UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 8, 2013

THE HOWARD HUGHES CORPORATION

(Exact name of registrant as specified in its charter)

One Galleria Tower
13355 Noel Road, 22nd Floor
Dallas, Texas  75240
(Address of principal executive offices)

Registrant’s telephone number, including area code:  (214) 741-7744

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o                        Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o                        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o                        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o                        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01                                           Entry into a Material Definitive Agreement.

On August 8, 2013, The Woodlands Commercial Properties Company, L.P. and The Woodlands Land Development Company, L.P. (collectively, the “Borrowers”) entered into the Third Amended and Restated Master Credit Agreement (the “Credit Agreement”) with Keybank National Association (“KeyBank”), the other lending institutions that are a party to the Credit Agreement, the other lending institutions that may become parties to the Credit Agreement (collectively, the “Lenders”) and KeyBank as administrative agent for the Lenders.  The entities comprising the Borrowers are all wholly-owned, indirect subsidiaries of The Howard Hughes Corporation.

The Credit Agreement amends and restates in its entirety the Second Amended and Restated Master Credit Agreement, dated March 29, 2011, by and among the Borrowers, KeyBank and the other parties thereto (the “Original Credit Agreement”).  The Credit Agreement provides for a three-year credit facility with an initial maturity date of August 8, 2016 (with two, one-year extensions) under which the Borrowers may borrow up to $250.0 million.  The Credit Agreement consists of a $125.0 million term loan and a $125.0 million credit line that is subject to a borrowing base calculation, each with a maximum interest rate of one-month LIBOR plus 2.75%.  The interest rate provided under the Original Credit Agreement was one-month LIBOR plus 4.00% with a 1.00%  LIBOR floor. Interest payments under the Credit Agreement are paid monthly and the principal is not due until maturity.  The Borrowers have outstanding balance of approximately $176.7 million under the Credit Agreement, which such amount was previously borrowed under the Original Credit Agreement.  The amounts borrowed under the Credit Agreement are secured by assets of the Borrowers and their subsidiaries and are non-recourse to The Howard Hughes Corporation.  The amounts borrowed under the Credit Agreement may be used solely for working capital purposes in the acquisition, operation and development of real estate within the Company’s master planned community known as The Woodlands.

The Credit Agreement contains a number of customary covenants, including compliance with various financial ratios and tests, and certain convents that restrict, among other things, the Borrowers and their direct subsidiaries ability to incur debt; incur liens; transfer properties and merge or consolidate.

The Loan Agreement also contains customary events of default, certain of which are subject to cure periods.  The events of default include, among other things, nonpayment of principal, interest or fees; breach of the representations or warranties in any material respect, breach of the financial, affirmative or negative covenants; payment default on, or accelerations of, other material indebtedness; bankruptcy or insolvency; material judgments entered against the Borrowers or their subsidiaries; certain changes in control of the Borrowers; and the invalidity or unenforceability of the Credit Agreement or other documents associated with the Credit Agreement.

The Credit Agreement further requires that certain subsidiaries of the Borrowers provide guaranties in favor of the Lenders.

The description of the Credit Agreement is qualified in in its entirety by the terms of the Credit Agreement.  A copy of the Credit Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 1.02                                           Termination of a Material Definitive Agreement.

The information set forth in Item 1.01 is incorporated herein by reference.

Item 2.03                                           Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 is incorporated herein by reference.

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Item 9.01                                           Financial Statements and Exhibits.

(d)                                 Exhibits

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Exhibit 10.1

THIRD AMENDED AND RESTATED MASTER CREDIT AGREEMENT

DATED AUGUST 8, 2013

among

THE WOODLANDS COMMERCIAL PROPERTIES COMPANY, L.P.,

THE WOODLANDS LAND DEVELOPMENT COMPANY, L.P.,

and

KEYBANK NATIONAL ASSOCIATION,

and

THE OTHER LENDERS THAT ARE A PARTY

TO THIS AGREEMENT

and

OTHER LENDERS WHICH MAY BECOME

PARTIES TO THIS AGREEMENT

AND

KEYBANK NATIONAL ASSOCIATION,

AS AGENT

AND

KEYBANC CAPITAL MARKETS,

AS LEAD MANAGER AND ARRANGER

TABLE OF CONTENTS

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(continued)

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(continued)

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(continued)

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(continued)

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TABLE OF CONTENTS

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TABLE OF CONTENTS

(continued)

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EXHIBITS

SCHEDULES

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THIRD AMENDED AND RESTATED MASTER CREDIT AGREEMENT

THIS THIRD AMENDED AND RESTATED MASTER CREDIT AGREEMENT is made the 8th day of August, 2013, by and among THE WOODLANDS COMMERCIAL PROPERTIES COMPANY, L.P. (“Commercial Company”), a Texas limited partnership having its principal place of business at c/o The Woodlands Operating Company, L.P., 24 Waterway Avenue, Suite 1100, The Woodlands, Texas 77380, THE WOODLANDS LAND DEVELOPMENT COMPANY, L.P. (“Land Company”; Commercial Company and Land Company are hereafter referred to collectively as “Borrowers”), a Texas limited partnership having its principal place of business at c/o The Woodlands Operating Company, L.P., 24 Waterway Avenue, Suite 1100, The Woodlands, Texas 77380, KEYBANK NATIONAL ASSOCIATION, the other lenders that are a party to this Agreement, and the other lending institutions which may become parties hereto pursuant to §18 (the “Lenders”), and KEYBANK NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (the “Agent”).

RECITALS

WHEREAS, Commercial Company, Land Company, KeyBank, Agent and the other parties thereto have entered into that certain Second Amended and Restated Master Credit Agreement, dated March 29, 2011, as amended by that certain First Amendment and Consent Pursuant to Second Amended and Restated Master Credit Agreement, dated November 30, 2011 (the “Original Credit Agreement”); and

WHEREAS, the parties desire to enter into this Agreement to amend and restate the Original Credit Agreement in its entirety;

NOW, THEREFORE, in consideration of the recitals herein and the mutual covenants contained herein, the parties hereto hereby covenant and agree and amend and restate the Original Credit Agreement in its entirety as follows:

§1.                               DEFINITIONS AND RULES OF INTERPRETATION; AMENDMENT AND RESTATEMENT

§1.1        Definitions.  The following terms shall have the meanings set forth in this §1 or elsewhere in the provisions of this Agreement referred to below:

Account Debtor.  Any person who is obligated on any of the Accounts Receivable.

Accounts Receivable.  All accounts, whether now owned or hereafter acquired by the respective Borrowers and whether now existing or hereafter arising, and all proceeds of the foregoing, from the Municipal Utility District Contracts and the Note Receivables, as more particularly described in the Security Agreements.

Adjusted Net Amount.  The outstanding principal amount payable pursuant to the Eligible Accounts Receivable, as adjusted as provided in the Borrowing Base worksheet attached hereto as Exhibit E.

Adjusted Value.  As of any Quarterly Measurement Date, the Appraised Value as most recently determined under §5.2(a), (c) or (d) of a Borrowing Base Asset (other than Eligible Accounts Receivable), as adjusted as of such Quarterly Measurement Date by the Borrowers to reflect any sales, changes in leasing status, transfers, new Indebtedness, new development or other circumstance affecting the Borrowing Base Assets, as provided in §5.2(b).  With respect to any Qualifying Income Properties for which there is not an Appraised Value set forth on Schedule 1.2 hereto or a subsequent Appraised Value determined pursuant to §5.2, the Adjusted Value of each such Qualifying Income Property shall be the historic cost (including land value) of such Qualifying Income Property.

Affiliates.  As applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means (a) the possession, directly or indirectly, of the power to vote ten percent (10%) or more of the stock, shares, voting trust certificates, beneficial interests, partnership interests, member interests or other interests having voting power for the election of directors of such Person or otherwise to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise, or (b) the ownership of (i) a general partnership interest, (ii) a managing member’s or manager’s interest in a limited liability company or (iii) a limited partnership interest or preferred stock (or other ownership interest) representing ten percent (10%) or more of the outstanding limited or general partnership interests, preferred stock or other ownership interests of such Person.  An Affiliate shall not include a Restricted Subsidiary or an Unrestricted Subsidiary.

Agent.  KeyBank, acting as Administrative Agent for the Lenders, its successors and assigns.

Agent’s Head Office.  The Agent’s head office located at 127 Public Square, Cleveland, Ohio 44114-1306, or at such other location as the Agent may designate from time to time by notice to the Borrowers and the Lenders.

Agent’s Special Counsel.  McKenna Long & Aldridge LLP or such other counsel as may be approved by the Agent.

Agreement.  This Third Amended and Restated Master Credit Agreement, including the Schedules and Exhibits hereto.

Agreement Regarding Fees.  See §4.2.

Appraisal.  An MAI appraisal (or update of a prior Appraisal) of the value of a parcel of Real Estate ordered by and addressed to Agent, determined on an as-is basis, performed by an independent appraiser selected by the Agent who is not an employee of the Borrowers, the Agent or a Lender, the form and substance of such appraisal and the identity of the appraiser to be in accordance with regulatory laws and policies (both regulatory and internal) applicable to the Lenders and otherwise acceptable to the Agent.

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Appraised Value.  The “as-is” value of a parcel of Real Estate determined by the most recent Appraisal of such parcel or update obtained pursuant to §5.2(c) subject, however, to such changes or adjustments to the value determined thereby as may be required by the appraisal department of the Agent in its good faith business judgment, or the valuation proposed by the Borrowers and approved by the Agent as provided in §5.2(c), whichever is applicable.  With respect to Land Assets, the Appraised Value may be determined on a per lot or per acre basis and then multiplied by the number of lots or acres.

Architect’s Contract.  For the applicable Vertical Commercial Improvements, the contract, between a Borrower and the Project Architect, providing for the design of the Improvements for the applicable Vertical Commercial Improvements and the supervision of the construction thereof.

Assignment of Hedge.  An Assignment of Hedge Agreement by the Borrowers to the Agent for the benefit of the Lenders, as the same may be modified and amended, pursuant to which the Interest Cap described in §7.24 is pledged as security for the Obligations, and any financing statements that may be delivered in connection therewith, such assignment to be in form and substance satisfactory to Agent.

Assignment of Interests.  Each of the collateral assignments of partner’s or limited liability company member’s interest or rights to distributions from a Borrower to the Agent, as the same may be modified or amended, pursuant to which there shall be collaterally assigned to the Agent for the benefit of the Lenders a security interest in the interest of such Person in certain of the Partnerships or in rights to distributions as more particularly described therein, each such assignment to be in form and substance satisfactory to the Agent.

Assignment of Leases and Rents.  Each of the collateral assignments of leases and rents from a Borrower or a Guarantor as permitted by §7.19, to the Agent, as the same may be modified or amended, pursuant to which there shall be assigned to the Agent for the benefit of the Lenders a security interest in the interest of such Borrower as lessor with respect to all Leases of all or any part of a Mortgaged Property, each such collateral assignment to be in form and substance satisfactory to the Agent.

Assignment of Management Agreement and Subordination.  Each collateral assignment of the Management Agreements from a Borrower or a Guarantor as permitted by §7.19 to the Agent for the benefit of the Lenders, as the same may be modified or amended, pursuant to which there shall be collaterally assigned to the Agent for the benefit of the Lenders a security interest in the interest of such Borrower with respect to the Management Agreements, together with the consent of the manager thereunder to such assignment and a subordination of the manager’s rights with respect to the Mortgaged Properties to the rights of the Agent with respect thereto.

Assignment of Project Documents.  Each assignment of project documents made by a Borrower to the Agent for the benefit of the Lenders, as the same may be modified or amended, pursuant to which a Borrower assigns and grants a security interest in such Borrower’s right, title and interest in and to, among other things, the Architect’s Contract, Construction Contract, Plans and Specifications and Project Consents pertaining to the applicable Vertical Commercial

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Improvements, each such assignment of project documents to be in form and substance satisfactory to the Agent.

Associations.  Collectively, The Woodlands Township and Woodlands Commercial Owners Association.

Assumption Agreement.  The assumption agreement dated August 29, 2006, pursuant to which Land Company assumed the obligations of Stibbs under the “Security Deed” and the “Assignment of Leases and Rents” delivered pursuant to the Master Credit Agreement dated November 30, 2004 among Borrowers, Agent, and the other parties thereto.

Authorized Officer.  As to Commercial Company, Randy Davis, Tim Welbes, Alex Sutton, or such other officer familiar with the matters subject to the applicable certification being executed by such officer having a title of vice president or president of Woodlands Operating as is designated in a written notice from Commercial Company to Agent and the Title Insurance Company.  As to Land Company, Randy Davis, Tim Welbes, Alex Sutton, or such other officer familiar with the matters subject to the applicable certification being executed by such officer having a title of vice president or president of Woodlands Operating as is designated in a written notice from Land Company to Agent and the Title Insurance Company.

Balance Sheet Date.  March 31, 2013.

Bankruptcy Code.  Title 11, U.S.C.A., as amended from time to time or any successor statute thereto.

Base Rate.  The greatest of (a) the variable per annum rate of interest announced from time to time by Agent at Agent’s Head Office as its “prime rate”, (b) one-half of one percent (0.5%) above the Federal Funds Effective Rate (rounded to the nearest 1/100th of one percent), or (c) the LIBOR Rate for an Interest Period of one (1) month plus one percent (1%).  The Base Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer.  Any change in the rate of interest payable hereunder resulting from a change in the Base Rate shall become effective as of the opening of business on the day on which such change in the Base Rate becomes effective, without notice or demand of any kind.

Base Rate Loans.  Collectively, the Revolving Credit Base Rate Loans and the Secured Term Base Rate Loans.

Borrowers.  As defined in the preamble hereto.

Borrowing Base.  At any time, the Borrowing Base for the Borrowers on a combined basis shall be an amount equal to the sum of:

(a)                                 sixty percent (60%) of the Adjusted Value of the Developed Residential Land;

(b)                                 fifty percent (50%) of the Adjusted Value of the Developed Commercial Land;

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(c)                                  sixty percent (60%) of the Adjusted Value of the Undeveloped Residential Land;

(d)                                 fifty percent (50%) of the Adjusted Value of the Undeveloped Commercial Land;

(e)                                  forty percent (40%) of the Adjusted Value of the Golf Courses;

(f)                                   for each Qualifying Income Property, an amount equal to the product obtained by multiplying (i) the Adjusted Value of such Qualifying Income Property, by (ii) 0.70;

(g)                                  ninety percent (90%) of the Adjusted Net Amount of the Eligible Accounts Receivable; and

(h)                                 sixty-five percent (65%) of the historic costs (including land at its Adjusted Value) of Properties under Construction owned by a Borrower that are subject to a lien in favor of the Agent to secure the Obligations, provided that the maximum Borrowing Base value pursuant to this clause (h) shall not exceed $50,000,000.00 at any time.

A form showing the computation of the Borrowing Base as of a Quarterly Measurement Date is set forth on Exhibit E hereto.  The Borrowing Base Assets must satisfy the conditions of §7.19 at all times.

Notwithstanding the foregoing, in no event shall (1) more than sixty percent (60%) of the Borrowing Base be comprised of the items described in clause (b) and (d) above and (2) the Conference Center be included in the Borrowing Base if any Borrower or Restricted Subsidiary has incurred other Indebtedness with respect thereto.

Borrowing Base Assets.  Collectively, the Developed Residential Land, the Developed Commercial Land, the Undeveloped Residential Land, the Undeveloped Commercial Land, the Golf Courses, the Qualifying Income Properties, the Eligible Accounts Receivable and Properties under Construction.  The Conference Center (a) is not, as of the Closing Date, a Borrowing Base Asset and (b) may not be a Borrowing Base Asset if the Conference Center is undergoing or about to undergo renovation.  However, the Conference Center may subsequently become a Borrowing Base Asset if all other terms and conditions set forth in this Agreement are complied with.

Budget.  The annual budgets of the Borrowers, which Budget shall be a detailed estimate of projected income, cash flow, land development costs and other capital expenditures of the Borrowers for each quarter of the calendar year in question, the projected cash flows and net income for such year, and a summary of the significant assumptions upon which such projections are based.  In addition, the Budget shall include the annual income and expenditures for the management, leasing, maintenance, supervision, direction and operation of each Qualifying Income Property (including those owned by Restricted Subsidiaries to the extent reasonably available from such entities) included within the Property for the calendar year in question.  The budget shall also include a budget of significant capital improvements, repairs, replacements, tenant improvements and leasing commissions and other similar tenant-related expenses with respect to each Qualifying Income Property (including those owned by Restricted Subsidiaries to

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the extent reasonably available from such entities) included within the Property for the calendar year in question, which shall be a complete and reasonable estimate of the capital expenditures, and expenditures for tenant improvements and leasing commissions and other similar tenant-related expenses, for such Property for the period covered thereby.  Each Budget shall be a reasonable estimate of the Borrowers of the income and expenditures for the Property for the period covered thereby and shall be prepared by the Borrowers in good faith and in accordance with sound cash basis accounting practices applied on a consistent basis (except that net income shall be prepared in accordance with generally accepted accounting principles applied on a consistent basis).  Notwithstanding anything herein to the contrary, any fees or expenses to be paid to the Borrowers, any General Partner, any Second Tier Partner, any Third Tier Partner or any affiliate of any of such Persons shall not exceed an amount which would be paid to an unaffiliated entity in any arms-length transaction.

Building.  All of the buildings and related structures and improvements now or hereafter located on a parcel of Real Estate.

Build-To-Suit Properties.  Properties owned by a Borrower or its Restricted Subsidiaries or Unrestricted Subsidiaries which are each 100% preleased under a net lease having a term of not less than five (5) years and with respect to which Vertical Commercial Improvements are to be constructed.

Business Day.  Any day on which banking institutions in Cleveland, Ohio are open for the transaction of banking business and, in the case of LIBOR Rate Loans, which also is a LIBOR Business Day.

Capital Reserve.  For any period with respect to any office, retail or multifamily project (as applicable), an amount determined by the Agent based on the then current market standards, which determination shall be made in Agent’s reasonable discretion, multiplied by the leasable area or number of units, as applicable, in the applicable office, retail or multifamily project.

Capitalized Lease.  A lease under which a Person is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with generally accepted accounting principles.

Cash.  Money in legal tender of the United States.

Cash Collateral Account Agreement.  The Third Amended and Restated Cash Collateral Account and Control Agreement between the Borrowers, the Agent and KeyBank, as the same may be modified or amended, such agreement to be in form and substance satisfactory to the Agent.

Cash Equivalents.  As of any date, (i) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than one year from such date, (ii) time deposits and certificates of deposits having maturities of not more than one year from such date and issued by any domestic commercial bank having (A) senior long term unsecured debt rated at least A or the equivalent thereof by S&P or A2 or the equivalent thereof by Moody’s and (B) capital and surplus in excess of $100,000,000.00, (iii) commercial paper rated at least A-1 or the equivalent thereof by S&P or

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P-1 or the equivalent thereof by Moody’s and in either case maturing within one hundred twenty (120) days from such date, and (iv) shares of any money market mutual fund rated at least AAA or the equivalent thereof by S&P or at least Aaa or the equivalent thereof by Moody’s.

CERCLA.  See §6.20.

Change of Control.  A Change of Control shall be deemed to occur upon the occurrence of any of the following events: (a) The Howard Hughes Group does not own and control, directly or indirectly, at least seventy-five percent (75%) of the voting interests and ownership interests in each Borrower; or (b) The Howard Hughes Group (or a wholly-owned (directly or indirectly) subsidiary of the Howard Hughes Group) is not the sole general partner of each Borrower.

Closing Date.  The first date on which all of the conditions set forth in §10 and §11 have been satisfied or waived in writing.

Code.  The Internal Revenue Code of 1986, as amended, and all regulations and formal guidance issued thereunder.

Collateral.  All of (a) the property, rights and interests of the Borrowers and the Guarantors which are subject to the security interests, liens and mortgages created by the Security Documents, including, without limitation, the Mortgaged Property, and (b) the Guaranty.

Collateral Qualification Documents.  With respect to any Vertical Commercial Improvements included in the Borrowing Base, or other Income Producing Properties, Developed Residential Land, Developed Commercial Land, Undeveloped Residential Land, Undeveloped Commercial Land or other property as required under this Agreement, each of the following:

(a)                                 Security Documents.  Such Security Documents relating to such property as the Agent shall require, in form and substance satisfactory to the Agent and duly executed and delivered by the respective parties thereto.

(b)                                 Perfection of Liens.  Evidence reasonably satisfactory to the Agent that the Security Documents are effective to create in favor of the Agent a legal, valid and enforceable first lien and security interest in such property and that all filings, recordings, deliveries of instruments and other actions necessary or desirable to protect and preserve such liens or security interests have been duly effected.

(c)                                  Survey.  The Survey of the Land upon which such Vertical Commercial Improvements are to be constructed or of such other property.

(d)                                 Title.  A current report from the Title Insurance Company covering the Land upon which such Vertical Commercial Improvements are to be constructed or such other property, or other evidence satisfactory to Agent, showing that title is vested in a Borrower or as permitted in §7.19, a Guarantor, and, if requested by Agent, true and accurate copies of all documents listed as exceptions in such report or to such title.

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(e)                                  UCC Certification.  A certification from the Title Insurance Company or other person to the Agent that a search of the public records designated by the Agent disclosed no conditional sales contracts, security agreements, chattel mortgages, leases of personalty, financing statements or title retention agreements which affect any property, rights or interests of such Borrower or as permitted by §7.19, a Guarantor that are or are intended to be subject to the security interest, assignments, and mortgage liens created by the Security Documents relating to such property except to the extent that the same are discharged prior to the inclusion of the Security Documents relating to such property in the Collateral.

(f)                                   Management Agreement.  If requested by Agent, a true copy of any Management Agreement relating to such Vertical Commercial Improvements or such other property, and if such Management Agreement is with an Affiliate of a Borrower, an Assignment of Management Agreement and Subordination.

(g)                                  Leases.  True copies of any Leases relating to such property requested by Agent together with a Rent Roll for such property certified by the Borrower owning such land as accurate and complete as of a recent date, and if any Lease is to any Affiliate of a Borrower, a subordination of such Lease to the Loan Documents in form and substance reasonably satisfactory to Agent.

(h)                                 Certificates of Insurance.  Each of (i) a current certificate of insurance as to the insurance maintained by the Borrower or as permitted by §7.19, a Guarantor owning such property or the Project Contractor with respect to such Vertical Commercial Improvements (including flood insurance if necessary) from the insurer or an independent insurance broker, identifying insurers, types of insurance, insurance limits, and policy terms; (ii) certified copies of all policies evidencing such insurance (or certificates therefor signed by the insurer or an agent authorized to bind the insurer); and (iii) such further information and certificates from the Borrower or as permitted by §7.19, a Guarantor owning the land on which such Vertical Commercial Improvements are to be constructed or such other property, the Project Contractor, their insurers and insurance brokers as the Agent may reasonably request, all of which shall be in compliance with the requirements of this Agreement and the Security Deeds.

(i)                                     Hazardous Substance Assessments.  A hazardous waste site assessment report concerning Hazardous Substances and asbestos on the Land relating to such Vertical Commercial Improvements or such other property dated or updated not more than three months prior to the inclusion of such property in the Collateral, from an Environmental Engineer, such report to contain no qualification except those that are acceptable to the Agent in its sole discretion and to otherwise be in form and substance satisfactory to the Agent.

(j)                                    Appraisal.  In the event such property is to be included in the Borrowing Base, an Appraisal of the proposed Vertical Commercial Improvements, assuming completion in accordance with the Plans and Specifications, or such other property in form and substance satisfactory to the Agent and dated not more than three (3) months prior to the inclusion of the Security Documents relating to the applicable Vertical Commercial Improvements or such other property in the Collateral.

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(k)                                 Budget.  If requested by Agent, the Project Budget for the proposed Vertical Commercial Improvements.

(l)                                     Construction Documents.  If requested by Agent, a fully executed copy of the Architect’s Contract and the Construction Contract for the proposed Vertical Commercial Improvements.

(m)                             Plans and Specifications; Permit.  If requested by Agent, one complete set of the Plans and Specifications for the proposed Vertical Commercial Improvements and copies of the Project Consents received through the date of inclusion of the Security Documents for such Vertical Commercial Improvements in the Collateral.

(n)                                 Additional Documents.  Such other documents, opinions, certificates, reports or assurances as the Agent may reasonably require in its discretion.

Commercial Company Secured Term Loan Commitment.  As to each Secured Term Loan Lender, the amount equal to such Secured Term Loan Lender’s Commercial Company Secured Term Loan Commitment Percentage of the aggregate principal amount of the Secured Term Loans from time to time outstanding to Commercial Company.

Commercial Company Secured Term Loan Commitment Percentage.  With respect to each Secured Term Loan Lender, the percentage set forth on Schedule 1.1 hereto as such Secured Term Loan Lender’s percentage of the aggregate Secured Term Loan to Commercial Company, as the same may be changed from time to time in accordance with the terms of this Agreement.

Commercial Company Secured Term Loan or Secured Term Loans.  An individual Secured Term Loan or the aggregate Secured Term Loans, as the case may be, made by the Secured Term Loan Lenders hereunder to Commercial Company.

Commercial Company Secured Term Loan Note.  A promissory note made by the Borrowers in favor of a Secured Term Loan Lender in the principal face amount equal to such Secured Term Loan Lender’s Secured Term Loan Commitment, in substantially the form of Exhibit B-1 hereto.

Commercial Land.  Collectively, the Developed Commercial Land and the Undeveloped Commercial Land.  The Commercial Land shall not include any of the Common Area Land.

Commitment.  With respect to each Lender, the aggregate of (a) the Revolving Credit Commitment of such Lender and (b) the Secured Term Loan Commitment of such Lender.

Commitment Percentage.  With respect to each Lender, the percentage set forth on Schedule 1.1 hereto as such Lender’s percentage of the aggregate Commitments of all of the Lenders, as the same may be changed from time to time in accordance with the terms of this Agreement.

Commodity Exchange Act.  The Commodity Exchange Act (7 U.S.C. §1 et seq.), as amended from time to time, and any successor statute.

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Common Area Land.  The Common Area Land shall be all land located within the Woodlands Project which is now or hereafter used, designated or reserved for amenities, green space, open space and infrastructure.  As of the date hereof, the Woodlands Project includes approximately 10,433 acres of Common Area Land.

Compliance Certificate.  See §7.4(e).

Conference Center.  The Woodlands Conference Center & Resort, currently consisting of approximately 440 guestrooms, 34 meeting rooms, 6 restaurants and related facilities.

Consolidated or combined.  With reference to any term defined herein, that term as applied to the accounts of a Person and its Restricted Subsidiaries, consolidated or combined in accordance with generally accepted accounting principles.

Construction Contract.  With respect to each Vertical Commercial Improvement, the contract between a Borrower that owns the land upon which the applicable Vertical Commercial Improvements are to be constructed, as the case may be, and the applicable Project Contractor providing for the construction of the applicable Vertical Commercial Improvements.

Construction Inspector.  A firm of professional engineers or architects selected by Borrowers and reasonably acceptable to the Agent.

Construction Schedule.  With respect to each Vertical Commercial Improvement, the schedule broken down by trade, job and subcontractor, of the estimated dates of commencement and completion of construction of the Improvements, prepared by the applicable Project Contractor, approved by the Agent.

Contribution Agreement.  The Cross Reimbursement and Indemnity Agreement dated as of July 31, 1997, between Commercial Company and Land Company, as amended, such Agreement to be in form and substance satisfactory to the Agent.

Conversion Request.  A notice given by the Borrowers to the Agent of their election to convert or continue a Loan in accordance with §4.1.

Debt Service Coverage Ratio.  As of any date of determination, the ratio of (a) Net Operating Income for an office, retail or multifamily project for the prior six (6) calendar months most recently ended, annualized, divided by (b) the Implied Debt Service.

Default.  See §12.1.

Default Rate.  See §4.12.

Defaulting Lender.  Any Lender that, as reasonably determined by the Agent, (a) has failed to perform any of its funding obligations hereunder, including in respect of its Loans, within two (2) Business Days of the date required to be funded by it hereunder and such failure is continuing, unless such failure arises out of a good faith dispute between such Lender and either the Borrowers or the Agent, (b) (i) has notified the Borrowers, the Agent or any Lender that it does not intend to comply with its funding obligations hereunder or (ii) has made a public

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statement to that effect with respect to its funding obligations under other agreements generally in which it commits to extend credit, unless with respect to this clause (b), such failure is subject to a good faith dispute, (c) has failed, within two (2) Business Days after request by the Agent, to confirm in a manner reasonably satisfactory to the Agent that it will comply with its funding obligations; provided that, notwithstanding the provisions of §2C, such Lender shall cease to be a Defaulting Lender upon the Agent’s receipt of confirmation that such Defaulting Lender will comply with its funding obligations, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any bankruptcy, insolvency, reorganization, liquidation, conservatorship, assignment for the benefit of creditors, moratorium, receivership, rearrangement or similar debtor relief law of the United States or other applicable jurisdictions from time to time in effect, including any law for the appointment of the Federal Deposit Insurance Corporation or any other state or federal regulatory authority as receiver, conservator, trustee, administrator or any similar capacity, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such capacity, charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a governmental authority (including any agency, instrumentality, regulatory body, central bank or other authority) so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts of the United States or from the enforcement of judgments or writs of attachment of its assets or permit such Lender (or such governmental authority or instrumentality) to reject, repudiate, disavow, or disaffirm any contracts or agreements made with such Person).  Any determination by the Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to §2C(e)) upon delivery of written notice of such determination to the Borrowers and each Lender.

Developed Commercial Land.  Developed Commercial Land shall mean the land designated for commercial or multifamily use under the Master Plan of the Woodlands Project with respect to which infrastructure development has been substantially completed to such an extent that permits construction of Vertical Commercial Improvements, and with respect to which the commencement of the construction of Vertical Commercial Improvements has not yet commenced.

Developed Residential Land.  Developed Residential Land shall mean that portion of the Woodlands Project (i) designated under the applicable Master Plan for single-family residential or institutional use, schools, churches, nurseries or day care centers or designated for gas stations, convenience stores or similar retail uses or apartment use and other commercial uses and designated as part of the Residential Land under the applicable Master Plan, (ii) for which a Municipal Utility District has been established or has been applied for, (iii) with respect to which infrastructure development has been substantially completed, and (iv) as to which the commencement of construction of such single family housing, institutional facilities or other improvements described above has not yet commenced.

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Direct Costs.  Direct Costs shall mean and include the Adjusted Value of the Land, the costs of the Personal Property, and all labor, materials, fixtures, machinery and equipment required to construct, equip and complete the Vertical Commercial Improvements.

Disbursement Accounts.  As defined in the Cash Collateral Account Agreement.

Distribution.  With respect to any Person, the declaration or payment of any cash, cash flow, dividend or distribution on or in respect of any shares of any class of capital stock, partner’s interest, member’s interest or other beneficial interest of such Person; the purchase, redemption, exchange or other retirement of any shares of any class of capital stock, partner’s interest, member’s interest or other beneficial interest of such Person, directly or indirectly through a Restricted Subsidiary of such Person or otherwise; the return of capital by a Person to its shareholders, partners, members or other beneficial owners as such; or any other distribution on or in respect of any shares of any class of capital stock, partner’s interest, member’s interest or other beneficial interest of such Person.

Division Agreement.  The Certificate of Merger of The Woodlands Commercial Properties Company, L.P. and The Woodlands Land Development Company, L.P. dated July 31, 1997 and the Plan of Merger attached thereto.

Dollars or $.  Dollars in lawful currency of the United States of America.

Domestic Lending Office.  Initially, the office of each Lender designated as such in Schedule 1.1 hereto; thereafter, such other office of such Lender, if any, located within the United States that will be making or maintaining Base Rate Loans.

Drawdown Date.  The date on which any Loan is made or is to be made, and the date on which any Revolving Credit Loan or Secured Term Loan which is made prior to the Maturity Date is converted to a Loan of the other Type.

Eligible Accounts Receivable. That portion of the Accounts Receivable which is owned by a Borrower, subject to a Security Agreement, in which Agent has a perfected first priority security interest, subject to no other security interest, lien, charge or other encumbrance of any nature, evidenced by promissory notes or other documentation acceptable to Agent, and consisting of accounts which have payment terms acceptable to the Agent and which:  (i) are and shall be created in the ordinary course of business of the Borrowers, except with respect to Accounts Receivable described in (ix) below so long as Land Company and Account Debtor are in compliance with (A) through (D) described therein; (ii) arise from a complete bona fide transaction and which require no further act under any circumstances on the part of any Borrower to make such receivable payable by the Account Debtor; (iii) are not subject to dispute, offset or counterclaim; (iv) do not arise out of any transaction with an Account Debtor which is insolvent or the subject of any bankruptcy or insolvency proceedings of any kind or of any other proceeding or action, threatened or pending, which might have a material adverse effect on the financial condition of such Account Debtors; (v) conform to all representations and warranties made by Borrowers in this Agreement and the other Loan Documents; (vi) have not remained unpaid for more than thirty (30) days from any payment date; (vii) do not arise out of any transaction with any affiliate of either Borrower, the General Partner, a Second Tier Partner, a

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Third Tier Partner, any Guarantor or any affiliate thereof; (viii) are owed by Account Debtors located within the United States of America; (ix) with respect to each Municipal Utility District Contract, (A) Land Company is in full compliance with the applicable CON-10 necessary to give rise to the obligation of the applicable Municipal Utility District to purchase the relevant facilities in accordance with the applicable CON-10, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction or Acquisition of Facilities, (B) except with respect to Accounts Receivable related to the San Jacinto River Authority contracts, Land Company has obtained and delivered to the Agent a copy of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated by the applicable Policy, (C) the obligation of the applicable Municipal Utility District to acquire the “facility” has not lapsed or expired, and (D) Land Company has delivered satisfactory evidence to the Agent that each Municipal Utility District Contract does not exceed the applicable Municipal Utility District’s authority to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District Contract; and (x) are not determined by the Majority Lenders in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as part of the Collateral).  Eligible Accounts Receivable shall in no event include any Investments of the type described in §8.3(k).

Eligible Assignee.  (a) A Lender or any Affiliate or Related Fund of such Lender; (b) a commercial bank; (c) a savings and loan association or savings bank; or (d) an insurance company, financing company, other financial institution, fund or institutional investor experienced in real estate lending or investing in loans similar to the Loans in the ordinary course of its business reasonably acceptable to Agent and Borrower; provided that an Eligible Assignee shall not include any Borrower or any of their Affiliates or Restricted Subsidiaries or Unrestricted Subsidiaries.

Employee Benefit Plan.  Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by a Borrower or any ERISA Affiliate, other than a Multiemployer Plan.

Environmental Engineer.  A firm of independent professional engineers or other scientists generally recognized as expert in the detection, analysis and remediation of the Hazardous Substances and related environmental matters and reasonably acceptable to the Agent.

Environmental Laws.  See §6.20(a).

Equity Offering.  The issuance and sale by a Borrower subsequent to the date of this Agreement of any partnership interests or equity securities of such Borrower to investors other than the then current partners.

ERISA.  The Employee Retirement Income Security Act of 1974, as amended and in effect from time to time, and all regulations and formal guidance issued thereunder.

ERISA Affiliate.  Any Person which is treated as a single employer with a Borrower under §414 of the Code or §4001 of ERISA, and any predecessor entity of any of them.

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ERISA Reportable Event.  A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA as to which the requirement of notice has not been waived or any other event with respect to which a Borrower or an ERISA Affiliate could have liability under §4062(e) or §4063 of ERISA.

Event of Default.  See §12.1.

Excess Cash Flow.  With respect to the Borrowers on a combined basis for any fiscal year period, an amount equal to the Operating Cash Flow of the Borrowers, minus (a) the sum of all interest and mandatory principal payments due and payable with respect to the Loans for such period, minus (b) mandatory interest and principal payments due and payable during such period on other permitted Indebtedness of the Borrowers for such period, and minus (c) Vertical Development Costs incurred during the applicable test period.

Excluded FATCA Tax.  Any tax, assessment or other governmental charge imposed on a Lender under FATCA that would not have been imposed but for a failure by a Lender (or any financial institution through which any payment is made to such Lender) to comply with the requirements of FATCA.

Excluded Hedge Obligation.  With respect to any Borrower or Guarantor, any Hedge Obligation, if, and to the extent that, all or a portion of the obligation of such Borrower or guarantee of such Guarantor of, or the grant by such Borrower or Guarantor of a security interest to secure, such Hedge Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Borrower’s or Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the obligation of such Borrower or guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such Hedge Obligation.  If a Hedge Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Hedge Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.

Exiting Lenders.  See §1.3.

Extension Option.  See §4.15(a)

Extension Request.  See §4.15(a).

FATCA.  §§ 1471 through 1474 of the Internal Revenue Code.

Federal Funds Effective Rate.  For any day, the rate per annum (rounded to the nearest one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve Bank of Cleveland on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate”, or, if such rate is not so published for any day that is a Business Day, the

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average of the quotations for such day on such transactions received by the Agent from three (3) Federal funds brokers of recognized standing selected by the Agent.

Fees.  The fees payable to either Borrower pursuant to any management agreements relating to the Woodlands Project or any part thereof, and easement usage fees payable to Commercial Company pursuant to the agreements commonly known as the TCI Easement Agreement.

FF&E.  All fixtures, furnishings, equipment, furniture, and other items of tangible personal property now or hereafter located on any hotel or used in connection with the ownership, use, occupancy, operation or maintenance of all or any part of such hotel, other than stocks of food and other supplies held for consumption in normal operation but including, without limitation, appliances, machinery, equipment, signs, artwork, office furnishings and equipment, guest room furnishings, beds, linens, televisions, radios, telephones, specialized equipment for kitchens, dishware, utensils, tables, chairs, laundries, bars, restaurants, public rooms, health and recreational facilities, all partitions, screens, awnings, shades, blinds, floor coverings, hall and lobby equipment, heating, lighting, plumbing, ventilating, refrigerating, incinerating, elevators, escalators, air conditioning and communication plants or systems with appurtenant fixtures, vacuum cleaning systems, call or beeper systems, security systems, sprinkler systems and other fire prevention and extinguishing apparatus and materials, reservation system computer and related equipment, and vehicles.

FF&E Reserve.  For any period, an amount equal to four percent (4%) of Gross Hotel Revenues from such hotel for such period.

First Extension Option.  See §4.15(a)

Funding Agreement. The Funding Agreement effective as of July 31, 1997 among Borrowers and the other parties thereto regarding contributions, distributions and loans, as amended by that certain First Amendment to Funding Agreement effective as of November 24, 2004.

Funding Subordination and Standstill Agreement.  The Third Amended and Restated Subordination and Standstill Agreement dated of even date herewith, by and among Agent, Commercial Company and Land Company relating to the Funding Agreement, as the same may be modified or amended.

General Partner.  Collectively, TWLDC Holdings GP and TWCPC Holdings GP.

Generally Accepted Accounting Principles.  Principles that are (a) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time and (b) consistently applied with past financial statements of the Borrower adopting the same principles; provided that a certified public accountant would, insofar as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than a qualification regarding changes in generally accepted accounting principles) as to financial statements in which such principles have been properly applied.

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Golf Courses.  The two existing golf courses (including the clubhouses, swimming pools, driving ranges, tennis courts and other related amenities) located in Carlton Woods Country Club commonly known as the Carlton Woods Nicklaus Golf Course and the Tom Fazio Carlton Woods Creekside Golf Course, together with any new golf courses that are developed and opened within the Woodlands Project and are included within the Collateral.

Gross Hotel Revenues.  All revenues and receipts of every kind derived from operating a hotel and parts thereof, including, without limitation, income (from both cash and credit transactions), before commissions and discounts for prompt or cash payments, from rentals or sales of rooms, stores, offices, meeting space, exhibit space, or sales space of every kind; license, lease, and concession fees and rentals (not including gross receipts of licensees, lessees, and concessionaires); net income from vending machines; health club membership fees; food and beverage sales; parking; sales of merchandise (other than proceeds from the sale of furniture, fixtures and equipment no longer necessary to the operation of such hotel); service charges, to the extent not distributed to the employees at such hotel as, or in lieu of, gratuities; and proceeds, if any, from business interruption or other loss of income insurance; provided, however, that, Gross Hotel Revenues shall not include gratuities to employees of such hotel; federal, state, or municipal excise, sales, use, or similar taxes collected directly from tenants, patrons, or guests or included as part of the sales price of any goods or services; insurance proceeds (other than proceeds from business interruption or other loss of income insurance); condemnation proceeds; or any proceeds from any sale of such hotel.

Guaranteed Pension Plan.  Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by a Borrower of any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Guarantor Contribution Agreement.  That certain First Amended and Restated Contribution Agreement dated of even date herewith among Borrowers, the Guarantors and each additional Person which may become a Guarantor which may hereafter become a party thereto, as the same may be modified, amended or ratified from time to time.

Guarantors.  Woodlands Operating, Town Center Development Company, L.P., Town Center Development Company GP, L.L.C., Woodlands Office Equities-95, LLC and any Person which may become a guarantor of the Obligations after the date hereof.

Guaranty.  The First Amended and Restated Unconditional Guaranty of Payment and Performance made by the Guarantors and each Person which becomes a Guarantor pursuant to §5.6 in favor of the Agent and the Lenders, as the same may be modified, amended, ratified or confirmed, such Guaranty to be in form and substance satisfactory to the Agent.

Hazardous Substances.  See §6.20(b).

Hedge Obligations.  All obligations of Borrowers to any Lender or an Affiliate of a Lender to make any payments (including, without limitation, any payments due upon a termination or default) under any agreement with respect to an interest rate swap, collar, cap or floor or a forward rate agreement or other agreement regarding the hedging of interest rate risk

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exposure executed in connection with the satisfaction of the condition set forth in §7.24 relating to the Obligations, and any confirming letter executed pursuant to such hedging agreement, and which shall include, without limitation, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of §1a(47) of the Commodity Exchange Act, all as amended, restated or otherwise modified.  Under no circumstances shall any of the Hedge Obligations secured or guaranteed by any Loan Document as to a Borrower or a Guarantor include any obligation that constitutes an Excluded Hedge Obligation of such Borrower or Guarantor.  Nothing herein shall require the Borrowers to obtain any such agreement from any Lender or an Affiliate of a Lender.

Highest Lawful Rate.  With respect to Agent or any Lender, the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Obligations under laws applicable to Agent or such Lenders which are currently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow.  On each day, if any, that Texas law establishes the Highest Lawful Rate, the Highest Lawful Rate shall be the “weekly ceiling” from time to time in effect (as defined in §303 of the Texas Finance Code, as amended) for that day.

Hospitality Management Fee.  Any fees payable to a Borrower or any of their respective Restricted Subsidiaries, Unrestricted Subsidiaries or Affiliates pursuant to any management agreement of any hospitality property included as a Borrowing Base Asset, including the Conference Center, but only if such hospitality property or the Conference Center is included as a Borrowing Base Asset consistent with the terms of this Agreement.

Hotel Debt Service Coverage Ratio.  As of any date of determination, the ratio of Hotel Net Operating Income for a hotel for the prior six (6) calendar months most recently ended, annualized, divided by the Implied Debt Service.

Hotel Net Operating Income.  For any hotel as of any date of determination, an amount equal to the total Gross Hotel Revenues of such hotel during such period; minus the sum of (A) the sum of all expenses and other proper charges incurred or accrued in connection with and directly attributable to the ownership and operation of such hotel during such period (including real estate taxes, management fees (calculated at the greater of (1) actual management fees and (2) an amount equal to three percent (3%) of total Gross Hotel Revenues for such period), franchise fees, payments under ground leases, insurance premiums, and bad debt expenses, but excluding any general and administrative expense, impairment charges, debt service charges, income taxes, capital expenses, depreciation, amortization of financing costs, and other non-cash charges) and (B) the FF&E Reserve for such period.

Howard Hughes Group.  The Howard Hughes Corporation, a Delaware corporation.

Hughes Landing I Apartments.  Approximately 391 multifamily apartments to be constructed in a 66-acre mixed-use development project at Lake Woodlands.

Hughes Landing Hotel.  A 175 room boutique hotel to be constructed in a 66-acre mixed-use development project at Lake Woodlands.

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Implied Debt Service.  On any date of determination, an amount equal to the annual principal and interest payment that would be payable using a mortgage debt constant of seven and one-half percent (7.5%) on a loan amount equal to the principal balance of the construction loan for the applicable project, or if there is no such loan, then on a hypothetical construction loan in a principal amount equal to sixty-five percent (65%) of the Project Costs for such project.

Improvements.  The improvements to be constructed on the Land for any Vertical Commercial Improvements in accordance with the Plans and Specifications therefor.

Income Producing Properties.  Income producing properties owned by Commercial Company or Land Company or their Restricted Subsidiaries located within the Woodlands Project or, with the approval of the Agent, adjacent thereto.

Indebtedness.  All obligations, contingent and otherwise, that in accordance with Generally Accepted Accounting Principles should be classified upon the obligor’s balance sheet as liabilities, or to which reference should be made by footnotes thereto, including in any event and whether or not so classified: (a) all debt and similar monetary obligations, whether direct or indirect; (b) all liabilities secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; (c) all guarantees, endorsements and other contingent obligations whether direct or indirect in respect of indebtedness of others, including any obligation to supply funds to or in any manner to invest directly or indirectly in a Person, to purchase indebtedness, or to assure the owner of indebtedness against loss through an agreement to purchase goods, supplies or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and the obligation to reimburse the issuer in respect of any letter of credit; (d) any obligation as a lessee or obligor under a Capitalized Lease; (e) all obligations with respect to letters of credit or similar instruments issued by a Person; (f) all subordinated debt; and (g) all indebtedness, obligations or other liabilities under or with respect to (i) interest rate swap, collar, cap or similar agreements providing interest rate protection and (ii) foreign currency exchange agreements.  Indebtedness shall not include current liabilities of the Borrowers or their respective Restricted Subsidiaries or Unrestricted Subsidiaries incurred in the ordinary course of business but not incurred through (i) the borrowing of money, or (ii) the obtaining of credit except for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services.  Indebtedness shall also include loans made pursuant to the Funding Agreement; provided, however, that loans made pursuant to the Funding Agreement shall be excluded from Indebtedness so long as no Event of Default exists, and no default, material misrepresentation or breach of warranty has occurred under the Funding Subordination and Standstill Agreement.

Indemnity Agreement.  The Indemnity Agreement Regarding Hazardous Materials, made by the Borrowers and the Guarantors in favor of the Agent and the Lenders, as the same may be modified or amended, pursuant to which the Borrowers agree to indemnify the Agent and the Lenders with respect to Hazardous Substances and Environmental Laws, such Indemnity Agreement to be in form and substance satisfactory to the Agent.

Indirect Costs.  Indirect Costs shall mean and include title insurance report fees, survey charges, engineering fees, architectural fees, real estate taxes, appraisal costs, commitment fees

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and interest payable to the Lenders under the Loan with respect to the Vertical Commercial Improvements, premiums for insurance, marketing, advertising and leasing costs, brokerage commissions, legal fees, accounting fees, overhead and administrative costs, and all other expenses which are expenditures relating to Vertical Commercial Improvements and are not Direct Costs.

Interest Cap.  See §7.24.

Interest Expense.  For any period, the sum of all actual interest expense (excluding capitalized interest funded pursuant to a construction loan but including all other capitalized interest) due and payable by (i) the Borrowers and (ii) the Restricted Subsidiaries with respect to any indebtedness other than Non-Recourse Indebtedness during such period.  Interest Expense shall include interest paid by the Borrowers and Land Company, respectively, with respect to loans made pursuant to the Funding Agreement; provided, however, that payments or accruals of interest by the Borrowers with respect to loans made pursuant to the Funding Agreement shall be excluded from Interest Expense so long as no Event of Default exists, and no default, material misrepresentation or breach of warranty has occurred under the Funding Subordination and Standstill Agreement.

Interest Payment Date.  The first day of each calendar month during the term of such Loan.

Interest Period.  With respect to each LIBOR Rate Loan (a) initially, the period commencing on the Drawdown Date of such Loan and ending one, two, three or six months thereafter, and (b) thereafter, each period commencing on the day following the last day of the next preceding Interest Period applicable to such LIBOR Loan and ending on the last day of one of the periods set forth above, as selected by the Borrowers in a Conversion Request; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

(i)                                     if any Interest Period with respect to a LIBOR Rate Loan would otherwise end on a day that is not a LIBOR Business Day, that Interest Period shall end and the next Interest Period shall commence on the next preceding or succeeding LIBOR Business Day as determined conclusively by the Agent in accordance with the then current bank practice in the applicable LIBOR interbank market;

(ii)                                  if the Borrowers shall fail to give notice as provided in §4.1, the Borrowers shall be deemed to have requested a conversion of the affected LIBOR Rate Loan to a Base Rate Loan on the last day of the then current Interest Period with respect thereto; and

(iii)                               no Interest Period relating to any LIBOR Rate Loan shall extend beyond the Maturity Date.

Investment.  With respect to any Person, all shares of capital stock, evidences of Indebtedness and other securities issued by any other Person, all loans, advances, or extension of credit to, or contributions to the capital of, any other Person, all purchases of the securities or business or integral part of the business of any other Person and commitments to make such purchases, all interests in real property, and all other investments; provided, however, that the term “Investment” shall not include (i) equipment, inventory and other tangible personal

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property acquired in the ordinary course of business, or (ii) current trade and customer accounts receivable for services rendered in the ordinary course of business and payable in accordance with customary trade terms.  In determining the aggregate amount of Investments outstanding at any particular time: (a) the amount of any investment represented as a guaranty shall be taken at not less than the principal amount of the obligations guaranteed and still outstanding; (b) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (c) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (d) there shall not be deducted in respect of any Investment any amounts received as earning on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (b) may be deducted when paid; and (e) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.

Joinder Agreement.  The Joinder Agreement with respect to the Guaranty, Guarantor Contribution Agreement and Indemnity Agreement to be executed and delivered pursuant to §5.6 by any Person required to become a Guarantor thereunder, such Joinder Agreement to be substantially in the form of Exhibit “H” hereto.

KeyBank.  KeyBank National Association, a national banking association, and its successors by merger.

Land.  With respect to each Vertical Commercial Improvement, the real estate upon which the Vertical Commercial Improvements are to be constructed.

Land Assets.  Collectively, the Residential Land and the Commercial Land.

Land Company.  As defined in the preamble hereto.

Land Company Secured Term Loan Commitment.  As to each Secured Term Loan Lender, the amount equal to such Secured Term Loan Lender’s Land Company Secured Term Loan Commitment Percentage of the aggregate principal amount of the Secured Term Loans to Land Company from time to time outstanding.

Land Company Secured Term Loan Commitment Percentage.  With respect to each Secured Term Loan Lender, the percentage set forth on Schedule 1.1 hereto as such Secured Term Loan Lender’s percentage of the aggregate Secured Term Loans to Land Company, as the same may be changed from time to time in accordance with the terms of this Agreement.

Land Company Secured Term Loan or Loans.  An individual Secured Term Loan or the aggregate Secured Term Loans, as the case may be, made by the Secured Term Loan Lenders hereunder to Land Company.

Land Company Secured Term Loan Note.  A promissory note made by the Borrowers in favor of a Secured Term Loan Lender in the principal face amount equal to such Secured Term Loan Lender’s Land Company Secured Term Loan Commitment, in substantially the form of Exhibit B-2 hereto.

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Lead Arranger.  KeyBanc Capital Markets.

Leases.  Leases, licenses and agreements whether written or oral, relating to the use of occupation of space in or on the Building or on the Real Estate.

Lenders.  KeyBank, the other Lenders a party hereto, and any other Person who becomes an assignee of any rights of a Lender pursuant to §18; and collectively, the Revolving Credit Lenders and the Secured Term Loan Lenders.

LIBOR Business Day.  Any day on which commercial banks are open for international business (including dealings in Dollar deposits) in the London interbank market.

LIBOR Lending Office.  Initially, the office of each Lender designated as such in Schedule 1.1 hereto; thereafter, such other office of such Lender, if any, that shall be making or maintaining LIBOR Rate Loans.

LIBOR Rate.  For any LIBOR Rate Loan for any Interest Period, the average rate (rounded to the nearest 1/100th) as shown in Reuters Screen LIBOR01 Page (or any successor service, or if such Person no longer reports such rate as determined by Agent, by another commercially available source providing such quotations approved by Agent) at which deposits in U.S. dollars are offered by first class banks in the London Interbank Market at approximately 11:00 a.m. (London time) on the day that is two (2) LIBOR Business Days prior to the first day of such Interest Period with a maturity approximately equal to such Interest Period and in an amount approximately equal to the amount to which such Interest Period relates, adjusted for reserves and taxes if required by future regulations.  If such service or such other Person approved by Agent no longer reports such rate or Agent determines in good faith that the rate so reported no longer accurately reflects the rate available to Agent in the London Interbank Market, Agent may select a replacement index.  For any period during which a Reserve Percentage shall apply, the LIBOR Rate with respect to LIBOR Rate Loans shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage.

LIBOR Rate Loans.  Collectively, the Revolving Credit LIBOR Rate Loans and the Secured Term LIBOR Rate Loans.

Liens.  See §8.2.

Liquidity.  As of any date of determination, the sum of (a) the Borrowers’ Cash plus (b) the amount of the Revolving Credit Loans available to be borrowed by Land Company as of such Quarterly Measurement Date.

Loan Documents.  This Agreement, the Notes (if any), the Security Documents, the Guarantor Contribution Agreement, the Joinder Agreements and all other documents, instruments or agreements now or hereafter executed or delivered by or on behalf of any Borrower or any Guarantor in connection with the Loans.

Loan or Loans.  Collectively, the Revolving Credit Loans and the Secured Term Loans.

Loan Request.  See §2.6.

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Majority Lenders.  As of any date, the Lender or Lenders (excluding any Defaulting Lenders) whose aggregate Commitment Percentage is more than fifty percent (50%) of the total Commitments.  Commitments and Loans held by Defaulting Lenders shall be disregarded when determining Majority Lenders.

Management Agreements.  Agreements, whether written or oral, providing for the management of all or any portion of the Mortgaged Properties.

Market Value Net Worth.  As of any date of determination, the sum of (a) Total Market Value Capitalization as of such date minus (b) the aggregate Total Indebtedness of the Borrowers and their respective Restricted Subsidiaries.

Master Plan.  The Master Plan for the Woodlands Project.

Material Agreements.  Collectively, the Master Plan, the documents and agreements governing the Associations, and, to the extent any rights thereunder are a part of the Collateral, any of the Municipal Utility District Contracts, the Note Receivables and the partnership agreements or other organizational documents pursuant to which rights have been pledged to Agent pursuant to an Assignment of Interests.

Material Assets.  Collectively, (a) Commercial Land sold in one transaction or a series of related transactions to the same Person (which for the purposes hereof shall include affiliated or related entities) for an aggregate purchase price of more than $50,000,000.00 within any twelve (12) month period, (b) Residential Land sold in one transaction or a series of related transactions to the same Person (which for the purposes hereof shall include affiliated or related entities) involving 750 or more contiguous single family lots within any twelve (12) month period, or (c) Land Assets sold for an aggregate purchase price of more than $50,000,000.00 within any twelve (12) month period to one or more Unrestricted Subsidiaries.

Maturity Date.  August 8, 2016, as the same may be extended by the Borrowers as provided in §4.15, or such earlier date on which the Loans shall become due and payable pursuant to the terms hereof.

Millennium II Apartments.  314 luxury apartment homes to be located at Timberloch Place and Six Pines Drive which shall be commonly known as The Millennium Six Pines.

Mortgaged Property or Mortgaged Properties.  Collectively, the Real Estate of Borrowers, or as permitted by §7.19, a Guarantor which is security for the Obligations pursuant to the Security Deeds.

Multiemployer Plan.  Any multiemployer plan within the meaning of §3(37) or §4001(a)(3) of ERISA or §414(f) of the Code maintained or contributed to by a Borrower or any ERISA Affiliate.

Municipal Utility District Contracts.  The Municipal Utility District Contracts and the Road Utility District Contracts included within MUD Contracts and Note Receivables in Schedule 1.2 hereto.

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Net Income (or Deficit).  With respect to any Person, for any fiscal period, the net income (or deficit) of such Person, after deduction of all expenses, taxes and other proper charges, determined in accordance with Generally Accepted Accounting Principles.

Net Operating Income.  For any office, retail or multifamily project (as applicable) and for a given period, an amount equal to the sum of rents and other recurring revenues received in the ordinary course of business from such office, retail or multifamily project (as applicable) (excluding pre-paid rents and revenues and security deposits except to the extent applied in satisfaction of tenants’ obligations for rent as applicable) minus the sum of (a) all expenses paid or accrued and related to the ownership, operation, or maintenance of such office, retail or multifamily project (as applicable) for such period, including, but not limited to, taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other expenses incurred in connection with such office, retail or multifamily project (as applicable), but specifically excluding general overhead expenses of the Borrowers and their Subsidiaries and any property management fees), (b) the greater of (i) actual property management fees of such office, retail or multifamily project (as applicable) or (ii) an imputed property management fee in an amount equal to four percent (4%) of the gross revenues from such office, retail or multifamily project (as applicable), (c) all rents and other income for such Real Estate received from tenants in default of payment or other material obligations under their lease, or with respect to leases as to which the tenant or any guarantor thereunder is subject to any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, liquidation or similar debtor relief proceeding, in each case for the applicable period and (d) Capital Reserves for such period.  Net Operating Income shall be adjusted to remove any impact of straight lining of rents and amortization of intangibles pursuant to Accounting Standards Codification No. 805, Business Combinations (formerly Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations).

Non-Defaulting Lender.  At any time, any Lender that is not a Defaulting Lender at such time.

Non-Recourse Indebtedness.  Indebtedness of a Person which is secured by one or more parcels of Real Estate and related personal property or interests therein and is not a general obligation of such Person, the holder of such Indebtedness having recourse solely to the parcels of Real Estate securing such Indebtedness, the Building and any leases thereon and the rents and profits thereof securing such Indebtedness, subject to such exceptions for fraud or material misrepresentation, misapplication of rents or misappropriation of funds (including insurance proceeds or condemnation awards), environmental issues, any loss of collateral due to forfeiture as a result of any criminal or quasi-criminal activity, springing recourse obligations due to voluntary or involuntary bankruptcy, encumbrances or transfers of interests or assets in violation of loan documents, or amendment, dissolution or other modifications or failures to follow organizational documents, and other customary matters as Agent may reasonably approve; provided, however, that the amount of any claims for liability with respect to any springing recourse obligations to the extent that a Person becomes liable therefor shall not be considered Non-Recourse Indebtedness.

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Non-Recurring Amount.  For any period, the sum of (a) any amounts included in Operating Cash Flow which are attributable to the non-recurring sale of income-producing assets (other than land sales) minus (b) any such amounts from a sale of completed Vertical Commercial Improvements which are in excess of the cost basis (exclusive of land) of such Vertical Commercial Improvements and minus (c) the market value of the land attributable to such Vertical Commercial Improvements.

Note Receivables.  The notes payable to Commercial Company or Land Company and all proceeds of the foregoing, as more particularly described on Schedule 1.6 hereto and which are subject to the Security Agreement to which Commercial Company or Land Company is a party, together with any additional notes payable to Commercial Company or Land Company and all proceeds of the foregoing hereafter approved by Agent in writing for inclusion as a Note Receivable and which is subject to a Security Agreement.

Notes.  Collectively, the Revolving Credit Notes and the Secured Term Loan Notes, if any.

Notice.  See §19.

Obligations.  All indebtedness, obligations and liabilities of the Borrowers and the Guarantors to any of the Lenders and the Agent, individually or collectively, under this Agreement or any of the other Loan Documents or in respect of any of the Loans or the Notes, or other instruments at any time evidencing any of the foregoing, whether existing on the date of this Agreement or arising or incurred hereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise.

OFAC.  Office of Foreign Asset Control of the Department of the Treasury of the United States of America.

Operating Cash Flow.  For any period, an amount equal to the sum of (a) the Operating Income of a Borrower for such period minus (b) the Operating Expenses of a Borrower for such period.

Operating Expenses.  For any period, all expenses of a Borrower directly attributable to the operation of such Borrower or the operation, repair and/or maintenance of the Property (if applicable) including, without limitation, taxes, insurance premiums, management fees, payments to third party suppliers, marketing and operating expenses, capital expenditures for maintenance or improvement of Income Producing Properties, general and administrative expenses and all land and lot development expenditures (other than the amounts expended in respect of construction of Vertical Commercial Improvements) including, without limitation, amounts reimbursable under Municipal Utility District Contracts.  For the purposes of this Agreement, Operating Expenses shall not include any Foreign, U.S., state and local income taxes, franchise taxes or other taxes based on the income imposed on a Borrower generally and not as owner of the Property, depreciation and any other non-cash expenditures of a Borrower, or any payment of principal or interest with respect to the Obligations or other Indebtedness or other fees or charges payable under the Loan Documents (except that appraisals and cost

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reimbursements to the Agent or the Lenders shall be Operating Expenses).  Operating Expenses shall be determined on the basis of sound cash basis accounting practices applied on a consistent basis, modified as described above, and consistent with the manner in which they have previously been calculated and provided to the Lenders.  Operating Expenses shall not include expenses of a Borrower’s Restricted Subsidiaries and Unrestricted Subsidiaries (except, for the purposes of calculation of the covenant set forth in §9.2 only, Operating Expenses shall include the expenses of a Restricted Subsidiary attributable to Real Estate that is secured by Indebtedness that is also fully recourse to a Borrower), or costs of Vertical Commercial Improvements.

Operating Income.  For any period, all revenue or receipts derived by a Borrower from any source, including, without limitation (as applicable), net proceeds of sales, excess proceeds from refinancing of existing debt, exchanges or transfers of Residential Land, Commercial Land and Income Producing Properties or interests therein, partnership distributions, dividends, management and other fees or similar payments, payments received on Accounts Receivable, interest income, rents and profits, operating expense and real estate tax expense reimbursements, escalations, percentage rents, administrative and supervisory fees, insurance proceeds and condemnation awards (other than proceeds and condemnation awards that are applied to Indebtedness by a lender or are used to restore and rebuild improvements) and any other extraordinary, non-recurring or miscellaneous revenues, but excluding capital contributions from a Borrower’s partners and net proceeds of new construction and development financings or any borrowings of the Loans.  Operating Income shall be determined on the basis of sound cash basis accounting practices applied on a consistent basis, modified as provided above and consistent with the manner in which they have previously been calculated and provided to the Lenders.  Operating Income shall not include gross income of Restricted Subsidiaries and Unrestricted Subsidiaries of a Borrower [except, for the purposes of calculation of the covenant set forth in §9.2 only, Operating Income shall include the income of a Restricted Subsidiary attributable to Real Estate that is secured by Indebtedness that is also fully recourse to a Borrower,] but instead the amount distributed to such Borrower.

Original Credit Agreement.  As defined in the recitals.

Outstanding.  With respect to the Loans, the aggregate unpaid principal thereof as of any date of determination.

Partial Interest.  The ownership interest (determined based on its right to receive cash flow and other distributions) of Land Company or Commercial Company, whether such interest is evidenced by a partnership interest or otherwise, in certain Persons which own office, retail, research/industrial and multifamily rental properties more particularly, as of the date hereof, described in Schedule 1.4 hereto, together with such additional interests as may hereafter be added as provided in §7.17.  For the purposes of calculating compliance with financial covenants, a Partial Interest shall sometimes be expressed as a percentage interest in the underlying Income Producing Property.

Partnerships.  The Persons described on Schedule 1.5 hereto in which a Borrower has an ownership interest, together with each other Person in which a Borrower may hereafter obtain an ownership interest which is a Restricted Subsidiary.

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Patriot Act.  The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as the same may be amended from time to time, and corresponding provisions of future laws.

PBGC.  The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

Performance Obligations.  Letters of credit issued on behalf of a Borrower or one of its Restricted Subsidiaries to, or a guaranty provided by a Borrower or Restricted Subsidiary to, a governmental authority, the purpose of which is to assure completion by a Borrower or such Restricted Subsidiary of the development or maintenance of land improvements.

Permitted Excess Cash Flow Investments.  Investments permitted pursuant to §8.3(a)-(g), the investments permitted pursuant to §8.3(h) and (i) (regardless of whether such Investment is deposited with Agent or any other Person), and such other investments as the Agent may reasonably approve.

Permitted Liens.  Liens, security interests and other encumbrances permitted by §8.2.

Person.  Any individual, corporation, partnership, limited liability company, trust, unincorporated association, business, or other legal entity, and any government or any governmental agency or political subdivision thereof.

Personal Property.  With respect to each Vertical Commercial Improvements, all materials, furnishings, fixtures, furniture, machinery, equipment and all items of tangible personal property now or hereafter owned or acquired by a Borrower, wherever located, and either (i) to be located on or incorporated into the applicable Vertical Commercial Improvements, (ii) used in connection with the construction of the applicable Vertical Commercial Improvements or (iii) to be used in connection with the operation or maintenance of the applicable Vertical Commercial Improvements.

Plan.  An Employee Benefit Plan, Multiemployer Plan and/or Guaranteed Pension Plan.

Plans and Specifications.  The final and/or permitted detailed architectural, structural, mechanical, electrical, landscaping, erosion control, grading, utility and other plans and specifications for the applicable Vertical Commercial Improvements prepared by the Project Architect.

Principal Financial Officer.  The primary officer or the authorized agent of the Borrowers, the General Partners, the Second Tier Partners, or the Third Tier Partners responsible for the preparation and certification of financial statements.

Project Architect.  With respect to each Vertical Commercial Improvements, the licensed professional architect retained by a Borrower to design such Vertical Commercial Improvements and prepare the Plans and Specifications therefor, and supervise the construction of such Vertical Commercial Improvements.

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Project Budget.  The budget for total estimated Project Costs for Vertical Commercial Improvements in such form as the Agent may reasonably request.

Project Consents.  All approvals, consents, waivers, orders, agreements, acknowledgments, authorizations, permits and licenses required under applicable Requirements or under the terms of any agreement, restriction, covenant or easement affecting Vertical Commercial Improvements, or otherwise necessary or desirable, for the ownership and acquisition of Vertical Commercial Improvements, the construction and equipping of the Improvements, and the use, occupancy and operation of Vertical Commercial Improvements following completion of construction of the Improvements, whether obtained from a governmental authority or any other Person.

Project Contractor.  With respect to each Vertical Commercial Improvements, the general contractor hired by a Borrower to construct the Vertical Commercial Improvements.

Project Costs.  For each Vertical Commercial Improvements, the sum of all Direct Costs and Indirect Costs that will be incurred by a Borrower in connection with the construction, equipping and completion of the Improvements and the operation and carrying of such Vertical Commercial Improvements through stabilization.

Properties under Construction.  Vertical Commercial Improvements located in the Woodlands Project under construction; provided that a property shall cease to be under construction and eligible for inclusion in the Borrowing Base as a Property Under Construction upon the earlier to occur of (a) eighteen months following the commencement of construction and (b) six (6) months after the issuance of a shell certificate of occupancy or an equivalent thereto for such improvements.

Property.  Collectively, the Accounts Receivable, the Residential Land, the Commercial Land, the Common Area Land, the Golf Courses, the Qualifying Income Properties, the Partial Interests, the Properties under Construction, the Income Producing Properties and the Fees.

Qualifying Income Properties.  Income Producing Properties that satisfy the terms of §5.2 and §7.19.  The initial Qualifying Income Properties are more particularly described in Schedule 1.3 hereto.

Quarterly Measurement Date.  Each December 31, March 31, June 30 and September 30 during the term of the Agreement, with the first Quarterly Measurement Date occurring June 30, 2013.

Real Estate.  All real property at any time owned or leased (as lessee or sublessee) by the Borrowers, any of their respective Restricted Subsidiaries, a Guarantor or any of the Partnerships.

Register.  See §18.2.

Related Fund.  With respect to any Lender which is a fund that invests in loans, any Affiliate of such Lender or any other fund that invests in loans that is managed by the same investment advisor as such Lender or by an Affiliate of such Lender or such investment advisor.

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Release.  See §6.20(c) (iii).

Rent Roll.  A report prepared and certified by a Borrower showing for each property its type, occupancy status, lease expiration date, lease rent and other information in substantially the form presented to the Lenders prior to the date hereof or in such other form as may have been approved by the Agent, such approval not to be unreasonably withheld.

Requirements.  Any law, ordinance, code, order, rule or regulation of any governmental authority relating in any way to the acquisition, ownership, construction, use, occupancy and operation of Vertical Commercial Improvements before, during and following the completion thereof, including those relating to subdivision control, zoning, building, use and occupancy, fire prevention, health, safety, sanitation, handicapped access, historic preservation and protection, tidelands, wetlands, flood control, access and earth removal, and all Environmental Laws.

Reserve Percentage.  For any Interest Period, that percentage which is specified three (3) Business Days before the first day of such Interest Period by the Board of Governors of the Federal Reserve System (or any successor) or any other governmental or quasi-governmental authority with jurisdiction over Agent or any Lender for determining the maximum reserve requirement (including, but not limited to, any marginal reserve requirement) for Agent or any Lender with respect to liabilities constituting of or including (among other liabilities) Eurocurrency liabilities in an amount equal to that portion of the Loan affected by such Interest Period and with a maturity equal to such Interest Period.

Residential Land. Collectively, the Developed Residential Land and the Undeveloped Residential Land.  The Residential Land shall not include any of the Common Area Land.

Restricted Subsidiary.  A Restricted Subsidiary shall mean (a) any corporation, association, partnership, limited liability company, trust, or other business entity of which the designated parent (i) shall be the general partner, managing member, controlling shareholder or similar controlling Person of such entity, (ii) shall own directly or indirectly through a Person or Persons at least fifty percent (50%) (by number of votes or controlling interests) of the outstanding Voting Interests and (iii) shall have control over all major decisions (including the decision to sell or encumber such Person’s assets) and day-to-day operations of such entity, and (b) any other entity the accounts of which are consolidated with the accounts of a Borrower in accordance with Generally Accepted Accounting Principles; provided that such Borrower has not elected that such entity be an Unrestricted Subsidiary as permitted in this Agreement.  Notwithstanding the foregoing, Stewart Title of Montgomery County, Inc. shall not constitute a Restricted Subsidiary.

Revolving Credit Base Rate Loans.  Revolving Credit Loans bearing interest calculated by reference to the Base Rate.

Revolving Credit Commitment.  With respect to each Revolving Credit Lender, the amount set forth on Schedule 1.1 hereto as the amount of such Revolving Credit Lender’s Revolving Credit Commitment to make or maintain Revolving Credit Loans to Land Company, as the same may be changed from time to time in accordance with the terms of this Agreement.

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Revolving Credit Commitment Percentage.  With respect to each Revolving Credit Lender, the percentage set forth on Schedule 1.1 hereto as such Revolving Credit Lender’s percentage of the aggregate Revolving Credit Commitments of all of the Revolving Credit Lenders, as the same may be changed from time to time in accordance with the terms of this Agreement.

Revolving Credit LIBOR Rate Loans.  Revolving Credit Loans bearing interest calculated by reference to the LIBOR Rate.

Revolving Credit Lenders.  Collectively, the Lenders which have a Revolving Credit Commitment, such Revolving Credit Lenders being identified on Schedule 1.1 hereto.

Revolving Credit Loan or Loans.  An individual Revolving Credit Loan or the aggregate Revolving Credit Loans, as the case may be, to be made by the Revolving Credit Lenders hereunder as more particularly described in §2.

Revolving Credit Note or Notes.  A promissory note or notes made by the Borrowers in favor of a Revolving Credit Lender in the principal face amount equal to such Revolving Credit Lender’s Revolving Credit Commitment, or if less, the outstanding amount of all Revolving Credit Loans made by such Revolving Credit Lender, in substantially the form of Exhibit A-2 hereto.

Second Extension Option.  See §4.15(a)

Second Tier Partners.  Collectively, TWLDC Holdings and TWCPC Holdings.

Secured Term Base Rate Loans.  The Secured Term Loans bearing interest by reference to the Base Rate.

Secured Term LIBOR Rate Loans.  The Secured Term Loans bearing interest by reference to the LIBOR Rate.

Secured Term Loan or Secured Term Loans.  An individual Secured Term Loan or the aggregate Secured Term Loans, as the case may be, made by the Secured Term Loan Lenders hereunder.

Secured Term Loan Commitment.  As to each Secured Term Loan Lender, the amount equal to such Secured Term Loan Lender’s percentage set forth on Schedule 1.1 of the aggregate principal amount of the Secured Term Loans from time to time outstanding.

Secured Term Loan Commitment Percentage.  With respect to each Secured Term Loan Lender, the percentage set forth on Schedule 1.1 hereto as such Secured Term Loan Lender’s percentage of the aggregate Secured Term Loans, as the same may be changed from time to time in accordance with the terms of this Agreement.

Secured Term Loan Lenders.  Collectively, the Lenders which have a Secured Term Loan Commitment, the initial Secured Term Loan Lenders being identified on Schedule 1.1 hereto.

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Secured Term Loan Notes.  Collectively, the Commercial Company Secured Term Loan Notes and the Land Company Secured Term Loan Notes, if any.

Security Agreements.  Collectively the Collateral Assignment of Documents from Commercial Company to the Agent for the benefit of the Lenders and the Collateral Assignment of Documents from Land Company to the Agents for the benefit of the Lenders, as the same may be modified or amended, pursuant to which the Accounts Receivable and the Fees have been pledged as security for the Obligations, such Security Agreements to be in form and substance satisfactory to the Agent.

Security Deeds.  The Deeds of Trust from a Borrower, Stibbs (which has been assumed by Land Company pursuant to the Assumption Agreement), or a Guarantor as permitted by §7.19 to the Agent for the benefit of the Lenders (or to trustees named therein acting on behalf of the Agent for the benefit of the Lenders), as the same may be modified or amended, pursuant to which a Borrower has conveyed a Mortgaged Property as security for the Obligations, such Security Deeds to be in form and substance satisfactory to the Agent.

Security Documents.  The Security Deeds, the Assignments of Rents and Leases, the Assignment of Management Agreements and Subordination, the Assignment of Interests, the Assignment of Project Documents, the Security Agreements, the Assignment of Hedge, the Cash Collateral Account Agreement, the Indemnity Agreement, the Guaranty, the Assumption Agreement, and any further collateral assignments to the Agent for the benefit of the Lenders, including, without limitation, UCC-1 financing statements executed and delivered in connection therewith.

Short-term Investments.  Investments described in subsections (a) through (g), inclusive, of §8.3.

Speculative Development.  Development of Commercial Land or Residential Land for (a) hotel, (b) multifamily or (c) office, retail or research/industrial use which is less than sixty-five percent (65%) leased pursuant to Third Party Leases.  A lease shall not be deemed a lease with an Affiliated Person in the event that a Borrower, any of the General Partners, any Second Tier Partner, any of the Third Tier Partners, any Guarantor, or any of their Restricted Subsidiaries or Unrestricted Subsidiaries enters into a joint venture with a third party unaffiliated with any of such Persons which in turn leases a portion of such property to such unaffiliated Person.  In the event that any of such property is to be leased to an Affiliate of a Borrower, any of the General Partners, any Second Tier Partner, any of the Third Tier Partners, any Guarantor, or any of their Restricted Subsidiaries or Unrestricted Subsidiaries, the square footage subject to such lease shall be deducted from the overall square footage of the project and excluded in calculating compliance with the foregoing tests.  Once a particular development is leased at or above such level, such development shall cease to be a Speculative Development, and shall be an Income Producing Property.

Stated Rate.  See §4.14(b).

Stibbs.  John H. Stibbs, Jr., as Trustee for a Borrower.

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Super-Majority Lenders.  As of any date, the Lender or Lenders (excluding any Defaulting Lenders) whose aggregate Commitment Percentage is equal to or greater than sixty-six and two-thirds percent (66 2/3%) of the total Commitments.  Commitments and Loans of Defaulting Lenders shall be disregarded when determining Super-Majority Lenders.

Survey.  With respect to each Mortgaged Property, an instrument survey of such Mortgaged Property or the Land upon which Vertical Commercial Improvements are to be constructed and any improvements thereon, if any, a plat, or other description of the Mortgaged Property reasonably satisfactory to Agent.

TCI Easement Agreement.  That certain Access Agreement between Woodlands and The Woodlands Communication Network pursuant to which Comcast Cable Communications, Inc., successor to The Woodlands Communication Network, operates a cable system within private easements owned by Woodlands for a period which ends on June 15, 2015.

Test Period.  See §9.2.

Third Party Lease.  A bona-fide arm’s length lease to a third party that is not an Affiliate of any Borrower, any of the General Partners, any Second Tier Partner, any of the Third Tier Partners, any Guarantor, or any of their Restricted Subsidiaries or Unrestricted Subsidiaries at the time construction commences.

Third Tier Partners.  Collectively, TWC Commercial Properties and TWC Commercial Properties, LLC, a Texas limited liability company as the general partners of TWCPC Holdings and TWC Land Development and TWC Land Development, LLC, a Texas limited liability company, as the general partners of TWLDC Holdings.

Title Insurance Company.  Stewart Title Company of Montgomery County, Inc. or another title insurance company or companies or title agent approved by the Agent.

Total Commitment.  The sum of the Commitments of the Lenders, as in effect from time to time.  As of the date of this Agreement, the Total Commitment is Two Hundred Fifty Million and No/100 Dollars ($250,000,000.00).  The Total Commitment may decrease in accordance with §2.3.

Total Debt Ratio.  As of any Quarterly Measurement Date, the ratio of (a) the aggregate Total Indebtedness of the Borrowers and their respective Restricted Subsidiaries to (b) Total Market Value Capitalization of the Borrowers.

Total Indebtedness.  See §9.1(a).

Total Market Value Capitalization.  At any time the sum of (a) an amount equal to the total value of the Borrowing Base Assets as determined for the purposes of computing the Borrowing Base at such time (without reference to any percentage advance rate), plus (b) the Appraised Value as most recently determined hereunder (or if the Appraised Value has not been determined, the historic cost (including construction in progress and land value)) of Income Producing Properties that are owned by Commercial Company or Land Company but do not constitute Borrowing Base Assets other than Build-To-Suit Properties (or in the event that such

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property is owned by a direct or indirect Restricted Subsidiary of Commercial Company or Land Company, then a percentage of such Appraised Value or cost, as applicable, equal to the percentage that Commercial Company’s or Land Company’s Partial Interest bears to the entire equity interest in such property), plus (c) the historic cost (including land value) of Build-To-Suit Properties owned by Commercial Company or Land Company which do not constitute Borrowing Base Assets (or in the event that such property is owned by a direct or indirect Restricted Subsidiary of Commercial Company or Land Company, then a percentage of such cost equal to the percentage that Commercial Company’s or Land Company’s Partial Interest bears to the entire equity interest in such property), plus (d) for each Partial Interest, an amount equal to the product obtained by multiplying (x) (i) the product obtained by multiplying (A) the sum of the historic cost of each Income Producing Property underlying the Partial Interest by (B) 0.70, by (y) the Partial Interest (expressed as a percentage) (but not less than zero).  Notwithstanding the foregoing, any property described in clauses (a), (b), (c) and (d) above that is security for any Non-Recourse Indebtedness in the event that the Non-Recourse Indebtedness secured by such asset exceeds fifty-five percent (55%) of the Adjusted Value of such asset, shall be excluded for the purposes of determining Total Market Value Capitalization.

Total Revolving Credit Commitment.  The sum of the Revolving Credit Commitments of the Revolving Credit Lenders, as in effect from time to time.  As of the date of this Agreement, the Total Revolving Credit Commitment is One Hundred Twenty-Five Million and No/100 Dollars ($125,000,000.00).  The Total Revolving Credit Commitment may decrease in accordance with §2.3.

Total Secured Term Loan Commitment.  The sum of the Secured Term Loan Commitments of the Secured Term Loan Lenders, as in effect from time to time.  As of the date of this Agreement, the Total Secured Term Loan Commitment is One Hundred Twenty-Five Million and No/100 Dollars ($125,000,000.00).

Tri-Party Agreement.  An agreement among the Agent, the Borrowers and the Title Insurance Company providing for the execution by the Title Insurance Company on behalf of the Agent of releases and other consents pursuant to §5.5, as the same may be modified or amended, such agreement to be in form and substance satisfactory to Agent.

TWC Commercial Properties.  TWC Commercial Properties, LP, a Delaware limited partnership.

TWC Land Development.  TWC Land Development, LP, a Delaware limited partnership.

TWCPC Holdings.  TWCPC Holdings, L.P., a Texas limited partnership.

TWCPC Holdings GP.  TWCPC Holdings GP, L.L.C., a Texas limited liability company.

TWLDC Holdings.  TWLDC Holdings, L.P., a Texas limited partnership.

TWLDC Holdings GP.  TWLDC Holdings GP, L.L.C., a Texas limited liability company.

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Type.  As to any Revolving Credit Loan or Secured Term Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

UCC.  The Uniform Commercial Code as from time to time in effect in the State of Texas.

Undeveloped Commercial Land.  Land designated for commercial use under the Master Plan of the Woodlands Project, but not Developed Commercial Land.

Undeveloped Residential Land.  Land designated for residential or institutional use, schools, churches, nurseries or day care centers or designated for gas stations, service stations or similar retail use or apartment use and other commercial uses designated as part of the Residential Land under the applicable Master Plan of the Woodlands Project, but not Developed Residential Land.

Unrestricted Cash and Cash Equivalents.  As of any date of determination, the sum of (a) the aggregate amount of Unrestricted Cash and (b) the aggregate amount of Unrestricted Cash Equivalents (valued at fair market value).  As used in this definition, “Unrestricted” means the specified asset is not subject to any escrow, reserves or Liens or claims of any kind in favor of any Person.

Unrestricted Subsidiaries.  Any corporation, association, partnership, limited liability company, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through a Person or Persons an ownership interest but which is not a Restricted Subsidiary or which a Borrower elects to be an Unrestricted Subsidiary.

Vertical Commercial Improvements.  Improvements to the Commercial Land or Residential Land, as applicable (which may include improvements to be used for multifamily rental housing), which are intended to be income-producing operating properties upon completion, rising vertically from such land together with any site work and grading performed on the Commercial Land or Residential Land, as applicable, in connection therewith.

Vertical Development Costs.  The aggregate amount of all historic costs (including land at its Adjusted Value) of Properties under Construction, less the amount of such costs paid for through any date of determination from proceeds of any financing secured by the applicable Properties under Construction.

Voting Interests.  Stock or similar ownership interests of any class or classes (however designated), the holders of which are at the time entitled, as such holders, (a) to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, partnership, trust or other business entity involved, or (b) to control, manage, or conduct the business of the corporation, partnership, association, trust or other business entity involved.

Waterway Project.  A planned approximately 500,000 rentable square foot Class A office building to be located at 10 Waterway Avenue, The Woodlands, Texas.

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Waterway Square Garage.  An approximately 1,942 space parking garage located off Lake Robbins Drive between Fountains Plaza & Woodloch Court in The Woodlands, Texas.

Waterway Square Hotel.  A planned hotel, including approximately 336 rooms, 27 meeting rooms and bar.

Woodlands.  The Woodlands Corporation.

Woodlands Operating.  The Woodlands Operating Company, L.P.

Woodlands Operating Distributions.  A Distribution made by The Woodlands Operating Company, L.P. to the partners or other beneficial owners of The Woodlands Operating Company, L.P.

Woodlands Operating Payments.  The sum of (a) the amount of all Distributions made by Woodlands Operating to the partners or other beneficial owners of Woodlands Operating during any period, plus (b) the amount of any Hospitality Management Fees paid during any period.

Woodlands Project.  The project commonly known as The Woodlands and described in the Master Plan.

§1.2                        Rules of Interpretation.

(a)                                 A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Agreement.

(b)                                 The singular includes the plural and the plural includes the singular.

(c)                                  A reference to any law includes any amendment or modification to such law.

(d)                                 A reference to any Person includes its permitted successors and permitted assigns.

(e)                                  Accounting terms not otherwise defined herein have the meanings assigned to them by Generally Accepted Accounting Principles applied on a consistent basis by the accounting entity to which they refer.

(f)                                   The words “include,” “includes” and “including” are not limiting.

(g)                                  The words “approval” and “approved” as the context so determines, means an approval in writing given to the party seeking approval after full and fair disclosure to the party giving approval of all material facts necessary in order to determine whether approval should be granted.

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(h)                                 All terms not specifically defined herein or by Generally Accepted Accounting Principles, which terms are defined in the Uniform Commercial Code as in effect in the State of Texas, have the meanings assigned to them therein.

(i)                                     Reference to a particular “§” refers to that section of this Agreement unless otherwise indicated.

(j)                                    The words “herein,” “hereof,” “hereunder” and words of like import shall refer to this Agreement as a whole and not to any particular section or subdivision of this Agreement.

(k)                                 In the event of any change in Generally Accepted Accounting Principles after the date hereof or any other change in accounting procedures pursuant to §7.3 which would affect the computation of any financial covenant, ratio or other requirement set forth in any Loan Document, then upon the request of Borrower or Agent, the Borrower, the Guarantors, the Agent and the Lenders shall negotiate promptly, diligently and in good faith in order to amend the provisions of the Loan Documents such that such financial covenant, ratio or other requirement shall continue to provide substantially the same financial tests or restrictions of the Borrower as in effect prior to such accounting change, as determined by the Majority Lenders in their good faith judgment.  Until such time as such amendment shall have been executed and delivered by the Borrower, the Guarantors, the Agent and the Majority Lenders, such financial covenants, ratio and other requirements, and all financial statements and other documents required to be delivered under the Loan Documents, shall be calculated and reported as if such change had not occurred.

§1.3                        Amendment and Restatement.  In order to facilitate the amendment and restatement of the Original Credit Agreement, certain lenders that were a party to the Original Credit Agreement are no longer continuing as Lenders under this Agreement (the “Exiting Lenders”), and certain new lenders are becoming a party to this Agreement as Lenders.  Contemporaneously with the execution of this Agreement, the Exiting Lenders shall be deemed to have assigned their Commitments under the Original Credit Agreement to the Lenders under this Agreement, and the Exiting Lenders shall be paid all principal, interest and fees due to them in connection therewith.  The Revolving Credit Commitments and the Secured Term Loan Commitments shall be allocated among the Lenders a party to this Agreement in accordance with their respective Revolving Credit Commitment Percentages and their Secured Term Loan Commitment Percentages.  The foregoing is done as an accommodation to the Borrowers, the Exiting Lenders and the Lenders, and shall be deemed to have occurred with the same force and effect as if such assignments were evidenced by the applicable Assignment and Acceptance Agreements (as defined in the Original Credit Agreement), and no other documents shall be, or shall be required to be, executed in connection therewith.

§2.                               THE REVOLVING CREDIT FACILITY

§2.1                        Commitment to Lend Revolving Credit Loans.  Subject to the terms and conditions set forth in this Agreement, each of the Revolving Credit Lenders severally agrees to lend to Land Company, and Land Company may borrow (and repay and reborrow) from time to time between the date hereof and the Maturity Date, upon notice by Land Company to the Agent

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given in accordance with §2.6, such sums as are requested by Land Company for the purposes set forth in §7.11 up to the lesser of (a) a maximum aggregate principal amount outstanding (after giving effect to all amounts requested) at any one time equal to such Revolving Credit Lender’s Revolving Credit Commitment and (b) such Revolving Credit Lender’s Revolving Credit Commitment Percentage of the sum of (i) the Borrowing Base minus (ii) the amount of all outstanding or requested Commercial Company Secured Term Loans and Land Company Secured Term Loans; provided, that, in all events no Default or Event of Default shall have occurred and be continuing and the Borrowers shall be in compliance with all covenants as required pursuant to §2.6(ii); and provided, further, that the outstanding principal amount of the Revolving Credit Loans (after giving effect to all amounts requested) shall not at any time exceed the Total Revolving Credit Commitment.  The Revolving Credit Loans shall be made pro rata in accordance with each Revolving Credit Lender’s Revolving Credit Commitment Percentage.  Each request for a Revolving Credit Loan hereunder shall constitute a representation and warranty by Land Company that all of the conditions set forth in §10 and §11, in the case of the initial Revolving Credit Loan, and §11, in the case of all other Revolving Credit Loans, have been satisfied on the date of such request.  No Revolving Credit Lender shall have any obligation to make Revolving Credit Loans to Land Company in the maximum aggregate principal amount outstanding of more than the amount of its Revolving Credit Commitment.

§2.2                        Unused Fee.  The Borrowers agree to pay to the Agent for the accounts of the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages an unused fee calculated at the rate per annum set forth below on the average daily amount by which the Revolving Credit Commitment from time to time exceeds the outstanding principal amount of Revolving Credit Loans during each calendar quarter or portion thereof commencing on the date hereof and ending on the Maturity Date.  The unused fee shall be calculated for each day based on the ratio (expressed as a percentage) of (a) the average daily amount of the outstanding principal amount of the Revolving Credit Loans during such quarter to (b) the Revolving Credit Commitment, and shall be payable based upon the ratios set forth below:

The unused fee shall be payable quarterly in arrears on the first day of each calendar quarter for the immediately preceding calendar quarter or portion thereof, or on any earlier date on which the Revolving Credit Commitment shall terminate as provided in §2.3, with a final payment on the Maturity Date.  Any payment due under this §2.2 shall be prorated for any partial calendar quarter.

§2.3                        Optional Reduction of Revolving Credit Commitment.  Land Company shall have the right at any time and from time to time upon three Business Days’ prior written notice to the Agent to reduce by $5,000,000.00 or an integral multiple of $500,000.00 in excess thereof (provided that in no event shall the aggregate Revolving Credit Commitment be reduced to an

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amount less than $25,000,000.00) or to terminate entirely the unborrowed portion of the Revolving Credit Commitment, whereupon the Revolving Credit Commitment of the Revolving Credit Lenders shall be reduced pro rata in accordance with their respective Revolving Credit Commitment Percentages of the amount specified in such notice or, as the case may be, terminated, any such reduction to be without penalty.  Promptly after receiving any notice of Land Company delivered pursuant to this §2.3, the Agent will notify the Revolving Credit Lenders of the substance thereof.  Upon the effective date of any such termination in full, the Borrowers shall pay to the Agent for the respective accounts of the Revolving Credit Lenders the full amount of any unused fee under §2.2 then accrued.  No reduction or termination of the Revolving Credit Commitment may be reinstated.  Any reduction of the Revolving Credit Commitment pursuant to this Agreement shall be allocated pro rata among the Revolving Credit Lenders in accordance with their Revolving Credit Commitment Percentages.

§2.4                        Evidence of Debt.  The indebtedness of the Borrowers resulting from the Loans made by each Lender from time to time shall be evidenced by one or more accounts or records maintained by such Lender and the Agent in the ordinary course of business, including, without limitation, the amounts of principal and interest payable and paid to such Lender from time to time hereunder.  The Borrowers hereby irrevocably authorize Agent and the Lenders to make, or cause to be made, at or about the time of the Drawdown Date of any Loan or at the time of receipt of any payment thereof, an appropriate notation on Agent’s and the Lender’s records reflecting the making of such Loan or (as the case may be) the receipt of such payment.  The Agent shall maintain accounts or records in accordance with its usual practice in which it shall record: (i) the date and the amount of each Loan made hereunder, the Type of Loan and, if appropriate, 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 each Lender hereunder, and (iii) the amount of any sum received by the Agent hereunder from the Borrowers and each Lender’s share thereof.  The accounts or records maintained by the Agent and each Lender shall be prima facie evidence of the existence and amounts of the Obligations recorded therein and shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrowers and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder or under the Notes, if any, to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Agent in respect of such matters, the accounts and records of the Agent shall control in the absence of manifest error.  The Borrowers agree that upon the request of any Lender made through the Agent (whether for purposes of pledge, enforcement or otherwise), the Borrowers shall promptly execute and deliver to such Lender (through the Agent) a Revolving Credit Note, a Commercial Company Secured Term Loan Note and/or a Land Company Secured Term Loan Note, as applicable, payable to the order of such Lender, which shall evidence such Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its Notes and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.  All references to Notes in the Loan Documents shall mean Notes, if any, to the extent issued hereunder.  By delivery of this Agreement and any Revolving Credit Note, Commercial Company Secured Term Loan Note and/or a Land Company Secured Term Loan Note, there shall not be deemed to have occurred, and there has not otherwise occurred, any payment, satisfaction or novation of the Indebtedness evidenced by the Original Credit Agreement, the “Revolving Credit Notes” and the “Secured Term Loan Notes” described in the

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Original Credit Agreement, which Indebtedness is instead allocated among the Revolving Credit Lenders and the Secured Term Loan Lenders as of the date hereof in accordance with their respective Revolving Credit Commitment Percentages, Commercial Company Secured Term Loan Commitment Percentages and Land Company Secured Term Loan Commitment Percentages, and is evidenced by this Agreement and any Revolving Credit Notes, Commercial Company Secured Term Loan Notes and Land Company Secured Term Loan Notes, and the Revolving Credit Lenders and the Secured Term Loan Lenders shall as of the date hereof make such adjustments to the outstanding Revolving Credit Loans and Secured Term Loans of such Revolving Credit Lenders and Secured Term Loan Lenders so that such outstanding Revolving Credit Loans and Secured Term Loans are consistent with their respective Revolving Credit Commitment Percentages and Secured Term Loan Commitment Percentages.  By execution hereof, the Lenders waive payment of any prepayment fees payable to such Lenders, if any, under the Original Credit Agreement.

§2.5                        Interest on Revolving Credit Loans.

(a)                                 Each Revolving Credit LIBOR Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the date on which such Revolving Credit LIBOR Rate Loan is converted to a Revolving Credit Base Rate Loan from a Revolving Credit LIBOR Rate Loan at the rate per annum equal to the sum of (i) the LIBOR Rate plus (ii) two and three quarters of one percent (2.75%).

(b)                                 Each Revolving Credit Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the date on which such Revolving Credit Base Rate Loan is converted to a Revolving Credit LIBOR Rate Loan from a Revolving Credit Base Rate Loan at a rate per annum equal to the sum of (i) the Base Rate plus (ii) one and one quarter of one percent (1.25%).

(c)                                  The Borrowers promise to pay interest on each Revolving Credit Loan in arrears on each Interest Payment Date with respect thereto.

§2.6                        Requests for Revolving Credit Loans.  Land Company (i) shall notify the Agent of a potential request for a Revolving Credit Loan as soon as possible prior to Land Company’s proposed Drawdown Date, and (ii) shall give to the Agent written notice in the form of Exhibit C-2 hereto (or telephonic notice confirmed in writing in the form of Exhibit C-2 hereto) of each Revolving Credit Loan requested hereunder (a “Loan Request”) no later than 10:00 a.m. three (3) Business Days prior to the proposed Drawdown Date.  The Agent shall promptly notify each of the Revolving Credit Lenders following the receipt of a Loan Request, but in any event not less than two (2) Business Days prior to the proposed Drawdown Date.  Land Company shall not make a Loan Request more frequently than five (5) times each month.  Each such notice shall specify with respect to the requested Revolving Credit Loan the proposed principal amount, Drawdown Date and Type (if applicable).  Each such notice shall also contain (i) a statement as to the purpose for which such advance shall be used (which purpose shall be in accordance with the terms of §7.11), and (ii) a certification by the Principal Financial Officer of each Borrower that the Borrowers are and will be in compliance with all covenants under the Loan Documents after giving effect to the making of such Revolving Credit Loan.  Except as provided in this §2.6, each such Loan Request shall be irrevocable and binding on Land Company and shall obligate

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Land Company to accept the Revolving Credit Loan requested from the Revolving Credit Lenders on the proposed Drawdown Date, provided that, in addition to Land Company’s other remedies against any Revolving Credit Lender which fails to advance its proportionate share of a requested Revolving Credit Loan, such Loan Request may be revoked by Land Company by notice received by the Agent no later than the Drawdown Date if any Revolving Credit Lender fails to advance its proportionate share of the requested Revolving Credit Loan in accordance with the terms of this Agreement, provided further that Land Company shall be liable in accordance with the terms of this Agreement to any Revolving Credit Lender which is prepared to advance its proportionate share of the requested Revolving Credit Loan for any costs, expenses or damages incurred by such Revolving Credit Lender as a result of Land Company’s election to revoke such Loan Request.  Nothing herein shall prevent Land Company from seeking recourse against any Revolving Credit Lender that fails to advance its proportionate share of a requested Revolving Credit Loan as required by this Agreement.  Land Company may without cost or penalty revoke a Loan Request by delivering notice thereof to each of the Revolving Credit Lenders no later than 10:00 a.m. two (2) Business Days prior to the Drawdown Date.  Each Loan Request shall be for a minimum aggregate amount of $1,000,000 or an integral multiple of $100,000 in excess thereof.

§2.7                        Funds for Revolving Credit Loans.

(a)                                 Not later than 2:00 p.m. (Atlanta time) on the proposed Drawdown Date of any Revolving Credit Loans, each of the Revolving Credit Lenders will make available to the Agent, at the Agent’s Head Office, in immediately available funds, the amount of such Revolving Credit Lender’s Revolving Credit Commitment Percentage of the amount of the requested Revolving Credit Loans which may be disbursed pursuant to §2.1.  Upon receipt from each Revolving Credit Lender of such amount, and upon receipt of the documents required by §10 and §11 and the satisfaction of the other conditions set forth therein, to the extent applicable, the Agent will make available to Land Company the aggregate amount of such Revolving Credit Loans made available to the Agent by the Revolving Credit Lender by promptly crediting such amount to the account of Land Company maintained at the Agent’s Head Office.  The failure or refusal of any Revolving Credit Lender to make available to the Agent at the aforesaid time and place on any Drawdown Date the amount of its Revolving Credit Commitment Percentage of the requested Revolving Credit Loans to the extent it is obligated to fund such Revolving Credit Loan hereunder shall not relieve any other Revolving Credit Lender from its several obligation hereunder to make available to the Agent the amount of such other Revolving Credit Lender’s Revolving Credit Commitment Percentage of any requested Revolving Credit Loans, including any additional Revolving Credit Loans that may be requested by Land Company subject to the terms and conditions hereof to provide funds to replace those not advanced by the Revolving Credit Lender so failing or refusing, provided that Land Company may by notice received by the Agent no later than the Drawdown Date refuse to accept any Revolving Credit Loan which is not fully funded in accordance with Land Company’s Loan Request subject to the terms of §2.6; provided further that no Revolving Credit Lender shall be obligated to advance any amount in excess of the limits set forth in §2.1.  In the event of any such failure or refusal, the Revolving Credit Lenders not so failing or refusing shall be entitled to a priority position as against the Revolving Credit Lender or Revolving Credit Lenders so failing or refusing for such Revolving Credit Loans as provided in §2C.

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(b)                                 Unless Agent shall have been notified by any Revolving Credit Lender prior to the applicable Drawdown Date that such Revolving Credit Lender will not make available to Agent such Revolving Credit Lender’s pro rata share of a proposed Revolving Credit Loan, Agent may in its discretion assume that such Revolving Credit Lender has made such Revolving Credit Loan available to Agent in accordance with the provisions of this Agreement and Agent may, if it chooses, in reliance upon such assumption make such Revolving Credit Loan available to Land Company, and such Revolving Credit Lender shall be liable to the Agent for the amount of such advance.  If such Revolving Credit Lender does not pay such corresponding amount upon the Agent’s demand therefor, the Agent will promptly notify the Borrowers, and, if such amount was actually advanced to the Borrowers, the Borrowers shall promptly pay such corresponding amount to the Agent.  The Agent shall also be entitled to recover from the Revolving Credit Lender or the Borrowers, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the applicable Borrower to the date such corresponding amount is recovered by the Agent at a per annum rate equal to (i) from the Borrowers at the applicable rate for such Revolving Credit Loan or (ii) from a Revolving Credit Lender at the Federal Funds Effective Rate plus one-half of one percent (0.5%).

§2A.                      THE SECURED TERM LOAN FACILITY

§2A.1               Commitment to Lend Commercial Company Secured Term Loan.  Subject to the terms and conditions set forth in this Agreement, each of the Secured Term Loan Lenders severally agrees to lend to Commercial Company on the Closing Date such Secured Term Loan Lender’s Commercial Company Secured Term Loan Commitment Percentage of the Commercial Company Secured Term Loan Commitment.

§2A.1A      Commitment to Lend Land Company Secured Term Loan.  Subject to the terms and conditions set forth in this Agreement, each of the Secured Term Loan Lenders severally agrees to lend to Land Company on the Closing Date such Secured Term Loan Lender’s Land Company Secured Term Loan Commitment Percentage of the Land Company Secured Term Loan Commitment.

§2A.2               Interest on Secured Term Loans.

(a)                                 Each Secured Term LIBOR Rate Loan (whether of Commercial Company or Land Company) shall bear interest for the period commencing with the Drawdown Date thereof and ending on the date on which such Secured Term LIBOR Rate Loan is converted to a Secured Term Base Rate Loan at a rate per annum equal to the sum of (i) the LIBOR Rate plus (ii) two and three quarters of one percent (2.75%).

(b)                                 Each Secured Term Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the date on which such Secured Term Base Rate Loan is converted to a Secured Term LIBOR Rate Loan at a rate per annum equal to the sum of (i) the Base Rate plus (ii) one and one quarter of one percent (1.25%).

(c)                                  The Borrowers promise to pay interest on the Secured Term Loans in arrears on each Interest Payment Date with respect thereto.

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§2B.                      INTENTIONALLY OMITTED.

§2C.                      DEFAULTING LENDERS.

(a)                                 If for any reason any Lender shall be a Defaulting Lender, then, in addition to the rights and remedies that may be available to the Agent or the Borrowers under this Agreement or applicable law, such Defaulting Lender’s right to participate in the administration of the Loans, this Agreement and the other Loan Documents, including without limitation, but subject to a Defaulting Lender’s rights pursuant to §27, any right to vote in respect of, to consent to or to direct any action or inaction of the Agent, shall be suspended during the pendency of such failure or refusal.  If a Lender is a Defaulting Lender because it has failed to make timely payment to the Agent of any amount required to be paid to the Agent hereunder (without giving effect to any notice or cure periods), in addition to other rights and remedies which the Agent or the Borrowers may have under the immediately preceding provisions or otherwise, the Agent shall be entitled to (i) collect interest from such Defaulting Lender on such delinquent payment for the period from the date on which the payment was due until the date on which the payment is made at the Federal Funds Effective Rate plus one-half of one percent (0.5%), (ii) withhold or setoff and to apply in satisfaction of the defaulted payment and any related interest, any amounts otherwise payable to such Defaulting Lender under this Agreement or any other Loan Document and (iii) bring an action or suit against such Defaulting Lender in a court of competent jurisdiction to recover the defaulted amount and any related interest.  Any amounts received by the Agent in respect of a Defaulting Lender’s Loans shall be applied as set forth in §2C(c).

(b)                                 Any Non-Defaulting Lender may, but shall not be obligated to, in its sole discretion, acquire all or a portion of a Defaulting Lender’s Commitments.  Any Lender desiring to exercise such right shall give written notice thereof to the Agent and the Borrowers no sooner than two (2) Business Days and not later than five (5) Business Days after such Defaulting Lender became a Defaulting Lender.  If more than one Lender exercises such right, each such Lender shall have the right to acquire an amount of such Defaulting Lender’s Commitments in proportion to the Commitments of the other Lenders exercising such right.  If after such fifth Business Day, the Lenders have not elected to purchase all of the Commitments of such Defaulting Lender, then the Borrowers (so long as no Default or Event of Default exists) or the Lenders may, by giving written notice thereof to the Agent, such Defaulting Lender and the other Lenders, demand that such Defaulting Lender assign its Commitments to an eligible assignee subject to and in accordance with the provisions of §18.1 for the purchase price provided for below.  No party hereto shall have any obligation whatsoever to initiate any such replacement or to assist in finding an eligible assignee.  Upon any such purchase or assignment, and any such demand with respect to which the conditions specified in §18.1 have been satisfied, the Defaulting Lender’s interest in the Loans and its rights hereunder (but not its liability in respect thereof or under the Loan Documents or this Agreement to the extent the same relate to the period prior to the effective date of the purchase) shall terminate on the date of purchase, and the Defaulting Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest to the purchaser or assignee thereof, including an appropriate Assignment and Acceptance Agreement.  The purchase price for the Commitments of a Defaulting Lender shall be equal to the amount of the principal balance of the Loans outstanding and owed by the Borrowers to the Defaulting Lender plus any accrued but unpaid interest thereon and accrued but

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unpaid fees.  Prior to payment of such purchase price to a Defaulting Lender, the Agent shall apply against such purchase price any amounts retained by the Agent pursuant to §2C(c).

(c)                                  Any payment of principal, interest, fees or other amounts received by the Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, or otherwise, and including any amounts made available to the Agent for the account of such Defaulting Lender pursuant to §13) shall be applied at such time or times as may be determined by the Agent as follows:  first, to the payment of any amounts owing by such Defaulting Lender to the Agent hereunder; second, as the Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Agent; third, if so determined by the Agent and the Borrowers, to be held in a non-interest bearing deposit account and released pro rata in order to satisfy obligations of such Defaulting Lender to fund Loans under this Agreement; fourth, to the payment of any amounts owing to the Agent or the Lenders as a result of any judgment of a court of competent jurisdiction obtained by the Agent or any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (i) such payment is a payment of the principal amount of any Revolving Credit Loans and (ii) such Revolving Credit Loans were made at a time when the conditions set forth in §10 and §11, to the extent required by this Agreement, were satisfied or waived, such payment shall be applied solely to pay the Revolving Credit Loans of all Non-Defaulting Lenders on a pro rata basis until such time as all Revolving Credit Loans are held by the Lenders pro rata in accordance with their Commitment Percentages, prior to being applied to the payment of any Revolving Credit Loans of such Defaulting Lender.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this §2.13(c) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto, and to the extent allocated to the repayment of principal of the Loan, shall not be considered outstanding principal under this Agreement.

(d)                                 Each Revolving Credit Lender that is a Defaulting Lender shall not be entitled to receive any facility unused fee pursuant to §2.2 for any period during which that Revolving Credit Lender is a Defaulting Lender.  With respect to any facility unused fee not required to be paid to any Defaulting Lender, the Borrowers shall not be required to pay any remaining amount of any such fee.

(e)                                  If the Borrowers (so long as no Default or Event of Default exists) and the Agent agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Agent will so notify the parties hereto, whereupon as of the date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Agent may determine to be necessary to cause the Loans to be held on a pro rata

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basis by the Lenders in accordance with their Commitments, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while such Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender.

§3.                               REPAYMENT OF THE LOANS

§3.1                        Stated Maturity.  The Borrowers promise to pay on the Maturity Date (as the same may be extended pursuant to §4.15), and there shall become absolutely due and payable on the Maturity Date, all of the Loans outstanding on such date, together with any and all accrued and unpaid interest thereon.

§3.2                        Mandatory Prepayments.

(a)                                 If at any time the aggregate outstanding principal amount of the Revolving Credit Loans exceeds the Total Revolving Credit Commitment, or the aggregate Secured Term Loans exceeds the Total Secured Term Loan Commitment, or the aggregate outstanding principal amount of the Revolving Credit Loans and the Secured Term Loans exceeds the Borrowing Base, then the Borrowers shall immediately pay the amount of such excess to the Agent for the respective accounts of the Revolving Credit Lenders and the Secured Term Loan Lenders for application to the Revolving Credit Loans and the Secured Term Loans.

(b)                                 Without limiting the terms of this Agreement, in the event that a Change of Control shall occur and all of the Lenders shall not have consented in writing thereto, then the Revolving Credit Lenders shall be relieved of all obligations to make Revolving Credit Loans and the Borrowers shall immediately pay to the Agent for the respective accounts of the Revolving Credit Lenders and the Secured Term Loan Lenders for application to the Revolving Credit Loans and the Secured Term Loans all of the Revolving Credit Loans and Secured Term Loans outstanding on such date, together with any and all accrued and unpaid interest thereon.

§3.3                        Optional Prepayments.  The Borrowers shall have the right, at their election, to prepay the outstanding amount of the applicable Revolving Credit Loans or Secured Term Loans, as a whole or in part, at any time without penalty or premium except as otherwise provided herein.  The applicable Borrower shall give the Agent, no later than 10:00 a.m., Atlanta time, at least three (3) Business Days prior written notice of any prepayment pursuant to this §3.3, in each case specifying the proposed date of payment of applicable Revolving Credit Loans or Secured Term Loans and the principal amount to be paid.

§3.4                        Partial Prepayments.  Each partial prepayment of the Loans under §3.3 shall be in the minimum amount of $5,000,000.00 or an integral multiple of $1,000,000.00 in excess thereof (unless the applicable Loan is being prepaid in full), and each partial prepayment of the Loans under §3.2 and §3.3 shall be applied, in the absence of instruction by the applicable Borrower, first to the principal of the Secured Term Loans and then to the principal of the Revolving Credit Loans, and within each category, first to the principal of Base Rate Loans and then to the

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principal of LIBOR Rate Loans.  Notwithstanding anything herein to the contrary (but subject to the terms of this sentence), all prepayments pursuant to §5.5 and §8.7 shall be applied first to the principal of the Secured Term Loans and then to the principal of the Revolving Credit Loans, and may be further allocated between the Commercial Company Secured Term Loans and the Land Company Secured Term Loans, as applicable, as specified in a notice to the Agent.

§3.5                        Effect of Prepayments.  Except as provided in this Agreement, amounts of the Revolving Credit Loans prepaid under §3.2, §3.3 and §3.4 prior to the Maturity Date may be reborrowed as provided in §2.  Any portion of the Secured Term Loan that is prepaid may not be reborrowed.  Except as otherwise expressly provided herein, all payments shall first be applied to accrued but unpaid interest and then to principal as provided above.

§4.                               CERTAIN GENERAL PROVISIONS

§4.1                        Conversion Options; Number of LIBOR Contracts.

(a)                                 The Borrowers may elect from time to time to convert any of their outstanding Secured Term Loans or Revolving Credit Loans to a Secured Term Loan or Revolving Credit Loan, respectively, of another Type and such Secured Term Loan or Revolving Credit Loan shall thereafter bear interest as a Base Rate Loan or a LIBOR Rate Loan, as applicable; provided that (i) with respect to any such conversion of a LIBOR Rate Loan to a Base Rate Loan, the Borrowers shall give the Agent at least three (3) Business Days’ prior written notice of such election, and such conversion shall only be made on the last day of the Interest Period with respect to such LIBOR Rate Loan; (ii) with respect to any such conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrowers shall give the Agent at least three (3) LIBOR Business Days’ prior written notice of such election and the Interest Period requested for such Loan; the principal amount of the Loan so converted shall be in a minimum aggregate amount of $2,000,000 or an integral multiple of $100,000 in excess thereof; and (iii) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing.  All or any part of the outstanding Secured Term Loans or Revolving Credit Loans of any Type may be converted as provided herein, provided that no partial conversion shall result in a Secured Term Base Rate Loan or Revolving Credit Base Rate Loan in an aggregate principal amount of less than $1,000,000 or a Secured Term LIBOR Rate Loan or a Revolving Credit LIBOR Rate Loan in an aggregate principal amount of less than $2,000,000 and that the aggregate principal amount of each Loan shall be an integral multiple of $100,000.  On the date on which such conversion is being made, each Lender shall take, to the extent it deems it necessary to do so, such action as is necessary to transfer its Commitment Percentage of such Loans to its Domestic Lending Office or its LIBOR Lending Office, as the case may be.  Each Conversion Request relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by the Borrowers.

(b)                                 Any Secured Term Loan or Revolving Credit Loan may be continued as such Type upon the expiration of an Interest Period with respect thereto by compliance by the Borrowers with the terms of §4.1; provided that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, but shall be automatically converted to a Base Rate Loan on the last day of the Interest Period relating thereto ending during the continuance of any Default or Event of Default.

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(c)                                  In the event that the Borrowers do not notify the Agent of their election hereunder with respect to any Loan, such Loan shall be automatically converted to a Base Rate Loan at the end of the applicable Interest Period.

(d)                                 There shall be no more than ten (10) LIBOR Rate Loans outstanding at any one time.

§4.2                        Closing Fees.  The Borrowers shall pay to KeyBank certain fees for services rendered or to be rendered in connection with the Loan as provided pursuant to that certain fee letter between the Borrowers and KeyBank (the “Agreement Regarding Fees”).  All such fees shall be solely for the account of KeyBank as provided in such agreement.

§4.3                        Agent Fee.  The Borrowers shall pay to the Agent, for the Agent’s own account, a non-refundable Agent’s fee pursuant to the Agreement Regarding Fees.  The Agent’s fee shall be payable quarterly in arrears on the first day of each calendar quarter for the preceding calendar quarter or portion thereof.  The Agent’s fee shall also be paid upon the Maturity Date or earlier termination of the Commitment.  The Agent’s fee for any partial quarter shall be prorated.

§4.4                        Funds for Payments.

(a)                                 All payments of principal, interest, unused fees, Agent’s fees, closing fees and any other amounts due hereunder or under any of the other Loan Documents shall be made to the Agent, for the respective accounts of the Lenders and the Agent, as the case may be, at the Agent’s Head Office, no later than 1:00 p.m. (Atlanta time) on the day when due, in each case in lawful money of the United States in immediately available funds.

(b)                                 All payments by the Borrowers hereunder and under any of the other Loan Documents shall be made without set off or counterclaim and free and clear of and without deduction for any taxes (other than any Excluded FATCA Tax), levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrowers are compelled by law to make such deduction or withholding.  If any such obligation is imposed upon the Borrowers with respect to any amount payable by them hereunder or under any of the other Loan Documents, the Borrowers will pay to the Agent, for the account of the Lenders or (as the case may be) the Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Lenders or the Agent to receive the same net amount which the Lenders or the Agent would have received on such due date had no such obligation been imposed upon the Borrowers.  If any such Lender, to the extent it may lawfully do so, fails to deliver the forms or other documentation required by this Agreement, then the Agent may withhold from any payments to be made to such Lender under any of the Loan Documents such amounts as are required by the Code.  If any governmental authority asserts that the Agent or the Borrowers (as to the Borrowers, with respect to Excluded FATCA Taxes only) did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify the Agent and/or the Borrowers (as to the Borrowers, with respect to Excluded FATCA Taxes only) therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the

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amounts payable to the Agent or by the Borrowers (as to the Borrowers, with respect to Excluded FATCA Taxes only) under this section, and costs and expenses (including all reasonable fees and disbursements of any law firm or other external counsel and the allocated cost of internal legal services and all disbursements of internal counsel) of the Agent and the Borrowers (as to the Borrowers, with respect to Excluded FATCA Taxes only).  The obligation of the Lenders under this section shall survive the termination of the Commitments, repayment of all Obligations and the resignation or replacement of the Agent.  Without limitation of §4.4(b), if a payment made to a Lender under any Loan Document would be subject to United States federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting and document provision requirements of FATCA (including those contained in §1471(b) or §1472(b) of the Code, as applicable), such Lender shall deliver to the Borrowers and the Agent, at the time or times prescribed by law and at such time or times reasonably requested by either, such documentation prescribed by applicable law (including as prescribed by §1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrowers and/or the Agent as may be necessary for the Borrowers and the Agent to comply with their obligations under FATCA, to determine that such Lender has or has not complied with such Lender obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment.  The Borrowers will deliver promptly to the Agent certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Borrowers hereunder or under such other Loan Document.

(c)                                  Each Lender organized under the laws of a jurisdiction outside the United States, if requested in writing by the Borrowers (but only so long as such Lender remains lawfully able to do so), shall provide the Borrowers with such duly executed form(s) or statement(s) which may, from time to time, be prescribed by law and, which, pursuant to applicable provisions of (i) an income tax treaty between the United States and the country of residence of such Lender, (ii) the Code, or (iii)any applicable rules or regulations in effect under (i) or (ii) above, indicates the withholding status of such Lender; provided that nothing herein (including without limitation the failure or inability to provide such form or statement) shall relieve the Borrowers of their obligations under §4.4(b).  In the event that the Borrowers shall have delivered the certificates or vouchers described above for any payments made by the Borrowers and such Lender receives a refund of any taxes paid by the Borrowers pursuant to §4.4(b), such Lender will pay to the Borrowers the amount of such refund promptly upon receipt thereof; provided that if at any time thereafter such Lender is required to return such refund, the Borrowers shall promptly repay to such Lender the amount of such refund. In the event that any such Lender shall, after it becomes a Lender hereunder, become subject to withholding as described above (such Lender is hereinafter referred to as a “Withholding Lender”), then the Withholding Lender shall promptly notify the Agent and the Borrowers and the Borrowers shall have the one-time right as to such Withholding Lender, to be exercised by delivery of written notice delivered to the Agent and the Withholding Lender within thirty (30) days of receipt of such notice, to elect to cause the Withholding Lender to transfer its Commitment.  The Agent shall promptly notify the remaining Lenders that each of such Lenders shall have the right, but not the obligation, to acquire a portion of the Commitment, pro rata based upon their relevant Commitment Percentages, of the Commitment of the Withholding Lender (or if any of such Lenders does not elect to purchase its pro rata share, then to such remaining Lenders in such proportion as approved by the Agent).  In the event that the Lenders do not elect to acquire all of the Withholding Lender’s Commitment, then the Agent shall endeavor to obtain a new Lender to

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acquire such remaining Commitment.  Upon any such purchase of the Commitment of the Withholding Lender, the Withholding Lender’s interest in the Obligations and its rights hereunder and under the Loan Documents shall terminate at the date of purchase, and the Withholding Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest.  The purchase price for the Withholding Lender’s Commitment shall equal the principal balance of the Obligations outstanding and owed by Borrowers to the Withholding Lender, plus any and all accrued and unpaid interest and fees thereon (provided that the Borrowers may pay the amount of any interest or fees owed to such Withholding Lender).

§4.5                        Computations.  All computations of interest on the Loans and of other fees to the extent applicable shall be based on a 360-day year and paid for the actual number of days elapsed.  Whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension.  The outstanding amount of the Loans as reflected on the records of the Agent from time to time shall be considered prima facie evidence of such amount.

§4.6                        Inability to Determine LIBOR Rate.  In the event that at any time the Agent shall determine in the exercise of its good faith business judgment that adequate and reasonable methods do not exist for ascertaining the LIBOR Rate or the Agent shall reasonably determine that the LIBOR Rate will not accurately and fairly reflect the cost of the Lenders making or maintaining LIBOR Rate Loans for such Interest Period, the Agent shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrowers and the Lenders) to the Borrowers and the Lenders.  In such event (a) any Loan Request or Conversion Request then made with respect to such LIBOR Rate Loans shall be automatically withdrawn and shall be deemed a request for Base Rate Loans and (b) any such LIBOR Rate Loan will automatically become a Base Rate Loan, and the obligations of the Lenders to make LIBOR Rate Loans shall be suspended until the Agent determines in the exercise of its good faith business judgment that the circumstances giving rise to such suspension no longer exist, whereupon the Agent shall so notify the Borrowers and the Lenders.

§4.7                        Illegality.  Notwithstanding any other provisions herein, if any present or future law, regulation, treaty or directive or the interpretation or application thereof shall make it unlawful, or any central bank or other governmental authority having jurisdiction over a Lender or its LIBOR Lending Office shall assert that it is unlawful, for any Lender to make or maintain LIBOR Rate Loans, such Lender shall forthwith give notice of such circumstances to the Agent and the Borrowers and thereupon (a) the commitment of the Lenders to make LIBOR Rate Loans shall forthwith be suspended and (b) the LIBOR Rate Loans then outstanding shall be converted automatically to Base Rate Loans.  Notwithstanding the foregoing, before giving such notice, the applicable Lender shall designate a different lending office if such designation will void the need for giving such notice and will not, in the judgment of such Lender, be otherwise materially disadvantageous to such Lender.

§4.8                        Additional Interest.  If any LIBOR Rate Loan or any portion thereof is repaid or is converted to a Base Rate Loan for any reason on a date which is prior to the last day of the Interest Period applicable to such LIBOR Rate Loan, or if repayment of the Loans has been accelerated as provided in §12.1, the Borrowers will pay to the Agent upon demand for the

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account of the Lenders in accordance with their respective Commitment Percentages, in addition to any amounts of interest otherwise payable hereunder, any amounts required to compensate the Lenders for any losses, costs or expenses which may reasonably be incurred as a result of such payment or conversion.

§4.9                        Additional Costs, Etc..  Notwithstanding anything herein to the contrary, if any present or future applicable law, or any amendment or modification of present applicable law, which expression, as used herein, includes statutes, rules and regulations thereunder and legally binding interpretations thereof by any competent court or by any governmental or other regulatory body or official with appropriate jurisdiction charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to any Lender or the Agent by any central bank or other fiscal, monetary or other authority (whether or not having the force of law), shall:

(a)                                 subject any Lender or the Agent to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Agreement, the other Loan Documents, such Lender’s Commitment or the Loans (other than franchise taxes and taxes based upon or measured by the income or profits of such Lender or the Agent), or

(b)                                 materially change the basis of taxation (except for changes in taxes on income or profits) of payments to any Lender of the principal of or the interest on any Loans or any other amounts payable to any Lender under this Agreement or the other Loan Documents, or

(c)                                  impose or increase or render applicable any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law) against assets held by, or deposits in or for the account of, or loans by, or commitments of an office of any Lender, or

(d)                                 impose on any Lender or the Agent any other conditions or requirements with respect to this Agreement, the other Loan Documents, the Loans, such Lender’s Commitment, or any class of loans or commitments of which any of the Loans or such Lender’s Commitment forms a part; and the result of any of the foregoing is

(i)                                     to increase the cost to any Lender of making, funding, issuing, renewing, extending or maintaining any of the Loans or such Lender’s Commitment, or

(ii)                                  to reduce the amount of principal, interest or other amount payable to such Lender or the Agent hereunder on account of such Lender’s Commitment or any of the Loans, or

(iii)                               to require such Lender or the Agent to make any payment or to forego any interest or other sum payable hereunder, the amount of which payment or foregone interest or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by such Lender or the Agent from the Borrowers hereunder;

then, and in each such case, the Borrowers will, within fifteen (15) days of demand made by such Lender or (as the case may be) the Agent at any time and from time to time and as often as the occasion therefor may arise, pay to such Lender or the Agent such additional amounts as such

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Lender or the Agent shall determine in good faith to be sufficient to compensate such Lender or the Agent for such additional cost, reduction, payment or foregone interest or other sum.  Each Lender and the Agent in determining such amounts may use any reasonable averaging and attribution methods, generally applied by such Lender or the Agent.  Notwithstanding the foregoing, Borrowers shall not be required to compensate any Lender pursuant to this §4.9 for any increased costs or reductions incurred more than one hundred eighty (180) days prior to the date of such Lender’s demand.  Notwithstanding the foregoing, the Borrowers shall have the right, in lieu of making the payment referred to in this §4.9, to prepay the Loan of the applicable Lender within fifteen (15) days of such demand and avoid the payment of the amounts otherwise due under this §4.9, provided, however, that the Borrowers shall be required to pay together with such prepayment of the Loan all other costs, damages and expenses otherwise due under this Agreement as a result of such prepayment.

§4.10                 Capital Adequacy.  If after the date hereof any Lender reasonably determines that (a) the adoption of or change in any law, rule, regulation or guideline regarding capital or liquidity requirements for banks or bank holding companies or any change in the interpretation or application thereof by any governmental authority charged with the administration thereof, or (b) compliance by such Lender or its parent bank holding company with any guideline, request or directive of any such entity regarding capital or liquidity adequacy or any amendment or change in interpretation of any existing guideline, request or directive (whether or not having the force of law), has the effect of reducing the return on such Lender’s or such holding company’s capital as a consequence of such Lender’s commitment to make Loans hereunder to a level below that which such Lender or holding company could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such holding company’s then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount deemed by such Lender to be material, then such Lender may notify the Borrowers thereof.  The Borrowers agree to pay to such Lender the amount of such reduction in the return on capital as and when such reduction is determined, upon presentation by such Lender of a statement of the amount setting for the Lender’s calculation thereof.  In determining such amount, such Lender may use any reasonable averaging and attribution methods.  For purposes of §4.9 and §4.10, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, publications, orders, guidelines and directives thereunder or issued in connection therewith and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall be deemed to have been adopted and gone into effect after the date hereof regardless of when adopted, enacted or issued.

§4.11                 Indemnity of Borrowers.  THE BORROWERS AGREE TO INDEMNIFY EACH LENDER AND TO HOLD EACH LENDER HARMLESS FROM AND AGAINST ANY LOSS, COST OR EXPENSE THAT SUCH LENDER MAY SUSTAIN OR INCUR AS A CONSEQUENCE OF (A) DEFAULT BY THE BORROWERS IN PAYMENT OF THE PRINCIPAL AMOUNT OF OR ANY INTEREST ON ANY LIBOR RATE LOANS AS AND WHEN DUE AND PAYABLE, INCLUDING ANY SUCH LOSS OR EXPENSE ARISING FROM INTEREST OR FEES PAYABLE BY SUCH LENDER TO LENDERS OF FUNDS OBTAINED BY IT IN ORDER TO MAINTAIN ITS LIBOR RATE LOANS, OR (B) DEFAULT BY A BORROWER IN MAKING A BORROWING OR

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CONVERSION AFTER SUCH BORROWER HAS GIVEN (OR IS DEEMED TO HAVE GIVEN) A LOAN REQUEST, OR (C) DEFAULT BY THE BORROWERS IN MAKING THE PAYMENTS OR PERFORMING THEIR OBLIGATIONS UNDER §§4.9, 4.10 OR 4.12.  THE BORROWERS AGREE THAT THE INDEMNIFICATION OF LENDERS BY BORROWERS SET FORTH IN THIS §4.11 INCLUDES INDEMNIFICATION IN THE EVENT OR ORDINARY NEGLIGENCE ON THE PART OF LENDER BUT DOES NOT INCLUDE INDEMNIFICATION OF LENDER FOR LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  THIS INDEMNITY INCLUDES, BUT IS NOT LIMITED TO, THE EXPENSE OF REASONABLE ATTORNEYS’ FEES (INCLUDING THE REASONABLE AMOUNT OF ALLOCATED COST OF IN-HOUSE COUNSEL.)

§4.12                 Interest Following Default; Late Charge.  Following the occurrence and during the continuance of any Event of Default (after, as well as before, any judgment), and regardless of whether or not the Agent or the Lenders shall have accelerated the maturity of the Loans, all Loans shall bear interest payable on demand at a rate per annum equal to two percent (2%) above the rate that would otherwise be applicable at such time (the “Default Rate”), until all Obligations shall be paid in full, or if such rate shall exceed the maximum rate permitted by law, then at the maximum rate permitted by law.  In addition, the Borrowers shall pay a late charge equal to three percent (3%) of any amount of interest and/or principal payable on the Loans or any other amounts payable hereunder or under the Loan Documents, which amount is not paid within ten (10) days of the date when due (such late charge being applicable only to the amounts not paid within ten (10) days of the date when due).  Borrowers acknowledge that it would be extremely difficult or impracticable to determine the Lenders’ actual damages resulting from any late payment, Event of Default or prepayment, and the late charges and Default Rate described in this Agreement are reasonable estimates of those damages and do not constitute a penalty.  The imposition and payment of a late charge shall not constitute a waiver of the Lenders’ rights with respect to the default.

§4.13                 Certificate.  A certificate setting forth any amounts payable pursuant to §4.8, §4.9, §4.10, §4.11 or §4.12 and a brief explanation of such amounts which are due, submitted by any Lender or the Agent to the Borrowers, shall be conclusive in the absence of manifest error.

§4.14                 Limitation on Interest.

(a)                                 Notwithstanding anything in this Agreement or the other Loan Documents to the contrary, it is the intent of the Agent, the Lenders and the Borrowers to conform to and contract in strict compliance with all applicable usury laws from time to time in effect.  All agreements (including the Loan Documents) between Agent, the Lenders and the Borrowers (or any other party liable with respect to any indebtedness under the Loan Documents) are hereby limited by the provisions of this Section which shall override and control all such agreements, whether now existing or hereafter arising and whether written or oral.  In no way, nor in any event or contingency (including but not limited to prepayment, default, demand for payment, or acceleration of the maturity of any obligation), shall the interest taken, reserved, contracted for, charged or received under this Agreement, any other Loan Document, or otherwise, exceed the maximum nonusurious amount permissible under applicable law.  If, from any possible construction of this Agreement, any other Loan Document, or any other document, interest would otherwise be taken, reserved, contracted for, charged or payable in excess of the

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maximum nonusurious amount, any such construction shall be subject to the provisions of this Section and this Agreement, such other Loan Document, and such other document shall be automatically reformed and the interest taken, reserved, contracted for, charged or payable shall be automatically reduced to the maximum nonusurious amount permitted under applicable law, without the necessity of execution of any amendment or new document.  If any Lender shall ever receive anything of value which is interest or characterized as interest under applicable law and which would apart from this provision be in excess of the maximum lawful nonusurious amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Loans to it (in inverse order of maturity) and not to the payment of interest, or refunded to the Borrowers if and to the extent such amount which would have been excessive exceeds such unpaid principal.  The right to accelerate maturity of the Loans and the other Obligations does not include the right to accelerate any interest which has not otherwise accrued on the date of such acceleration, and the Agent and the Lenders do not intend to charge or receive any unearned interest in the event of acceleration.  All interest paid or agreed to be paid to the Lenders on the Loans shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full stated term (including any renewal or extension) of the Loans so that the amount of interest on account of the Loans does not exceed the maximum nonusurious amount permitted by applicable law.  As used in this Section, the term “applicable law” shall mean such laws as they now exist or may be changed or amended or come into effect in the future.  As used in this Section, the term “interest” includes all amounts that constitute, are deemed, or are characterized as interest under applicable law.

(b)                                 If at any time the interest rate (the “Stated Rate”) called for under this Agreement or any other Loan Document exceeds or would exceed the Highest Lawful Rate, the rate at which interest shall accrue hereunder or thereunder shall automatically be limited to the Highest Lawful Rate, and shall remain at the Highest Lawful Rate until the total amount of interest accrued equals the total amount of interest which would have accrued but for the operation of this sentence.  Thereafter, interest shall accrue at the Stated Rate unless and until the Stated Rate would again exceed the Highest Lawful Rate, in which case the immediately preceding sentence shall apply.

(c)                                  Borrowers hereby agree that as a condition precedent to any claim seeking usury penalties against Lenders, Borrowers will provide written notice to Agent, advising Agent in reasonable detail of the nature and amount of the violation, and Lenders shall have sixty (60) days after receipt of such notice in which to correct such usury violation, if any, by either refunding such excess interest to Borrowers or crediting such excess interest against the Loans and/or any other indebtedness then owing by Borrowers to Lenders.  To the extent that Lenders are relying on Chapter 303, as amended, of the Texas Finance Code to determine the Highest Lawful Rate, Lenders will utilize the weekly rate ceiling from time to time in effect as provided in such Chapter 303, as amended.  To the extent United States federal law permits a greater amount of interest than is permitted under Texas law, Lenders will rely on United States federal law instead of such Chapter 303, as amended, for the purpose of determining the Highest Lawful Rate.  Additionally, to the extent permitted by applicable law now or hereafter in effect, Lenders may, at Lenders’ option and from time to time, implement any other method of computing the maximum lawful rate under such Chapter 303, as amended, or under other applicable law by

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giving notice, if required, to Borrowers as provided by applicable law now or hereafter in effect.  This §4.14 will control all agreements between Borrowers, Agents and Lenders.

(d)                                 Borrowers and Lenders expressly agree that in no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving triparty accounts) apply to Revolving Credit Loans or to any advance of Revolving Credit Loans made pursuant to the terms of this Agreement.

§4.15                 Extension of Maturity Date.

(a)                                 Provided that no Default or Event of Default shall have occurred and be continuing, the Borrowers shall have two (2) consecutive options (the first option, the “First Extension Option”, the second option, the “Second Extension Option”, each an “Extension Option”), to be exercised by giving written notice to the Agent in the form of Exhibit D hereto not more than ninety (90) days and not less than forty-five (45) days prior to the then effective Maturity Date (each, an “Extension Request”), subject to the terms and conditions set forth in this Agreement, to extend the then effective Maturity Date for the First Extension Option to August 8, 2017 and for the Second Extension Option to August 8, 2018.  Each request by the Borrowers for extension of the Maturity Date shall constitute a representation and warranty by the Borrowers that all of the conditions set forth in this Section shall have been satisfied on the date of such request.

(b)                                 The obligations of the Agent and the Lenders to extend the Maturity Date as provided in §4.15(a) shall be subject to the satisfaction of the following conditions precedent on the then effective Maturity Date (without regard to such extension request):

(i)                                     Payment of Extension Fee.  The Borrowers shall pay to the Agent on or before the then effective Maturity Date (without regard to such extension request) for the pro rata account of the Lenders in accordance with their respective Commitment Percentages an extension fee equal to one quarter of one percent (0.25%) of the Total Commitment, which fee shall, when paid, be fully earned and non-refundable under any circumstances.

(ii)                                  No Default.  On the date the Extension Request is given and on the Maturity Date (as determined without regard to such extension) there shall exist no Default or Event of Default.

(iii)                               Representations and Warranties.  The representations and warranties made by the Borrowers, the Restricted Subsidiaries and the Guarantors in the Loan Documents or otherwise made by or on behalf of such Persons in connection therewith or after the date thereof 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 Maturity Date (as determined without regard to such extension) other than for changes in the ordinary course of business permitted by this Agreement that have not had any materially adverse affect on the business of any of such Persons.

(iv)                              Extension of Interest Cap.  The Interest Cap required under §7.24 shall be extended to a date not earlier than the Maturity Date (as extended) at the strike rate and for the notional amount required pursuant to §7.24.

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(v)                                 Reduction of Total Commitment.  With respect to the First Extension Option, (1) the sum of the Total Revolving Credit Commitment and the Total Secured Term Loan Commitment shall be reduced pro rata in the aggregate to $220,000,000.00.  The Maturity Date for the First Extension Option shall not be extended until (along with the satisfaction of all other conditions set forth in this §4.15), the Borrowers pay to Agent for the respective accounts of the Revolving Credit Lenders and the Secured Term Loan Lenders for application to the Revolving Credit Loans and the Secured Term Loans prior to the then effective Maturity Date (without regard to such extension), all aggregate outstanding principal balances of all Revolving Credit Loans and Secured Term Loan in excess of $220,000,000.00.  If the First Extension Option is properly exercised, then with respect to the Second Extension Option, (2) the sum of the Total Revolving Credit Commitment and the Total Secured Term Loan Commitment shall be further reduced pro rata in the aggregate to $185,000,000.00.  The Maturity Date for the Second Extension Option shall not be extended until (along with the satisfaction of other conditions set forth in this §4.15) the Borrowers pay to Agent for the respective accounts of the Revolving Credit Lenders and the Secured Term Loan Lenders for application to the Revolving Credit Loans and the Secured Term Loans prior to the then effective Maturity Date (without regard to such extension), all aggregate outstanding principal balances of all Revolving Credit Loans and Secured Term Loan in excess of $185,000,000.00.  As between the Commercial Company Secured Term Loan Commitments and the Land Company Secured Term Loan Commitments, the Borrowers shall be permitted to allocate such reductions resulting from the application of the reduced amounts between the respective Secured Term Loan Commitments as specified in a notice to the Agent.  If the Borrowers do not deliver to the Agent such notice, then the Agent shall apply the reductions pro rata among the Commercial Company Secured Term Loan Commitments and the Land Company Secured Term Loan Commitments, respectively.  No reduction of the Revolving Credit Commitments, the Commercial Company Secured Term Loan Commitments and the Land Company Secured Term Loan Commitments pursuant to this §4.15 may be reinstated.

(c)                                  The Agent shall notify each of the Lenders in the event that the Maturity Date is extended as provided in this §4.15.

§5.                               COLLATERAL SECURITY AND GUARANTY

§5.1                        Collateral.  The Obligations shall be secured by (i) a perfected first priority lien or security title and security interest to be held by the Agent for the benefit of the Lenders in the Mortgaged Property and certain personal property of Borrowers and certain Guarantors related to the Mortgaged Property, pursuant to the terms of the Security Deeds, (ii) a perfected first priority security interest to be held by the Agent for the benefit of the Lenders in leases, rents and profits pursuant to the Assignment of Rents and Leases, in the Management Agreements pursuant to the Assignment of Management Agreements and Subordination and in the Construction Contracts, Architect’s Contracts and other items pursuant to the Assignment of Project Documents, (iii) the Indemnity Agreement, (iv) a perfected first priority lien to be held by the Agent for the benefit of the Lenders in the interest of the Borrowers in the Fees and the Accounts Receivable pursuant to the Security Agreements, (v) a perfected first priority security interest to be held by the Agent for the benefit of the Lenders in the interest of Borrowers in certain of the Partnerships pursuant to the Assignment of Interests that are not otherwise exempt from such pledge in accordance with §7.17 hereof, (vi) the Cash Collateral Account Agreement, and (vii) such additional collateral, if

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any, as the Agent for the benefit of the Lenders from time to time may accept as security for the Obligations with the consent of the Majority Lenders, which consent may be given or withheld in the sole discretion of the Majority Lenders.  The Obligations shall also be guaranteed pursuant to the terms of the Guaranty.

§5.2                        Appraisals; Adjusted Value.

(a)                                 The Appraised Value for the Borrowing Base as of the date hereof shall be as set forth on Schedule 1.2 hereto.  With respect to Land Assets, the Adjusted Value may be determined as provided herein on a per lot or per acre basis and then multiplied by the number of lots or acres.

(b)                                 The Borrowers acknowledge that the Borrowers shall make such quarterly adjustments to the Adjusted Value of the Borrowing Base Assets and the Borrowing Base as may be required by the Agent in the exercise of its good faith business judgment to account for the effects of development costs, sales of land and other assets, new debt, defaults under Indebtedness, or other circumstances, as reflected in the quarterly Compliance Certificate and the attached Borrowing Base worksheet, a form of which is attached hereto as Exhibit E.

(c)                                  In addition to such quarterly adjustments as may be necessary, the Agent shall order an Appraisal or a thorough update revising a prior Appraisal each year with the as-is value of the Borrowing Base Assets (other than the Eligible Accounts Receivable, Properties under Construction and Qualifying Income Properties, but specifically including the Waterway Square Garage and 1400 Woodloch) to be determined as of year end, and request that such Appraisal or update be provided to Agent on or prior to March 31 of each year during the term of the Loans for the purpose of determining the Appraised Value thereof.  Upon Borrower’s written request, Agent shall also order an Appraisal or a thorough update revising a prior Appraisal for Income Producing Properties, no more than once each quarter, with the as-is value of such properties to be determined as of the applicable quarter, and request that such Appraisal or update be provided to Agent within ninety (90) days of Agent’s request for the purpose of determining the Appraised Value thereof.  From time to time, but provided there is no existing Event of Default, not more frequently than once in any twelve (12) month period, Agent may in its discretion order an Appraisal or a thorough update revising a prior Appraisal of the as-is value of the Qualifying Income Properties commonly known as 1400 Woodloch, 1505 Lake Robbins and any new Qualifying Income Properties after the date of this Agreement as selected by Agent.  Each Appraisal or update shall be reviewed by the appraisal department of the Agent to determine the Appraised Value of the applicable Borrowing Base Assets.  The Appraised Values of the Borrowing Base Assets (other than the Eligible Accounts Receivable, Properties under Construction and Qualifying Income Properties) and of the Qualifying Income Properties commonly known as 1400 Woodloch, 1505 Lake Robbins and any new Qualifying Income Properties after the date of this Agreement as selected by Agent determined therefrom shall be the Appraised Value for such Borrowing Base Assets for the purposes of this Agreement until such time as such Appraised Value is required hereunder to be redetermined.  Borrowers shall have the right to request that Agent select a different appraiser to perform the Appraisals or updates, but any selection of an appraiser shall be in accordance with the legal requirements applicable to Agent.  The Borrowers shall pay the Agent within thirty (30) days of demand from Agent all reasonable costs of such Appraisals.  During such valuation process, the prior

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Appraised Value (as the same may have been adjusted to reflect changes in the Borrowing Base Assets) shall continue to be in effect until the new Appraised Value is determined hereunder.

(d)                                 [Intentionally omitted.]

(e)                                  Notwithstanding the other provisions of this §5.2, the Agent may, for the purpose of determining the current Appraised Value of the Borrowing Base Assets (other than the Eligible Accounts Receivable and Properties under Construction) and Borrowing Base, obtain thorough interim Appraisals updating and revising prior Appraisals with respect to the Borrowing Base Assets or such portion thereof as the Agent shall determine (i) at any time that the regulatory requirements of any Lender generally applicable to real estate loans of the category made under this Agreement as reasonably interpreted by such Lender shall require more frequent Appraisals, (ii) at any time following a condemnation of more than an immaterial portion of an asset within a category of Borrowing Base Assets (as determined by the Agent) or any material adverse change with respect to a Borrowing Base Asset (provided that such Appraisal shall be limited to the affected Borrowing Base Asset), or (iii) at the request of the Majority Lenders.  The expense of such Appraisals and updates performed pursuant to this §5.2(e) shall be borne by the Borrowers.  Copies of any Appraisals or updates revising prior Appraisals obtained pursuant to this §5.2 shall be promptly delivered to each of the Lenders (and for the purposes hereof any Related Funds shall be considered a single Lender).

(f)                                   In the event that the Agent shall advise the Borrowers, on the basis of any Appraisal, update or other valuation pursuant to this §5.2, that the Borrowing Base is insufficient to comply with the requirements of §9.3, then until the Borrowing Base shall be restored to compliance with §9.3 the Revolving Credit Lenders shall not be required to make advances under §2.1.

(g)                                  The Borrowers acknowledge that the Agent may make changes or adjustments to the value set forth in any Appraisal as may be required by the appraisal department of the Agent in the exercise of its good faith business judgment, and that the Agent is not bound by the value set forth in any Appraisal performed pursuant to this Agreement and does not make any representations or warranties with respect to any such Appraisal.  The Borrowers further agree that the Lenders and Agent shall have no liability as a result of or in connection with any such Appraisal for statements contained in such Appraisal, including without limitation, the accuracy and completeness of information, estimates, conclusions and opinions contained in such Appraisal, or variance of such Appraisal from the fair value of such property that is the subject of such Appraisal given by the local tax assessor’s office, or the Borrowers’ idea of the value of such property.

§5.3                        [Intentionally Omitted.]

§5.4                        Releases of Certain Liens.  The Borrowers shall have the right to obtain the release of the interests described in the Assignment of Interests and the Note Receivables pursuant to the cash sale of same for fair market value to third parties unaffiliated with any Borrower and their respective Restricted Subsidiaries and Unrestricted Subsidiaries; provided, however, that all net proceeds from any such sales shall be deposited by the Borrowers in such Borrower’s Disbursement Account; and provided further that a Borrower may obtain a release of

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the Municipal Utility District Contracts upon a transfer of such Municipal Utility District Contracts to an Unrestricted Subsidiary of such Borrower pursuant to §8.8, provided that no Default or Event of Default exists or would be created as a result of such transfer.  Notice of each such proposed sale together with a request for release by the Agent must be received by the Agent at least five (5) Business Days prior to the date the release shall be required by the Borrowers.  The Borrowers shall reimburse the Agent for all costs and expenses incurred in granting such release as provided in §15.

§5.5                        Release of Mortgaged Property; Consent to Easements.

(a)                                 Provided no Default or Event of Default shall have occurred hereunder and be continuing (or would exist immediately after giving effect to the transactions contemplated by this §5.5), the Agent shall release one or more individual properties included in the Mortgaged Property or Developed Commercial Land, Developed Residential Land, Undeveloped Commercial Land or Undeveloped Residential Land from the lien or security title of the Security Documents encumbering the same upon the request of the Borrowers subject to and upon the following terms and conditions as applicable:

(i)                                     Except as set forth in §5.5(a)(v) and (vi) below or in §8.8 as to sales by a Borrower, such release shall be for fair market value as a result of an arms-length sale of such Mortgaged Property in the ordinary course of such Borrower’s business to a party that is not an Affiliate of any Borrower, any General Partner, any Second Tier Partner, any Third Tier Partner or any Guarantor; and provided that the applicable Borrower shall have delivered to the Agent a certificate pursuant to §7.4(g) from the Principal Financial Officer of such Borrower to such effect for all such sales and releases the preceding calendar month, a Borrower shall be entitled to obtain releases of Undeveloped Residential Land, Developed Residential Land, Undeveloped Commercial Land and Developed Commercial Land on which there are no Vertical Commercial Improvements from the Title Insurance Company pursuant to the Tri-Party Agreement without further certification to the Agent or the Title Insurance Company; provided, further, that in the event that such sale is of any other Mortgaged Property, the applicable Borrower shall deliver to Agent and the Title Insurance Company a certificate from an Authorized Officer of such Borrower to the effect that such sale is in compliance with the terms of this §5.5(a)(i);

(ii)                                  In the event that such sale is to an Affiliate of any Borrower, any General Partner, any Second Tier Partner, any Third Tier Partner or any Guarantor (including a Restricted Subsidiary or Unrestricted Subsidiary), Agent shall have confirmed that such sale is in accordance with the requirements of §8.8 (and if the Title Insurance Company is executing releases pursuant to the Tri-Party Agreement, Agent shall send to the Title Insurance Company written notice of such confirmation).  In the event such transfer is from a Borrower to the other Borrower, such release shall be conditioned upon the delivery to Agent by the transferee Borrower of an amendment of such Borrower’s Security Documents to include such property as additional property encumbered thereby;

(iii)                               The applicable Borrower shall cause the Title Insurance Company to pay or cause to be deposited contemporaneously with each sale of all excess net sales

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proceeds, if any, into the Disbursement Account of the applicable Borrower maintained pursuant to the Cash Collateral Account Agreement;

(iv)                              In the event that Agent is required to execute the release or confirmation documents, Agent shall provide such release or confirmation to the Title Insurance Company within four (4) Business Days of receipt of Borrower’s request to have such property released, and any release documents to be executed by the Agent shall be in form and substance reasonably satisfactory to the Agent;

(v)                                 Releases of Mortgaged Property may be made by Agent or the Title Insurance Company pursuant to the Tri-Party Agreement of parcels consistent with good land development practices contributed, donated or sold at a reduced price by a Borrower to non-profits and other like entities, and to public agencies, such as The Woodlands Town Center Improvement District, The Woodlands Association, Municipal Utility Districts, Property Owners’ Associations or Harris County Park Authority, for the development of churches, public facilities, parks or for other public or community purposes; and

(vi)                              Agent may consent or subordinate to (and the Title Insurance Company may pursuant to the Tri-Party Agreement do so on behalf of Agent), easements, subdivision plats, road dedications, restrictions or similar agreements provided that the applicable Borrower shall have delivered to Agent the certificate required by §7.4(g) as to such agreements or matters for the preceding calendar month.

(b)                                 Notwithstanding the foregoing, the Agent shall delegate the release of Mortgaged Property from the lien of the Security Documents and consents to easements, subdivision plats, road dedications, restrictions and similar agreements to the Title Insurance Company pursuant to the Tri-Party Agreement.  Such releases will be administered by the Title Insurance Company in accordance with the terms of the Tri-Party Agreement, and Agent shall have the right to revoke the authority of any such Title Insurance Company to execute such releases at any time as provided in the Tri-Party Agreement; provided, that so long as no Event of Default has occurred and is continuing, Agent shall enter into another Tri-Party Agreement with another Title Insurance Company approved by Agent.  The Borrowers shall pay all fees, costs and expenses of each such Title Insurance Company.  Upon an Event of Default, Agent may revoke the authority of the Title Insurance Company under the Tri-Party Agreement and at its option either execute such releases and consents itself or designate another Title Insurance Company to execute such releases and consents pursuant to a Tri-Party Agreement.

(c)                                  As a result of the frequency and volume of sales of property by the Borrowers, it is possible that the title information provided by the Title Insurance Company to the Agent may not reflect all sales that have occurred to date.  In the event that Agent shall receive evidence satisfactory to it that the Security Documents encumber property not owned by or on behalf of a Borrower, Agent shall be authorized to release such property from the lien of the Security Documents.  The Borrowers shall be permitted to submit such evidence to Agent.

§5.6                        Additional Guarantors.  In the event that either of the Borrowers shall form a Restricted Subsidiary, the Borrowers shall cause such Restricted Subsidiary to become a Guarantor promptly following its formation unless such Restricted Subsidiary is prohibited from

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guaranteeing the Indebtedness of any other Person pursuant to any document, instrument or agreement evidencing secured Indebtedness of such Restricted Subsidiary permitted by this Agreement or any provision of such Restricted Subsidiary’s organizational documents entered into as a condition of the extension of such secured Indebtedness.  In the event a Restricted Subsidiary is no longer subject to a prohibition described in the immediately preceding sentence, Borrowers shall promptly cause such Restricted Subsidiary to become a Guarantor hereunder.  Each such Restricted Subsidiary which is required hereunder to become a Guarantor shall execute and deliver to Agent a Joinder Agreement, and shall cause all of the conditions set forth in §10 applicable to Guarantors or Loan Documents executed by Guarantors to be satisfied.  The organizational agreements of such Restricted Subsidiary or such other resolutions or consents satisfactory to Agent shall specifically authorize such Restricted Subsidiary to guaranty the Obligations and the Borrowers shall certify to the Agent that applicable law does not preclude such Subsidiary from executing the Joinder Agreement.  Borrowers shall further cause all representations in the Loan Documents made by or with respect to Guarantors and their Subsidiaries in the Loan Documents to be true and correct with respect to such additional Guarantor, and no Default or Event of Default shall exist or might exist in the event that such Restricted Subsidiary becomes a Guarantor.

§5.7                        Release of Collateral.  Upon the refinancing or repayment of the Obligations, then the Agent shall release the Collateral from the lien and security interest of the Security Documents and release the Guarantors, provided that Agent has not received a notice from the “Representative” (as defined in §14.11) or the holder of the Hedge Obligations that any Hedge Obligation is then due and payable to the holder thereof.

§6.                               REPRESENTATIONS AND WARRANTIES

The Borrowers represent and warrant to the Agent and the Lenders as follows:

§6.1                        Corporate Authority, Etc.

(a)                                 Organization; Good Standing.  Each Borrower is a Texas limited partnership duly organized and is validly existing under the laws of Texas.  Each Second Tier Partner is a Texas limited partnership duly organized and validly existing under the laws of the State of Texas.  Each General Partner is a Texas limited liability company duly organized and validly existing and in good standing under the laws of the State of Texas.  Woodlands Operating is a Texas limited partnership duly organized and validly existing under the laws of Texas.  Each of the Borrowers and the Guarantors (i) has all requisite power to own its respective properties and conduct its respective business as now conducted and as presently contemplated, and (ii) as to each of such Persons, is duly authorized to do business in each other jurisdiction where a failure to be so qualified in such other jurisdiction could have a materially adverse effect on the business, assets or financial condition of such Person.

(b)                                 Subsidiaries.  Each of the Restricted Subsidiaries of the Borrowers (i) is a corporation, limited partnership, limited liability company or trust duly organized under the laws of its State of organization and is validly existing and in good standing under the laws thereof, (ii) has all requisite power to own its property and conduct its business as now conducted and as presently contemplated and (iii) is in good standing and is duly authorized to do business in each

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jurisdiction where a failure to be so qualified could have a materially adverse effect on the business, assets or financial condition of such Borrower or such Restricted Subsidiary.

(c)                                  Authorization.  The execution, delivery and performance of this Agreement and the other Loan Documents to which the Borrowers, the General Partners, Woodlands Operating or the Guarantors are or are to become a party and the transactions contemplated hereby and thereby (i) are within the authority of such Person, (ii)have been duly authorized by all necessary proceedings on the part of such Person, (iii)do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which such Person is subject or any judgment, order, writ, injunction, license or permit applicable to such Person, (iv)do not and will not conflict with or constitute a default (whether with the passage of time or the giving of notice, or both) under any provision of the articles of incorporation, partnership agreement, declaration of trust or other charter documents or bylaws of, or any agreement or other instrument binding upon, such Person or any of its properties, and (v)do not and will not result in or require the imposition of any lien or other encumbrance on any of the properties, assets or rights of such Person.

(d)                                 Enforceability.  The execution and delivery of this Agreement and the other Loan Documents to which the Borrowers, Woodlands Operating or the Guarantors are or are to become a party are valid and legally binding obligations of such Person enforceable in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

§6.2                        Governmental Approvals.  The execution, delivery and performance of this Agreement and the other Loan Documents to which the Borrowers, the General Partners, Woodlands Operating or the Guarantors are or are to become a party and the transactions contemplated hereby and thereby do not require the approval or consent of, or filing with, any governmental agency or authority other than those already obtained and the filing of the Security Documents in the appropriate records office with respect thereto.

§6.3                        Title to Properties; Leases.  Except as set forth on Schedule 6.3 hereto, each Borrower and its Restricted Subsidiaries owns all of the assets reflected in the consolidated balance sheet of the applicable Borrower as at the Balance Sheet Date or acquired since that date (except property and assets sold or otherwise disposed of in the ordinary course of business since that date), subject to no rights of others, including any mortgages, leases, conditional sales agreements, title retention agreements, liens or other encumbrances except Permitted Liens.  Without limiting the foregoing, each Borrower and its Restricted Subsidiaries has good and indefeasible fee simple title to all real property reasonably necessary for the operation of its business, free from all liens or encumbrances of any nature whatsoever, except for Permitted Liens (provided that Borrowers lease their headquarters building).

§6.4                        Financial Statements.  The Borrowers have furnished or caused to be furnished to each of the Lenders:  (a) the consolidated balance sheet of each Borrower and its subsidiaries as of the Balance Sheet Date certified by each Borrower’s Principal Financial Officer as fairly

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presenting the balance sheet of such Persons for such period, and (b) certain other financial information.  Such balance sheet and statements have been prepared in accordance with generally accepted accounting principles (other than the inclusion of footnotes) and fairly present the financial condition of such Borrower and its subsidiaries as of such dates and the results of the operations of such Borrower and its subsidiaries for such periods.  There are no liabilities, contingent or otherwise, of any Borrower or any of its subsidiaries involving material amounts not disclosed in said financial statements and the related notes thereto.

§6.5                        No Material Changes.  Since the Balance Sheet Date, there has occurred no materially adverse change in the financial condition or business of either Borrower, or their respective subsidiaries taken as a whole as shown on or reflected in the consolidated balance sheet of such Borrower as of the Balance Sheet Date, or its consolidated statement of income or cash flows for the fiscal year then ended, other than changes in the ordinary course of business that have not had any materially adverse effect either individually or in the aggregate on the business or financial condition of such Person.  There has been no materially adverse change to the physical condition of any of the Borrowing Base Assets since the last Appraisal thereof (or if no Appraisal has been performed under this Agreement with respect thereto, then since the last Compliance Certificate and accompanying Borrowing Base Worksheet).  There has occurred no materially adverse change in the financial condition or business of any of the Borrowing Base Assets from the condition shown on the statements delivered to the Lenders pursuant to §6.4 other than changes in the ordinary course of business that have not had any materially adverse effect either individually or in the aggregate on the business or financial condition of the Borrowing Base Assets.

§6.6                        Franchises, Patents, Copyrights, Etc.  The Borrowers and their respective Restricted Subsidiaries possess all franchises, patents, copyrights, trademarks, trade names, servicemarks, licenses, liquor licenses and permits, and rights in respect of the foregoing, adequate for the conduct of their business substantially as now conducted without known violation of any rights of others, except where a failure to possess such rights could not have a materially adverse effect on the business, assets or financial condition of such Person.