee”)
or its registered assigns, on or before ___, 200_, as such date may be extended pursuant to
Section 2.6 of the Credit Agreement (or accelerated following an Event of Default as further
provided below) the principal amount of
[1][DOLLARS]
($[___,___,_][1] in the
installments referred to below.

     Borrowers also promise to pay interest on the unpaid principal amount hereof, from the date
hereof until paid in full, at the rates and at the times which shall be determined in accordance
with the provisions of that certain Credit Agreement, dated as of August 1, 2005 (as it may be
Modified, the “Credit Agreement” ; capitalized terms used herein but not defined herein shall have
the meanings given to them in the Credit Agreement), and entered into by and among Borrowers, the
Lenders party thereto from time to time, and Deutsche Bank Trust Company Americas, as
Administrative Agent for the Lenders.

     This Note is one of the “Notes” evidencing the Term Loans in the original aggregate principal
amount of $335,000,000 and is issued pursuant to and entitled to the benefits of the Credit
Agreement, to which reference is hereby made for a more complete statement of the terms and
conditions under which the Term Loan evidenced hereby was made and is to be repaid.

     All payments of principal and interest in respect of this Note shall be made in lawful money
of the United States of America in same day funds at the Principal Office of Administrative Agent
or at such other place as shall be designated in writing for such purpose in accordance with the
terms of the Credit Agreement. Unless and until an Assignment and Acceptance Agreement effecting
the assignment or transfer of the obligations evidenced hereby shall have been accepted by
Administrative Agent and recorded in the Register, Borrowers, each Agent and Lenders shall be
entitled to deem and treat Payee as the owner and holder of this Note and the obligations evidenced
hereby. Payee hereby agrees, by its acceptance hereof, that before disposing of this Note or any
part hereof it will make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of Borrowers
hereunder with respect to payments of principal of or interest on this Note.

     This Note is subject to mandatory prepayment and to prepayment at the option of Borrowers,
each as provided in the Credit Agreement.

     THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWERS AND PAYEE HEREUNDER SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

     Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this
Note, together with all accrued and unpaid interest thereon, may become, or may be declared to be,
due and payable in the manner, upon the conditions and with the effect provided in the Credit
Agreement.

 

			
	[1]	 	Lender’s Term Loan Commitment
	[2]	 	 Date of Issuance

E-1-1

 

 

     The terms of this Note are subject to amendment only in the manner provided in the Credit
Agreement.

     No reference herein to the Credit Agreement and no provision of this Note or the Credit
Agreement shall alter or impair the obligations of Borrowers, which are absolute and unconditional,
to pay the principal of and interest on this Note at the place, at the respective times, and in the
currency herein prescribed.

     Borrowers promise to pay all costs and expenses, including reasonable attorneys’ fees, all as
provided in the Credit Agreement, incurred in the collection and enforcement of this Note.
Borrowers and any endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand
notice of every kind and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.

E-1-2

 

 

     IN WITNESS WHEREOF, Borrowers have caused this Note to be duly executed and delivered by its
officer thereunto duly authorized as of the date and at the place first written above.

	 	 	 	 	 
	 	 	EH/TRANSEASTERN, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

 

 

EXHIBIT E-2 TO CREDIT AGREEMENT

FORM OF REVOLVING LOAN NOTE

			
	 	 	 
	$[1] [___,___,___]

[2]___, 200_
	 	New York, New York

     FOR VALUE RECEIVED, EH/Transeastern, LLC and TE/TOUSA Senior, LLC (jointly and severally, the
“Borrowers” and each a
“Borrowers”), jointly and severally promise to pay
(NAME OF LENDER] (“Payee”) or its registered assigns, on or
before ___, 200_, as such date may be
extended pursuant to Section 2.6 of the Credit Agreement (or accelerated following an Event of
Default as further provided below) the lesser of (a)
[1] [DOLLARS]
($[1][___,___,___]) and (b) the unpaid principal amount of all advances made by Payee
to Borrowers as Revolving Loans under the Credit Agreement referred to below.

     Borrowers also promise to pay interest on the unpaid principal amount hereof, from the date
hereof until paid in full, at the rates and at the times which shall be determined in accordance
with the provisions of that certain Credit Agreement, dated as of August 1, 2005 (as it may be
Modified, the “Credit Agreement”; capitalized terms used herein but not defined herein shall have
the meanings given to them in the Credit Agreement), and entered into by and among Borrowers, the
Lenders party thereto from time to time, and Deutsche Bank Trust Company Americas, as
Administrative Agent for the Lenders.

     This Note is one of the “Notes” evidencing the Revolving Commitments in the original aggregate
principal amount of $ 115,000,000 and is issued pursuant to and entitled to the benefits of the
Credit Agreement, to which reference is hereby made for a more complete statement of the terms and
conditions under which the Revolving Loans evidenced hereby were made and are to be repaid.

     All payments of principal and interest in respect of this Note shall be made in lawful money
of the United States of America in same day funds at the Principal Office of Administrative Agent
or at such other place as shall be designated in writing for such purpose in accordance with the
terms of the Credit Agreement. Unless and until an Assignment and Acceptance Agreement effecting
the assignment or transfer of the obligations evidenced hereby shall have been accepted by
Administrative Agent and recorded in the Register, Company, each Agent and Lenders shall be
entitled to deem and treat Payee as the owner and holder of this Note and the obligations evidenced
hereby. Payee hereby agrees, by its acceptance hereof, that before disposing of this Note or any
part hereof it will make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, the failure to make a notation of any
payment made on this Note shall not limit or otherwise affect the obligations of Borrowers
hereunder with respect to payments of principal of or interest on this Note.

     This Note is subject to mandatory prepayment and to prepayment at the option of Borrowers,
each as provided in the Credit Agreement.

     THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWERS AND PAYEE HEREUNDER SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

 

			
	[1]	 	Lender’s Revolving Credit Commitment
	 
	[2]	 	Date of Issuance

E-2-1

 

 

     Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this
Note, together with all accrued and unpaid interest thereon, may become, or may be declared to be,
due and payable in the manner, upon the conditions and with the effect provided in the Credit
Agreement.

     The terms of this Note are subject to amendment only in the manner provided in the Credit
Agreement.

     No reference herein to the Credit Agreement and no provision of this Note or the Credit Agreement
shall alter or impair the obligations of Borrowers, which are absolute and unconditional, to pay
the principal of and interest on this Note at the place, at the respective times, and in the
currency herein prescribed.

     Borrowers promise to pay all costs and expenses, including reasonable attorneys’ fees, all as
provided in the Credit Agreement, incurred in the collection and enforcement of this Note.
Borrowers and any endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand
notice of every kind and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.

E-2-2

 

 

     IN WITNESS WHEREOF, Borrowers have caused this Note to be duly executed and delivered by its
officer thereunto duly authorized as of the date and at the place first written above.

	 	 	 	 	 
	 	 	EH/TRANSEASTERN, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

S-1

 

TRANSACTIONS ON

REVOLVING LOAN NOTE

	 	 	 	 	 	 	 	 	 
	 
	 	Amount of Loan
	 	Amount of Principal
	 	Outstanding Principal
	 	Notation
	Date
	 	Made This Date
	 	Paid This Date
	 	Balance This Date
	 	Made By
	 
	 	 
	 	 
	 	 
	 	 

 

 

EXHIBIT E-3 TO CREDIT AGREEMENT

FORM OF SWING LINE NOTE

			
	 	 	 
	$[1][___,___,___]

[2]                    , 200_
	 	New York, New York

     FOR VALUE RECEIVED, EH/Transeastern, LLC and TE/TOUSA Senior, LLC (jointly and severally, the
“Borrowers” and each a “Borrowers”), jointly and severally promise to pay to Deutsche Bank Trust
Company
Americas, as Swing Line Lender (“Payee”), on or before ___, 200_, as such date may be extended
pursuant to
Section 2.6 of the Credit Agreement (or accelerated following an Event of Default as further
provided below), the
lesser of (a) [1][DOLLARS] ($[___,___,___]) and (b) the unpaid principal amount of all
advances made by Payee to
Borrowers as Swing Line Loans under the Credit Agreement referred to below.

     Borrowers also promise to pay interest on the unpaid principal amount hereof, from the date
hereof until paid in full, at the rates and at the times which shall be determined in accordance
with the provisions of that certain Credit Agreement, dated as of August 1, 2005 (as it may be
Modified, the “Credit Agreement”; capitalized terms used herein but not defined herein shall have
the meanings given to them in the Credit Agreement), and entered into by and among Borrowers, the
Lenders party thereto from time to time, and Deutsche Bank Trust Company Americas, as
Administrative Agent for the Lenders.

     This Note is the “Swing Line Note” and is issued pursuant to and entitled to the benefits of the
Credit Agreement, to which reference is hereby made for a more complete statement of the terms and
conditions under which the Swing Line Loans evidenced hereby were made and are to be repaid.

     All payments of principal and interest in respect of this Note shall be made in lawful money of the
United States of America in same day funds at the Principal Office of Swing Line Lender or at such
other place as shall be designated in writing for such purpose in accordance with the terms of the
Credit Agreement.

     This Note is subject to mandatory prepayment and to prepayment at the option of Borrowers, each as
provided in the Credit Agreement.

     THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWERS AND PAYEE HEREUNDER SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

     Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this
Note, together with all accrued and unpaid interest thereon, may become, or may be declared to be,
due and payable in the manner, upon the conditions and with the effect provided in the Credit
Agreement.

     The terms of this Note are subject to amendment only in the manner provided in the Credit
Agreement.

     No reference herein to the Credit Agreement and no provision of this Note or the Credit Agreement
shall alter or impair the obligations of Borrowers, which are absolute and unconditional, to pay
the principal of and interest on this Note at the place, at the respective times, and in the
currency herein prescribed.

 

			
	[1]	 	Swing Line Sublimit [the lesser of (i) $20,000,000, and (ii) the aggregate unused
amount of Revolving Commitments then in effect]
	 
	[2]	 	Date of Issuance

E-3-1

 

 

     Borrowers promise to pay all costs and expenses, including reasonable attorneys’ fees, all as
provided in the Credit Agreement, incurred in the collection and enforcement of this Note.
Borrowers and any endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand
notice of every kind and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.

E-3-2

 

 

     IN WITNESS WHEREOF, Borrowers have caused this Note to be duly executed and delivered by its
officer thereunto duly authorized as of the date and at the place first written above.

	 	 	 	 	 
	 	 	EH/TRANSEASTERN, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

S-1

 

TRANSACTIONS ON

SWING LINE NOTE

	 	 	 	 	 	 	 	 	 
	 
	 	Amount of Loan
	 	Amount of Principal
	 	Outstanding Principal
	 	Notation
	Date
	 	Made This Date
	 	Paid This Date
	 	Balance This Date
	 	Made By
	 
	 	 
	 	 
	 	 
	 	 

L-5-Annex A-1

 

PLEDGE AGREEMENT

     THIS
PLEDGE AND SECURITY AGREEMENT, dated as of July ___, 2005
(this “Agreement”), is made by TE/TOUSA SENIOR, LLC, a limited liability company organized under the laws
of the state of Delaware (“Pledgor”), in favor of DEUTSCHE BANK TRUST COMPANY AMERICAS, in its
capacity as Administrative Agent for the Lenders described below (in such capacity, together with
its successors in such capacity, the “Administrative Agent”).

RECITALS

     A. Pursuant to that certain Credit Agreement dated as of the date hereof (as the same may be
Modified from time to time, the “Loan Agreement”) by and among Pledgor and EH/Transeastern, LLC, a
limited liability company organized under the laws of the state of Delaware (the “Operating
Company” and, together with Pledgor, jointly and
severally, the “Borrowers” and each a
“Borrower”), the Lenders from time to time
party thereto (the “Lenders”), and Administrative Agent,
the Lenders have agreed to make a loan to the Borrowers in an initial principal amount of
$450,000,000 (the “Loan”), consisting of $335,000,000 aggregate principal amount of Term Loans, and
up to $115,000,000 aggregate principal amount of Revolving Commitments.

     B. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed
to such terms in the Loan Agreement.

AGREEMENT

     NOW THEREFORE, to induce the Lenders to extend the Loan, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, Pledgor hereby
covenants and agrees as follows:

     1. Definitions. In addition to all of the other capitalized terms defined herein,
the following terms shall have the following respective meanings:

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

          1.2 “Collateral” means (i) the Pledged Interests, (ii) all additional Pledged
Interests, rights and/or options acquired by Pledgor pursuant to Section 2.2(h) below or
otherwise, (iii) all rights of Pledgor, if any, as creditor of the Pledged Entities; and (iv) all
Proceeds. The inclusion of Proceeds in the Collateral does not authorize Pledgor to sell, dispose
of or otherwise use the Collateral in any manner not specifically authorized hereby.

          1.3 “Corporations” means the corporations identified on Exhibit A attached
hereto.

1

 

          1.4 “Distributions” means all dividends, distributions, liquidation proceeds, cash,
profits, instruments and other property and economic benefits to which Pledgor is entitled with
respect to the Pledged Interests whether or not received by or otherwise distributed to Pledgor,
whether such dividends, distributions, liquidation proceeds, cash, profits, instruments and other
property and economic benefits are paid or distributed by the Pledged Entities in respect of
operating profits, sales, exchanges, refinancing, condemnations or insured losses of the company’s
assets, the liquidation of the company’s assets and affairs, management fees, guaranteed payments,
repayment of loans, reimbursement of expenses or otherwise in respect of or in exchange for any or
all of the Pledged Interests.

          1.5 “Event of Default” means, for purposes of this Agreement, the occurrence of any
of the following:

               (a) An “Event of Default” under the Loan Agreement shall have occurred and be
continuing;

               (b) Any representation or warranty made by Pledgor hereunder shall be inaccurate or
incomplete in any material respect on or as of the date made or deemed made;

               (c) Pledgor
shall breach any of the covenants set forth in
Section 4.1; or

               (d) Pledgor shall fail to observe or perform any other term or provision contained in this
Agreement and such failure shall continue for thirty (30) days following the date Pledgor knew or,
in the orderly conduct of its business, should have known of such failure.

          1.6 “LLCs” means the limited liability companies identified on Exhibit A
attached hereto.

          1.7 “LLC Interests” means all membership, equity or ownership and/or other interests
now or hereafter owned by Pledgor in the LLCs, and including all of Pledgor’s right, title and
interest in and to: (i) any and all now existing and hereafter acquired membership, equity or
ownership interest of Pledgor in the LLCs, whether in capital, profits or otherwise; (ii) any and
all now existing and hereafter arising rights of Pledgor to receive Distributions or payments from
the LLCs, whether in cash or in kind and whether such Distributions or payments are on account of
Pledgor’s interest as owner of a membership, equity or ownership interest of the LLCs or as a
creditor of the LLCs or otherwise, and all other economic rights and interests of any nature of
Pledgor in the LLCs; (iii) any and all now existing and hereafter acquired management and voting
rights of Pledgor of, in, or with respect to the LLCs, whether as an owner of a membership, equity
or ownership interest of the LLCs or otherwise, and whether provided for under the Operating
Agreements and/or applicable law, and all other rights of and benefits to Pledgor of any nature
arising or accruing under the Operating Agreements; (iv) any and all now existing and hereafter
acquired rights of Pledgor to any specific property owned by the LLCs; (v) if any of the
membership, equity or ownership interests in the LLCs are evidenced in certificate form, the LLC
Interests shall include all such certificates, delivered to Administrative Agent accompanied by
stock powers (in form and substance reasonably acceptable to Administrative Agent) duly executed in
blank; (vi) all rights of Pledgor to cause an
 

2

 

assignee to be substituted in the LLCs as a member in the place and stead of Pledgor; (vii) all
rights, remedies, powers, privileges, security interest, Liens and claims of Pledgor for damages
arising out of or for breach of or default under the Operating Agreements; (viii) all present and
future claims, if any, of Pledgor against the LLCs under or arising out of the Operating Agreements
for monies loaned or advanced, for services rendered or otherwise; (ix) all rights of Pledgor to
access the books and records of the LLCs and to other information concerning or affecting the LLCs;
(x) all rights of Pledgor to terminate the Operating Agreements, to perform thereunder, to compel
performance and otherwise to exercise all remedies thereunder; (xi) all rights of Pledgor to
acquire the rights or interest of any other member in the LLCs and (xii) all Proceeds of the
foregoing.

          1.8 “Obligations” means all obligations and liabilities of Pledgor under the Loan
Documents to which Pledgor is a party.

          1.9 “Operating Agreements” means the operating agreements and articles of
organization, certificates of formation or other formation documents and all other agreements,
certificates and other documents which govern the existence, operation and ownership of the LLCs,
as the same are in effect as of the date hereof and as the same hereafter may be Modified from time
to time in accordance with the Loan Agreement.

          1.10 “Organizational Documents” means (i) the articles or certificate of incorporation
(including any amendments thereto or restatements thereof), bylaws and any certificate or statement
of designation of the Corporations, (ii) the Operating Agreements and (iii) the Partnership
Agreements.

          1.11 “Partnerships” means the partnerships identified on Exhibit A attached
hereto.

          1.12 “Partnership Agreements” means the partnership agreements and certificates of
limited partnership, together with all other agreements, certificates and other documents which
govern the existence, operation and ownership of the Pledged Entities, as the same are in effect as
of the date hereof and as the same hereafter may be Modified from time to time in accordance with
the Loan Agreement.

          1.13 “Partnership Interests” means all partnership, equity or ownership and/or other
interests now or hereafter owned by Pledgor in the Partnerships, and including all of Pledgor’s
right, title and interest in and to: (i) any and all now existing and hereafter acquired
membership, equity or ownership interest of Pledgor in the Partnerships whether in capital, profits
or otherwise; (ii) any and all now existing and hereafter arising rights of Pledgor to receive
Distributions or payments from the Partnerships, whether in cash or in kind and whether such
Distributions or payments are on account of Pledgor’s interest as an owner of a partnership, equity
or ownership interest of the Partnerships or as a creditor of the Partnerships or otherwise, and
all other economic rights and interests of any nature of Pledgor in the Partnerships; (iii) any and
all now existing and hereafter acquired management and voting rights of Pledgor of, in, or with
respect to the Partnerships, whether as an owner of a partnership, equity or ownership interest of
the Partnerships or otherwise, and whether provided for under the Partnership

3

 

Agreements and/or applicable law, and all other rights of and benefits to Pledgor of any nature
arising or accruing under the Partnership Agreements; (iv) any and all now existing and hereafter
acquired rights of Pledgor to any specific property owned by the Partnerships; (v) if the
Partnership Interests are evidenced in certificate form, the Partnership Interests shall include
all such certificates, delivered to Administrative Agent accompanied by stock powers (in form and
substance reasonably acceptable to Administrative Agent) duly executed in blank; (vi) all rights of
Pledgor to cause an assignee to be substituted in the Partnerships as a partner in the place and
stead of
Pledgor; (vii) all rights, remedies, powers, privileges, security interest, Liens and claims of
Pledgor for damages arising out of or for breach of or default under the Partnership Agreements;
(viii) all present and future claims, if any, of Pledgor against the Partnerships under or arising
out of the Partnership Agreements for monies loaned or advanced, for services rendered or
otherwise; (ix) all rights of Pledgor to access the books and records of the Partnerships and to
other information concerning or affecting the Partnerships; (x) all rights of Pledgor to terminate
the Partnership Agreements, to perform thereunder, to compel performance and otherwise to exercise
all remedies thereunder; (xi) all rights of Pledgor to acquire the rights or interest of any other
partner in the Partnerships and (xii) all Proceeds of the foregoing.

          1.14 “Pledged Entities” means the Corporations, the LLCs and the Partnerships.

          1.15 “Pledged Interests” means the LLC Interests, the Partnership Interests and the
Pledged Stock.

          1.16 “Pledged Stock” means, with respect to Pledgor: (i) all shares of capital stock of
the Corporations, now owned or hereafter acquired by Pledgor, and the certificates representing the
shares of such capital stock (delivered to Administrative Agent accompanied by stock powers (in
form and substance reasonably acceptable to Administrative Agent) duly executed in blank) and any
interest of Pledgor in the entries on the books of any financial intermediary pertaining to such
shares (such now-owned shares being identified on Schedule 1 attached hereto), and all
options and warrants for the purchase of shares of the stock of the Corporations now or hereafter
held in the name of Pledgor; (ii) all additional shares of stock or certificated interests of the
Corporations from time to time acquired by Pledgor in any manner, and the certificates representing
such additional shares (delivered to Administrative Agent accompanied by stock powers (in form and
substance reasonably acceptable to Administrative Agent) duly executed in blank) and any interest
of Pledgor in the entries on the books of any financial intermediary pertaining to such shares and
interests, and, with respect to shares described in clause (i) above and this clause (ii), all
securities convertible into and options, warrants, dividends, cash, instruments and other rights
and options from time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares (including all rights to request or cause the issuer thereof
to register any or all of the Collateral under federal and state securities laws to the maximum
extent possible under any agreement for such registration rights), and all put rights, tag-along
rights or other rights pertaining to the sale or other transfer of such Collateral, together in
each case with all right under any agreements, articles or certificates of incorporation or
otherwise pertaining to such rights; (iii) all voting rights and rights to cash and non-cash
dividends, instruments and other property from time to

4

 

time received, receivable or otherwise distributed in respect of, or in exchange for, any or all of
the foregoing; and (iv) all Proceeds of the foregoing.

          1.17 “Pro Rata Share” means, when calculating a Lender’s portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the
then unpaid amount of the Obligations owing to such Lender in accordance with the Loan Agreement
and the other Loan Documents, and the denominator of which is the then outstanding amount of all
the Obligations.

          1.18 “Proceeds” means, collectively, (i) all “proceeds” (as such term is defined in
Section 9-102 of the Code) with respect to any of the Collateral, (ii) whatever is receivable or
received when any of the Collateral is sold, collected, exchanged or otherwise disposed of, whether
such disposition is voluntary or involuntary, and includes, without limitation, all rights to
payment, including return premiums, with respect to any insurance relating thereto and also
includes all interest, dividends and other property receivable or received on account of any of the
Collateral or proceeds
thereof, and in any event, shall include all Distributions or other income from any of the
Collateral, all collections thereon or all Distributions with respect thereto, and (iii) all
proceeds, products, accessions, rents, profits, income, benefits, substitutions and replacements of
and to any of the Collateral.

     2. Pledge of Collateral.

          2.1 As security for the due and punctual payment and performance of all of the Obligations
(whether at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise, including without limitation the payment of amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a)),
whether allowed or allowable as claims, Pledgor hereby (a) pledges, transfers, hypothecates and
assigns to Administrative Agent the Collateral, for the purposes herein expressed, and (b) grants
to Administrative Agent a continuing general first-priority lien on and security interest in and to
the Collateral. Pledgor shall promptly deliver or cause to be delivered to Administrative Agent all
certificates or instruments evidencing the Pledged Interests, together with duly executed stock
powers or other appropriate endorsements. With respect to any Collateral in the possession of or
registered in the name of a custodian bank or nominee therefor, or any Collateral represented by
entries on the books of any financial intermediary, Pledgor agrees to cause such custodian bank or
nominee to enter into an agreement with Administrative Agent reasonably satisfactory to
Administrative Agent in form and content confirming that the Collateral is held for the account of
Administrative Agent. With respect to any Collateral held in an account maintained by
Administrative Agent as financial intermediary, Pledgor hereby gives notice to Administrative Agent
of Administrative Agent’s security interest in such Collateral. In addition, Pledgor agrees that in
the event that any Collateral is held by Administrative Agent in a fiduciary capacity for or on
behalf of Pledgor as the beneficial owner thereof, any agreements executed by Pledgor in connection
therewith are hereby amended to authorize and direct the pledge, hypothecation and/or transfer of
such Collateral to Administrative Agent as secured party by Administrative Agent as fiduciary in
accordance with the terms, covenants and conditions of this Pledge Agreement. The rights granted to
Administrative Agent pursuant to this Pledge Agreement are in addition to the rights granted to
Administrative Agent pursuant to any such

5

 

agreements. In case of conflict between the provisions of this Pledge Agreement and those of any
other such agreement, the provisions hereof shall prevail.

          2.2 The Collateral shall be held and disposed of by Administrative Agent in accordance with
the following provisions:

               (a) Administrative Agent shall retain a valid and perfected first-priority security interest
in the Collateral until the date on which each and every one of the Obligations has been fully and
indefeasibly performed in accordance with the terms of the Loan Agreement and the other Loan
Documents, including the indefeasible payment in full of the principal amount of the Loan
Agreement, and all interest accrued thereon.

               (b) Upon the occurrence and during the continuance of an Event of Default, Administrative
Agent may exercise, in addition to its other rights and remedies hereunder, or in any of the other
Loan Documents, all rights and remedies of a secured party under the Code with respect to the
Collateral as in effect at the time and otherwise available by action or actions at law or in
equity, including, without limitation:

                    (i) to
sell, assign and effectively transfer the Collateral either at public or private sale, at the option of Administrative Agent, without recourse to judicial
proceedings and without either demand, appraisement, advertisement or notice (except such notice as
is expressly provided herein) of any kind, all of which are expressly waived;

                    (ii) to proceed by way of appropriate judicial proceedings to have the Collateral sold at
judicial sale, with or without appraisement;

                    (iii) to seek an injunction of the prohibited action; or

                    (iv) to
pursue any other available legal remedy; and, out of the Proceeds of the sale of the Collateral, Administrative Agent shall be entitled to receive, by
preference and priority over all Persons whatsoever, the full remaining and unpaid balance of the
Obligations, together with all interest, costs, reasonable attorneys’ fees and other charges.

               (c) Without
limiting the provisions of Section 2.2(b), upon the occurrence and during the continuation of an Event of Default, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except for any notice
required by law or as expressly provided herein) to or upon Pledgor, the Pledged Entities, the
Guarantor, or any other Person (all and each of which other demands, defenses, advertisements and
notices are hereby waived), Administrative Agent and/or its nominee(s) or designee(s) may forthwith
collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, or otherwise dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), upon such terms and conditions as Administrative Agent may
deem advisable and at such prices as Administrative Agent may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. Administrative Agent and/or such
nominee(s) or designee(s) shall have the right upon any public sale or sales, and, to the extent
permitted by law, upon any private sale or sales, to purchase the Collateral so sold, free of any
right or equity of redemption in Pledgor, which right or equity Pledgor hereby waives and/or

6

 

releases to the extent permitted by applicable law. Administrative Agent shall apply any Proceeds
from time to time held by it and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale in accordance with the Loan Agreement and the other Loan
Documents. Administrative Agent or any Lender may be the purchaser(s) of any or all of the
Collateral at any such sale and Administrative Agent, as agent for and representative of Lenders,
shall be entitled, for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any public sale, to use and apply any of the
Obligations as a credit on account of the purchase price for any Collateral payable by
Administrative Agent at such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Pledgor, and Pledgor hereby waives (to the
extent permitted by applicable law) all rights of redemption, stay and/or appraisal which it now
has or may have at any time in the future have under any rule of law or statute now existing or
thereafter enacted. Notwithstanding anything to the contrary contained in this Agreement, the
parties have agreed that (A) before Administrative Agent has consummated any sale or other
disposition of the Collateral, it shall have provided written notice to Pledgor (concurrently with
or following any Event of Default) of its intent to do so not less than 60 days prior to such sale
or disposition, and (B) such 60 day period shall be deemed a commercially reasonable notice period
under all circumstances. Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Administrative Agent may adjourn any public or
private sale from time to time by announcing the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so adjourned. Pledgor hereby
waives any claims against Administrative Agent arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the price which might
have been obtained at a public sale, even if Administrative Agent accepts the first offer received
and does not offer such Collateral to more than one offeree. In connection with any sale of the
Collateral, Administrative Agent may specifically disclaim any warranties of title or the like, and
such disclaimer shall not
be considered to adversely affect the commercial reasonableness of such sale. If Administrative
Agent sells any of the Collateral on credit, Pledgor will be credited only with payments actually
made by the purchaser(s) of such Collateral which are received by Administrative Agent and applied
to the Obligations. In the event a purchaser fails to pay for the Collateral, Administrative Agent
may resell the Collateral and Pledgor shall be credited with the proceeds of the sale.

               (d) In addition to the remedies described in Sections 2.2(b) and 2.2(c)
above, upon the occurrence and during the continuation of any Event of Default, (i)
Administrative Agent and/or its nominee(s) or designee(s) shall have the right to receive any and
all Distributions or other payments paid with respect to the Pledged Interests and the other
Collateral, as applicable, and make application thereof in accordance with this Agreement (and any
dividends and other payments received in trust by Pledgor for the benefit of Administrative Agent
shall be segregated from the other funds of Pledgor), and (ii) provided an Event of Default has
occurred and is continuing, at Administrative Agent’s election, all Pledged Interests shall be
transferred to Administrative Agent and/or one or more nominee(s) or designee(s) thereof, and
Administrative Agent and/or such nominee(s) or designee(s) may in the name of Pledgor or in
Administrative Agent’s and/or such nominee(s)’ or designee(s)’ own name, collect all payments and
assets due Pledgor pursuant to the Pledged Interests and/or the applicable Organizational
Documents, and Administrative Agent and/or such nominee(s) or designee(s) may thereafter

7

 

exercise (x) all voting and other rights pertaining to the Pledged Interests, as applicable, to the
extent permitted by law, and (y) any and all rights of conversion, exchange, subscription and any
other rights, privileges or options pertaining to the Pledged Interests as if they were the
absolute owners thereof (including the right to exchange at their discretion any and all of the
Pledged Interests upon the merger, consolidation, reorganization, recapitalization or other change
in the entity structure of the Pledged Entities), or upon the exercise by Pledgor or Administrative
Agent and/or such nominee(s) or designee(s) of any right, privilege or option pertaining to such
Pledged Interests, and, in connection therewith, the right to deposit and deliver evidences of the
Pledged Interests with any committee, depository, transfer agent, registrar or other designated
agency (upon such terms and conditions as they may determine), all without liability except to
account for property actually received by them, but neither Administrative Agent nor any such
nominee or designee shall have any duty to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing. Further, unless and until
Administrative Agent and/or such nominee(s) or designee(s) succeed to actual ownership thereof,
pursuant to the exercise of Administrative Agent’s remedies described in Sections 2.2(b)
and 2.2(c) above, neither Administrative Agent nor Lenders nor any such nominee or
designee shall be obligated to perform or discharge any obligation, duty or liability in connection
with the Pledged Interests. The rights of Administrative Agent hereunder shall not be conditioned
or contingent upon the pursuit by Administrative Agent or Lenders of any other right or remedy
against Pledgor, the Guarantor or any other guarantor of the Loan Agreement, or against any other
person or entity which may be or become liable in respect of all or any part of the Obligations or
against any other collateral security therefor, guarantee thereof or right of offset with respect
thereto. Neither Administrative Agent, Lenders nor any such nominee or designee shall be liable for
any failure to demand, collect or realize upon all or any part of the Collateral or for any delay
in doing so, nor shall they be under any obligation to sell or otherwise dispose of any Collateral
upon the request of Pledgor or any other person or entity or to take any other action whatsoever
with regard to the Collateral or any part thereof, unless such actions are required by applicable
law.

               (e) Administrative Agent is hereby authorized to and shall apply the net proceeds of such
sale of, or other realization upon, any or all of the Collateral, after first deducting the costs
and expenses of sale, including reasonable attorneys’ fees and
reasonable costs of Administrative Agent and Lenders’ agents, to the payment of the Obligations in
such order as Administrative Agent shall elect, in its sole discretion, it being understood that
this Agreement shall remain in full force and effect and Administrative Agent shall retain all
rights hereunder, until the date on which all of the Obligations have been indefeasibly satisfied
in full, after deducting all such costs and expenses. If, after any sale of the Collateral pursuant
to this Section 2.2, there shall be a balance remaining after the payment of all of the
items described above, such balance shall be paid to persons or entities entitled by law to receive
such balance to allocate among themselves, without any liability resulting from the allocation
thereof on the part of Administrative Agent or Lenders.

               (f) Following the occurrence and during the continuance of an Event of Default, in addition
to any other remedies available to Administrative Agent hereunder and without imposing upon
Administrative Agent any duty to do so, Administrative Agent may, in its sole and absolute
discretion, pay, purchase, contest or compromise any encumbrance, charge or

8

 

Lien which is prior or superior to its security interest in the Collateral and pay all expenses
incurred in connection therewith (any payment or expense so incurred shall be deemed Obligations
and shall be immediately due and payable and secured hereby), all of which shall be deemed
authorized by Pledgor. All such expenses not paid or reimbursed by Pledgor when due shall accrue
interest at the default rate specified in the Loan Agreement. Nothing in this Section
2.2(f) shall be construed as authorizing Pledgor to grant or permit any encumbrance, charge or
Lien on the Collateral in violation of any other provision of this Agreement or the other Loan
Documents.

               (g) In the event that Pledgor purchases or otherwise acquires or obtains any additional
Pledged Interests in the Pledged Entities or any rights, options, subscriptions or warrants to
acquire such Pledged Interests, all such Pledged Interests, options, rights, subscriptions or
warrants shall automatically be deemed to be a part of the Collateral. If any such Pledged
Interests are to be evidenced by a certificate, any such additional certificates shall be promptly
delivered to Administrative Agent, together with assignments related thereto, or other instruments
appropriate to transfer a certificate representing any Pledged Interests, duly executed in blank.
Pledgor shall deliver to Administrative Agent all subscriptions, warrants, options and all such
other rights, and upon the delivery to Administrative Agent, Administrative Agent shall hold such
subscriptions, warrants, options and other rights as additional collateral pledged to secure the
Obligations; provided, however, that if Administrative Agent determines, in its sole
discretion, that the value of any such subscriptions, warrants, options or other rights shall
terminate, expire or be materially reduced in value by holding the same as Collateral,
Administrative Agent shall have the right (but not the obligation), in its sole discretion, to sell
or exercise the same, and if exercised, then the monies disbursed by Administrative Agent in
connection therewith shall become part of the Obligations and all the stock, securities, evidences
of indebtedness and other items so acquired shall be titled in the name of the applicable Pledgor
and shall become part of the Collateral.

               (h) Pledgor hereby expressly agrees and acknowledges that: (i) the Pledged Interests are not
of a type customarily sold on a recognized market; and (ii) so long as Administrative Agent
provides notice of sale of the Collateral in such form, to such persons, and through such
publication as required under the Code, and as long as any public or private sale is held in the
place required under such Section, Administrative Agent shall be deemed to have acted in good faith
and in a commercially reasonable manner so long as it provides not less than 30 days notice of such
sale.

               (i) Because of the Securities Act of 1933, as Modified (the “Securities Act”), or
any other applicable laws or regulations, there may be legal restrictions or limitations affecting
Administrative Agent in any attempts to dispose of certain portions of the
Collateral in the enforcement of its rights and remedies hereunder. For these reasons, and without
limiting the generality of the other provisions of this Agreement, Administrative Agent is hereby
authorized by Pledgor, but not obligated, in the event of any Event of Default hereunder giving
rise to Administrative Agent’s rights to sell or otherwise dispose of the Collateral, and after the
giving of any notices required herein, to sell all or any part of the Collateral at private sale,
subject to an investment letter or in any other manner which will not require the Collateral, or
any part thereof, to be registered in accordance with the Securities Act, or other applicable rules
and regulations

9

 

promulgated thereunder, or any other law or regulation, at the best price reasonably obtainable by
Administrative Agent at any such private sale or other disposition in the manner mentioned above,
and Pledgor specifically acknowledges that any such disposition shall be commercially reasonable
under the Code, even though any such private sales may be at prices and on terms less favorable
than those obtainable through a public sale without such restrictions, and agrees that
Administrative Agent shall have no obligation to engage in public sales and no obligation to delay
the sale of any Collateral for the period of time necessary to permit the issuer thereof to
register it for sale as a registered security under the Securities Act or under applicable state
securities laws, even if such issuer would, or should agree to, so register it. Administrative
Agent is also hereby authorized by Pledgor, but not obligated, to take such actions, give such
notices, obtain such consents, and do such other things as Administrative Agent may deem required
or appropriate in the event of a sale or disposition of any of the Collateral. If Administrative
Agent determines to exercise its right to sell any or all of the Collateral, upon written request,
Pledgor shall and shall cause each issuer of any Pledged Interests owned by Pledgor to be sold
hereunder from time to time to furnish to Administrative Agent all such information as
Administrative Agent may request in order to determine the number of shares and other instruments
included in the Collateral which may be sold by Administrative Agent in exempt transactions under
the Securities Act and the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect. Pledgor clearly understands that
Administrative Agent may at its discretion approach a restricted number of potential purchasers and
that a sale under such circumstances may yield a lower price for the Collateral, or any part or
parts thereof, than would otherwise be obtainable if same were registered and sold in the open
market. Pledgor agrees: (i) in the event Administrative Agent shall, upon an Event of Default
hereunder, sell the Collateral, or any portion thereof, at such private sale or sales,
Administrative Agent shall have the right to rely upon the advice and opinion of any member firm of
a national securities exchange as to the best price reasonably obtainable upon such private sale
thereof; and (ii) that such reliance shall be conclusive evidence that Administrative Agent handled
such matter in a commercially reasonable manner under the Code.

               (j) In order to permit Administrative Agent to exercise the voting and other consensual
rights which it may be entitled to exercise pursuant to this Section 2.2 and to receive all
Distributions and other payments which it may be entitled to receive hereunder, (i) Pledgor shall
promptly execute and deliver (or cause to be executed and delivered) to Administrative Agent all
such proxies, dividend payment orders and other instruments as Administrative Agent may from time
to time reasonably request and (ii) WITHOUT LIMITING THE EFFECT OF THE IMMEDIATELY PRECEDING CLAUSE
(i), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, PLEDGOR HEREBY GRANTS
TO ADMINISTRATIVE AGENT AN IRREVOCABLE PROXY TO VOTE THE PLEDGED INTERESTS PLEDGED BY PLEDGOR AND
TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED
INTERESTS WOULD BE ENTITLED (INCLUDING WITHOUT LIMITATION GIVING OR WITHHOLDING WRITTEN CONSENTS OF
MEMBERS OR PARTNERS, AS APPLICABLE, CALLING
SPECIAL MEETINGS OF MEMBERS OR PARTNERS, AS APPLICABLE, AND VOTING AT SUCH MEETINGS), WHICH PROXY
SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE

10

 

NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY PLEDGED INTERESTS ON THE RECORD BOOKS OF THE
ISSUER THEREOF) BY ANY OTHER PERSON (INCLUDING THE ISSUER OF THE PLEDGED INTERESTS OR ANY OFFICER
OR AGENT THEREOF), AND WHICH PROXY SHALL ONLY TERMINATE UPON THE PAYMENT IN FULL OF THE OBLIGATIONS
(WHICH, HOWEVER, SHALL REMAIN SUBJECT TO THE PREFERENTIAL PAYMENT PROVISIONS).

     3. Representations and Warranties of Pledgor. Pledgor hereby represents and
warrants, as of the date hereof, that:

          3.1 Pledgor (i) is the record and beneficial owner of the Pledged Interests to the extent and
in the manner set forth in Exhibit A attached hereto as of the date hereof, and (ii) will
own any Pledged Interests and other Collateral hereafter acquired, in either case, free and clear
of all claims, Liens, options and encumbrances of any kind and Pledgor has the right and authority
to pledge and assign its portion of the Pledged Interests and grant a security interest therein as
herein provided.

          3.2 The execution, delivery and performance of this Agreement by Pledgor will not cause a
violation of or a default under the Organizational Documents of Pledgor or the Pledged Entities.

          3.3 The pledge, assignment, lien and security interest made and granted hereunder constitutes
a valid pledge, assignment, lien and security interest of, on and in all of the Collateral owned by
Pledgor; and, upon the filing of a financing statement in the state of organization of Pledgor,
such lien and security interest shall constitute a perfected first-priority lien and security
interest on and in the Collateral, which lien and security interest, to the extent provided in the
Code, shall be enforceable as such against all creditors of Pledgor and any person or entity
purporting to purchase or otherwise acquire any Collateral from Pledgor (subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting
the rights of creditors generally).

          3.4 The Organizational Documents are described on Exhibit B hereto. True, correct and
complete copies of the Organizational Documents have been delivered to the Administrative Agent,
each of which is in full force and effect, has not been Modified except to the extent indicated
therein and there are no defaults under the Organizational Documents and no events which, with the
passage of time or giving of notice or both, would constitute a default under the Organizational
Documents.

          3.5 The state of formation and the mailing address of Pledgor are set forth on Exhibit
C hereto. No change has been or will be made in the state of formation or the mailing address
of the Pledged Entities or Pledgor except upon at least thirty (30) days’ prior notice to
Administrative Agent and the delivery to Administrative Agent of such financing statements and
other documents as Administrative Agent may require in connection therewith.

          3.6 No approval by, authorization of, or filing with any federal, state or other governmental
commission, agency or authority is necessary in connection with the execution,

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delivery and performance by Pledgor of this Agreement or to perfect the security interests granted
herein.

          3.7 Other than rights of setoff granted to financial institutions with respect to accounts
that may hold cash that constitutes a portion of the Collateral, there are no
setoffs, counterclaims or defenses with respect to the Collateral owned by Pledgor and no
agreement, oral or written, has been made with any other person or party under which any deduction
or discount may be claimed with respect to such Collateral and Pledgor does not know of any fact
which would prohibit or prevent Pledgor assigning or granting a security interest in the
Collateral.

          3.8 The pledge, assignment, lien and security interest made and granted hereunder and the
exercise of remedies by Administrative Agent hereunder do not violate, and do not require that any
filing, registration or other act be taken with respect to, any Requirements of Law pertaining to
the registration or transfer of securities, including without limitation the Securities Act of 1933
and the Securities Exchange Act of 1934, and any and all rules and regulations promulgated
thereunder (as such laws may be Modified from time to time,
collectively, the “Securities Laws”).
The Pledged Interests are represented by a “certificated security” as that term is defined in
Section 8-102 of the Code. Pledgor shall at all times comply with the Securities Laws as the same
pertain to all or any portion of the Collateral or pledge, assignment, lien and security interest
made and granted hereunder.

          3.9 No approval by or authorization or consent of any other Person is necessary to authorize
or validate the execution and delivery of this Agreement, or if such approval, authorization, or
consent is necessary, it is evidenced by the Consent and Waiver attached hereto or otherwise
obtained.

          3.10 The interests comprising the Collateral, including the Pledged Interests (i) are not dealt
in or traded on securities exchanges or in securities markets and (ii) are not “investment company
securities” (as defined in Section 8-103(b) of the Code).

          3.11 The Pledgor hereby represents and warrants that (i) the terms of the Organizational
Documents governing each of the Pledged Interests expressly provide that the Pledged Interests are
securities governed by Article 8 of the UCC as in effect in each applicable jurisdiction, (ii)
Section 13.2 of the Operating Agreement is in full force and effect, and (iii) the certificates
evidencing the Pledged Interests contain a legend substantially as follows: “This certificate
evidences an interest in [NAME OF ENTITY WITH RESPECT TO PLEDGED LLC INTEREST] and shall be a
security governed by Article 8 of the Uniform Commercial Code as in effect in the State of New York
and, to the extent permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction.”

     4. Covenants
of Pledgor.

          4.1 Pledgor hereby covenants and agrees as follows:

12

 

               (a) Except as permitted under the Loan Agreement, Pledgor will not amend, terminate, rescind,
supplement or otherwise modify the Organizational Documents, or waive any rights thereunder.

               (b) Without the prior written consent of Administrative Agent, which consent may be granted
or withheld in Administrative Agent’s sole and absolute discretion, and except as expressly
provided herein or in the Loan Agreement (or as otherwise approved by the Lenders in accordance
with the Loan Agreement), Pledgor shall not, either directly or indirectly, mortgage, sell, dispose
of (whether directly or indirectly), hypothecate, pledge, create a security interest or Lien upon,
encumber, give, or place in trust, any of the Pledged Interests, or any other Collateral owned by
Pledgor, until the date on which all of the Obligations have been fully and indefeasibly paid in
full and otherwise performed.

               (c) Pledgor
shall, at Pledgor’s cost, maintain the portion of the Collateral owned by Pledgor and shall defend, at Pledgor’s cost, Administrative Agent’s security
interest in and to the Pledged Interests or any other Collateral as applicable, against all persons
and against all claims and demands whatsoever.

               (d) Pledgor shall promptly notify Administrative Agent, in writing, of the imposition at any
time of any claim, option, Lien or encumbrance upon or against all or any portion of the Pledged
Interests and/or any other Collateral.

               (e) Except as expressly provided in the Loan Agreement, without the prior written consent of
Administrative Agent, at no time shall Pledgor cause or allow any Pledged Entity (nor, without
limiting the foregoing, shall Pledgor vote to enable, or take any other action to permit, such
Pledged Entity) to:

                    (i) make
any Distribution under any of the Organizational Documents or otherwise, or purchase or redeem or obligate itself to purchase or redeem any Pledged
Interests in violation of this Agreement or any of the other Loan Documents; or

                    (ii) redeem or cancel any Pledged Interests or issue or authorize to be issued any additional
Pledged Interests; or

                    (iii) breach any of the covenants or obligations relating to (x)
Pledgor under to this Agreement, and (y) Pledgor or the Pledged Entities under the Loan Agreement
or the other Loan Documents.

               (f) Without
limiting the provisions of Section 4.1(b) above, at such time as Pledgor enters
into negotiation with any other party for the sale, transfer, pledge, assignment or encumbrance of,
or the granting of any security interest in the Collateral, or of any other rights of each Pledgor
under the Organizational Documents, Pledgor immediately will notify such other party of the
existence of this Agreement.

               (g) Without
limiting the foregoing provisions of this Section 4.1,except as
expressly provided in the Loan Agreement (or as otherwise approved by the Administrative Agent in
accordance with the Loan Agreement), Pledgor will not agree to admit

13

 

any new members or partners, as the case may be, into the Pledged Entities or transfer its
interests in the Pledged Entities. Any such permitted or approval admission or transfer shall be
made on the condition that such new member or partner, as the case may be, executes and delivers,
and agrees to be bound by an agreement, in form and content substantially identical to this
Agreement, pursuant to which such new member or partner, as the case may be, pledges its interest
in the Pledged Entities to Administrative Agent to secure the Obligations, and such admission or
transfer shall be otherwise in accordance with the terms of the Organizational Documents.

               (h) Pledgor
authorizes Administrative Agent, at the expense of
Pledgor, at any time and from time to time to file any initial financing statements, amendments
thereto and continuation statements, with or without signature of Pledgor, as deemed necessary by
Administrative Agent to perfect its security interest in the Collateral. Pledgor hereby ratifies
its authorization for Administrative Agent to have filed any initial financing statements,
amendments thereto or continuation statements if filed prior to the date of this Agreement. Pledgor
will sign and deliver any financing statements and other documents and information, and perform
such other acts, as Administrative Agent deems necessary or desirable from time to time to
establish and maintain in favor of Administrative Agent valid and perfected security interest in
the Collateral, free of all other Liens, encumbrances, security interests and claims. Pledgor shall
also furnish to Administrative Agent all certificates or other instruments and papers evidencing or
constituting any of the Collateral, together with appropriate endorsements and assignments and any
information relating thereto, and shall do anything Administrative Agent may reasonably deem
necessary or desirable
from time to time from time to time to establish a valid security interest in and to further
protect and perfect its interests in the Collateral.

               (i) Pledgor
upon demand shall pay to Administrative Agent the
amount of any and all reasonable expenses, including the fees and disbursements of counsel and of
any experts and agents, which Administrative Agent may incur in connection with the sale of,
collection from, or other realization upon, any of the Collateral; (ii) the exercise or enforcement
of any of the rights of Administrative Agent hereunder; or (iii) the failure by Pledgor to perform
or observe any of the provisions hereof.

               (j) In no event shall Pledgor do or permit to be done, or omit to do or permit the omission
of, any act or thing, the doing or omission of which, would impair the validity, enforceability,
perfection or priority of the security interests granted herein.

               (k) The Pledgor hereby covenants and agrees that it will not agree to any amendment or repeal
of Section 13.2 of the Operating Agreement and in any event shall promptly notify the
Administrative Agent in writing if for any reason the Pledged Interests shall cease to be
securities for purposes of the UCC in any applicable jurisdiction.

          4.2 Pledgor hereby covenants and agrees that in the event that Administrative Agent, its
designee or any purchaser at a foreclosure sale acquires all or any portion of the Pledged
Interests, notwithstanding anything to the contrary in the Organizational Documents, such Person,
at its option, shall be admitted as a member or partner, as the case may be, of the Pledged
Entities, and shall be entitled to receive all benefits and exercise all rights in connection

14

 

therewith pursuant to the Organizational Documents; provided, however, that such Person shall have
no liability for matters in connection with the Pledged Interests arising or occurring, directly or
indirectly, prior to such Person’s becoming a member or partner, as the case may be, of the Pledged
Entities.

     5. Voting
Rights; Distributions. So long as no Event of Default shall have occurred
and be continuing: (a) Pledgor shall be permitted to exercise all voting and other rights with
respect to the Pledged Interests; and (b) subject to the provisions of the Loan Agreement, Pledgor
shall be entitled to make and receive Distributions paid in respect of the Collateral; provided,
however, that any and all Distributions paid or payable other than in cash in respect of, or in
exchange for, any Collateral shall be, and shall forthwith be delivered to Administrative Agent to
hold as, Collateral and shall, if received by Pledgor, be received in trust for the benefit of
Administrative Agent, be segregated from the other property of Pledgor and be forthwith delivered
to Administrative Agent as Collateral in the same form as so received (with all necessary
endorsements). Upon the occurrence of an Event of Default, except as otherwise expressly provided
in the Loan Agreement, the aforesaid rights shall immediately vest in Administrative Agent in
accordance with Section 2.2(d) hereof.

     6. Power
of Attorney. Pledgor hereby irrevocably appoints and instructs
Administrative Agent (and its nominees and designees) as its attorney-in-fact to take any and all
actions necessary and proper, upon notice to Pledgor, or to carry out the intent of this Agreement
and to perfect and protect the lien, pledge, assignment and security interest of Administrative
Agent created hereunder, provided, however, that Administrative Agent shall not exercise such grant
except during the continuance of an Event of Default. Pledgor hereby ratifies, approves and
confirms all actions taken by Administrative Agent and its agents and attorneys-in-fact pursuant to
this Section 6. Neither Administrative Agent, Lenders nor any said agent or
attorney-in-fact will be liable for any acts of commission or omission nor for any error of
judgment or mistake of fact or law with respect to its dealings with the Collateral, except for
acts constituting recklessness or willful misconduct. This power of attorney, being coupled
with an interest, is irrevocable until the date upon which the Obligations have been indefeasibly
satisfied in full. Without limiting the foregoing, if Pledgor fails to perform any agreement or
obligation contained herein, Administrative Agent may itself perform, or cause performance of,
where necessary or advisable in the name or on behalf of Pledgor, and at the expense of Pledgor, as
applicable.

     7. Rights
and Duties of Administrative Agent; Application of Proceeds.

          7.1 The provisions of this Section 7 are solely for the benefit of
Administrative Agent and the Lenders, and neither Pledgor nor any Borrower shall have any rights or
benefits pursuant to this Section 7. Notwithstanding any other provisions of this Agreement
to the contrary, Administrative Agent (on behalf of the Lenders) may amend the provisions of this
Section 7 and any other provision of this Agreement which govern the relationship and
rights among Administrative Agent and the Lenders, without notice to Pledgor or any Borrower and
without the consent of Pledgor or any Borrower. Through its acceptance of this Agreement, each
Lender agrees to be bound by the terms hereof.

15

 

          7.2 Notwithstanding any provision of this Agreement to the contrary, as between
Administrative Agent and the Lenders, the exercise by Administrative Agent of its rights and
remedies hereunder shall be subject to and in accordance with the provisions of Sections 7.2 and
8.5 of the Loan Agreement.

          7.3 Neither Administrative Agent nor any Lender shall independently acquire for its own
account (whether by way of direct grant, indemnification, subrogation or otherwise), any Lien
affecting the Collateral or any portion thereof. Neither Administrative Agent nor any Lender shall
acquire any Lien on any other property (real or personal, tangible or intangible or otherwise) of
any Transaction Party which Lien secures the Loan or any portion thereof unless such Lien is
granted in favor of Administrative Agent for the benefit of the Lenders, pari passu in accordance
with their respective Pro Rata Shares. Any Liens obtained by the Administrative Agent or any Lender
in violation of this Section 7.3 shall be immediately assigned to the Administrative Agent
for the pari passu benefit of all Lenders in accordance with their respective Pro Rata Shares and
until so assigned shall automatically be deemed held by the Administrative Agent or any such Lender
in trust for the pari passu benefit of all Lenders in accordance with their respective Pro Rata
Shares. If, following a Potential Default or an Event of Default, the Administrative Agent or any
Lender shall receive any payment or proceeds from any Borrower Party in respect of the Obligations,
such Person shall immediately pay such amounts to Administrative Agent for distribution in
accordance with this Agreement. Nothing contained herein shall affect the setoff right of Lenders
as set forth in Section 9.17 of the Loan Agreement.

          7.4 In its capacity as the Lenders’ contractual representative, the Administrative Agent is a
“representative” of the Lenders within the meaning of Section 9-102(a)(72)(E) of the New York
Uniform Commercial Code. The Lenders have empowered and authorized Administrative Agent, on their
behalf, to execute and deliver to the Pledgor, this Agreement and any financing statements,
agreements, documents or instruments as shall be necessary or appropriate to effect the purposes of
this Agreement.

     8. Miscellaneous

          8.1
Notices. All notices, requests, demands and other communications which are
required or may be given under this Agreement shall be in writing and shall be delivered to the
parties hereto in the manner provided in the Loan Agreement to the
following addresses:

	 	 	 
	To Pledgor:

	 	TE/TOUSA Senior, LLC
	 

	 	c/o Technical Olympic USA, Inc.
	 

	 	Suite 500-N
	 

	 	4000 Hollywood Blvd.
	 

	 	Hollywood, FL 33021
	 

	 	Facsimile: (954) 364-4037
	 

	 	Attention: Patricia M. Petersen, Esq.

16

 

	 	 	 
	with a copy to:

	 	Greenberg Traurig P.A.
	 

	 	1221 Brickell Avenue
	 

	 	Miami, FL 33131
	 

	 	Facsimile: (305) 579-0717
	 

	 	Attention: Paul Berkowitz, Esq.
	 
	 	 
	To

	 	Deutsche Bank Trust Company Americas
	Administrative

	 	200 Crescent Court, Suite 550
	Agent:

	 	Dallas, Texas 75201
	 

	 	Facsimile: (214) 740-7910
	 

	 	Attention: Ann Ramsey
	 
	 	 
	With a copy to:

	 	Latham & Watkins LLP
	 

	 	633 West Fifth Street, Suite 4000
	 

	 	Los Angeles, California 90071
	 

	 	Facsimile: (213) 891-8763
	 

	 	Attention: Donald I. Berger, Esq.
	 
	 	 
	To a Lender:

	 	To the Administrative Agent

Any party may change the address to which notices are to be sent by notice of such change to each
other party given as provided above.

          8.2
No Assignment. Pledgor may not assign its rights or obligations under this
Agreement without the prior written consent of the Administrative Agent and, to the extent required
pursuant to the Loan Agreement, the Lenders. Subject to the foregoing, all provisions contained in
this Agreement and the other Loan Documents and in any document or agreement referred to herein or
therein or relating hereto or thereto shall inure to the benefit of the Administrative Agent and
each Lender, their respective successors and assigns, and shall be binding upon Pledgor and its
successors and assigns. Each Lender may assign its interest hereunder in whole or in part in
connection with an assignment of its Pro Rata Share of the Loan pursuant to Section 9.8(1) of the
Loan Agreement.

          8.3
No Assumption of Obligations; No Liability. Neither Administrative Agent nor
Lenders assumes any of the obligations of Pledgor, including, without limitation, any claims that
may arise or exist under or in connection with the Organizational Documents, nor shall
Administrative Agent or Lenders be deemed to be a member or partner, as the case may be, of the
Pledged Entities; Pledgor hereby indemnifies and agrees to hold Administrative Agent and Lenders
harmless from any obligation or liability of Pledgor arising out of the Organizational Documents or
the operation of the Pledged Entities. Neither Administrative Agent, Lenders nor any of their
respective directors, officers, 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 Pledgor or otherwise.
Notwithstanding the foregoing, in the event of a foreclosure by Administrative Agent on, or sale to
Administrative Agent or any Lender(s) of, any of the Pledged Interests, the admission of
Administrative Agent and such Lender(s) to the Pledged Entities and the

17

 

assumption by Administrative Agent and such Lender(s) of any obligations in connection therewith
shall be governed by Section 4.2 hereof.

          8.4
Modification. Except for the provisions of
Section 7 above and any related
defined terms (which, so long as they apply solely to Section 7, may be Modified or waived
with the written consent of Administrative Agent and the Required Lenders), and subject to Section
9.2 of the Loan Agreement, this Agreement may be Modified only by, and none of the terms hereof may
be waived without, a written instrument executed by Pledgor and Administrative Agent.

          8.5
Severability. The illegality or unenforceability of any provision of this
Agreement or any other Loan Document or any instrument or agreement required hereunder or
thereunder shall not in any way affect or impair the legality or enforceability of the remaining
provisions hereof or thereof.

          8.6
No Waiver. No failure or delay on the part of Administrative Agent in the
exercise of any power, right or privilege hereunder shall impair such power, right or privilege or
be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude any other or further exercise thereon for
of any other power, right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

          8.7
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

          8.8
JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, PLEDGOR CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON- EXCLUSIVE JURISDICTION OF THOSE COURTS. PLEDGOR IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT. PLEDGOR WAIVES PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK
LAW.

          8.9
WAIVER OF JURY TRIAL. PLEDGOR, AND BY ACCEPTANCE OF THIS AGREEMENT,
ADMINISTRATIVE AGENT AND EACH OF THE LENDERS, WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
THE PARTIES TO THE LOAN AGREEMENT AGAINST ANY OTHER PARTY OR ANY PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR

18

 

OTHERWISE. PLEDGOR, AND BY ACCEPTANCE OF THIS AGREEMENT, ADMINISTRATIVE AGENT AND EACH OF THE
LENDERS, AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, PLEDGOR, AND BY ACCEPTANCE OF THIS AGREEMENT, ADMINISTRATIVE
AGENT AND EACH OF THE LENDERS, FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF
OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.

          8.10
Construction of Agreement. All words used herein in the plural shall be deemed to
have been used in the singular, and all words used herein in the singular
shall be deemed to have been used in the plural, where the context and construction so require.
Section headings in this Agreement are included for convenience of reference only and are not a
part of this Agreement for any other purpose.

19

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	PLEDGOR:

TE/TOUSA Senior, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-1

 

EXHIBIT A 

Description of Pledged Entities and Pledged Interests

Corporations

	 	 	 
	Pledged Entity	 	Pledged Interest
	None.
	 	N/A

Limited Liability Companies

	 	 	 
	Pledged Entity	 	Pledged Interest
	EH/Transeastern, LLC
	 	100%

Partnerships

	 	 	 
	Pledged Entity	 	Pledged Interest
	None.
	 	N/A

A- l

 

 

EXHIBIT B 

Organizational Documents

B-1

 

 

EXHIBIT C 

State of Formation and Address

     Pledgor was formed under the laws of the State of Delaware and it has the following mailing
address:

TE/TOUSA Senior, LLC

c/o Technical Olympic USA, Inc.

Suite 500-N

4000 Hollywood Blvd.

Hollywood, FL 33021

Facsimile: (954) 364-4037

Attention: Patricia M. Petersen, Esq.

C-1

 

 

Borrowing Base Certificate

Period ending [                    ], 200___

			
	 	 	 
	Deutsche Bank Trust Company Americas

     As Administrative Agent

200 Crescent Court, Suite 550

Dallas, Texas 75201

Facsimile: (214) 740-7910

Attention: Ann M. Ramsey
	 	[                    ], 200___

     Pursuant to that certain Credit Agreement, dated as of August 1, 2005, among
EH/Transeastern, LLC, a limited liability company organized under the laws of the state of
Delaware (the “Operating Company”), TE/TOUSA Senior, LLC, a limited liability company
organized under the laws of the state of Delaware (“TOUSA
Senior” and together with
Operating Company, jointly and severally, the
“Borrowers” and each a “Borrower”); the
Lenders from time to time party thereto (collectively and severally,
the “Lenders”); and
Deutsche Bank Trust Company Americas (“DBTCA”), as administrative agent for the Lenders (in
such capacity, the “Administrative Agent”)(as may be amended or otherwise modified from time
to time, the “Credit Agreement”), the undersigned, a Responsible Officer of each of the
Borrowers, hereby certifies and represents and warrants on behalf of each Borrower,
respectively, as follows:

	1.	 	The attached information is true, complete and correct as of the close of
business on [   ],200___.
	 
	2.	 	This certificate is furnished to the Administrative Agent pursuant to Section 5.1
(9) of the Credit Agreement.
	 
	3.	 	The Borrowing Base has been calculated in accordance with the provisions of the
Credit Agreement.

     Capitalized terms used herein without definition shall have the meaning ascribed to
them in the Credit Agreement.

      

	 	 	 	 	 
	EH/TRANSEASTERN, LLC
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	TE/TOUSA SENIOR, LLC
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

 

 

EH/Transeastern, LLC and TE/TOUSA Senior, LLC
 Borrowing Base Calculation

As of
[                 ], 200      

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Advance	 	 	Borrowing	 
	Categories
	 	Total FMV	 	 	Rate	 	 	Base	 
	 
	Qualified Purchase/Option Agreements
	 	 	 	 	 	 	0.35	 	 	 	 	 
	Unimproved Land
Lots Under Development
	 	 	 	 	 	 	0.50	 	 	 	 	 
	Finished Lots
	 	 	 	 	 	 	0.65	 	 	 	 	 
	Unsold Homes Under Construction
	 	 	 	 	 	 	0.65	 	 	 	 	 
	Completed Unsold Homes
	 	 	 	 	 	 	0.80	 	 	 	 	 
	Sold Homes
	 	 	 	 	 	 	0.80	 	 	 	 	 
	Escrow Proceeds Receivables plus
	 	 	 	 	 	 	0.90	 	 	 	 	 
	Unrestricted Cash in excess of
	 	 	 	 	 	 	 	 	 	 	 	 
	$10,000,000
	 	 	 	 	 	 	1.00	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	$	 	 	 	 	%	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Availability
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Lesser of:
	 	 	 	 	 	 	 	 	 	 	 	 
	A)
	 	 	 	 	 	 	 	 	 	 	 	 
	Borrowing Base
	 	$	 	 	 	 	 	 	 	 	 	 
	Less:
	 	 	 	 	 	 	 	 	 	 	 	 
	Swing Loans Outstanding
	 	$	 	 	 	 	 	 	 	 	 	 
	Revolving Credit Outstanding
	 	 	 	 	 	 	 	 	 	 	 	 
	Term Loans Outstanding
	 	 	 	 	 	 	 	 	 	 	 	 
	Letters of Credit
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total availability
	 	$	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	B)
	 	 	 	 	 	 	 	 	 	 	 	 
	Total maximum credit
	 	$	 	 	 	 	 	 	 	 	 	 
	Less:
	 	 	 	 	 	 	 	 	 	 	 	 
	Swing Loans Outstanding
	 	$	 	 	 	 	 	 	 	 	 	 
	Revolving Credit Outstanding
	 	 	 	 	 	 	 	 	 	 	 	 
	Letters of Credit
	 	 	 	 	 	 	 	 	 	 	'	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total availability
	 	$	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 

Other covenants as a % of BB:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Within
	 	 	Less Than	 	Actual	 	Covenant?
	Qualified Purchase/Option Agreements
	 	 	20.0	%	 	 	 	 	 	 	[Y/N]	 
	Unimproved Land
	 	 	25.0	%	 	 	 	 	 	 	[Y/N]	 
	Lots Under Development and Finished
	 	 	50.0	%	 	 	 	 	 	 	[Y/N]	 
	Lots
	 	 	 	 	 	 	 	 	 	 	 	 
	Unentitled Land
	 	$	40,000,000	 	 	 	 	 	 	 	[Y/N]	 

 

 

EXHIBIT H

TO CREDIT AGREEMENT

BLOCKED DEPOSIT ACCOUNT AGREEMENT

     This Blocked Deposit Account Agreement, dated as of July [___], 2005 (this
“Agreement”), among EH/TRANSEASTERN, LLC, a limited liability company organized under the laws of
the state of Delaware (“EH Transeastem”) and TE/TOUSA SENIOR LLC, a limited liability
company organized under the laws of the state of Delaware
(“TE/TOUSA Senior” and, together
with EH Transeastem, the “Debtors”). DEUTSCHE BANK AG, NEW YORK BRANCH, as administrative agent for
the Lenders (the “Administrative Agent”) and [NAME OF DEPOSIT BANK] in its capacity as a
“bank” as defined in Section 9-102 of the UCC (in such capacity, the “Financial
Institution”). Capitalized terms used but not defined herein
shall have the meaning assigned thereto in to that certain Credit Agreement, dated as of July [___], 2005
(as amended, restated, supplemented or otherwise modified from time to time, the “Security
Agreement”), and entered into by and among Debtors, the Lenders from time to time party
thereto (the “Lenders”), and Administrative Agent.
All references herein to the “UCC”
shall mean the Uniform Commercial Code as in effect in the State of New York.

     Section 1. Establishment of Deposit Account. The Financial Institution hereby confirms and
agrees that:

     (a) The Financial Institution has established account number [IDENTIFY ACCOUNT NUMBER] in the
name “[IDENTIFY EXACT TITLE OF ACCOUNT]” (such account and any successor account, the “Deposit Account”) and the Financial
Institution shall not change the name or account number of the Deposit Account without the prior
written consent of (i) the Administrative Agent and (ii) prior to delivery pursuant to Section
7(a) of a Notice of Sole Control in substantially the form set forth in Exhibit A hereto,
the Debtors; and

     (b) The
Deposit Account is a “deposit account” within the meaning of Section 9-102(a)(29) of
the UCC.

     Section 2. Control of the Deposit Account. If at any time the Financial Institution shall
receive any instructions originated by the Administrative Agent directing the disposition of funds
in the Deposit Account, the Financial Institution shall comply with such instructions without
further consent by the Debtors or any other person. The Financial Institution hereby acknowledges
that it has received notice of the security interest of the Administrative Agent in the Deposit
Account and hereby acknowledges and consents to such lien. The Financial Institution may comply
with instructions from Debtors directing the disposition of funds in the Deposit Account until
such time as the Financial Institution has received a Notice of Sole Control delivered pursuant to
Section 8(a) hereof; provided that if the Debtors are otherwise entitled to issue instructions and

EXHIBIT H-1

 

 

such instructions conflict with any instructions issued the Administrative Agent, the Financial
Institution shall follow the instructions issued by the Administrative Agent.

     Section 3. Subordination of Lien; Waiver of Set-Off. In the event that the Financial
Institution has or subsequently obtains by agreement, by operation of law or otherwise a security
interest in the Deposit Account or any funds credited thereto, the Financial Institution hereby
agrees that such security interest shall be subordinate to the security interest of the
Administrative Agent. Money and other items credited to the Deposit Account will not be subject to
deduction, set-off, banker’s lien, or any other right in favor of any person other than the
Administrative Agent (except that the Financial Institution may set off (i) all amounts due to the
Financial Institution in respect of customary fees and expenses for the routine maintenance and
operation of the Deposit Account and (ii) the face amount of any checks which have been credited to
such Deposit Account but are subsequently returned unpaid because of uncollected or insufficient
funds).

     Section 4. Choice of Law. This Agreement and the Deposit Account shall each be governed by
the laws of the State of New York. Regardless of any provision in any other agreement, for
purposes of the UCC, New York shall be deemed to be the Financial Institution’s jurisdiction
(within the meaning of Section 9-304 of the UCC) and the Deposit Account shall be governed by the
laws of the State of New York.

     Section 5. Conflict with Other Agreements.

     (a) In the event of any conflict between this Agreement (or any portion thereof) and any other
agreement now existing or hereafter entered into, the terms of this Agreement shall prevail;

     (b) No amendment or modification of this Agreement or waiver of any right hereunder shall be
binding on any party hereto unless it is in writing and is signed by all of the parties hereto; and

     (c) The Financial Institution hereby confirms and agrees that:

     (i) There are no other agreements entered into between the Financial
Institution and the Debtors with respect to the Deposit Account; and

     (ii) It has not entered into, and until the termination of this Agreement,
will not enter into, any agreement with any other person relating the Deposit
Account and/or any funds credited thereto pursuant to which it has agreed to
comply with instructions originated by such persons as contemplated by Section
9-104 of the UCC.

     Section 6. Adverse Claims. The Financial Institution does not know of any liens, claims or
encumbrances relating to the Deposit Account. If any person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant

EXHIBIT H-2

 

 

of attachment, execution or similar process) against the Deposit Account, the Financial
Institution will promptly notify the Administrative Agent and the Debtors thereof.

     Section 7. Maintenance of Deposit Account. In addition to, and not in lieu of, the obligation
of the Financial Institution to honor instructions as set forth in Section 2 hereof, the Financial
Institution agrees to maintain the Deposit Account as follows:

     (a) Notice of Sole Control. If at any time the Administrative Agent delivers to the
Financial Institution a Notice of Sole Control in substantially the form set forth in Exhibit A
hereto, the Financial Institution agrees that after receipt of such notice, it will take all
instruction with respect to the Deposit Account solely from the Administrative Agent.

     (b) Statements and Confirmations. The Financial Institution will promptly send copies
of all statements, confirmations and other correspondence concerning the Deposit Account
simultaneously to each of the Debtors and the Administrative Agent at the address for each set
forth in Section 11 of this Agreement; and

     (c) Tax Reporting. The name and taxpayer identification number of the Debtors for all
interest, if any, relating to the Deposit Account, shall be reported to the Internal Revenue
Service and all state and local taxing authorities.

     Section 8. Representations, Warranties and Covenants of the Financial Institution. The
Financial Institution hereby makes the following representations, warranties and covenants:

     (a) The Deposit Account has been established as set forth in Section 1 and such Deposit
Account will be maintained in the manner set forth herein until termination of this Agreement; and

     (b) This Agreement is the valid and legally binding obligation of the Financial Institution.

     Section 9. Indemnification of Financial Institution. The Debtors and the Administrative Agent
hereby agree that (a) the Financial Institution is released from any and all liabilities to the
Debtors and the Administrative Agent arising from the terms of this Agreement and the compliance of
the Financial Institution with the terms hereof, except to the extent that such liabilities arise
from the Financial Institution’s negligence, bad faith or willful misconduct, and (b) each Debtor,
its successors and assigns shall at all times indemnify and save harmless the Financial Institution
from and against any and all claims, actions and suits of others arising out of the terms of this
Agreement or the compliance of the Financial Institution with the terms hereof, and from and
against any and all liabilities, losses, damages, costs, charges, counsel fees and other expenses
of every nature and character arising by reason of the same, until the termination of this
Agreement, except, in any case, to the extent that such arises from the Financial Institution’s own
negligence, bad faith or willful misconduct.

EXHIBIT H-3

 

 

     Section 10. Successors; Assignment. The terms of this Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective corporate successors
or heirs and personal representatives who obtain such rights solely by operation of law. The
Administrative Agent may assign its rights hereunder only with the express written consent of the
Financial Institution and by sending written notice of such assignment to the Debtors.

     Section 11 Notices. Any notice, request or other communication required or permitted to be
given under this Agreement shall be in writing and deemed to have been properly given when
delivered in person, or when sent by telecopy or other electronic means and electronic
confirmation of error free receipt is received or two (2) days after being sent by certified or
registered United States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.

	 	 	 	 	 
	 

	 	To Debtors:
	 	EH/TRANSEASTERN, LLC
	 

	 	 	 	TE/TOUSA SENIOR, LLC
	 

	 	 	 	c/o Technical Olympic USA, Inc.
	 

	 	 	 	Suite 500-N
	 

	 	 	 	4000 Hollywood Blvd.
	 

	 	 	 	Hollywood, FL 33021
	 

	 	 	 	Facsimile: (954) 364-4037
	 

	 	 	 	Attention: Patricia M. Petersen, Esq.
	 
	 	 	 	 
	 

	 	with a copy to:
	 	GREENBERG TRAURIG P.A.

1221 Brickell Avenue 

Miami, FL 33131

Facsimile: (305) 579-0717

Attention: Paul Berkowitz, Esq.
	 
	 	 	 	 
	 

	 	To
Administrative
Agent:
	 	DEUTSCHE BANK TRUST COMPANY

AMERICAS

200 Crescent Court, Suite 550
	 

	 	 	 	Dallas, Texas 75201
	 

	 	 	 	Facsimile: (214) 740-7910
	 

	 	 	 	Attention: Ann Ramsey
	 
	 	 	 	 
	 

	 	With a copy to:
	 	LATHAM & WATKINS LLP
	 

	 	 	 	633 West Fifth Street, Suite 4000
	 

	 	 	 	Los Angeles, California 90071
	 

	 	 	 	Facsimile: (213) 891-8763
	 

	 	 	 	Attention: Donald I. Berger, Esq.
	 
	 	 	 	 
	 

	 	To a Lender:
	 	To the Administrative Agent
	 
	 	 	 	 
	 

	 	Financial
Institution:
	 	[INSERT ADDRESS] 

Attention:

Telecopier

EXHIBIT H-4

 

 

     Any party may change its address for notices in the manner set forth above.

     Section 12. Termination. The obligations of the Financial Institution to the
Administrative Agent pursuant to this Agreement shall continue in effect until the security
interest of the Administrative Agent in the Deposit Account has been terminated pursuant to
the terms of the Security Agreement and the Administrative Agent has notified the Financial
Institution of such termination in writing. The Administrative Agent agrees to provide Notice
of Termination in substantially the form of Exhibit A hereto to the Financial Institution
promptly upon the request of the Debtors on or after the termination of the Administrative
Agent’s security interest in the Deposit Account pursuant to the terms of the Security
Agreement. The termination of this Agreement shall not terminate the Deposit Account or alter
the obligations of the Financial Institution to the Debtors pursuant to any other agreement
with respect to the Deposit Account.

     Section 13. Counterparts. This Agreement may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto may execute
this Agreement by signing and delivering one or more counterparts.

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

	 	 	 	 	 	 	 
	 	 	EH/TRANSEASTERN, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

EXHIBIT H-5

 

 

	 	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST
COMPANY AMERICAS, as
 Administrative
Agent
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF FINANCIAL INSTITUTION],

as Financial Institution
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

EXHIBIT H-6

 

 

EXHIBIT A

TO DEPOSIT ACCOUNT CONTROL AGREEMENT

[Letterhead of Administrative Agent]

[Date]

[Name and Address of Financial Institution]

Attention:

     Re: Notice of Sole Control

Ladies and Gentlemen:

     As referenced in the Blocked Deposit Account Agreement, dated as of                     , 200___, among
EH/TRANSEASTERN, LLC and TE/TOUSA SENIOR, LLC, you and the undersigned (a copy of which is
attached), we hereby give you notice of our sole control over deposit account number                      (the
“Deposit Account”) and all financial assets credited thereto. You are hereby instructed not to
accept any direction, instructions or entitlement orders with respect to the Deposit Account or the
financial assets credited thereto from any person other than the undersigned, unless otherwise
ordered by a court of competent jurisdiction.

     You are instructed to deliver a copy of this notice by facsimile transmission to
EH/TRANSEASTERN, LLC and TE/TOUSA SENIOR, LLC.

	 	 	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST COMPANY AMERICAS,
	 	 	as Administrative Agent
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

			
	cc:	 	EH/TRANSEASTERN, LLC 

TE/TOUSA SENIOR, LLC

EXHIBIT H-A-1

 

 

EXHIBIT B

TO BLOCKED DEPOSIT ACCOUNT AGREEMENT

[Letterhead of the Administrative Agent]

[Date]

[Name and Address of Financial Institution]

Attention:

     Re: Termination of Blocked Deposit Account Agreement

     You are hereby notified that the Blocked Deposit Account Agreement, dated as of
                    , 200[_], among EH/TRANSEASTERN, LLC and TE/TOUSA SENIOR, LLC, you and the undersigned (a
copy of which is attached) has been terminated as of
                    
, 20___ , and, as of such date, you have no
further obligations to the undersigned pursuant to such Agreement. Notwithstanding any previous
instructions to you, you are hereby instructed to accept all future directions with
respect to account number(s)                      from EH/TRANSEASTERN, LLC and TE/TOUSA SENIOR, LLC. This
notice terminates any obligations you may have to the undersigned with respect to such account,
however nothing contained in this notice shall alter any obligations which you may otherwise owe
to EH/TRANSEASTERN, LLC and TE/TOUSA SENIOR, LLC pursuant to any other agreement.

     You are instructed to deliver a copy of this notice by facsimile transmission to
EH/TRANSEASTERN, LLC and to TE/TOUSA SENIOR, LLC.

	 	 	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST COMPANY AMERICAS,
	 	 	as Administrative Agent
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

Exhibit H-B-1

 

 

EXHIBIT I TO CREDIT AGREEMENT

REQUEST FOR BORROWING

August 1, 2005

			
	TO:	 	Deutsche Bank Trust Company Americas,

as Administrative Agent

90 Hudson Street Mail Stop: JCY05-0511

Jersey City, NJ 07302

Attention: Mr. Deirdre Wall

Facsimile: (201) 593-2310

Phone: (201)-593-2170

     Reference is made to that certain Credit Agreement, dated as of August 1, 2005 (as it
may be Modified, the “Credit Agreement”; capitalized terms used herein but not defined herein shall
have the meanings given to them in the Credit Agreement), and entered into by and among EH/
TRANSEASTERN, LLC, a limited liability company organized under the laws of the state of Delaware
(“EH Transeastern”) and TE/TOUSA SENIOR LLC, a limited liability company organized under the laws
of the state of Delaware (“TE/TOUSA Senior” and,
together with EH Transeastern, the “Borrowers”),
the Lenders from time to time party thereto (the “Lenders”), and DEUTSCHE BANK TRUST COMPANY
AMERICAS in its capacity as Administrative Agent for the Lenders (in such capacity, together with
its successors in such capacity, the “Administrative Agent”).

     Pursuant to Sections 2.1, 2.2(a), 2.2(b) and 2.5 of the Credit Agreement, the Borrowers hereby
elect to make the following Borrowings:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.	 	 	Date of Borrowings:
	 	 
	 	August 1, 2005

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.	 	 	Amount of Borrowings:
	 	 	 	$	335,000,000	 

I-1

 

 

     3. Interest Rate Options:

     o (i) Base Rate Borrowings

     þ (ii) LIBO Rate Borrowings for an initial Interest Period of
one month

You are hereby irrevocably instructed to disburse such amounts to the undersigned at the account
designated on Exhibit A attached hereto.

     The Borrowers hereby represent and warrant to the Administrative Agent and the Lenders that:

     (a) the undersigned Person signing on behalf of the Borrower is a Responsible Officer
of each such Borrower;

     (b) in the case of any Swing Line Loan hereunder, after giving effect to the proposed
Borrowings, the Total Utilization of Revolving Commitments does not exceed the Revolving
Commitments;

     (c) in the case of any Revolving Loan hereunder, after giving effect to the proposed
Borrowings, the Total Utilization of Revolving Commitments does not exceed the Available
Credit;

     (d) the representations and warranties of the Borrowers set forth in the Credit
Agreement and in the other Loan Documents are true and correct in all material respects
(subject to updates as approved by the Administrative Agent) on and as of the date hereof
(or, if such representation and warranty is expressly stated to have been made as of a
specific date, as of such specific date);

     (e) as of the date hereof and immediately after giving effect to the Borrowings
requested hereby, no Potential Default or Event of Default shall have occurred and be
continuing; and

          (f) after giving effect to the Borrowings requested hereby, the Borrowers remain in compliance
with the covenants set forth in Article V and Article VI of the Credit Agreement.

[SIGNATURE PAGE APPEARS ON NEXT PAGE]

I-2

 

 

     BORROWERS:

	 	 	 	 	 	 	 
	 	 	EH/TRANSEASTERN, LLC
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tommy L. McAden	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Tommy L. McAden
	 	 	Title: Executive Vice President
	 
	 	 	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tommy L. McAden	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Tommy L. McAden
	 	 	Title: Executive Vice President

I-3

 

 

EXHIBIT A

Wiring Instructions

See other closing documents for wiring instructions to Chicago Title.

I-4

 

 

EXHIBIT J TO CREDIT AGREEMENT

FUNDING NOTICE

     Reference is made to that certain Credit Agreement, dated as of August 1, 2005 (as
it may be Modified, the “Credit Agreement”; capitalized terms used herein but not defined herein
shall have the meanings given to them in the Credit Agreement), and entered into by and among
EH/TRANSEASTERN, LLC, a limited liability company organized under the
laws of the state of
Delaware (“EH Transeastern”) and TE/TOUSA SENIOR LLC, a limited liability company organized
under the laws of the state of Delaware “TE/TOUSA Senior” and, together with EH
Transeastern, the “Borrowers”), the Lenders from
time to time party thereto (the “Lenders”), and
DEUTSCHE BANK TRUST COMPANY AMERICAS in its capacity as Administrative Agent for the Lenders (in
such capacity, together with its successors in such capacity, the
“Administrative Agent”).

     Pursuant to Sections 2.1, 2.2(a) and 2.2(b) of the Credit Agreement, Borrowers desire that
Lenders make the following Loans to the Borrowers in accordance with the applicable terms and
conditions of the Credit Agreement on August 1, 2005 (the
“Credit Date”):

	 	 	 	 	 	 	 	 	 	 	 
	 	 	1.	 	Revolving Loans	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	o	 	Base Rate Loans:	 	$	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	o	 	Eurodollar Rate Loans, with  an  Initial Interest Period of                       Month(s):	 	$	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	2.	 	Term Loan:	 	$	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	o	 	Base Rate Loans:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	þ	 	Eurodollar Rate Loans,  with  an Initial Interest Period of 1 Month:	 	$	335,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	3.	 	Swing Line Loans:	 	$	 	 

     Company hereby certifies that:

     (i) after making the Loans requested on the Credit Date, the Total Utilization of
Revolving Commitments shall not exceed the Revolving Commitments then in effect;

     (ii) as of the Credit Date, the representations and warranties contained in the Credit
Agreement and each other Loan Document are true, correct and complete in all material respects on
and as of such Credit Date to the same extent as though made on and as of such date, except to the
extent, including, without limitation, with respect to Section 4.2, such representations and
warranties specifically relate to an earlier date, in which case such representations and
warranties are true, correct and complete in all material respects on and as of such earlier date;
and

     (iii) as of the Credit Date, no event has occurred and is continuing or would result
from the consummation of the borrowing contemplated hereby that would constitute an Event of
Default or a Potential Default.

[Signature Page Follows]

J-l

 

 

	 	 	 	 	 	 	 
	Date: August 1, 2005	 	EH/TRANSEASTERN, LLC
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tommy L. McAden	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Tommy L. McAden
	 	 	Title: EVP
	 
	 	 	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tommy L. McAden	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Tommy L. McAden
	 	 	Title: EVP

 

 

EXHIBIT
K TO CREDIT AGREEMENT 
FORM OF LETTER OF CREDIT REQUEST

Dated 1

Deutsche Bank Trust Company Americas

as Administrative Agent for the Lenders party

to the Credit Agreement referred to below

60 Wall Street, 38th Floor

MS:NYC60-3812

New York, NY 10005

Attention: [Global Loan Operations, Standby Letter of
Credit Unit]

Issuing Bank: 2

Dear Ladies and Gentlemen:

     Reference is made to that certain Credit Agreement, dated as of August 1, 2005 (as it may be
Modified, the “Credit Agreement”; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among EH/Transeastern, LLC and TE/TOUSA Senior, LLC
(jointly and severally, the “Borrowers” and each a
“Borrower”), the Lenders party thereto from
time to time, and Deutsche Bank Trust Company Americas, as Administrative Agent for the Lenders.

     We hereby request that the Issuing Bank, in its individual capacity, issue a Letter of Credit
for the account of [name of applicable Borrower Party] on 3 (the “Date of
Issuance”), which Letter of Credit shall be denominated in United States Dollars and shall be in
the aggregate amount of 4.

     The
beneficiary of the requested Letter of Credit will be 5, and such
Letter of Credit will be in support of
1
and will have a stated expiration date of 2.

 

			
	1	 	Date of Letter of Credit Request. On or after the Initial Borrowing Date and prior to
the 30th day prior to the Revolving Loan Maturity Date.
	 
	2	 	If Letter of Credit is to be issued by Deutsche Bank AG, New York Branch, insert:
Deutsche Bank AG, New York Branch, Global Loan Operations, Standby Letter of Credit Unit, 60
Wall Street, New York, New York 10005, MS NYC 60-3812. For Letters of Credit to be issued by
other Issuing Bank insert name and address of applicable Issuing Bank.
	 
	3	 	Date of Issuance, which shall be at least three (3) Business Days from the date hereof
(or such shorter period as is reasonably acceptable to the Issuing Bank).
	 
	4	 	Aggregate initial amount of the Letter of Credit.
	 
	5	 	Insert name and address of beneficiary.

K-1

 

 

          The Letter of Credit will contain the terms set forth in Schedule A.

We hereby certify that:

          (1) the representations and warranties contained in Article IV of the Credit Agreement and in
the other Loan Documents are true and correct in all material respects on and as of the Date of
Issuance to the same extent as though made on and as of such date, except to the extent such
representations and warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material respects on and as
of such earlier date; and

          (2) no Potential Default or Event of Default has occurred and is continuing nor, after giving
effect to the issuance of the Letter of Credit requested hereby, would such a Potential Default or
an Event of Default occur.

	 	 	 	 	 	 	 
	 	 	EH/TRANSEASTERN, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

 

			
	1	 	Insert brief description of supportable obligations.
	 
	2	 	Insert the last date upon which drafts may be presented which may not be later than
the dates referred to in Section 2.4(d) of the Credit Agreement.

K-2

 

 

SCHEDULE A TO

LETTER OF CREDIT REQUEST

TERMS

K-Schedule A-l

 

 

ENVIRONMENTAL INDEMNITY AGREEMENT

     THIS ENVIRONMENTAL INDEMNITY AGREEMENT (“Agreement”) is dated as of August 1, 2005, by and
among EH/TRANSEASTERN, LLC, a limited liability company organized under the laws of the state of
Delaware and TE/TOUSA SENIOR LLC, a limited liability company organized under the laws of the state
of Delaware (“Borrowers” and each a
“Borrower”), TOUSA HOMES, L.P., a Delaware limited
partnership (“TOUSA Member”), and TECHNICAL OLYMPIC USA, INC., a Delaware corporation
(together with Borrowers and TOUSA Member, jointly and severally,
“Indemnitors”), in favor
of DEUTSCHE BANK TRUST COMPANY AMERICAS, in its capacity as Administrative Agent for the Lenders
described below (in such capacity, together with its successors in such capacity, the
“Administrative Agent”), with reference to the following facts:

RECITALS

     A. Pursuant to that certain Credit Agreement dated as of the date hereof (as the same may be
Modified from time to time, the “Loan Agreement”) by and among Borrowers, the Lenders from time to
time party thereto (the “Lenders”), and
Administrative Agent (together with the Lender, the “Lender
Parties”), the Lenders have agreed to make a loan to Borrowers in an initial principal amount of
$450,000,000 (the “Loan”), consisting of $335,000,000 aggregate principal amount of Term Loans, and
up to $115,000,000 aggregate principal amount of Revolving Commitments.

     B. The obligations of Indemnitors with respect to the Loan are secured, in part, by the
Security Instruments, which encumber the Mortgaged Property.

     C. One of the conditions precedent to the Lenders’ obligation to make the Loan is that
Indemnitors enter into this Agreement.

     D. All capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to such terms in the Loan Agreement.

AGREEMENT

     NOW THEREFORE, in consideration of the making of the Loan by Lenders to Borrowers, and for
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the Indemnitors agree to the following:

     1. In the event any Lender Party is obligated by an applicable federal, state or local
law, ordinance or regulation or otherwise directed by any governmental agency or authority, to (a)
clean-up, remove or encapsulate or cause the clean-up, removal, or encapsulation of any Hazardous
Materials from the Mortgaged Property, or (b) to perform any assessment or remedial acts with
respect to any underground storage tank (“UST”) located in, on, over, under, from,
affecting, or about the Mortgaged Property, Indemnitors shall, jointly and severally, (i) promptly
undertake to arrange for such assessment clean-up, removal, encapsulation or remedial acts, (ii)
exercise their commercially reasonable efforts to ensure that such assessment clean-up, removal,
encapsulation or remedial acts shall be conducted in a timely and diligent manner, and (iii)

1

 

assume the cost and expense of such assessment clean-up, removal, encapsulation or
remedial acts.

     2. In the event that at any time during which the Mortgaged Property is owned by a party
having the benefit of this Agreement, any lien is recorded or filed against the Mortgaged Property
pursuant to any federal, state or local law, ordinance, rule or regulation regarding Hazardous
Materials or USTs, Indemnitors shall, jointly and severally, not later than thirty (30) days
following any Indemnitors’ receipt of notification of the filing of such lien, satisfy the claim
and cause the lien thereunder to be discharged of record (whether by payment, bonding or
otherwise).

     3. In addition to the foregoing, Indemnitors shall, jointly and severally, protect, defend,
indemnify and save harmless the Lender Parties and their officers, directors, shareholders, agents
and employees (collectively, the “Indemnified Parties”) from and against any and all
claims, actions, proceedings, losses, costs, damages, liabilities, obligations, causes of action,
diminution in value of the Mortgaged Property (including any diminution in the sales price of the
Mortgaged Property suffered by any Lender Party or any of its respective Affiliates), fines,
penalties or expenses (including without limitation attorneys’ fees and expenditures for
investigation, removal, clean-up, and remedial costs) imposed upon or incurred by or asserted
against the Indemnified Parties by reason of: (a) the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release, threatened release, handling or transportation of any
Hazardous Materials in, on, under, over, from, or affecting the Mortgaged Property; (b) the
improper installation, maintenance or removal of any USTs on the Mortgaged Property; (c) any
personal injury (including wrongful death) or property damage (real or personal) arising out of or
related to any such Hazardous Materials or USTs in, on, under, over, from or affecting the
Mortgaged Property; (d) any lawsuit brought or threatened, settlement reached, or government
hearing, investigation, inquiry, proceeding or order relating to any such Hazardous Materials in,
on, under, over, from or affecting the Mortgaged Property; or (e) any violation of laws, orders,
regulations, requirements, or demands of governmental authorities which are based upon or in any
way related to any such Hazardous Materials or USTs in, on, under, over, from or affecting the
Mortgaged Property including, without limitation, the reasonable costs and expenses of any remedial
action, consultants’ fees, reasonable attorneys’ fees, investigation and laboratory fees, court
costs, and litigation expenses. Administrative Agent shall have the right to approve any counsel
selected to defend any Lender Party or the other Indemnified Parties hereunder.

     4. Notwithstanding anything to the contrary contained herein, Indemnitors shall not be liable
for any Hazardous Materials first placed on or under the Mortgaged Property (or any portion
thereof) after ownership and control of the Mortgaged Property has been transferred to a third
party following foreclosure or exercise of the power of sale under the Security Instrument
(“Transfer of Ownership”); provided, however, that (i) the migration of any Hazardous
Materials placed in, under, over, from or affecting the Mortgaged Property (or such portion
thereof), which materials were present prior to Transfer of Ownership, shall remain the joint and
several liability of Indemnitors; and (ii) Indemnitors shall have the burden of proving that such
environmental condition occurred, subsequent to Transfer of Ownership.

     5. Notwithstanding anything to the contrary contained in the Loan Documents, this Agreement is
not secured by the Mortgaged Property and the obligations herein are separate and

2

 

distinct from any obligations of the Indemnitors or Borrowers related to environmental
matters which are set forth in the Security Instrument and the other Loan Documents.

     6. Each of the Indemnitors expressly acknowledge as follows: (a) that the effectiveness of
this Agreement shall not be affected by and shall expressly survive the extinguishment of the
aforementioned debt from Borrowers to any Lender Party; (b) that the effectiveness of this
Agreement shall not be affected by and shall expressly survive the sale of the Mortgaged Property
by Lender Parties or any of their respective Affiliates in the event that any such Person becomes
the owner of all or any interest in the Mortgaged Property; (c) that this Agreement is not being
given as security for Borrowers’ obligation to repay the Loan or as an assurance to the Lender
Parties that the Mortgaged Property will retain sufficient value to satisfy the obligations of
Borrowers to repay the Loan; and (d) that this Agreement is being given solely to allocate, as
between Borrowers, Guarantors and the Lender Parties, the risk of expenses which may become
necessary because of environmental problems with respect to the Mortgaged Property.

     7. Each reference herein to the Administrative Agent, Lenders or any Lender Party shall be
deemed to include their successors and assigns, and any one or more purchasers of the Loan or the
Mortgaged Property, if purchased from any Lender Party, to whose favor the provisions of this
Agreement shall also inure. No consent by the Indemnitors shall be required for any assignment or
reassignment of the rights of the Lender Parties hereunder to any one or more purchasers of the
Loan or the Mortgaged Property or any portion thereof; provided, however, Indemnitors’ liability
hereunder is not increased or decreased as a result of such assignment or reassignment. Each
reference herein to the Indemnitors shall be deemed to include the heirs, executors,
administrators, legal representatives, successors and assigns of the Indemnitors, all of whom shall
be bound by the provisions of this Agreement.

     8. Each of the Indemnitors (and their representative, executing below, if any) has full power,
authority and legal right to execute this Agreement and to perform all its obligations under this
Agreement.

     9. This Agreement may not be modified, amended, waived, changed, discharged or terminated
orally or by any act or failure to act on the part of the Administrative Agent, the Lenders or the
Indemnitors, but only by an agreement in writing signed by the party against whom enforcement of
any modification, amendment, waiver, extension, change, discharge or termination is sought.

     10. PURSUANT TO SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK,
INDEMNITORS AGREE THAT THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND INTERPRETED AS TO VALIDITY,
ENFORCEMENT AND IN ALL OTHER RESPECTS, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THIS
AGREEMENT SHALL ALSO CONSTITUTE AN INDEMNITY AGREEMENT UNDER ANY APPLICABLE PROVISIONS OF THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT (42 U.S.C. SECTION 9601, ET
SEQ.), AS NOW OR HEREAFTER AMENDED.

3

 

     11. Should any litigation be commenced between the Indemnitors, the Administrative
Agent and the Lenders with respect to this Agreement, the party prevailing in such litigation shall
be entitled, in addition to such other relief as may be granted, to a reasonable sum for attorneys’
fees and court costs in such litigation, including without limitation any appeals or bankruptcy
proceedings. All costs and other payments required to be paid by Indemnitors hereunder on behalf of
the Lender Parties or otherwise shall be due on demand by the Administrative Agent, on behalf of
the Lenders. If those payments are not paid promptly by Indemnitors on demand by the Administrative
Agent, on behalf of the Lenders, and if the Administrative Agent or any Lender shall advance any
funds in payment thereof, Indemnitors shall nevertheless remain jointly and severally liable for
all amounts due hereunder plus interest at the default rate under Section 2.9(5) of the Loan
Agreement on all such funds advanced by the Administrative Agent or any Lender until repaid by
Indemnitors, in addition to all other rights and remedies of the Administrative Agent or the
Lenders hereunder or by law.

     12. INDEMNITORS, ADMINISTRATIVE AGENT AND LENDERS, BY THEIR ACCEPTANCE OF THIS AGREEMENT,
MUTUALLY, EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY FOR ANY PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, IN THE INTEREST OF AVOIDING DELAYS AND
EXPENSES ASSOCIATED WITH JURY TRIALS.

[Signature on Next Page]

4

 

     IN WITNESS WHEREOF, each Indemnitor has duly executed and delivered
this Agreement as of the day first written above to become effective as stated
herein.

	 	 	 	 	 	 	 
	 	 	INDEMNITORS:
	 
	 	 	 	 	 	 
	 	 	EH/TRANSEASTERN, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TE/TOUSA SENIOR LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TOUSA HOMES, L.P.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TECHNICAL OLYMPIC USA, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

5

 

List of Attachments 

Schedule A — Legal Description

2

 

SCHEDULE A

Legal Description

 

 

EXHIBIT M TO CREDIT AGREEMENT

FORM OF COMPLIANCE CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:

     1. I am the Chief Financial Officer of each of EH/Transeastern, LLC, a Delaware limited
liability company (“Company”) and TE/TOUSA Senior, LLC, a Delaware limited liability company
(“Parent”).

     2. I have reviewed the terms of that certain Credit Agreement, dated as of August 1, 2005 (as
it may be Modified, the “Credit Agreement”; capitalized terms used herein but not defined herein
shall have the meanings given to them in the Credit Agreement), and entered into by and among
Company, Parent, the Lenders party thereto from time to time, and Deutsche Bank Trust Company
Americas, as Administrative Agent for the Lenders, and I have made, or have caused to be made under
my supervision, a review in reasonable detail of the transactions and condition of Company and
Parent during the accounting period covered by the attached financial statements.

     3. The examination described in paragraph 2 above did not disclose, and I have no knowledge
of, the existence of any condition or event which constitutes an Event of Default, or Potential
Default during or at the end of the accounting period covered by the attached financial statements
or as of the date of this Certificate, except as set forth in a separate attachment, if any, to
this Certificate, describing in reasonable detail, the nature of the condition or event, the period
during which it has existed and the action which Company has taken, is taking, or proposes to take
with respect to each such condition or event.

     The foregoing certifications, together with the computations set forth in Annex A hereto and the financial
statements delivered with this Certificate in support hereof, are made and delivered                     , 200___, pursuant to
Section 5.1(3)(i) of the Credit Agreement.

	 	 	 	 	 	 	 
	 	 	EH/TRANSEASTERN, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:
	 	 	Title: Chief Financial Officer
	 
	 	 	 	 	 	 
	 	 	TE/TOUSA SENIOR, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:
	 	 	Title: Chief Financial Officer

M-l

 

 

ANNEX A TO

COMPLIANCE CERTIFICATE

FOR THE FISCAL [QUARTER] [YEAR] ENDING [mm/dd/yy].

	 	 	 	 	 	 	 	 	 	 	 
	1. Consolidated EBITDA: sum of (a) through (n) =	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(a	)	 	Consolidated Net Income:	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(b	)	 	Consolidated Interest Expense (but only to the extent there was a
corresponding reduction to Consolidated Net Income):	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(c	)	 	provisions for Taxes based on income or gain,
franchise, unitary, value added, single business or other
similar concepts (but only to the
extent there was a corresponding reduction to Consolidated Net Income):	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(d	)	 	total depreciation expense (but only to the extent there was a
corresponding reduction to Consolidated Net Income):	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(e	)	 	total amortization expense
(including, without limitation, transaction fees)
(but only to the extent there was a
corresponding reduction to Consolidated Net Income):	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(f	)	 	fees and expenses directly incurred or
reimbursed by Parent or any of its Consolidated Subsidiaries
in connection with the Transactions (but only to the extent
there was a corresponding reduction to
Consolidated Net Income):	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(g	)	 	Extraordinary Gains/Losses (but only to the extent there was a
corresponding reduction to Consolidated Net Income):	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(h	)	 	debt prepayment fees incurred in connection with the
prepayment of any Indebtedness (but only to the extent there was a
corresponding reduction to Consolidated Net Income):	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(i	)	 	Permitted Tax Distributions and any other Restricted Payments
permitted by subsections [___] of Section 6.5
of the Credit Agreement (but only to the extent there was a
corresponding reduction to Consolidated Net Income):	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(j	)	 	write-offs, write-downs, non-cash charges and other
non-Cash items (excluding any such non-Cash item to the extent that it
represents an accrual or reserve for potential Cash items in any future period
or amortization of a prepaid Cash item that was paid in a prior period) (but
only to the extent there was a corresponding reduction to Consolidated Net
Income):	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(k	)	 	indemnity or insurance payments received in connection with an
Acquisition (but only to the extent there was a corresponding reduction
to Consolidated Net Income):	 	$[     ,     ,     ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(l	)	 	any amount by which the basis in any property or asset was increased
due to purchase accounting (due to purchase accounting related
to the Transactions) or “mark to market” during such period or
any prior period to the extent that such amount was recognized
as an item of	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Exhibit M-2	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	expense reducing Consolidated Net Income, whether upon sale or
revaluation of such property or asset, collection of principal, amortization,
or otherwise (but only to the extent there was a corresponding reduction
to Consolidated Net Income):	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(m	)	 	minority interest expense (but only to the extent there was a
corresponding reduction to Consolidated Net Income):	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	2. Consolidated Cash Interest Expense:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	3. Consolidated Interest Expense:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	4. Consolidated Net Income: (i) + (ii) — (iii) =	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(i	)	 	the net income (or loss) of Parent and its Consolidated Subsidiaries
on a consolidated basis for such period taken as a single accounting period determined
in conformity with GAAP:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(ii)
	 	(a)
	 	the income (or loss) of any Person accrued prior to the date it
becomes a Consolidated Subsidiary of Parent or is merged into or
consolidated with Parent or any of its Consolidated Subsidiaries
or that Person’s Assets are acquired by Parent or any of its Consolidated
Subsidiaries (but only to the extent included in computing such net income
(or loss) in accordance with GAAP and without duplication):
	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(b)
	 	the income of any Consolidated Subsidiary of
Parent to the extent that the declaration or payment of dividends
or similar distributions by that Consolidated Subsidiary of that
income is not at the time permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that
Consolidated Subsidiary (but only to the extent included in
computing such net income (or loss) in accordance with
GAAP and without duplication):
	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(c)
	 	any after-tax gains or losses attributable to
returned surplus Assets of any Pension Plan (but only to the
extent included in computing such net
income (or loss) in accordance with GAAP and without duplication):
	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(d)
	 	(to the extent not included in clauses (a)
through (c) above) any net extraordinary gains (or plus net
extraordinary losses) (but only to the extent included in
computing such net income (or loss) in accordance
with GAAP and without duplication):
	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	5. Consolidated Senior Debt:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	6. Consolidated Total Debt:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	7. Consolidated
Interest Coverage Ratio: (i)/(ii) =	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	M-3	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	(i	)	 	Consolidated EBITDA

for the twelve-month period ending on such date:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(ii)
	 	Consolidated Cash Interest Expense

for the twelve-month period ending on such date:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Actual:                        
	 	_.___:1.00
	 

	 	 	 	 	 	 	 	Required:                    
	 	_.___:1.00
	 
	 	 	 	 	 	 	 	 	 	 
	8. Total Leverage Ratio: (i)/(ii) =	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(i	)	 	Consolidated Total Debt	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(ii)
	 	Consolidated EBITDA

for the four Fiscal Quarters ending on such date:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Actual:                        
	 	_.___:1.00
	 

	 	 	 	 	 	 	 	Required:                    
	 	_.___:1.00
	 
	 	 	 	 	 	 	 	 	 	 
	9. Senior Leverage Ratio: (i)/(ii) =	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(i	)	 	Consolidated Senior Debt	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(ii)
	 	Consolidated EBITDA

for the four Fiscal Quarters ending on such date:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Actual:                        
	 	_.___:l.00
	 

	 	 	 	 	 	 	 	Required:                    
	 	_.___:1.00
	 
	 	 	 	 	 	 	 	 	 	 
	10. Minimum Liquidity I: (a) + (b) =	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(a	)	 	Revolving Commitments then in effect less Total Utilization
of Revolving Commitments:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(b	)	 	aggregate amount of Cash, Cash Equivalents and
Foreign Cash Equivalents held by or credited to accounts of
the Parent and its
Consolidated Subsidiaries:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Actual:                        
	 	$[ __, __, __ ]
	 

	 	 	 	 	 	 	 	Required:                    
	 	[$25,000,000]
	 
	 	 	 	 	 	 	 	 	 	 
	11. Minimum Liquidity II: (a) + (b) =	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(a	)	 	Revolving Commitments then in effect less Total Utilization
of Revolving Commitments:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	(b	)	 	aggregate amount of Cash and Cash Equivalents subject to Blocked
Deposit Account Control Agreements or Blocked Securities Account Control
Agreements
and Foreign Cash Equivalents subject to Foreign Charges Over Bank Accounts:	 	$[ __, __, __ ]
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	M-4	 	 

 

 

ASSIGNMENT OF CONTRACTS, LICENSES, PERMITS,

AGREEMENTS, WARRANTIES AND APPROVALS

          THIS ASSIGNMENT OF CONTRACTS, LICENSES, PERMITS, AGREEMENTS,
WARRANTIES AND APPROVALS (this “Assignment”), dated as of the [                    ] day of July, 2005, is
made by
[                                        ],
a [                    ] having
an address at [                                        ] (“Assignor”), to DEUTSCHE BANK TRUST COMPANY
AMERICAS, a New York corporation having an office at 60 Wall Street, New York, New York 10005, as
Administrative Agent for the Lenders (the “Agent”).

R
E C I T A L S :

          [Assignor is the owner of the fee simple interest in the real property described on
Exhibit A attached hereto (the “Project”);] [Assignor is the holder of certain rights to
acquire the real property described on Exhibit A attached hereto (the “Project”);]

          Assignor and Agent are parties to a Credit Agreement dated as of the date hereof by and among
EH/Transeastem, LLC, a limited liability company organized under the laws of the state of Delaware,
and TE/TOUSA Senior LLC, a limited liability company organized under the laws of the state of
Delaware, as borrowers (“Borrower”); the lenders from time to time party thereto (the “Lenders”);
and Deutsche Bank Trust Company Americas, as administrative agent for the Lenders (said Credit
Agreement, as modified and supplemented and in effect from time to time, the “Credit Agreement”:
capitalized terms used but not defined herein having the meanings set forth in the Credit
Agreement). The Credit Agreement provides for certain loans (the “Loans”) to be made by Agent to
Borrowers in an original maximum aggregate principal amount of Five Hundred Million Dollars
($500,000,000.00).

          [Assignor has executed and delivered a Mortgage with Security Agreement, Assignment of Leases
and Rents and Fixture Filing, dated as of the date hereof (in its original form and as hereafter
amended, the “Mortgage”), establishing a first priority lien on the Project (subject to the
Permitted Encumbrances) to secure the payment and performance of the Obligations.]

          The execution and delivery of this Assignment by Borrowers to Agent is a condition precedent
to the obligation of Lenders to make the Loans.

          NOW, THEREFORE, for good and valuable consideration, receipt of which by the parties hereto
is hereby acknowledged, the parties hereto hereby agree as follows:

          Section 1. Secured Obligations. This Assignment is made for the purpose
of securing the following (collectively, the “Secured Obligations”):

     (i) the prompt and punctual payment when due of all amounts now outstanding or
hereafter becoming due and payable under the Credit Agreement and the other Loan Documents
and all modifications thereof; and

     (ii) the performance and observance of all other Obligations under the
Loan Documents.

          Section 2. Assignment. As security for the payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Secured Obligations, now existing
or hereafter arising, Assignor hereby assigns, transfers, and pledges to Agent, and hereby grants
to Agent a security interest in, all of Assignor’s right, title and interest, whether now owned or
hereafter acquired, in

 

 

to and under all agreements to which Assignor is a party executed in connection with the
acquisition, entitlement, development, construction, operation, management and sale of the Project
(including, without limitation, agreements for the sale, lease or exchange of goods or other
property, and/or the performance of services), and all licenses, permits, variances and
certificates used in connection with the development, construction, operation and sale of the
Project (including, without limitation, business licenses, state health department licenses, food
service licenses, liquor licenses, licenses to conduct business, certificates of need and all such
other permits, licenses and rights, obtained from any Governmental Authority or private Person
concerning development, construction, ownership, operation, use, occupancy or transfer of the
Project) (each a “Contract”; collectively, the “Contracts”). Without limiting the foregoing, the
term “Contracts” shall include:

     (i) those certain agreements and contracts, licenses, permits and other matters
listed on Exhibit B attached hereto;

     (ii) all rights of Assignor to receive monies due and to become due under or
pursuant to the Contracts;

     (iii) all claims of Assignor for damages arising out of or for breach of or
default under the Contracts;

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

     (v) to the extent not included in the foregoing, all rights of Assignor in and to
all cash and non-cash proceeds, products, offspring, rents, revenues, issues, profits,
royalties, income, benefits, additions, substitutions, replacements and accessions of and to
any and all of the foregoing.

          Section3. Exercise of Assigned Rights.

          (a) Assignor hereby irrevocably directs the grantor or licensor of or the contracting party to
any Contract, to the extent permitted by such Contract and under any recognition or other agreement
executed by such grantor, licensor or contracting party, upon demand from Agent, to recognize and
accept Agent as the holder of such Contract for any and all purposes as fully as it would recognize
and accept Assignor and the performance of Assignor thereunder. Following an Event of Default and
during the continuance thereof, each such party to the Contracts upon written notice from Agent of
the occurrence of an Event of Default, shall be and is hereby authorized by Assignor to perform
under their respective Contract(s) for the benefit of 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.

          (b) Notwithstanding anything to the contrary contained herein, subject to the other provisions
of this Assignment and the Loan Documents, for so long as no Event of Default shall have occurred
and be continuing, Assignor may exercise all of its rights and privileges under the Contracts.
Assignor’s foregoing right shall immediately cease and terminate upon and during the continuance of
any such Event of Default.

          Section 4. Representations and Warranties. Assignor hereby represents and
warrants to Agent as follows:

-2-

 

     (i) Assignor has the full power, right and authority to execute and
deliver this Assignment.

     (ii) Assignor lawfully holds rights and interests in the Contracts, has the
authority to assign its interest under each said Contract (to the extent said assignment is
permitted by law or the terms of the applicable Contract), and has not sold, assigned,
transferred, mortgaged or pledged any such right or interest under the Contracts to any
person other than Agent and has not executed any other document or instrument that might
prevent or limit Agent from operating under or realizing the benefits of the terms,
conditions and provisions of this Assignment.

     (iii) Assignor is not in default under the Contracts or any of them, and to
Assignor’s Knowledge, no other party, if any, to the respective Contracts is in default
thereunder

     (iv) No authorizations, consents, approvals, licenses, permits, filings or
registrations with any governmental authority or agency are necessary for the execution,
delivery or performance by Assignor of this Assignment or for the validity or enforceability
thereof except those obtained on or prior to the Closing Date.

          Section 5. Covenants of Assignor. Assignor covenants and agrees as
follows:

     (i) Assignor shall perform and observe, in a timely manner, all of the
covenants, conditions, obligations and agreements of Assignor under the Contracts and shall
suffer or permit no delinquency on its part to exist thereunder.

     (ii) Without the prior written consent of Agent, which consent shall not be
unreasonably withheld or delayed, the Assignor shall not (A) sell, assign, transfer,
mortgage or pledge any Contract or any such right or interest under any Contract or (B)
cancel, terminate, amend, supplement or modify any of the Contracts.

     (iii) Assignor 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 licensor, grantor or other contracting party under the Contracts.

     (iv) Within ten (10) days after execution of any of the Contracts, Assignor shall
deliver a copy of an executed original of such Contract to Agent and, at the reasonable
request of Agent, shall require each counterparty to a material Contract to execute and
deliver to Agent a consent to this Assignment, such consent to be in a form acceptable to
Agent, in its reasonable discretion.

          Section 6. Remedies. Upon the occurrence of any Event of Default, Agent shall
have the right (but not the obligation), without notice to or demand on Assignor: (i) to exercise
any and all rights and remedies provided under the Credit Agreement, the other Loan Documents or
hereunder, as well as such remedies as may be available at law or in equity, and (ii) to correct
any such Event of Default in such manner and to such extent as Agent may deem reasonably necessary
to protect the security hereof, including specifically, without limitation, the right (but not the
obligation) to appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Agent, and also the right (but not the obligation) to perform and
discharge each and every obligation, covenant, condition and agreement of Assignor under the
Contracts, and, in exercising any such powers, to pay necessary costs and expenses, employ counsel,
and incur and pay reasonable attorneys’ fees and expenses. For purposes of this paragraph, the term
“attorneys” includes attorneys who are employees of Agent acting as counsel

-3-

 

for Agent, and the terms “fees,” “costs” and “expenses” shall include, without limitation,
the reasonable fees charged by Agent for its in-house counsel.

          Section 7. Enforcement of Contracts. At any time after the occurrence and
during the continuance of an Event of Default, Agent, at its option, without notice, and without
regard to the adequacy of security for the Secured Obligations, either in person or by agent, with
or without bringing any action or proceeding, or by a receiver to be appointed by a court at any
time hereafter, may enforce for its own benefit the Contracts, or any single Contract. The exercise
of any rights under this Assignment shall not be deemed to cure or waive any Event of Default, or
waive, modify or affect any notice of any potential Default or Event of Default, or invalidate any
act done pursuant to such notice.

          Section 8. No Obligation of Agent: Assignor Remains Liable. Notwithstanding
any legal presumption to the contrary, nothing contained herein shall operate or be construed to
obligate Agent to perform or discharge, nor does Agent hereby undertake to perform or discharge,
any of the terms, covenants, conditions, obligations, duties or liabilities contained in the
Contracts or otherwise to impose any obligation upon Agent with respect to the Contracts.
Notwithstanding anything to the contrary, (i) Assignor shall remain liable in respect of the
Contracts to the extent set forth therein to perform and satisfy all of its duties and obligations
thereunder to the same extent as if this Assignment had not been executed and (ii) the exercise by
Agent of any of the rights and remedies hereunder shall not release Assignor from any of its duties
or obligations under the Contracts.

          Section 9. Further Assurances. Assignor shall, from time to time upon the
written request of Agent, promptly execute and deliver such further documents and take such further
action as Agent may reasonably request in order to create, preserve, perfect and protect the
assignment and security interest granted hereby or to enable Agent to exercise and enforce its
rights and remedies hereunder. All of the foregoing shall be at Assignor’s expense (including,
without limitation, (i) all filing, registration and recording fees and (ii) all stamp taxes and
other taxes and charges in connection therewith).

          Section 10. Attorney-in-Fact. Agent is hereby appointed the attorney-in-fact of
Assignor for the purpose of carrying out the provisions of this Assignment and taking any action
and executing any instruments which Agent may deem necessary or advisable to accomplish the
purposes hereof, including, without limitation, the right to sign and file any financing statement
(or amendment or extension thereof) deemed necessary by Agent in connection herewith, which
appointment as attorney-in-fact is irrevocable and coupled with an interest.

          Section 11. Security Agreement.

          (a) This Assignment shall also constitute a security agreement as that term is used in the
Uniform Commercial Code (the “UCC”). Agent shall have, in addition to all other rights and remedies
provided herein or in any other Loan Document, in law, at equity or otherwise, all rights and
remedies of a secured party under the UCC. Agent shall give Assignor ten (10) days’ written notice
of the time and place of any public sale of any Contract or the time after which any private sale
or any other intended disposition is to be made. After deducting all expenses incurred in
connection with the enforcement of its rights hereunder, Agent shall cause the proceeds of the
Contracts to be applied to the payment of the Secured Obligations in such order as Agent may
determine, and Assignor, subject to the terms of the other Loan Documents, shall remain liable for
any deficiency.

          (b) Prior to or concurrently with the execution and delivery of this Assignment, Assignor
authorizes Agent to file such financing statements and other documents in such offices as Agent may
require to perfect the security interests granted by this Assignment.

-4-

 

          Section 12. No Liability; Indemnity. In the exercise of the powers
herein granted to Agent, no liability shall be asserted or enforced by Assignor against Agent, all
such liability being hereby expressly waived and released by Assignor except for claims resulting
from the gross negligence or willful misconduct of Administrative Agent. Assignor shall indemnify,
defend and hold Agent harmless against and from all liability, loss, damage and expense (including
reasonable attorney’s fees and disbursements), which Agent may or shall incur or be subject to by
reason of this Assignment, by reason of any act or omission of Assignor under any of the Contracts,
or by reason of any action taken in good faith by Agent hereunder, and against and from any and all
claims and demands whatsoever which may be asserted against Agent by reason of any alleged
obligation or undertaking on its part to perform or discharge any of the terms, covenants and
conditions contained in the Contracts. Should Agent incur any such liability, loss, damage or
expense, the amount thereof (including reasonable costs and expenses, reasonable attorneys’ fees
and expenses actually incurred), together with interest thereon at the default rate of interest set
forth in Section 2.9(5) of the Credit Agreement, shall be secured hereby and by the other Security
Instruments and all other Loan Documents and shall be payable by Assignor to Agent immediately upon
demand.

          Section 13. Termination. Agent, by the acceptance of this Agreement, agrees that when
all Secured Obligations shall have been paid in full and fully performed, this Assignment shall
terminate, and Agent shall execute and deliver to Assignor, upon such termination, at Assignor’s
sole cost and expense, such instruments of re-assignment, all without recourse and without any
representation or warranty whatsoever, as shall be reasonably requested by Assignor.

          Section 14. Expenses. If any suit or other proceeding is instituted by Agent to
enforce this Assignment (or any portion hereof), Assignor shall pay, upon demand, all of the
reasonable out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’
fees and disbursements) incurred by Agent in connection therewith. The obligations of Assignor
under this Section 14 shall survive the expiration or termination of this Assignment.

          Section 15. Reinstatement. This Assignment and the security interest created
hereunder shall automatically be reinstated if and to the extent that for any reason any payment by
or on behalf of Assignor in respect of the Secured Obligations is rescinded or must otherwise be
restored by any holder of the Secured Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and Assignor shall indemnify Agent for all reasonable
costs and expenses (including, without limitation, reasonable attorney’s fees and disbursements)
incurred by Agent in connection with such rescission or restoration.

          Section 16. Miscellaneous.

          (a) No Waiver. No failure on the part of Agent or any of its agents to exercise, and
no course of dealing with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by Agent or
any of its agents of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and
are not exclusive of any remedies provided by law.

          (b) Marshaling. Agent shall not be required to marshal any present or future security
for (including but not limited to this Assignment and the Contracts subject to the security
interest created hereby), or guaranties of, the Secured Obligations or any of them, or to resort to
such security or guaranties in any particular order; and all of its rights hereunder and in respect
of such securities and guaranties shall be cumulative and in addition to all other rights, however
existing or arising. To the extent that it lawfully may, Assignor hereby agrees that it will not
invoke any law relating to the

-5-

 

marshaling of collateral which might cause delay in or impede the enforcement of Agent’s rights
under this Assignment or under any other instrument evidencing any of the Secured Obligations or
under which any of the Secured Obligations is outstanding or by which any of the Secured
Obligations is secured or guaranteed, and to the extent that it lawfully may Assignor hereby
irrevocably waives the benefits of all such laws. Agent shall have no duty as to the collection or
protection of the Contracts or any income thereon, nor as to the preservation of rights against
prior parties, nor as to the preservation of any rights pertaining thereto beyond the sole custody
thereof.

          (c) Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to its choice of law
rules.

          (d)
Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally construed in favor of
Agent in order to carry out the intentions of the parties hereto as nearly as may be possible and
(ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not
affect the validity or enforceability of such provision in any other jurisdiction.

          (e) Cumulative Remedies. All rights and remedies set forth in this Assignment are
cumulative, and Agent may recover judgment thereon, issue execution therefor, and resort to every
other right or remedy available at law or in equity, without first exhausting and without affecting
or impairing the security of any right or remedy afforded hereby; and no such right or remedy set
forth in this Assignment shall be deemed exclusive of any of the remedies or rights granted to
Agent in the Credit Agreement[, the Mortgage] or any other document. Nothing contained in this
Assignment shall be deemed to limit or restrict the rights and remedies of Agent under any other
document related to the Secured Obligations.

          (f)
Waivers, Etc. This Assignment may not be amended, waived or discharged except by
an instrument in writing duly executed by Assignor and Agent, except Agent may elect to waive any
of its rights hereunder from time to time without permanently waiving any such right by virtue of
any single such waiver or being obligated so to waive such right (or any other right) in any future
similar or dissimilar circumstances.

          (g) Successors and Assigns. This Assignment shall be binding upon, and shall inure to
the benefit of the respective successors and assigns of Assignor, Agent and each holder of any of
the Secured Obligations; provided, however, that Assignor shall not assign or transfer its
rights or obligations hereunder without the prior written consent of Agent.

          (h) Notices. All notices, requests and other communications provided for herein
shall be given or made in writing in the manner specified in the Credit Agreement.

          (i) Headings. Headings used in this Assignment are for convenience of reference
only and do not constitute part of this Assignment for any purpose.

          (j) WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, ASSIGNOR
HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING BROUGHT BY ASSIGNOR OR AGENT
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR IN
CONNECTION WITH THIS ASSIGNMENT.

-6-

 

          (k) Counterparts. This Assignment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument and either
of the parties hereto may execute this Assignment by signing any such counterpart.

[signature page follows]

-7-

 

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

	 	 	 	 	 	 	 	 	 
	 	 	ASSIGNOR:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	                                                            ,

a                     	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	                                        ,
a                     , its

                    	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	AGENT:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST COMPANY AMERICAS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 

 

 

Exhibit A 

[insert description of property]

 

 

Exhibit B

LIST OF CERTAIN CONTRACTS

 

 

COMPLETION GUARANTY

     THIS COMPLETION GUARANTY (this “Guaranty”) is dated as of July [_], 2005, and made by TOUSA
HOMES, L.P., a Delaware limited partnership (“TOUSA Member”), and TECHNICAL OLYMPIC USA, INC., a
Delaware corporation (together with TOUSA Member, jointly and severally, the “Guarantors”), in
favor of DEUTSCHE BANK TRUST COMPANY AMERICAS, in its capacity as Administrative Agent for the
Lenders described below (in such capacity, together with its successors in such capacity, the
“Administrative Agent”).

R E
C I T A L S

     A. Pursuant to that certain Credit Agreement dated as of the date hereof (as the same may be
Modified from time to time, the “Loan Agreement”) by and among EH/TRANSEASTERN, LLC, a limited
liability company organized under the laws of the state of Delaware and TE/TOUSA SENIOR, LLC, a
limited liability company organized under the laws of the state of Delaware (together, jointly and
severally, the “Borrowers” and each a “Borrower”), the Lenders from time to time party thereto (the
“Lenders”), and Administrative Agent, the Lenders have agreed to make a loan to Borrowers in an
initial principal amount of $500,000,000 (the “Loan”), consisting of $350,000,000 aggregate
principal amount of Term Loans, and up to $150,000,000 aggregate principal amount of Revolving
Commitments.

     B. The Operating Company Entities have initiated certain Projects, as defined below, and
Borrowers intend to use portions of the Revolving Commitments to pay for certain costs and expenses
incurred or to be incurred in connection therewith.

     C. It is a condition precedent to the making of the Loan by the Lenders that Guarantors shall
have executed and delivered this Guaranty to the Administrative Agent.

     D. Capitalized terms used and not otherwise defined herein shall have the meaning
ascribed to such terms in the Loan Agreement.

A G
R E E M E N T

     NOW THEREFORE, to induce the Lenders to extend the Loan to Borrowers, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Guarantors
hereby covenant and agree, jointly and severally, as follows:

     (i) Completion Obligations.

          (a) Defined Terms. For purposes of this Guaranty the following capitalized terms
shall have the meanings set forth herein:

               (1) “Development Activities” means the development, construction, equipping, and
completion of any fixtures, infrastructure, or other works of improvement, including, without
limitation, grading, installation of utilities, excavation, demolition, lot development, and any
other activities that could give rise to a Mechanics Lien.

1

 

               (2) “Encroachments” means any overlaps, boundary line disputes, and any other
encroachments with respect to any Real Property adjoining the Mortgaged Property or any easements
encumbering the Mortgaged Property.

               (3) “Losses” means liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses and disbursements (including reasonable attorney’s fees and
expenses) of any kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against Administrative Agent or Lenders.

               (4) “Mechanic’s Lien(s)” means any and all Liens filed by any Person, directly or
indirectly (including through any number of tiers of contractors, subcontractors, or material
suppliers) furnishing, or claiming to have furnished, materials, labor, or services for or in
connection with a Project, other than any Lien held by Administrative Agent.

               (5) “Project” means performance and completion of all Development Activities with respect to
any portion of the Mortgaged Property as to which Development Activities have commenced as of the
date of this Guaranty. A Project shall not be deemed completed until all Development Activities
contemplated by any applicable Contractual Obligations with respect to such Project, including any
applicable Purchase/Option Agreement, has been completed and unconditional releases of all
applicable Mechanics Liens has been delivered to Borrowers and Administrative Agent.

               (6) “Project
Costs” means any and all costs, expenses, and liabilities for and/or in
connection with a Project, including: costs for labor, goods, materials, and services; all
architectural, engineering and consulting fees; all permitting fees, licensing fees, amounts
payable under construction contracts and subcontracts, costs of bonds, and any and all other costs
of such Project what could give rise to a Mechanics Lien. “Project Costs” shall also include any
and all costs, expenses, and outlays intended to be funded under a Revolving Commitment, or that
the Loan Agreement requires Borrowers to pay, with respect to a Project.

               (7) “Survey
Exceptions” means (1) those exceptions to an ALTA
lender’s title policy that would customarily be eliminated upon the delivery of an ALTA Survey ,
including the following sections of the Florida Form 9 Endorsement to an ALTA Title Policy: the
second sentence of Section l(b) and sections l(b)(3), l(b)(4), 3(a), 4 and 5; and (2) an exception
to an ALTA title policy which eliminates one or more of the coverages described in clause (1) as a
result of existing development on the subject Real Property.

          (b) Payment of Project Costs. Guarantors do hereby, jointly and severally,
unconditionally, absolutely and irrevocably guarantee to the Administrative Agent, for the benefit
of the Lenders and their respective successors and assigns, as a primary obligor and not merely as
a surety that Borrowers shall fully and punctually pay and discharge all Project Costs, in
accordance with the Loan Agreement and the other Loan Documents, as the same may become due and
payable, and pay and discharge all proper claims and demands (subject to any Good Faith Contest)
for any Project Costs.

          (c) Removal of Mechanics Liens. Guarantor shall promptly pay, bond, or otherwise
remove any Mechanics’ Liens that may be filed at any time with respect to the Project,

2

 

including, without limitation, any and all Mechanics Liens (1) disclosed pursuant to Title
Policies issued (or committed to be issued) to Administrative Agent on or about the Closing Date;
or (2) otherwise subject on or about the Closing Date to a recorded notice of commencement or
similar document evidencing the commencement of a work of improvement on the subject Mortgaged
Property. Notwithstanding the foregoing, (i) Guarantors shall not be required to take any action
with respect to any Mechanic’s Lien that Borrowers have timely removed in accordance with the Loan
Agreement or that are the subject of a Good Faith Contest; and (ii) Administrative Agent shall not
be required to accept additional Real Property as a Borrowing Base Asset if Mechanics Liens
encumber such properties at the time acquired; instead, any such Mechanics Liens shall be subject
to Administrative Agent’s approval in its sole and absolute discretion.

          (d) Completion of Development Activities. Guarantors shall promptly and in compliance with the Loan
Agreement complete or cause the completion of all Development Activities with respect to a Project
in accordance with all applicable Contractual Obligations, all free and clear of all material
defects and in full compliance with all Requirements of Law and free of Mechanic’s Liens.

          (e) Losses Arising from Survey Exceptions. Guarantors agree and acknowledge that (1) Borrowers have
not delivered certain updated ALTA Survey s to Administrative Agent with respect to portions of the
Mortgaged Property, and, as a result, the Title Policies issued at closing contain certain Survey
Exceptions that would otherwise be unacceptable to Administrative Agent; and (2) Administrative
Agent’s willingness to accept such Title Policies subject to the Survey Exceptions is expressly
conditioned upon Guarantors, agreement to indemnify, defend, and hold harmless Administrative Agent
against Losses that could have been avoided had an ALTA Survey been timely delivered and the Survey
Exceptions removed from the Title Policies. In consideration of the foregoing, Guarantors do
hereby, jointly and severally, unconditionally, absolutely and irrevocably guarantee to the
Administrative Agent, for the benefit of the Lenders and their respective successors and assigns,
as a primary obligor and not merely as a surety, any Losses arising out of or in connection with
the existence of any Liens in respect of the Mortgaged Property, including, without limitation, any
Encroachments, to the extent such Liens and Encroachments: (i) are not already specifically
included as exceptions in the Title Policies (other than in or through any Survey Exceptions); and
(ii) would have been revealed by a current ALTA Survey of the subject Mortgaged Property performed
as of the date of the subject Title Policy. Guarantors agree to indemnify, defend, and hold
harmless Administrative Agent and Lenders from and against any such Losses.

          (f) Reimbursement of Administrative Agent. If Administrative Agent shall, in accordance with the
Loan Agreement: (a) cause any Development Activities with respect to a Project to be performed; (b)
pay any Project Costs; or (c) cause any Mechanic’s Lien to be released, paid, bonded or discharged;
then Guarantors shall immediately reimburse Administrative Agent for all sums paid by
Administrative Agent including any reasonable attorneys, fees in connection therewith.

          (g) Guaranteed Obligations. Each of the obligations of Guarantors as set forth in this Section 1 are
referred to as the “Guaranteed Obligations”. Each Guarantor further agrees that the Guaranteed
Obligations may be not Modified, waived, accelerated or compromised from

3

 

time to time, in whole or in part, without notice to or further assent from it, and
that it will remain bound upon its guarantee notwithstanding any Modification, waiver,
acceleration or compromise of any of the Guaranteed Obligations.

                    (ii) Nature of Guaranty. This is an irrevocable,
absolute,
continuing guaranty of payment and performance and not a guaranty of collection. Each Guarantor
waives any right to require that any resort be had by the Administrative Agent or any Lender to any
of the security held for payment of the Guaranteed Obligations or to any balance of any deposit
account or credit on the books of the Administrative Agent or any Lender in favor of Borrowers or
any other person. This Guaranty may not be revoked by Guarantors and shall continue to be effective
with respect to the Guaranteed Obligations arising or created after any attempted revocation by
Guarantors. It is the intent of Guarantors that the obligations and liabilities of Guarantors
hereunder are absolute and unconditional under any and all circumstances and that until the
Guaranteed Obligations are fully and finally satisfied, such obligations and liabilities shall not
be discharged or released in whole or in part, by any act or occurrence which might, but for the
provisions of this Guaranty, be deemed a legal or equitable discharge or release of Guarantors.

     (iii) Rights Independent. The obligations of Guarantors hereunder are independent
of the Obligations of Borrowers or the obligations of any other Person, including any other Person
executing a guaranty of any or all of the Guaranteed Obligations
(such Person, an “Other
Guarantor”) or any security for the Guaranteed Obligations, and the Administrative Agent may
proceed in the enforcement hereof independently of any other right or remedy that the
Administrative Agent may at any time hold with respect to the Guaranteed Obligations or any
security or other guarantee therefor. The Administrative Agent may file a separate action or
actions against Guarantors hereunder, whether action is brought and prosecuted with respect to any
security or against Borrowers or any Other Guarantor or any other Person, or whether Borrowers or
any Other Guarantor or any other Person is joined in any such action or actions. Each Guarantor
waives the benefit of any statute of limitations affecting its liability hereunder or the
enforcement of the Guaranteed Obligations. The liability of Guarantors hereunder shall be
reinstated and revived, and the rights of the Administrative Agent and each Lender shall continue,
with respect to any amount at any time paid on account of the Guaranteed Obligations which shall
thereafter be required to be restored or returned by the Administrative Agent or any Lender upon
the bankruptcy, insolvency, or reorganization of Borrowers or any other Person, or otherwise, all
as though such amount had not been paid. Each Guarantor further agrees to the extent (i) Borrowers
or any Guarantor make any payment to the Administrative Agent or any Lender in connection with the
Guaranteed Obligations and all or any part of such payment is subsequently invalidated, declared to
be fraudulent or preferential, set aside or required to be repaid by the trustee, receiver or any
other entity, whether under any Bankruptcy Law or otherwise, or (ii) in the event following the
payment in full of the principal amount of the Loan, the Administrative Agent or any Lender is
subject to further liability, loss, or expense covered by the indemnification obligations set forth
in the Loan Documents (the payments and obligations referred to in clauses (i) and (ii) above are
hereafter referred to, collectively, as “Preferential Payments”), then this Guaranty shall
continue to be effective or shall be reinstated, as the case may be, and, to the extent of such
payment or repayment by the Administrative Agent or such Lender, the Guaranteed Obligations or part
thereof intended to be satisfied by such Preferential

4

 

Payment shall be revived and continued in full force and effect as if said Preferential
Payment had not been made.

     (iv) Authority to Modify the Guaranteed Obligations. Each Guarantor authorizes the
Administrative Agent and each Lender, without notice to or demand on Guarantors and without
affecting its liability hereunder or the enforceability hereof, from time to time to: (a) Modify,
waive, accelerate or compromise the time for payment or the terms of the Guaranteed Obligations or
any part thereof, including increase or decrease the rates of interest thereon; (b) Modify, waive,
accelerate, compromise, or enter into or give any agreement, approval, or consent with respect to,
the Guaranteed Obligations or any part thereof or any of the Loan Documents or any security or
additional guaranties, or any condition, covenant, default, remedy, right, representation, or term
thereof or thereunder; (c) accept new or additional instruments, documents, or agreements in
exchange for or relative to any of the Loan Documents or the Guaranteed Obligations or any part
thereof; (d) accept partial payments on the Guaranteed Obligations; (e) receive and hold additional
security or guaranties for the Guaranteed Obligations or any part thereof or this Guaranty; (f)
release, reconvey, terminate, waive, abandon, subordinate, exchange, substitute, transfer, and
enforce the Guaranteed Obligations or any security or any other guaranties, and apply any security
and direct the order or manner of sale thereof as the Administrative Agent or such Lender in its
discretion may determine; (g) release Borrowers or any other Person or any Other Guarantor from any
personal liability with respect to the Guaranteed Obligations or any part thereof; (h) settle,
release on terms reasonably satisfactory to the Administrative Agent or such Lender or by operation
of law or otherwise, compound, compromise, collect, or otherwise liquidate or enforce any of the
Guaranteed Obligations and any security or other guarantee in any manner, consent to the transfer
of any security, and bid and purchase at any sale; and (i) consent to the merger or any other
change, restructure, or termination of the corporate existence of Borrowers or any other Person and
correspondingly restructure the Guaranteed Obligations, and any such merger, change, restructure,
or termination shall not affect the liability of Guarantors hereunder or the enforceability hereof
with respect to all Guaranteed Obligations.

     (v) Waiver of Defenses.

          (a) Each Guarantor waives any right to require the Administrative Agent or any Lender, prior
to or as a condition to the enforcement of this Guaranty, to: (i) proceed against Borrowers or any
other Person or any Other Guarantor; (ii) proceed against or exhaust any security for the
Guaranteed Obligations or to marshal assets in connection with foreclosing collateral security;
(iii) give notice of the terms, time, and place of any public or private sale of any security for
the Guaranteed Obligations; or (iv) pursue any other remedy in the Administrative Agent’s or such
Lender’s power whatsoever.

          (b) Each Guarantor waives any defense arising by reason of: (i) any disability or other
defense of Borrowers or any other Person with respect to the Guaranteed Obligations; (ii) the
unenforceability or invalidity of the Guaranteed Obligations, any of the Loan Documents or any
security or any other guarantee for the Guaranteed Obligations, or the lack of perfection or
failure of priority of any security for the Guaranteed Obligations; (iii) the cessation from any
cause whatsoever of the liability of Borrowers or any other Person or any Other Guarantor (other
than by reason of the full payment and discharge of the Guaranteed Obligations); (iv) any act or

5

 

omission of the Administrative Agent or any Lender or any other Person which
directly or indirectly results in or aids the discharge or release of Borrowers or any other Person
or the Guaranteed Obligations or any security or other guarantee therefor by operation of law or
otherwise; (v) the taking or accepting of any other security, collateral or guaranty, or other
assurance of the payment or performance of all or any of the Guaranteed Obligations; (vi) any
release, surrender, exchange, subordination, deterioration, waste, loss or impairment by the
Administrative Agent or any Lender (including any negligent impairment but excluding any gross
negligent or willful impairment) of any collateral, property or security, at any time existing in
connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations;
(vii) the failure of the Administrative Agent, any Lender or any other Person to exercise diligence
or reasonable care in the preservation, protection, enforcement, sale or other handling or
treatment of all or any part of any collateral, property or security (but excluding any gross
negligence or willful misconduct on the part of the Administrative Agent or any Lender); (viii) the
fact that any collateral, security, security interest or lien contemplated or intended to be given,
created or granted as security for the repayment of the indebtedness evidenced by the Notes or the
Guaranteed Obligations shall not be properly perfected or created, or shall prove to be
unenforceable or subordinate to any other security interest or lien, it being recognized and agreed
by each Guarantor that such Guarantor is not entering into this Guaranty in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectibility or value of any of
the collateral for the Guaranteed Obligations or any security interest in such collateral; (ix) any
payment by Borrowers to the Administrative Agent or any Lender is held to constitute a preference
under the Bankruptcy Code or any another federal, state or local laws concerning bankruptcy,
insolvency, reorganization or relief of debtors, or for any reason the Administrative Agent or any
Lender is required to refund such payment or pay such amounts to Borrowers or any other Person
legally entitled thereto; and (x) any and all other suretyship or guarantor defenses that may be
available to Guarantors.

          (c) Each Guarantor waives: (i) all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and all other notices of any
kind or nature whatsoever with respect to the Guaranteed Obligations, and notices of acceptance of
this Guaranty and of the existence, creation, or incurring of new or additional Guaranteed
Obligations; (ii) any rights to set-offs, recoupments, claims or counterclaims; and (iii) any right
to revoke or terminate this Guaranty.

     (vi) Subordination.

          (a) Each Guarantor hereby covenants and agrees that the principal of, or interest on, all now
existing and hereafter arising Indebtedness of Borrowers to Guarantor
(the “Claims”) and all rights
and remedies of Guarantors with respect thereto and any lien securing payment thereof are and shall
continue to be subject, subordinate and rendered junior in the right of payment to all amounts due
and payable in respect of the Guaranteed Obligations, as the same may be Modified, waived,
accelerated or compromised from time to time.

          (b) Guarantors represent and warrant to the Administrative Agent that
Guarantors are or will be the sole and absolute owners of the Claims and have not sold,
assigned, transferred or otherwise disposed of any right they may have to repayment of the
Claims or any security therefor. Guarantors hereby further covenant and agree that upon the
occurrence and

6

 

during the continuation of any Potential Default or Event of Default, until the
Guaranteed Obligations are paid and performed in full: (i) Guarantors will not receive, directly or
indirectly, any payment, advance, credit or further security of any kind whatsoever on account of
the Claims; (ii) Guarantors will not sell, assign, transfer or endorse the Claims or any part or
evidence thereof; (iii) Guarantors will not Modify the Claims or any part or evidence thereof; and
(iv) Guarantors will not take, or permit any action to be taken, to assert, collect or enforce the
Claims or any part thereof.

          (c) Upon any distribution of all of the assets of any Borrower to its creditors upon the
dissolution, winding up, liquidation, arrangement, or reorganization of any Borrower, whether in
any bankruptcy, insolvency, arrangement, reorganization or receivership proceeding or upon an
assignment for the benefit of creditors or any other marshalling of the assets and liabilities of
any Borrower or otherwise, any payment or distribution of any kind (whether in cash, property or
securities) which is payable or deliverable upon or with respect to the Claims shall be held in
trust for the Administrative Agent and the Lenders and shall be paid over or delivered to the
Administrative Agent for the benefit of the Lenders to be applied against the payment or prepayment
of the Guaranteed Obligations until the Guaranteed Obligations shall have been indefeasibly paid in
full. If any proceeding referred to in the preceding sentence is commenced by or against any
Borrower: (i) the Administrative Agent is hereby irrevocably authorized and empowered (in its own
name or in the name of Guarantors or otherwise), but shall have no obligation, to demand, sue for,
collect and receive every payment or distribution referred to the preceding sentence and give
acquittance therefor and to file claims and proofs of claim and take such other action (including,
without limitation, voting the Claims or enforcing any security interest or other lien securing
payment of the Claims) as the Administrative Agent may deem necessary or advisable for the exercise
or enforcement of any of the rights or interests of the Administrative Agent hereunder; and (ii)
Guarantors shall duly and promptly take such action as the Administrative Agent may reasonably
request (A) to collect the Claims for account of the Administrative Agent and to file appropriate
claims or proofs of claim in respect of the Claims, (B) to execute and deliver to the
Administrative Agent such powers of attorney, assignments, or other instruments as it may
reasonably request in order to enable it to enforce any and all claims with respect to, and any
security interests and other liens securing payment of, the Claims, and (C) to collect and receive
any and all payments or distributions which may be payable or deliverable upon or with respect to
the Claims.

          (d) All payments or distributions upon or with respect to the Claims which are received by
Guarantor contrary to the provisions of this Guaranty shall be received in trust for the benefit of
the Administrative Agent, shall be segregated from other funds and property held by Guarantors and
shall be forthwith paid over to the Administrative Agent in the same form as so received (with any
necessary endorsement) to be applied (in the case of cash) to, or held as collateral (in the case
of non-cash property or securities) for, the payment or prepayment of the Guaranteed Obligations.

     (vii) Deferral of Subrogation. Until all of the Guaranteed Obligations have been
paid and performed in full, (i) Guarantors shall not exercise any rights of subrogation,
contribution or reimbursement against any Borrower or any Other Guarantor of the Guaranteed
Obligations, and (ii) Guarantor shall not exercise any right to enforce any right, power or remedy
which the Administrative Agent or any Lender now has or may in the future have against Borrowers or
any

7

 

Other Guarantor and any benefit of, and any right to participate in, any security for this
Guaranty or for the obligations of Borrowers or any Other Guarantor now or in the future held by
the Administrative Agent or any Lender. If Guarantor nevertheless receives payment of any amount on
account of any such subrogation, contribution or reimbursement rights or otherwise in respect of
any payment by Guarantor of the Guaranteed Obligations prior to payment and performance in full of
all of the Guaranteed Obligations, such amount shall be held in trust for the benefit of the
Administrative Agent and immediately paid to the Administrative Agent for application to the
Guaranteed Obligations in such order and manner as the Administrative Agent may determine.

     (viii) Condition of Borrowers. Each Guarantor represents and warrants to the
Administrative Agent, for the benefit of the Lenders that: (a) this Guaranty is executed at the
request of Borrowers; (b) such Guarantor has established adequate means of obtaining from Borrowers
on a continuing basis financial and other information pertaining to the business of each such
Borrower; (c) such Guarantor is now and will continue to be adequately familiar with the business,
operations, condition, and assets of Borrowers; (d) such Guarantor will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the Loan Documents; and (e)
the agreements, waivers and acknowledgements contained herein are knowingly made in contemplation
of such benefits. Each Guarantor hereby waives and relinquishes any duty on the part of the
Administrative Agent or any Lender to disclose to such Guarantor any matter, fact or thing relating
to the business, operations, condition, or assets of Borrowers now known or hereafter known by the
Administrative Agent or any Lender during the life of this Guaranty. With respect to any of
Guaranteed Obligations, neither the Administrative Agent nor any Lender need inquire into the
powers of Borrowers or the officers or employees acting or purporting to act on its behalf, and all
Guaranteed Obligations made or created in good faith reliance upon the professed exercise of such
powers shall be guaranteed hereby.

     (ix) Representations and Warranties of Guarantor. Each Guarantor represents and
warrants to the Administrative Agent that all of representations and warranties relating to such
Guarantor contained in the Loan Agreement are true and correct. Each Guarantor further represents
and warrants to the Administrative Agent that all of the representations and warranties set forth
in Schedule 1 hereto are true and correct as of the date hereof.

     (x) Payments. All payments made by Guarantors to or for the account of the
Administrative Agent or any Lender shall be made without condition or deduction of any kind,
including for any counterclaim, defense, recoupment of set-off. All payments made by Guarantors
hereunder shall be made free and clear of and without deduction for any present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto (collectively, “Taxes”). Guarantors shall pay such Taxes and shall
promptly furnish to the Administrative Agent copies of any tax receipts or such evidence of payment
as the Administrative Agent or any Lender may reasonably require.

     (xi) Costs and Expenses in Enforcement. Each Guarantor agrees to pay to the
Administrative Agent all out of pocket advances, charges, costs, and expenses, including reasonable
attorneys fees, incurred or paid by the Administrative Agent in exercising any right, power, or
remedy conferred by this Guaranty, or in the enforcement of this Guaranty, whether or not an action
is filed in connection therewith.

8

 

     (xii) Notices. All notices, requests, demands and other communications which
are required or may be given under this Guaranty shall be in writing and shall be delivered to the
parties hereto in the manner provided in the Loan Agreement to the following addresses:

	 	 	 	 	 
	 

	 	To Guarantors:
	 	Technical Olympic USA, Inc.
	 

	 	 	 	Suite 500-N
	 

	 	 	 	4000 Hollywood Blvd.
	 

	 	 	 	Hollywood, FL 33021
	 

	 	 	 	Facsimile: (954) 364-4037
	 

	 	 	 	Attention: Patricia M. Petersen, Esq.
	 
	 	 	 	 
	 

	 	 	 	c/o TOUSA Homes, L.P.
	 

	 	 	 	c/oTechnical Olympic USA, Inc.
	 

	 	 	 	Suite 500-N
	 

	 	 	 	4000 Hollywood Blvd.
	 

	 	 	 	Hollywood, FL 33021
	 

	 	 	 	Facsimile: (954) 364-4037
	 

	 	 	 	Attention: Patricia M. Petersen, Esq.
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Greenberg Traurig P.A.
	 

	 	 	 	1221 Brickell Avenue
	 

	 	 	 	Miami, FL 33131
	 

	 	 	 	Facsimile: (305) 579-0717
	 

	 	 	 	Attention: Paul Berkowitz, Esq.
	 
	 	 	 	 
	 

	 	To
	 	Deutsche Bank Trust Company Americas
	 

	 	Administrative
	 	200 Crescent Court, Suite 550
	 

	 	Agent:
	 	Dallas, Texas 75201
	 

	 	 	 	Facsimile: (214) 740-7910
	 

	 	 	 	Attention: Ann Ramsey
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Latham & Watkins LLP
	 

	 	 	 	633 West Fifth Street, Suite 4000
	 

	 	 	 	Los Angeles, California 90071
	 

	 	 	 	Facsimile: (213) 891-8763
	 

	 	 	 	Attention: Donald I. Berger, Esq.

Any party may change the address to which notices are to be sent by notice of such change to each
other party given as provided above.

     (xiii) Termination. The guarantees made hereunder (a) shall terminate when all of
the Guaranteed Obligations have been indefeasibly paid and performed in full, and (b) shall
continue to be effective or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any Guaranteed Obligation is rescinded or must otherwise be restored by any Lender or
Guarantor upon the bankruptcy or reorganization of any Borrower, Guarantor or otherwise.

9

 

     (xiv) No Waiver: Cumulative Remedies. The rights, powers and remedies of the
Administrative Agent hereunder and under the other Loan Documents are cumulative and in addition to
all rights, power and remedies provided under any and all agreements among Guarantors, Borrowers,
the Administrative Agent and the Lenders relating to the Guaranteed Obligations, at law, in equity
or otherwise. Any delay or failure by the Administrative Agent to exercise any right, power or
remedy shall not constitute a waiver thereof by the Administrative Agent or the Lenders, and no
single or partial exercise by the Administrative Agent of any right, power or remedy shall preclude
any other or further exercise thereof or any exercise of any other rights, powers or remedies.
Without limiting the foregoing, the Administrative Agent on behalf of the Lenders is hereby
authorized to demand specific performance of this Guaranty at any time when Guarantors shall have
failed to comply with any of the provisions of this Guaranty applicable to it.

     (xv) Amendments. Subject to Section 9.2 of the Loan Agreement, this Guaranty may be
Modified only by, and none of the terms hereof may be waived without, a written instrument
executed by each Guarantor and the Administrative Agent.

     (xvi) Waivers. Each Guarantor warrants and agrees that each of the waivers set forth
in this Guaranty are made with such Guarantor’s full knowledge of their significance and
consequences, and that under the circumstances, the waivers are reasonable and not contrary to
public policy or law. If any of such waivers are determined to be contrary to any applicable law or
public policy, such waivers shall be effective only to the maximum extent permitted by law.

     (xvii) Binding Agreement. This Guaranty and the terms, covenants, and conditions
hereof shall be binding upon and inure to the benefit of Guarantors, the Administrative Agent, each
Lender, and their respective successors and assigns; provided, however, that Guarantors shall not
be permitted to transfer, convey, assign or delegate this Guaranty or any interest herein without
the prior written consent of the Administrative Agent and, to the extent required pursuant to the
Loan Agreement, the Lenders. Each Lender may assign its interest hereunder in whole or in part in
connection with an assignment of its interest in the Guaranteed Obligations pursuant to Section
9.8(1) of the Loan Agreement.

     (xviii) GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

     (xix) JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH GUARANTOR CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GUARANTOR
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION

10

 

OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS GUARANTY. EACH GUARANTOR WAIVES
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.

     (xx) WAIVER OF JURY TRIAL. EACH GUARANTOR, AND BY ACCEPTANCE OF THIS GUARANTY, THE
ADMINISTRATIVE AGENT AND EACH OF THE LENDERS, WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
THE PARTIES TO THE LOAN AGREEMENT AGAINST ANY OTHER PARTY OR ANY PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. GUARANTOR, AND BY ACCEPTANCE OF THIS
GUARANTY, THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS, AGREES THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, GUARANTOR,
AND BY ACCEPTANCE OF THIS GUARANTY, THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS, FURTHER
AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS GUARANTY OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.

     (xxi) Severability. In case any one or more of the provisions contained in this
Guaranty should be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular provision hereof in a
particular jurisdiction shall not in and of itself affect the validity of such provision in any
other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions.

     (xxii) Miscellaneous. All words used herein in the plural shall be deemed to have been
used in the singular, and all words used herein in the singular shall be deemed to have been used
in the plural, where the context and construction so require. Section headings in this Guaranty are
included for convenience of reference only and are not a part of this Guaranty for any other
purpose.

11

 

     IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed as of
the date first written above.

	 	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	TECHNICAL OLYMPIC USA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	TOUSA HOMES, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

 

 

Schedule 1

Representations and Warranties of Each Guarantor

          1.
Organization; Requisite Power and Authority; Qualification.

	(a)	 	Such Guarantor (A) is either a corporation, a limited partnership or a limited liability
company duly incorporated, formed or organized, validly existing, and in good standing under
the laws of the state of its incorporation, organization and/or formation, (B) is duly
qualified to do business and is in good standing under the laws of each jurisdiction in which
the failure to be so qualified and in good standing will have or is reasonably expected to
have a Material Adverse Effect, and (C) has all requisite corporate, partnership or limited
liability company power and authority to own, operate and encumber its Property and to conduct
its business as presently conducted and as proposed to be conducted in connection with and
following the consummation of the transactions contemplated by this Agreement. Such Guarantor
is a single member limited liability company for purposes of federal income taxation and for
purposes of the tax laws of any state or locality in which it is subject to taxation based on
its income.
	 
	(b)	 	True, correct and complete copies of the Organizational Documents of such Guarantor
have been delivered to the Administrative Agent and have not been Modified except to the
extent indicated therein. All of the Organization Documents are in full force and effect, and
there are no defaults under such Organizational Documents (including with respect to any
restrictions on Indebtedness contained therein), and no events which, with the passage of time
or giving of notice or both, would constitute a default under such Organizational Documents
(including with respect to any restrictions on Indebtedness contained therein).
	 
	(c)	 	Such Guarantor has the requisite power and authority to execute, deliver and perform this
Agreement and each of the other Loan Documents which are required to be executed on its
behalf. The execution, delivery and performance of each of the Loan Documents which must be
executed in connection with this Agreement by such Guarantor and to which such Guarantor is a
party and the consummation of the transactions contemplated thereby are within such
Guarantor’s partnership, company, or corporate powers, have been duly authorized by all
necessary partnership, company, or corporate action and such authorization has not been
rescinded. No other partnership, company, or corporate action or proceedings on the part of
such Guarantor is necessary to consummate such transactions.
	 
	(d)	 	Each of the Loan Documents to which such Guarantor is a party has been duly executed and
delivered on behalf of such Guarantor and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (subject to bankruptcy, insolvency,
reorganization, or other laws affecting creditors’ rights generally and to principles of
equity, regardless of whether considered in a proceeding in equity or at law), is in full
force and effect and all the terms, provisions, agreements and conditions set forth therein
and required to be performed or complied

 

 

	 	 	with by such Guarantor on or before the Closing Date have been performed or
complied with, and no Potential Default or Event of Default exists thereunder.

          2. No Conflict. As of the Closing Date, the execution, delivery and performance by
such Guarantor of the Loan Documents to which it is a party and the consummation of the
Transactions contemplated by the Loan Documents do not and will not (a) violate (i) any provision
of any law or any governmental rule or regulation applicable to such Guarantor, (ii) any of the
Organizational Documents of such Guarantor, or (iii) any order, judgment or decree of any court or
other agency of government binding on such Guarantor, except in the case of clauses (i), (ii) and
(iii) to the extent such violation will not result in a Material Adverse Effect; (b) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a default under any
material Contractual Obligation of such Guarantor, except to the extent such conflict, breach or
default will not result in a Material Adverse Effect; or (c) require any approval of stockholders,
members or partners or any approval or consent of any Person under any Contractual Obligation of
such Guarantor except for such approvals or consents which will be obtained on or before the
Closing Date and except for any such approvals or consents the failure of which to obtain will not
result in a Material Adverse Effect.

          3. No Material Litigation. No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to such Guarantor’s Knowledge, threatened by or
against such Guarantor or against such Guarantor’s Properties or revenues which is likely to be
adversely determined and which, if adversely determined, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. The performance of any action by
such Guarantor required or contemplated by any Loan Documents is not restrained or enjoined (either
temporarily, preliminarily or permanently).

 

 

This instrument was prepared by and

after recording should be returned to:

Donald I. Berger, Esq.

Latham & Watkins LLP 
633 West
Fifth Street, Suite 4000 
Los
Angeles, California 90071

COLLATERAL ASSIGNMENT OF CONTRACTS, CONTRACT RIGHTS, AND RELATED
PROPERTY

          THIS
COLLATERAL ASSIGNMENT OF CONTRACT, CONTRACT RIGHTS, AND RELATED PROPERTY (this
“Assignment”), dated as of the 1st day of August, 2005, is made by EH/Transeastern, LLC, a
Delaware Limited Liability Company having an address at 4000 N.
Hollywood Boulevard, Suite 500N,
Hollywood, Florida 33021 (“Assignor”), to DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York
corporation having an office at 60 Wall Street, New York, New York 10005, as Administrative Agent
for the Lenders (“Agent” and in its capacity as secured party and assignee hereunder, the
“Assignee”).

RECITALS:

          Assignor and Assignee are parties to a Credit Agreement dated as of the date hereof by and
among Assignor, and TE/TOUSA Senior LLC, a limited liability company organized under the laws of
the state of Delaware, as borrowers (“Borrower”); the lenders from time to time party thereto (the
“Lenders”); and Deutsche Bank Trust Company Americas, as administrative agent for the Lenders
(said Credit Agreement, as modified and supplemented and in effect from time to time, the “Credit
Agreement”). The Credit Agreement provides for certain loans (the “Loans”) to be made by Assignee
to Borrowers in an original maximum aggregate principal amount of Four Hundred and Fifty Million
Dollars ($450,000,000.00).

          Assignor is the holder of certain rights to acquire the real property described on Exhibit
A attached hereto (the “Project”) pursuant to the terms of that certain agreement described in
Schedule 1 attached hereto between the grantor, seller or owner described in Schedule 1
(the “Owner”), and Assignor, as grantee, buyer, purchaser, builder or optionee (the “Principal
Contract”) a memorandum of
which has been recorded in Official Records Book                     , Page                      of the Public Records of
                                         County, Florida (the “Memorandum of Contract”).

          Assignor and its predecessor holder of the purchase rights under the Principal Contract have
entered into an Assignment and Assumption of Option Agreement and Related Documents of even date
herewith (the “Assignment Agreement”) pursuant to which various additional agreements,
permits, and documents were assigned to Assignor.

          In connection with the execution of the Assignment Agreement, Assignor has entered into a
Consent and Estoppel of Owner (“Owner Consent”) with the Owner pursuant to which the Owner has
recognized certain rights and remedies of Assignee;

 

 

          The execution and delivery of this Assignment by Assignor to Assignee is a
condition precedent to the obligation of Lenders to make the Loans.

          Capitalized terms used in this Assignment shall have the meanings set forth below or in the
Glossary attached hereto as Appendix 1, and if not otherwise defined herein, shall have the
meanings set forth in the Credit Agreement.

          NOW, THEREFORE, for good and valuable consideration, receipt of which by the parties hereto
is hereby acknowledged, the parties hereto hereby agree as follows:

          Section 1. Secured Obligations. This Assignment is made for the purpose of
securing the following (collectively, the “Secured Obligations”):

     (i) the prompt and punctual payment (whether at stated maturity, by
acceleration or otherwise) when due of the Indebtedness and all amounts now outstanding or
hereafter becoming due and payable under the Credit Agreement and the other Loan Documents
and all modifications thereof; and

     (ii) the performance and observance of all other Obligations under the
Loan Documents.

          Section 2. Assignment. As security for the Secured Obligations, Assignor
hereby
assigns, transfers and pledges to Assignee, and hereby grants to Assignee a security interest
in, all of Assignor’s right, title and interest, whether now owned or hereafter acquired, in
and to the following (collectively, the “Collateral”):

     (i) the Principal Contract, the Memorandum of Contract, any “Construction
Agreement,” “Ancillary Documents,” or “Contract Documents” referred to in the Assignment
Agreement (collectively, the foregoing are referred to as the “Contract Documents”); and

     (ii) all agreements to which Assignor is a party executed in connection with the
acquisition, entitlement, development, construction, operation, and management of the
Project (including, without limitation, agreements for the sale, lease or exchange of goods
or other property, and/or the performance of services), other than the Contract Documents
(the “Additional Contracts”); and

     (iii) all of the following rights of Assignor under and subject to the
Contract Documents or Additional Contracts:

               (A) the right to exercise the option to purchase the Project and to consummate the
closing of the purchase of the Project;

               (B) all rights of Assignor to receive monies due and to become due under or pursuant to the
Contract Documents or Additional Contracts;

               (C) all claims of Assignor for damages arising out of or for breach of or default under
the Contract Documents or Additional Contracts;

               (D) all rights of Assignor to terminate, amend, supplement, modify or waive performance under
the Contract Documents or Additional Contracts, to compel performance and otherwise to exercise all
remedies thereunder; and

-2-

 

          (iv) all zoning, development, and land use approvals, and all
licenses, permits, variances and certificates used in connection with
the 
   development,
construction, operation and sale of the Project (collectively,
“Permits”);

          (v) all Rents and other Personalty;

          (vi) all the estate, right, title, interest, claim or demand whatsoever of
Assignor, either at law or in equity, in and to the Awards;

          (vii) all other interest of every kind and character which Assignor now has or at
any time hereafter acquires in and to the Project or the 
   Contract Documents; and

          (viii) all substitutions, replacements and accessions with respect to the
foregoing, and proceeds derived therefrom.

          Section 3. Exercise of Assigned Rights.

          (a) Assignor hereby irrevocably directs Owner, to the extent permitted by the
Contract Documents and the Owner Consent and under any other recognition or other agreement
executed by the Owner, upon demand from Assignee, to recognize and accept Assignee as the holder of
the Contract Documents for any and all purposes as fully as it would recognize and accept Assignor
and the performance of Assignor thereunder. Following an Event of Default and during the
continuance thereof, the Owner, upon written notice from Assignee of the occurrence of an Event of
Default, shall be and is hereby authorized by Assignor to perform under the Contract Documents for
the benefit of Assignee 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.

          (b) Notwithstanding anything to the contrary contained herein, subject to the other provisions
of this Assignment and the Loan Documents, for so long as no Event of Default shall have occurred
and be continuing, Assignor may exercise all of its rights and privileges under the Contract
Documents, Additional Contracts, and other Collateral. Assignor’s foregoing right shall immediately
cease and terminate upon the occurrence and during the continuance of any such Event of Default.

          Section 4. Representations and Warranties. Assignor hereby represents and
warrants to Assignee as follows:

     (i) Assignor has the full power, right and authority to execute and
deliver this Assignment.

     (ii) Assignor lawfully holds rights and interests in the Collateral, has the
authority to assign its interest under the Collateral, and has not sold, assigned,
transferred, mortgaged or pledged any such right or interest under the Collateral any person
other than Assignee and has not executed any other document or instrument that might prevent
or limit Assignee from operating under or realizing the benefits of the terms, conditions
and provisions of this Assignment.

     (iii) Assignor is not in default under the Contract Documents or any of them, and
to Assignor’s Knowledge, neither Owner or any other party to the Contract Documents is in
default thereunder.

     (iv) No authorizations, consents, approvals, licenses, permits, filings or
registrations with any Governmental Authority are necessary for the execution, delivery or
performance by

-3-

 

Assignor of this Assignment or for the validity or enforceability thereof except
those obtained on or prior to the Closing Date.

     (v) To the best of Assignor’s knowledge and except as set forth in the reports
listed on Schedule 4.1 to the Credit Agreement, (A) no enforcement, cleanup, removal or
other governmental or regulatory actions have, at any time, been instituted, completed or
threatened against the Project, or against Assignor with respect to the Project, pursuant to
any applicable federal, state or local laws, ordinances, or regulations relating to any
Hazardous Materials (“Hazardous Materials Laws”); (B) no violation or non-compliance with
Hazardous Materials Laws has occurred with respect to the Project at any time; (C) no claims
have, at any time, been made or threatened by any third party against the Project or against
Assignor with respect to the Project, relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Materials (the matters set forth
in clauses (A) and (B) above are hereinafter referred to as “Hazardous Materials
Claims”); and (D) no occurrence or condition on any real property adjoining or in the
vicinity of the Project exists which could cause the Project to be subject to any
restrictions on the ownership, occupancy, transferability or use of the Project under any
Hazardous Materials Laws. Assignor shall promptly advise Assignee in writing if any
Hazardous Materials Claims are hereafter asserted, or if Assignor obtains knowledge of any
discharge, release, or disposal of any Hazardous Materials in, on, under or about the
Project, or that any condition described in clause (D) above has occurred.

          Section 5. Covenants of Assignor with Respect to Collateral. Assignor
covenants
and agrees as follows:

     (i) Assignor shall perform and observe, in a timely manner, all of the
covenants, conditions, obligations and agreements of Assignor under the Contract Documents
and Additional Contracts and shall suffer or permit no delinquency on its part to exist
thereunder.

     (ii) (A) Without the prior written consent of Assignee, which consent may be
granted or denied in Assignee’s sole discretion, the Assignor shall not sell, assign,
transfer, mortgage or pledge the Contract Documents, Additional Contracts, or other
Collateral, or (B) without the prior written consent of Assignee, which shall not be
unreasonably withheld, cancel, terminate, amend, supplement or modify of the Contract
Documents or Additional Contracts.

     (iii) Assignor shall use its commercially reasonable efforts to enforce or secure
the performance of each and every material obligation, covenant, condition and agreement to
be performed by the Owner under the Contract Documents.

     (iv) Assignor will promptly and faithfully comply with, conform to and obey all
present and future Requirements of Law which may be applicable to it or to the Collateral,
or any part thereof.

     (v) Assignor shall keep in full force and effect all licenses, permits and other
governmental approvals which are necessary for the operation of the Collateral and any
performance under the Contract Documents (including any construction activities on the
Project) and Additional Contracts, and furnish evidence satisfactory to Assignee of such
compliance. Without limiting the foregoing, Assignor shall not transfer or permit the
transfer of any licenses, permits and other governmental approvals which are necessary for
the development or operation of the Project in accordance with the Contract Documents,
except from Owner to Assignor, without the prior written approval of Assignee, which
approval may be withheld in Assignee’s sole and absolute discretion.

-4-

 

     (vi) Without limiting the generality of Section 5(iv) hereof, to the extent
Assignor or its agents undertake or are required to undertake any actions on or in respect
of the Project, Assignor shall keep and maintain the Project in compliance with, and shall
not cause or permit the Project to be in violation of, any Florida, federal or local laws,
ordinances or regulations relating to industrial hygiene or to the environmental conditions
on, under or about the Collateral, including, but not limited to, soil and ground water
conditions and underground storage tanks (“USTs”). Assignor shall not use, generate,
manufacture, store, dispose of or permit to exist in, on, under or about the Project any
Hazardous Materials. Assignor hereby agrees at all times to comply fully and in a timely
manner with, and to cause all of its employees, agents, contractors and subcontractors and
any other persons occupying or present on the Project on its behalf to so comply with, all
applicable Florida, federal and local laws, regulations, guidelines, codes, statutes, and
ordinances applicable to the use, generation, handling, storage, treatment, transport and
disposal of any Hazardous Materials now or hereafter located or present on or under the
Project, including, but not limited to, any USTs. Without Assignee’s prior written consent,
which shall not be unreasonably withheld, Assignor shall take no remedial action with
respect to any Hazardous Materials in, on, under, over, from or affecting the Project, and
shall not enter into any settlement agreement, consent decree or other compromise or
agreement related to any such Hazardous Materials. Assignee’s consent to such action shall
not be construed to mean that Assignee has the capacity to cause or determine the
appropriate Hazardous Materials management practices of Assignor but only is intended for
Assignee to assure that its collateral hereunder is not being impaired.

     (vii)
Inspection; Estoppel Certificates. Subject to the limitations set
forth in the Contract Documents, Assignor will permit Assignee, at all reasonable times and
with reasonable notice, to inspect the Project. Without limiting the foregoing, such
inspections may include entry by Assignee or its agents on the Project: (i) to determine the
status of construction, quality and condition of improvements on the Project, (ii) to
ascertain the existence of Hazardous Materials on the Project, (iii) to determine the
compliance of the Project and its use with any applicable law, rule or regulation and (iv)
for any other purpose deemed reasonably necessary by Assignee. Assignee shall use
commercially reasonable efforts to avoid interfering with ongoing construction, development
and sales activities on the Project. Assignor and Assignee each will, from time to time,
upon twenty (20) days, prior written request by the other party, execute, acknowledge and
deliver to the requesting party, in the case of a request to Assignee, a certificate signed
by an authorized officer or officers and in the case of a request to Assignor, an Officer’s
Certificate, stating that this Assignment is unmodified and in full force and effect (or, if
there have been modifications, that this Assignment is in full force and effect as modified
and setting forth such modifications) and stating the amount of accrued and unpaid interest
and the outstanding principal amount of the Note. The estoppel certificate from Assignor
shall also state either that, to Assignor’s best knowledge and based on no independent
investigation, no Default exists hereunder or under the Contract Documents or, if any Event
of Default shall exist hereunder, specify any Event of Default of which Assignor has actual
knowledge and the steps being taken to cure such Event of Default.

          Section 6. Hold Harmless. Assignor will defend and hold Assignee harmless
from
any action, proceeding or claim affecting the Project, this Assignment and/or the Collateral, to
the extent such action, proceeding or claim did not result primarily from Assignee’s gross
negligence or willful wrongdoing. Assignor shall appear in and defend (or pay the reasonable
expenses of Assignee to defend, if Assignee gives Assignor notice of its election to handle such
defense) any action or proceeding purporting to affect the security of this Assignment and/or the
rights and/or powers of Assignee hereunder, and Assignor shall pay all costs and expenses
(including costs of evidence of title and reasonable attorneys’ fees) in any action or proceeding
in which Assignee may so appear and/or any suit

-5-

 

by Assignee to realize upon the security provided by this Assignment, to enforce any
obligations secured by this Assignment, and/or to prevent the breach hereof. Assignor’s obligations
under this Section 6 shall survive payment of the Indebtedness and the release of the lien and
security interest granted herein.

          Section 7. Mechanic’s Lien. Assignor shall not permit or suffer any
mechanic’s, materialmen’s or other lien to be created or to remain a lien upon the Project or any
portion thereof as a result of access to and entry upon the Project by Assignor or its agents;
provided however, Assignor shall have the right to pursue a Good Faith Contest of any such claims
in accordance with the requirements of the Credit Agreement.

          Section 8. Remedies. Upon the occurrence and during the continuance of any
Event of Default, Assignee shall have the right (but not the obligation), without notice to or
demand on Assignor: (i) to exercise any and all rights and remedies provided under the Credit
Agreement, the other Loan Documents or hereunder, as well as such remedies as may be available at
law or in equity, and (ii) to correct any such Event of Default in such manner and to such extent
as Assignee may deem reasonably necessary to protect the security hereof, including specifically,
without limitation, the right (but not the obligation) to appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or powers of Assignee, and also
the right (but not the obligation), either in person or by agent, with or without bringing any
action or proceeding, or by a receiver to be appointed by a court at any time hereafter, to perform
and discharge each and every obligation, covenant, condition and agreement of Assignor under the
Contract Documents, Additional Contracts, and Owner Consent, and, in exercising any such powers, to
pay necessary costs and expenses, employ counsel, and incur and pay reasonable attorneys’ fees and
expenses. For purposes of this paragraph, the term “attorneys” includes attorneys who are employees
of Assignee acting as counsel for Assignee, and the terms “fees,” “costs” and “expenses” shall
include, without limitation, the reasonable fees charged by Assignee for its in-house counsel.

          Section 9. Receiver. Assignee shall be entitled, as a matter of strict right,
without notice and ex parte, and without regard to the value or occupancy of the security, or the
solvency of the Assignor, Borrower or of any Guarantor, or the adequacy of the Collateral as
security for the Indebtedness, to apply to any court of competent jurisdiction (including
application on ex parte motion, if deemed necessary or desirable by Assignee), for the appointment
of a receiver to perform the obligations of Assignor under the Contract Documents and Additional
Contracts and to take possession of the Collateral and collect any Rents due Assignor. Such actions
shall include, without limitation, each of the following to the extent permitted under the Contract
Documents and the Owner Consent: taking charge of, managing, preserving, protecting, completing
construction of, and operating the Project, or any combination thereof; making all necessary and
needed repairs; paying all Impositions and all other costs incurred in connection with the Project;
and, after payment of the expenses of the receivership, including reasonable attorneys’ and legal
assistants’ fees and after compensation to the receiver for management and completion of the
Project, applying all net proceeds derived therefrom in reduction of the Indebtedness or in such
other manner as the court shall direct. The appointment of such receiver shall be a matter of
strict right to Assignee, regardless of the adequacy of the security or of the solvency of any
party obligated for payment of the Secured Obligations. All expenses, fees and compensation
incurred pursuant to any such receivership shall be secured by the lien of this Assignment until
paid. The receiver, personally or through agents, may exclude Assignor wholly from the Project and,
to the extent permitted under the Contract Documents and the Owner Consent, have, hold, use,
operate, manage and control the Project and may in the name of Assignor exercise all of Assignor’s
rights and powers to maintain, construct, operate, restore, insure and keep insured the Project in
such manner as such receiver deems appropriate.

          Section 10. Enforcement of Contract Documents. At any time after the occurrence
and during the continuance of an Event of Default, Assignee, at its option, without notice, and
without

-6-

 

regard to the adequacy of security for the Secured Obligations, either in person or by
agent, with or without bringing any action or proceeding, or by a receiver to be appointed by a
court at any time hereafter, may enforce the Contract Documents and Additional Contracts for its
own benefit. The exercise of any rights under this Assignment shall not be deemed to cure or waive
any Event of Default, or waive, modify or affect any notice of any Potential Default or Event of
Default, or invalidate any act done pursuant to such notice.

          Section 11. No Obligation of Assignee: Assignor Remains Liable. Notwithstanding
any legal presumption to the contrary, nothing contained herein shall operate or be construed to
obligate Assignee to perform or discharge, nor does Assignee hereby undertake to perform or
discharge, any of the terms, covenants, conditions, obligations, duties or liabilities contained in
the Contract Documents or Additional Contracts or otherwise to impose any obligation upon Assignee
with respect to the Collateral. Notwithstanding anything to the contrary, (i) Assignor shall remain
liable in respect of the Contract Documents and Additional Contracts to the extent set forth
therein to perform and satisfy all of its duties and obligations thereunder to the same extent as
if this Assignment had not been executed and (ii) the exercise by Assignee of any of the rights and
remedies hereunder shall not release Assignor from any of its duties or obligations under the
Contract Documents and Additional Contracts.

          Section 12. Further Assurances. Assignor shall, from time to time upon the
written request of Assignee, promptly execute and deliver such further documents and take such
further action as Assignee may reasonably request in order to create, preserve, perfect and protect
the assignment and security interest granted hereby or to enable Assignee to exercise and enforce
its rights and remedies hereunder. All of the foregoing shall be at Assignor’s expense (including,
without limitation, (i) all filing, registration and recording fees and (ii) all stamp taxes and
other taxes and charges in connection therewith).

          Section 13. Attornev-in-Fact. Assignee is hereby appointed the attorney-in-fact
of Assignor for the purpose of carrying out the provisions of this Assignment and taking any action
and executing any instruments which Assignee may deem necessary or advisable to accomplish the
purposes hereof, including, without limitation, the right to sign and file any financing statement
(or amendment or extension thereof) deemed necessary by Assignee in connection herewith, which
appointment as attorney-in-fact is irrevocable and coupled with an interest.

          Section 14. Security Agreement.

          (a) This Assignment shall also constitute a security agreement as that term is used in the
Uniform Commercial Code (the “UCC”) and for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and for the purpose of further securing payment and performance of
the Indebtedness and the Obligations, Assignor hereby grants to Assignee a security interest and
lien in all rights, titles, and interests now owned or hereafter acquired by Assignor in all
Personalty and other collateral constituting a part of the Collateral.

          (b) Assignor represents and warrants that, except for any financing statement filed by
Assignee, no presently effective financing statement covering the Personalty or any part of the
Collateral, has been filed with any filing officer, and no other security interest has attached or
has been perfected in the Collateral or any part thereof. Assignor shall from time to time within
fifteen (15) days after request by Assignee, execute, acknowledge and deliver any financing
statement, renewal, affidavit, certificate, continuation statement or other document as Assignee
may request in order to evidence, perfect, preserve, continue, extend or maintain this security
agreement and the security interest created hereby as a first lien on the Collateral. Assignor
authorizes Assignee to file financing statements describing the Collateral or any part thereof.

-7-

 

          (c) Assignee shall have, in addition to all other rights and remedies
provided herein or in any other Loan Document, in law, at equity or otherwise, all rights and
remedies of a secured party under the UCC. Assignee shall give Assignor ten (10) days’ written
notice of the time and place of any public sale of the Collateral or the time after which any
private sale or any other intended disposition is to be made. After deducting all expenses incurred
in connection with the enforcement of its rights hereunder, Assignee shall cause the proceeds of
the Collateral to be applied to the payment of the Secured Obligations in such order as Assignee
may determine, and Assignor, subject to the terms of the other Loan Documents, shall remain liable
for any deficiency.

          Section 15.
No Liability; Indemnity.

          (a) In the exercise of the powers herein granted to Assignee, no liability shall be asserted
or enforced by Assignor against Assignee, all such liability being hereby expressly waived and
released by Assignor except for claims resulting from the gross negligence or willful misconduct of
Assignee. Assignor shall indemnify, defend and hold Assignee harmless against and from all
liability, loss, damage and expense (including reasonable attorney’s fees and disbursements), which
Assignee may or shall incur or be subject to by reason of this Assignment, by reason of any act or
omission of Assignor under any of the Contract Documents, or by reason of any action taken in good
faith by Assignee hereunder, and against and from any and all claims and demands whatsoever which
may be asserted against Assignee by reason of any alleged obligation or undertaking on its part to
perform or discharge any of the terms, covenants and conditions contained in the Contract
Documents, Additional Contracts or otherwise with respect to the Collateral. Should Assignee incur
any such liability, loss, damage or expense, the amount thereof (including reasonable costs and
expenses, reasonable attorneys’ fees and expenses actually incurred), together with interest
thereon at the default rate of interest set forth in Section 2.9(5) of the Credit Agreement, shall
be secured hereby and by the other Security Instruments and all other Loan Documents and shall be
payable by Assignor to Assignee immediately upon demand.

          (b) Without limiting any other indemnification obligations hereunder, Assignor shall indemnify
and hold Assignee harmless from any loss, liability, cost, expense and/or claim (including without
limitation the cost of any fines, remedial action, damage to the environment and cleanup and the
fees of experts and reasonable attorneys fees) of or against Assignee arising from (i) the use,
presence, generation, storage, release or disposal of any Hazardous Materials in, on, under, over,
from or affecting the Collateral or the Project or the transport of any Hazardous Materials to or
from the Project; and (ii) the violation of any law relating to industrial hygiene or environmental
conditions in connection with the Collateral or the Project, including soil and ground water
conditions and USTs; and (iii) the breach of any of the representations, warranties and covenants
of Assignor with respect to Hazardous Materials set forth in this Assignment. Assignee shall have
the right to approve any counsel selected by Assignor to defend Assignee hereunder. Assignee may
hire engineers and other consultants of its choice to perform the inspections, and testing
permitted under this Assignment relating to Hazardous Materials, all at Assignor’s sole expense.
The inspection of the Project by Assignee or its agents will not relieve Assignor, of its
obligation to comply with any environmental laws. Assignor’s obligations under this Section shall
survive payment of the Indebtedness and the release of the lien granted herein.

          Section 16. Termination. Assignee, by the acceptance of this Agreement, agrees
that when all Secured Obligations shall have been paid in full and fully performed, subject to
Section 2.20(5) of the Credit Agreement and Section 18 below, this Assignment shall terminate, and
Assignee shall execute and deliver to Assignor, upon such termination, at Assignor’s sole cost and
expense, such instruments of re-assignment, all without recourse and without any representation or
warranty whatsoever, as shall be reasonably requested by Assignor.

-8-

 

          Section 17. Expenses. Assignor agrees to pay to Assignee immediately and
without demand all costs and expenses incurred by Assignee in exercising the remedies under this
Assignment, the Credit Agreement, the Guaranties and the other Loan Documents, including but
without limitation, court costs and attorneys’ fees expended or incurred by Assignee in any
arbitrations, judicial reference, legal action or otherwise in connection with (a) the negotiation,
preparation, amendment and enforcement of the Credit Agreement and the other Loan Documents,
including without limitation during any workout or attempted workout, and/or in connection with the
rendering of legal advice as to Assignee’s rights, remedies and obligations under the Credit
Agreement or any of the other Loan Documents, (b) collecting any sum which becomes due to Assignee
under the Credit Agreement or any of the other Loan Documents, (c) any proceeding for declaratory
relief, any counterclaim to any proceeding or any appeal, or (d) the protection, preservation or
enforcement of any rights or remedies of Assignee. All such costs and expenses shall accrue
interest at the Default Interest Rate or the highest rate permitted under applicable law from the
date of expenditure until said sums have been paid. Assignee shall be entitled to bid, at the sale
of the Collateral held pursuant to any foreclosure of this instrument, the amount of said costs,
expenses and interest in addition to the amount of the other Indebtedness and Secured Obligations
as a credit bid, the equivalent of cash.

          Section 18. Reinstatement. This Assignment and the security interest created
hereunder shall automatically be reinstated if and to the extent that for any reason any payment by
or on behalf of Assignor in respect of the Secured Obligations is rescinded or must otherwise be
restored by any holder of the Secured Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and Assignor shall indemnify Assignee for all reasonable
costs and expenses (including, without limitation, reasonable attorney’s fees and disbursements)
incurred by Assignee in connection with such rescission or restoration.

          Section 19. Miscellaneous.

          (a) No Waiver. No failure on the part of Assignee or any of its agents to exercise,
and no course of dealing with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by Assignee
or any of its agents of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and
are not exclusive of any remedies provided by law.

          (b) Marshaling. Assignee shall not be required to marshal any present or future
security for (including but not limited to this Assignment and the Contract Documents subject to
the security interest created hereby), or guaranties of, the Secured Obligations or any of them, or
to resort to such security or guaranties in any particular order; and all of its rights hereunder
and in respect of such securities and guaranties shall be cumulative and in addition to all other
rights, however existing or arising. To the extent that it lawfully may, Assignor hereby agrees
that it will not invoke any law relating to the marshaling of collateral which might cause delay in
or impede the enforcement of Assignee’s rights under this Assignment or under any other instrument
evidencing any of the Secured Obligations or under which any of the Secured Obligations is
outstanding or by which any of the Secured Obligations is secured or guaranteed, and to the extent
that it lawfully may Assignor hereby irrevocably waives the benefits of all such laws. Assignee
shall have no duty as to the collection or protection of the Contract Documents or any income
thereon, nor as to the preservation of rights against prior parties, nor as to the preservation of
any rights pertaining thereto beyond the sole custody thereof.

          (c) Governing Law. THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT ANY SUCH LAWS MAY NOW OR HEREAFTER BE
PREEMPTED BY FEDERAL

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LAW, IN WHICH CASE SUCH FEDERAL LAW SHALL SO GOVERN AND BE CONTROLLING; AND PROVIDED
FURTHER, THAT THE LAWS OF THE STATE OF FLORIDA SHALL GOVERN AS TO THE CREATION, PERFECTION,
PRIORITY AND ENFORCEMENT OF LIENS AND SECURITY INTERESTS IN PROPERTY LOCATED IN SUCH STATE, IT
BEING UNDERSTOOD, HOWEVER, THAT TO THE FULLEST EXTENT PERMITTED BY THE LAWS OF THE STATE OF
FLORIDA, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL THE
LOAN DOCUMENTS, AND THE INDEBTEDNESS AND OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.

          (d) Severability. If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally construed in favor of
Assignee in order to carry out the intentions of the parties hereto as nearly as may be possible
and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not
affect the validity or enforceability of such provision in any other jurisdiction.

          (e) Cumulative Remedies. All rights and remedies set forth in this Assignment are
cumulative, and Assignee may recover judgment thereon, issue execution therefor, and resort to
every other right or remedy available at law or in equity, without first exhausting and without
affecting or impairing the security of any right or remedy afforded hereby; and no such right or
remedy set forth in this Assignment shall be deemed exclusive of any of the remedies or rights
granted to Assignee in the Credit Agreement, any other Loan Documents, or any other document.
Nothing contained in this Assignment shall be deemed to limit or restrict the rights and remedies
of Assignee under any other document related to the Secured Obligations. For payment of the
Indebtedness, Assignee may resort to any other security therefor held by Assignee in such order and
manner as Assignee may elect. In the event Assignee shall have proceeded to enforce any right under
the Credit Agreement, any Guaranty or any other Loan Document and such proceedings shall have been
discontinued or abandoned for any reason, then in every such case Assignor, Borrower, Guarantors
and Assignee shall be restored to their former positions and the rights, remedies and powers of
Assignee shall continue as if no such proceedings had been taken. Without affecting the liability
of any person (other than any person released pursuant to the provisions of this section) for
payment of any Indebtedness secured hereby, and without affecting or impairing in any way the
priority or extent of the liens of the Loan Documents upon any property not specifically released
pursuant hereto, Assignee may at any time and from time to time (a) release any person liable for
payment of any Indebtedness secured hereby; (b) extend the time or agree to alter the terms of
payment of any of the Indebtedness; or (c) accept additional security of any kind; (d) release any
property securing the Indebtedness.

          (f) Waivers. Etc. This Assignment may not be amended, waived or discharged except by
an instrument in writing duly executed by Assignor and Assignee, except Assignee may elect to waive
any of its rights hereunder from time to time without permanently waiving any such right by virtue
of any single such waiver or being obligated so to waive such right (or any other right) in any
future similar or dissimilar circumstances. Any failure by Assignee to insist upon strict
performance by Assignor or Guarantor of any of the terms and provisions of any of the Loan
Documents shall not be deemed to be a waiver of any of the terms or provisions of the Loan
Documents and Assignee shall have the right thereafter to insist upon strict performance by the
applicable Borrower Parties of any and all of them.

          (g) Successors and Assigns. This Assignment shall be binding upon, and shall inure to
the benefit of the respective successors and assigns of Assignor, Assignee and each holder of any
of the Secured Obligations; provided, however, that Assignor shall not assign or transfer
its rights or obligations hereunder without the prior written consent of Assignee.

-10-

 

          (h) Notices. All notices, requests and other communications provided
for herein shall be given or made in writing in the manner specified in the Credit Agreement.

          (i) Headings. Headings used in this Assignment are for convenience of reference
only and do not constitute part of this Assignment for any purpose.

          (j) WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, ASSIGNOR
HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING BROUGHT BY ASSIGNOR OR AGENT
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR IN
CONNECTION WITH THIS ASSIGNMENT.

          (k) Counterparts. This Assignment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument and either
of the parties hereto may execute this Assignment by signing any such counterpart.

          Section 20. Assignor’s Third Party Waivers. Assignor hereby acknowledges and
agrees that this Assignment is subject to the terms of Section 2.20 of the Credit Agreement,
including the waivers set forth in subsection (3) thereof.

[signature page follows]

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     IN WITNESS WHEREOF, the Assignor executed this Assignment as of the day and year first
written above.

	 	 	 	 	 	 	 
	 	 	ASSIGNOR:	 	 
	 
	 	 	 	 	 	 
	SIGNATURES WITNESSED BY:
	 	 	 	 	 	 
	 	 	EH/Transeastern, LLC, a Delaware Limited

Liability Company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Tommy L. McAden,	 	 
	 	 	Executive Vice President	 	 

	 	 	 	 	 
	Sign:
	 	 	 	 
	Print:

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Sign:
	 	 	 	 
	Print:

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 	 	(Corporate Seal)

STATE OF                                                  )

COUNTY OF                                              )

     THE FOREGOING INSTRUMENT was acknowledged before me this                      day of,                     
2005, by                                         , as                              
            of    
                                     , in its capacity as
                                         of                             
            
, on behalf of the                                          and the
                                        . He/she either                     is personally known to me, or  
                    has provided a valid
                     driver’s license as identification.

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Print Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(NOTARIAL SEAL)	 	Notary Public, State of	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	My Commission Expires:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

APPENDIX 1

 GLOSSARY

     1.1
Accounts: All of Assignor’s present and future rights to payment of money,
accounts, accounts receivable which arise from or relate to construction on the Project and to all
contracts and agreements which relate to the foregoing.

     1.2 Awards: All awards and payments made or hereafter to be made by any Governmental
Authority having the power of eminent domain with respect to Assignor, including any awards and
payments for any taking of all or a portion of the Collateral, as a result of, or by agreement in
anticipation of, the exercise of the right of condemnation or eminent domain, or for any change or
changes of grade of streets affecting the Collateral.

     1.3 Deposited Funds: All funds deposited with Assignee as required under the Loan
Documents.

     1.4 Event of Default. An “Event of Default” under the Credit Agreement or a default
under this Assignment beyond any cure periods provided with respect thereto.

     1.5 General Intangibles: All choses in action, causes of action and all other
intangible personal property of Assignor of every kind and nature (other than the Accounts)
including, without limitation, corporate or other business records relating to Assignor and/or the
Collateral (including computer-readable memory and any computer hardware or software necessary to
retrieve such memory), good will, inventions, designs, software and other intellectual property,
patents, trademarks and applications therefor, trade names, trade styles, trade secrets,
copyrights, registrations, licenses, franchises, customer lists, tax refund claims and the like,
wherever located.

     1.6 Hazardous Materials: Any flammable explosives, radioactive materials, chemical
liquids or solids, polychlorinated biphenyls, asbestos, liquid or gaseous products or hazardous
wastes, pollutants, toxic pollutants, toxic substances and similar substances and materials defined
as hazardous or toxic wastes, substances or materials under any applicable law, including, without
limitation, the Florida Resource Recovery and Management Act
(Section 403.702, et seq., Florida
Statutes); the Pollutant Discharge Prevention and Control Act (Sections 376.011 — 376.17 and 376.19
- 376.21, Florida Statutes), the Comprehensive Environmental Response, Compensation, and Liability
Act (42 U.S.C. Section 9601, et seq.); the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801, et seq.); the Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et
seq.); any so-called “Superfund” or “Superlien”
law; the Toxic Substance Control Act of 1976 (15
U.S.C. Section 2601 et seq.); the Clean Water Act (33 U.S.C. Section 1251 et seq.); and the Clean
Air Act (42 U.S.C. Section 7901 et seq.); and also including any petroleum, including crude oil or
any fraction thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas
useable for fuel, or any mixture thereof.

     1.7 Impositions; All (a) real estate and personal property taxes and other taxes and
assessments, water and sewer rates and charges, and all other governmental charges and any interest
or costs or penalties with respect thereto, and charges for any easement or agreement maintained
for the benefit of the Collateral which at any time prior to or after the execution of the
Assignment may be assessed, levied, or imposed upon the Collateral or the rent or income received
therefrom or any use or occupancy thereof, and (b) other taxes, assessments, fees and governmental
charges levied, imposed or assessed upon or against Assignor or any of its properties.

 

 

     1.8 Indebtedness: The principal of and accrued interest on and all other
amounts, payments and premiums due under the Credit Agreement (including any future advances), and
all other amounts, now existing or hereafter arising of Borrower Parties, or any of them, owing to
Assignee under and/or secured by the Assignment, or any amendments, modifications, renewals,
substitutions and extensions of any of the foregoing. Indebtedness shall not include any
obligations arising under the Indemnity Agreement.

     1.9 Indemnity Agreement: The Environmental Indemnity Agreement, dated as of even date
herewith, executed by Borrower and Guarantors in favor of Assignee and any amendments,
modifications, renewals, substitutions and extensions of any of the foregoing.

     1.10 Inventory: Any and all goods, merchandise and other personal property, whether
tangible or intangible, now owned or hereafter acquired by Assignor which is held for sale, lease
or license to customers, furnished to customers under any contract or service or held as raw
materials, work in process, or supplies or materials used or consumed in Assignor’s business.

     1.11 Personalty All tangible and intangible personal property of Assignor (whether now
owned or hereafter acquired), including all equipment, inventory, goods, consumer goods, chattel
paper, instruments, working capital reserves, project escrows, money (which are rental, tax or
insurance deposits), general intangibles, documents, minerals, crops and timber (as those terms are
defined in the applicable Uniform Commercial Code) and all other personal property of Assignor
which is used on, or in connection with or is acquired for such use, or which arises out of the
development or improvement of the Project, together with all rights, titles and interests
appurtenant thereof, (together with all additions, accessions, accessories, amendments and
modifications thereto, extensions, renewals, replacements, enlargements and proceeds thereof,
substitutions therefor, and income and profits therefrom), including all Inventory, Accounts,
Deposited Funds, and General Intangibles,

     1.12 Rents: All of Assignor’s right, title and interest in and to all of the rents,
royalties, issues, profits, revenue, income and other benefits of the Project or the Contract
Documents or arising from the use or enjoyment of all or any portion thereof, whether now due, past
due, or to become due.

 

 

Exhibit A

[INSERT DESCRIPTION OF PROPERTY]

 

 

SCHEDULE 1

DESCRIPTION OF CONTRACT

Option and Development Agreement dated as of                     , 200_, by and between                     , LLC,
[a Florida limited liability company], as Owner (the “Owner”), and [Transeastern Properties,
Inc., a Florida corporation], as Optionee, as amended byEX-10.3 Sr. Mezzanine Credit Agreement

 

EXHIBIT __

$137,500,000

SENIOR MEZZANINE CREDIT AGREEMENT

by and among

TE/TOUSA MEZZANINE, LLC

as the Borrower

DEUTSCHE BANK TRUST COMPANY AMERICAS,

and

THE INSTITUTIONS FROM TIME TO TIME PARTY HERETO

as Lenders

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as the Administrative Agent for the Lenders

DEUTSCHE BANK SECURITIES INC.,

as Sole Lead Arranger and Sole Book Running Manager

Dated as of August 1, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE 1. DEFINED TERMS	 	 	1	 
	 	 	 	 	 
	 	 	 	 
	 	 	1.1	 	Defined Terms
	 	 	1	 
	 	 	1.2	 	Other Interpretive Provisions
	 	 	29	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 2. CREDIT FACILITY	 	 	31	 
	 	 	 	 	 
	 	 	 	 
	 	 	2.1	 	Loan
	 	 	31	 
	 	 	2.2	 	Reserved
	 	 	32	 
	 	 	2.3	 	Reserved
	 	 	32	 
	 	 	2.4	 	Funding of Borrowings
	 	 	32	 
	 	 	2.5	 	Interest Elections
	 	 	32	 
	 	 	2.6	 	Extension of Initial Maturity Date
	 	 	33	 
	 	 	2.7	 	Manner of Payment of Loan; Evidence of Debt
	 	 	35	 
	 	 	2.8	 	Repayment and Prepayment of the Loan
	 	 	36	 
	 	 	2.9	 	Interest
	 	 	38	 
	 	 	2.10	 	Presumptions of Payment
	 	 	38	 
	 	 	2.11	 	Pro Rata Treatment
	 	 	39	 
	 	 	2.12	 	Inability to Determine Rates
	 	 	39	 
	 	 	2.13	 	Illegality
	 	 	39	 
	 	 	2.14	 	Funding
	 	 	40	 
	 	 	2.15	 	Increased Costs
	 	 	40	 
	 	 	2.16	 	Obligation of Lenders to Mitigate; Defaulting Lenders; Replacement of Lenders
	 	 	41	 
	 	 	2.17	 	Funding Indemnification
	 	 	42	 
	 	 	2.18	 	Taxes
	 	 	43	 
	 	 	2.19	 	Preferential Payments
	 	 	44	 
	 	 	2.20	 	Credit Support
	 	 	44	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 3. CONDITIONS PRECEDENT	 	 	44	 
	 	 	 	 	 
	 	 	 	 
	 	 	3.1	 	Conditions to Funding of the Loan
	 	 	44	 
	 	 	3.2	 	Outside Closing Date
	 	 	46	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 4. REPRESENTATIONS AND WARRANTIES	 	 	47	 
	 	 	 	 	 
	 	 	 	 
	 	 	4.1	 	Financial Condition
	 	 	47	 
	 	 	4.2	 	No Material Adverse Effect
	 	 	47	 
	 	 	4.3	 	Compliance with Laws
	 	 	47	 
	 	 	4.4	 	Organization, Powers; Authorization; Enforceability
	 	 	47	 
	 	 	4.5	 	No Conflict
	 	 	48	 
	 	 	4.6	 	No Material Litigation
	 	 	49	 
	 	 	4.7	 	Taxes
	 	 	49	 
	 	 	4.8	 	Regulated Entities
	 	 	50	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	4.9	 	Subsidiary Entities
	 	 	50	 
	 	 	4.10	 	Federal Reserve Board Regulations
	 	 	50	 
	 	 	4.11	 	ERISA Compliance
	 	 	50	 
	 	 	4.12	 	Assets and Liens
	 	 	51	 
	 	 	4.13	 	Securities Acts
	 	 	52	 
	 	 	4.14	 	Consents,
Etc.
	 	 	52	 
	 	 	4.15	 	Hazardous Materials
	 	 	52	 
	 	 	4.16	 	Intellectual Property
	 	 	53	 
	 	 	4.17	 	Insurance
	 	 	53	 
	 	 	4.18	 	Full Disclosure
	 	 	54	 
	 	 	4.19	 	Brokers
	 	 	54	 
	 	 	4.20	 	No Default
	 	 	54	 
	 	 	4.21	 	Solvency
	 	 	54	 
	 	 	4.22	 	Contractual Obligations
	 	 	54	 
	 	 	4.23	 	Representations Regarding the Mortgaged Property
	 	 	54	 
	 	 	4.24	 	Use of Proceeds
	 	 	56	 
	 	 	4.25	 	Single Purpose Entity
	 	 	56	 
	 	 	4.26	 	Labor
	 	 	56	 
	 	 	4.27	 	Taxpayer Identification Number
	 	 	56	 
	 	 	4.28	 	Anti-Terrorism Laws
	 	 	56	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 5. AFFIRMATIVE COVENANTS	 	 	57	 
	 	 	 	 	 
	 	 	 	 
	 	 	5.1	 	Reporting Requirements
	 	 	57	 
	 	 	5.2	 	Maintenance of Existence and Rights
	 	 	60	 
	 	 	5.3	 	Compliance with Laws; Forfeiture
	 	 	60	 
	 	 	5.4	 	Access
	 	 	60	 
	 	 	5.5	 	Insurance; Casualty; Condemnation; Restoration
	 	 	60	 
	 	 	5.6	 	Books and Records
	 	 	61	 
	 	 	5.7	 	Maintenance of Property
	 	 	61	 
	 	 	5.8	 	Taxes
	 	 	61	 
	 	 	5.9	 	Environmental
	 	 	62	 
	 	 	5.10	 	Business and Operations
	 	 	62	 
	 	 	5.11	 	Title to the Mortgaged Property
	 	 	62	 
	 	 	5.12	 	Loan Proceeds
	 	 	62	 
	 	 	5.13	 	Hedging Arrangements
	 	 	62	 
	 	 	5.14	 	Single Purpose Entities
	 	 	62	 
	 	 	5.15	 	Subordination
	 	 	63	 
	 	 	5.16	 	Further Assurances
	 	 	64	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 6. NEGATIVE COVENANTS	 	 	64	 
	 	 	 	 	 
	 	 	 	 
	 	 	6.1	 	Liens
	 	 	64	 
	 	 	6.2	 	Indebtedness
	 	 	65	 
	 	 	6.3	 	Fundamental Change
	 	 	65	 
	 	 	6.4	 	Disposition
	 	 	65	 
	 	 	6.5	 	Investments
	 	 	66	 

ii

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	6.6	 	Transactions with Affiliates
	 	 	68	 
	 	 	6.7	 	Modifications to Organizational Documents and Material Agreements
	 	 	68	 
	 	 	6.8	 	Restricted Payments
	 	 	68	 
	 	 	6.9	 	Financial Covenants
	 	 	70	 
	 	 	6.10	 	Sale Leaseback
	 	 	71	 
	 	 	6.11	 	Negative Pledges
	 	 	71	 
	 	 	6.12	 	Covenants Regarding the Senior Loan
	 	 	71	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 7. EVENTS OF DEFAULT	 	 	71	 
	 	 	 	 	 
	 	 	 	 
	 	 	7.1	 	Event of Default
	 	 	71	 
	 	 	7.2	 	Remedies
	 	 	73	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 8. THE ADMINISTRATIVE AGENT	 	 	74	 
	 	 	 	 	 
	 	 	 	 
	 	 	8.1	 	Appointment
	 	 	74	 
	 	 	8.2	 	Delegation of Duties
	 	 	75	 
	 	 	8.3	 	Exculpatory Provisions
	 	 	75	 
	 	 	8.4	 	Reliance by the Agents
	 	 	75	 
	 	 	8.5	 	Notice of Default
	 	 	76	 
	 	 	8.6	 	Non-Reliance on Agents and Other Lenders
	 	 	76	 
	 	 	8.7	 	Indemnification
	 	 	76	 
	 	 	8.8	 	Agents in Their Individual Capacity
	 	 	77	 
	 	 	8.9	 	Successor Administrative Agent
	 	 	77	 
	 	 	8.10	 	Limitations on Agents Liability
	 	 	77	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 9. MISCELLANEOUS PROVISIONS	 	 	77	 
	 	 	 	 	 
	 	 	 	 
	 	 	9.1	 	No Assignment by Borrower
	 	 	77	 
	 	 	9.2	 	Modification
	 	 	78	 
	 	 	9.3	 	Cumulative Rights; No Waiver
	 	 	78	 
	 	 	9.4	 	Entire Agreement
	 	 	79	 
	 	 	9.5	 	Survival
	 	 	79	 
	 	 	9.6	 	Notices
	 	 	79	 
	 	 	9.7	 	Governing Law
	 	 	79	 
	 	 	9.8	 	Assignments,
Participations, Syndication, Etc.
	 	 	79	 
	 	 	9.9	 	Counterparts
	 	 	81	 
	 	 	9.10	 	Sharing of Payments
	 	 	81	 
	 	 	9.11	 	Confidentiality
	 	 	82	 
	 	 	9.12	 	Consent to Jurisdiction
	 	 	82	 
	 	 	9.13	 	Waiver of Jury Trial
	 	 	82	 
	 	 	9.14	 	Indemnity
	 	 	83	 
	 	 	9.15	 	Telephonic Instruction
	 	 	84	 
	 	 	9.16	 	Marshalling; Payments Set Aside
	 	 	84	 
	 	 	9.17	 	Set-off
	 	 	84	 
	 	 	9.18	 	Severability
	 	 	85	 
	 	 	9.19	 	No Third Parties Benefited
	 	 	85	 
	 	 	9.20	 	Time
	 	 	85	 
	 	 	9.21	 	Reinstatement
	 	 	85	 

iii

 

SCHEDULES AND EXHIBITS

SCHEDULES:

	 	 	 
	Schedule 4.1

	 	Material Obligations and Liabilities
	Schedule 4.6

	 	Material Litigation
	Schedule 4.7

	 	Taxes
	Schedule 4.9

	 	Subsidiary Entities
	Schedule 4.11

	 	ERISA Compliance
	Schedule 4.14

	 	Required Consents
	Schedule 4.15

	 	Hazardous Materials
	Schedule 4.17

	 	Existing Insurance
	Schedule 4.23(5)

	 	Purchase and Option Agreements
	Schedule 4.27

	 	Taxpayer Identification Number
	Schedule 5.1(2)

	 	Conditions to Funding of Loan
	Schedule 5.5

	 	Insurance Requirements
	Schedule 6.5

	 	Investments
	Schedule 6.6

	 	Affiliate Transactions
	Schedule 6.12(1)

	 	Liens
	Schedule 6.21

	 	Permitted Indebtedness
	Schedule 9.6

	 	Notices
	Schedule I

	 	Pro Rata Shares
	Schedule II

	 	Mortgaged Property/Operating Company Entitys/ Security Schedule II Instruments

EXHIBITS

	 	 	 
	Exhibit A-1

	 	Form of Carve-Out Guaranty
	Exhibit A-2

	 	Form of Completion Guaranty
	Exhibit B

	 	Form of Assignment and Acceptance Agreement
	Exhibit C

	 	Form of Closing Certificate
	Exhibit D

	 	[Reserved]
	Exhibit E

	 	Form of Note
	Exhibit F

	 	Form of Pledge Agreement
	Exhibit G

	 	[Reserved]
	Exhibit H

	 	[Reserved]
	Exhibit I

	 	[Reserved]

iv

 

	 	 	 
	Exhibit J

	 	[Reserved]
	Exhibit K

	 	[Reserved]
	Exhibit L

	 	Form of Environmental Indemnity
	Exhibit M

	 	Form of Compliance Certificate
	Exhibit N

	 	[Reserved]
	Exhibit O

	 	[Reserved]

v

 

SENIOR MEZZANINE CREDIT AGREEMENT

     THIS SENIOR MEZZANINE CREDIT AGREEMENT (this “Agreement”) is made and dated as of the
1st day
of August, 2005 (“Effective Date”), by and among TE/TOUSA MEZZANINE, LLC, a
limited liability company organized under the laws of the state of Delaware (“Borrower”); THE
LENDERS FROM TIME TO TIME PARTY HERETO (collectively and severally,
the “Lenders”); and DEUTSCHE
BANK TRUST COMPANY AMERICAS (“DBTCA”), as administrative agent for the Lenders (in such capacity,
the “Administrative Agent’’).

RECITALS

     A. The Borrower has requested that the Lenders make a loan in an aggregate principal
amount of $137,500,000 (the “Loan”). Proceeds from the Loan, the Junior Mezzanine Loan (as
hereinafter defined) and the Senior Loans (as hereinafter defined) shall be used to finance the
acquisition (“Acquisition”) of the Transeastern Assets (as defined below), and pay transaction
costs and expenses.

     B. Pursuant to a Credit Agreement (the “Senior Credit Agreement”) made and
dated as of the
1st day
of August, 2005 (“Effective Date”), by and among
EH/Transeastern, LLC, a limited liability company organized under the laws of the state of Delaware
(the “Operating Company”). TE/TOUSA Senior, LLC, a limited liability company organized
under the laws of the state of Delaware (“TOUSA Senior” and together with Operating Company,
jointly and severally, the “Senior Borrower” and
each a “Senior Borrower”); the lenders from time
to time party thereto (collectively and severally, the
“Senior Lenders”); and DBTCA as
administrative agent for the Lenders (in such capacity, the
“Senior Administrative Agent”), Senior
Lenders have agreed to extend certain credit facilities to the Senior Borrower, in an initial
principal amount of $450,000,000 (the “Senior Loan”).

     C. The Lenders party hereto have agreed to extend such credit facilities and DBTCA has agreed
to act as administrative agent on behalf of the Lenders on the terms and subject to the conditions
set forth herein and in the other Loan Documents (as that term and other capitalized terms used
herein are defined in, or the location of the definitions thereof
referenced in, Article I).

     NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:

AGREEMENT

ARTICLE 1.

DEFINED TERMS

     1.1 Defined Terms. As used in this Agreement, the following terms have
the following meanings:

1

 

     “Account Collateral” shall mean (a) any accounts of Borrower, and all cash, checks,
drafts, certificates, instruments and other property, including, without limitation, all deposits
and/or wire transfers from time to time deposited or held in, credited to or made to the accounts;
(b) all interest, dividends, cash, instruments and other property from time to time received,
receivable or otherwise payable in respect of, or in exchange for,
any or all of the foregoing; and (c) to the extent not covered by clauses (a) or (b) above, all proceeds (as defined under the UCC)
of any or all of the foregoing.

     “Act” shall have the meaning set forth in Section 4.13 of this Agreement.

     “Administrative Agent” shall have the meaning given such term in the preamble to this
Agreement and shall include any successor to DBTCA as the initial “Administrative Agent”
thereunder.

     “Affiliate” shall mean, as to any Person, any other Person directly or indirectly
Controlling, Controlled by or under direct or indirect common Control with, such Person. In the
case of a Lender which is a fund that invests in loans, any other fund that invests in loans which
is managed by the same investment advisor as such Lender, or by another Affiliate of such Lender or
such investment advisor, shall be deemed an Affiliate of such Lender.

     “Agents” shall mean the Administrative Agent, the Lead Arranger and any other Persons
acting in the capacity of an agent for the Lenders under this Agreement, together with their
permitted successors and assigns.

     “Agreement” shall mean this Senior Mezzanine Credit Agreement, as the same may be
Modified.

     “ALTA” shall mean American Land Title Association, or any successor thereto.

     “Anti-Terrorism Laws” shall have the meaning set forth in Section 4.28(1) of
this Agreement.

     “Applicable Base Rate” shall mean the floating rate per annum equal to the daily
average Base Rate in effect during the applicable calculation period plus the “Base Rate Spread”
set forth in the Notes.

     “Applicable LIBO Rate” shall mean, with respect to the applicable Interest Period, the
per annum rate equal to the Reserve Adjusted LIBO Rate plus the “LIBO Rate Spread” set
forth in the Notes.

     “Appraisal” shall mean a real estate appraisal conducted in accordance with the
Uniform Standards of Professional Appraisal Practice (as promulgated by the Appraisal Standards
Board of the Appraisal Foundation) and all Requirements of Law applicable to Lenders, including in
conformity with the Financial Institutions Reform Recovery and Enforcement Act (FIRREA), undertaken
by an independent appraisal firm reasonably satisfactory to Administrative Agent, and providing an
assessment of fair market value of the subject Real Property.

2

 

     “Asset Purchase Agreement” shall mean that certain Asset Purchase Agreement dated as
of June 6, 2005 by and among Operating Company, Seller, Arthur J. Falcone, Edward W. Falcone and
Falcone/Ritchie, LLC.

     “Assignee” shall have the meaning given such term in Section 9.8(1) of this
Agreement.

     “Assignment and Acceptance Agreement” shall mean an agreement in the form of that
attached to this Agreement as Exhibit B.

     “Base Distribution Conditions” shall have the meaning given such term in Section
6.8(2)(iv) of this Agreement.

     “Base Rate” shall mean on any day the higher of: (a) the Prime Rate in effect on such
day, and (b) the sum of the Federal Funds Rate in effect on such day plus one half of one percent
(0.50%).

     “Base Rate Loans” shall mean any Loan bearing interest at a rate determined by
reference to the Base Rate.

     “Beneficial” when used in the context of beneficial ownership has the analogous
meaning to that specified in Rule 13d-3 under the Securities Exchange Act of 1934, as amended.

     “Bona Fide Sales Contract” shall have the meaning set forth in the Senior Credit
Agreement.

     “Borrower” shall have the meaning given to such term in the preamble to this
Agreement.

     “Borrower Parties” shall mean, jointly and severally, each of the Borrower,
Guarantors, Pledger and any Affiliate of the foregoing executing any Loan Document.

     “Borrowing” shall mean (a) all Base Rate Loans made, converted or continued on the
same date, or (b) all LIBO Rate Loans of the same Interest Period. For purposes hereof, the date of
a Borrowing comprising one or more Loans that have been converted or continued shall be the
effective date of the most recent conversion or continuation of such Loan or Loans.

     “Borrowing Base” shall have the meaning set forth in the Senior Credit Agreement.

     “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which
banks in New York are authorized or obligated to close their regular banking business.

     “Capital Stock” shall mean (i) with respect to any Person that is a corporation, any
and all shares, interests, participations or other equivalents (however designated and whether or
not voting) of corporate stock, including, without limitation, each class or series of common stock
and preferred stock of such Person and (ii) with respect to any Person that is not a corporation,
any and all investment units, partnership, membership or other equity interests of such Person.

     “Carveout Guaranties” shall mean each Guaranty (Carveout) of even date herewith
executed by Guarantors in favor of Administrative Agent in the form
of Exhibit A-2.

3

 

     “Cash Equivalents” shall mean, with respect to any Person: (a) securities issued,
guaranteed or insured by the United States of America or any of its agencies with maturities of not
more than one year from the date acquired; (b) certificates of deposit with maturities of not more
than one year from the date acquired by a United States federal or state chartered commercial bank
of recognized standing, which has capital and unimpaired surplus in excess of $500,000,000 and
which bank or its holding company has a short-term commercial paper rating of at least A-2 or the
equivalent by S&P or at least P-2 or equivalent by Moody’s; (c) reverse repurchase agreements with
terms of not more than seven days from the date acquired, for securities of the type described in
clause (a) above and entered into only with commercial banks having the qualifications described in
clause (b) above; (d) commercial paper issued by any Person incorporated under the laws of the
United States of America or any state thereof and rated at least A-2 or the equivalent thereof by
S&P or at least P-2 or the equivalent thereof of Moody’s, in each case with maturities of not more
than one year from the date acquired; and
(e) investments in money market funds registered under the Investment Company Act of 1940, which
have net assets of at least $500,000,000 and at least 85% of whose assets consist of securities and
other obligations of the type described in clauses (a) through
(d) above and (f) other investments of comparable security and liquidity to those enumerated in clauses (a)
through (e) above.

     “Casualty” shall mean a fire, explosion, flood, collapse, hurricane, or other casualty
affecting one or more Mortgaged Property.

     “CERCLIS” shall have the meaning set forth in Section 4.15 of this
Agreement.

     “Change of Control” shall mean, at any time, the occurrence of any of
the following:

          (i) TOUSA shall cease to own and control, directly or indirectly, one hundred percent
(100%) of the Capital Stock of TOUSA Member; or

          (ii) TOUSA Member shall cease to be the sole managing member of Investment Vehicle.

     “Change in Law” shall mean (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender (or by any lending office of such Lender or by such Lender’s holding
company, if any) with any guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

     “Closing Certificate” shall mean a certificate in the form of that attached to this
Agreement as Exhibit C.

     “Closing Date” shall mean the date as of which all conditions set forth in Section
5.1 of this Agreement shall have been satisfied or waived and the Loan shall have been funded.

     “Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder, as from time to time in effect.

4

 

     “Collateral” shall mean, collectively, 100% of the Capital Stock of TOUSA Senior,
together with the Account Collateral, all other collateral under the Pledge Agreement, and all
other tangible and intangible property in respect of which Administrative Agent is granted a
security interest or pledge under the Loan Documents.

     “Compliance Certificate” shall have the meaning set forth in Section 5.1(3)(i)
of this Agreement.

     “Condemnation” shall mean a taking or voluntary conveyance during the term hereof of
all or any part of the Mortgaged Property or any interest therein or right accruing thereto or use
thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding
by any Governmental Authority, whether or not the same shall have actually been commenced.

     “Consolidated” shall mean with respect to any Person, the consolidation of accounts of
such Person and its Subsidiaries, in conformity with GAAP. “Consolidation” shall have a meaning
correlative thereto.

     “Consolidated Entity” shall mean, with respect to any Person, (a) any Subsidiary of
such Person and (b) any Person consolidated in the financial statements of such Person in
accordance with GAAP.

     “Consolidated Net Income” shall mean, for any period, the net income (or loss) of the
Borrower for such period, determined on a Consolidated basis in conformity with GAAP.

     “Contact Office” shall mean the office of DBTCA located at Deutsche Bank Trust Company
Americas, 60 Wall Street, MS NYC60-1110, New York, NY 10005-2858, Attention: Loan Administration,
or such other offices in New York, New York as the Administrative Agent may notify the Borrower and
the Lenders from time to time in writing.

     “Contractual Obligation” as to any Person shall mean any provision of any security
issued by such Person or of any agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.

     “Control” shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise, and the terms “Controlled,” “Controlling” and “Common
Control” shall have correlative meanings.

     “Credit Date” means the date of the making of a Loan.

     “DBTCA” shall mean Deutsche Bank Trust Company Americas.

     “Deposit Account” means a demand, time, savings, passbook or like account with a bank,
savings and loan association, credit union or like organization, other than an account evidenced by
a negotiable certificate of deposit.

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     “Disposition” shall mean the sale, conveyance, pledge, hypothecation, ground lease,
encumbrance, creation of a security interest with respect to, or other transfer, whether voluntary
or involuntary, direct or indirect, of any legal or beneficial interest in a Mortgaged Property,
the Collateral or other Property of the Borrower or its Subsidiary
Entities; provided, however, that Disposition shall not include any Senior Permitted Encumbrances.

     “Distribution” shall mean with respect to any Borrower Party or Borrower’s Subsidiary
Entities: (i) any distribution of cash or Cash Equivalent, directly or indirectly, to the partners
or holders of Capital Stock of such Persons, or any other distribution on or in respect of any
partnership, company or equity interests of such Persons; (ii) the declaration or payment of any
dividend on or in respect of any shares of any class of Capital Stock of such Persons; or (iii) the
purchase, redemption, or other retirement of any shares of any class of Capital Stock of such
Persons, directly or indirectly.

     “Dollars” and the sign “$” mean the lawful money of the United States of America.

     “EBITDA” shall mean for the Borrower and its Subsidiaries for any period ending on any
date of determination, an amount equal to (a) the Consolidated Net Income for such period,
minus (b) gains from extraordinary items for such period, to the extent included in the
calculation of Consolidated Net Income for such period in conformity with GAAP, but without
duplication, plus (c) the sum of (i) any provision for income taxes for such period, (ii)
Interest Expense deducted in the calculation of Consolidated Net Income for such period in
conformity with GAAP (including, without duplication, previously capitalized Interest Expense which
would be included in “cost of goods sold” and deducted from Consolidated revenues in determining
Consolidated Net Income), (iii) the amount of depreciation and amortization for such period
(including the amortization or write-down of goodwill associated with the purchase price under the
Asset Purchase Agreement of Four Hundred Seventeen Million One Hundred Forty-Two Thousand Five
Hundred Dollars ($417,142,500.00) plus the Permitted Post Closing Payments, (iv) any write-off of
goodwill, and (v) the amount of (x) any item of extraordinary loss not paid in cash in such period
and (y) any non-cash impairment charges in such period, in each case to the extent included in the
calculation of Consolidated Net Income for such period in conformity with GAAP, but without
duplication.

     “Effective Date” shall mean the date first written in the introductory paragraph of
this Agreement.

     “Eligible Assignee” shall mean any of the following:

          (a) A commercial bank organized under the laws of the United States, or any state thereof, and
having a combined capital and surplus of at least $100,000,000;

          (b) A commercial bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of
any such country, and having a combined capital and surplus of at least $100,000,000 (provided that
such bank is acting through a branch or agency located in the country in which it is organized or
another country which is also a member of the OECD);

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          (c) A Person that is engaged in the business of commercial banking and that is: (1) an
Affiliate of a Lender, (2) an Affiliate of a Person of which a Lender is an Affiliate, or (3) a
Person of which a Lender is an Affiliate;

          (d) An insurance company, mutual fund or other financial institution organized under the laws
of the United States, any state thereof, any other country which is a member of the OECD or a
political subdivision of any such country which invests in bank loans and has total assets of
$500,000,000; and

          (e) Any fund which invests in bank loans and whose assets exceed $100,000,000;

provided, however, that no Person shall be an “Eligible Assignee” unless at the time of the
proposed assignment to such Person: (i) such Person is able to make or maintain, as applicable, its
portion of the Loan in Dollars, (ii) such Person is exempt from withholding of tax on interest and
is able to deliver the documents related thereto pursuant to Section 2.18(5) of this
Agreement, and (iii) such Person is not a Transaction Party or an Affiliate thereof.

     “Entitled Land” shall mean Real Property with respect to which all applicable
discretionary land use and environmental approvals, including zoning and discretionary subdivision
(not including recordation of a final subdivision plat), have been obtained from federal, state,
and local agencies with jurisdiction over the subject property; provided, however, that “entitled”
shall not require Borrower to obtain any permits or other approvals that are administrative,
ministerial, or otherwise subject to issuance upon satisfaction of or compliance with objective
criteria (such as building permits, grading permits or similar approvals).

     “Environmental Indemnity” shall mean the Environmental Indemnity, dated the date
hereof, made by Borrower and Guarantors in favor of Administrative Agent.

     “Environmental Law” shall have the meaning provided in the Environmental Indemnity.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as Modified,
and the rules and regulations promulgated thereunder as from time to time in effect.

     “ERISA Affiliate” shall mean any trade or business (whether or not incorporated) under
common control with any Consolidated Entity within the meaning of Section 414(b) or (c) of the Code
(and Sections 414(m) and (o) for purposes of provisions relating to Section 412 of the Code).

     “ERISA Event” shall mean (a) a Reportable Event with respect to a Pension Plan or a
Multiemployer Plan; (b) a withdrawal by any Consolidated Entity or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated
as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any
Consolidated Entity or any ERISA Affiliate from a Multiemployer Plan or notification that a
multiemployer is in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a plan amendment as a termination under Section 4041 or 4041A of ERISA or the
commencement of proceedings by the PBGC to terminate a Pension Plan or

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Multiemployer Plan; (e) a failure by any Consolidated Entity to make required contributions to a
condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; (g) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Consolidated Entity or any
ERISA Affiliate; or (h) an application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code with respect to any Plan.

     “Eurodollar Business Day” shall mean a Business Day on which commercial banks in
London, England are open for domestic and international business.

     “Event of Default” shall have the meaning given such term in Section 7.1 of
this Agreement.

     “Evidence of No Withholding” shall have the meaning given such term in Section
2.18(5) of this Agreement.

     “Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender, or
any other recipient of any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United
States of America, or by any state, locality or foreign jurisdiction under the laws of which such
recipient is organized or in which it maintains an office or permanent establishment, (b) any
branch profits taxes imposed by the United States of America or any similar tax imposed by any
other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender, any
withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement or is attributable to such Foreign Lender’s failure to
comply with Section 2.18(5) of this Agreement; provided, however, Excluded Taxes shall not
include any withholding tax resulting from any inability to comply with Section 2.18(5) of
this Agreement solely by reason of there having occurred a Change in Law.

     “Executive Order” shall have the meaning set forth in Section 4.28(1) of
this Agreement. “Extension Period” shall have the meaning set forth in Section
2.6.”

     “F/R
Member” shall mean Falcone/Ritchie, LLC, a Florida limited liability company.

     “Fair Market Value” shall have the meaning set forth in the Senior Credit Agreement.

     “Federal Funds Rate” shall mean for any day, an interest rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if
such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is. not so published for any day which is a Business Day, the
average of the quotations at approximately 1:00 p.m. (New York time) on such day on such
transactions received by the Administrative Agent from three Federal funds brokers of recognized
standing selected by the Administrative Agent in its sole discretion.

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     “Fee Letter” shall mean the letter agreement dated August 1, 2005 between DBTCA,
Senior Borrowers, Junior Mezzanine Borrower and Borrower relating to fees.

     “Fiscal
Quarter” or “fiscal quarter” shall mean any three-month period ending on March
31, June 30, September 30 or December 31 of any Fiscal Year.

     “Fiscal Year” or “fiscal year” shall mean the 12-month period ending on December 31 in
each year or such other period as any Borrower may designate and the Administrative Agent may
approve in writing.

     “Foreign Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of this definition, the
United States of America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

     “GAAP” shall mean generally accepted accounting principles in the United States of
America as in effect from time to time set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of determination;
provided that with respect to determining compliance with any financial covenants set forth
in Section 6.9 (including related definitions), “GAAP” shall be determined based upon those
accounting principles referred to above as of the Closing Date.

     “Good Faith Contest” shall mean the contest of an item if (1) no Event of Default
shall exist and be continuing; (2) the item is diligently contested in good faith, and, if
appropriate, by proceedings timely instituted, (3) the Borrower shall keep the Administrative Agent
informed of the status of such contest at reasonable intervals; (4) if the Borrower is not
providing security as provided in clause (5) below, adequate reserves are established in accordance
with GAAP with respect to the contested item; (5) either such contest operates to suspend
collection or enforcement (as the case may be) of the contested item or the Borrower has deposited
with Administrative Agent security (which may be in the form of a bond) in amount and form
reasonably satisfactory to Administrative Agent; and (6) the failure to pay or comply with the
contested item during the period of the contest is not reasonably likely to result in a Material
Adverse Effect.

     “Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or regulatory authority)
thereof, any court or other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

     “Guaranties” shall mean individually and collectively, (i) the Carveout Guaranties,
executed by the TOUSA Guarantors and F/R Member in favor of the Administrative Agent, in each case
in the form attached to this Agreement as Exhibit A-1; and (ii) the Completion Guaranty
executed by the TOUSA Guarantors in favor of the Administrative Agent, in the form attached hereto
as Exhibit A-2.

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     “Guarantors” shall mean, individually and collectively, the TOUSA Guarantors and F/R
Member, each in its capacity as a guarantor under the Guaranties to which it is a party.

     “Hazardous Materials” shall mean any flammable materials, explosives, radioactive
materials, hazardous wastes, toxic substances or related materials, including, without limitation,
any substances defined as or included in the definitions of “hazardous substances,” “hazardous
wastes,” “hazardous materials,” or “toxic substances” under any applicable federal, state, or local
laws or regulations.

     “Hazardous Materials Laws” shall mean any applicable federal, state or local laws,
ordinances or regulations relating to Hazardous Materials.

     “Hedging Contracts” shall mean all Interest Rate Contracts, foreign exchange
contracts, currency swap or option agreements, forward contracts, commodity swap, purchase or
option agreements, other commodity price hedging arrangements, and all other similar agreements or
arrangements designed to alter the rights of any Person arising from fluctuations in interest
rates, currency valves or commodity prices.

     “Impositions” shall mean all taxes (including all ad valorem, sales (including those
imposed on lease rentals), use, single business, gross receipts, value added, intangible
transaction, privilege or license or similar taxes), governmental assessments (including all
assessments for public improvements or benefits, whether or not commenced or completed prior to the
date of this Agreement and whether or not commenced or completed within the term of this
Agreement), water, sewer or other rents and charges, excises, levies, fees (including license,
permit, inspection, authorization and similar fees), and all other governmental charges, in each
case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Collateral, the Mortgaged Property and/or any Rents (including all
interest and penalties thereon), which at any time prior to, during or in respect of the term of
the Loan may be assessed or imposed on or in respect of or be a Lien upon (a) Borrower or its
Subsidiary Entities (including all income, franchise, single business or other taxes), (b) the
Collateral, the Mortgaged Property, or any other collateral delivered or pledged to the
Administrative Agent, or any Rents therefrom or any estate, right, title or interest therein, or
(c) any occupancy, operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Mortgaged Property.

     “Improvements” shall have the meaning set forth in the Senior Security Instruments.

     “Increased-Cost Lender” shall have the meaning set forth in Section 2.16(3) of
this Agreement.

     “Indebtedness” of any Person shall mean without duplication (a) all indebtedness of
such Person for borrowed money, (b) all obligations of such Person evidenced by notes, bonds,
debentures or similar instruments that bear interest, (c) all reimbursement and all obligations
with respect to letters of credit and bankers’ acceptances, (d) all indebtedness for the deferred
purchase price of property or services, other than trade payables incurred in the Ordinary Course
of Business that are not overdue, (e) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to Property acquired by such

10

 

Person (even though the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such Property), (f) all capital lease
obligations of such Person and the present value of future rental payments under all synthetic
leases, (g) all guaranty obligations of such Person with respect to obligations of another Person
that would otherwise constitute Indebtedness hereunder, (h) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any stock or stock equivalents of
such Person, valued, in the case of redeemable preferred stock, at the greater of its voluntary
liquidation preference and its involuntary liquidation preference plus accrued and unpaid
dividends, (i) all payments that such Person would have to make in the event of an early
termination on the date Indebtedness of such Person is being determined in respect of Hedging
Contracts of such Person and (j) all Indebtedness of the type referred to above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any lien upon or in Property (including accounts and general intangibles) owned by such Person,
even though such Person has not assumed or become liable for the payment of such Indebtedness but
only to the extent of the lesser of (x) the amount of such Indebtedness and (y) the fair market
value of the Property securing such Indebtedness. Notwithstanding the foregoing, “Indebtedness”
shall not include (x) the face amount of any undrawn Performance Letters of Credit, (y)
Indebtedness Associated with Assets Not Owned, or (z) obligations with respect to options to
purchase Real Property that have not been exercised.

     “Indebtedness Associated with Assets Not Owned” shall mean any Indebtedness of any
land bank, or any other third party Indebtedness that would be required to be included on the
balance sheet or financial statements of the Borrower pursuant to any accounting rule requiring
such Consolidation, except to the extent that such Indebtedness would otherwise fall under clause
(g) of the definition of “Indebtedness” with respect to the Borrower.

     “Indemnified Liabilities” shall have the meaning given such term in Section
9.14 of this Agreement.

     “Indemnified Person” shall have the meaning given such term in Section 9.14 of
this Agreement.

     “Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

     “Initial Maturity Date” shall mean the earlier of (i) August 1, 2009, and (ii) the
date that all the Loans shall become due and payable in full hereunder, whether by acceleration or
otherwise.

     “Insurance Requirements” shall mean, collectively, (i) all material terms of any
insurance policy required pursuant to this Agreement and (ii) all material regulations and then
current standards applicable to or affecting the Mortgaged Property or any part thereof or any use
or condition thereof, which may, at any time, be recommended by the Board of Fire Underwriters, if
any, having jurisdiction over the Mortgaged Property, or such other body exercising similar
functions.

     “Interest Coverage Ratio” shall mean, at any time, the ratio of (i) EBITDA for the
fiscal quarter then most recently ended, to (ii) Interest Incurred for such period.

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     “Interest Expense” shall mean, for any period, for any Person for any period, total
interest expense of such Person and its Subsidiaries for such period determined on a Consolidated
basis in conformity with GAAP. Notwithstanding that GAAP may otherwise provide, the Borrower shall
not be required to include in Interest Expense the amount of any premium paid to prepay
Indebtedness.

     “Interest Incurred” shall mean for any period the aggregate amount (without
duplication and determined in each case in conformity with GAAP) of interest incurred during such
period, whether such interest was expensed or capitalized, paid, accrued, or scheduled to be paid
or accrued by Borrower and its Subsidiary Entities during such period, including (a) original issue
discount and non-cash interest payments of accruals on any Indebtedness, (b) the interest portion
of all deferred payment obligations, and (c) all commissions, discounts, and other fees and charges
owed with respect to bankers’ acceptances and letter of credit financings and Interest Rate
Contracts. For purposes of this definition, (i) interest on any capital lease obligations shall be
deemed to accrue at an interest rate reasonably determined by Borrower to be the rate of interest
implicit in such obligations in conformity with GAAP, and (ii) interest incurred attributable to
any Indebtedness represented by the guaranty of an obligation of another Person shall be deemed to
be the interest incurred attributable to the Indebtedness so guaranteed.

     “Interest Period” shall mean (i) with respect to any portion of the Loan which bears
interest at the Applicable Base Rate or the default rate under
Section 2.9(5), the period
commencing on the date of such borrowing and ending on the last day of the calendar month in which
made, and each succeeding calendar month thereafter; provided, that if any Base Rate
Borrowing is converted to a LIBO Rate Borrowing, the applicable Base Rate Interest Period shall end
on such date of conversion; and (ii) with respect to any portion of the Loan which bears interest
at the Applicable LIBO Rate, the period commencing on the date of such Loan and ending on the
numerically corresponding day in the calendar month that is one, two, three or six months
thereafter, as specified in the applicable Borrowing Request or Rate Request. Notwithstanding the
foregoing: (x) if any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case of a LIBO Rate
Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and (y) any Interest Period
pertaining to a LIBO Rate Borrowing that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month of such Interest
Period. For purposes hereof, the date of a Loan initially shall be the date on which such Loan is
made and thereafter shall be the effective date of the most recent conversion or continuation of
such Loan.

     “Interest Rate Contracts” shall mean all interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements and interest rate insurance.

     “Interest Rate Determination Date” means, with respect to any Interest Period, the
date that is two Business Days prior to the first day of such Interest Period.

     “Investment” shall mean, with respect to any Person, (i) any purchase or other
acquisition by that Person of Securities, or of a beneficial interest in Securities, issued by any
other Person,

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(ii) any purchase by that Person of a Property or assets (Real Property or Personal Property) from
a Person other than a wholly owned Subsidiary of the Borrower, and (iii) any loan (other than loans
to employees), advance (other than deposits with financial institutions available for withdrawal on
demand, prepaid expenses, accounts receivable, advances to employees and similar items made or
incurred in the Ordinary Course of Business) or capital contribution by that Person to any other
Person, including, without limitation, all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business. The amount of any
Investment shall be the original cost of such Investment, plus the cost of all additions thereto
less the amount of any return of capital or principal to the extent such return is in cash with
respect to such Investment without any adjustments for increases or decreases in value or
write-ups, write-downs or write-offs with respect to such Investment.

     “Investment Vehicle” shall mean TE/TOUSA, LLC, a Delaware limited liability company.

     “Investment Vehicle Limited Liability Company Agreement” shall mean the limited
liability company agreement dated as of July 28, 2005 by and between TOUSA Member and F/R Member.

     “IRS” shall mean the Internal Revenue Service or any entity succeeding to any of its
principal functions under the Code.

     “Joint Venture” shall mean, as to any Person: (i) any corporation fifty percent (50%)
or less of the outstanding securities having ordinary voting power of which shall at the time be
owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries
or by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability
company, association, joint venture or similar business organization fifty percent (50%) or less of
the ownership interests having ordinary voting power of which shall at the time be so owned or
controlled.

     “Junior Mezzanine Administrative Agent” means DBTCA in its capacity as Administrative
Agent under the Junior Mezzanine Loan.

     “Junior Mezzanine Borrower” means TE/TOUSA Mezzanine Two, LLC.

     “Junior Mezzanine Credit Agreement” means that certain Junior Mezzanine Credit
Agreement, dated as of the Closing Date, by and among the Junior Mezzanine Borrower, each Junior
Mezzanine Lender party thereto and Junior Mezzanine Administrative Agent, among others, in form and
substance reasonably satisfactory to Administrative Agent, as such agreement may be Modified.

     “Junior Mezzanine Credit Documents” means any of the Junior Mezzanine Credit
Agreement, the Junior Mezzanine Notes, if any, the Junior Mezzanine Pledge Agreement, and all other
documents, instruments or agreements executed and delivered by any Junior Mezzanine Party for the
benefit of the Junior Mezzanine Administrative Agent or any Junior Mezzanine Lender in connection
therewith, as such agreements may be Modified.

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     “Junior Mezzanine Debt Service” means, for any period, all scheduled payments due and
owing in connection with the Junior Mezzanine Loans in accordance with the terms of the Junior
Mezzanine Credit Documents, including all payments of interest and principal, fees, expenses and
other payments to the extent such fees, expenses and other payments are required pursuant to the
terms of such Junior Mezzanine Credit Documents.

     “Junior Mezzanine Indebtedness” means Indebtedness outstanding under the Junior
Mezzanine Credit Documents.

     “Junior Mezzanine Lenders” means the lenders party to the Junior Mezzanine Credit
Agreement.

     “Junior Mezzanine Loan” means a term loan made pursuant to the Junior Mezzanine Credit
Agreement.

     “Junior Mezzanine Note” means any promissory note issued under the Junior Mezzanine
Credit Agreement.

     “Junior Mezzanine Pledge Agreements” means the Pledge Agreements, dated as of the
Closing Date, executed by Junior Mezzanine Borrower and the Investment Vehicle in favor of Junior
Mezzanine Agent in the form attached to the Junior Mezzanine Credit Agreement, as it may be
Modified.

     “Knowledge” shall mean the knowledge of any Responsible Officer of any Borrower or any
Transaction Party, as applicable, or any other Person delegated by such Responsible Officer as to
any particular matter, of the facts or matters that each such Person could reasonably be expected
to discover or otherwise become aware of after due inquiry in the course of performing their duties
for any Borrower or any Transaction Party, as applicable, in the Ordinary Course of Business.

     “Lead Arranger” shall mean Deutsche Bank Securities Inc., in its capacity as lead
arranger for the credit facility evidenced by this Agreement, together with its permitted
successors and assigns.

     “Lease” shall mean any lease, sublease or subsublease, letting, license, concession,
or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to
which any Person is granted or permitted to have by the applicable Operating Company Entity a
possessory interest in, or right to use or occupy all or any portion of any space in the Mortgaged
Property or any facilities at the Mortgaged Property, and every Modification thereto and every
guarantee of the performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.

     “Lenders” shall mean each of the lenders from time to time party to this Agreement,
including any Assignee permitted pursuant to Section 9.8 of this Agreement.

     “LIBO Rate” shall mean, with respect to any Interest Period, the per annum rate for
such Interest Period and for an amount equal to the amount of the Loan shown on Dow Jones Telerate
Page 3750 (or any equivalent successor page) at approximately 11:00 (London time) two

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Eurodollar Business Days prior to the first day of such Interest Period or if such rate is not
quoted, the arithmetic average as determined by the Administrative Agent of the rates at which
deposits in immediately available Dollars in an amount equal to the amount of the Loan having a
maturity approximately equal to such Interest Period are offered to four (4) reference banks to be
selected by the Administrative Agent in the London interbank market, at approximately 11:00 a.m.
(London time) two Eurodollar Business Days prior to the first day of such Interest Period.

     “LIBO Rate Loan” shall mean a Loan bearing interest at a rate determined by reference
to the LIBO Rate.

     “LIBO Reserve Percentage” shall mean with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and other reserves and
taking into account any transitional adjustments) which is imposed under Regulation D on
eurocurrency liabilities. As of the Closing Date, the LIBO Reserve Percentage is zero, provided,
however, there can be no assurance as to what such amount may be in the future.

     “Lien” shall mean any security interest, mortgage, pledge, lien, claim on property,
charge or encumbrance (including any conditional sale or other title retention agreement), any
lease in the nature thereof, and any agreement to give any security interest.

     “Loan” shall mean any loan made by any Lender pursuant to this Agreement.

     “Loan Documents” shall mean, collectively, this Agreement, the Notes, the Guaranties,
the Pledge Agreement, the Environmental Indemnity, and all other documents executed and/or
delivered by Borrower in connection with the Loan including any certifications or representations
delivered by or on behalf of Borrower Parties.

     “Management Fee Payment Date” shall mean the later of (i) October 1, 2006; and (ii)
the date (at the end of a calendar quarter) the ratio (expressed as a percentage) of Total Funded
Debt to Total Book Capitalization (calculated on a pro forma basis with effect given to the
Permitted Management Fee being paid) is less than 70%.

     “Margin Stock” shall mean “margin stock” as defined in Regulation U.

     “Material Adverse Effect” shall mean any of the following: (1) with respect to (a)
TOUSA Guarantors, taken as a whole, or (b) Borrower and Borrower’s Subsidiaries taken as a whole, a
material adverse change in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of such Persons from and after the
Closing Date; (2) a material impairment of the ability of any Borrower Party to otherwise perform
under any Loan Document; or (3) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Borrower Party of any Loan Document.

     “Maturity Date” shall mean the Initial Maturity Date, as the same may be extended
pursuant to Section 2.6 of this Agreement. The Maturity Date shall be subject to
acceleration upon an Event of Default as otherwise provided in this Agreement.

     “Mezzanine Agent” shall mean the Administrative Agent under each of the Mezzanine
Loans.

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     “Mezzanine Borrowers” shall mean, collectively, the Junior Mezzanine Borrower and the
Senior Mezzanine Borrower.

     “Mezzanine Credit Agreements” shall mean, collectively, the Junior Mezzanine Credit
Agreement and the Senior Mezzanine Credit Agreement.

     “Mezzanine Debt Service” shall mean for any period, all scheduled payments due and
owing in connection with the Mezzanine Loans, in accordance with the terms of the Mezzanine Loan
Documents, including all payments of interest and principal. Mezzanine Debt Service shall not
include any payments of principal upon maturity or the acceleration of the Mezzanine Loans
following an event of default thereunder.

     “Mezzanine Funded Debt” shall mean Indebtedness of the Mezzanine Borrowers arising
from the Mezzanine Loans.

     “Mezzanine Lender” shall mean the lenders from time to time party to the Junior
Mezzanine Credit Agreement and the Senior Mezzanine Credit Agreement.

     “Mezzanine Loan” shall mean a term loan made pursuant to the Junior Mezzanine Credit
Agreement or the Senior Mezzanine Credit Agreement.

     “Mezzanine Loan Documents” shall mean any of the Mezzanine Credit Agreements and all
other documents or agreements executed and delivered by Mezzanine Borrowers for the benefit of any
Mezzanine Agent or any Mezzanine Lender in connection therewith, as each may be Modified.

     “Model Homes” shall mean all Units which are used as models, sales offices, or design
centers to market a particular real estate development project and the contents thereof.

     “Modifications” shall mean any amendments, supplements, modifications, renewals,
replacements, consolidations, severances, substitutions and extensions of any document or
instrument from time to time; “Modify,” “Modified,” or related words shall have meanings
correlative thereto.

     “Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.

     “Mortgaged Property” shall have the meaning set forth in the Senior Credit
Agreement.

     “Multiemployer Plan” shall mean a “multiemployer plan” (within the meaning of Section
4001(a)(3) of ERISA) and to which any Consolidated Entity or any ERISA Affiliate makes, is making,
or is obligated to make contributions or, during the preceding three calendar years, has made, or
been obligated to make, contributions.

     “Non-Consenting Lender” shall have the meaning set forth in Section 2.16(3) of
this Agreement.

     “Note” shall mean a promissory note in substantially the form of that attached to this
Agreement as Exhibit E (or such other form approved by the Borrower, the applicable Lender

16

 

and the Administrative Agent) issued by the Borrower at the request of a Lender pursuant to this
Agreement.

     “NPL” shall have the meaning set forth in Section 4.15 of this Agreement.

     “Obligations” shall mean any and all debts, obligations and liabilities of the
Borrower or the other Borrower Parties to the Administrative Agent, the other Agents and the
Lenders (whether now existing or hereafter arising, voluntary or involuntary, whether or not
jointly owed with others, direct or indirect, absolute or contingent, liquidated or unliquidated,
and whether or not from time to time decreased or extinguished and later increased, created or
incurred), arising out of or related to the Loan Documents. Subject to Section 9.21 hereof,
“Obligations” shall not include any obligation or liability of any Borrower hereunder which
survives the repayment of Loans and the termination of this Agreement.

     “Officers’ Certificate” shall mean as to any entity, a certificate executed on behalf
of such entity by a Responsible Officer.

     “Operating Company” shall mean EH/Transeastern, LLC, a limited liability company
organized under the laws of the state of Delaware.

     “Operating Company Entities” shall mean the Operating Company and any of its wholly
owned Subsidiaries that own any portion of the Mortgaged Property.

     “Ordinary Course of Business” shall mean, with respect to a specific Person, the
ordinary course of such Person’s business, substantially as conducted by any such Person prior to
and as of the Closing Date, and (A) undertaken by such Person in good faith and not for purposes of
evading any covenant or restriction in any Loan Document, and (B) which shall not in any event
interfere with the ongoing operation of the Property of such Person in a manner consistent with
similar properties and shall not interfere with the day-to-day operations of such Property as
contemplated in the Loan Documents.

     “Originating Lender” shall have the meaning set forth in Section 9.8(4) of
this Agreement.

     “Organizational Documents” shall mean: (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of designation or instrument relating to the
rights of preferred shareholders of such corporation, and all applicable resolutions of the board
of directors (or any committee thereof) of such corporation, (b) for any partnership, the
partnership agreement, any certificate of formation, and any other instrument or agreement relating
to the rights between the partners or pursuant to which such partnership is formed, (c) for any
limited liability company, the operating agreement, any articles of organization or formation, and
any other instrument or agreement relating to the rights between the members, pertaining to the
manager, or pursuant to which such limited liability company is formed, and (d) for any trust, the
trust agreement and any other instrument or agreement relating to the rights between the trustors,
trustees and beneficiaries, or pursuant to which such trust is formed.

     “Other Charges” shall mean maintenance charges, impositions other than Impositions,
and any other charges, including, without limitation, vault charges and license fees for the use of

17

 

vaults, chutes and similar areas adjoining the Mortgaged Property, now or hereafter levied or
assessed or imposed against the Mortgaged Property or any part thereof by any Governmental
Authority, other than those required to be paid by a Tenant pursuant to its respective Lease.

     “Other Taxes” shall mean any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies of a Governmental Authority with
respect to any payment made under any Loan Document or from the execution, delivery or enforcement
of any Loan Document.

     “Participant” shall have the meaning given such term in Section 9.8(4) of
this Agreement.

     “Payment Date” shall mean the date payments of interest are due pursuant to
Section 2.9(3).

     “PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to
any of its principal functions under ERISA.

     “Pension Plan” shall mean a pension plan (as defined in Section 3(2) of ERISA) subject
to Title IV of ERISA which the Consolidated Entities or any ERISA Affiliate sponsors, maintains, or
to which it makes, is making, or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years, but excluding any Multiemployer Plan.

     “Performance Letters of Credit” shall mean any letter of credit issued (a) on behalf
of a Person in favor of a Governmental Authority, including, without limitation, any utility,
water, or sewer authority, or other similar entity, for the purpose of assuring such Governmental
Authority that such Person or an Affiliate of such Person will properly and timely complete work it
has agreed to perform for the benefit of such Governmental Authority; or (b) in lieu of other
contract performance, including, without limitation, bid and performance bonds.

     “Permitted Entitlement Cure Payment” shall mean a one-time capital contribution by
TOUS A Member made to Operating Company (through the Upper Tier Companies) to prevent a default by
Operating Company under the Asset Purchase Agreement as a result of its failure to timely make a
Permitted Entitlement Payment.

     “Permitted Entitlement Payment” shall mean the “Entitlement Payments” described in
Section 3.6(b) of the Asset Purchase Agreement, provided that each of the conditions to such
payments have been fully satisfied in accordance with the Asset Purchase Agreement and
Administrative Agent has received reasonable evidence thereof.

     “Permitted Management Fee” shall mean the management fee to be paid to TOUSA Member or
its designated Affiliate pursuant to Section 6.6 of the Investment Vehicle Limited
Liability Company Agreement, provided that such fee is then due and payable thereunder.

     “Permitted Post Closing Sale Payments” shall mean the payments to be made to Seller
pursuant to Section 3.6 of the Asset Purchase Agreement, provided that: (i) in no event shall the
aggregate amount of such payments exceed $75 million; (ii) each of the conditions to such

18

 

payments have been fully satisfied in accordance with the Asset Purchase Agreement and
Administrative Agent has received reasonable evidence thereof.

     “Permitted Tax Distribution” shall mean for any period, an amount equal to the taxable
income of the Investment Vehicle taking into account the taxable income of its direct and indirect
Subsidiary Entities, multiplied by the highest marginal tax rate (including federal, state and
local taxes) applicable to a corporation residing in New York, New York in effect for the taxable
period with respect to which the income is deemed earned for federal income tax purposes, taking
into account the character and type of income earned and the deductibility of state and local
income taxes for federal income tax purposes, which Permitted Tax Distribution shall be made to the
Investment Vehicle for distribution to its members in accordance with its Organizational Documents.

     “Person” shall mean an individual, partnership, corporation (including a business
trust), joint stock company, estate, trust, limited liability company, unincorporated association,
Joint Venture or other entity, or a Governmental Authority.

     “Personal Property” shall have the meaning set forth in the granting clause of the
Senior Security Instruments.

     “Plan” shall mean an employee benefit plan (as defined in Section 3(3) of ERISA) which
the Consolidated Entities or any ERISA Affiliate sponsors or maintains or to which the Consolidated
Entities or any ERISA Affiliate makes, is making, or is obligated to make contributions and
includes any Pension Plan, other than a Multiemployer Plan.

     “Pledge Agreement” shall mean the Pledge Agreement dated as of even date herewith, in
substantially the form attached to this Agreement as
Exhibit F, executed by the Pledgor,
pursuant to which shall be pledged to Administrative Agent, for the ratable benefit of the Lenders,
all of each Pledgor’s direct ownership interests in TOUSA Senior.

     “Pledgor”
shall mean Borrower, in its capacity as pledgor under the Pledge
Agreement.

     “Potential Default” shall mean an event which but for the lapse of time or the giving
of notice, or both, would constitute an Event of Default.

     “Prime Rate” shall mean the fluctuating per annum rate announced from time to time by
DBTCA or any successor Administrative Agent at its principal office in New York, New York as its
“prime rate”. The Prime Rate is a rate set by DBTCA as one of its base rates and serves as the
basis upon which effective rates of interest are calculated for those loans making reference
thereto, and is evidenced by the recording thereof after its announcement in such internal
publication or publications as DBTCA may designate. The Prime Rate is not tied to any external
index and does not necessarily represent the lowest or best rate of interest actually charged to
any class or category of customers. Each change in the Prime Rate will be effective on the day the
change is announced within DBTCA.

     “Principal Office” means, for each of Administrative Agent, the Contact Office, or
such other office as such Person may from time to time designate in writing to Borrower,
Administrative Agent and each Lender.

19

 

     “Priority Capital Investment” shall mean the priority capital provided by TOUSA
Member to the Investment Vehicle in the amount of $20 million.

     “Pro Rata Share” means with respect to all payments, computations and other matters
relating to the Loans of any Lender, the percentage obtained by dividing (a) the outstanding
principal balance of the Loans of that Lender, by (b) the aggregate outstanding principal balance
of the Loans of all Lenders.

     “Proceeds” shall mean amounts, awards or payments payable to or for the benefit of the
Borrower (including, without limitation, amounts payable under any title insurance policies
covering the Mortgaged Property owner’s ownership interest in the Mortgaged Property) or the
Administrative Agent in respect of all or any part of the Mortgaged Property in connection with a
Casualty or Condemnation thereof (after the deduction therefrom and payment to the Borrower and the
Administrative Agent, respectively, of any and all reasonable expenses incurred by the Borrower and
the Administrative Agent in the recovery thereof, including all attorneys’ fees and disbursements,
the fees of insurance experts and adjusters and the costs incurred in any litigation or arbitration
with respect to such Casualty or Condemnation).

     “Property” of any Person shall mean, collectively and severally, any and all Real
Property and all Personal Property owned or occupied by the subject
Person. “Property” shall
include all Capital Stock owned by the subject Person in a Subsidiary Entity.

     “Purchase/Option Agreements” shall mean (i) those certain purchase and option
agreements identified in Schedule 4.23(5); and (ii) agreements pursuant to which the
Operating Company Entities have the option or right to purchase Real
Property; provided, however, that the agreement is either substantially in the form previously approved by
Administrative Agent or Administrative Agent reasonably approves the agreement.

     “Qualified Purchase/Option Agreement” shall mean a Purchase/Option Agreement with
respect to Qualified Option Land.

     “Qualified Option Land” shall have the meaning set forth in the Senior Credit
Agreement.

     “Rate Request” shall mean a request for the conversion or continuation of a Base Rate
Loan or LIBO Rate Loan as set forth in Section 2.5(2).

     “Real Property” shall mean each of those parcels (or portions thereof) of real
property, improvements and fixtures thereon and appurtenances thereto now or hereafter owned or
leased by the Borrower and its Subsidiaries.

     “Register” shall have the meaning set forth in Section 9.8(2) of this
Agreement.

     “Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and shall include any successor or other regulation of
said Board of Governors relating to reserve requirements applicable to member banks of the Federal
Reserve System.

20

 

     “Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System (12 C.F.R. § 221), as the same may from time to time be Modified.

     “Regulation T” shall mean Regulation T of the Board of Governors of the Federal
Reserve System (12 C.F.R. § 221), as the same may from time to time be Modified.

     “Regulation X” shall mean Regulation X of the Board of Governors of the Federal
Reserve System (12 C.F.R. § 221), as the same may from time to time be Modified.

     “Rents” shall mean all rents, rent equivalents, moneys payable as damages or in lieu
of rent or rent equivalents, royalties (including, without limitation, all oil and gas or other
mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including,
without limitation, security, utility and other deposits), accounts, cash, issues, profits,
charges for services rendered, termination or surrender fees, penalties and other consideration
of whatever form or nature arising from the use or enjoyment of all or any portion of the
Mortgaged Property, or received by or paid to or for the account of or benefit of the Senior
Borrower, from any and all sources arising from or attributable to the Mortgaged Property,
including the rental or surrender of any office space, retail space, parking space, halls,
stores, and offices of every kind, the rental or licensing of signs, sign space or advertising
space and all membership fees and dues, receipts, accounts receivable, cancellation fees, credit
card receipts and other receivables relating to or arising from rentals, rent equivalent income,
income and profits from guest rooms, meeting rooms, conference and banquet rooms, food and
beverage facilities, health clubs, spas, vending machines, parking facilities, telecommunication
and television systems, guest laundry, the provision or sale of other goods and services, and
Proceeds, if any, from business interruption or other loss of income insurance.

     “Replacement Lender” shall have the meaning set forth in Section 2.16(3) of
this Agreement.

     “Reportable Event” shall mean any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder, other than any such event for which the thirty (30)-day
notice requirement under ERISA has been waived in regulations issued by the PBGC.

     “Required Lenders” shall mean, at any time of determination, Lenders holding more
than 662/3% of the aggregate principal balance of all Loans.

     “Requirements of Law” shall mean, as to any Person, the Organizational Documents of
such Person, and any law, treaty, rule or regulation, or a final and binding determination of an
arbitrator or a determination of a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or any of its
property is subject, including, without limitation, Environmental Laws and all covenants,
restrictions and conditions now or hereafter of record which may be applicable to the Borrower, the
Senior Borrowers, the Collateral, or the Mortgaged Property and the Improvements and the
Building Equipment thereon, or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction of the Mortgaged Property and the Improvements
and the Building Equipment thereon including, without limitation, building and zoning codes and
ordinances and laws relating to handicap accessibility.

21

 

     “Reserve Adjusted LIBO Rate” shall mean the rate per annum (rounded upward, if
necessary, to the next higher 1/16 of one percent) calculated as of the first day of such Interest
Period in accordance with the following formula:

	 	 	 
	Reserve Adjusted LIBO Rate =

	 	   LR
	 

	 	1-LRP

where

LR = LIBO Rate

LRP = LIBO Reserve Percentage

     “Responsible Financial Officer” shall mean, with respect to any Person, the chief
financial officer, controller or treasurer of such Person or any other officer, partner or member
having substantially the same authority and responsibility.

     “Responsible Officer” shall mean, with respect to any Person, the president, chief
executive officer, vice president, Responsible Financial Officer, general partner, managing member
of such Person or any other officer, partner or member having substantially the same authority and
responsibility.

     “S&P” shall mean Standard & Poor’s Rating Services, a division of the McGraw-Hill
Companies, Inc., or any successor thereto.

     “Securities” shall mean any stock, shares, partnership interests, membership
interests, voting trust certificates, certificates of interest or participation in any profit
sharing agreement or arrangement, bonds, debentures, options, warrants, notes, or other evidences
of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as “securities” or any certificates of interest, shares or
participations in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.

     “Seller” shall mean, collectively, Transeastern Properties, Inc. and various of its
affiliate “Companies” as further described in the Asset Purchase Agreement.

     “Senior Administrative Agent” as defined in the recitals hereto.

     “Senior Borrowers” shall mean, collectively, EH/Transeastern, LLC and TE/TOUSA Senior,
LLC.

     “Senior Borrowers’ Available Credit” shall mean the “Available Credit” under the
Senior Credit Agreement, as defined therein.

     “Senior Borrowers’ Net Worth” shall mean the net worth of the Senior Borrowers as
determined in conformance with GAAP; for the purposes of calculating Senior Borrowers’ Net Worth it
is understood that equity in the Senior Borrowers will include member loans to the extent permitted
under this Agreement.

     “Senior Credit Agreement” as defined in the recitals hereto.

22

 

     “Senior Credit Documents” as defined in the recitals hereto.

     “Senior Credit Party” means each Person (other than any Agent, Issuing Bank, or any
Senior Lender or any other representative thereof) from time to time party to a Senior Credit
Document.

     “Senior Event of Default” means an Event of Default under the Senior Credit
Agreement.

     “Senior Extension Period” means the “Extension Period” under the Senior Credit
Agreement.

     “Senior Funded Debt” shall mean Indebtedness of the Senior Borrower arising from the
Senior Obligations.

     “Senior Guarantors” as defined in the recitals hereto.

     “Senior
Lenders” as defined
in the recitals hereto.

     “Senior Loans” means the Term Loans, Swing Loans and Revolving Loans under the
Senior Credit Agreement, as such terms are defined therein.

     “Senior Obligations” means the “Obligations” under and as defined in the Senior Credit
Agreement.

     “Senior Permitted Debt” shall mean collectively,

          (i) the Senior Obligations;

          (ii) the Indebtedness described in Schedule 6.21 to the Senior Credit Agreement;

          (iii) trade payables and other liabilities incurred in the Ordinary Course of Business of
the applicable Transaction Party and payable by on or behalf of such Person in respect of the
operation of the Mortgaged Property, not secured by Liens on the Mortgaged Property (other than
those liens which are the subject of a Good Faith Contest or Liens which are Senior Permitted
Encumbrances), provided, however, that (but subject to the remaining terms of this
definition) each such amount shall be paid within sixty (60) days following the date on which each
such amount is incurred;

          (iv) with respect to the Operating Company Entities, Indebtedness (if any) under
agreements otherwise permitted under the Senior Credit Documents (including Purchase/Option
Agreements and equipment leases); and

          (v) with respect to the Operating Company Entities, non-recourse Indebtedness secured by
Real Property the Fair Market Value of which does not exceed $10 million.

     “Senior Permitted Encumbrances” shall mean:

23

 

          (i) Liens pursuant to any Senior Credit Documents;

          (ii) Liens (other than environmental Liens and Liens in favor of the PBGC) with respect
to the payment of Taxes, assessments or governmental charges, including liens securing community
development district bonds or similar bonds issued by any Governmental Authority to accomplish
similar purposes, and in all cases which are not yet due and payable or which are the subject of a
Good Faith Contest;

          (iii) Liens listed on Schedule 6.12(1) of this Agreement;

          (iv) Purchase money Liens on Personal Property granted by the Senior Borrowers or their
Subsidiary Entities or Capital Leases as otherwise permitted under this Agreement and limited in
each case to the property purchased with the proceeds of such purchase money Indebtedness or
subject to such Capital Lease; provided, however, that no such Lien shall attach to any
Mortgaged Property;

          (v) Liens on the Real Property owned by the Operating Company and securing Indebtedness
as permitted under clause (v) of the definition of Senior Permitted Debt;

          (vi) Liens incurred or deposits made in the Ordinary Course of
Business in connection with worker’s compensation, unemployment insurance and other types of social
security, other than any Lien imposed by ERISA; and

          (vii) Any Liens with respect to the Mortgaged Property consisting of the following:

               (A) Liens or deposits to secure the performance of bids,
tenders, sales, options, contracts (other than for the repayment of borrowed money), surety, stay,
appeal, customs, indemnity, performance obligations or other similar bonds or obligations (not
constituting Indebtedness), arising in the Ordinary Course Of Business;

               (B) Liens incidental to the conduct of the business of the Senior
Borrowers and their Subsidiary Entities consisting of encumbrances arising by reason of zoning
restrictions, easements, licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar encumbrances on the use of Real Property which (i) do not
materially detract from the value of such Real Property or interfere with the ordinary conduct of
the business conducted and proposed to be conducted at such Real Property, (ii) violate any other
terms and conditions of this Agreement; and (iii) are not incurred in connection with the borrowing
of money or the obtaining of advances or credit;

               (C) Liens arising under leases or subleases of Real Property not otherwise prohibited under
the terms of this Agreement and which do not in the aggregate materially detract from the value of
such Real Property or interfere with the ordinary conduct of the business conducted and proposed to
be conducted at such Real Property;

               (D) Liens arising from filing UCC financing statements relating solely to leases not
prohibited by this Agreement and otherwise in the Ordinary Course Of Business of Borrower;

24

 

               (E) Liens set forth in the Senior Title Policy issued with respect to the Senior Security
Instruments;

               (F) Liens securing judgments for the payment of money not
constituting an Event of Default or securing appeal or other surety bonds related to such
judgments;

provided, that with respect to any Liens described in subsections (vii)(A), (B) or (F), all
such Liens shall be junior and subordinate to the lien of the Senior Administrative Agent created
by the Senior Security Instruments.

     “Senior Security Instruments” shall mean, individually and collectively, with respect
to each Mortgaged Property, the mortgage, deed of trust, collateral assignment, or other document
as set forth in the Senior Credit Agreement.

     “Senior Term Loan” shall mean any Term Loan pursuant to the Senior Credit
Agreement.

     “Senior Title Policy” shall mean an ALTA mortgagee title insurance policy as described
in the Senior Credit Agreement.

     “Single Purpose Entity” means a Person, other than an individual, which (A) is formed
or organized solely for the purpose of holding, directly or indirectly, an ownership interest in
the Mortgaged Property or the Capital Stock of Persons holding directly or indirectly, ownership
interests in the Mortgaged Property (in respect of such Person, its “Purpose”), (B) does not engage
in any business unrelated to its Purpose, (C) has not and will not have any assets other than those
related to its Purpose, and has not or will not have any Indebtedness, other than as expressly
permitted by the Loan Documents or Mezzanine Loan Documents, as applicable, (D) maintains its own
separate books and records and its own accounts, in each case which are separate and apart from the
books and records and accounts of any other Person, (E) holds itself out as being a Person,
separate and apart from any other Person, (F) does not and will not commingle its funds or assets
with those of any other Person, (G) conducts its own business in its own name, (H) maintains
separate financial statements (except where consolidated financial statements are permitted or
required by applicable law or GAAP, provided that such consolidated statements shall reflect that
such Person and any other Person covered by such financial statements are separate legal entities)
and files its own tax returns (except as otherwise required or permitted by applicable law), (I)
pays its own debts and liabilities when they become due out of its own funds, (J) observes all
partnership, corporate, limited liability company or trust formalities, as applicable, and does all
things necessary to preserve its existence as an entity, (K) except as expressly permitted by the
Loan Documents or Mezzanine Loan Documents, as applicable, maintains an arm’s-length relationship
with its Affiliates and shall not enter into any Contractual Obligations with any Affiliates except
upon terms and conditions that are intrinsically fair and substantially similar to those that would
be available on an arms-length basis (taking into account the relative standards of quality and
reputation of the party rendering the service) with third parties other than an Affiliate, (L) pays
the salaries of its own employees and maintains a sufficient number of employees in light of its
contemplated business operations, (M) does not guarantee or otherwise obligate itself with respect
to the debts of any other Person, or hold out its credit as being available to satisfy the
obligations of any other Person, except as

25

 

expressly contemplated by the Loan Documents or Mezzanine Loan Documents, as applicable, (N) does
not acquire obligations or securities of its partners, members or shareholders, (O) allocates
fairly and reasonably shared expenses, including any overhead for shared office space, (P) uses
separate stationery, invoices, and checks, (Q) does not and will not pledge its assets for the
benefit of any other Person (except in connection with Senior Permitted Encumbrances) or make any
loans or advances to any other Person, (R) does and will correct any known misunderstanding
regarding its separate identity, (S) maintains adequate capital in light of its contemplated
business operations, and (T) has and will have a partnership or operating agreement, certificate of
incorporation or other organizational document which complies with the requirements set forth in
this definition. In addition, the Organizational Documents of such Person shall provide that such
Person without the unanimous consent of all of the partners, directors or members, as applicable,
shall not with respect to itself or to any other Person in which it has a direct or indirect legal
or beneficial interest (i) seek or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, custodian or other similar official for the benefit of the creditors of such
Person or all or any portion of such Person’s properties, or (b) take any action that might cause
such Person to become insolvent, petition or otherwise institute insolvency proceedings or
otherwise seek any relief under any laws relating to the relief from debts or the protection of
debtors generally.

     “Solvent” shall mean, when used with respect to any Person, that at the time of
determination: (i) the fair saleable value of its assets is in excess of the total amount of its
liabilities (including, without limitation, contingent liabilities); (ii) the present fair saleable
value of its assets is greater than its probable liability on its existing debts as such debts
become absolute and matured; (iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments) as they mature; and (iv) it
has capital sufficient to carry on its business as conducted and as proposed to be conducted.

     “Subordinated Creditor” shall have the meaning given such term in Section
5.15(1) of this Agreement.

     “Subordinated Indebtedness” shall have the meaning given such term in Section
5.15(1) of this Agreement.

     “Subsidiary” shall mean, with respect to any Person: (a) any corporation more than
fifty percent (50%) of the outstanding securities having ordinary voting power of which shall at
the time be owned or Controlled, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, or (b) any partnership, limited
liability company, association, joint venture or similar business organization more than fifty
percent (50%) of the ownership interests having ordinary voting power of which shall at the time be
so owned or Controlled.

     “Subsidiary Entities” with respect to any Person, shall mean a Subsidiary or Joint
Venture of such Person.

     “Survey” shall mean a survey of the Mortgaged Property prepared by a surveyor licensed
in the State and satisfactory to the Administrative Agent and the company or companies issuing

26

 

the Senior Title Policy, and containing a certification of such surveyor satisfactory to the
Administrative Agent.

     “Tax Affiliate” shall mean, with respect to any Person, (a) any Subsidiary of such
Person, and (b) any Affiliate of such Person with which such Person files or is eligible to file
Consolidated, combined or unitary tax returns.

     “Tax Returns” shall have the meaning set forth in Section 4.7 of this
Agreement.

     “Taxes” shall mean any and all federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental, customs duties, capital stock, franchise, profits, withholding, social
security, unemployment, disability, Real Property, Personal Property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

     “Tenant” shall mean any Person leasing, subleasing or otherwise occupying any portion
of the Mortgaged Property or permitted to use any portion of the facilities at the Mortgaged
Property, other than the Manager and its employees, agents and assigns.

     “Terminated Lender” shall have the meaning given set forth in Section 2.16(3)
of this Agreement.

     “Total Book Capitalization” shall mean the sum of (i) Total Funded Debt and (ii)
Senior Borrower’s Net Worth.

     “Total Funded Debt” shall mean the sum of (i) the Senior Funded Debt; and (ii) the
Mezzanine Funded Debt.

     “Total Utilization of Senior Revolving Commitments” shall have the meaning given to
the term “Total Utilization of Revolving Commitments” as set forth in the Senior Credit Agreement.

     “TOUSA” shall mean Technical Olympic USA, Inc., a Delaware corporation.

     “TOUSA Guarantors” shall mean TOUSA and TOUSA Member.

     “TOUSA Member” shall mean TOUSA Homes, L.P., a Delaware limited partnership.

     “TOUSA Senior” shall mean TE/TOUSA SENIOR, LLC, a Delaware limited liability company.

     “Transaction Parties” shall mean, jointly and severally, each of the Senior Credit
Parties, the Junior Mezzanine Borrower, the Borrower Parties and the Upper Tier Entities.

     “Transactional Affiliate” shall have the meaning set forth in Section 6.6 of
this Agreement.

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     “Transeastern Assets” shall mean the assets being acquired under the Asset Purchase
Agreement.

     “Transfer” shall mean to, directly or indirectly, sell, assign, convey, mortgage,
transfer, pledge, hypothecate, encumber, grant a security interest in, exchange or otherwise
dispose of any beneficial interest or grant any option or warrant with respect to, or where used as
a noun, a direct or indirect sale, assignment, conveyance, transfer, pledge or other disposition of
any beneficial interest by any shall mean whatsoever whether voluntary, involuntary, by operation
of law or otherwise.

     “Type” of Loan shall mean either a Base Rate Loan or a LIBO Rate Loan.

      “UCC” shall
mean the Uniform Commercial Code in effect in the State.

     “Unfunded Pension Liability” shall mean the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that Plan’s assets,
determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section
412 of the Code for the applicable plan year.

     “Unentitled Land” shall mean any Real Property owned by the Operating Company Entity
that is not Entitled Land or does not otherwise meet the criteria necessary for inclusion in the
Borrowing Base.

     “Unit” shall mean a single or multi family residential unit, including a condominium
unit and a townhouse unit.

     “Unrestricted Cash” shall mean all cash and Cash Equivalents of the Senior Borrower
and its Subsidiary Entities that is (i) not subject to a Lien or other restriction (including,
without limitation, any escrow in connection with a Bona Fide Sales Contract) other than a Lien in
favor of the Senior Administrative Agent; and (ii) are held in an account in accordance with the
Senior Credit Agreement.

     “Upper Tier Entities” shall mean the Mezzanine Borrowers, the Investment Vehicle and
any other Person that is a borrower or pledgor under the Mezzanine Loans.

     “USA Patriot Act” shall have the meaning set forth in Section 4.28(1) of
this Agreement.

     “U.S. Government Obligations” shall mean any direct obligations of, or obligations
guaranteed as to principal and interest by, the United States Government or any agency or
instrumentality thereof, provided that such obligations are backed by the full faith and credit of
the United States. Any such obligation must be limited to instruments that have a predetermined
fixed dollar amount of principal due at maturity that cannot vary or change. If any such obligation
is rated by S&P, it shall not have an “r” highlighter affixed to its rating. Interest must be fixed
or tied to a single interest rate index plus a single fixed spread (if any), and move
proportionately with said index. U.S. Government Obligations include, but are not limited to: U.S.
Treasury direct or fully guaranteed obligations, Farmers Home Administration certificates of
beneficial ownership, General Services Administration participation certificates, U.S. Maritime
Administration guaranteed Title XI financing, Small Business Administration

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guaranteed participation certificates or guaranteed pool certificates, U.S. Department of Housing
and Urban Development local authority bonds, and Washington Metropolitan Area Transit Authority
guaranteed transit bonds. In no event shall any such obligation have a maturity in excess of 365
days.

     1.2 Other Interpretive Provisions.

          In this Agreement and in the other Loan Documents, except as otherwise expressly provided:

               (i) words expressing the singular include the plural and vice versa;

               (ii) words denoting gender include all genders;

               (iii) words denoting the whole of a matter or thing include a part of the matter or thing;

               (iv) the terms “Collateral” and “Mortgaged Property” shall be construed to be followed by
the phrase “or any part or portion thereof or interest therein”;

               (v) words and expressions importing natural Persons include Persons that are not natural
Persons and vice versa;

               (vi) the words “hereof”, “herein” and “hereunder” and words of similar import shall refer
to this Agreement or the applicable Loan Document, as the case may be, as a whole and not to any
particular provision of this Agreement or such Loan Document;

               (vii) the words “include”, “includes”, “including” and similar terms shall be construed as
if followed by the words “without being limited to”;

               (viii) the words “shall” and “will” shall be construed as obligatory terms;

               (ix) the word “may” shall be construed as a discretionary term (and, as if followed by
“but shall not be obligated to”);

               (x) all references to sections, schedules and exhibits are to
sections, schedules and exhibits in or to this Agreement or the applicable Loan Document, as the case may be;

               (xi) article, section, subsection and paragraph headings and captions and any tables of
contents are included solely for convenience of reference only and shall not constitute a part of
this Agreement or the applicable Loan Document, as the case may be, for any other purpose;

               (xii) exhibits and schedules annexed to this Agreement or the applicable Loan Document, as
the case may be, are hereby incorporated into this Agreement or such Loan Document, as the case may
be, as a part of this Agreement or such Loan Document, as the case

29

 

may be, with the same effect as if set forth in the body of this Agreement or such Loan Document,
as the case may be;

               (xiii) the recitals to this Agreement are incorporated into this Agreement and form a part
of this Agreement and the Borrower represent and warrant that, as of the date hereof, Recital A is
true and correct;

               (xiv) a reference to a document or agreement, including this Agreement or any Loan
Document, includes a reference to such document or agreement as novated, amended, modified,
supplemented or replaced from time to time;

               (xv) derivatives of a word defined herein or therein, as the case may be, have a
corresponding meaning;

               (xvi) a reference to writing includes printing, engraving, typewriting, lithography,
photography and any other mode of reproducing or representing words, figures or symbols in a
permanent and visible form;

               (xvii) a reference to any legislation or to any provision of any legislation shall include
any amendment to, and any modification, replacement or re-enactment thereof, any legislative
provision substituted therefor, and all regulations, rules, rulings and statutory instruments
issued thereunder or pursuant thereto;

               (xviii) a reference to a party to this Agreement, any Loan Document or another agreement or
document includes such party’s executors, administrators, successors and permitted assigns
(provided that the foregoing shall not be deemed to permit any Transfer of any ownership
interest that is otherwise prohibited hereunder);

               (xix) if a provision binds two or more parties that provision binds those parties jointly
and severally;

               (xx) if
a party comprises two or more Persons, the provisions of this Agreement or the applicable Loan Document, as the case may be, binding that party bind those
Persons jointly and severally;

               (xxi) if a payment obligation comes due on a day which is not a Business Day, payment shall
be due on the immediately following Business Day;

               (xxii) attorneys’, consultants’ and experts’ fees shall include customary disbursements and
related charges of the professional involved;

               (xxiii) “Approval”, “Approved”, “approval” or “approved” shall mean, as the context so
determines, an approval in writing given to the party seeking approval after full disclosure to the
party giving approval of all material facts necessary in order to determine whether approval should
be granted. Approvals by Agent or any Lender may be granted or withheld in the absolute and sole
discretion of Agent or such Lender unless this Agreement or any Loan Document expressly provides
otherwise. Similarly, where a matter is stated to be in Agent’s or any Lender’s opinion, in Agent’s
or any Lender’s judgment, acceptable to Agent or

30

 

any Lender, satisfactory to Agent or any Lender, required by Agent or any Lender, determined by
Agent or any Lender or subject to Agent’s or any Lender’s consent or like phrases, unless this
Agreement or any Loan Document expressly provides otherwise, such terms shall be construed to mean
in Agent’s or such Lender’s sole opinion, in Agent’s or such Lender’s sole judgment, acceptable to
Agent or such Lender in its sole discretion, satisfactory to Agent or such Lender in its sole
discretion, required by Agent or such Lender in its sole discretion, determined by Agent or such
Lender in its sole discretion, and subject to Agent’s or such Lender’s consent in its sole
discretion;

               (xxiv) whenever a consent, approval, request or like act may not be unreasonably withheld, it
shall also not be unreasonably delayed or conditioned; and

               (xxv) the principle of construing this Agreement or any other Loan Document against the
party that drafted the same is expressly excluded.

ARTICLE 2.

CREDIT FACILITY

     2.1 Loan.

          (1) Loan. Subject to the terms and conditions hereof, each Lender severally agrees to
make, on the Closing Date, a Loan to Borrower in an amount equal to such Lender’s Loan Commitment.
Borrower agrees to accept the Loan and to repay the same in accordance with the terms hereof

          (2) No Reborrowing. Borrower may request and receive only one borrowing hereunder in
respect of the Loans and amounts borrowed under the Loans that are repaid or prepaid by Borrower
may not be reborrowed.

          (3) Maturity Date. All amounts owed hereunder with respect to the Loan shall be paid
in full no later than the Maturity Date.

          (4) Borrowing Mechanics for the Loan.

               (i) Borrower shall deliver to Administrative Agent a fully executed funding notice in a form reasonably acceptable to Administrative Agent no later than one (1) day
prior to the Closing Date. Promptly upon receipt by Administrative Agent of such funding request,
Administrative Agent shall notify each Lender of the proposed borrowing.

               (ii) Each Lender shall make its Loan available to Administrative Agent not later than
12:00 p.m. (New York time) on the Closing Date, by wire transfer of same day funds in Dollars, at
Administrative Agent’s Contact Office. Upon satisfaction or waiver of the conditions precedent
specified herein, Administrative Agent shall make the proceeds of the Loan available to Borrower on
the Closing Date by causing an amount of same day funds in Dollars equal to the proceeds of all
such Loan received by Administrative Agent from Lenders to be credited to the account of Borrower
at Administrative Agent’s Contact Office or to such other account as may be designated in writing
to Administrative Agent by Borrower.

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     2.2 Reserved.

     2.3 Reserved.

     2.4 Funding of Borrowings. Each Lender shall make each Loan to be made by it hereunder
on the proposed date thereof by wire transfer of immediately available funds to the Administrative
Agent at the Contact Office, ABA 021-001-033 for the Administrative Agent’s Account No. 99-401-268,
Ref: TE/TOUSA Mezzanine LLC, no later than 12:00 p.m. (New York time). The Administrative Agent
will make such Loan available to the Borrower pursuant to the terms and conditions hereof by
promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained
with the Administrative Agent in New York City and designated by the Borrower in the applicable
funding request.

     2.5 Interest Elections.

          (1) Elections by the Borrower for the Borrowings. Each Borrowing initially shall be of
the Type specified in the applicable funding request and, in the case of a LIBO Rate Loan, shall
have an initial Interest Period as specified in such funding request (which shall be a period
contemplated by the definition of the term “Interest Period”). Thereafter, the Borrower may elect
to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a
LIBO Rate Loan, may elect Interest Periods therefor, all as provided in this Section; provided,
however, any conversion or continuation of LIBO Rate Loans shall be subject to the provisions of
Sections 2.2(a)(2)(iii) and (iv). The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. At any time, the Borrower may have only
eight (8) Interest Periods then in effect.

          (2) Notice of Elections. To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent in writing of such election (which notice may be by
facsimile) by the time that a Borrowing Request would be required under Section 2.4 if the
Borrower were requesting a Borrowing of the Type resulting from such election to be made on the
effective date of such election. Each such Rate Request shall be irrevocable, shall be signed by a
Responsible Officer and shall be in the form of Exhibit D hereto.

          (3) Information in Interest Election Requests. Each Rate Request shall specify the
following information in compliance with Section 2.2:

               (i) the Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the portions thereof to be
allocated to each resulting Borrowing (in which case the information to be specified pursuant to
clauses (C) and (D) of this section shall be specified for each resulting
Borrowing);

               (ii) the effective date of the election made pursuant to such Rate Request, which shall
be a Business Day;

               (iii) whether the resulting Borrowing is to be a Base Rate Loan or a LIBO Rate Loan; and

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               (iv) if the resulting Borrowing
is a LIBO Rate Loan, the Interest Period to be applicable
thereto after giving effect to such election, which shall be a period contemplated by the
definition of the term “Interest Period”.

     If any such Rate Request requests a LEBO Rate Loan but does not specify an Interest Period, then
the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

          (4) Notice by the Administrative Agent to Lenders. Promptly following receipt of a
Rate Request, the Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

          (5) Failure to Elect; Potential Default and Events of Default. If the Borrower fails
to deliver a timely Rate Request with respect to a LIBO Rate Loan prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to a Base Rate Loan. Notwithstanding any
contrary provision hereof, if a Potential Default or an Event of Default has occurred and is
continuing on the day occurring three Eurodollar Business Days prior to the date of, or on the date
of, the requested funding, continuation or conversion, then, so long as a Potential Default or an
Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a
LIBO Rate Loan and (ii) unless repaid, each LIBO Rate Loan shall be converted to a Base Rate Loan
at the end of the Interest Period applicable thereto.

     2.6 Extension of Initial Maturity Date.

          (1) Unless previously accelerated, or extended pursuant to this Section 2.6. all
Obligations with respect to the Loans shall be paid in full no later than 1:00 p.m., New York time
on the Initial Maturity Date. Provided that no Potential Default or Event of Default shall have
occurred and be continuing, the Borrower shall have the option, to be exercised by giving written
notice to the Administrative Agent at least one year and thirty days prior to the Initial Maturity
Date (and in any event concurrently with the extension by the Senior Borrowers of the Senior Loans
pursuant to Section 2.6 the Senior Credit Agreement and the extension by the Junior
Mezzanine Borrowers of the Junior Mezzanine Loans pursuant to Section 2.6 of the Junior Mezzanine
Credit Agreement), subject to the terms and conditions set forth in this Agreement, to extend the
Initial Maturity Date by twelve (12) months to August 1, 2010 (the “Extension Period”). The
request by the Borrower for the extension of the Initial Maturity Date shall constitute a
representation and warranty by the Borrower that no Potential Default or Event of Default then
exists and that all of the conditions set forth in Section 2.6(2) below shall have been
satisfied on the Initial Maturity Date. Provided that all conditions to the extension required to
be satisfied as of the Extension Date (as set forth in this Section 2.6) are then satisfied, the
extension shall become effective concurrently with the extension of the Senior Loans and Senior
Mezzanine Loans (the “Extension Date”), subject however to the further satisfaction of all
conditions to the extension required to be satisfied as of the Initial Maturity Date (as set forth
in this Section 2.6).

          (2) The obligations of the Administrative Agent and the Lenders to extend the Initial Maturity
Date as provided in Section 2.6(1) shall be subject to the prior satisfaction of

33

 

          each of the following conditions precedent as determined by the Administrative Agent in its good
faith judgment:

               (i) on the Initial Maturity Date there shall exist no Potential Default or Event of Default;

               (ii) on or prior to the Extension Date, the Borrower shall have paid to the
Administrative Agent for the ratable benefit of the Lenders an extension fee (the “Extension
Fee”) equal to one-quarter of one percent (0.25%) of the original principal amount of the Loan
(which fee Borrower hereby agrees shall be fully earned and nonrefundable under any circumstances
when paid);

               (iii) the representations and warranties made by the Borrower Parties in the Loan
Documents shall have been true and correct in all material respects when made and shall also be
true and correct in all material respects on the Extension Date and the Initial Maturity Date,
unless such representations and warranties specifically relate to an earlier date, in which case,
they shall have been true and correct in all material respects as of such earlier date (provided,
however, that any factual matters disclosed in the Schedules referenced in Article 4 shall
be subject to update in accordance with clause (iv) below);

               (iv) the Borrower Parties shall have delivered to the Administrative
Agent updates of all the Schedules set forth in Article 4 hereof as of the Extension Date
and as of the Initial Maturity Date, and such updated Schedules shall be acceptable to
Administrative Agent in its reasonable judgment;

               (v) the Borrower shall have delivered to the Administrative Agent a Compliance
Certificate dated as of the Extension Date and as of the Initial Maturity Date demonstrating the
Borrower is in compliance with the covenants set forth in
Article 6;

               (vi) the Borrower shall have paid all reasonable out-of-pocket costs and expenses incurred by
the Administrative Agent and all reasonable fees and expenses paid to third party consultants
(including reasonable attorneys’ fees and expenses) by Administrative Agent in connection with
such extension;

               (vii) as of the Extension Date and as of the Initial Maturity Date, the ratio (expressed
as a percentage) of Total Funded Debt to Total Book Capitalization, shall be 60% or less;

               (viii) the initial maturity date of the Senior Loans shall have been
extended for one year such that the maturity date thereof does not
occur before August 1, 2009 and
the initial maturity date of the Junior Mezzanine Loan shall have been extended for one year such
that the maturity date thereof does not occur before August 1, 2010; and

               (ix) as of the Extension Date and as of the Initial Maturity Date, the
Borrower Parties shall have acknowledged and ratified that their obligations under the applicable
Loan Documents remain in full force and effect, and continue to guaranty the Obligations under the
Loan Documents, as extended.

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          (3) The Administrative Agent shall notify each of the Lenders in the event that the
Borrower requests that the Initial Maturity Date be extended as provided in this Section
2,6.

     2.7 Manner of Payment of Loan; Evidence of Debt.

          (1) Repayment. Subject to any earlier acceleration of the Loan following an Event of
Default, the Borrower hereby unconditionally promises to pay to the Administrative Agent for
account of the Lenders the outstanding principal amount of the Loan on the Maturity Date.

          (2) Manner of Payment.

               (i) The Borrower shall notify the Administrative Agent in writing
(which notice may be by facsimile or electronic mail) of any repayment or prepayment hereunder (i)
in the case of repayment or prepayment of a LIBO Rate Loan with an Interest Period not expiring on
the date of payment, not later than 1:00 p.m. (New York time) three Business Days before the date
of repayment or prepayment, or (ii) in the case of repayment or prepayment of a LIBO Rate Loan with
Interest Periods expiring on the date of repayment or prepayment or a Base Rate Loan, not later
than 1:00 p.m. (New York time) on the date of repayment or prepayment. Each such notice shall be
irrevocable and shall specify the repayment or prepayment date and the principal amount of each
Borrowing or portion thereof to be repaid or prepaid. Promptly following receipt of any such notice
relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.
Each repayment or prepayment of a Borrowing shall be applied ratably to the Loan included in the
repaid or prepaid Borrowing. Repayments and prepayments shall be accompanied by (A) accrued
interest to the extent required by Section 2.9 and (B) any payments due pursuant to
Section 2.8. If the Borrower fails to make a timely selection of the Borrowing or
Borrowings to be repaid or prepaid, such payment shall be applied, first, to pay any outstanding
Base Rate Loan and, second, to other Borrowings in the order of the remaining duration of their
respective Interest Periods (the Borrowing with the shortest remaining Interest Period to be repaid
first).

               (ii) The Borrower shall make each payment required to be made by them hereunder (whether
of principal, interest or fees) or under any other Loan Document (except to the extent otherwise
provided therein) prior to 1:00 p.m. (New York time) (unless otherwise specified in this
Agreement), on the date when due, in immediately available funds, without set-off or counterclaim;
provided that if a new Loan is to be made by any Lender on a date the Borrower are to repay
any principal of an outstanding Loan of such Lender, such Lender shall apply the proceeds of such
new Loan to the payment of the principal to be repaid and only an amount equal to the difference
between the principal to be borrowed and the principal to be repaid shall be made available by such
Lender to the Administrative Agent as provided in Section 2.4. or paid by the Borrower to
the Administrative Agent pursuant to this paragraph, as the case may be. Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating interest thereon. All such
payments shall be wired to the Administrative

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Agent at the Contact Office, ABA 021-001-033 for the Administrative Agent’s Account No. 99-
401-268, Ref: TE/TOUSA Mezzanine LLC, except as otherwise expressly provided in the relevant Loan
Document, and except that payments pursuant to
Sections 2.15, 2.17, 2.18 and 9.14
shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute
any such payments received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding Business Day and, in
the case of any payment accruing interest, interest thereon shall be payable for the period of such
extension. All payments hereunder or under any other Loan Document (except to the extent otherwise
provided therein) shall be made in Dollars.

          (3) Maintenance of Loan Accounts by Lenders. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

          (4) Maintenance of Loan Accounts by the Administrative Agent. The Administrative Agent
shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the
Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of
the Lenders and each Lender’s share thereof.

          (5) Effect of Entries. The entries made in the accounts maintained pursuant to
Sections 2.7(3) and (4) above shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loan in accordance with the terms of this Agreement.

          (6) Promissory Notes. Upon the request of a Lender, the Borrower shall promptly
execute and deliver to such Lender a Note evidencing such Lender’s Commitment.

     2.8 Repayment and Prepayment of the Loan

          (1) Mandatory Prepayments. The Borrower shall remit to the Administrative Agent
as a mandatory prepayment for application against the outstanding principal balance of the Loan:

               (i) The Proceeds of a Casualty or Condemnation of a Mortgaged Property to the extent
required to be applied to the prepayment of the Loan under this Agreement.

               (ii) Concurrently with any prepayment of principal of the Senior Term Loan or the Junior
Mezzanine Loan, Borrower shall prepay the principal amount of the Loan on a pro rata basis based on
the outstanding principal balance of the Loan, the Senior Loan, and the Junior Mezzanine Loan.

36

 

          (2) Optional Prepayments. Borrower shall be prohibited from voluntarily prepaying the
Loan, in whole or in part, until the first Payment Date following the first anniversary of the
Closing Date (the period to but excluding such Payment Date, the “Lockout Period”). Lenders shall
have no obligation to accept any voluntary prepayment during the Lockout Period. After the
expiration of the Lockout Period, upon not less than five (5) Business Days’ prior written notice
to the Administrative Agent (which shall promptly provide telephonic notice of the receipt thereof
to each of the Lenders), the Borrower may voluntarily prepay principal amounts outstanding under
the Loan in whole or in part (without any release of collateral securing the Loan); provided,
however, that voluntary prepayments shall be in the minimum amount of $1,000,000 and integral
multiples of $100,000 in excess thereof. As a condition precedent to any voluntary prepayment of a
Loan, the principal amount of the Senior Loan and, provided no Event of Default has occurred and is
continuing, the Junior Mezzanine Loans, shall be concurrently repaid pro rata based on the
outstanding principal balance of the Loan, the Senior Loan, and the Junior Mezzanine Loan. In no
event shall Administrative Agent be obligated to accept any voluntary payment of the Loan unless
either an Event of Default has occurred and is continuing or it has received evidence reasonably
satisfactory to Administrative Agent that the required pro rata portion of the Senior Loan and
Junior Mezzanine Loan has been, or concurrently will be, paid.

          (3) Accrued Interest. The Borrower shall pay in connection with any prepayment
hereunder, whether voluntary or mandatory, all interest accrued but unpaid on that portion of the
Loan to which such prepayment is applied, concurrently with payment of any principal amounts.

          (4) Priority of Payments.

               (i) Following the occurrence and continuance of an Event of Default, all amounts
received by the Administrative Agent on account of the Obligations, shall be promptly disbursed by
the Administrative Agent as follows:

                    (A) First, to the payment of expenses incurred by the
Administrative Agent in the performance of its duties and the enforcement of the rights of the
Lenders under the Loan Documents, including, without limitation, all costs and expenses of
collection, reasonable attorneys’ fees (including all allocated costs of internal counsel), court
costs and other amounts payable as provided in Section 9.14 below;

                    (B) Then, to the Lenders, pro rata in accordance with their respective Pro Rata Shares, until
interest accrued on the Loan has been paid in full;

                    (C) Then, to the Lenders, pro rata in accordance with their respective Pro Rata Shares, until
principal under the Loan has been paid in full;

                    (D) Then, to the Lenders, pro rata to each Lender in accordance
with the amount expressed in a percentage, which the amount of remaining Obligations owed to such
Lender bears to all remaining Obligations held by all Lenders, until all other Obligations have
been paid in full.

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               (ii) The
order of priority set forth in Section 2.8(4)(i) and the related
provisions of this Agreement are set forth solely to determine the rights and priorities of the
Administrative Agent and the other Lenders as among themselves. The order of priority set forth in
clauses (B) through (D) of Section 2.8(4)(i) may at any time and from time to time be changed by
the Required Lenders without necessity of notice to or consent of or approval by the Borrower or
any other Person. The order of priority set forth in clause (A) of Section 2.8(4)(i) may be changed
only with the prior written consent of the Administrative Agent.

          2.9 Interest.

          (1) Base Rate Loans. The Loans comprising each Base Rate Loan shall bear interest at a
rate per annum equal to the Applicable Base Rate.

          (2) LIBO Rate Loans. The Loans constituting each LIBO Rate Loan shall bear interest at
a rate per annum equal to the Applicable LIBO Rate for the Interest Period for such Borrowing.

          (3) Payment of Interest.

               (i) The Borrower shall pay interest on Base Rate Loans quarterly, in arrears, on the
last Business Day of each calendar quarter, as set forth on an interest billing statement delivered
by the Administrative Agent to the Borrower (which delivery may be by facsimile transmission) no
later than 1:00 p.m. (New York time) on a date at least one Business Day prior to the date such
interest is due.

               (ii) The Borrower shall pay interest on the LIBO Rate Loans on the last day of the
applicable Interest Period or, in the case of LIBO Rate Loans with an Interest Period ending later
than three months after the date funded, converted or continued, at the end of each three month
period from the date funded, converted or continued and on the last day of the applicable Interest
Period, as set forth on an interest billing statement delivered by the Administrative Agent to the
Borrower (which delivery may be by facsimile transmission) no later than 1:00 p.m. (New York time)
on a date at least one Business Day prior to the date such interest is due.

          (4) Computations. All computations of interest and fees payable hereunder shall be
based upon a year of 360 days for the actual number of days elapsed (which results in more interest
being paid than if computed on the basis of a 365-day year).

          (5) Default Interest. During such time as there shall have occurred and be continuing
an Event of Default, all Obligations outstanding, shall, at the election of the Administrative
Agent, bear interest at a per annum rate equal to two percent (2%) above the Applicable Base Rate
in effect during the applicable calculation period (whether or not such Applicable Base Rate shall
otherwise have been elected by Borrower in accordance with this Agreement).

     2.10 Presumptions of Payment.

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          Unless the Administrative Agent shall have received notice from the Borrower prior to the date
on which any payment is due to the Administrative Agent for the account of the Lenders hereunder
that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower
has made such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Rate.

     2.11 Pro Rata Treatment.

          Except to the extent otherwise provided herein: (i) each payment or prepayment of principal of
any Loan by the Borrower shall be made for account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Loan held by them; and (ii) each payment of interest on
any Loan by the Borrower shall be made for account of the Lenders pro rata in accordance with the
amounts of interest on such Loan then due and payable to the respective Lenders.

     2.12 Inability to Determine Rates.

          In the event that the Administrative Agent shall have reasonably determined (which
determination shall be conclusive and binding upon the Borrower) that by reason of circumstances
affecting the interbank market adequate and reasonable means do not exist for ascertaining the LIBO
Rate for any Interest Period, the Administrative Agent shall forthwith give telephonic notice of
such determination to each Lender and to the Borrower. If such notice is given: (1) no portion of
the Loan may be funded as a LIBO Rate Loan, (2) any Base Rate Loan that was to have been converted
to a LIBO Rate Loan shall, subject to the provisions hereof, be continued as a Base Rate Loan, and
(3) any outstanding LIBO Rate Loan shall be converted, on the last day of the Interest Period
applicable thereto, to a Base Rate Loan. Until such notice has been withdrawn by the Administrative
Agent, the Borrower shall not have the right to convert any Base Rate Loan to a LIBO Rate Loan or
to continue a LIBO Rate Loan as such. The Administrative Agent shall withdraw such notice in the
event that the circumstances giving rise thereto no longer pertain and that adequate and reasonable
means shall exist for ascertaining the LIBO Rate for the Interest Period requested by the Borrower,
and, following withdrawal of such notice by the Administrative Agent, the Borrower shall have the
right to convert any Base Rate Loan to a LIBO Rate Loan and to continue any LIBO Rate Loan as such
in accordance with the terms and conditions of this Agreement.

     2.13 Illegality.

          Notwithstanding any other provisions herein, if any law, regulation, treaty or directive
issued by any Governmental Authority or any change therein or in the interpretation or application
thereof, shall make it unlawful for any Lender to maintain LIBO Rate Loans as contemplated by this
Agreement: (1) the commitment of such Lender hereunder to continue LIBO Rate Loans or to convert
Base Rate Loans to LIBO Rate Loans shall forthwith be cancelled, and (2) LIBO Rate Loans held by
such Lender then outstanding, if any, shall be

39

 

converted automatically to Base Rate Loans at the end of their respective Interest Periods or
within such earlier period as may be required by law. In the event of a conversion of any LIBO Rate
Loan prior to the end of its applicable Interest Period, the Borrower hereby agrees promptly to pay
any Lender affected thereby, upon demand, the amounts required pursuant to Section 2.17
below, it being agreed and understood that such conversion shall constitute a prepayment for
all purposes of this Section 2.13. The provisions hereof shall survive the termination of
this Agreement and payment of all other Obligations.

     2.14 Funding.

          Each Lender shall be entitled to fund all or any portion of its Commitment to make any Loan in
any manner it may determine in its sole discretion, including, without limitation, in the Grand
Cayman inter-bank market, the London inter-bank market and within the United States, but all
calculations and transactions hereunder shall be conducted as though all Lenders actually fund all
LIBO Rate Loans through the purchase of offshore Dollar deposits in the amount of such Lender’s
Commitment of the relevant LIBO Rate Loan with a maturity corresponding to the applicable Interest
Period.

     2.15 Increased Costs.

          (1) In the event that any applicable law, order, regulation, treaty or directive issued
by any central bank or other governmental authority, agency or instrumentality or in the
governmental or judicial interpretation or application thereof, or compliance by any Lender with
any request or directive (whether or not having the force of law) issued by any central bank or
other governmental authority, agency or instrumentality:

               (i) Does or shall subject any Lender to any Taxes of any kind
whatsoever with respect to this Agreement or any Loan, or change the basis of determining the Taxes
imposed on payments to such Lender of principal, fee, interest or any other amount payable
hereunder (except for change in the rate of tax on the overall net income of such Lender);

               (ii) Does or shall impose, modify or hold applicable any reserve,
capital requirement, special deposit, compulsory loan or similar requirements against assets held
by, or deposits or other liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of such Lender which are not
otherwise included in the determination of interest payable on the Obligations; or

               (iii) Does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender of making, renewing
or maintaining its Loan or the rate of return on the capital of such Lender or any corporation
controlling such Lender, then, in any such case, the Borrower shall, without duplication of amounts
payable pursuant to Section 2.18. promptly pay to such Lender, upon its written demand made
through the Administrative Agent, any additional amounts necessary to compensate such Lender for
such additional cost or reduced amounts receivable or rate of return as determined by such Lender
with respect to this Agreement or such Lender’s Loan, so long as such Lender

40

 

requires substantially all obligors under other commitments of this type made available by such
Lender to similarly so compensate such Lender.

          (2) If a Lender becomes entitled to claim any additional amounts pursuant to this Section
2.15, it shall promptly notify the Borrower of the event by reason of which it has become so
entitled. A certificate specifying the reason for any additional amounts so claimed payable
containing the calculation thereof in reasonable detail submitted by a Lender to the Borrower,
accompanied by a certification that such Lender has required substantially all obligors under other
commitments of this type made available by such Lender to similarly so compensate such Lender,
shall constitute prima facie evidence thereof.

          (3) Failure or delay on the part of any Lender to demand compensation pursuant to this
Section 2.15 shall not constitute a waiver of such Lender’s right to demand such
compensation. The provisions of this Section 2.15 shall survive the termination of this
Agreement and payment of the Loan and all other Obligations.

     2.16 Obligation of Lenders to Mitigate: Defaulting Lenders; Replacement of
Lenders.

          (1) As promptly as reasonably practicable after the officer of any Lender responsible for
administering such Lender’s Loan becomes aware of any event or condition that would entitle such
Lender to receive payments under Section 2.15 above or Section 2.18 below or to
cease maintaining LIBO Rate Loans under Section 2.13 above, such Lender will use reasonable
efforts: (i) to maintain its Loan through another lending office of such Lender or (ii) take such
other reasonable measures, if as a result thereof the additional amounts which would otherwise be
required to be paid to such Lender pursuant to Section 2.15 above or pursuant to
Section 2.18 below would be materially reduced or eliminated or the conditions rendering
such Lender incapable of maintaining LIBO Rate Loans under Section 2.5 above no longer
would be applicable, and if, as determined by such Lender in its sole discretion, the maintaining
of such LIBO Rate Loans through such other lending office or in accordance with such other
measures, as the case may be, would not otherwise materially adversely affect such LIBO Rate Loans
or the interests of such Lender.

          (2) [Reserved].

          (3) Anything contained herein to the contrary notwithstanding, in the event that: (a) (i) any
Lender (an “Increased-Cost Lender”) shall give notice to Borrower that such Lender is adversely
affected under Section 2.13 (other than in circumstances where events subject to such
Section generally affect Lenders) or is entitled to receive payments under Section 2.15 or
2.18 (other than in circumstances where events subject to such Sections generally entitle
Lenders to payment), (ii) the circumstances which have caused such Lender to be so adversely
affected or which entitle such Lender to receive such payments shall remain in effect, and (iii)
such Lender shall fail to withdraw such notice within five Business Days after Borrower’s request
for such withdrawal; or (b) any Lender shall become and then be a Defaulting Lender; or (c) in
connection with any proposed amendment, modification, termination, waiver or consent which requires
unanimous approval as contemplated by Section 9.2, the consent of Required Lenders shall
have been obtained but the consent of one or more of such other Lenders (each a “Non-Consenting
Lender”) whose consent is required shall not have

41

 

been obtained; then so long as no Potential Default or Event of Default is then continuing, with
respect to each such Increased-Cost Lender, Defaulting Lender or Non-Consenting Lender (the
“Terminated Lender”), Borrower may, by giving written notice to Administrative
Agent and any Terminated Lender of its election to do so, elect to cause such Terminated Lender
(and such Terminated Lender hereby irrevocably agrees) to assign its outstanding Loan in full to
one or more Eligible Assignees (each a “Replacement Lender”) in accordance with the provisions of
Section 9.8 and Terminated Lender shall pay any fees payable thereunder in connection with
such assignment; provided, (1) on the date of such assignment, the Replacement Lender shall
pay to Terminated Lender an amount equal to the sum of (A) an amount equal to the principal of, and
all accrued interest on, all outstanding Loan of the Terminated Lender, (B) an amount equal to all
unreimbursed drawings that have been funded by such Terminated Lender, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to
Section 2.19; (2) on
the date of such assignment, Borrower shall pay any amounts payable to such Terminated Lender
pursuant to Section 2.15 and 2.18; or otherwise as if it were a prepayment and (3)
in the event such Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall
consent, at the time of such assignment, to each matter in respect of which such Terminated Lender
was a Non-Consenting Lender. Upon the prepayment of all amounts owing to any Terminated Lender,
such Terminated Lender shall no longer constitute a “Lender” for purposes hereof; provided,
any rights of such Terminated Lender to indemnification hereunder shall survive as to such
Terminated Lender.

     2.17 Funding Indemnification.

          In the event of (a) the payment of any principal of any LIBO Rate Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any LIBO Rate Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in
any notice delivered pursuant hereto (regardless of whether such notice is permitted to be
revocable under Section 2.5 and is revoked in accordance herewith), or (d) the assignment
of any LIBO Rate Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to
Section 2.5. then, in any such event, the
Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In
the case of a LIBO Rate Loan, the loss to any Lender attributable to any such event shall be deemed
to include an amount determined by such Lender to be equal to the excess, if any, of (i) the amount
of interest that such Lender would have accrued on the principal amount of such Loan for the period
from the date of such payment, conversion, failure or assignment to the last day of the then
current Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue,
the duration of the Interest Period that would have resulted from such borrowing, conversion or
continuation) if the interest rate payable on such deposit were equal to the Reserve Adjusted LIBO
Rate for such Interest Period, over (ii) the amount of interest that such Lender would earn
on such principal amount for such period if such Lender were to invest such principal amount for
such period at the interest rate that would be bid by such Lender (or an affiliate of such Lender)
for Dollar deposits from other banks in the eurodollar market at the commencement of such period. A
certificate of any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower

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and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown
as due on any such certificate within 10 days after receipt thereof.

     2.18
Taxes.

          (1) Any and all payments by or on account of any obligation of the Borrower hereunder or under
any other Loan Document shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.18) the Administrative Agent, Lender (as the
case may be) receives an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable law.

          (2) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.

          (3) The Borrower shall indemnify the Administrative Agent and each Lender, within ten (10)
Business Days after written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section 2.18) paid by the Administrative Agent, such Lender and any
penalties, interest (except to the extent such penalties and/or interest arise as a result of a
Lender’s delay in dealing with any such Indemnified Tax) and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or by the Administrative Agent
on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

          (4) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

          (5) Each Foreign Lender shall deliver to the Borrower (with copies to the Administrative
Agent) on or before the date hereof (or in the case of a Foreign Lender who became a Lender by way
of an assignment, on or before the date of the assignment) or at least five (5) Business Days prior
to the first date for any payment herewith to such Lender, and from time to time as required for
renewal under applicable law, such certificates, documents or other evidence, as required by the
Code or Treasury Regulations issued pursuant thereto, including, without limitation, Internal
Revenue Service Form W-8BEN or W-ECI, as appropriate, and any other certificate or statement of
exemption required by Section 871(h) or Section 881(c) of the Code or any subsequent version
thereof, properly completed and duly executed by such Lender establishing that payments to such
Lender hereunder are not subject to withholding under the

43

 

Code (“Evidence of No Withholding”). Each Foreign Lender shall promptly notify the Borrower and the
Administrative Agent of any change in its applicable lending office and upon written request of the
Borrower or the Administrative Agent shall, prior to the immediately following due date of any
payment by the Borrower hereunder or under any other Loan Document, deliver Evidence of No
Withholding to the Borrower and the Administrative Agent. The Borrower shall be entitled to rely on
such forms in their possession until receipt of any revised or successor form pursuant to this
Section 2.18(5). If a Lender fails to provide Evidence of No Withholding as required
pursuant to this Section 2.18(5). then (i) the Borrower (or the Administrative Agent) shall
be entitled to deduct or withhold from payments to Administrative Agent or such Lender as a result
of such failure, as required by law, and (ii) the Borrower shall not be required to make payments
of additional amounts with respect to such withheld Taxes pursuant to
Section 2.18(1) to
the extent such withholding is required solely by reason of the failure of such Lender to provide
the necessary Evidence of No Withholding.

     2.19 Preferential Payments. Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, if any amount paid on account of the Obligations is
subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be
repaid by any Lender or the Administrative Agent or paid over to a trustee, receiver or any other
entity, whether under any bankruptcy act or otherwise (such payment,
a “Preferential Payment”),
then, to the extent of such Preferential Payment, the Obligations or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment
had not been made.

     2.20
Credit Support.

          (1)
Guaranties. As credit support for the Obligations, on or before the Closing Date,
the Guarantors shall execute and deliver to the Administrative Agent, the Guaranties.

          (2)
Pledge Agreement. As credit support for the Obligations, on or before the Closing
Date, the Pledger shall execute and deliver to the Administrative Agent, the Pledge Agreement.

ARTICLE 3.

CONDITIONS PRECEDENT

     3.1
Conditions to Funding of the Loan. As conditions precedent to the
agreement of the Lenders to fund their respective Pro Rata Shares of the Loan as of the date
hereof:

          (1) The Borrower Parties, as applicable, shall have delivered or shall have caused to be
delivered to the Administrative Agent, in form and substance satisfactory to the Lenders and their
counsel and duly executed by the appropriate Persons (with sufficient copies for each of the
Lenders), each of the following:

               (i) This Agreement;

               (ii) To
the extent requested by any Lender pursuant to this
Section 3.1, a Note
payable to such Lender;

44

 

               (iii) the Guaranties;

               (iv) the Pledge Agreement;

               (v) the Environmental Indemnity;

               (vi) A certificate of the Secretary or Assistant Secretary of the
general partner or managing member of those Borrower Parties which are partnerships or limited liability
companies attaching copies of resolutions duly adopted by the Board of Directors of such general
partner or managing member approving the execution, delivery and performance of the Loan Documents
on behalf of such Borrower Parties and certifying the names and true signatures of the officers of
such general partner or managing member authorized to sign the Loan Documents to which such
Borrower Parties are party on behalf of such Borrower Parties;

               (vii) A certificate or certificates of the Secretary or an Assistant
Secretary of those Borrower Parties which are corporations attaching copies of resolutions duly
adopted by the Board of Directors of such Borrower Parties approving the execution, delivery and
performance of the Loan Documents to which such Borrower Parties are party and certifying the names
and true signatures of the officers of each of such Borrower Parties authorized to sign the Loan
Documents to which such Borrower Parties are party on behalf of such Borrower Parties;

               (viii) Opinions of counsel for the Borrower Parties, in form and substance reasonably
acceptable to the Administrative Agent and the Lenders;

               (ix) Copies of the Organizational Documents of each of the
Transaction Parties, certified by the Secretary of State of the state of formation of such Person
as of a recent date;

               (x) A certificate of authority and good standing or analogous
documentation as of a recent date for each of the Borrower Parties, for each state in which such
Person is organized, formed or incorporated, as applicable, and each state with respect to which
the failure to be in good standing will have or is reasonably likely to have a Material Adverse
Effect with respect to such Person;

               (xi) From a Responsible Officer of each of the Borrower Parties, a
Closing Certificate dated as of the Closing Date and a Borrowing Base Certificate dated as of the
Closing Date;

               (xii) Confirmation from the Administrative Agent that all fees required to be paid by the
Borrower on or before the Closing Date (including pursuant to the Fee Letter) have been, or will
upon the funding of the Loan be, paid in full;

               (xiii) A complete and accurate copy of the most recent audited financial statement of TEP
Holdings Inc. (f/k/a Transeastern Properties, Inc.);

               (xiv) pro forma financial statements for the Borrower as at the Closing Date, and
reflecting the consummation of the transactions contemplated under the Asset

45

 

Purchase Agreement, the related financings and the other transactions contemplated by the Loan
Documents to occur on or prior to the Closing Date, which pro forma financial statements shall be
in form and substance satisfactory to the Administrative Agent.

               (xv) Evidence satisfactory to the Administrative Agent that all
reasonable costs and expenses of the Administrative Agent and the Lenders, including, without
limitation, fees of outside counsel and fees of third party consultants and appraisers, required
to be paid by the Borrower on or prior to the Closing Date have been, or will upon the funding of
the Loan be, paid in full;

          (2) Each of the requirements set forth on Schedule 5.1(2) attached hereto shall have
been met to the satisfaction of the Administrative Agent and the Lenders.

          (3) All representations and warranties of the Borrower Parties set forth herein and in the
other Loan Documents shall be accurate and complete in all material respects as if made on and as
of the Closing Date (unless any such representation and warranty speaks as of a particular date, in
which case it shall be accurate and complete in all material respects as of such date).

          (4) There shall not have occurred and be continuing as of the Closing Date any Event of
Default or Potential Default.

          (5) All acts and conditions (including, without limitation, the obtaining of any third party
consents and necessary regulatory approvals and the making of any required filings, recordings or
registrations) required to be done and performed and to have happened precedent to the execution,
delivery and performance of the Loan Documents by each of the Borrower Parties shall have been done
and performed.

          (6) All conditions to the Closing of the Senior Loan and the Junior Mezzanine Loan shall have
occurred.

          (7) All documentation, including, without limitation, documentation for corporate and legal
proceedings in connection with the transactions contemplated by the Loan Documents shall be
satisfactory in form and substance to the Administrative Agent, the Lenders and their counsel.

     3.2
Outside Closing Date. If all conditions precedent set forth in Section 3.1
above shall not have been met to the satisfaction of the Administrative Agent and the Lenders on or
before August 15, 2005, then the agreement of the Lenders to fund their respective Pro Rata Shares
of the Loan shall terminate and this Agreement shall automatically be deemed of no further force or
effect (except to the extent terms and provisions of this Agreement specifically provide that they
shall survive termination hereof).

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ARTICLE 4.

REPRESENTATIONS AND WARRANTIES

     As an inducement to the Administrative Agent and each Lender to enter into this
Agreement, and for the Lenders to advance their respective Pro Rata Shares of the Loan,
Borrower represents and warrants as follows:

     4.1
Financial Condition.

          (1) The pro forma Consolidated balance sheets of the Borrower and its Subsidiary Entities as
at June 30, 2005, and the related pro forma Consolidated statements of income, retained earnings
and cash flows of the Borrower and its Subsidiary Entities for the fiscal year or fiscal quarter,
as the case may be, then ended, (and the June 30, 2004 financial statements of TEP Holdings Inc.
(f/k/a Transeastern Properties, Inc.) certified by independent certified public accountants
acceptable to the Administrative Agent), copies of which have been furnished to each Lender, fairly
present the pro forma Consolidated financial condition of the Borrower and its Subsidiary Entities
as at such date and the pro forma Consolidated results of the operations of the Borrower and its
Subsidiary Entities for the period ended on such date, all in conformity with GAAP (subject, in the
case of the financial statements as of and for the period ended June 30, 2005, to normal year-end
adjustments and to the absence of notes).

          (2) Except as set forth on Schedule 4.1, neither the Borrower nor any of its
Subsidiary Entities has any material obligation, material contingent liability or material
liability for taxes, material long-term leases or unusual forward or long-term material commitment
that is not reflected in the financial statements referred to in clause (1) above or in the
notes thereto and not otherwise permitted by this Agreement.

     4.2
No Material Adverse Effect. Since December 31, 2004, no event has occurred which
has resulted in, or is reasonably likely to have, a Material Adverse Effect.

     4.3
Compliance with Laws. Each of the Borrower and its Subsidiary Entities is in
compliance with all Requirements of Law and is not in default or in violation of any order, writ,
injunction, decree or demand of any Governmental Authority, except where the failure to do so or
such default, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. To the Knowledge of the Borrower, there are no Requirements of Law
applicable to any Transaction Party the compliance with which by such Transaction Party would, in
the aggregate, have a Material Adverse Effect. There has not been committed by Borrower or its
Subsidiary Entities any act or omission affording the federal government or any other Governmental
Authority the right of forfeiture as against any Collateral, Mortgaged Property or any part thereof
or any monies paid in performance of the Obligations or Senior Borrower’s obligations under any of
the Senior Credit Documents.

4.4 Organization, Powers: Authorization; Enforceability.

          (1) Each Borrower Party (A) is either a corporation, a limited partnership or a limited
liability company duly incorporated, formed or organized, validly existing, and in good standing
under the laws of the state of its incorporation, organization and/or formation, (B) is duly
qualified to do business and is in good standing under the laws of each jurisdiction in which

47

 

the failure to be so qualified and in good standing will have or is reasonably expected to have a
Material Adverse Effect, and (C) has all requisite corporate, partnership or limited liability
company power and authority to own, operate and encumber its Property and to conduct its business
as presently conducted and as proposed to be conducted in connection with and following the
consummation of the transactions contemplated by this Agreement. Borrower is a single member
limited liability company for purposes of federal income taxation and for purposes of the tax laws
of any state or locality in which it is subject to taxation based on its income.

          (2) True, correct and complete copies of the Organizational Documents of Borrower, Pledger,
and their respective Subsidiary Entities have been delivered to the Administrative Agent and have
not been Modified except to the extent indicated therein. All of the Organization Documents are in
full force and effect, and there are no defaults under such Organizational Documents (including
with respect to any restrictions on Indebtedness contained therein), and no events which, with the
passage of time or giving of notice or both, would constitute a default under such Organizational
Documents (including with respect to any restrictions on Indebtedness contained therein).

          (3) The Borrower Parties have the requisite power and authority to execute, deliver and
perform this Agreement and each of the other Loan Documents which are required to be executed on
their behalf. The execution, delivery and performance of each of the Loan Documents which must be
executed in connection with this Agreement by any Borrower Party and to which any Borrower Party is
a party and the consummation of the transactions contemplated thereby are within such Borrower
Party’s partnership, company, or corporate powers, have been duly authorized by all necessary
partnership, company, or corporate action and such authorization has not been rescinded. No other
partnership, company, or corporate action or proceedings on the part of any Borrower Party is
necessary to consummate such transactions.

          (4) Each of the Loan Documents to which any Borrower Party is a party has been duly executed
and delivered on behalf of such Borrower Party and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms (subject to bankruptcy, insolvency,
reorganization, or other laws affecting creditors’ rights generally and to principles of equity,
regardless of whether considered in a proceeding in equity or at law), is in full force and effect
and all the terms, provisions, agreements and conditions set forth therein and required to be
performed or complied with by such Borrower Party on or before the Closing Date have been performed
or complied with, and no Potential Default or Event of Default exists thereunder.

     4.5
No Conflict. The execution, delivery and performance of the Loan Documents,
the borrowing hereunder, and the use of the proceeds thereof, will not violate any material
Requirement of Law or any Organizational Document or any material Contractual Obligation of any of
the Borrower or any of its Subsidiary Entities; or create or result in the creation of any Lien on
any material assets of any of the Borrower or Senior Credit Party or their Subsidiary Entities
other than the Liens created by the Loan Documents.

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     4.6
No Material Litigation. Except as disclosed on Schedule 4.6 hereto, no litigation,
investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to
Borrower’s Knowledge, threatened by or against Borrower or its Subsidiary Entities, any Senior
Credit Party or against any such Person’s Properties or revenues which is likely to be adversely
determined and which, if adversely determined, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. The performance of any action by any
Borrower Party required or contemplated by any Loan Documents is not restrained or enjoined (either
temporarily, preliminarily or permanently).

     4.7
Taxes. (1) All federal, state, local and foreign income and franchise and other
material Tax returns, reports and similar statements or filings of the Borrower and its Tax
Affiliates (collectively, the “Tax Returns”) have been filed with the appropriate Governmental
Authorities in all jurisdictions in which such Tax Returns are required to be filed, all such Tax
Returns are true and correct in all material respects, and all taxes, charges and other impositions
reflected therein have been paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof except to the extent such Taxes,
assessments, fees and other charges of Governmental Authorities are subject to a Good Faith
Contest. The Borrower Parties have no Knowledge of any proposed tax assessment against any Borrower
Party or any Senior Credit Party that will have or is reasonably likely to have a Material Adverse
Effect. There are no pending or proposed special or other assessments for public improvements or
otherwise affecting the Mortgaged Property, nor are there any contemplated improvements to the
Mortgaged Property that may result in such special or other assessments, which would, individually
or collectively have or would be reasonably likely to have a material adverse effect on such
Mortgaged Property. Except as set forth on Schedule 4.7, no Tax Return is under audit or
examination by any Governmental Authority and no notice of such an audit or examination or any
assertion of any claim for Taxes has been received from any Governmental Authority. Proper and
accurate amounts have been withheld by the Borrower and each of its Tax Affiliates from their
respective employees for all periods in full and complete compliance with the tax, social security
and unemployment withholding provisions of applicable Requirements of Law and such withholdings
have been timely paid to the respective Governmental Authorities.

          (2) Except
as set forth on Schedule 4.7, none of the Borrower or any of its Tax
Affiliates has (i) executed or filed with the IRS or any other Governmental Authority any agreement
or other document extending, or having the effect of extending, the period for the filing of any
Tax Return or the assessment or collection of any charges, (ii) incurred any obligation under any
tax sharing agreement or arrangement other than those of which the Administrative Agent has
received a copy prior to the date hereof, or (iii) been a member of an affiliated, combined or
unitary group other than the group of which the Borrower (or its Tax Affiliate) is the common
parent.

          (3) All mortgage, mortgage recording, stamp, intangible or other similar Tax required to be
paid by any Person under applicable Requirements of Law currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or enforcement of any of the
Loan Documents, including, without limitation, the Senior Security Instruments, have been paid or
have been collected by the closing agent for payment, and, under current Requirements of Law, the
Pledge Agreements are enforceable against the Borrower in

49

 

accordance with their terms by the Administrative Agent (or any subsequent holder thereof) subject
only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally,
and subject as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

     4.8
Regulated Entities. None of the Borrower Parties or Borrower’s Subsidiary
Entities, nor any Person controlling such entities, is (a) an “investment company” or an
“affiliated Person” of, or “promoter” or “principal underwriter” for, or otherwise “controlled” by
an “investment company,” as such terms are defined in the Investment Company Act of 1940, as
amended. None of the Borrower and its Subsidiary Entities (1) is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any
state public utilities code, or any other Federal or state statute or regulation limiting its
ability to incur Indebtedness, or (2) is a “foreign Person” within the meaning of Section 1445 of
the Code.

     4.9
Subsidiary Entities. The Borrower Parties and the Senior Credit Party have fully
disclosed to Administrative Agent all material aspects of the ownership structure of the
Transaction Parties and their respective Subsidiary Entities and have disclosed to Administrative
Agent the correct legal name of each such Person, the type of organization, and the jurisdiction of
its incorporation or organization, and (2) the class of outstanding Capital Stock of Borrower and
its Subsidiary Entities along with the percentage thereof owned, directly or indirectly, by the
Transaction Parties. None of such issued and outstanding Capital Stock is subject to any vesting,
redemption, or repurchase agreement, and there are no warrants or options outstanding with respect
to such Capital Stock, except as disclosed in Schedule 4.9. The outstanding Capital Stock of each
Subsidiary Entity is duly authorized, validly issued, fully paid, nonassessable and not subject to
any Liens. Each Transaction Party: (A) is a corporation, limited liability company, or partnership,
which is duly organized, validly existing and, if applicable, in good standing under the laws of
the jurisdiction of its organization, (B) is duly qualified to do business and, if applicable, is
in good standing under the laws of each jurisdiction in which failure to be so qualified and in
good standing would result in a Material Adverse Effect, and (C) has all requisite power and
authority to own, operate and encumber its Property and to conduct its business as presently
conducted and as proposed to be conducted hereafter.

     4.10
Federal Reserve Board Regulations. None of the Borrower Parties or any Senior
Credit Party is engaged or will engage, principally or as one of its important activities, in the
business of extending credit for the purpose of “purchasing” or “carrying” any “Margin Stock”
within the respective meanings of such terms under Regulations U, T and X. No part of the proceeds
of the Loan will be used for “purchasing” or “carrying” “Margin Stock” as so defined or for any
purpose which violates, or which would be inconsistent with, the provisions of, the Regulations of
the Board of Governors of the Federal Reserve System.

     4.11 ERISA Compliance.

     Except
as disclosed on Schedule 4.11:

          (1) Each Plan is in compliance with the applicable provisions of ERISA, the Code and
other federal or state law failure to comply with which would reasonably be likely to

50

 

result in a Material Adverse Effect. Each Plan which is intended to qualify under Section 401 (a)
of the Code has received a favorable determination letter from the IRS and to Borrower’s Knowledge,
nothing has occurred which would cause the loss of such qualification.

          (2) There are no pending or, to Borrower’s Knowledge, threatened claims, actions or lawsuits,
or action by any Governmental Authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to any Plan which has
resulted or could reasonably be expected to result in a Material Adverse Effect.

          (3) No ERISA Event has occurred or is reasonably expected to occur with respect to any Pension
Plan or, to Borrower’s Knowledge, Multiemployer Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect.

          (4) No Pension Plan has any Unfunded Pension Liability which has resulted or could reasonably
be expected to result in a Material Adverse Effect.

          (5) None of the Borrower Parties, the Senior Credit Parties or their respective Subsidiaries,
nor any ERISA Affiliate has incurred, nor reasonably expects to incur, any liability under Title IV
of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA) which has resulted or could reasonably be expected to result in a Material Adverse
Effect.

          (6) None of the Borrower Parties, the Senior Credit Parties or their respective Subsidiaries,
nor any ERISA Affiliate has incurred nor reasonably expects to incur any liability (and no event
has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan which has
resulted or could reasonably be expected to result in a Material Adverse Effect.

          (7) None of the Borrower Parties, the Senior Credit Parties or their respective Subsidiaries,
nor any ERISA Affiliate has transferred any Unfunded Pension Liability to any Person or otherwise
engaged in a transaction that is subject to Section 4069 or 4212(c) of ERISA which has resulted or
could reasonably be expected to result in a Material Adverse Effect.

     4.12
Assets and Liens.

          (1) Each of the Borrower and its Subsidiary Entities has good and marketable title to
all Property and assets reflected in the financial statements
referred to in Section 4.1 above, except Property and assets sold or otherwise disposed of in the Ordinary Course of
Business subsequent to the respective dates thereof. The Operating Company Entities have good and
marketable title to all of the Mortgaged Property, free and clear of all Liens whatsoever except
the Senior Permitted Encumbrances. The Mortgaged Property constitutes all of the Real Property,
Personal Property, equipment and fixtures currently owned, leased or licensed by the Operating
Company Entities. The Collateral constitutes all of the Property currently owned, leased or
licensed by the Borrower.

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          (2) The Pledge Agreement and the other Loan Documents, upon filing of UCC financing
statements in the applicable jurisdiction or taking possession of any certificates issued under the
applicable Organizational Documents of the pledged Person, create and constitute a valid and
perfected Lien on the Collateral for the full amount of the Loan, free and clear of all Liens.
There are no Liens encumbering the Mortgaged Property other than Senior Permitted Encumbrances.
Except as may be indicated in and insured over by the Senior Title Policy, to the Borrower’s
Knowledge there are no claims for payment for work, labor or materials affecting the Mortgaged
Property which are or may become a lien prior to, or of equal priority with, the Liens created by
the Senior Security Instruments. None of the Senior Permitted Encumbrances will have a material
adverse affect on the Mortgaged Property which they encumber. Except for Lots released in
accordance with Section 6.4(6) of this Agreement, the Borrower shall cause the Operating
Company Entities to each preserve its right, title and interest in and to the Mortgaged Property
for so long as any Obligations remain outstanding and will warrant and defend same and the validity
and priority of the Lien of the Senior Security Instruments from and against any and all claims
whatsoever other than the Senior Permitted Encumbrances. The Borrower shall preserve its right,
title and interest in and to the Collateral for so long as any Obligations remain outstanding and
will warrant and defend same and the validity and priority of the Lien of the Pledge Agreement from
and against any and all claims whatsoever.

     4.13
Securities Acts. None of the Borrower or its Subsidiary Entities have issued any
unregistered securities in violation of the registration requirements of Section 5 of the
Securities Act of 1933 (as amended from time to time, the “Act”) or any other law, nor are they in
violation of any rule, regulation or requirement under the Act, or the Securities Exchange Act of
1934 (as amended from time to time) other than violations which could not reasonably be expected to
have a Material Adverse Effect. None of the Borrower and its Subsidiary Entities is required to
qualify an indenture under the Trust Indenture Act of 1939, (as amended from time to time) in
connection with its execution and delivery of this Agreement or the incurrence of Indebtedness
hereunder.

     4.14
Consents, Etc. Except as disclosed in Schedule 4.14, no consent, appro valor
authorization of, or registration, declaration or filing with any Governmental Authority or any
other Person is required (i) in connection with the execution and delivery of the Loan Documents by
the Borrower Parties; or (ii) the performance of or compliance with the terms, provisions and
conditions of the Loan Documents by such Persons, other than those that have been obtained, copies
of which have been or will be delivered to the Administrative Agent pursuant to Section 3.1, and
each of which on the Effective Date will be in full force and effect.

     4.15
Hazardous Materials. The Borrower and its Subsidiary Entities have caused Phase I
and the other environmental assessments as set forth in Schedule 4.15 to be conducted or have taken
other steps to investigate the past and present environmental condition and use of the Mortgaged
Property. Based on such investigation, except as otherwise disclosed in the assessments listed on
Schedule 4.15: (1) during the period of ownership of any Mortgaged Property by any Operating
Company Entity, such Mortgaged Property (or any portion thereof) has not been used for the purpose
of, or in any way involving, the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of any Hazardous Materials on, under, in or about
the Mortgaged Property, or transporting any

52

 

Hazardous Materials to, from or across the Mortgaged Property, except in all cases in material
compliance with Hazardous Materials Laws and only in the course of legitimate business operations
at the Mortgaged Property, and to the Borrower’s Knowledge, (a) no such use occurred at any time
prior to the period of ownership of such Mortgaged Property by any Operating Company Entity, and
(b) no such use has occurred on any property adjacent to such Mortgaged Property at any time prior
to the date hereof; (2) the Operating Company Entities have obtained all material environmental,
health and safety permits and licenses necessary for their respective operations, and all such
permits are in good standing and the holder of each such permit is currently in compliance with all
terms and conditions of such permits; (3) none of the Mortgaged Property is listed or proposed for
listing on the National Priorities List (“NPL”) pursuant to CERCLA or on the Comprehensive
Environmental Response Compensation Liability Information System List (“CERCLIS”) or any similar
applicable state list of sites requiring remedial action under any Hazardous Materials Laws; (3)
none of the Operating Company Entities has sent or directly arranged for the transport of any
hazardous waste to any site listed or proposed for listing on the NPL, CERCLIS or any similar state
list; and (4) to the Borrower’s Knowledge, there is not now on or in any Mortgaged Property: (a)
any landfill or surface impoundment; (b) any underground storage tanks; (c) any asbestos-containing
material; or (d) any polychlorinated biphenyls (PCB), which in the case of any of clauses (a)
through (d) could reasonably result in a violation of any Hazardous Materials Laws.

     Except as set forth in the environmental reports and studies delivered to the Administrative
Agent prior to the date hereof, (i) to Borrower’s Knowledge, no Hazardous Materials are presently
constructed, deposited, stored, or otherwise located on, under, in or about the Mortgaged Property
except in material compliance with Hazardous Materials Laws; (ii) to Borrower’s Knowledge, no
Hazardous Materials have migrated from the Mortgaged Property upon or beneath other properties
which would reasonably be expected to result in material liability for Borrower or any of its
Subsidiary Entities; and (iii) to Borrower’s Knowledge, no Hazardous Materials have migrated or
threaten to migrate from other properties upon, about or beneath the Mortgaged Property which would
reasonably be expected to result in material liability for any Borrower or its Subsidiary Entities.

     4.16
Intellectual Property. The Borrower and its Subsidiary Entities own or are
licensed or otherwise have the right to use all of the patents, trademarks, service marks, trade
names and copyrights that are necessary for the operation of their respective businesses, without
any conflict with the rights of any other Person that could reasonably be expected to have a
Material Adverse Effect. To Borrower’s Knowledge no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now contemplated to be
employed, by the Borrower and its Subsidiary Entities infringes upon any rights held by any other
Person.

     4.17
Insurance. Schedule 4.17 accurately describes the insurance coverages for the
Borrower and its Subsidiary Entities as of the Closing Date. Such insurance coverages are currently
in full force and effect and in compliance with the applicable requirements of Section 5.5. The
Borrower has obtained and delivered to the Administrative Agent evidence of all insurance policies
as required under Section 5.5. The Borrower has not, and to the Borrower’s Knowledge no Person has,
done by act or omission anything that would impair the coverage of any such policy.

53

 

     4.18
Full Disclosure. The information provided to the Administrative Agent and the
Lenders by or on behalf of the Borrower Parties and each of Borrower’s Subsidiary Entities relating
to such Persons and the transactions contemplated under the Loan Documents does not contain any
untrue statement of a material fact or omit to state a material fact necessary to make the
statements contained therein or herein not materially misleading.

     4.19 Brokers. None of the Borrower Parties or any of Borrower’s Subsidiary Entities
has dealt with any broker or finder with respect to the transactions embodied in this Agreement and
the other Loan Documents except for JMP Securities, LLC (“JMP”), and any commissions or fees due to
JMP shall have been paid.

     4.20 No Default. No Potential Default or Event of Default has occurred and is
continuing.

     4.21 Solvency. After giving effect to the Loan and the Senior Loan, and the
disbursement of the proceeds thereof, the Transaction Parties shall each be Solvent. None of the
Transaction Parties is contemplating either the filing of a petition by it under any state or
federal bankruptcy or insolvency laws or the liquidation of all or a major portion of such entity’s
assets or property, and no Transaction Party has any Knowledge of any Person contemplating the
filing of any such petition against it or against any other Transaction Party.

     4.22 Contractual Obligations. None of the Borrower Parties or any of Borrower’s
Subsidiary Entities is a party to any Contractual Obligation which is reasonably likely to have a
Material Adverse Effect. None of the Borrower Parties or any of Borrower’s Subsidiary Entities is
in default in any respect in the performance, observance or fulfillment of any of its Contractual
Obligations, which default is reasonably likely to have a Material Adverse Effect. None of the
Borrower Parties or any of Borrower’s Subsidiary Entities has any material financial obligation
(contingent or otherwise) under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it or any Collateral or Mortgaged
Property is otherwise bound, other than (a) obligations incurred in the ordinary course of the
operation of the Mortgaged Property, (b) Senior Permitted Encumbrances with respect to the
Mortgaged Property; and (c) obligations under the Loan Documents or the Senior Credit Documents.

     4.23 Representations Regarding the Mortgaged Property.

          (1) Condemnation and Casualty. No Condemnation has been commenced or, to Borrower’s
Knowledge, is contemplated with respect to all or any material portion of the Mortgaged Property.
No portion of the Mortgaged Property has been materially damaged as a result of any Casualty.

          (2) Assessments. To Borrower’s Knowledge, except as disclosed in the Senior Title
Policy, on the real estate tax bill, the existing and/or proposed entitlement and land use and
zoning approvals (copies of which tax bills and zoning compliance have been provided to
Administrative Agent), there are no pending or proposed special or other assessments for public
improvements or otherwise affecting the Mortgaged Property, nor are there any

54

 

contemplated improvements to the Mortgaged Property that may result in such special or other
assessments.

          (3) Flood Plain. The Mortgaged Property is not located in an area identified by the
Federal Emergency Management Agency as an area having special flood hazards, except as disclosed on
the Surveys or if located in such area, that status has been disclosed to Administrative Agent and
does not unreasonably impair the value of the subject Mortgaged Property.

          (4) No Prior Assignment. There are no prior sales, transfers or assignments of any
portion of the Rents due and payable or to become due and payable which are presently outstanding
following the funding of the Loan, other than those being terminated or assigned to the
Administrative Agent concurrently herewith.

          (5) Leases and Purchase/Option Agreements. The Mortgaged Property is not subject to
any Leases demising any portion of the Mortgaged Property other than those permitted in accordance
with the Senior Credit Agreement. No Person (other than the Operating Company Entities) has any
possessory interest in the Mortgaged Property or right to occupy the same except as permitted in
accordance with the Senior Credit Agreement. The Approved Leases and Purchase/Option Agreements are
in full force and effect, and are enforceable in accordance with their terms (subject to
bankruptcy, insolvency, reorganization, or other laws affecting creditors’ rights generally and to
principles of equity, regardless of whether considered in a proceeding in equity or at law). There
are no material defaults under the Purchase/Option Agreements and Senior Permitted Encumbrances by
Senior Borrowers or their Subsidiary Entities, or to the Borrower’s Knowledge any other Person, and
to the Borrower’s Knowledge there are no conditions that, with the passage of time or the giving of
notice, or both, would constitute material defaults thereunder. There has been no prior sale,
transfer or assignment, hypothecation or pledge by the Senior Borrowers or any Operating Company
Entity of any Purchase/Option Agreement or of any Rents payable pursuant thereto, which will be
outstanding following the funding of the Loan, other than those being assigned to the
Administrative Agent concurrently herewith. All construction and other obligations of a material
nature to be performed by the Senior Borrowers and the Operating Company Entities under the
Purchase/Option Agreements, and other Senior Permitted Encumbrances either have been satisfied or
are reasonably capable of being satisfied without undue expense in accordance with the provisions
of the subject Purchase/Option Agreement, or Permitted Encumbrance. Any payments by the Senior
Borrowers or any Operating Company Entity to the other parties to the Purchase/Option Agreements,
and other Senior Permitted Encumbrances for tenant improvements, infrastructure, or land
development have been made to the extent then required. No Person party to any Approved Lease,
Purchase/Option Agreement, or any Permitted Encumbrance is entitled to any material offsets,
abatements, deductions against the Rent payable thereunder from and after the date hereof.

          (6) Options to Acquire. Except in connection with Bona Fide Sales Contracts, none of
the Mortgaged Property is subject to any right of first refusal, right of first offer or other
options to purchase other than those in favor of the Operating Company Entities pursuant to the
Purchase/Option Agreements.

55

 

          (7) Borrowing Base Certificates. All Borrowing Base Certificates (as defined in
the Senior Credit Agreement) submitted to Senior Administrative Agent pursuant to Section
5.1(9) of the Senior Credit Agreement, including the statements regarding the satisfaction of
the criteria comprising each category of the Borrowing Base (as defined in the Senior Credit
Agreement) and the calculations pertaining thereto, are true, correct and complete in all material
respects.

     4.24 Use of Proceeds. The proceeds of the Loan and the Senior Loans have been or are
being used by the Borrower and the Senior Borrower, respectively, solely (a) to finance the
acquisition of the Transeastern Assets (“Acquisition”), (b) to pay transaction costs and expenses,
and (c) for the general corporate needs of the Borrower and the Senior Borrower.

     4.25 Single Purpose Entity. Each Transaction Party (other than the TOUSA Guarantors
and the F/R Member) is a Single Purpose Entity.

     4.26 Labor. There are no strikes, work stoppages, slowdowns or lockouts pending or to
Borrower’s Knowledge, threatened against or involving the Borrower or any of its Subsidiary
Entities, other than those that in the aggregate would not have a Material Adverse Effect. There
are no unfair labor practices, grievances or complaints pending, or, to the Borrower’s Knowledge,
threatened, against or involving the Borrower or any of its Subsidiary Entities, nor are there any
pending or, to the Borrower’s Knowledge, threatened arbitrations or grievances involving the
Borrower or any of its Subsidiary Entities, other than those that, in the aggregate, if resolved
adversely to the Borrower or its Subsidiary Entities, would not have a Material Adverse Effect.

     4.27 Taxpayer Identification Number. The Borrower’s federal taxpayer identification
numbers are as set forth on attached Schedule 4.27.

     4.28 Anti-Terrorism Laws

          (1) Neither of the Borrower nor, to the Knowledge of any of the Transaction Parties, any of
their Affiliates is in violation of any laws relating to terrorism or money laundering
(“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective
September 23, 2001 (the “Executive Order”), and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56
(signed into law on October 26, 2001) (the “USA Patriot Act”).

          (2) Neither of the Borrower nor, to the Knowledge of any of the Transaction Parties, any of
their Affiliates acting or benefiting in any capacity in connection with the Loan is any of the
following:

               (i) a Person or entity that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;

               (ii) a Person or entity owned or controlled by, or acting for or on behalf of, any
Person or entity that is listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order;

56

 

               (iii) a Person or entity with which any Lender is
 prohibited from dealing or otherwise
engaging in any transaction by any
Anti-Terrorism Law;

               (iv) a Person or entity that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order; or

               (v) a Person or entity that is named as a “specially designated national and blocked Person”
on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control
at its official website or any replacement website or other replacement official publication of
such list.

          (3) Neither of the Borrower nor, to the Knowledge of any Transaction Party or any of
Borrower’s Subsidiary Entities, any of their Affiliates acting in any capacity in connection with
the Loan (i) conducts any business or engages in making or receiving any contribution of funds,
goods or services to or for the benefit of any Person described in clause (2) above, (ii)
deals in, or otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any
Anti-Terrorism Law.

ARTICLE 5.

AFFIRMATIVE COVENANTS

     Each of the Borrower Parties and the Borrower’s Subsidiary Entities, jointly and severally,
hereby covenants and agrees with the Administrative Agent and each Lender that, as long as any
Obligations remain unpaid, it will do, and cause any Transaction Party to do directly or
indirectly, the following:

     5.1 Reporting Requirements.

     The Borrower shall furnish to the Administrative Agent each of the following:

          (1) Quarterly Reports.

          Within 60 days after the end of each fiscal quarter (other than fiscal quarters ending December
31), financial information regarding the Borrower and its Subsidiaries consisting of Consolidated
and consolidating unaudited balance sheets as of the close of such quarter and the related
statements of income and cash flow for such quarter and that portion of the fiscal year ending as
of the close of such quarter, setting forth in comparative form the figures for the corresponding
period in the prior year and the figures contained in the Projections, or, if applicable the latest
business plan provided pursuant to clause (d) below, for the current fiscal year, in each
case certified by the Responsible Financial Officer of the Borrower as fairly presenting the
Consolidated and consolidating financial position of the Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the periods indicated in
conformity with GAAP (subject to the absence of footnote disclosure and normal year-end audit
adjustments).

          (2) Annual Reports.

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          Within 90 days after the end of each fiscal year, financial information regarding the Borrower and
its Subsidiaries consisting of Consolidated and consolidating balance sheets of the Borrower and
its Subsidiaries as of the end of such year and related statements of income and cash flows of the
Borrower and its Subsidiaries for such fiscal year, all prepared in conformity with GAAP and
certified, in the case of such Consolidated financial statements, without qualification as to the
scope of the audit or
as to the Borrower being a going concern by independent certified public accountants reasonably
acceptable to the Administrative Agent, together with the report of such accounting firm stating
that such financial statements fairly present the Consolidated financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their operations and cash flow
for the periods indicated in conformity with GAAP applied on a basis consistent with prior years
(except for changes with which such independent certified public accountants shall concur and which
shall have been disclosed in the notes to the financial statements).

          (3) Compliance Certificate. Together with each delivery of any report pursuant to
clauses (1) and (2) of this Section 5.1,

               (i) a
certificate of a Responsible Officer of the Borrower (each, a
“Compliance
Certificate”) (A) showing in reasonable detail the calculations used in demonstrating compliance
with each of the financial covenants contained in Section 6.9 as of the end of such
quarter, and (B) stating that no Potential Default or Event of Default has occurred and is
continuing or, if a Potential Default or an Event of Default has occurred and is continuing,
stating the nature thereof and the action that the Borrower proposes to take with respect thereto;
and

               (ii) summary Consolidated and consolidating financial statements for the Borrower.

          (4) Projections/Business Plan.

          Not later than the end of each Fiscal Year, the annual business and financial plans of the Borrower
for the next succeeding Fiscal Year.

          (5) Default Notices.

          As soon as practicable, and in any event within five Business Days after a Responsible Officer of
any Transaction Party has Knowledge of the existence of any Potential Default, Event of Default or
other event having had a Material Adverse Effect, the Borrower shall give the Administrative Agent
notice specifying the nature of such Potential Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given by telephone, shall be promptly
confirmed in writing on the next Business Day.

          (6) Notice of Litigation.

          Promptly
after the commencement thereof, the Borrower shall give the Administrative Agent written notice of the commencement of all actions, suits and proceedings
before any domestic or foreign Governmental Authority or arbitrator, affecting the Borrower or any
of its Subsidiary Entities, that, in the reasonable judgment of the Borrower, expose the

58

 

Borrower or its Subsidiary Entities to liability which, if adversely determined could reasonably be
expected to have a Material Adverse Effect.

          (7) ERISA Matters.

          The Borrower shall furnish the Administrative Agent the following:

               (i) promptly and in any event within ten (10) days after the Borrower, any of its
Subsidiaries or any ERISA Affiliate knows or has reason to know that any ERISA Event reasonably
likely to result in a liability of the Borrower or its Subsidiaries in excess of $1,000,000 has
occurred, a written statement of a Responsible Officer of the Borrower describing such ERISA Event
and the action, if any, that the Borrower, its Subsidiaries and ERISA Affiliates propose to take
with respect thereto and a copy of any notice filed by the Borrower, any of their Subsidiaries or
any ERISA Affiliate with the PBGC or the IRS pertaining thereto; and

               (ii) promptly following any request therefor, copies of (i) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by the Borrower or any ERISA Affiliate
with the Internal Revenue Service with respect to each Title IV Plan; (ii) the most recent
actuarial valuation report for each Title IV Plan; (iii) all notices received by the Borrower or
any ERISA Affiliate from a Multiemployer Plan sponsor or any governmental agency concerning an
ERISA Event; and (iv) such other documents or governmental reports or filings relating to any Title
IV Plan (or employee benefit plan sponsored or contributed to by any Company) as the Administrative
Agent shall reasonably request.

          (8) Environmental Matters.

          The Borrower shall provide to the Administrative Agent promptly (and in any event within 10
Business Days): (i) any Hazardous Material Claims Known to the Borrower (not listed on Schedule
4.15 hereto) which would be reasonably expected to result in a Material Adverse Effect to the
portion of the Mortgaged Property subject to such Hazardous Material Claim; (ii) the receipt of any
credible notice of any alleged violation of Hazardous Materials Laws with respect to the Mortgaged
Property provided that such alleged violation, if true (and if any release of the Hazardous
Materials alleged therein were not promptly remediated), would result in a breach of subsections
(1) or (2) of Section 5.9; and (iii) the discovery of any occurrence or condition on the Mortgaged
Property that could cause the Borrower to be in violation of clause (1) or, if not promptly
remediated, clause (2) of Section 5.9.

          (9) Reserved.

          (10) Other Information.

          The Borrower will provide the Administrative Agent or any Lender with such other information
respecting the business, properties, condition, financial or otherwise, or operations of the
Borrower or any of their Subsidiary Entities as the Administrative Agent or any Lender through the
Administrative Agent may from time to time reasonably request.
 

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     5.2 Maintenance of Existence and Rights. The Borrower Parties and the Borrower’s
Subsidiary Entities shall do or cause to be done all things necessary to (i) preserve, renew and
keep in full force and effect such Person’s existence, rights, licenses, permits and franchises
necessary to comply with all Requirements of Law applicable to them, the Collateral, and the
Mortgaged Property, except to the extent permitted in Section 6.3; and (ii) remain qualified to do
business and maintain its good standing in each jurisdiction in which failure to be so qualified
and in good standing would reasonably be expected to have a Material Adverse Effect.

     5.3
Compliance with Laws; Forfeiture. Subject to any Good Faith Contest, each of the
Borrower Parties and the Borrower’s Subsidiary Entities shall comply and cause the Collateral and
the Mortgaged Property to be in material compliance with all material Requirements of Law
applicable to the Borrower Parties and the Borrower’s Subsidiary Entities, the Collateral, and the
Mortgaged Property and the uses permitted upon the Mortgaged Property. There shall never be
committed by the Borrower Parties and the Borrower’s Subsidiary Entities, and the Borrower Parties
and the Borrower’s Subsidiary Entities shall not knowingly permit, any other Person in occupancy of
or involved with the operation or use of the Mortgaged Property to commit, any act or omission
affording the federal government or any state or local government the right of forfeiture as
against the Mortgaged Property or any part thereof or any monies paid in performance of the
Borrower’s obligations under any of the Loan Documents. Borrower hereby covenants and agrees not to
commit, knowingly permit or suffer to exist any act or omission affording such right of forfeiture.

     5.4 Access. The Borrower shall from time to time permit the Administrative Agent and
the Lenders, or any agents or representatives thereof, promptly after
written notification of the same (except that during the continuance of an Event of Default, no
such notice shall be required) to (a) examine and make copies of and abstracts from the records and
books of account of the Borrower and each of its Subsidiary Entities, (b) visit the properties of
the Borrower and each of its Subsidiary Entities, (c) discuss the affairs, finances and accounts of
the Borrower and each of its Subsidiary Entities with any of its respective officers or directors
and (d) communicate directly with any of the Borrower’s certified public accountants. The Borrower
shall authorize its independent certified public accountants to disclose to the Administrative
Agent or any Lender during the continuance of an Event of Default any and all financial statements
and other information of any kind, as the Administrative Agent or any Lender reasonably requests
from the Borrower and that such accountants may have with respect to the business, financial
condition, results of operations or other affairs of the Borrower or any of its Subsidiary
Entities.

     5.5
Insurance; Casualty; Condemnation; Restoration.

          (1) Insurance. The Administrative Agent has accepted the Borrower’s current insurance
program and policies through December 31, 2005 and any requirements set forth in this Section
5.5 which are not satisfied by said current insurance program are hereby waived through such
date. On and after December 31, 2005, the Borrower shall, at their sole cost and expense, keep, or
cause to be kept by the Senior Borrower, in full force and effect insurance coverage of the types
and minimum limits as set forth in Schedule 5.5.

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          (2) Insurance Proceeds. Borrower shall provide prompt notice to Lender of any
Casualty or Condemnation. In the event any Casualty or Condemnation in respect of which the Senior
Administrative Agent applies Proceeds from any related insurance policy toward the payment of the
Senior Loan, all excess Proceeds remaining after the Senior Loan has been repaid in full shall be
applied toward prepayment of the Loan and shall be accompanied by the amount of interest
theretofore accrued but unpaid in respect of the principal amount so prepaid, plus the amount of
interest which would have accrued on the principal amount so prepaid had it remained outstanding
through the end of the Interest Accrual Period (as defined in the Senior Credit Agreement) in which
such prepayment is made. In the event the Senior Loan is paid in full, the provisions of Section
5.5 of the Senior Loan Agreement as in effect on the date hereof shall apply herein and the Senior
Borrowers shall have the same obligations to the Administrative Agent and Administrative Agent
shall have the same rights, including but not limited to, with respect to the Proceeds from such
insurance, claims adjustments and the restoration of the Mortgaged Property, as provided therein to
Senior Administrative Agent.

     5.6 Books and Records. The Borrower and its Subsidiary Entities shall keep and
maintain, or cause to be kept and maintained, on a Fiscal Year basis proper books and records in
which accurate and complete entries shall be made of all dealings or transactions of or in relation
to the Loan, the Collateral, the Mortgaged Property and the business and affairs of the Borrower
and Senior Borrowers relating to the Collateral and the Mortgaged Property (respectively) which
shall reflect all items of income and expense in connection with the operation of the Collateral
and the Mortgaged Property and in connection with any services, equipment or furnishings provided
in connection with the operation of the Collateral and Mortgaged Property, in accordance with GAAP.

     5.7 Maintenance of Property. The Borrower and its Subsidiary Entities shall keep and
maintain, or cause to be kept and maintained, the Collateral, the Mortgaged Property, and every
part thereof in good condition and repair, subject to ordinary wear and tear, and, subject to the
provisions of this Agreement with respect to damage or destruction caused by a Casualty or
Condemnation, shall not permit or commit any waste, impairment, or deterioration of any portion of
the Collateral or the Mortgaged Property in any material respect. The Borrower further covenants to
do or cause to be done all other acts which from the character or use of the Collateral or the
Mortgaged Property may be reasonably necessary to protect the security hereof, the specific enumerations
herein not excluding the general.

     5.8 Taxes.

          (1) The Borrower Parties and the Borrower’s Subsidiary Entities shall file all Tax Returns
required to be filed in any jurisdiction and, if applicable, and except with respect to Taxes
subject to any Good Faith Contest, pay and discharge all Taxes imposed upon it or any of its
Properties or in respect of any of its franchises, business, income or property before any material
penalty shall be incurred with respect to such Taxes.

          (2) The Borrower shall pay or cause to be paid all Impositions now or hereafter levied or
assessed or imposed against the Collateral or the Mortgaged Property or any part thereof prior to
the imposition of any interest, charges or expenses for the non-payment thereof and shall cause to
be paid all Other Charges on or before the date they are due. Subject

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to the right of Borrower and the Senior Borrowers to pursue a Good Faith Contest, the
Administrative Agent, on behalf of the Borrower, may pay, but shall not be obligated to pay, any
delinquent Impositions and Other Charges which are attributable to or affect the Mortgaged
Property, the Borrower or Senior Borrowers directly to the applicable taxing authority with respect
thereto, and the Borrower agrees to reimburse the Administrative Agent for such payments promptly
on demand.

     5.9 Environmental.

          The Borrower shall or shall cause Senior Borrowers to:

          (1) Keep and maintain, or cause to be kept and maintained, the Mortgaged Property in material
compliance with all Hazardous Materials Laws.

          (2) Promptly cause the removal of any Hazardous Materials discharged, disposed of, or
otherwise released in, on or under the Mortgaged Property that are in material violation of any
Hazardous Materials Laws, and cause any remediation required by any Hazardous Material Laws or
Governmental Authority to be performed, though no such action shall be required if any action is
subject to a Good Faith Contest. In the course of carrying out such actions, the Borrower shall
provide the Administrative Agent with such periodic information and notices regarding the status of
investigation, removal, and remediation, as the Administrative Agent may reasonably require.

     5.10 Business and Operations. The Borrower and its Subsidiary Entities shall continue
to engage in the businesses presently conducted by them as and to the extent the same are necessary
for the ownership, maintenance, management and operation of the Collateral and the Mortgaged
Property.

     5.11 Title to the Mortgaged Property. Borrower shall warrant and defend (a) Senior
Borrower’s and the Operating Company Entity’s title to the Mortgaged Property and every part
thereof, subject only to Liens permitted hereunder (including Senior Permitted Encumbrances) and
(b) the validity and priority of the Liens of the applicable Senior Security Instrument under the
Senior Credit Agreement on the Mortgaged Property, subject only to Liens permitted hereunder
(including Senior Permitted Encumbrances), in each case against the claims of all Persons
whomsoever.

     5.12 Loan Proceeds. The Borrower shall use the entire amount of the proceeds of the
Loan as provided in Section 4.24.

     5.13 Hedging Arrangements. Within ninety (90) days after the Closing Date, Borrower
shall enter into Interest Rate Contracts in form and substance reasonably satisfactory to
Administrative Agent, and shall be assigned to Administrative Agent pursuant to assignment
documents in form and substance satisfactory to
Administrative Agent in its reasonable discretion.

     5.14 Single Purpose Entities. Borrower shall cause each Transaction Party (other than
the TOUSA Guarantors) to maintain themselves as Single Purpose Entities.

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     5.15 Subordination.

          (1) Except with respect to Permitted Entitlement Payments permitted under Section
6.8(1), each Borrower Party hereby absolutely and irrevocably subordinates, and agrees that
each other Transaction Party shall subordinate (each such Transaction Party, in such capacity, a
“Subordinated Creditor”), both in right of payment and in time of payment any and all present or
future obligations and liabilities of the Borrower to such Persons (such obligations and
liabilities referred to in clauses (a) or (b) being
“Subordinated Indebtedness”), to the prior
payment in full in cash of the Obligations. Each Subordinated Creditor agrees to make no claim for,
or receive payment with respect to, such Subordinated Indebtedness until all Obligations and such
obligations have been fully discharged in cash.

          (2) All amounts and other assets that may from time to time be paid or distributed to or
otherwise received by any Subordinated Creditor in respect of Subordinated Indebtedness in
violation of this Section 5.15 shall be segregated and held in trust by the Subordinated
Creditor for the benefit of the Lenders and promptly paid over to the Administrative Agent.

          (3) Each Subordinated Creditor further agrees not to assign all or any part of the
Subordinated Indebtedness unless the Administrative Agent is given prior notice and such assignment
is expressly made subject to the terms of this Agreement. If the Administrative Agent so requests,
(a) all instruments evidencing the Subordinated Indebtedness shall be duly endorsed and delivered
to the Administrative Agent, (b) all security for the Subordinated Indebtedness shall be duly
assigned and delivered to Administrative Agent for the benefit of the Lenders, (c) the Subordinated
Indebtedness shall be enforced, collected and held by the relevant Subordinated Creditor as trustee
for the Lenders and shall be paid over to the Administrative Agent for the benefit of the Lenders
on account of the Obligations, and (d) the Subordinated Creditors shall execute, file and record
such documents and instruments and take such other action as the Administrative Agent deems
necessary or appropriate to perfect, preserve and enforce the Lenders’ rights in and to the
Subordinated Indebtedness and any security therefor. If any Subordinated Creditor fails to take any
such action, the Administrative Agent, as attorney-in-fact for such Subordinated Creditor, is
hereby authorized to do so in the name of the Subordinated Creditor. The foregoing power of
attorney is coupled with an interest and cannot be revoked.

          (4) In any bankruptcy or other proceeding in which the filing of claims is required by
Requirements of Law, each Subordinated Creditor shall file all claims relating to the Subordinated
Indebtedness that the Subordinated Creditor may have against the obligor thereunder and shall
assign to the Administrative Agent, for the benefit of the Lenders, all rights relating to the
Subordinated Indebtedness thereunder. If any Subordinated Creditor does not file any such claim,
the Administrative Agent, as attorney-in-fact for the Subordinated Creditor, is hereby authorized
to do so in the name of the Subordinated Creditor or, in the Administrative Agent’s discretion, to
assign the claim to a nominee and to cause proof of claim to be filed in the name of the
Administrative Agent or the Administrative Agent’s nominee. The foregoing power of attorney is
coupled with an interest and cannot be revoked. The Administrative Agent or its nominee shall have
the right, in its reasonable discretion, to accept or reject any plan proposed in such proceeding
and to take any other action which a party filing a claim is entitled to do. In all

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such cases, whether in administration, bankruptcy or otherwise, the Person or Persons authorized to
pay such claim shall pay to the Administrative Agent for the benefit of the Lenders the amount
payable on such claim and, to the full extent necessary for that purpose, each Subordinated
Creditor hereby assigns to the Administrative Agent
for the benefit of the Lenders all of the Subordinated Creditor’s rights to any such payments or
distributions; provided, however, the Subordinated Creditor’s obligations hereunder shall not be
satisfied except to the extent that the Administrative Agent receives cash by reason of any such
payment or distribution.

          (5) Each of the Subordinated Creditors hereby agrees that the Administrative Agent and the
Lenders may at any time in their discretion renew or extend the time of payment of the Obligations
or exercise, fail to exercise, waive or Modify any other of their rights under this Agreement, any
Loan Document or any instrument evidencing or securing or delivered in connection therewith, and in
reference thereto may make and enter into such agreements as to them may seem proper or desirable,
all without notice to or further assent from the Subordinated Creditors (except as otherwise
expressly required pursuant to this Agreement), and any such action shall not in any manner impair
or affect the subordination set forth in this Section 5.15 or any of the Administrative
Agent’s or Lenders’ rights hereunder. The Subordinated Creditors each hereby waive and agree not to
assert against the Administrative Agent or the Lenders any rights which a guarantor or surety could
exercise with respect to any indebtedness of any Transaction Party, but nothing in this Section
5.15 shall constitute the Subordinated Creditors as a guarantor or surety.

     5.16 Further Assurances.

          The Borrower Parties and the Borrower’s Subsidiary Entities shall, and shall cause each of the
Borrower and its Subsidiary Entities to, promptly upon request by the Administrative Agent or any
Lender, do any acts or, execute, acknowledge, deliver, record, re-record, file, re-file, register
and re-register, any and all such further deeds, conveyances, security agreements, mortgages,
assignments, estoppel certificates, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and other instruments the
Administrative Agent or such Lender, as the case may be, may reasonably require from time to time
in order (i) to carry out more effectively the purposes of this Agreement or any other Loan
Document, and (ii) to assure, convey, grant, assign, transfer, preserve, protect and confirm to the
Administrative Agent and Lenders the rights granted or now or hereafter intended to be granted to
the Lenders under any Loan Document or under any other document executed in connection therewith.

ARTICLE 6.

NEGATIVE COVENANTS

     Each of the Borrower Parties and the Borrower’s Subsidiary Entities, jointly and severally,
hereby covenants and agrees with the Administrative Agent and each Lender that, as long as any
Obligations remain outstanding:

     6.1 Liens. The Borrower shall not cause or permit any of its Subsidiary Entities to,
create, incur, assume or suffer to exist, any Lien upon any of its Property except:

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          (1) The Liens under the Pledge Agreement;

          (2) With respect to the Senior Borrowers and the Operating Company Entities, the Senior
Permitted Encumbrances; and

          (3) Other Liens which are the subject of a Good Faith Contest.

          Borrower shall not permit or suffer the existence of any Lien on the Collateral other than those
Liens in favor of Administrative Agent.

     6.2 Indebtedness. Borrower shall not incur any Indebtedness other than the
Obligations. Borrower shall not cause or permit: (i) TOUSA Senior to incur any Indebtedness other
than the Senior Obligations; and (ii) any Operating Company Entities to incur any Indebtedness
other than Senior Permitted Debt.

     6.3 Fundamental Change.

          (1) The Borrower shall not, and shall not permit any of its Subsidiary Entities to do any or
all of the following: merge or consolidate with any Person, or sell, assign, lease or otherwise
effect a Disposition, whether in one transaction or in a series of transactions, of all or
substantially all of its Properties and assets, whether now owned or hereafter acquired, or enter
into any agreement to do any of the foregoing.

          (2) The Borrower shall not, and shall not permit any of its Subsidiary Entities to engage to
any material extent in any business other than such Person’s business as conducted on the date
hereof and businesses which are incidental thereto.

     6.4 Disposition.

          The Borrower shall not cause or permit, and shall not permit any of its Subsidiary Entities to
cause or permit, any of the following to occur:

          (1) Any Change of Control; or

          (2) Any Disposition by TOUSA Member or F/R Member of any of the Capital Stock in the
Investment Vehicle; or

          (3) Any Disposition by the Investment Vehicle of any of the Capital Stock in any other Upper
Tier Company or indirect ownership of 100% of the Capital Stock in Borrower; or

          (4) Any Disposition by Borrower of any of the Capital Stock in TOUSA Senior or indirect
ownership of 100% of the Capital Stock in any other Operating Company Entity; or

          (5) Any Disposition by TOUSA Senior of any of the Capital Stock in the Operating Company or
indirect ownership of 100% of the Capital Stock in any other Operating Company Entity; or

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          (6) Without the Administrative Agent’s prior written consent in its sole and absolute
discretion, a Disposition of legal, Beneficial or direct or indirect equitable interests in all or
any part of the Mortgaged Property, except as set forth in Section 6.4(5) of the Senior Credit
Agreement.

     6.5 Investments.

          The Borrower shall not, and shall not permit any of its Subsidiary Entities to, directly or
indirectly make or maintain any Investment except:

          (1) Investments existing on the date of this Agreement and disclosed on Schedule 6.5;

          (2) Investments in cash and Cash Equivalents;

          (3) Investments by the Operating Company in accounts, contract, general intangibles and
chattel paper (each as defined in the UCC), notes receivable and similar items arising or acquired
in the Ordinary Course of Business;

          (4) Investments received in settlement of amounts due to the Borrower or any Subsidiary
Entity of the Borrower effected in the Ordinary Course of Business;

          (5) Investments by the Operating Company in any wholly owned Subsidiary of Operating Company
provided that:

               (i) The Subsidiary is a Single Purpose Entity;

               (ii) The Organization Documents of such Subsidiary are approved by Administrative Agent in
its reasonable judgment;

               (iii) The Subsidiary guarantees the Loan pursuant to a Guaranty in form and
substance reasonably satisfactory to Administrative Agent;

               (iv) The applicable Operating Company Entity executes a Pledge
Agreement in form and substance reasonably satisfactory to Administrative Agent creating a first
priority Lien in favor of Administrative Agent in and to all the equity interests in the new
Subsidiary and the Operating Company Entities execute and deliver such additional financing
statements, security documents, and other materials as may be necessary or appropriate to perfect
Administrative Agent’s first priority Lien thereon;

               (v) Unless the Property of such Subsidiary is exempt from the Lien of the Senior Security
Instruments pursuant to clause (v) of the definition of Senior Permitted Encumbrances, such
Subsidiary shall:

                    (A) execute and deliver a Senior Security Instrument in accordance with the Senior Credit
Agreement;

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                    (B) satisfy all of the conditions set forth in Section 6.5(8) with respect to any
Real Property it owns or will acquire; and

                    (C) otherwise comply with the requirements of the Senior Credit Agreement.

          (6) Loans or advances to employees of the Operating Company Entities in the Ordinary Course
Of Business, which loans and advances shall not exceed the aggregate outstanding principal amount
of $1,000,000 at any time;

          (7) Advances on sales commissions to the sales agents of the Operating Company Entities; and

          (8) Acquisitions by the Operating Company Entities of Real Property (and ancillary Personal
Property in connection therewith) in the Ordinary Course of Business of such Persons, subject to
satisfying each of the following conditions (which conditions shall be satisfied regardless of
whether the Real Property was subject to a Qualified Purchase/Option Agreement prior to such
Acquisition):

               (i) No Potential Default or Event of Default shall have occurred and then be continuing nor
shall any Potential Default or Event of Default arise as a result of such acquisition;

               (ii) Such Acquistion shall comply with the requirements of the Senior Credit Agreement;

               (iii) All representations and warranties under Section 4.23 shall be true, correct, and
complete with respect to the subject Real Property;

               (iv) Administrative Agent shall have received: (a) copies of the Senior Title Policy required
to be issued to the Senior Administrative Agent under the Senior Credit Agreement and ALTA owners
title insurance policies or unconditional commitments therefor naming the applicable Operating
Company Entity as the insured issued by one or more title companies reasonably satisfactory to
Administrative Agent, in amounts not less than the Fair Market Value of such Real Property, dated
not more than thirty (30) days prior to the Closing Date and copies of all recorded documents
listed as exceptions to title or otherwise referred to therein, each in form and substance
reasonably satisfactory to Administrative Agent; (b) evidence satisfactory to Administrative Agent
that the Operating Company Entities have paid to the title company or to the appropriate
governmental authorities all expenses and premiums of the title company and all other sums required
in connection with the issuance of such title policy and all recording, mortgage, transfer, and
stamp taxes (including mortgage recording and intangible taxes) payable in connection with
recording the related Senior Security Instrument in the appropriate real estate records; and (c) a
Survey with respect to the subject Real Property.

               (v) Administrative Agent shall have received reports and other
information, in form, scope and substance reasonably satisfactory to Administrative Agent regarding
environmental matters relating to the Real Property, which reports shall include a Phase I Report
and shall demonstrate compliance with Section 4.15.

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               (vi) The Real Property shall be covered by the insurance policies required to be maintained by
Senior Borrower under this Agreement.

               (vii) At the request of Administrative Agent, deliver an Appraisal with respect to the subject
Real Property.

               (viii) In no event shall the aggregate Fair Market Value of any Unentitled Land owned by the
Operating Company Entities exceed $40 million.

     6.6 Transactions with Affiliates.

     The Borrower shall not, and shall not permit any of its Subsidiary Entities to directly or
indirectly enter into or permit to exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any service) with (i) a
holder or holders of more than five percent (5%) of any class of Capital Stock of TOUSA Guarantors,
F/R Member, or their respective constituent equity holders; or (ii) with any Affiliate of the
foregoing which is not a wholly owned Subsidiary of Borrower (a “Transactional Affiliate”),
except (A) as set forth on Schedule 6.6 or (B) upon prior notice to Administrative Agent
and upon fair and reasonable terms no less favorable to the Borrower than would be obtained in a
comparable arm’s-length transaction with a Person not a Transactional Affiliate.

     6.7 Modifications to Organizational Documents and Material Agreements.

          (1) The Borrower shall not, and shall not permit any of its Subsidiary Entities, to Modify
any of their Organizational Documents without the Administrative Agent’s prior written consent,
other than (a) Modifications necessary to clarify existing provisions of such Organizational
Documents; and (b) Modifications which would have no adverse effect on the rights or interests of
Administrative Agent or Lenders in conjunction with the Loan or under the Loan Documents and would
not change in any material respect the rights and obligations of the parties to such Organizational
Documents.

          (2) The Borrower shall not, and shall not permit any of its Subsidiary Entities to Modify any
Purchase/Option Agreements with respect to Qualified Option Land without the Administrative Agent’s
prior written consent, other than Modifications which would have no adverse effect on the rights or
interests of Administrative Agent or Lenders in conjunction with the Loan or under the Loan
Documents and would not change in any material respect the rights and obligations of the parties to
such Purchase/Option Agreements.

     6.8 Restricted Payments.

          (1) If any Event of Default has occurred and is continuing, the Borrower shall not make, and
shall not permit any of its Subsidiary Entities to make any Distributions other than Distributions
to the Seller in respect of Permitted Entitlement Payments, provided that such Permitted
Entitlement Payments are then due in accordance with the terms of the Asset Purchase Agreement.

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          (2) The Borrower shall not make, and shall not permit any of its Subsidiary Entities to make,
any other Distributions unless no Event of Default has occurred and is then continuing and such
Distribution consists of one or more of the following:

               (i) Such Distribution is to the Seller in respect of Permitted Post
Closing Sale Payments, provided that such Permitted Post Closing Sale Payments are
then due in accordance with the terms of the Asset Purchase Agreement.

               (ii) Permitted Tax Distributions.

               (iii) Distributions to the Junior Mezzanine Borrower in an amount equal to the Junior Mezzanine
Debt Service in accordance with the terms of the Junior Mezzanine Loan Documents.

               (iv) In the event, as of the end of a calendar quarter, taking into
consideration the proposed Distribution, the ratio (expressed as a percentage) of Total Funded Debt
to Total Book Capitalization is less than 60% and trailing twelve (12) months EBITDA is $225
million or more (the “Base Distribution Conditions”), Distributions not exceeding $2.5 million in
any calendar quarter.

               (v) The Permitted Management Fee may be paid to TOUSA Member subject to the following
conditions:

                    (A) The aggregate amount of the fee shall not exceed $5 million with respect to any calendar
year;

                    (B) All such fees shall accrue and shall only be payable on and
after the Management Fee Payment Date if such payments will not, on a pro-forma basis, result in
non-compliance with any of the covenants in Section 6.9 below; and

                    (C) The Permitted Management Fee shall be (and is hereby) fully subordinated to the payment
of the Obligations.

               (vi) Distributions to TOUSA Member (through the Upper Tier
Companies) as reimbursement for any Permitted Entitlement Cure Payment, provided that each of the
following conditions has been satisfied:

                    (A) The aggregate amount of such Distributions does not exceed $37.5 million

                    (B) The Distributions shall occur quarterly in three equal installments; and

                    (C) At the time of each such quarterly Distribution the ratio
(expressed as a percentage) of Total Funded Debt to Total Book Capitalization is less than 70%, and
trailing twelve (12) months EBITDA is $225 million or more.

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               (vii) Distributions to TOUSA Member (through the Upper Tier Companies) as reimbursement for the
Priority Capital Investment provided the following conditions have been satisfied:

                    (A) the Distributions are made only during the Senior
Extension Period (provided all conditions thereto have been satisfied, including those under
Section 2.6, and the Facilities have in fact been extended);

                    (B) the Distributions shall occur quarterly in four equal
installments and the aggregate amount of the Distributions shall not exceed the Priority Capital
Investment;

                    (C) no interest or preferred return shall have been or shall be
paid in respect of the Priority Capital Investment prior to the repayment in full of all
Obligations (including all outstanding principal and interest); and

                    (D) at the time of each such quarterly redemption no Potential
Default or Event of Default then exists and each of the Base Distribution Conditions shall have
been satisfied.

     6.9 Financial Covenants.

               (i) Maximum Total Leverage. At any time during the periods
indicated below, Borrower shall not permit the ratio (expressed as a percentage) of Total Funded
Debt to Total Book Capitalization to be greater than the percentages set forth below:

	 	 	 	 	 
	Period	 	Percentage
	From December 31, 2005 to
December 31, 2006
	 	 	80	%
	 
	 	 	 	 
	From December 31, 2006 to
September 30, 2007
	 	 	70	%
	 
	 	 	 	 
	From September 30, 2007
	 	 	60	%

               (ii) Maximum Senior Leverage. At any time during the periods indicated below,
Borrower shall not permit the ratio (expressed as a percentage) of Senior Funded Debt to Total Book
Capitalization to be greater than the percentages set forth below:

	 	 	 	 	 
	Period	 	Percentage
	From December 31, 2005 to
December 31, 2006
	 	 	60	%
	 
	 	 	 	 
	From December 31, 2006 to September 30,
2007
	 	 	50	%
	 
	 	 	 	 
	From September 30, 2007
	 	 	40	%

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               (iii) Minimum Interest Coverage Ratio. As of the last day of any Fiscal Quarter
(beginning with the Fiscal Quarter ending December 31, 2005), Borrower shall not permit the
Interest Coverage Ratio to be less than 2.5.

               (iv) Minimum Net Worth. At any time, Borrower shall not permit Senior Borrowers’ Net
Worth to be less than $125,000,000.

               (v) Minimum Liquidity. At all times, Borrower shall not permit the sum of (A) Senior
Borrowers’ Available Credit then in effect; and (B) Unrestricted Cash (other than any Unrestricted
Cash then included in the Borrowing Base) to be less than $25,000,000.

     6.10 Sale Leaseback.

          The Borrower shall not, and shall not permit any of its Subsidiary Entities to, enter into any sale
and leaseback transaction covering any Real Property;
provided, however. that the Operating
Company Entities may sell Model Homes in the Ordinary Course Of Business and leaseback such Model
Homes for a term not to exceed three years so long as none of the Borrower or any of its Subsidiary
Entities has any obligation to sell or repurchase the leased Model Homes at the end of the lease
term.

     6.11 Negative Pledges.

          The Borrower shall not, and shall not permit any of its Subsidiary Entities to (a) enter into or
suffer to exist or become effective any consensual encumbrance or restriction of any kind on their
ability to pay dividends or make any other Distributions or make loans or advances to or other
Investments in, or pay any Indebtedness owed to, the Borrower or any other Subsidiary Entity of the
Borrower, except for customary profit allocation provisions or (b) enter into or suffer to exist or
become effective any agreement prohibiting or limiting the ability of the Borrower or any
Subsidiary Entity of the Borrower to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, to secure the Obligations,
including any agreement requiring any other Indebtedness or Contractual Obligation of the Borrower
or any of its Subsidiary Entities to be equally and ratably secured with the Obligations.

     6.12 Covenants Regarding the Senior Loan.

          Borrower shall not permit the Senior Credit Parties to Modify the Senior Credit Documents without
Administrative Agent’s prior written consent. Any Modification to the Senior Credit Documents in
violation of this Section 5.18 shall be ineffective as against the Administrative Agent and Lenders
hereunder.

ARTICLE 7.

EVENTS OF DEFAULT

     7.1 Event of Default. Each of the following shall constitute an event of
default under this Agreement (an “Event of Default”):

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          (1) (i) The Borrower shall fail to make any payment of principal or interest on the Loan
(including any mandatory prepayments under Section 2.8(1), or (ii) shall fail to pay any
other Obligation within five days of the date when due; or

          (2) any representation or warranty made or deemed made by any Borrower Party in any Loan
Document or by any Borrower Party (or any of its officers) in connection with any Loan Document
shall prove to have been incorrect in any material respect when made or deemed made; or

          (3) Any of the Borrower Parties or their Subsidiary Entities shall default in the observance
or performance of any covenant or agreement contained in Article VI; or

          (4) Any Transaction Party shall fail to perform or observe any term, covenant or agreement
contained in this Agreement or in any other Loan Document (other than those that are otherwise the
subject of an Event of Default under this Section 7.1), if such failure shall remain
unremedied for 30 days after the date on which written notice thereof shall have been given to the
Borrower by the Administrative Agent; or

          (5) The Borrower or any of its Subsidiary Entities shall fail to make any payment on any
Indebtedness (other than the Obligations), and in each such case, such failure relates to
Indebtedness having a principal amount of $5,000,000 or more, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or otherwise); or (ii)
any other event shall occur or condition shall exist under any agreement or instrument relating to
any Indebtedness of the Borrower or any of its Subsidiary Entities having a principal amount of
$5,000,000 or more, if the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or (iii) any Indebtedness of the Borrower and
any of its Subsidiary Entities having a principal amount of $5,000,000 or more shall become or be
declared to be due and payable, or required to be prepaid or repurchased (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof; or

          (6) (i) the Borrower or any of its Subsidiary Entities shall generally not pay its debts as
such debts become due, shall admit in writing its inability to pay its debts generally or shall
make a general assignment for the benefit of creditors, (ii) any proceeding shall be instituted by
or against the Borrower or any of its Subsidiary Entities seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its, debts under any Requirement of Law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or
the appointment of a custodian, receiver, trustee or other similar official for it or for any
substantial part of its property; provided, however, in the case of any such
proceedings instituted against the Borrower or any of its Subsidiary Entities (but not instituted
by the Borrower or any of its Subsidiary Entities), either such proceedings
shall remain undismissed or unstayed for a period of sixty (60) days or any of the actions sought
in such proceedings shall occur, or (iii) the Borrower or any of its Subsidiary Entities shall take
any corporate action to authorize any of the actions set forth above in clauses (i) and (ii) of
this subsection (6); or

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          (7) any final judgment or order (or other similar process) involving, in any single case or
in the aggregate, an amount in excess of $10,000,000 in the case of a money judgment, to the extent
not covered by insurance, or that could reasonably be expected to have a Material Adverse Effect,
in the case of a non-monetary judgment, shall be rendered against one or more of the Borrower or
its Subsidiary Entities by a court having jurisdiction, and such judgment or order shall continue
unsatisfied and in effect for a period of thirty (30) days without being vacated, discharged,
satisfied, or stayed or bonded pending appeal; or

          (8) (1) an ERISA Event shall occur and the amount of all liabilities and deficiencies
resulting therefrom that are or are reasonably likely to be imposed on the Borrower, any of its
Subsidiary Entities, or any ERISA Affiliate, whether or not assessed, exceeds $1,000,000 in the
aggregate, (2) the commencement or increase of contributions to, or the adoption of or the
amendment of a Pension Plan by any of the Borrower Parties or an ERISA Affiliate which has resulted
or could reasonably be expected to result in an increase in Unfunded Pension Liability among all
Pension Plans in an aggregate amount in excess of $1,000,000 or (3) any of the Borrower Parties or
an ERISA Affiliate shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under
a Multiemployer Plan, which has resulted or could reasonably be expected to result in a Material
Adverse Effect; or

          (9) Any Guarantor shall attempt to rescind or revoke its Guaranty, with respect to future
transactions or otherwise, or shall fail to observe or perform any term or provision of its
Guaranty; or

          (10) Any Event of Default shall occur under any of the other Loan Documents; or

          (11) There shall occur a Change of Control; or

          (12) One or more of the Borrower and its Subsidiary Entities shall have entered into one or
more consent or settlement decrees or agreements or similar arrangements with a Governmental
Authority or one or more judgments, orders, decrees or similar actions shall have been entered
against one or more of the Borrower and its Subsidiary Entities based on or arising from the
violation of or pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all the foregoing, the
Borrower and its Subsidiary Entities are likely to incur uninsured environmental liabilities and
costs in excess of $15,000,000 in the aggregate; or

          (13) A Senior Event of Default shall occur and be continuing.

     7.2 Remedies.

          (1) If any Event of Default shall occur, the Administrative Agent may (or at the direction of
the Required Lenders shall): (i) declare the outstanding principal balance of the Loan and interest
accrued but unpaid thereon and all other Obligations immediately due and payable, without demand
upon or presentment to any of the Borrower Parties, which are expressly waived by the Borrower
Parties; (ii) exercise, on behalf of the Lenders, all rights and remedies under the Guaranties, the
Pledge Agreements and any other collateral documents

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entered into with respect to the Loan, and (iii) immediately exercise all rights, powers and
remedies available at law, in equity or otherwise, including, without limitation, under the other
Loan Documents, all of which rights, powers and remedies are cumulative and not exclusive;
provided, however, that upon the occurrence of the Events of Default specified in
Section 7.1(6)(ii), the Loan, all such interest and all such amounts and Obligations shall
automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower.

          (2) Upon the occurrence and during the continuance of an Event of Default, with respect to
the Account Collateral, the Administrative Agent may:

               (i) without notice to the Borrower, except as required by law, and at any time or from time
to time, charge, set-off and otherwise apply all or any part of the Account Collateral against the
Obligations;

               (ii) in the Administrative Agent’s sole discretion, at any time and from time to time, exercise any
and all rights and remedies available to it under this Agreement, and/or as a secured party under
the UCC;

               (iii) demand, collect, take possession of or receipt for, settle,
compromise, adjust, sue for, foreclose or realize upon the Account Collateral (or any portion
thereof) as the Administrative Agent may determine in its sole discretion; and

               (iv) take all other actions provided in, or contemplated by, this Agreement.

          (3) With respect to the Borrower and the Collateral nothing contained herein or in any other
Loan Document shall be construed as requiring the Administrative Agent to resort to the Collateral
for the satisfaction of any of the Obligations, and, the Administrative Agent may seek satisfaction
out of the Collateral or any part thereof, in its absolute discretion in respect of the
Obligations. In addition, the Administrative Agent shall have the right from time to time to
partially foreclose this Agreement and the Pledge Agreement (or any of them) in any manner and for
any amounts secured by this Agreement or the Pledge Agreement then due and payable as determined by
the Administrative Agent in its sole discretion. Notwithstanding one or more partial foreclosures,
the Collateral shall remain subject to this Agreement and the Pledge Agreement to secure payment of
sums secured by this Agreement and the Pledge Agreement and not previously recovered.

ARTICLE 8.

THE ADMINISTRATIVE AGENT

     8.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under the Loan Documents and each such Lender
hereby irrevocably authorizes the Administrative Agent, as the agent for such Lender, to take such
action on its behalf under the provisions of the Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by the terms of the Loan
Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in the Loan Documents, the

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Administrative Agent shall not have any duties or responsibilities, except those expressly set
forth herein or therein, or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read into the Loan
Documents or otherwise exist against the Administrative Agent.

     8.2 Delegation of Duties. The Administrative Agent may execute any of its duties
under the Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. With respect to the Lenders, the
Administrative Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

     8.3 Exculpatory Provisions. None of the Administrative Agent, the other Agents, nor
any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (1) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with the Loan Documents (except for its or such Person’s own
gross negligence or willful misconduct), or (2) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower Parties or any officer
thereof contained in the Loan Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or in connection with
the Loan Documents or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of the Loan Documents or for any failure of the Borrower Parties to perform their
obligations hereunder or thereunder. The Administrative Agent and the other Agents shall not be
under any obligation to any Lender to ascertain or to inquire as to the observance or performance
of any of the agreements contained in, or conditions of, the Loan Documents or to inspect the
properties, books or records of the Borrower Parties.

     8.4 Reliance by the Agents. Each of the Agents shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice, consent, certification,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation reasonably believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Borrower), independent accountants and other
experts selected by such Agent. As to the Lenders: (1) the Administrative Agent shall be fully
justified in failing or refusing to take any action under the Loan Documents unless it shall first
receive such advice or concurrence of one hundred percent (100%) of the Lenders (or, if a provision
of this Agreement expressly provides that a lesser number of the Lenders may direct the action of
the Administrative Agent, such lesser number of Lenders) or it shall first be indemnified to its
satisfaction by the Lenders ratably in accordance with their respective Pro Rata Shares against any
and all liability and expense which may be incurred by it by reason of taking or continuing to take
any action (except for liabilities and expenses resulting from the Administrative Agent’s gross
negligence or willful misconduct), and (2) the Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under the Loan Documents in accordance with a
request of one hundred percent (100%) of the Lenders (or, if a provision of this Agreement
expressly provides that the Administrative Agent shall be required to act or refrain from acting at
the request of a lesser number of the Lenders, such lesser number of Lenders), and such request and
any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

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     8.5 Notice of Default. The Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of any Potential Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring to the Loan
Documents, describing such Potential Default or Event of Default and stating that such notice is a
“notice of default.” In the event that the Administrative Agent receives such a notice and a
Potential Default or Event of Default has occurred, the Administrative Agent shall promptly give
notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such
Potential Default or Event of Default as shall be reasonably directed by the Required Lenders;
provided that, unless and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Potential Default or Event of Default as it shall deem advisable
in the best interest of the Lenders (except to the extent that this Agreement, the Pledge
Agreements or the Guaranties expressly require that such action be taken or not taken by the
Administrative Agent with the consent or upon the authorization of the Required Lenders or such
other group of Lenders, in which case such action will be taken or not taken as directed by the
Required Lenders or such other group of Lenders or Lenders).

     8.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that
none of the Administrative Agent, the other Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Administrative Agent or the other
Agents hereinafter taken, including any review of the affairs of the Borrower Parties, shall be
deemed to constitute any representation or warranty by the Administrative Agent or the other Agents
to any Lender. Each Lender represents to the Administrative Agent and the other Agents that it has,
independently and without reliance upon the Administrative Agent, the other Agents or any other
Lender, and based on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower Parties and made its own decision to make its loans
hereunder and enter into this Agreement. Each Lender also represents that it will, independently
and without reliance upon the Administrative Agent, the other Agents or any other Lender, and based
on such documents and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the Borrower Parties.
Except for notices, reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, the Administrative Agent and the other Agents shall not have
any duty or responsibility to provide any Lender with any credit or other information concerning
the business, operations, property, financial and other condition or creditworthiness of the
Borrower Parties which may come into the possession of the Administrative Agent or any other Agent
or any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates.

     8.7 Indemnification. The Lenders agree to indemnify the Administrative Agent and the
other Agents in their respective capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to the respective
amounts of their Pro Rata Shares, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any

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kind whatsoever which may at any time (including without limitation at any time following the
payment of the Obligations) be imposed on, incurred by or asserted against the Administrative Agent
or the other Agents in any way relating to or arising out of the Loan Documents or any documents
contemplated by or referred to herein or the transactions contemplated hereby or any action taken
or omitted by the Administrative Agent or the other Agents under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent’s or any other Agent’s gross negligence or
willful misconduct, respectively. The provisions of this Section 8.7 shall survive the payment of
the Obligations and the termination of this Agreement.

     8.8 Agents in Their Individual Capacity. The Administrative Agent, the other Agents
and their affiliates may make loans to, accept deposits from and generally engage in any kind of
business with any of the Borrower Parties or any of their respective Subsidiary Entities and
Affiliates as though the Administrative Agent and the other Agents were not, respectively, the
Administrative Agent, the Lead Arranger or an Agent hereunder. With respect to such loans made or
renewed by them and any Note issued to them, the Administrative Agent and the other Agents shall
have the same rights and powers under the Loan Documents as any Lender and may exercise the same as
though it were not the Administrative Agent, the Lead Arranger or an Agent, respectively, and the
terms “Lender” and “Lenders” shall include the Administrative Agent, the Lead Arranger and each
other Agent in its individual capacity.

     8.9 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent under the Loan Documents upon thirty (30) days’ notice to the Lenders. If the
Administrative Agent shall resign, then the Lenders (other than the Lender resigning as
Administrative Agent) shall (with, so long as there shall not exist and be continuing an Event of
Default, the consent of the Borrower, such consent not to be unreasonably withheld or delayed)
appoint a successor agent or, if the Lenders are unable to agree on the appointment of a successor
agent, the Administrative Agent shall appoint a successor agent for the Lenders whereupon such
successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the
term “Administrative Agent” shall mean such successor agent effective upon its appointment, and the
former Administrative Agent’s rights, powers and duties as Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former Administrative
Agent or any of the parties to this Agreement or any of the Loan Documents or successors thereto.
After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of the Loan Documents shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under the Loan Documents.

     8.10 Limitations on Agents Liability. The Lead Arranger, in such capacity, shall not
have any right, power, obligation, liability, responsibility or duty under this Agreement or the
other Loan Documents.

ARTICLE 9.

MISCELLANEOUS PROVISIONS

     9.1 No Assignment by Borrower. None of the Borrower Parties may assign its
rights or obligations under this Agreement or the other Loan Documents without the prior written

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consent of the Administrative Agent and one hundred percent (100%) of the Lenders. Subject to the
foregoing, all provisions contained in this Agreement and the other Loan Documents and in any
document or agreement referred to herein or therein or relating hereto or thereto shall inure to
the benefit of the Administrative Agent and each Lender, their respective successors and assigns,
and shall be binding upon each of the Borrower Parties and such Person’s successors and assigns.

     9.2 Modification.

          (1) Neither this Agreement nor any other Loan Document may be Modified or waived unless such
Modification or waiver is in writing and signed by the Administrative Agent, the Borrower and,
except for the Modifications and waivers requiring consent of one hundred percent (100%) of the
Lenders referred to below, the Required Lenders. No such Modification or waiver shall, without the
prior written consent of one hundred percent (100%) of the Lenders: (1) reduce the principal of, or
rate of interest on, the Loan or fees payable to the Lenders hereunder or under the Fee Letter, (2)
except as expressly contemplated by Section 9.8 below, modify the Pro Rata Share of any
Lender, (3) Modify the definition of “Required Lenders”,
(4) extend or waive any scheduled payment date for any principal, interest or fees (other than in
connection with the permitted extension of the Initial Maturity Date as provided in Section
2.6), (5) release TOUSA Guarantors from their obligations under the Guaranties entered into by them,
release Borrower from its obligation to repay the Loan, release any of the Pledgers under the
Pledge Agreements or release any portion of the collateral pledged under the Pledge Agreements
(except for such releases as may be specifically authorized by or otherwise approved in accordance
with this Agreement), (6) Modify this Section 9.2, or (7) Modify any provision of the Loan
Documents which by its terms requires the consent or approval of one hundred percent (100%) of the
Lenders..

          (2) It is expressly agreed and understood that the election by the Required Lenders to
accelerate amounts outstanding hereunder and/or to terminate the obligation of the
Lenders to make any Loan hereunder shall not constitute a Modification or waiver of any term or
provision of this Agreement or any other Loan Document. No Modification of any provision of the
Loan Documents relating to the Administrative Agent shall be effective without the written consent
of the Administrative Agent.

          (3) [Reserved].

     9.3
Cumulative Rights; No Waiver. The rights, powers and remedies of the
Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative
and in addition to all rights, power and remedies provided under any and all agreements among the
Borrower Parties, the Administrative Agent and the Lenders relating hereto, at law, in equity or
otherwise. Any delay or failure by Administrative Agent and the Lenders to exercise any right,
power or remedy shall not constitute a waiver thereof by the Administrative Agent or the Lenders,
and no single or partial exercise by the Administrative Agent or the Lenders of any right, power or
remedy shall preclude other or further exercise thereof or any exercise of any other rights, powers
or remedies.

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     9.4 Entire Agreement. This Agreement, the Fee Letter, the other Loan Documents and
the schedules, appendices, documents and agreements referred to herein and therein embody the
entire agreement and understanding between the parties hereto and supersede all prior agreements
and understandings relating to the subject matter hereof and thereof.

     9.5 Survival. All representations, warranties, covenants and agreements contained in
this Agreement and the other Loan Documents on the part of the Borrower Parties shall survive the
termination of this Agreement and shall be effective until the Obligations are paid and performed
in full or longer as expressly provided herein.

     9.6 Notices. All notices given by any party to the others under this Agreement and
the other Loan Documents shall be in writing unless otherwise provided for herein, and any such
notice shall become effective (i) upon personal delivery thereof, including, but not limited to,
delivery by overnight mail and courier service, (ii) four (4) days after it shall have been mailed
by United States mail, first class, certified or registered, with postage prepaid, or (iii) in the
case of notice by a telecommunications device, when properly transmitted, in each case addressed to
the party at the address set forth on Schedule 9.6 attached hereto. Any party may change the
address to which notices are to be sent by notice of such change to each other party given as
provided herein. Such notices shall be effective on the date received or, if mailed, on the third
Business Day following the date mailed.

     9.7 Governing Law. This Agreement and the other Loan Documents shall be governed by
and construed in accordance with the laws of the State of New York without giving effect to its
choice of law rules.

     9.8 Assignments, Participations, Syndication, Etc.

          (1) With the prior written consent of the Administrative Agent, such consent not to be
unreasonably withheld or delayed, any Lender may at any time assign and delegate to one or more
Eligible Assignees (provided that no written consent of the Administrative Agent shall be required
in connection with any assignment and delegation by a Lender to an Affiliate of such Lender) (each
an “Assignee”) all or any part of such Lender’s Pro Rata Share of the Loan and the other
Obligations held by such Lender hereunder, in a minimum amount of $1,000,000, which minimum amount
may be an aggregated amount in the event of simultaneous assignments to or by two or more funds
under common management (or if such Lender’s Pro Rata Share of the Loan is less than $1,000,000,
one hundred percent (100%) thereof); provided, however, that the Borrower and the Administrative
Agent may continue to deal solely and directly with such Lender in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee, shall
have been given to the Borrower and the Administrative Agent by such Lender and the Assignee; (ii)
such Lender and its Assignee shall have delivered to the Borrower and the Administrative Agent an
Assignment and Acceptance Agreement, (iii) the assignment shall have been recorded in the Register,
and (iv) the Assignee has paid to the Administrative Agent a processing fee in the amount of
$3,500.

          (2) The Agent shall, on behalf of the Borrower, maintain a copy of each Assignment and
Acceptance Agreement delivered to it and a register (the
“Register”) for the
 

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recordation of the names and addresses of the Lenders and the principal amount of the Loan owing to
each Lender from time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, each Lender and the Administrative Agent shall treat each Person
whose name is recorded in the Register as the owner of the Loan for all purposes of this Agreement.
From and after the date that the Administrative Agent notifies the assignor Lender and the Borrower
that it has received an executed Assignment and Acceptance Agreement and payment of the
above-referenced processing fee, and the assignment has been recorded in the Register: (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned to it pursuant to such Assignment
and Acceptance Agreement, shall have the rights and obligations of a Lender under the Loan
Documents, (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and
under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance
Agreement, relinquish its rights and be released from its obligations under the Loan Documents (but
shall be entitled to indemnification as otherwise provided in this Agreement with respect to any
events occurring prior to the assignment) and (iii) this Agreement shall be deemed to be amended to
the extent, but only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Pro Rata Shares resulting therefrom.

          (3) Within five Business Days after its receipt of notice by the Administrative Agent that it
has received an executed Assignment and Acceptance Agreement and payment of the processing fee
(which notice shall also be sent by the Administrative Agent to each Lender), the Borrower shall,
if requested by the Assignee, execute and deliver to the Administrative Agent, a new Note
evidencing such Assignee’s Pro Rata Share of the Loan.

          (4) Any Lender may at any time sell to one or more commercial banks or other Persons not
Affiliates of the Borrower (a “Participant”) participating interests in the Loan and the other
interests of that Lender (the “Originating Lender”) hereunder and under the other Loan Documents;
provided, however, that (i) the Originating Lender’s obligations under this Agreement shall remain
unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such
obligations, and (iii) the Borrower and the Administrative Agent shall continue to deal solely and
directly with the Originating Lender in connection with the Originating Lender’s rights and
obligations under this Agreement and the other Loan Documents. In the case of any such
participation, the Participant shall be entitled to the benefit of Sections 2.13,
2.15, and 2.18 (and subject to the burdens of Sections 2.15, 2.16
and 9.8 above) as though it were also a Lender thereunder, and if amounts outstanding under
this Agreement are due and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it as a Lender under
this Agreement, and Section 9.10 of this Agreement shall apply to such Participant as if it
were a Lender party hereto.

          (5) Notwithstanding any other provision contained in this Agreement or any other Loan
Document to the contrary, any Lender may assign all or any portion of its Pro Rata Share of the
Loan held by it to any Federal Reserve Lender or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors of
the Federal Reserve

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System and any Operating Circular issued by such Federal Reserve Lender, provided that any payment
in respect of such assigned Pro Rata Share of the Loan made by the Borrower to or for the account
of the assigning and/or pledging Lender in accordance with the terms of this Agreement shall
satisfy the Borrower’s obligations hereunder in respect to such assigned Pro Rata Share of the Loan
to the extent of such payment. No such assignment shall release the assigning Lender from its
obligations hereunder. Notwithstanding anything to the contrary contained herein, any Lender that
is a fund that invests in bank loans may create a security interest in all or any portion of the
sums owing to it and the Note or Notes held by it to the trustee for holders of obligations owed,
or securities issued, by such fund as security for such obligations or securities, provided, that
unless and until such trustee actually becomes a Lender in compliance with the other provisions of
this Section 9.8, (i) no such pledge shall release the pledging Lender from any of its
obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of
the rights of a Lender under the Loan Documents even though such trustee may have acquired
ownership rights with respect to the pledged interest through foreclosure or otherwise.

          (6) Subject to Section 9.8(1) above, the Lead Arranger may syndicate the Loan and the
other Obligations held by the Lenders hereunder before or after the Closing Date, and the Lead
Arranger (or its designated Affiliates) shall manage all aspects of such syndication, including the
number and identity of the potential Lenders participating in the syndication and the Loan amounts
and compensation offered in connection therewith. Each Borrower Party agrees to take all actions as
the Lead Arranger (or its designated Affiliates) may reasonably request to assist in the
syndication, including: (i) making its senior management and representatives available to
participate in informational meetings with potential Lenders at such times and places as the Lead
Arranger (or its designated Affiliates) may reasonably request;
(ii) using its reasonable efforts to ensure that the syndication efforts benefit from such Borrower
Party’s lending relationships; and (iii) providing the Lead Arranger (or its designated Affiliates)
with all information reasonably deemed necessary to successfully complete the syndication.

          (7) Until the date the Lead Arranger notifies the Borrower that the syndication of the Loan
has been completed, the Borrower Parties shall not, and shall not permit the Borrower and its
Subsidiary Entities to engage any Person to effect any offering, placement or arrangement of debt
securities or any bank financing by or on behalf of any Transaction Party.

     9.9 Counterparts. This Agreement and the other Loan Documents may be executed in any
number of counterparts, all of which together shall constitute one agreement.

     9.10 Sharing of Payments. If any Lender shall receive and retain any payment, whether
by setoff, application of deposit balance or security, or otherwise, in respect of the Obligations
in excess of such Lender’s Pro Rata Share thereof, then such Lender shall purchase from the other
Lenders for cash and at face value and without recourse, such participation in the Obligations held
by them as shall be necessary to cause such excess payment to be shared ratably as aforesaid with
each of them; provided, that if such excess payment or part thereof is thereafter recovered from
such purchasing Lender, the related purchases from the other Lenders shall be rescinded ratably and
the purchase price restored as to the portion of such excess payment so recovered, but without
interest. Each Lender is hereby authorized by the Borrower Parties to exercise any and all rights
of setoff, counterclaim or bankers’ lien against the full amount of the

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Obligations, whether or not held by such Lender. Each Lender hereby agrees to exercise any such
rights first against the Obligations and only then to any other Indebtedness of the Borrower to
such Lender.

     9.11 Confidentiality. Each Lender agrees to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all information provided to it by any of the
Borrower Parties or by the Administrative Agent on the Borrower Parties’ behalf, in connection with
this Agreement or any other Loan Document, and neither it nor any of its Affiliates shall use any
such information for any purpose or in any manner other than pursuant to the terms contemplated by
this Agreement, except to the extent such information: (1) was or becomes generally available to
the public other than as a result of a disclosure by any Lender or any prospective Lender, or (2)
was or becomes available from a source other than the Borrower Parties not known to the Lenders to
be in breach of an obligation of confidentiality to the Borrower Parties in the disclosure of such
information. Nothing contained herein shall restrict any Lender from disclosing such information
(i) pursuant to any requirement of any Governmental Authority; (ii) pursuant to subpoena or other
court process; (iii) when required to do so in accordance with the provisions of any applicable
Requirement of Law; (iv) to the extent reasonably required in connection with any litigation or
proceeding to which the Administrative Agent, any Lender or their respective Affiliates may be
party; (v) to the extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (vi) to such Lender’s independent auditors and other
professional advisors; and (vii) to any Participant or Assignee and to any prospective Participant
or Assignee, provided that each Participant and Assignee or prospective Participant or Assignee
first agrees to be bound by the provisions of this Section 9.11.

     9.12 Consent to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK LOCATED
IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION
AND DELIVERY OF THIS CREDIT AGREEMENT, EACH OF THE BORROWER PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION
OF THOSE COURTS. EACH OF THE BORROWER PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH
OF THE BORROWER PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS EACH AGREE THAT SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS MAY BE MADE BY ANY MEANS PERMITTED BY NEW YORK LAW.

     9.13 Waiver of Jury Trial. EACH OF THE BORROWER PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS WAIVE ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR

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THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH OF THE BORROWER PARTIES,
THE ADMINISTRATIVE AGENT AND THE LENDERS AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF SUCH PARTIES FURTHER
AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

     9.14 Indemnity. Whether or not the transactions contemplated hereby are consummated,
each of the Borrower Parties shall indemnify and hold the Administrative Agent, the other Agents
and each Lender and each of their respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an “Indemnified Person”) harmless from/and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges,
expenses and disbursements (including reasonable attorney’s fees and expenses) of any kind or
nature whatsoever which may at any time (including at any time following repayment of the Loan and
the termination, resignation or replacement of the Administrative Agent or replacement of any
Lender) be imposed on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such Person under or in
connection with any of the foregoing, including with respect to any investigation, litigation or
proceeding (including any insolvency proceeding or appellate proceeding) related to or arising out
of this Agreement or the Loan or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”);
provided, however, that the Borrower Parties shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities resulting solely from the gross negligence or
willful misconduct of such Indemnified Person. Without limiting the foregoing, the Borrower shall
pay all reasonable out-of-pocket expenses (including reasonable fees and disbursements of outside
counsel) (1) of the Administrative Agent incident to the preparation, negotiation and
administration and performance of the Loan Documents, including any proposed Modifications or
waivers with respect thereto, the due diligence review undertaken in connection therewith, and the
syndication of the Loan (but such expenses shall not include any fees paid to the syndicate
members), and the preservation and protection of the rights of the Lenders and the Administrative
Agent under the Loan Documents (including expenses incurred in creating and perfecting the Lien in
favor of the Administrative Agent pursuant to this Agreement and the other Loan Documents), and (2)
of the Administrative Agent and each of the Lenders incident to the enforcement of payment of the
Obligations, whether by judicial proceedings or otherwise, including, without limitation, in
connection with bankruptcy, insolvency, liquidation, reorganization, moratorium or other similar
proceedings involving any

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Transaction Party or a “workout” of the Obligations. The agreements in this Section 9.14
shall survive payment of all other Obligations.

     9.15 Telephonic Instruction. Any agreement of the Administrative Agent and the Lenders
herein to receive certain notices by telephone is solely for the convenience and at the request of
the Borrower. The Administrative Agent and the Lenders shall be entitled to reasonably rely on the
authority of any Person purporting to be a Person authorized by the Borrower to give such notice
and the Administrative Agent and the Lenders shall not have any liability to the Borrower or other
Person on account of any action taken or not taken by the Administrative Agent or the Lenders in
reliance upon such telephonic notice. The obligation of the Borrower to repay the Loan shall not be
affected in any way or to any extent by any failure by the Administrative Agent and the Lenders to
receive written confirmation of any telephonic notice or the receipt by the Administrative Agent
and the Lenders of a confirmation which is at variance with the terms understood by the
Administrative Agent and the Lenders to be contained in the telephonic notice.

     9.16
Marshalling; Payments Set Aside. Neither the Administrative Agent nor the Lenders
shall be under any obligation to marshal any assets in favor of any of the Borrower Parties or any
other Person or against or in payment of any or all of the Obligations. To the extent that any of
the Borrower Parties makes a payment or payments to the Administrative Agent or the Lenders, or the
Administrative Agent or the Lenders enforce their Liens or exercise their rights of set-off, and
such payment or payments or the proceeds of such enforcement or set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent in its discretion)
to be repaid to a trustee, receiver or any other party in connection with any insolvency
proceeding, or otherwise, then (1) to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set-off had not occurred, and (2) each Lender
severally agrees to pay to the Administrative Agent upon demand its ratable share of the total
amount so recovered from or repaid by the Administrative Agent.

     9.17 Set-off. In addition to any rights and remedies of the Lenders provided by law, if
an Event of Default exists, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower Parties, any such notice being waived by the Borrower Parties to the
fullest extent permitted by law, to set off and apply in favor of the Lenders any and all deposits
(general or special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing to, such Lender to or for the credit or the account of the Borrower
Parties against any and all Obligations owing to the Lenders, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall have made demand under
this Agreement or any Loan Document and although such Obligations may be contingent or unmatured.
Each Lender agrees promptly to (i) notify the Borrower Parties and the Administrative Agent after
any such set-off and application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application and (ii) pay such amounts
that are set-off to the Administrative Agent for the ratable benefit of the Lenders.

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     9.18 Severability. The illegality or unenforceability of any provision of this
Agreement or any other Loan Document or any instrument or agreement required hereunder or
thereunder shall not in any way affect or impair the legality or enforceability of the remaining
provisions hereof or thereof.

     9.19 No Third Parties Benefited. This Agreement and the other Loan Documents are made
and entered into for the sole protection and legal benefit of the Borrower Parties, the Lenders and
the Administrative Agent, and their permitted successors and assigns, and no other Person shall be
a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim
in connection with, this Agreement or any of the other Loan Documents.

     9.20 Time. Time is of the essence as to each term or provision of this Agreement and
each of the other Loan Documents.

     9.21 Reinstatement. This Agreement and the security interests created herein shall
continue to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Borrower’s Obligations hereunder, or any part thereof, is, pursuant to
bankruptcy, insolvency or other applicable laws, rescinded or reduced in amount, or must otherwise
be restored or returned by Administrative Agent or any Lender. In the event that any payment or any
part thereof is so rescinded, reduced, restored or returned, such Obligations and the security
interests created herein shall continue to be effective or be reinstated (except to the extent the
related collateral has been sold to a bona fide purchaser for value) and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.

[SIGNATURE PAGES FOLLOWING]

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

	 	 	 	 	 
	 	BORROWER:

TE/TOUSA MEZZANINE, LLC

 	 
	 	By:  	/s/ Tommy McAden
 	 
	 	Name:  	Tommy McAden  	 
	 	Title:  	Executive Vice President 	 
	 

Signature page to Senior Mezzanine Credit Agreement

 

 

	 	 	 	 	 
	 	LENDERS AND AGENTS: 

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent and a Lender 

 	 
	 	By:  	/s/ James Rolison
 	 
	 	Name:  	James Rolison	 
	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	/s/  Linda Wang
 	 
	 	Name:  	Linda Wang 	 
	 	Title:  	Vice President 	 
	 

Signature page to Senior Mezzanine Credit Agreement

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